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1920.

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA.

REPORT

OF THE

COMMISSION

ON THE

SlTGAR, INDUSTRY;

TOGETHER WITH

..

Presented by Oommand ,· ordered to be printed, 18th J.1i_arch, 1920.

[Cost of Pape1·.-Preparation, no !' h·en ; 775 copies ; approx imate cost of pri n ting and pu bli shi ng, £43.]

l:'rill.tecl a nd Published for the GOVERNMEN T of the COMMONWEALTH of A U STRALIA by ALBERT J . M ULLETT, Government Printer for the State of Victoria.

No. 9.-F.5618. -PRICE ls. 9n.

905

Royal Commission-Letters Patent ( 4) Introductory .. Area under Sugar Cane

CONTENTS.

Capital Invest ed in the Sugar Industry C..1pital Invested in Raw Sugar Mills Number of Persons Employed in Cultivation Number of Persons Employed in Raw Sugar Mills and Refineries

Wages Local Disputes Non-British Labour Tropical Diseases Intemperance

Cost of Production Cultivation-Efficiency Increasing the Area under Cultivation Payment for Sugar Cane-The Relative Percentage System .. Labour-saving Machinery

Raw Sugar Mills-Ownership, &c. Milling By-products of Sugar Manufacture Molasses ..

Residue from Filter Presses .. Meg ass Sugar for Use in Manufacture Attitude of Financial Institutions towards the Industry Price for Raw Sugar Bureau Sugar Experiment Stations Cane-growers' Associations Beet Sugar Distribution to Retailers Empire Preference World Production of Sugar P resent Statutory and Administrative Control of the Industry Future Control New Elements of Control-Prices Influence of Present Abnormal World Prices Commonwealth Control necessary Attitude of the Industry to F ederal Control Periodical Fixing of Wages and Prices Contracting Out Whether Extended Powers are necessary .. How Control may be exercised .. Control over R efin eries, Wholesale Refined Sugar Prices, and Importations Summary R ecommendations

..

907

PA.Jl

iv-vii X

xi

Xl

xi xii Xlll

xiii xiv xiv XV

XYI

xvu XIX

XXI

XX Ill

xxiii xxiv xxvn XXX

XXX

XXXll

XXXll

XXXlll

xxxiv XXXV

XXXV

xxxvii xxxvn xi

xl xl

xli xlii xlii xlii xliv

xlv xlvii . xlvii xlvii xlvii xlix liv

GREETING:

IV

COMMONWEALTH OF AUSTRALIA. GEORGE THE FIFTH, by the Grace of God,- of the United Kingdom of Great Br·itain and Ireland and of the British Dominions beyond the Seas King, Defender of the Faith, Emperor of India : 'rO Our trusty and well-beloved ALBERT BATHURST PIDDINGTON, Esqui'l'e, B.A., one of Ou·r

Cc unsellm·s lea'l'ned ;n the Law, NICHOLAS CoLSTON Loc KYER, Esquire, C.B.E., I.S.O., STEPHEN MILLS, Esquire, Barrister-at-Law.

KNOW YE that We do by these Our Letters issued in Our narne by Our Governor-General of Our Commonwealth of Australia, acting with the advice of Our Federal Executive Council, and in pursuance of the Constitution of Our said Commonwealth, the "Royal Commissions Act ·1902- 1912," and all other powers him thereunto enabling, appoint you to be Comm,issioners to inquire into and report upon the suga?" industry in Australia, and more particularly in regard to- .

1. The national value of the I ndustry-( a) Acreage under cultivation. (b) Capital invested-(1) in lamd and field· work ;

(2) in inills and factories . (c) Numbe1· employed-( 1) in cultivation ; (2) in mills and factories. (d) Wages-

(1) paid; (2) whether any in·present wages is necessary. 2. Production- - ·

(a) Each year si1we 1912. (b) Surplus available annually for · expor tt. . (c) Possibilities of extension of Su,gar Cane Industry­ (1) in .acreage;

(2) whether additional labour available if requi?"ed ; (3) if maTkets readily and commere1:ally available. 3. Government control_:_ ·

Extent to which necessary oT desirable in the interests of­ (a) Wage-earners; (b) Producers ; (c) Consumers-

(1) ordinary ; (2) other dependent ind'tlstries. (d) Whether Commonwealth or State control desirable. (e) If Commonwealth, what extensions (if any) of present powers necessary. 4. Protection-

( a) Best method of protecting and increasing the industry. (b) Measure of protection indispensable to home producer using the most modern means of producing, aga,inst the foreign · producer. (c) Additional cost to the consume'l' through protection. (d) Should duty be fixed O'l' fluctuate with wO'I'ld's market p'l'ice .'t .:

5. Beet Sugar-(a) Extent of industry; (b) 111easure of protection indispensable to maintain home producer, using the most mode'l'n means of producing,· against the fo'l'eigri producer. (c) Possibilities of extension of Suga'l' Beet Industry. (d) Competition with Sugar Industry. 6. Ernpire Preference- _

Presuming that Commonwealth Government adopts policy of Empire preference as regards co1·tsu1nption ofsugar- ·

(a) Would adherence to such policy lead to the encou?"agement and extension of the industr·y in Austmlia? (b) I n the event of shortage in the Australian crop making importation necessary, to what extent would the interests of the Commonwealth be qffected by adherence to the policy of Empire

preference ?

AND WE appoi1'tt you, the said ALBERT BATHURST PIDDINGTON, to be Chairman of the said Commissioners. AND you, _o:n or before the thir:tieth day of June, One tho·usand nine hundred and nineteen, to report to Ou1· Governm·-General in and over Our said Commonwealth "the result-of your -inqui1·ies into the matters intrusted to you by these Our Lette'l's Patent. - · .

In .TESTIMONY WHEREOF We have caused these Our Letters to be made Patent and the Seal of Our said CommrYnwealth to. be thereunto affixed. WITNESS Our trusty and. well-beloved SIR RoNALD CRAUFURD MuNRO FERGUSON, a Member _ of His MaJ·esty's Most Honorable Privy Council, Kni,qht Grand Oross of the Most

(SEAL · OF THE CoMMON- Distinguish,ed Order df Saint Micha.el and Saint George, Governor-General and Commander­ WEALTH OF AusTRALIA.) in-Chief of the Commonwealth of Australia this thirty-first day of March, in the year· of Our. Lord One thousand nine hundred and nineteen, and in the ninth year of Our reign.

(Signed) R. M. FERGUSON,

Governor-Geneml.

By His Excellency's Command, (Sig11ed) W. A. WATT,

Acting P1·ime M iniste1·.

Entered on Recm·d by me, in the Register;· of Patents, No. 6, page 362, this thirty-first day of Mm·ch, One thousand nine hundred and nineteen. (Signed) M. L. SHEPHERD.

. GREETING:

909

t

COMMONWEALTH OF AUSTRALIA.

GEORGE THE FIFTH, by the Grace of God, of the United Kingdom of Great Britain and Ireland and ofthe British Dominions beyond the Seas King, Defender ofthe Faith, Emperor of India:

TO Our trusty and well-beloved ALBERT BATHURST PIDDINGTON, Esquire, B.A., one of -Our Counsellors lea'rned in the Law, NICHOLAS CoLSTON LocKYER, C.B.E., . I.S.O., STEPHEN MrLLS, Esquire, BaTrister-at-Law .

WHEREAS by Letters Patent issued in OuT nam,e by OuT Governor-Ge neral of . Our Commonwealth · of Australia on the thirty-first day of March in the year of Our Lord One thousand nine hundred and nineteen, We did, with the advice of Our Federal Executive Council and in pursuance of the Constitution of Ou'r said Commonwealth, the " Royal Commissions Act 1902-1912" and all other powers us-thereunto enabling, appoint you to be Coinmissioners to into and report upon the sugar indust1·y in Australia and the other matters specified the said Letters Patent : ·

AND W'HEREAS by the said Letters Patent you were 'required on or before the thirtieth day of June, One thousand nine hundred and nineteen, to report to Our Governor-General in and over .Our said Commonwealth, the result of your inq1.tiries into the matters intrusted"to you by the said LetteTs Patent:

AND WHEREAS it is desirable to extend, until the thirty-first day of August, One thousand . nine hundred . and nineteen, the period which you are required to 1·eport as aforesaid to Ou1· said Governo'r-General : ·

NOW THEREFORE KNOW YE that We do by these Our Letters Patent issued in Our name by Our said Governor­ General, acting with the advice of the Federal Executive Council and in pursuance of the Constitution of Our said Common­ wealth, the " Royal Commissions Act 1902-1912 " and all otheT powers us thereunto enabling, extend, until the thirty-fiTst day of August, One thousand nine hundred and nineteen, the period within which you are required to report to Our said Governor-General the res-ult of your inquiries into the matters intrusted to you by the said Letters Patent :

IN TESTIMONY WHEREOF We have caused these Our· Letters to be made Patent and the Seal of Our said Commonwealth to be affixed thereunto.

WITNESS Our right trusty and well-belo·ved SIR RONALD CRAUFURD MuNRO FERGUSON, a MembeT (SEAL OF THE CoMMON- of His Majesty's Most Honorable Privy Council, Knight · Grand Cross of the Most WEALTH OF AusTRALIA.) Distinguished Order of Saint Michael and Saint Geor-ge, Governor-General and Oommander­ in-Chiefof the Commonwealth of Austrctlia, this twentieth day of A,ugust, in the .yea1· of

Our L01;d One thousand nine hundred and nineteen , and i?t.. the _ tenth year of Our reign.

(Sig1ied) .. R. JYI. FERGUSON, · (}overnor-G(meral. ·

By His Excellency's Command-(Signed) E. D. MILLEN,

. for Acting Prime 111inister.

Entered on Record by ·nte in Register ofPatents No . 6, page 375, this ttcenty-first day of August, One thousand nine hundred and nineteen. ·

(Signed) . ·. J. G. McLAREN.

''

• GREETING:

Vl

COMMONWEALTH OF AUSTRALIA.

GEORGE THE FIFTH, by the G-race of God, of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas King, Defender of the Faith, Emperor of India:

TO Our trusty aniJ, well-beloved ALBERT BATHURST PIDDINGTON, Esquire, B.A., one of Our Counsellors learned in the law, NICHOLAS CoLSTON LocKYER, Esquire, C.B.E., l.S.O., STEPHEN MILLS, Esquire, Barrister-at-Law .

WHEREAS by Letters Patent (hereinafter referred to as "the said Letters Patent") issued in Our name by Our Governor­ Ge neral of Our Commonwealth of Australia on the day of March in the year of Our Lord One thousand nine hundred and nineteen, We did, with the advice of Our Federal Executive Council and in pursuance of the Constitution of Our said Commonwealth, the "Royal Commissions Act 1902-1912 " and all other powers us thereunto enabling, appoint you to be

Commissioners to inquire into and 'report upon the Sugar Industry in Au.Rtralia and the other matters more particularly specified in the said Letters Patent :

AND WHEREAS by Letters Patent issued in Our name by Our Governor-General of Our Commonwealth of Australia on the twentieth day of August, in the year of Our Lord One thousand nine hundred and nineteen, JiVe did, with the advice of Our Federal Executive Council and in pursuance of the Constitution of Our said Commonwealth, the " Royal Act 1902-1912" and all other powers us -thereunto enabling, e;-ctend until the thirty-first day of Au,qust, One thousand hundred and nineteen, the period within which you are required to report to Our said Governor-General the result of your

inquiries into the matters intrusted to you by the said Letters Patent:

AND WHEREAS it is desiralJle that you should further inquire into the Sugar Industry in Australia and the other matters more particularly specified in the said Letters Patent :

AND WHEREAS it M desirable that you should report to Our said Governor-General on or the thirtieth day of September, One thousand nine hundred and nineteen, the result of yo1tr inquiries into the matters intrusted to you by the s_Jtid Letters Patent: ·

AND WHEREAS it is desiralJle that, in addition to the matters more particularly specified in the said Letters Patent you should inquire intQ and report upon the following matters, namely :-The production, cost of manufacture, and utilization of the by-products of sugar :

NOW THEREFORE KNOW YE that We do by these Our Letters Patent issued in Our name by Our said Governor­ General, acting with the advice of the Federal Executive and in pursuance of the Constitution of Our. said Commonwealth, the" Royal Commissions Act 1902-1912" and all other powers us thereunto enabling;require you to further inquire into the Sugar Industry in Australia and the other matters more particularly specified in the said Letters Patent and in these L etters Patent and into the following matters, namely:-

The production, cost of manufacture, and utilization of the by-products of sugar ; and to report to Our said Governor-General on or before the day of September, One thousand nine hundred and nineteen, the result of your inquiries into the matters intrusted to you by the said Letters Patent and by thestJ Letters Patent:

AND vVE DO DECLARE that these Letters Patent shall be deemed to be and have been of the same force and effect as if the matters particularly specified in the said Letters Patent had been included among the matters more particularly specified in these Letters Patent:

IN TESTIMONY WHEREOF We have caused these Our Letters to be made Patent and the Seal of Our said Commonwealth to be thereunto affixed. --

WITNES S Our right trusty and well-beloved SIR RoNALD CRAUFURD MuNRO FERGUSON, a Membe1· of Our Most Honorable Privy Council, Knight Grand Cross of Our Most Distinguished (SEAL OF THE CoMMON- Crder of Saint Michael and Saint George, Our Governor-General and Commander-in­ WEALTH OF AusTRALIA.) Chief in and over Our Commonwealth of Australia, this third day of September, in the

of Our Lord One thousand nine hundred and nineteen and in the tenth year of Our

By His Command,

(Signed) W. A. WATT,

for Prime Minister.

(Signed) R •. M. FERGUSON,

Governor-General.

Entered on Record by me in Register of Patents, No. 6, page 376, this fourth day of September, One thousand nin8 hundred and nineteen.

(Signed) M. L. SHEPHERD.

GREETING:

911

vii

COMMONWEALTH OF AUSTRALIA.

GEORGE THE FIFTH, by the Grace of God, of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas King, Defe·nder of the Faith, Emperor of Tnaia:

TO Our trusty and well-beloved ALBERT BATHURST PIDDINGTON, Esquire, B.A., one of our Counsellors learned in the Law, NICHOLAS CoLSTON LocKYER, Esquire, C.B.E., I.S.O., STEPHEN MILLS , Esquire, Barrister-at-Law.

WHEREAS by Letters Patent (hereinafter referred to as" the .first -mentioned Letters Patent ")· issued in Our name by Our G?vernor-General of Our Commonwealth of Aust·ralia on the thirty-first day of March, in the year of Our Lord One thousand mne hundred and nineteen, We did, with the advice of Our Federal Executive Cou ncil, and in pursuance of the Constitution of Our said Commonwealth, the" Royal Commissions Act 1902-1912 "and all other powers us thereu nto enabling, appoint

you to be Commissioners to inquire into and report upon the sugar industry i n Australia and the other matters more particularly specified in the first-mentioned L etters Patent:

AND WHEREAS by Letters Patent issued in Our name by Our Governor-General of Our Commonwealth of Australia on the twentieth day of August, in the year of Our Lord One thousand nine hu'ndred and nineteen, We did, with · the advice of Our Federal Executive Council, and in pursuance of the Constitution of Our said Commonwealth, the " Royal Commissions Act 1902-1912" and all other powers us thereunto enabling, extend, until the thirty-first day of Aug·ust, One

thousand nine hundred and nineteen , the period within which you are required to report to Our said Governor-General the result of your inquiries into the matters intrusted to you by the first-mentioned Letters Patent :

AND WHEREAS by Letters Patent (hereinafter referred to as "the said Letters Patent") issued in Our name by O'I.Jr Governor-General of Our Commonwealth of Australia on the third day of September in the year of Our Lord One thousand nine hundred and nineteen, We did, with the advice of Our Federal Executive Council, and in pursuance of the Co nstitution of Our said Commonwealth, the" Royal Commissions Act 1902-1912" and all other powers Us thereunto enabling, require

you to further inquire into the sugar industry in Australia and the other matters more particularly specified in the first­ mentioned Letters Patent and in the said Letters Patent, and to report to Our said Go vernor-General on or before the thirtieth day of September, One thousand nine hundred and nineteen, the result of your inquiries into the matters intrusted to you by the first-mentioned Letters Patent and by the said Letters Patent. ·

AND WHEREAS it · is desirable to extend the time within which you are required to report upon the matters intrusted to you by the first-mentioned Letters Patent and by the said Letters Patent, and to require you to report upon those matters to Our Governor-General with as little delay as possible.

NOW THEREFORE KNOW YE that We do by these Our Letters Patent issued in Our name by Our said Governor-General, acting with the advice of the Federal Executive Council, and in pursuance of the Constitution of Our said Commonwealth, the "Royal Commiss ions Act 1902- 1912" and all other powers us thereunto enabling, extend the time within which you are required to report upon the matters intrusted to you by the first-mentioned Letters Patent and by the said Letters Patent, and require you to report upon those matters to Our said with as little delay as possible :

IN TESTIMONY WHEREOF We have caused these Our Letters to be made Patent and the Seal of Our said Commonwealth to be thereunto affixed.

WITNESS Our right trusty and well-beloved SIR RoNALD CRAUIWRD MuNRO FERGUSON, a Member of Our Most Honorable Privy Council, Knight Grand Cross of our Most (SEAL OF THE CoMMON- .Order of Saint Michael and Saint George, Our and Gommand_er-tn-

WEALTH OF AusTRALIA.) Chief in and over Our Commonwealth of Australw, thts fifteenth day of October, the year of Our Lord One thousand nine hundred and nineteen, and in the tenth year of Ow· reign.

By His Excellency's Command, W. M. HUGHES, Prime Minister.

(Signed) R. M. FERGUSON,

Governor-General.

E ntered on record by me in Register of Patents No. 6, page 379, this sixteenth day of October, One thousand nine hundred and nineteen. (Signed) J. G. McLAREN.

.913

REP 0 R rl' .

To His Excellency the Right SrR RoNALD CRAUFURD MuNRO FERGUSON,

a "Member of His Majesty's Most Honorable Privy Council, Knight Grand Cross of the- Most Distinguished Order of Saint Michael and Saint George , Governor­ General and Commander-in-Chief in and over the Commonwealth of Australia.

MAY IT PLEASE YOUR ExcELLENCY : ·

We, your Commissioners, by Letters Patent to inquire into and report upon the · Sugar Industry in Australia, and more particularly in relation to the matters enumerated in the said Letters Patent (v. pp. iv-vii), have the honour to submit the following Report, which will be supplemented by a further Report on the matter referred to in par. 28, .p. liv. . . The Commission began the t'aking of in Melbourne on the 9th April, 1919, and

subsequently visited the Maffra district to inspect the Beet Sugar Industry. The Commission next sat at Sydney, the sittings lasting from the 28th April until the 9th May, on which date your Commissioners proceeded to the New Sout'h Wales Sugar districts, taking evidence at Grafton, Maclean (where Harwood :Mill was inspected) , Wardell, (where the Broadwater Mill was inspected), and at Ballina. The Cudgen sugar-growing district near Murwillumbah was next visited and evidence taken at Cudgen and Murwillumbah, and an inspection made of the Condong Mill, situated near Murwillumbah. The mills referred to are

all the· property of the Colonial Sugar Refining Company. The Commission next proceeded to Queensland and took evidence in Brisbane, from the 28th May to the 12th June, and afterwards visited and took evidence at Mossman, Cairns, Babinda, Innisfail, Ingham, Townsville, Ayr, Proserpine, Mackay, Bundaberg, Childers, and Maryborough. The following mills were inspected:- '

Name of Mill. District. Owners.

Mossman Central . . . . Mossman .. . . Mossman Central Uill Co. Ltd.

Hambledon . . . . Cairns .. . . Colonial Sugar R efining Co. Ltd.

Mulgrave Central . .

"

.. .. Mulgrave Central Mill Co. Ltd.

Babinda . . . . Babinda .. . . Queensland Government

Goondi - .. . . South Johnstone . . Colonial Sugar Refining Co. Ltd.

Mourilyan .. ..

"

. . The Australian Sugar Company

South Johnstone . .

"

.. .. Queensland Government

Macknade .. . . H erbert . . . . Colonial Sugar Refining Co. Ltd.

Victoria .. ..

"

. . ..

" " " Kalamia .. . . Lower Burdekin . . The Australian Estates and Mortgage Co. , Melbourne

Pioneer .. . .

" "

.. Pioneer Sugar Mills Ltd. (Messrs. Drysdale Bros.)

Inkerman . . . .

" "

..

Mill Co. Ltd .

" Proserpine . . . . Proserpine .. . .

Farleigh .. . . Mackay . . . . Farleigh E state Sugar Co. Ltd.

Home bush . . . .

"

.. . . Colonial Sugar Refining Co. Ltd ..

Palms .. ..

"

. . . . The Australian Estates and Mortgage Co., Melbourne

Pleystowe .. . .

"

. . .. Pleystowe Central Mill Co. Ltd.

Plane Creek . . . .

"

.. . . Plane Creek Central Mill Co. Ltd.

Marian .. . . . " . . . . Marian Central Mill Co . Ltd.

Race-course .. ..

"

. . . . Race-course Central Sugar Co. Ltd.

Millaquin . . .. Bunda berg . . . . Millaquin Sugar Co. Ltd.

Binger a . . . .

"

. . . . Messrs. Gibson and Howes Ltd.

Fairymead .. . .

"

. . . . Fairymead Sugar Co. Ltd.

Qunaba .. . .

"

. . . . lVIillaquin Sugar Co. Ltd.

Childers .. . . Isis . . . . . . Colonial Sugar Refining Co. Ltd.

Doolbi . . . . ..

"

.. . . . . Millaquin Sugar Co . Ltd.

Isis . . . . . .

"

. . . . . . Isis Central Mill Co. Ltd.

These mills comprise ali" the miils of Queensland, with the exception of a which, _· owing to their situation·, the Commission could not inspect without delay.

X

Frequent opportunities were afforded to the Commission of observing tile work of cultivating and harvesting cane in the -different districts in which evidence was taken, and the Commission also saw at the JVIeringa , Experimental Station, near Cairns, the work of Dr. Illingworth, Ento­ mologist of the Queensland Government, whose researches in connexion with the suppression of sugar pests will be mentioned later. The Commission also visited the State Experimental Farms (Sugar) at Mackay and Bundaberg. ·

The Commission sat again at Brisbane from the 4th to the. 6th August, and visited the ,,, Colonial Sugar Refining Company Ltd.'s Refinery at New Farm. Further sittings at Sydney

(11th to 13th August), at Melbourne 3rd, 5th, 7th, lOth and 28th November, at l\faffra 6th December, and at Melbo-q.rne 15th December, completed the taking of evidence. Throughout thejr work the Commissioners received every assistance from the State Governments of Victoria, New South Wales and Q.ueensland, as well as from local authorities. In particular, the Commissioners are indebted to the Queensland Government for enabling them to overcome the difficulties which would otherwise have arisen as a result of the cessation of all the ordinary shipping services during the seamen's strike.

In all the Commission examined 293 witnesses. The tern1s of the Commission included both Cane Sugar and Beet Sugar. An appreciable delay in the presentation of this Report has been c.aused by the refusal of !'I the Colonial Sugar Refining Company to furnish certain information called for by the Commission.

A special Act was passed by · the Commonwealth Parliament to remove doubts as to the power of the Commission to demand that information, but the. Company maintained its attitude of refusal after the passing of that Act. It is understood that the Government is taking certain action in the matter. As above a Supplementary Report relating to the Colonial Sugar Refining Company's affairs

will be furnished.

INTRODUCTORY.

The main geographical feature of the Australian cane sugar lands is that they constitute a North to South strip of a thousand miles stretching from about 16° South Lat. (Mossman) to 30° South Lat. (Grafton), and is nowhere more than 30 miles in width. It may in forming a mental picture of the relations of the cane areas to coastal lands generally if the following statement is considered:-

Assuming that the coastal strip of 1,000 miles · within which cane is produced averages 20 miles in width (which is approximately correct), and that the cane lands were symmetrically distributed, the proportion of such a ribbon of country actually occupied by sugar cane could be represented by a number of rectangles each 20 miles by 1 mile, and about 71 miles apart. Or, if all the lands under sugar cane in Australia were concentrated in one block they would only

occupy a space 20 miles by a little more than 14 miles, or a square with sides of about 17 miles.

There are no extensive compact areas of rich agricultural land suitable for sugar cultivation on a Huge scale. The various centres of production are separated by long distances. They are necessarily self -contained so far as transport and milling power are concerned, and the industry is conducted under various conditions of soil, rainfall, and temperature which materially affect the method and cost of cultivation. Whilst, for the purposes of successful organization and

economic production, the disadvantages inherent in such conditions are obvious, the sugar industry has nevertheless been of great value in settling a population in many portions of our tropical and sub-tropical lands which otherwise must have remained unoccupied. In the moist coastal regions of the tropics, no other industry is yet in sight which promises profitable employment

on any appreciable scale or permanence to white labour.

Apart from its directly economic value, this industry is exercising an important influence in acclimatizing a large number of white people to tropical conditions of life, and in that respect is rendering valuable service towards future development.

An interesting feature in connexion with this investigation was the confidence expressed by those long resident in the north as to the suitability of the climate for the white race, the only reservation being that a change south or to the highlands is desirable periodically for the women and children.

The chief complaint made was in respect to the unstable character of the industry, which for many years has been the subject of changes of policy on the part of the Federal and State Governments, and to the cost for wages which are in eXce- ss of those in any other

agricultural industry. ·

915

Xl

AREA UNDER SUGAR CANE.

The total area sugar cane in Australia according to the latest figures-those of 1918-19-was 171,100 acres, ·of which 160,534 acres are in Queensland and 10,566 acres in New South Wales. The average for the five years ending 1918- 19 was 17 4,535 acres for the two States combined. ·

. In New South Wales and in the Queensland distriots south of l\r1ackay, there is a gradual displacement of sugar cultivation by other forms of agricultural effort, of which dairying is the most important. This change is taking place, chiefly but not wholly, in districts subject to frost. In New South Wales, on the Tweed, Richmond and Clarence rivers, the movement is much

more marked than in Queensland, but in both States "Yvithin thg sugar areas named, the profitable use of large areas for purposes other than the production of sugar cane may be regarded as completely demonstrated. In some parts of the New South 'Vales rivers districts dairying and/ or fruit productio:q. have wholly displaced cane cultivation.

A representative of the United Cane Growers Association said that "the whole sugar industry is artificial from A to Z." It is artificial in the sense that its very existence in normal times depen ds upon Tariff protection, and in the sense that there seems no hope, within such period as can be foreseen, of its emergence from the state of complete dependence

upon Tariff aid, and of its beco1ning capable of producing sugar in Australia for export at a profit. It is, however, a inqustry in the sense that there are considerable areas in the tropical of Queensland which are specially suitable for the growth of sugar cane, and in

.which, up to the present, no other use of the land appears to afford a prospect of permanent and profitable settlement. While the " wet belt" in Queensland is particularly suitable for the prcduction of cane, other areas with comparatively small rainfall have for many years been used in its production. In some of these districts, particularly the Lower Burdekin, the existence of

laFge supplies of underground water at small depths makes irrigation possible, an d this, if it could be generally applied, would probably give a security and regularity of crop. In the Lower Burdekin district the Government is carrying out an irrigation scheme, and, in conjunction, a scheme for the generation and distribution o± electric current. If that scheme fulfils the hcpes

of its proj ectors the district will be in a very favorable positiop.. Undergrcund water is fcund near Bundaberg also, and in the past considerable expenditure has been incurrE-d for pumping plants, &c., but the working costs are said to be too great at existing wages rates. This is a difficulty which may be felt in the Lower Burdekin.

CAPITAL INVESTED IN THE SUGAR INDUSTRY.

Evidence as to the value of cane lands cleared and ready for cultivation varied very much in different districts, and witnesses invariably preferred to quote an average price for farms with improvements and plant. It is in this form also that average estimates for the whole of the cane lands of the State were submitted by official witnesses in Queensland who in the course of their

duties make periodical visits to all the sugar districts. The estimate of the General Manager, Bureau of Central Sugar :.Mills, was £30 per acre, and that of the General Superintendent, Bureau of Sugar Experiment Stations, £27 per acre. Examination of all the other oral testimony on the subject, and of a mass of documentary evidence,

has convinced the Commission that no precise estimate can be made, but that the figures for the average value of land, buildings and plant set out on page xviii (£31 15s. per acre) represent as close an approximation as is reasonably possible . . Applying that yalue to the total . acreage under cane, including the New South Wales cane areas, gives a capital value for the Improved lands used as cane. farms of £5,541,486.

:Mr. E. W. Knox, General Manager of the Colonial Sugar Refining Company, said he estimated that in 1913 the average value of improved sugar lands· in was about £17 :per. acre which he thought a fair and reasonable value. Mr. Knox also said that In the Herbert distnct­ the principal district in Queensland in which his company is co!lcerned-farms are selling at

about £35 per acre "when they ought to be selling at £17." He that present con­

ditions were not normal, and that is why he preferred to deal With values as In 1913. The witness thought that even though the cost of production outside Australia be increased there will be surplus supplies in the near future.

CAPITAL INVESTED IN RAW SUGAR MILLS. The General Manager of the Central Sugar :Mills in estimated the value the

raw sugar mills and machinery in t hat State at £4,500,000. pmnted out. that the available statistics give the ca_ pital value as £3,100 ,000, bu,t in his opimon that valUe 1s the aggregate of values ·:which ·have been· considerably· written down. ·

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. , I

Xll

So far as the Central Mills are concerned (which includes all those operated by the Govern­ ment or over which the Government has any control in connexion with advances of Government money not yet paid off), a consulting engineer was appointed about ·fourteen months ago with additional duties as valuator of mill machinery for the Central Cane Prices Board. In the latter capacity he has visited not only the Central Mills, but also all other mills in Queensland. At the date of his evidence, however, his valuations had only been made in respect of about half of the mills, and even those were not fully completed. The basis of the valuation is the pre-war value, not present-day prices, and a deduction is made for obsolescence, if existing . .

It does not appear that the valuer had any specific instructions as to the basis upon which he should proceed, but the inference from his adoption of ,the pre-war standard of value is that in his opinion there will be a reversion to that value or to something approaching it. ·He stated that some of the mills are inefficient in their plant and also in their management.

In New South Wales the only raw sugar mills are owned by the Colonial Sugar Refining Company Limited, and there being no cane-prices legislation in that State there has also been no valuation of mill machinery on behalf of the Government, nor any inspection by independent · experts outside the company.

The Commonwealth Year Book gives the-value of the New South Wales mills at £524,000. Any exact estimate of the value of the raw sugar mills is impossible with the information at present obtainable. On replacement value ·at the present time the amount. would be much in excess of the sums above stated, but in the opinion of the Commission an amount of about £5,00Q,OOO may be accepted as a reasonably fair estimate of the capital value in both States of the mills as going concerns when allowance is made for partial obsolescence and general depreciation.

· NUMBER OF PERSONS EMPLOYED IN CULTIVATION.

According to the evidence given by a representative of the Australian vVorkers Union, Queensland, the number of persons employed in that State in the sugar industry, apart from mill workers, is as follows :-Growers

Field Hands Cutters Carters, &c.

...

4,400 3,000 6,100 1,000

14,500

In dealing with the figures of field employment, particularly as to cutters, there is consider­ able risk of an over-estimate owing to the fact that during the season many men pass from one employer or from one district to another, and may be recorded more than once. It was stated, however, that the Australian Workers Union exercises great care to avoid such duplication, and that the above estimate given is as accurate as the nature of tb.e case allows, and it agrees with

other evidence on the same subject. The cane cutters for the most part come from other districts, or other States, and do not remain in the cane areas after the close of the cutting season . . It was stated that there is a sufficiency of labour, and this appears to be generally true, at least in respect of cutting cane, but in many districts there was complaint by growers of a

scarcity of first-rate agricultural labourers. About 90 per cent. of the white men in the industry are said to be members of the Australian Workers Union. Some complaint was made on behalf of the Australian Workers Union that coloured aliens are increasing, and there appears to be some ground for the belief that the high rates paid in recent

years for cutting cane and for some of the agricultural operations in connexion with cane have had the effect of drawing some coloured men from other occupations into the sugar industry wherever they see an opportunity of obtaining employment. Coloured aliens desiring to work in the sugar industry in Queensland must first obtain a permit. from the Agricultural Department, and a list was handed in to the Commission showing that such permits have been issued to 1,550 persons. The evidence showed that coloured men are more numerous in the Northern sugar districts than in other places ; indeed, in the sugar district of which Cairns is the shipping port, it was asserted that there are sufficient coloured men to perform the whole cane harvesting if they could legally be so

Under the award made by Mr. Justice McCawley, Queensland, on the 27th June_, 1919, it is, however, provided that no coloured labour shall be employed or continued in employment at cane ·cutting, :while-in.-connexion.with the cultivation of sugar cane coloured labour on wp!ch:has heen .. ploughed,:oir any ·farm·· on which more than 75 acres ·are planted with There is a proviso that nothing in the award shall prevent. the-owner of a sugar-cane farm from.·

I . 917

Xlll

employing his own countrymen on such farm. The effect of the award in this respect· is that, except as to the work of clearing, coloured labour can only be employed on farms having less than 75 acres under cane, and cannot be used at all in cane cutting except on farms owned by coloured persons of the same nationality as the coloured labourers to be employed.

The Government Statistician, New South Wales, is unable to supply particulars of the number of growers at present employed in cultivation of cane in New South \Vales, but taken on the proportion of area as compared with Queensland the figures for New South Wales WOl.lld be:- . ·

Growers 290

Field Hands 198

Cutters 402

Carters, &c. . 66

Taking the two States (Queensland and New South Wales) together, the total number of persons employed in the sugar industry apart from mill workers, may be t aken as about 15,400. It has to be remembered, however, that a considerable proportion-perhaps half of this nun1ber­ are only employed in connexion with sugar during five or six months of t he year.

NUMBER OF PERSONS EMPLOYED IN RAW-SUGAR MILLS AND REFINERIES. In· round figures the total number of persons empl

number must seek other employment. Iri the refineries the work is very much more constant, and the numbers may be taken as appr _..oxin1ately correct for the whole year.

WAGES.

The question of wages, hours of labour, accommodation, food, &c., for sugar-field workers and sugar-mill workers was the subject of an investigation by Mr. Justice McCawley, of Queensland, during the second quarter of 1919, and an award, dated 27th June, 1919, was promulgated.* The minimum wages to be paid to sugar-field workers were fixed as follows:-

(a) Field ·workers over 18 years of age (b) Youths from 14 to 16 years of age Youths from 16 to 18 years of age Canecutters (day labour) ..

N o. l District. No. 2 District. N o. 3 District .

P er H our. P er H our. Per Hour.

s. d.

1 8!

0 11 1 1 .

2 2 "

s. d.

1 7

0 9i

1 0

2 0

s. d.

1 6

0 9!

0 11 1 11!

In this a ward " means an employee cutting cane for the purpose of manufacture into sugar. Per Week:. Per Week. Per Week.

£ s. d. £ s. d. £ s. d.

Field workers (over 18 years of age) engaged by the week 3 18 0 3 12 0 3 8 0

Provided that unless an employee is continued in employment for not less than four consecutive weeks, he shall be paid not less than the hourly rates hereinbefore prescribed. The No. 1 Sugar District is the most northerly, including all that portion of the State of Queensland north of 20° south latitude. This includes Mossman, Cairns, Babinda, Innisfail, Ingham and Ayr. ·

The No: 2 District includes all that portion of the State of Queensland bet ween the Tropic of Capricorn (latitude of Rockhampton) and 20° south latitude. This includes Proserpine and Mackay . . No. 3 District includes all that portion of the State of Queensland south of the Tropic of

Capricorn. This includes Bundaberg, Childers, Maryborough, Moreton, and the small areas sout h of Brisbane. The award provides that the ordinary working hours, both for wages men and piece-workers, including canecutters, shall not exceed 48 in any week, and shall not exceed eight hours and forty n1inutes in any one day. Although an hourly rate for day labour in cane cutting is fixed by the a ward, this is only of importance in ·relation to the cutting of inferior or damaged cane, as the operation of

.

* It is the in the industry to allude to the awards by the names of the Justices who have made t hem. The awards have heen: in 1914 the McNaughton award; in 1916 t he Di ckson award ; a.nd in HH7 a nd 191 9 t he McCawley awards.

XIV

acre. Where the tonnage is 15 tons to the acre and over, which is the case for much the greater part of the whole area, the rate is 7s. per ton in No. 1 District, ·diminishing by 3d. per ton successively in No. 2 and No. 3 Districts, and the range is from the rate of 7s. tor a crop of 15 tons to the acre and over to 15s. for a crop cutting only 5 to 6 tons to the acre, the gradations

being fairly regular nearly all through the list until the last two lines are reached, where the difference between a crop of 6 to 7 tons to the acre is fixed at 12s. per ton, and 5 ·to 6 tons to the acre at 15s., is 3s. per ton. The other variations are-in three cases 3d. and in

four cases 6d. The average daily tonnage cut by a competent cutter throughout the season is variously estimated at from 3 tons to more than double that quantity. It may, perhaps, be assumed that 4 tons per day is a reasonable rate of cutting for an efficient man, though the Australian Workers .

Union sought before the Arbitration Court to justify an increase of nearly 100 per cent. on existing contract rates for cutting by stating that a cutter should cut 2f tons per day. The Judge, however, rej ected this as a fair basis for computation.

On the award contract rates, 28s. per day would be earned · by a worker cutting 4 tons of cane. The evidence shows, however, that the award contract rates are frequently increased under pressure, and it was the opinion of some witnesses that the average earning on contract cutting would be not less than 30s. per working day.

To meet the cost of the cutting of specially damaged crops, which are difficult to deal with under the contract system, a rate varying from 1s. ll!d. per hour in the most southerly district to 2s. 2d. per hour in the most northerly district has been fixed by the a ward.

It is clear from frequent references in t he judgments and awards that the Arbitration Court continually bears in mind the seasonal character.of much of the work in the sugar industry and makes full allowance for that factor.

It seems quite clear that present rates of wages paid by growers and the contract rates for cane cutting are sufficiently and ·even strongly attractive to labour. There is, of course, a point below which wages must not sink if the industry is to be continuEd, and on the other hand production would be endangered if wages rise beyond the point which leaves a reasonable margin of profit for the grower.

LOCAL DISPUTES.

Much complaint was made by cane-gro·wing witnesses, both in New South Wales and Queensland, as to the difficulties arising out of minor disputes with canecutters. The Queens­ land Arbitration Act confers certain powers upon industrial magistrates, and Mr. Justice McCawley, speaking in connexion with his Award of 27th June, 1919, said he found during the last year that the industrial magistrates, who were usually men of sound judgment, ha.d been of the utmost service settling disputes. Near each important sugar district an industrial magistrate is located, and he can proceed rapidly to the scene of the dispute and call the parties together. He has no power to call a compulsory conference, but representatives of both sides are usually prepared to attend voluntarily. Recognising that there are many matters arising out of the canecutters agreement requiring more rapid adjustment than can be effected by

an industrial magistrate, the Award of 27th June, 1919, confers powers of adjudication upon the Cane Inspector in most of the cases likely to arise. The Judge suggested that in addition these express provisions of the Award should be further supplemented by something in the nature of organized committees of employers and workers who could select representatives with power to confer and make authoritative decisions.

NON-BRITISH LABOUR.

Reference has already been made to complaints as to use of coloured labour, and it was suggested in evidence that the number of coloured persons tends to increase by the illicit introduction of coloured aliens. The evidence on this point, however, and a consideration of the conditions under which it would be possible to smuggle coloured aliens, and of the existing precautions against such introduction, practically discredit the suggestion.

Strong representations were made by a representative of the Australian Workers Union as to the extent to which foreigners, particularly Italians, are "penetrating" the sugar industry as growers, and obtaining a substantial footing. The Herbert River district (Ingham and Halifax) is said to contain about 90 per cent. of foreigners, mostly Italians. As to the Herbert River, the

General Manager of the Colonial Sugar Refining Company said that a great many farms in that district have changed hands, and that the purchasers are mostly Italians who buy the farms jointly, work them themselves, and trade them off as soon as they can. . The witness also expressed the opinion that .these Italians do not buy as a permanency to make a home, but remain for a few years and then frequently go out of the country altogether.

919

XV

The figures put in for Victoria and Macknade mills on the Herbert River show that · the number of British cutters employed in HH5 was 60 , as against 108 in 1918, while the non-British numbered 358 in 1915, and 332 in 1918. · It was alleged that foreigners practically evade the arbitration awards, and have a standard of living below that of the Australian. The suggestion that awards are systematically evaded by Italians and others was made the subject of careful inquiry, with the result that in the opinion of the Commission the charge is certainly not proven,

and there is good reason for believing that no systematic evasion occurs. There are, however, a few breaches of the award which come under notice and are the subject of prosecutions, usually follQwed by small fines. Witnesses invariably stated that the Italians in the sugar industry are industrious and law-abiding citizens.

TROPICAL DISEASES.

· The question of the adequate development of tropical Australia by a · white population and the permanent prosperity of the sugar industry in the northern coastal areas of Queensland is conditioned by the degree of success attained in the efforts now being made to cope with prevalent tropical diseases. It may be said at once that if these efforts are supported by the general community there appears to be every hope of their success.

The greatest menace is the hookworm disease. The effect of this disease is not so much to cause mortality as to induce a chronic condition of low development and imperfect health. The mental power of children is dwarfed by it just as their physical power is dwarfed, and in acute • cases it completely arrests sexual development.

In 1916, Dr. Heiser-representing the International Health Board, which is created and maintained by the Rockefeller Foundation-visited Australia, and, as a result ..of his preliminary inquiries, he made an offer on behalf of the International Health Board to make a survey of hookworm distribution in Australia and its dependencies.

This work was first begun in Papua in June, 1917, and a survey made, totalling 846 natives, of whom 65 per cent. showed infection. In 1918, Dr. Waite-who was carrying out the work on behalf of the International Health Board-commenced his investigation in Queensland. The expense of this investigation was borne principally by the International Health Board, and

subsidized by the Queensland Government to the extent of £1,500.

The result of this investigation was the demonstration that of 15,000 persons examined in North Queensland, that is between Townsville and Cooktown, 20 per cent. of the total white people examined were infected with hookworm, and the aboriginals showed an infection of between 75 and 95 per cent. .

An arrangement has recently been made for an eradication campaign having a five years' programme, the expenditure being shared between the Commonwealth Government, the State Government of Queensland, and the International Health Board. The is estimated to be £20,000 annually. The annual contributions of the Commonwealth Government

and of the State Government rise from £6,000 each in the first year to £8,000each in the fifth year, while that of . the International Health Board, which is £8,000 for the first year, diminishes progressively to £4,000 in the fifth year. Dr. Waite-returned to the United States in 1919, and his place as principal representative of the International Health Board in Australia has been taken by Dr. Sawyer.

The direction of the campaign is in the hands of a central committee in Melbourne, and a local committee in Queensland, on which all the interests are represented . . It is not intended that the operations shall be limited to Queensland, as it is considered they must extend more widely throughout the Commonwealth for the purpose of survey and for eradication as necessity is shown.

The indirect advantages of this work, in assisting in t he control of dysentery and other intestinal diseases, are expected to be very considerable. ·

Dr. S. M. Lambert, of the Rockefeller Foun

considers that the treatment and cure of the blacks is an absolute essential to the success of the campaign. Districts having a very high rainfall are particularly subject to the disease, whereas in a dry belt the infection is said to be a negligible fa ctor. Dr. Lambert said, however, that hookworm

is easily diagnosed, easily cured, and easily eradicated, the main measures being the education of.the people to the use of proper sanitary lavatories: " What is needed as against the existing conditions is fly-proof and vermin-proof privies, because if you do not have such type privies, rats,

XVI

chickens, and even pigs, carry the stuft all over the ground, and spread the eggs in that way that they develop into little worn:ts and at!ect the individual. There should also be . a campaign of education, because soil pollution in the north is so common-it is in all new countries-that is to say, men, women, and children go out and deposit their nightsoil anywhere on the . ground, without realizing the harm they are doing themselves and others. Having been introduced in the soil it must find some home in animal life, and man is the host. Animals other than. man are also subject to hookworm, but not of the kind that attacks the human race. They have their own hookworm."

In Dr. Lambert's opinion, hookworm may be carried· by sugar workers and shearers into southern areas, and would probably find suitable developing conditions in coal and other mines; "Mines are notoriously places where hookworm finds lodgment, and where they do the greatest economic damage, because of the soil pollution and the surroundings having 72 per cent. of moisture in' the shade'" (an essential in the development of hookworm disease). It is apparent, therefore,

that while it is of the greatest importance that everything possible should be done to cure existing patients and eradicate the disease from the North, in the absence of. proper care it might easily become a serious injury within large portions of the Commonwealth. · · ·

Dr. Breinl, Director of the Australian Institute of Tropical Medicine,' Townsville, said he agrees with Dr. Lambert as to the menace of hookworm, especially to the sugar industry . . Another disease less easily amenable to treatment than hookworm, · but fortunately much less common, being almost confined to a few districts, is sprue-an inflammation of the intestinal tract. This .. cJisease is endemic in India, Java, and the East in general, though in Australia observations tend

to show it is contracted by means of infected drinking water, and that it is only known to attack white people . . Brei:nl said that preventive measures, such as those of. value in cases of hook­ viz., of drinking water and proper. sanitary precautions, would probably go .far

towards its eradication. . · · · . . .

Sprue is an undoubted menace in the few districts to· which it is practically confined, but Dr. Breinl does not think it likely to spread into sou.thern areas, as it requires special conditions peculiar to -the tropics, so that in early cases persons from sprue would have a good chance if they were to move south. ·Areturn .to_the original district invariably causes a relapse.

While the of Tow'nsville i.s at present particularly affected by some .of the tropical diseases, Dr. Breinl pointed out that there is practically no typhoid in that area, and he said also that the general mortality rate is l<;>wer than elsewhere.

INTEMPERANCE.

Dr. Breinl, whose evidence has been quoted in connexion with Tropical Diseases, said that he has .seen a great deal of intemperance in these northern parts, and regards intemperance as the greatest menace to North Queensland. He said: "Alcohol does more harm than all other put together, including tropical diseases. The condition as regards intemperance is, if

any.thing, on the increase. I base that statement on the ruling prices of public houses; the prices have been going up steadily for the last six or seven years. I am sure it reduces the resisting power _ against disease, and considerably shortens the life of the individual. I have tl'avelled a good deal in various countries, and have never seen any country in which there were so many visible evidences of intoxication as in these northern towns ; I have never seen so much open drunkenness."

Another witness, Dr. Young, agreed with Dr. Breinl's observation as to the effect of alcoholism, but as to the more open drinking in the North of Australia, said :--'-" One must always remember that here there is more life carried on outside." Dr. Young also said that in his opi:nlon the hours of work in tropical Queensland are entirely wrong. Work should start earlier and should be suspended from a bout _ 12 o'clock noon until 3 in the afternoon. The witness also suggested that conditions· of housing .and clothing need considerable improvement . .

The housing difficulty in the tropical areas is indeed a very real difficulty, and one which cannot be met without a considerable expenditure. The periodical recurrence of cyclones renders it impracticable to use very light forms ot and, .according to Dr. Young, architects in Townsville find that there is a great reluctance on the part of private owners to allow the ere9tion of homes upon any but the ·most conventional lines. Even :where expenditure would not be increased, people generally prefer ·customary but unsuitable designs. Reform in. this direction can, it appears, only take place gradually, and as the result of earnest and continued to

educate the inhabitants on the subject. It is not prin1arily a question of providing extra comfort or luxury, but one of insuring houses of a type which will conduce to the health of the population. Dr. Ernest Humphry, Government Medical Officer at Townsville, who ]las been resident in Townsville for 3lr years, ·and is engaged in general practice, thought there has been a . decided decrease in intemperance during the la.st 30 years, that it is still a formidable menace to white settlement. · · ·

921

xvn

COST OF PRODUCTION.

The cult ivation of sugar cane differs fr01n that of n1ost other crops inas1nuch as fr on1 one planting t wo , three, or n1ore successive cuttings or harvestings are obtained. The period between planting and cutting varies from about t welve 1nonths in the north of Queensland to two years in the north of New South Wales . After the first cutting, there are t wo further annual crops known

as first and second ratoons, and not infrequently further _ratoon crops are cut . As a rule, the fi rst, or plant crop is t he most prolific, and the yield decreases each year until t he " stools " are ploughed out. The cost of cult ivation and the relat ion of that cost to the financial returns, t here­ fore, vary each year during t he period covered by one series of crops, and it is desirable that an average of successive costs and receipts for a period of at least fo ur years should be obtained in

order to arrive at definite conclusions. Apart from t he above reasons, the period mentioned would also probably cover a fair average of seasonal condit ions and show their influence on t he annual yields. '

Under the Queensland Regulation of Sugar Cane Prices A ct 1915-17, a Local Board, or t he Central Board, when making an award fixing the price of sugar cane t o be paid by millers to growers supplying same " may take into consideration t he cost of production of sugar cane," and the regulations under the Act provide that every cane grower shall" furnish annually to the

Central Board a declared return in r espect to the last preceding crushing season, disclosing his liabihties, cost of cultivation, harvest ing, transport , and all other expenses, t ogether with

particulars of receipts from sale of cane, and all other income derived from his occupat ion as a cane grower. In t he year 1916, forms showinP: In detail t he particulars desired were forwarded to each grower to be filled in and returned, but notwithstanding that failure t o comply with the regulations Involved liability to a penalty not exceeding £100, there was not only little response, but the data collected were not considered sufficient ly reliable t o be of practical value. Of 987

growers supplying cane to four of the mills in the Mackay di strict only 25 furnished stat ements of cost of production. Apart from t he inability of some farmers to fill in t hese returns, and the natural distast e of others t o engage ]p., a considerable volume of clerical work, it was feared by many t hat any such information, if supplied, w9uld be use d to thejr detriment. The regulations,

were, however, not enforced.

. I n 1919, t he Central Cane Pdces Board sent its Secretary, who is also a consult ing

Inen1ber of the Board, to collect the desired 'infonnat ion. He arranged wit h the cane growers' r epresentative on each Local Cane Prices Board t o get 10 per cent . of the growers in each dist rict to furnish statements of cost of production and other particulars disclosing their net returns. A number of statements were furnished under this arrangen1ent, but t he particulars rel2oted only

to the year 1918, which was an abnormal year. It was marked by the most destructive cyclone on record in certain of the sugar fields, and by floods, both of which destroyed large quant it ies of cane in several dist ricts, ent ailing heavy losses .on t he farmers. The Secretary stated in evidence-

I t would be correct to take the view that those returns did not represent the normal condition of things, but it was the only informat ion I could obtain. If tt were the normal condition, they (the farmers) would be ab.-olutely bankrupt. . . . . . I do not think it possible to obtain information of the cost of production and condition

of the farmers in the past in ordinary normal years.

F or nearly four years the Central Cane Prices Board has endeavoured to ascertain t he cost of production in connexion wit h each mill ing district. From the evidence of the Secretary quoted above, the Board's efforts in that regard do not appear to have 1net with n1uch success . So far as the Commission is a-ware} there is no omoial record, either in regard to each district or the

whole industry, of the average cost of production. Few farmers are in t he habit of keeping records in any usefu l q.etail of their cost s of cult ivation, and even when that is attempted there is considerable variation in the method, and much confusion as to what really constitutes cost of production. The cost of producing a ton of cane obviously differs ·according to the skill

of the farmer, the qualit y of the soil, the extent and physical character of the area, the rainfall, &c. The distance from t he mill and the facilities for carriage, &c ., have also t o be considered. Most of t hese factors will be found to vary in a single dist rict .

Apart from the large number of £arrners who do not keep any account of their transac­ t ions, there appeared to be a gener 1 disinclination on the part of those who do keep account s to furnish statement s of. actual receipts and expenditure. This, it was suggested, was due to the fear that if any margin of profit was sho:wn above bare cost of production, it would

encourage further claims on the part of empl yees for increased -v ages . . A lirnited num.ber of individual returns were received which purported t o repres nt actual cost. and receipts. There wcr also iurnished a umber of estin1at . of what 'Nas conside ·ed th ost of production. It. is rgn1arkable that the average of these data indicates ·hat the sugar-farming industry is

F.5618.-2

xviii

carried on at a loss, but an examination of the statements submitted clearly dem·onstrates that with a few (1) The capital value is greatly inflated. (2) The costs represent efficient rather than the actual average cultivation.

(3) .. The receipts represent returns from a crop of average and not of efficient cultivation. ( 4) The average price receive0- per ton of cane is understated. · (5) An unfavorable and not an average year is taken for the purpose of example. · Further, at the time of taking evidence, claims for increased wages for employees in the sugar fields were before the Arbitration Court. If. these increased wages had been granted, the costs of production would have been increased . . Excepting in certain minor respects, the application for increased wages was .not successful. The unsatisfactory character of the information supplied to the Commission has added very greatly to the difficulty in arriving at a definite opinion as to the average return derived from the production ?f sugar cane.

In responding to the invitation of the Commission, it was perhaps only natural that those farmers. _ who were labouring under adverse conditions should predominate in tendering evidence, and in the districts it was noticeable that many of the farmers who apparently and

reputedly were doing well stated that their records were destroyed in the cyclone of 1918, the destructive energy of which seems to have been specially manifested in obliterating evidence of that character. ·

After :making for obvious discrepancies in much of the information supplied, the Commission is of opinion that the following figures represent the approximate value of the land and improvements :- ·

VALUE OF LAND AND IMPROVEMENTS.

The acreage here taken is the average of five years (1914-15 to 1918-19).

Productive acres (harvested) 105,417-60·40 per cent.

Non-productive acres 69,118-39·60 per cent.

Land-17 4,535 acres, at per acre Buildings, Plant, and Implen1ents

------ 174,535 £20 0 0

11 15 0

£3,490,700 2,050,786

£31 15 0 £5,541,486

These values are probably somewhat in excess of the actual values of existing.:assets, but it is considered they represent what is necessary for expenditure for land and equipment on an average sugar farm. '

In every district visited the Commission obtained from local organizations ·or from individual growers (including sugar companies which grow cane) statements as to the cost of_ production either in the form

It is not practicable, in attempting to determine the costs of production, to distinguish between the inefficient and the efficient farmer, or between lands or districts suitable or unsuitable for the cultivation of sugar cane. The weighted a:verage price actually paid by the mills per ton of cane for the years 1917 and 1918_, covering a total of 4,659,165 tons, was 6!d. per ton, and of this it is considered, after deduction for burnt cane, the farmers received an average of about £1 12s. per ton. Whilst this was the average price paid for the years n1entioned, the prices paid by different 1nills varied considerably. The following is a comparison of the prices paid on an average over the two seasons 1917 and 1918 by the various groups of mills- . . .

C.S.R. C01npany's .Mills 1,339,511 tons-average £1 14s. 7!d. Other Proprietary Mills 1,783,144 tons-average £1 12s. Ofd.

Central Mills other than Governn1ent 791,457 tons-average £1 12s. 4!d. Govern1nent Central Mills . . 637,591 tons-average £1 lOs. 7!d. Whole industry 4,659,165 tons-average £1 12s. 6t d.

A few of the minor niills responsible for an inappreciable tonnage are not included in the above figures (except under "'iVhole Industry"). An outstanding feature in the above figures is the

XIX

comparatively higli price paid to the farmers by the Colonial Sugar _Refining Co1npany. This Company has nine n1ills, and cannot be said, on an average, to be more favorably situated than is the case with the other mills. It may be added that a few of t he proprietary rnills other than those of the C:S.R. Company,

together with a fmy of t he central mills not under Government control, have also paid to the farmers very satisfa ctory prices per ton of cane. Whilst low prices may be due occasionally to damage . by weather and other causes reducing the sugar co ntents of the cane, or by partjal crop failures, which involve proportionate increase of milling cost, as a general rule it may be concluded that the efficiency and equipment of each mill constitute one of the important fa c_ tors

affecting the price of cane. Another important fa ctor is the type of cane grown considered in relation to soil and climat e. (See i nstan ces on page xxxvi.) The small sum paid per ton of cane by the Government Central Mills is partly due to the fact that these mills include some which have failed owing to inefficient management and other

causes, with the result that the Governn1ent has been con1pelled to assume control. reason is that one of the group, viz., South Johnstone lVIill is overloaded with capital charges, and, under present conditions, cannot possibly pay reasonable prices to the farmers. Again, Babinda l\tlill has not yet reached a state of satisfactory efficiency. These t wo n1ills are the largest and most rnodern in Australia, and under more favorable conditions should have

contributed materially t o an increase in the average price paid per t on of cane. On the other hand, there are a nun1ber of central mills the shareholders of which are gradually repaying their debts to the Governn1ent of Queensland, and thus acquiring an ownership in the property. vVhil st the redemption payments continue, they naturally lessen the price which otherwise could be paid for cane, but the farmers benefit in another way, because they are acquiring,a valuable property. The following sums, with addition of interest, were paid on this

account for. the past three years:-Interest

1915-16.

£10,064 20,207

£30,271

1916-17.

£19,292 19,769

£39,061

1917-18.

£40,069 23,175

£63,244

If the amount of the payments on account of redemption money made in 1917- 18 towards purchase of the rnills had been available for the purchase of cane, it would have increased the price per t on by 1 Otd. The particular ·mills concerned crushed 537,922 tons in the seasons 1917-1918. On t his t otal

they paid on an average £112s. 2d. per ton. They could have paid £1 13s. Ot d. if the -reden1ption n1oney had been available as indicated above.

CULTIVATION- EFFICIENCY.

It was generally ad1nitt ed in evidence t hat there is a great deal to be desired in respect to efficiency in cultivation. There is, however, something to be said in extenuation of deficiencies of this character. There are many farmers with little, if any, capital at t heir disposal. · I n not a few cases t heir experience is limited. Some lack initiative or t he courage or energy to depart from

the methods to which they have been long accuston1ed. The increasing cost of labour, fanning implements, 1nanures, and commodities generally has tq some extent at least exereised a deterrent influence, and although there are associations of cane growers and other si1nilar organizations, these render little, if any, assistance by co-operative effort in insuring the purchase of manures

and supplies under more favorable conditions. The result is that but little n1anure is used, and the farmer does not reap the advantages which should be within his reach, and which would place him in a bet ter posit ion to meet the extra costs of production. During t he war period the price of manures has been ahnost prohibitive, but it is highly probable a wise system of

organization would have insured supplies at n1uch reduced prices.

The average production of mi,ne aJnd sugar per acre during recent years was-Average over ten ye1r 19')9- 10-1918-19.

Average over five years 1914- 15-1918-19.

Cane per acre harvested . . 18 · 03 tons 18 ·59 tons

Sugar per acre 2 · 08 tons 2 ·14 tons

I t was generally admitted by expert official witnesses, and by fa rmers, t hat by better methods of cult i ation and by the use of suitable 1nanur s he average yield might be largely increased. · \¥hilst a comparison with other coun ries of the average yield of cane and sugar per acre n1ay be misleading owing to he different methods of cul ivation, t he variations in

clin1ate, and the length of time necessary for the ripening of the cane, thee idence generally points to the fact that our average production, t hough slowly improving, is not atisf.a ctory. This applies generally throughout the whole indu +ry.

•'·

A of lack of tJrganizatioh is the shortage in the supply of lime, which

on most soils Is IndiSpensable to.good Owing t o thB leaching effects of a heavy rainfall, and als? to what was termed In "the destructive methods of cultivation," the greater proportion 9f our s:ugar la:p_ds are deficient in this valuable soil constituent. l\1r. J. C. Brunnich, F.I.O., Qhemist to the GDverhment; in .The Queensland Agricultural

J ourna:l ?f April; 1919, . attention to the fact " lime. is. an

food, . Intimately connected. In tne growth of the _ plant the building up of _ protmns and car?ohydrates, of organic acids.'" He also quotes Sir A. D. Hall, an en1inent

agncultural chemist, who states-Of all. the soil making f·qr fertility, I ·shoul'd put lime t he first ; upon its presence depend both the

processes whiCh produce food in quaJ?.tities a4equate for crop at a high level, and those whi:ch

naturally_ regenerate. _ and the of the It is, moreover, the factor which is most easily under

the control of the agrl.culturtst.

. It is generally cbitceded t hat th-e application vf lime to our sugar land's would increase the average yield bf cane, and that without it the exhttUstiort br land f'or profitable culture is !lllich hastened. A!l investigation by BureaD: of Sugar Stati011s in Queensland In 1917-:-18 disdos'ed in part!Clilars rec-eived !rom 967 that these " eighty­

tw? farmers have used hnre, 230 gr:eBh manuring, 25'6 have ttsed It is

pointed ·out by the 1Q-ettet:;t_ l Sup:erinterrd'ent of the 'Que·enshtnd Sugar Stations in his report of 22nd OctobBr, 1918, that-AcJ.dity ih our ·dine fi elds st ill veiy marked, ariel ll.n:i'e is of the utmost importance. There ·appears to be an impression exisbng in some qu·arters that th·e Bureau does not favour the use of puhrerized lime. This is alt-o.geth'et erroneous , as th·e extension ·of the use 'of lime in any form that wiU correct -a:cidity :an:d give the grower all the hen<:diti that U3ually accrue from its use would be welc'o1ned. ·

Th'e industry is suffering .generally from the want of this necess-ary element, t:l}.e cost of which has been unreasonably high. This appears all the -m0re remarkable, -seeing that the coral islands adjacent to the 'cUast and t he many li1ne deposits on the main land afford abundant sources of It was ass'ert:ed ih evidence that a ·s·erious difficulty arose from the high cost of carriage and pr·oper crushing In contt·a·st to the position in Queensland . ., it was pointed out by Mr. Bruhnich that in -crushed was sold at the quarries at 12s. 6d. per ton.

At Illinois, U.S .A., it was not iohg since ·sold, inclu.Sive of railway charges, at 8s. per ·ton, " and, although t he cost is so low, nrany farmers prefer ·crushing their own limestone, and five firms ar'e sellihg Inachihes suitao!e for t l&is putpos1e-." A recent developineht by pti\tate enterprise is t lre supply of gro'tlnd coral li rnrestone containing ah appreci'a ble p e:rc·entage ·o! aci'd. ·This is 'obtained hom an island in the vicinity oi Bowen. The ptic-e quoted is £2 lOs . p-er ton, whi-ch repr'esJents a ·considBr-able reducti'0n on former prices.

Properly organized effort should make available an abundant supply of lime at reasonable cost to the farn1er. This, together with the and the inspiring force

of practical and instruction, ·would place the farmer in a better financial position, and substantially b-enefit the whole industry·. -

In regard t-o tropical soils ·and their cultivation, the remarks of -Professor J. B. at a meeting of the Royal Agricultural .Society of Demel'ara, on 17th April, 1918, have been frequently quoted, 1

Are singulady appli

the rproduc'tion of widely-spreading areas of hign alluvial and fluviatile plains. Such were the front lands and grea't areas of the lower river beds of the Colony. . . . . . . Fie was_ 'satisfi ed fr

connexion with tropical agficu1t1rre, ·t h'at p er mi:men't ·cultiva'bh n in t-he tropics 'i"equired a highe'r deg'l.'ee (of sikill and 'ino're 'persistent tha1'1 in t en1pera·t e and. sub-tropical 'lalncls. _

This conchrsion applies t·o ·our l-and's, ·excepting the li:rttt ited river front ages \vhich ate favoured by periodical flooding a'rrd depos1't. A feature of importai1ce t o o'ut agricuiti.lra1 econo:m.y is the increasing experr-tation of fertilizers. Whilst on the •one hand ,a·re being ma-de f.or the

of local prodttction and manufactures, such products as fertilizers, t he use of which will increase prima·ry pr oduction, aid settlement, and thus increase the home market for our locally­ manufactured ·art:i:des, are exported in iarge quant ities. One 0f the .most valuable of fertilizers for tihe ·cultivation of sugar ·cane is sulphate of .ammonia . . In Aust raJia Jarge quantities '3Jte ;p- oduced as by-products of the Exports this increased from cwt.

ih 1910 to i96,:954 1cwt. in _ Qf the latter quantity, no t han 94,540 cwt. were Java, which :in the period l9i0- 18 _ h-as consumed 321,424 C'Y'\rt. of sulphate of -a1nmbhla

:rhanu.[acture

fro¥n an average of £13 5s. 8d. ton the £35 5d . . per ton 1,n 1918- 19.

These are the declared export values. From I910 to 1917- 18 Inclusive, a total of 912,706 cwt., valued at £1,014,098, was exported from Australia.

923 •i

XXI

. If sulphate. of amm.opia is in sq great a demand in other countries as a fertilizer for sug&r lands, notwithstanding the grefl,tly price, it appears remarkable t hat its use in Australia is diminishing. The Commission is not a ware t hat it is of less value for the purpose of increasing the production of our own sugar and t he neglect of its greater use further emphasizes the

possibilities ·of increased yields by 1n ore enterprising methods . . Dealing wit h t he u se of fertilizers in sugar-cane culture in Louisiana, an expert st at es t4e nLJ..mber of F acts A baut Sugar, dated 7t h June, 1919 :- · With the desire to recoup the losses of the previous year by putting every available acre into cane, even t hough the land r:p.ight be in a low state of fertility, there has been a general disregard of the principles of good farming. . . . Planters are, ho wever? beginning to see tb.at they can raise as many t ons of on one.-half their plantations as t hey h ft.ve beep. producing o:u t wo -thirds of t heir land; a:jld they can do this wit h the expenditure of less labour, seed, fertilizer, and capital at a lower cost per t on. These· are equally applie;able to Australia. The whole C01n1nonwealt h is interest ed in the economic developn1ent of its primary as 'well as other industries, and anything which 'vill tend t o increase the average yield and decrease cast of production is worthy of special effort. INCREASING THE AREA UNDER CULTIVATION. The sugar industry in Australia is subj ect to eonsiderable variations in t he annual yields. ·This is illustrated by the following figures :- · 19l2- 13 1913- 14 1914-15 1915- 16 • t OF RA '\¥ 129,877 tqns 265,029 tons 245,876 tons 159,640 t ons SUGAR. 1916-17 1917-18 1918-19 1919-20 193,037 tons 327,589 tons 202,112 tons 166,000 tons The the tons. of cane and sugar per acre during the above period, were :-Year. • '\, c res of cane crushed. Cane per acre. Su gar per a cre • Tons. Tons. 1912-13 . . 84,279 13·468 1·54 19.13- 14 .. 109,001 ... 20· 839 2 ·43 l914-l5 .. 18·455 ' 2 ·155 1915-16 .. 100,489 13·038 1·59 1916- 17 . . 81,137 21·236 2 ·38 1917- 18 .. 114,295 25 ·191 2·865 1918-19 .. 117,139 15 ·1 96 1·725 rrhe 1917- 18 was a phenomenal one, such as may be expected to recur only at very rare intervals. Excluding that the average production of t he six other years specifi ed was nearly 200,000 tons, whilst the average consun1pt ion was 276.308 tons. Mr. Easterby, t he General Superintendent of the Bureau of Sugar Experiment Stations, estimates 50Q,OOO- acres as the maxi:p:mm area on which cane could be grown in Queensland. Of that area about 170,000 acres are now under cane; this leaves 330,000 acres still uncultivated. Of that area, the wit ness said t hat 120,000 acres ·might be classified as good Cs:Lne land, about 100,000 ac:res as medium cane land, and the balance as inferior . Of t he 330,000 acres, he estimated t hat 75,000 acres co-qld be used for purposes ot }fer than the production of sugar cane . Aiter every allowance for those lands which are not ·desirable by reason of dj ffi.culty of access, or are otherwise unsl!-itable for t he purpose of cultivation, t here is far more room for extension of the industry than is likely to be l)ecessary for many years to come. In the season 1918- 1.9, the total area devoted to sugar cultiva,tion was 171,101 . acres, of which 117,139 acres were under cane, and 53,962 aores under fallow. This represented an increase of 15,535 acres devot d to cane cultivation over that of t he year 1912- 13. Eut more important than estimates of acreage are tho e of pro duction of sugar, and on t his p-oint Mr. East erby states ths:Lt in his opinion 500,000 tons per annqn1 is about t:Q.e limit. In t he season of the largest product ion yet recorded (1917) the tonnage produced about 3141000 tons. Assuming t he p,ccuracy of l\1r. Easterby's estimate, it will be seen t hat the maximl!-n1 production po rssible is somewhat more than twice the present average product ion, if the yield per acre of cane and t he relation of t on of cane to one ton of sugar remain a. at present. As to New South Wales, the present pro duction is about 20, 000 fons per annum., · and it seems probable t hat t his quantity will tend t o decrea e rather than to increase. The foreg oing remarks lea d up t o t he question- H ow far and in what manner is it possible to encourage production, and at t he arne time avoid he danger of the los and , eri us ·dislocatio f t he industry whi · h will ·urel re ult fr om ov r roductioJ1 2

xxii

The opening up of new areas, and the promoting of cultivation to an extent that will insure in an average year a supply equal to the Australian demand, might be attended with serious loss to the growers whenever the yield exceeds the local demand. The production of wheat, as well as other cereals, has shown even more remarkable variation in the annual yield, but in regard to these there is always found a more or less profitable out let for surplus production by exportation. •

The great expansion of the Cuban production, the regular prolific output of Java, and the opening up of large areas for cane sugar in the Philippines, Formosa, and other tropical. countries by cheap coloured labour, together with the almost certain resumption of beet production on a pre-war scale in Europe and elsewhere, will probably render the profitable export of Australian sugar, under ordinary trade conditions, quite impracticable. If a surplus occurs during the next year or two advantage might be taken of the present world shortage, which is not likely to last for any extended period.

These conditions n1ust be borne in mind when the question of further expansion of the local industry is under consideration. It is evident, however, from the foregoing figures, that a greater annual output of Australian sugar is most desirable. The net importations of the past seven years averaged nearly 55,000 tons, or about 20 per cent. of our annual consumption, and the natural increase in our population, on the basis ofpresent consumption per head, will necessitate a further supply of over 4,000 tons next year, and for each succeeding year an increasing quantity. It is estimated that in 1924 the consumption of sugar in Australia will be about 314,000 tons.

The Com1nission is of opinion that it is undesirable to encourage additional sugar cultivation or the establishment of new mills south of Mackay. The more temperate regions of southern Queensland, and those of northern New South Wales, are capable of agricultural development in other directions, and so far as-sugar is concerned, the ordinary risks of product jon are accentuated by periodic losses through frost.

On the other hand, so far as agriculture is concerned, the tropical · coastal lands depend almost wholly on the cultivation of sugar cane, and, in the opinion of the Commission, any expansion by the opening up of new country and the construction of mills, which may be found necessary, should be confined to those areas.

It is not practicable to indicate particular localities or areas which are suitable for the further expansion of the industry. It is understood that some survey work has been carried out with that end in view, but in the event of- any impetus being given to further development, it appears necessary that an early and exhaustive investigation should be made in order that only the most suitable and fertile lands be selected.

In many instances the Commission found that the value of sugar lands 'had greatly risen during the last few years, and thart the rise in value often bore little, if any, relationship to their income-producing capacity. This inflation appears to have coincided with the establishment of the Cane Prices Board and the fixing of an increased price for raw sugar.

This suggests in regard to future sales of Government lands for the. purpose of sugar cultivation, there should be a condition that such land must be devoted for a period of years to thepurpose for which it is sold, and that it may only be re-sold subject to that condition and at such price for land as may be approved by the Government, the outgoing owner also to receive full value for improvements. An alternative course is a leasehold for, say, ten years, with similar conditions as to cultivation, and with the option · of purchase at the end of that period after allowance for improvements. This would enable farmers to start under more favorable circumstances than when burdened with a heavy capital charge. If they are successful, they could assume the responsibility of ownership without anxiety, and if they would be in no worse position than under present conditions, provided they receive compensation for their improvements in the event of their land being again leased.

Assuming that future policy will lead to more stability in the industry, and thus to further areas being placed under crop, some restriction, it is considered, should be placed upon the total area made available for that purpose. For the ten years 1909- 10 to 1918- 19 the average total area devoted to cane was 163,130 acres, of which 100,818 acres were harvested, yielding 18 ·03 tons per acre. For a similar period, the average yield of sugar per harvested acre was 2 · 08 tons. Based upon these figures, the necessary to produce on an average of seasons

a sufficient supply to meet the estimated demands of Australia fo r the 1920, about 300,000 tons, would be 145,000 productive acres (plus the normal proportion of fallow land). Compared with the area under sugar in 1918- 19, this would represent an increase of 27,861 productive acres (sayP 28,000), or a total additional area sufficient to directly support some 1,500 persons on 700 40-acre farms, and provide indirect employment for an .additional 3,500 people.

XX Ill

If, however, the statistics for the five years 1914--5 to 1918-9 are taken as the basis of the oalculation above (instead of the ten-year period), the following results appear :-Average total area devoted to cane 17 4,535 acres

Average total area harvested 105,417 acres

Average annp_al cane yield . . 1,959,348 tons

Average yield of cane per acre harvested 18 ·59 tons

Average yield of sugar per acre harvested 2 ·14 tons

On this basis, slightly over 140,000 productive acres (plus fallow land) would produce 300,000 tons of sugar- involving the increase of the area harvested in 1918- 19 by 23,000 acres, the establishment of sorne 1,200 persons on 570 40-acre farms, and the indirect employment of, say, _ 2,800 additional people.

With each year of increased population and consequently greater den1and, the cultivated area and the employn1ent afforded by the industry would be open to expansion; but it must be understood special provision is essential to deal with the recurring surplus of production which will inevitably follow any such expansion as that indicated.

PAYMENT FOR SUGAR CANE.

THE RELATIVE PERCENTAGE SYSTEM.

. A perennial grievance of cane-growers is the impossibility of arranging the cutting so that the crop of each grower shall be cut at the tirne of its maximum density and value, with consequent payment accordingly. The density is low at the beginning of t he season, say, June or · July, gradually increasing until about the end of November, and then declining. No theoretically perfect remedy for this difficulty has been, or in the nature of things is likely to be, discovered ; but a scheme called the Relative Percentage Scheme, which has lately been adopted in sorne of _the mill districts, appears to be the most equitable yet put into operation. This schen1e _ is

described in a pamphlet issued by the Australian Sugar PrGducers' Association Ltd. The joint authors, Dr. J. H. Reed, of Cairns, and Mr . C. H. O'Brien, the Sugar Chemist member of the Central Cane Prices Board, both appeare4 before the Cornmission and explained the seheme. The special feature of the schmne is. that the season is divided into weekly periods, and every grower whose cane delivered in any one week is up to the average quality of all the cane delivered during that week receives the average price, which is the same ior the whole season, and is arrived at by dividing the total amount of money available for the suppliers by the total tonnage of cane delivered. Cane having a sugar content above the average of the week is paid

for at a proportionately higher rate, and cane falling below the standard at a proportionately lower rate. It is claimed for this scheme that the scale of payment offers a sufficient range to give inducement for the growing of the most profitable varieties of cane; while the minin1um of hardship is imposed upon those growers who by reason of unfortur1ate circumstances have cane

of inferior quality at any particular period. Another point urged in favour of the scheme is that it eliminates the inefficiency and loss arising fr om the cutting of srnall crops throughout a lengthy period, which under the system of individual analysis is necessary in order to enable the gro\ver to obtain the average pecuniary result to which the quality of his eane entitles him. Up to the

present the Relative Percentage System has been adopted in several of the northern centres, and witnesses in those centres were unanimous in describing it as completely satisfactory. In some districts it has not yet been considered at all, while in others witnesses appeared to think it rather difficult to understand, a difficulty which is not likely to be pern:anent.

LABOUR-SAVING MACHINERY.

In the cultivation of cane in Australia but little is made of mechanical power. Steam tractors for ploughing are rarely employed, either because farmers are still dubious about their merits or because of the high initial cost. Useful improvements in labour-saving machinery for the cane industry have been made . by Australian inventors. These include cane planters, trash cutters, weeding implements, tractors,

&c., but the chief requirement-an efficient and economical cane harvester- has yet to be perfected. For the operation of planting, ingenious machines for dropping cane segments in the drill and applying fertilizer at the same operation have been placed on the market by Australian inventors, but, although they appear to be efficient and e(l,onomical, they have been adopted to ·a limited extent only. A similar result appears to have fo ll owed other attempts to introduce

labour-saving machinery. It may be borne in mind that the sugar districts in Queensland are isolated from one another, and this renders interchange of knowledge between the catteredfarmers somewhat difficult. Son1e steps, it is hoped, may be taken in the ±uture to jnsure periodical demonstrations in each sugar district of the improvements in Jabour- aving machinery.

' ':

XXIV

Several cane harvesting machines have been attempt ed. The most notable of these is the Lnce hn,rvester, which it is asserted has been attended \Vith some success in level country. This machine strips and t ops as well as cuts the cane, but so far it has not been brought into any general use. It is an American invention . A very commendable attempt to solve the question was made at considerable expense some years ago by a Victorian engineer, who constructed two machines for the purpose. His son, Mr. J ames S. Hurrey, stated in evidence that several years ago one of these machines was tested at Bundaberg, in Queensland. It appears to have performed the work oi cutting satisfactorily, but the t opping of the cane had to be done by hand. One of the chief merits of this machine is an ingenious contrivance in the shape of a slotted shaft which moves up and down, and so enables the machine to cut below the surface no matter what the lay of the ground may be. The carriage of the Hurrey harvester is supported Ly wheels, and in its present form is not adapted for hilly country, but with caterpillar traction it may be that many of the difficulties in that regard might be overcome. The question of mechanical topping has also to be solved.

By the courtesy of the Colonial Sugar Helining Company, the Commission were able to see on the cinema screen the work of the Luce harvester, which is spoken of sometimes as destined to solve the greatest of the difficult ies of the cane gruwer, the efrective and cheap cutting of the crop. Growers Associations are alive to the importance of such an invention, but only actual experiments in Australia would show whether the machine is suitable for some of our sugar districts. The landed cost of a Luce harvester is said to be £2,500. The Luce harvester appears to be the only machine of the kind in practical operation in the field , but although it has been in existence for several years, during which many improvements have been made, it is not used to any appreciable extent. The only locality in which it seems to be favoured is in Cuba, at the plantations of the Cuba Cane Sugar Corporation, where five machines are in operation. In reply to inquiries by the Australian Sugar Producers Association, the Director of the Hawaiian Sugar Planters Association reported on 9th December, 1918-" From what I hear of the Luce harvester machine, it has worked successfully only in fields where the cane is particularly suited for its operation, t hat is, comparatively light, erect st anding cane." This suggests that it must be considerable improved and subjected to special alteration before it can be profitably used under Australian conditions.

Mr. Thomas Hughes, an officer of the Colonial Sugar Company, whose chief duties related to matters concerning sugar and labour arrangements in foreign countries, referred in his evidence to the question of the possible use of harvesting and other labour-saving machinery in connexion with the cane industry. He recently visited Cuba and several of t he other cane sugar producing countries, and specially inquired into the result of experiments made in labour­ saving appliances. Owing to the disconnected areas devoted to cane sugar farming in Australia, and the uneven nature of the country he concluded-" I cannot see any chance·of any mechanical harvesting being taken up under the conditions obtaining in Australia. Any scheme like the harvester machine, I am afraid, would be quite impracticable here. There is more scope for the employment of tractors than for the employment of mechanical harvesters. The tractor is used now in America. I have looked into the tractor question pretty fully. It has been used for many purposes other than mere mechanical haulage. For instance, the average American farmer pumps his water in the morning with it, runs his churn, cuts the wood, and does his ploughing, and so forth, all with one tractor."

It is difficult to estimat e the influence which efficient labour-saving machinery may have in reducing the cost of cultivation of sugar cane and the consequent price of sugar, and, whilst there has been little notable success in that respect up to the present time, the subject is one worthy of close attention and encouragement on the part of any authority which may be established Eor the purpose of promoting the development of the sugar industry.

RAW SUGAR MILLS-OWNERSHIP, ETC.

In New South Wales the only raw sugar mills existing are those on the Clarence, Richmond, and Tweed Rivers. There is one mill on each of these rivers, and they all belong to the Colonial Sugar R efining Company.

In Queensland that Company owns six raw sugar mills, namely, Hambledon and Goondi, in the Cairns and Innisfail districts ; Maclmade and . Victoria, in the Herbert River district; Homebush (Mackay district), and Childers, near the town of that name.

The other principal proprietary mill s in Queensland are :- l\1ourilyan, · owned by t he · Australian Sugar Company; Pioneer and Inkerman in t he Ayr dist rict , hath owned by a company t he shares of which are held by "tbe Drysdale famil y; Kalamia (Ayr) and Palms (Mackay), owned by the Australi an Estates and Mortgage Company Limited; F arleigh (Mackay), owued by the

929

Farleigh S?-gar Company Qf Bundabe:rg; Bingera (Gibson and H owes Limited, Bundaberg); Fairy­ (Fmrymead Sugar Company Limited, Bundaberg) ; Qunaba and Millaquin (Bundaberg

dtstrict) ; and Doolbi (Childers), belonging to t he Millaquin Sugar Company. _

Apart from the purely proprietary mills such as those above mentioned, there is an importa11t group of Queensland mills known as Central Sugar Mills. T hese mills haye been erected under the Sugar Works Act s 1893- 1911. The principal Act is t ermed" An Act to authorize the making of advances by way of guaranteed loans for the establishment of sugar works and to provide for the repayment t hereof and for other purposes connect ed therewith." T he Act operat ed as an encouragement to the establisllment of raw-sugar mills, chiefly through a guarantee being given

by t he Government for the payment of debent ures issued with the Treasm e.r's permission by n raw-sugar company. In 1895 an amending Act was passed giving power t'o the Trer.surer to pnrchase the debentures issued under t h e principal Act .

At the end of 1914 an Act was passed called The Co-operative S1tgm· Wot· ks Act 1914-, the special object of which, a.s the t itle indicates, is to stimulat e the erection and maintenance of raw­ R ngar fa ctories to be worked by comp fl,nies under co-operative methods. It is provided, e.g. , that the Articles of of any such company shall limit t he dividend to be paid to share­ holders t o 5 per cent . per annum, and by implication the company appears t o be required t o refmin from. declfl,ring any dividends until the advances by t he Treasury .have been repaid. A further requi.rement is that no person shall be qualified to hold shares unless he is, and remains, a grower · of cane on not less t han a cert ain prescribed area. ·

Seventeen mills have been erected under t he Sugar Works Acts 1893- 191 1. The total amount advanced by the Treasury was £1 ,674,804, of which £454,629 has been repaid, and at the 30th June, 1919, t he t otal liability to t he Treasury, including arrears of interest (£15,795 ), balance at loan .and overdraft in trust account, amounted to £1,235,970. Of t his amount about £937,067 constitutes a deb it against Babinda and Sout h J ohnst one, the two largest of t he Central mills, both of which were complet ed during the war. - ·

Of the seventeen Central Sugar Mills erected under the Sugar Works Acts 1893- 1911, only three have completely discharged t heir liability to the Treasury, though there are others which are regularly meeting the annual payment s for int erest and redemption: . Nerang mill, which on t he 30t h June, 1919, had a total indebtedness t o t he Treasury, including arrears of interest, balance at loan, and, overdraft in trust account of £35,330, has been closed, as t he operations for some have been disappointin g. The report for 1918 stated t he excess of liabilit ies over asset s at about £22,000. Since then asset s havin g a book value of £20,684 have been seen t hat t he control, wi t h the exceptions above named, is in the hands of a Board of Directors, and so long as t he in terest and redemption payments are reasonably met, the Government t akes no part in the management. I n t he case of Gin Gin, Mount Bauple, Nerang, Proserpine, and .North Eton, the Govemment t ook charge mving to the failure of t he local control to meet the payments due. Babinda and Sout h John st one are directly cont rolled by the Government at present, but it was predicted, with regard to Babinda at least, t hat at t he & piration of twenty years from the date of opening the Govern-ment will be paid off and t he mill ·will become the property of t he suppliers. · The success of the Babinda mill appears to be assured since it is located in t he centre of an area of cane lands within easy access and capable of providing the necessat y cane supplies. With regard to Sout h Johnstone, the outlook is not so favorable. This is the newest and most costly of the Cent ral Sugar Mill , t he t otal debit shown in the Auditor-General's R eport of 1919 being £580,281. The Auditor-General in t hat R epmt said- " It is generally recogni sed t hat the erection of this mill (Sov.t h J ohnst one) in its pre ·ent po ition has proYed n. serious mistn1 e. . The question of the proYision of an adequat e supply of rane, wh ich is the principal desideratum, appears to have been entirely oYerlookcd." Tbe General l\Iauager, Bureau of Sugar Mills, said- " It is generally admitted now that • out h J ohnstone mi]] i 11 ot on the best site. The particular di adv antage in sit uation of • outh J ohnstone is that t he cane supply is so far distant. The greater supply is at the further end of the area, and there is uphill haulage ·t o t he mill. " This, of course, means an excessive cost, which wiH be cont inuous. The co t of

XXVI

tramways for hauling cane to the :rp.ill has been nearly £200,000. A part of the North Coast Line is _ now constructed which will be the means of bringing additional tonnage to South Johnstone mi_ll and thus reduce the annual loss at present incurred. vVhilst the Babinda and South Johnstone m1lls have drawn to some extent on cane which previously was crushed at other mills, they nevertheless were responsible for bringing into cultivation a large area of additional sugar lands. ·

. The next most mill to the above is the Inkerman mill, · erected by Drysdale Bros.

In 1914 on the Burdekin River, which has an annual crushing capacity of about 100,000 tons of cane. The . mills throughout Queensland are equal to a total output of sugar sufficient to meet much more than the present annual demand, that is if in a season of large yield the crop were evenly distributed throughout the various districts. But the distribution is frequently very uneven, overtaxing the milling capacity in some districts, while leaving the mills in other districts insufficiently supplied with cane.

Other mills, such as lVI:t. Bauple and Proserpine, have had an unprofitable career for some years, and have a large liability to the Government, the prospect of redemption of which seems rather remote. Some of the causes which have produced failure and which, unless guarded against, will cause failure ·in the future efforts are set out in the 1904 and 1905 reports of the then Comptroller (Dr. Maxwell) of the Bureau of Central Sugar Mills. These are :-

(a) The fact that .the directorates of Central mills were appointed by and from the members of a company, and owing to the nature of the situation were most generally men who had no knowledge of the business of sugar manufacture nor experience in the control of large undertakings. (b) From the lack of appreciation of t-heir corporate responsibilities by several of the

directorates, including the failure to observe the necessity for united action. (c) The inability of many of s:uch directorates to examine and. select competent managers, and to co-operate intelligently with managers when selected. (d) That the Oel'ltral Sugar l\1:ills invariably enabled the land-owners to sell or Tent

their lands at highly increased prices. The mills have provided the capital to bring those lands into value and to carry on the farmers -vvho have been producers of cane. Land-owners using the mills as their agents have collected their rents · or purchase money directly on delivery · of the cane and as the first fruit of the crops ; while the mills themselves, partly in some cases and wholly in others, have failed to repay to the public Treasury the loans which built the mills, and also the interest thereon. Dr. Maxwell goes on to argue that whenever it is detern1ined to establish a Central mj]l in any locality, the first step should be the resumption or purchase of the lands which are to be the source of the cane supply at their value independently of the erection .of the .mill. He recommends that in cases where considerable areas are resumed in this way, the ground should be resold in suitable sized blocks at prices covering the cost to suppliers, who be required to enter into an agreement to become permanent suppliers of qane. Where the intention is to erect a mill in a district where the lands are already in the possession of small permanent settlers, a guarantee should be obtained from a sufficient number of settlers based. upon solid security to furnish all the cane required by the mill and for a period of time to be determined upon. Dr. 1\Taxwell further recommEm.ded that in all such cases the Government should provide and build

the mill, and the Treasurer should remain in absolute possession and exclusive control and management until such tirne at least as the public moneys invested shall have been fully redeemed. ·

One of the outstanding causes of failure of several of the mills has been an insufficient and irregular supply Gf cane, and this is a difficulty which even now is rarely absent in the majority of the districts. There are exceptions to this, and in a few cases the mill proprietors are not prepared to encourage the bringing under cane of any further area as their mill capacity is fully t axed in a reasonably good season.

A weakness of the Central mill system, which was disclosed in the evidence given to the 0ommission, is- that where a mill is in the hands of cane farmers they sometimes display a regrettable lack of judgment in refusing to allow the requisite amount of money to be spent on the mill to keep it in an efficient state. When it is realized also that the Central mills operating

under farmer directorates are not subject to any real check upon results such as is obtainable by a centralized and competent authority, it will be seen that some of the conditions vital for success and necessary to secure progress are absent or are likely to be imperfectly fulfilled. This is true, although in some instances the directorates of Central 1nills include men of broad. outlook and of undoubted capacity.

A circumstance which, in soine localities, leads to complaint· and dissatisfaction, is that the control of some of the Central mills tends more and more to become concentrated in the hands of shareholde.rs who are not themselves suppliers of cane. A State Royal Commission, which

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sat in 1915, in Queensland, to inquire into certain complaints in connexion with the working of Central Sugar :Mills at Mackay, pointed out, with regard to one of the mills, that out of 58,500 shares. more than 56,000 were held by shareholders who were not suppliers of cane. ·

In the Mackay district nine mills are operating w{thin a limited area. Some witnesses suggested that the interests of the district would be n1uch better served by concentration of the milling work in two or three large modern and well-equipped factories. Exactly in what way it should be carried out in detail would need a eareiul and expert study of all the conditions, but, if found to be financially practicable, it would undoubtedly tend to raise the standard of the industry and increase its net returns. While l\1ackay is the most conspicuous instance of a locality where greater centralization of n1illing power seems desirable, there are other districts

where the application of the same principle might also be beneficial.

There is clear evidence of a general desire for extension of the co-operative principle, but it cannot be doubted that in the working out of that principle in a highly technical industry such as the manufacture of sugar, there is an imperative necessity for placing the ultimate direction and control in trained and competent hands. .·

:MILLING.

The following description of the " Equipment and Operations in a First Class Factory " is taken from an official report on the Cane Sugar Industry in Cuba, &c ., issued by the Department of Commerce of U.S.A. in 1917, and refers to Cuba. \Vith regard to paragraph 4 of that descrjrtion it may be that the crushers referred to generally spoken of in the evidence taken

by the Cornrriission as "Krajewski" crushers are in use in some of the mills in Australia, though in the majority of cases a somewhat different machine known as a shredder is preferred.il. \Vith regard to the paragraphs dealing with the li1nin g of the iuice and the treatment of the residuun1 fron1 the settling tanks by filter preS"Ses, it may be noted that a number of the raw sugar mjlls in

Queensland use an alternative process which dispenses with the nlter press and is said to bemore economical, particularly because it enables the services of a number of men to be dispensed with. This alternative process, however, is one upon which Australian sugar experts are not yet unanimous, some being enthusiastic as to the economies effected by its use, while others ·are

maintaining an attitude of interested and state that they are not yet convinced of

the desirability of adopting it. It should further be noted that the description quoted below is of a factory of much larger capacity than any of those· in Australia, and in some respects of more modern equipment. The term " factory " is en1ployed in Cuba as denoting what is more generally called in Australia a "raw sugar n1ill," though in this country the term "mill" is also used to denote one of the sets of three-roller mills (see paragraph 5 in the following description).

Keeping in view what has been said above as to the capacity, &c ., of the factory and variation in practice relating to the use of filter presses, the description which follows is generally applicable (with modifications of detail, some of which are indicated) to Australian raw sugar factories.

EQUIPMENT AND OPERATIONS IN A Fms :r CLAS8 FACTORY.

1. The cane cars are placed in position for unloading by electric winch s. (These are not used in Australia.)

2. Cars are unloaded by electric hoist s, two hoists to each car. From 5 to 6 tons of cane are unloaded at one time. The empty cars are taken away by a locomotive. (In Australia the " David's" rake is commonly used for transferring cane fr om the trucks po the carrier leading to the crusher ; electric hoists are not used). 3. Each of the two sets of four Fulton mills grinds 96 tons of cane per hour. To supply these an average of 3 tons of cane per minute are unloaded by the electric hoist s.

4. After t4e cane is unloaded it is car,.ied up by an endless-apron elevator and dropped into t.he crushers. (In A s­ ''levelling and cuttm g knives'' are fi xed over the elevator or carrier, and these partly prepare the cane for crushing.)

5. The crushed cane passes through four sets of three-roller mills. After ]') assing through the fir st rollers a little hot ·water is added , increDsed in quantity for each successive set of rollers. The ob ject of add ing the vva.ter-:- or . maceration, as it is called- is to increase the extraction of the juice. For every ] 00 tons of c2.ne 25 tons of wn.te r are added fo r maceration . At the rate of 95 tons per hour per tandem of roller mills th extraction at the mill is 95 t o 96

per cent. of the suge,r in the cane. Each of the mills has three rollers, one on top and t \vo ' below, revolving u:r der hydraulic pressure of 400 to GOO tons. This factory equipment is called a fourteen-roller mill. Thr mills are d1 iYeJl hy a modern Corliss engine. (In Australia only three of the raw sugar factories have four .·ets of rollc1 s, s ven have t\\·o sets only, and all the others h ave three set . )

6. The bao-asse is carri ed to the furnaces by a belt conveyor, a nd is fed into the furnaces n.utomatically from the conveyor. 7. There is a st eam-genemting plant of 5,000 h or e-powcr con. i ing of twenty multitubular Loil 1. in t \n nty furnaces. The furnaces ar e of the step-grat e type. They con um 1 prr c 11 . of w od in a.dci i n to tb e bagaE>sr . rrhe bagasse fibre is from 9 to 10 tons of fibre to 100 t ons of cane. ] n older lPnd · the :6 re in the can i greater.

8. The juice run from the grindmg n, 1Jls into a tram r, the j 11ic passing through, w}.i) e t l trash i. cauiecl up and discharged . The stramed j 11ice is pumped up to the jui ce . cale, where it i '" ighed . (Juice s al s aJ e J ot . cd in Australia.) 9. The two scales have a weighing capacity of 10,0 lh.· . a h ; he cale have re ivin g tank · below .

.,

10. From the scale tanks the juice is discharged into other tanks, where it is limed ; the diluted lime is kept in Rolution in a smaller tank.

11 . From -the liming t anks the juice is discharged into pump tanks, fl,nd is pumped to the he1:!>ters, wlJei•e it is brought to a temperature of 200° F . 12. From the six it is dii;>charged into thirteen defecators of 5,000 gi1llons capacity each, wl1ere the t emperature is brought t o the boiling point fl,nd tP-e heating ifl finished.

13. Tb,.e juice is allowed to stand and set,tle in the defecators, and the clear is then drj1 WJ1 o:ff into t.an 1m to be pumped to the 14. The :p.md remaining in the defecators is discharged into tanks, where it is diluted and allqwed to stn.nd l1Jltil the clear juice can be drawn off . The r esiduum in these tanks is pumped to the fi lter presses . .

15. There are filter presses, with 42 leaves each. The mud from the first set of filter presses is discharged into a mixing tank; where it is diluted with water and pumped through a second set of fi lter presses iu order to extract the sucrose in the mud. -

l6. The clear juice from all sources, defecator tanks and :filter presses, i1? pu rp_ped to the evaporator supply tf!.nks. In the t wo quadruple-effect evaporators, of four bodies each, and a total of 42,000 feet of heating surface, the juice is concentrated to a density of 61 to 62 Brix. obtained by special attachment. 17. The syrup from the evaporators is pumped to the ten syrup-settling tanks, from which it is discharged into

the five vacuum pans (three calandria and t wo coil. pans). In these pans syrup is crystallized or boiled to grain. 18. From the vacuum pans the massecuite is discharged into the crystallizers, of which there are 24:, of 1,400 cubic feet each. These open crystallizers are !nixing tanks where the mass is kept agitated until centrifugaling. 19. Over the centrifugals are small mixers into which the massecuite runs from the crystallizers. From these mixers it goes to the centrifugals, of which there are 28, each 40 inches in diameter, with 15 by 15 mesh to the square inch. 'fhe rapid revolutions of the centrifugals separate the crystals from the molasses and complete t he raw-sugar manufacture. The centrifugal capacity of each machme is twelve bags of 325 lbs. each per hour.

20. The sugar from the centrifugals is carried by belts to elevators and into the sugar hoppers, and thence into the bags. 21. After centrifugaling the molasses is pumped to molasses tanks, of which there are ten, six for first and four for second molasses. ..

The practical test of a factory's efficiency is the extent to which it succeeds in recovering from the cane its sugar content. A good recovery of sugar can only be obtained by modern equipment con1bined with skilful use of that equipment. The percentage of sucrose or pure sugar contained in the cane is ·ascertained by analysis. As this percentage cannot be co1upletely recovered even in the best practice, an empirical

fo rmula is used to determine the percentage which can be practically obtained. This percentage, which was formerlY' ca lled in Australia P .O:C.S., i .e., Pure Obtainable Cane Sugar, is now known as C.C.S.-Comn1ercial Cane Sugar, a term embodied in Queensland Cane Prices legislation. As a means of comparing the work of one fact ory with another, the Cane Prices Board has

adopted a test known as the Coefficient of Work. Thi3 is the percentage of commercial cane sugar in the cane which is actually recovered as sugar of a commercial standard known as 94 net titre. This method and the term "coeffi cient of work " were in use by the Colonial Sugar Refining Company prior to the Cane Prices Act; the t ennis not used in other countries.

The Cane Prices Board takes a coefficient of work of 90 per cent. as the standard when considering the claims of sugar millers in relation to cane prices. The Board makes no allowance for any failure to reach t hat standard, but a mill-owner is allowed the pecuniary J;enefit of any higher standard of efficiency he obtains.

The i1nportant question of the balance between a desirable figure of extraction with resultant sugar recovery, and the price paid for these results is fully discussed in a paper by J.P. Ogilvie, in Jourrtal of the Society of Chemical Industry, No . 8, Vol. 38, 1919. l\1r. Ogilvie states that, owing to in1proven1ents in n1illing equipment and processes, it has bec01ne possible to extract 96 t o 98 per cent. of the sucrose originally present in -the cane. In view of the opinion held by s01ne manufacturers that there may be an economic limit of extraction,

and that yields of 96 to 98 per cent. may approach, if not exceed, that limit, the question has recently been debated by plantation managers and chemists in Hawaii. Opinion in the Islands is generally in favour of high extraction ; but it is pointed out that , beyond a certain point, the extra sucrose obtained may be accompanied by such a quantity of i1npurities that the further working of the juice n1ay prove unprofitable. It is this condition which controls the economic limit of extraction. It is said that definite data are still rather insufficient, but in Hawaii it

appears very .generally to be thought that under the conditions there an extraction of 96 to 98 per cent. does not exceed the economic limit. The in obtaining evidence on which to compare Commonwealth equipment and practice with other countries, found that but few of the sugar experts examined have had the opportunity of seeing sugar-manufacture outside Australia. A highly-trained witness with wid e experience within and without the Commonwealth said :-

Generally speaking, I am of the firm opinion that most Queensland mills are quite ineffi cient in the ordinary sense of the word . By,that I mean that they neither extract (i;e ., in the milling processes) nor recover ('i. e., in the subsequent the economic maximum of sugar in cane, and no oth r su ar-produ in country in t he wor1<1

less to fr m t h path oft u :ffi i noy.

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So far as extraction is concerned the opinion of this witness is borne out by the results sh.own in the "chemical returns " for warded to the Con1mission by propriet ors of the raw suga r mills in Queensland except the Colonial Sugar R efining Company . ·

The average over all those mills was 92 .19, 92 . 05 , 91 . 93, and 91. 56 in the years 1915, 1917, and 1918 respectively, the average of fibre in the cane for the same yea.rs being

11. 99, 11. 55, 12. 02, and 12 . 69 . The United St at es Rep ort on the Cane Sugar Industry (1 917) says (p. 165) :-" In well-designe d m odern m ills, handling cane carrying not over 12 per cent. of fibre, more than 97 per cent. of the sugar in t he cane is extracted, t he remainder being left in the fibre or bagasRe. Thus a perfe ct extraction is

closely approached."

The figur es of extraction in Hawaiian 1nills for the season 1913-14, the lat est given in that report show, however, an average of 95. 46, only two mills exceeding 97 p er cent. The same report stat es the average for Java at 90.4 per cent., and for Cuba 91 to 92 p er cent.

The extraction figur es in Queensland are t hus seen to be higher t han in J ava, but t he Qtreensland practic'e involves very he·avy ma ceration in order t o obtain the Tesults quoted. The percBhtage of 1naceration water applied in the years quoted was 36 . 47, 33 . 49, 25 . 78, and 30 . 89, as against the Java averages for 1911 , 1912, 1913, and 1914 of 14 . 6, 14. 3, 13 . 9, and 14. 28. From

this it would appear that the sucrose extract ed in Queensland is carried in a liquid consisting of between twice and three times as inuch applied water as in J ava. This means a corresponding increase of cost fo r: the subsequent evaporation. It should be mentioned, however, that in Java only plant cane is deatt with. ·

Adequacy of Evaporation Plant .- It was admitted either during inspections or in the evidence that in some of the mills there is an absence of proper bala nce between the crushing capacity of the milling station and t he plant f0r evapor.ating. This is a factor militating against the economical recovery of sugar.

H . T. E·asterh.y, the Genera l Superintendent of the Queensland Bureau of Sugar

Experiments, in 1n aking a return of the equipm:ent of the Queensland n1ills, expressed t he opinion that a coefficient of work of fro:rn 92 t o 95 per cent . represented an efficient mill, 90 t o 92 per cent . a fairly efficient 1n iH, and undBr 90 per cent. inefficient . He grouped 23 rnills for the years 1917 and 1918 as follows

1917. 1918.

5 7

'efficient 3

1

.l

Inefficient 11 15

'

23 23

'rhese m_ :i.lls do not includB the Colonial Sugar Refining Company's six fact ories in Queensland. As to t he factories that are included; Mr. C. H . O'Brien, Technical :Member of the Cane P rices Board, court eously calculated the weighted average coefficient to be 90 . 7. The Cane Prices Board accepts 90 per cent. coefficient of work as t heir minimum of efficiency. .Even with this red!Uletion ·apon Mr. Easterby's st a.ncilard the number of ineffi cient mills was found to be

ll ··out of 23 in 1917, .and 15 ou·t -of 23 in 1918. CZeanliness.- Except in a very few of the factories, t he Commission was surprised t o observe 1aln •cmnplete absence of that cleanliness throughout the processes, and particularly in vessels

and utensils upon which every auth0rit y insist s .as an essential to efficient manufacture. A few ophrions on t his point may fbe qu oted. Spencer, H andbook 1917, page 104, says-" Ulcanliness of the fact or and utensils cannot eliminate bacteria, but can reduce t heir activity. Further , there are fewer bact eria and yeast s in a clean than in an untidy fact OTy ." The importance of t his fact is that " det erioration 'is ·generally believed lby investigato-rs to be usually d·ue t o b act eria and yeast s " (i bid ).

Again , at page 24, t he same writer as umes t hat ·foulne is a souree of sugar lo ·ses ; .and at page -5'8 says t hat-Thorough cleanliness !rom start to fin ish is v e1 y es,. cntial, no t on ly from the point of vit' w of colour, but also ·of yie1d ·of · 'ugar.

Martineau (Sugar, page 88), describing a famous El dorf n1anufacturer's establishment, .says-IT' o see La:ngens Beet ro ot Sugar Fa ·tory at El-sdorf . . . . \Ya s a real treat for any on ho appreciates

tt he ·pleasure of seeing things w ll done : everything cl an, ever tidy and handy, no on the fl_o or R, and a

c_omplete chemical control of all the operations. H e u d to descn be any sugar refi nery d cvo1cl of these vu tu s as a pigsty.

.. I

.,. I

.,

. ' ( .

XXX

_ . The connexion between foulness and sugar losses were. thus explained by the Agricultural Chennst to the Queensland Government :- ·

I believe there is so:q.1ething in the statement that a witness made in this inquiry that the presence of dirt in sugar factories is likely to cause a loss of sugar by inversion. In fact, any dirt is always likely to feed materials for bacteria, and unquestionably inversion can be caused during the progress of sugar manufact ure by bacteria, as there are always liquors and syrups exposed in tanks \V"hich are very open to attack. Dirt itself forms a breeding ground for bacteria.

I quite agree with the view expressed that sugar fact ories ought t o be always in the cleanest condition. For some years I have been in beet factories in Europe, and t here cleanliness is always insisted on, very strictly, too.

In one of the factories where strict cleanliness is observed, the manager that this was done, not only to avert sugar losses in a direct way, but because a clean sugar factory i1npresses upon the employees the great importance of cleanliness in all the operations of sugar making, and thus leads then1 to regard their operations as something higher than rnere Inechanical perform.ances.

It seen1s clear upon the whole that as a result of circumstances alluded to in various parts of this R eport the millB referred to are, in many cases, below a proper standard of efficiency, but it is hoped that the recommendations n1ade later in this Report will afford the mills an opportunity to improve the general standard of efficiency.

BY-PRODUCTS OF SUGAR MANUFACTURE.

The residuals from the manufacture of sugar which, under favorable conditions, have a commercial value or may be converted into by-products of value, are- . ·

1. Molasses. 2. The residue from the filter presses. 3. Megass, the fibre remaining after the cane is crushed.

As pointed out in this Report, the sugar production of Australia is small when compared with most ·other sugar-producing countries, and as the plantations are scattered over a great length of coastline, the profitable utilization of by-products is largely conditioned by length of carriage and consequent freight costs. The utilization of these products, the greater proportion of which at present is wasted, is worthy of furtheT careful investigation. The

Commission is unable fron1 the evidence to :'urive at any definite conclusions as to the direct benefit the sugar industry 1nay derive by the special treatment of these by-products. One of t he rrwst in1portant products, so far as any new departure is is molasses, as a potential source

of 1notive power, but any p roposal for its use in that way would be best Qonsidered as part of the general question of the possibility of n1anufacturing Power Alcohol on a large scale in Australia from various products. It is stated that undeT the n1ost favorable circun1stances the local supply of molasses' for the purpose would meet only a comparatively small proportion of the

Australian demand for Power Alcohol.

The follow _" ng ren1arks, therefore, can only indicate the probable use to which the by-products of sugar manufacture n1ay be applied, and what is or has been done in that direction in Australia and elsewhere.

l. lVIOLASSES .

Molasses may be rnanufactlired into Run1, Industrial Spirits, or Power Alcohol. During the war it was utilized by the Corr1monwealth Governn1ent for the purpose of manufacturing acetate of li1ne, fron1 which is obtained acetone, an essential in the n1anufacture of cordite. Molasses mixed with cane tops, after 'being cut up into what is locally known as chop chop,

forms a valuable food for stock, though it is not used to the extent which might be expected. Molasses in large quantities in Australia are mixed with the n1egass, and burned as fuel at the raw sugar works. Dr. J. Hastings Reed, Vice-President of · the Australian Sugar Producers Associat:on, in addressing the Council in February, 1919, referred to an invention for which he was responsible.

He clai1ned that his invention enables molasses to be burned with good profit in furnaces of ordinary construction, and with greater profit in furnaces of special (though not expensive) construction. l-Ie also n1aintained that molasses could be subjected to dry distillation, with the production of valuable liquid distillates, and of a specially valuable coke. Further, molasses could . be converted into a dry carbonaceous (humus-like) powder, containing a large percentage of potash, which could be bagged, stored, and applied to the soil by itself or as a 1nixture with other fertilizers.

The utilization of molasses as a manure directly applied to cane crops has formed the subject of practical experiment and subsequent controversy. · Very successful results were obtained by Mr. W. Jackson, a cane far_mer, at North Eton, Queensland, who for many years has the

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value of, and has used, refuse as a manure. Mr. Jackson used very large quantities of 1nolasses -3,000 gallons per acre-but the value of this article for general use as a 1nanure is looked upon with doubt. Owing to the cost of cartage, an indispensable condition to its profitable use is the close proximity o"f the farm to the mill, and it is stated that its application would probably

be beneficial only in soils of a high lime content. -

In commenting on certain experiments conducted in the vVest Indies to test the value of molasses for fertilizing purposes, the South African Sugar Journal says :-"It is, however, t.o be observed that, sa vc in very exceptional circumstances, the employment of molasses in this w

able residues of sugar fo r the production of a! cohoL" ·

In 1914, at the invitation of the President of the Cuban Republic, Mr . Noel Deerr, the Cane Sugar Expert and Technologist of the Hawaiian Experiment Station, visited Cuba and reported on the conditions of the industry. Referring to the molasses problen1, lV Ir . Deerr estimated that 40 gallons of molasses were produced for each ton of sugar, and that not less than 3 per cent. of. potash was contained in the molasses. He also states-" the recovery of alcohol, potash, and nitrogen from the n1olasses presents no technical difficulties The process is simple

and the plant not expensive. I ·estimate that t en centralized distilleries located at different points in Cuba could be erected for a capital cost of, say, $1,800,000 (£37,500 each), and that these would be capable of treating the whole molasses output of Cuba (100,000,000 gallons in 1913-14) A cheap source of power at present almost wholly unutilized is available, and I believe that it would

be greatly to the advantage of Cuba as a whole if the Government did all in its power by liberal legislation to foster and develop a molasses alcohol industry." IIe also makes the very interesting suggestion- " I believe that a very extended use for the alcohol capable of being produced locally can be found within the limits of the sugar plantation in the following cases :-(a) Alcohol-burning

locomotives; (b) alcohol-burning tractors, to be used in propelling ploughs, cultivators, and other agricultural in1plements." Applying the above figures to the average Australian sugar yield for six years ended 1917-18, 220,000 tm1s, at 40 gallons to the ton there should be a total average annual yield of 8,800,000 gallons of 1nolasses, which . on Mr. Deerr's figures should produce 3,520,000 gallons of

commercial alcohol, equivalent as a source of power to 60 per cent. of gasoline. No information is at present available as to the financial success of any attempt to utilize molasses for the purpose of motive power alcohol. The Natal Cane By-Product. Company, near Durban, is reported to have succeeded in 1918 it1 establishing the manufacture on a cmnmerical basis. That company is n1anufacturing an article called N atalite, a mixture of alcohol and ether,

which it is claimed is equal, if not superior, to petrol. A very important developn1ent in connexion with the utilization of alcohol as a n1otive power is dealt with by Mr. W. N. Kernot, in- the official Journal of the Oomnwnwealth Institute of Science and Industry of June, 1919. Following a discovery by Mr . Ralph McKay, of lVIessrs .

H. V. McKay's Agricultural Implement Works, at Sunshine, Victoria, it was found by the Special Comn1ittee of the Institute on Alcohol Fuel and Engines that "Not only has it been thoroughly demonstrated that alcohol can be used successfully in internal combustion engines, but it has also been proved beyond doubt that the difficulty of starting frmn cold has been overcome in a simple

and effective n1anner." lVIr. Kernot, however, points out- " The experiments which have been carried out show, however, that the engine problen1 is a small one compared with the questions of production of alcohol on a large scale and its denaturation."

In J anuary, 1919, Dr. W. E. Cross, Director of t he Sugar Experiment Station at Tucuman, Argentine, contributed an informative paper to the Louisiana Planter on the subject of the \Vaste Products of Cane-Sugar Farming. Dealing with the question of molasses, he refers t o an interesting developn1ent in Java by which the article may be more conveniently handled and height

costs very appreciably lessened. He states- " It was found difficult to ship ordinary molasses from Java to Holland or other European countries owing to the fact it would run out of a barrel, &c., and therefore the idea was conceived that the n1olasses might be evaporated to a solid n1ass before shipment. The details of the operation necessary for this have been worked out carefully, and the process is now being carried out daily upon a con1n1erciaJ scale. The boiling is conduct ed exact ly

as for third sugars- a high vacuum and low temperature being used. After the boiling is co1npleted, the heating is continued for about 1t hours, when the consistency of the mass beco1nes more liquid, and so the gases which are likely to be fa nned are able to escape. The boiling is con1pleted when a sample of the 1nolasses put in water becomes hard and brittle. When this

stage is reached, the vacuum is released , and t he mass is allowed t o drip slowly fron1 the bo t tom of the pan. It is taken .in square 1natting baskets, in '.vhich it is shipped to Europe. "

Dr. Thomas Guthrie, Chief Chemist to the Color ial Sugar Refining Cmnpany, in referring to the J ava method, said- " It is not a dry ma s, a.· i fit clo ly into ev ry ve sel into which it is poured, and when taken out of the pan it is packed in mats. I should say there is from 2 to

#.

'

xxxn

4 per cent. of moisture in it. Ordinary molasses contains from 22 to 25 per cent; of water, and 20 per cent. is distilled off in order to get the solidified molasses. . . . . There is also a

corresponding · reduction in bulk as well as in weight. The first condition is convenience for transport, the saving of the package, and no returned empties, which nearly double the cost. Tliey are the ordinary Java grass mat s in which it is packed. . . The question of solidified molasses here has been considered for distillation purposes . I investigated it, and do not think it is practicable at present in Australia."

In respect to the 1nanufacture of alcohol from n1olasses for motive power purposes, Dr. Guthrie stated-" As to whether I think there is an immeaiat e prospect of it being produced commercially, in the early future, in competition with petrol, I do not think there is any object in that, because we can absorb all that can be made here for more necessary industries, and why fo rce it into other channels. . . . . We cannot get the manufactured spirit for the norn1al demand. It would not pay to bring down molasses from Queensland at t he present price of spirit, even if the molasses were given away."

It will be seen that the evidence in respect to the utilization of molasses for the manufacture of motive power alcohol, so far, js not very encouraging, but fu rther investigation and possible new processes may aid in avoiding the present regrettable waste. As Dr. Guthrie pointed out in his evidence, " It is disappointing to have to use so valuable a thing as molasses for the purpose of fuel. " It is used extensively in the ·sugar. mills as fuel, the value of which compared with coal is about one-third.

2. THE RESIDUE FROM: FILTER PRESSES.

The muddy residuum remaining in the subsiders in which the juice is allowed to stand and settle until the clear juice is drawn off, passes through the filter presses for the extraction of the remaining juice, and the final residue, called filter press cake, is valuable as a fertilizer, and an appreciable quantity of wax suitable for commercial purposes.

I t is claimed by the Natal Cane By-Products Company that their l1foduct "Cane wax is sold through a London agent, and there is a good demand for it at highly ren1unerative prices. It is used for making furniture polish, hardening lubricants·, making gramophone records, and everything requiring the utilization of a hard wax." It is also stated, "After the wax is extracted

the residue is returned to the mill to he used as a fertilizer, the process of n1anufacture only involving a loss of 20 to 30 per cent. of the original quantity."

For the purpose of lessening labour costs, various modifications of a process which eliminates the' necessity fo r filter presses have been introduced during recent years in :q1any mills in Australia, and the residue instead of being converted into filter cake is returned after dilution to the crushing mills, where it is finally discharged with the megass for consumption as fuel in. the furnaces.

It is aifficult to form any useful conclusions from the operations of the Natal Cane By­ Products Cmnpany owing to the difference as compared with Australia of wages- costs, and the length of carriage from the source of the raw material to the By-Products Factory.

The extraction of cane wax is receiving t he attention of the experts of the Colonial Sugar ·Refining Company, which company still uses the filter press system. Dr. "Guthrie mentioned­ " It is not a g_uestion of being able to utilize the by-products, but rat her of manufacturing cheaply enough!.. . . . . I cannot say if there is any immediate likelihood of our being able to manu­

facture waxes. . We are making experiments to find a cheaper method of extraction, and one of our staff now has the matter in hand, but our work was interfered with by the war."

3. l\1:EGASS .

The shredded and crushed cane after discharge fro m the 1nills is known as megass (in fo reign countries as bagasse). In Australia it is used as fu el. The moisture content ranges from 44 to over 50 per cent. in differeJ?.t mills. The fi bre varies in different districts from 10 to over 14 per ce.nt. of the total weight of the cane. Assuming the average at 12 per cent., on an average crushing

240,000 t ons of megass or fibre, a material suitable for the manufacture of paper, are annually consumed. as fuel in Australia. It is estimated that 4 to 5 tons of megass are equal to a ton of average coal. Arrangements have been made by the Olaa Plantation, Hawaii, to const ruct a n1egass paper 1nill capable of turning out 16t tons of paper a day. It was stat ed that "Its pt rpose, primarily, will be to produce the heavy n1ulching paper experimentally adopted on Olaa last year, as a means of

preventing the growth of weeds in t he early stages of the crop,

and that t he 1nill can be made t o manufacture other p ape,r of Inany grades, ranging from the ordinary brown wrapping paper and cardboard to super-calendered stock . such as that used by . " 1nagaz1nes.

937

XXX Ill

T.P.e question of fuel is of ,great i1nportance. in n1illing cost, but utilizati_ O.J!. of the fo.r is wholly_ depend,ent upon the}elative cqst of other material for fuel.

TP,e possibility of the profitagle use of :megass for other than the present purposes is worthy of close attention in the future. The manufacture of good quality paper. fr on1 it is said, has already been demonstrated, but whether it 1nay be more economically used for that purposy tlia:h fbr fuel even under tHe 1nost cbnditi ns bf an abundant supply reman1s n1atter

?f tlbHbt: Ihfod±iatioh indicates tlil:tt nb rlpj;rreciable has beeh n1atle in this tlirectioh In stigar-prodHcihg countries nThcli lOre favd ably situated for the purpose than Aust though the special att-ention of experts has been devoted to the questic:n.

SUGAR FOR USE IN MANUFACTURE.

Some alarm has been occasioned in the minds ot sugar-cane growers and others intereste4 in Sugar by a that the price of sugar for the purpose of 1nanufacture would

be retluced, antl it was cohsiaered that ahy such reduction would result in serious injtuy to the sugar industry. There been ifo cause f6r:_ complaint on the part of the rr;tanufacturers; who throughout have been very fortunately situated. In respect to Ja1ns, Canned Fruits, Biscuits, and practically

every article in which sugar forms an ingredient, the s4ortage of freight, excessive world price of sugar; and otHer conditions arising out of the 'vaT practically destroyeel all cbmpetition . But apa1;t frQ:rr). the abdve advantages,_ tl]_e irnportati_ on_ of chocolates,

a,nd was pro:p_ibited by a proclamatiqn of lOth Al).gus't, 1917; with the consequence that since that date the whole domestic trade has been reserved to the local manufacturers. , Towards the of 19_ 17 the fixeP- tp_e price of ryfined svgar at _ £24 t on when for .use in

fo r the irtiiiiilfactur·e of jams, jeliies, jind canned fruits fo r exptlr't. This was done tp.e

fJf assisti{lg ,the industry.. At this iin1e the ordinary wholesale price per ton was £29 5s.

at Syaney, arid £2g 7s. 6d. at Melbourne. · In 1918, t his concessi ·n was limited t & exparts of Janis, jellies) and canned fttiits s1ipplietl uneler cont ract t o the Impefial; I ridian, arid U .S.1t Gdvernments.

In October, 1918, the price to manufacturers for the purpose of those contracts was increased tu £26 pe nb:ii: At £his p·ertdff the price & f sug r pet ton in tHe United Stat es was £46 ; and in England £57 15s.

. Towards the e·ncr o'f January, t gt19, it deciB.ed t o make avaitable sugar at £26 per ton · fqr the purpdse o£ tHe in respect t o j ams and fruits. Sugar was

a:lso' made at £2'6 p·er ton fo'r manufacture iri bo'nd fb'r export o'f confectionery; chocolate, conderisea: milk, and c6ffee essence . . The p ice at whicH sugar wa;s [tVailable· for manufactu:tirig putpos·es fb't lo cal cotl:::>Uinption was· £27 5s. Sydney, and £27 7 s. 6-d. Melborirne.

' ' . TRese concessl_O'ns tB arr'emarkable expansion of t rade 'n canned

ffuits, and, Condensed tn:lHc ' Tile :Iirices fo-r export being l11or'e ftatisfac,t ory than those for dornestic eb'lls'un1f>tio'n, tileie foll owed a s hstantiai -:r'eductio'n il1 sales fo r' local requirements.

That mariU:faeturers have suhi:1tamtially benefited by tlle lovv" comp·arative ptice of sugar and their prosperity during the war is beyond questioil. The concession's extended to' them have been only possible by reas6n of the larger propo rtion of the demand fot sugar beirrg n1et by Australian produ,ct!on, and it may pe. noted that whilst the manufacturers of jam and condensed

mifk hav$' reape:d t!ie advantages of the in:flatea prices for their products abroad, tlle sugar grower ha · no't been similarly fortunate. ·

·The ein balrgo drr im})ort ed confectionery and the con'trol exer ·is eel over 1 o'cal sugar ptices has substantially aided-the' confectionery mann£ cturers. One manu£ cturer stat d in evidence­ " I£ there were ITO embargo we wo ld still be unable t o m:eet aU the local demands for confec tionery. ; . . . 1 might say _ now that :b.early e• ery confe ctionery n1anufact urer in Australia

added very considerably t o his plant and building . In my own ca 'e I have expended over in burldirigs arid plant, and :E knbvv my competitors are acting in1ilarly in every 1tat e. The expenditure of £100,000 in new quildings was oiLtributed to very 1naterially Ly the e1nbargo placed on fron1 abroad. . . . . The jnducerrient for t he xpenditure was the

flourish-ing Gondition of the industry under the en bargo, plus the comn1ercial outlook in cmnparing price of i n Australia and· price abroad."

(h\e' ?{ oul' ja:ir manufacturers st -ted-" Dur. i-ng the last our years .,k-have had a :f t i ' e as ja:m man*facturers than e ' er before . . . ·. We have not been at any

drsa lva1 age turn g the last four years with re p c to h pti f su ar. should think we have

h

F.5618.-3

' I •

. it is quite clear that whatever representations may have been made in respect to the price of sugar in Australia, manufacturers have been very fortunately situated, and the benefits they have derived have been largely due to the policy which has made the sugar industry as well as their own the subject of fiscal assistance. -

. The Commission invites attention to the fact that the concessions to in

respect to preferential prices for sugar used in the manufacture of goods for export really amount to an Export Bounty. Whether this should be continued is deserving of serious consideration.

Prior to the existing· Government control over the price and distribution of sugar, manufacturers of goods in which sugar formed an appreciable ingredient were allowed drawback of import duty on the sugar contained in Australian manufactured goods exported. This enabled manufacturers-so far as the sugar price is concerned-to compete on equal terms with manufac- turers in other countries. - .

In regard to this practice, Sir Henry Jones, of H. Jones and Co. Ltd., Hobart, who represent the largest interest in Australia in Jams, Canned Fruits, &c., stated in evidence-" I think that the jam manufacturing trade would b 3 well enough off if it had a rebate duty on the sugar used in jam wtich is exportE-d outside Australia. It would be unreasonable to expect more than that"

ATTITUDE OF FINANCIAL INSTITUTIONS TOWARDS THE INDUSTRY.

It was suggested in evidence that the Banks have become increasingly reluctant to make advances to raw sugar mills for the purpose of improving efficiency, or extending their present installation. · ,(. ·

Two reasons are assigned for Banks looking askance at loans to raw sugar mills for the purpose of any new installations. They are, first :-In the case of "Central Mills" (i.e., co­ operately owned milling companies in which the shareholders are farmers, or chiefly farmers who dominate the directorate) the insistence of the growers upon a high cane price. This prevents the setting aside of adequate reserves from which new equipments can be installed, and mill managers or chemists are unable to get from the directors what they regard as indispensablefor improving efficiency, or even for maintaining the existing standard.

A banker, with many years experience in the Mackay district, gave evidence as follows:--" Even shareholders who are farmers and ha ye large interests in the factory appear to be more keen to obtain an unduly high price for their commodity to the detriment to their vested interest in or the stability of their markets ; this applies particularly to the Mackay district, where the larger percentage of the mills are the absolute property of the farmers. Too small profits are allowed the manufacturer to

maintain the efficiency of the mill, and; in consequence, the very pul$e of his cane­ -farming existence is suffering, in favour of direct profits. Taken as a whole, machinery in this district is working out. Insufficient money is spent on maintenance, and little, if any, new machinery is being installed. I do not say that the farmers are getting too

much ·for cane, but I do say that workers and farmers are getting more than their share of the present distribution. A small decrease in the price of cane would mean every­ thing to the efficiency of the mill ; for example, Is. per ton less for cane on a 50,000 ton crop would not materially affect the farmer, but would give tlie mill an extra £2,500 to spend on efficiency. Working on .this policy the improvement in the work of

t.he mill must, in subsequent years, repay the farmer tenfold."

The second reason assigned for the policy of reserve on the part of Banks- is that under the Cane Prices Act there is a power in the Government of taking over factories which fail to start crushing according to the terms· of an Award. This is said to beadeterrent against advances upon mill security. And further, the standard of 90 per cent. coefficient of. work· adopted by the Cane Prices Board as the basis on which to allow the manufacturer his profit is said to be out of the reach of many small or inferior factories. And since already such factories would be making little or no profit because of their inefficiency, they can have no hope (now that they 1nust pay for cane upon the assumption that they get better results than they do) of setting aside money to improve their plant. The witness last quoted said of the industry in the Mackay district-

" For some years pas-t the balance-sheets· of the majority of raw sugar companies have been most unsatisfactory. 1\fany have not only been working a loss, or an insufficient profit, but maintenance has been sadly neglected, and from a financial institution's point of view, depreciation has not been adequately written off. The machinery used in raw sugar mills requires constant attention and extensive renewals to keep it thoroughly up to date. The ite1n maintenance is not, in all cases, a maintenance in the true sense of improvements to n1achinery and plants. The usual overhaul of the mill is an anhual expenditure, consisting largely of a general clean up, and a preparation

939

:k:Xxv

for the next season's cri1shing, which, in some years, covers the whole of the maintenance outlay, as shown by the balance-sheets. Banking institutions dissect the items of a ·balance-sheet so far as they are able ; they inquire into every detail, and the figures shown by the raw sugar companies of recent years have not established confidence.

The present attitude of Banks towards the industry is one of unrest, particularly where raw sugar companies are concerned. \Vithout some relaxing of the existing legislative restrictions, I can only anticipate financial institutions withdrawing all pecuniary assistance.'; ·

That this attitude of caution does not extend to advances to farmers may be seen fro1n the evidence of the General lV1anager of the Queensland National Bank-" Our advances are very large sometimes ip. son1e of the sugar districts. w ·e have an in11nense number of accounts, and advance freely to mills who ask for it \vith

the object of advancing to the that is, mills entirely outside our own company. For instance, take ::\fackay as a standard. The manager usually at the commencement of the season writes to us saying so and so, a farmer, wants so n1u ch to tide him over · the season. I do not remember ever refusing it. Growers are in a totally different

position now to what they were. Some of them are in good circumstances, having got on their feet. I am speaking of our experience of banking. The average farmer, who has been at it for some yea.rs, has got over his difficulties, and is a freeholder. I should think the very large majority, speaking of Bundaberg in particular, would be in that position.

" I do not mean to infer from what I have just stated that the farmers are getting too much, or anything like that for their cane, but that they are in a fair state of prosperity now. Our Bank operates in other cane districts besides Bundaberg. We operate in Ayr, Cairns, Childers, Halifax, Innisfail, Mackay, Port Douglas, Inghan1,

and Sarina as well. They appear to comprise all the sugar districts. It is correct to say, so far as our Bank is concerned, there has been no material contraction ofadvances in connexion with sugar land."

PRICE FOR RAW SUGAR.

As will be observed by a perusal of this Report, it is practically impossible to arrive at any precise result in respect to the average cost of production per ton of sugar cane. The great majority of farmers cultivate small holdings; the average area of land devoted to sugar cane is about 40 acres. Of this area, less than two-thirds is harvested each year. As explained elsewhere, the majority of these farn1ers keep no accounts, and it is only by a careful study of the accounts

which were submitted and by viewing the general ccndition of the industry that the Con1mission was able to form an opi'nion as to how the present rate of wages, prices for raw sugar, costof living, &c., affect the welfare of the fanner. There is no general evide:n.ce of prosperity, nor, with few exceptions, are phere any signs of further develop1nent.

Owing to the Colonial Sugar Refining Company having refused to furnish, co nfidentially or otherwise, any information in respect to the financial results of the operations of its raw sugar mills in Queensland and New South Wales, the Commission has been unable to obtain complete information in respect to the milling branch of the industry. On the information available it is found that, with few exceptions, the raw sugar mills are deriving but small and frequently insufficient profits. In certain cases this is probably partly due to inefficiency and other avoidable

causes, but it can be said that the average financial results of the numerous mills- the accounts of which have been placed at the disposal of the C01nmission- do not disclose conditions likely to attract capital or enterprise. The consun1er has certainly not been ·prejudiced by the profits earned in the last few years by the majority of the raw sugar mills.

The Commission is of opinion that an increase in the price of raw sugar fron1 £21 to £22 per ton is justified, and considers that, if approved, the allocation of this additional sum between the miller and the farmer rna y be left to the discretion and decision of the Cane Prices Board, pending the appointment of a Board of Control as recommended later in this Report.

It may be added that the past t wo seasons, including dan1age by cyclones and floods, have proved unfavorable to the industry generally, and that in many cases the returns to the farmers and not a few of the millers have been extremely unsatisfactory.

BUREAU OF SUGAR T STATIONS.

This Bureau was established under the provisions of the Queensland Sugar Stations A ct 1900. It was at fir st under the charge of Dr. \V. Maxwell, who was succeeded several _ years since by the present General Mr. H. T. Easterby.

, ..

' '' !

XXX Vi

E::cperilhe?tal stations have been for some years at and Bundaberg,

and a thud station has been recently located at South Johnstone, near Innisfail. Interesting and valuable work has been and is being Garried out at these stations in ascertaining the characteristics and suitabil:itJ_ of varieties o£ cane introduced from New Guinea and elsewhere or raised . in Australia. are also Ill:ade to determine the value of various fertilizers and _methods of planting and oultivation. Soil analyses are undertaken by the Department of Agriculture. ·

The Bureau has also under its control an Entomological Station, at. Meringa, near Cairns, now in charge of Dr. James whose work in connexion with the suppression of various insect pests which attack the cane is of a high charttcter. The General Superintendent -visits the various sugar districts, ai1d addresses the farmers at the different centres .on cane cultivation. Visits are alsb ma·de by field assistants, who submit reports upon " Sugar farms generally, the alkalinity or acidity of sbils, details

of crops, use of lime, green manures, and fertilizers, drainage; irrigation, weather, ploughing, planting, cultivation, harvesting, ratooning, labour, varieties of canes, arrdwing of cane, plant diseases, disposal of trash, &c." Literature on the subject- both in pamphlet form :tiid pet medium of The Aust-ralian Sugar Journal and other publicatio·ns.__.,_is circulated for the infonrtat:ion and instruction of farmers.

A\ statement of receipts and expenditure of the Bureau for the year 1917-18

discloses actual receipts to the amount of £18,951,. and expeiiditute £12,368. The year closed with a credit balance of £8,109, which, after deducting the balance of £1,526 brought forward at the commencement of the year, left a surplus of £6,580 of receipts over payment§.- · The sources ·of revenue were an assessment (paid by the growers) <;Jf !d. a ton 0n all cane ctushed, amounting

to £8,326, and a subsidy by the Queensland Government of an equal31:rhount. T_Q_e Commonwealth ·contributed £1,,000 as first instalment towards the oost the came grub investigation, and a sum of £1,227 was received for cane raised and sold at the Experiment Stations. Owing to the very exceptional harvest in 1917-18; the revenue from and Government subsidy was much

greater than usual. In view of this; and the balance remaining to credit, the assessment for the ensuing year was. reduced to per ton. As the cane cruHhed in was over 38 per cent.

less than that of the preceding year, the receipts of the Bureau were less by £9,718 than in 1917-18, and to meet expenses it was necessary to draw to extent at_ £3,146 on the reserves. Revenue fluctuations of this character 1nust n1ilitate seriously against efficient investigation and continuity of work.

An important point, though not· always appreciated . by the- is the

selection of varieties of cane most suitable for the districts in which it is propused to be grown. T-he industry a debt of gratitude to lVlr. H. Entomologist to the Queensland

Government, who led an expedition under the auspice's of that and of tlie Governn1ent of New South Wales to New Guinea in the years 1895-- 1896. One of the fruits af the expedition was the discovery of the famous Badila and Goru cai1es, the former of vt hich is i1pb:tt ali sides now regarded as possessing the hest comb·inatio" n of qualities fo·r geJ:ieri:tl cultivation. Its use has extended to other countries, and it is said to- be the most widely-grown variety o':£ ca-rte in tl:ie w&:rld.

The trial of these canes in the fields was undertaken by two of the 111i1l m'anageFS' of the Colonial Sugar Refining Company--Dt. Reed, at Hambledon, near Cairns_; and Mr.. Fa;rquhar, at 1VIack-nade, near Ingham. Another valuable and widely-grown va:rie,ty, known as _ was

raised by Mr. Clark, at Hambledon, with valuable 0y Dr. __ Reed.- The _Qo1_ onial _ Sl!gar Refining Company is also conducting experiments- at Thiacknade Mi_ ll; on River. This Company has done useful wotk in seeking new varieties in Papua and elsewhere; and conducting the necessary :field tests. .

However valuabl

Tests of new varieties of eane are in the first _instance appropriately out at the experimental stations, hut each particu1ar of promise be :further teste·d under' the varying climatic and soil conditions of the respective sugar districts. Tlre vital importance of selection of the best varieties of cane is apparent from the following extract fron1 _ a circular issued by tile Colonial Sugar Refining Con1pany Li:t.p:.ited to the ea11e gro'We:Es at Childers, under date 28th April, 1914:-

The following co mpariso n of fhe sea'Son's average p .-o.c .s. for sevel'a1 varietie::J cro1jpecl at Childer.s- in 1913 may be appreciated by those growers who are interested in the growth of sweeter canes:-

D.ll35 ...

1900 S-eed1i

Worth per ton.

p.o.c.s. old

new

13.1 14.-3-16.0

s. d.

22 1

. 2& 8{t

25 &

s. d.

22 24 7

28 Q

941

xxxvii

Despite its poor there was about 70 per cent. of D.ll35 in the 1913 crop, and it can be seen at a glance that the gro'Yers of t his vanety would even under the ?ld scale of prices have been better off by several shillings per ton had areas been under the sweeter canes, which on the a verage yielded slight ly more cane per acre ; whilst the respective values under the new scale strikingly sho w what the substit ution of Badila and 1900 Seedling for D.ll35

means to the growers . As_ 20 per cent. of the 1913 crop consist ed of 1900 seedling, its sweetness and yield per acre can be t aken as thoroughly rehable and representative of t he district.

Field days are held at the experiment st ations, and useful practical demonstrations given for the of those who 1nay attend, but, owing to distance and other causes, it was st at ed the proportiOn who are able to benefit by this is small. It would- seem better to arrange for cultivation plots on farms in ordinary working condition. The evidence shows that at one t ime experi1nental plots on farms were arranged; but the official experience was said t o be that farmers treated the care of t he plots as a secondary

matter, wit h the consequence that the results were not satisfactory. The payment of a moderate bonus, upon complying with prescribed conditions, would probably ren1ove t hat difficulty. If, in addition to the present three experimental stations, there were, say, 100 such plots scatt ered throughout the sugar districts, if only 2 acres each in extent, the cost would probably not exceed £2,000 per annum .

CANE GROWERS' ASSOCIATIONS.

· The two representative of the sugar growers are the Australian Sugar

Producers' Association and the United Cane Growers' Association. The first of these is the elder association, and its members represent the greater area under cane. It includes sugar millers in its membership. It has conducted for rp.any years The Australian Sttgar Journal, a well-edited of great educational value to the industry.

The United Cane Growers Association confines its membership "to local associations or unions of cane growers and others in sympathy with its object s, " and although the millers are not expressly excluded, the rules suggest and the practice confirms the n1ore limited scope of membership. In March, 1918, it was arranged that The Q1.teensland Producers' R eview should be · the official organ of this association. The members are to a large extent cultivators of small

areas, and the majority of them are locat ed in the Mackay district and ot her dist rict s sout h of Townsville. As the objects of each association as expressed in their constitutions· are "to promote combined action on the part of Australian sugar-cane growers and ot hers interested in the industry for the protection and advancement of the industry, &c.", it is unfortunat e t here should be a division entailing duplication of needless expense, and a weakening of influence by. the substitution of disunion for combination. An effort was made some tin1e since for the purpose of bringing about a n amalgamation of these associations, but it was not success£ ul.

These associations are combinations of various district associations whose contributions to the support of the parent bodies are based upon t he tonnage of cane crushed on account of their members. Hitherto the efforts of the representative associations appear to have "been aln1ost wholly concentrated upon arbitration proceedings and the regulative legislation of recent years.

Thus their energies have been chiefly absorbed in mat ters of a controversial charact er, where under more stable conditions they might have proved centres of activity for the improvement and development of the industry. Though differences may mark the general relationship. of these associations, they agree in the opinion that, whatever the Government policy n1ay be In regard to tariff or other assistance and control, it should definitely cover a period of years.

BEET SUGAR.

In 1873 the Victorian Government obtained a vote of £5 ,000 fo r the encourage1nent of manufacture of sugar from beet-root grown in Victoria. The Report ?f the of

Agriculture, dated 1st .June, 1874, shows that a claim was made fo r a portwn of t his bount y, the claimants stating that they had manufactured about 224 t ons of beet sugar. It does not appear that the cultivation was further follo wed up at that time. - In the year 1878, a private company called the R osstown R ailway and

Co. Ltd., which had as its chief object the production of beet sugar, obtained an Act auth?nz1ng the construction of a railway to connect their propert y at R osst own, Melbourne, wit h the Elsternwick Government railway. This railway conneXIon was complet ed IJ?- 1888 . The company then had a nominal capital of £1,000 ,000 , of which about £250,000 was paid up. A factory wa 1 erected and some effort was made to grow beet. It appears, however, that the fact ory never actually came ·into operation, and that the venture ended in failure.

In 1896 the Victorian P arliament passed an Act making a\ £100,00.0, of .which £62,000 was expended, on t he ba is of £2 for every £1 of private capital ub cn bed, In t he

,.

- t

XXXVlll

establishment of a factory at Maffra, Victoria. The first substantial production of beet sugar in Australia occurred in connexion with this factory, and it is still the only one in Australia producing sugar from beets. The company, which was subsidized under the Act just quoted, gave a mortgage to the Victorian Government to secure the advances made, and after two years

of effort without financial success the Government foreclosed, took possession of the property, and shut up the factory. The failure of the company may have been due in part at least to an error of judgment in choosing the site, as according to the Victorian Director of Agriculture the Maffra district "is not a suitable district for beet culture, and it was most unfortu:o.ate that it was selected for the establishment of a beet factory." That remark, however, should be read in conjunction with what is said below as to the effect of a projected scheme of irFigation.

After the closing of the factory in 1899 nothing further was done until 1910 when, in connexion with a scheme for closer settlement, the Victorian Government decided to offer special facilities for the growing of beet; Two estates comprising an aggregate of about 13,000 acres were purchased by the Government and sold to settlers on specially easy terms, but with a condition (the enforcement of which ceased after a year or two) that each purchaser should plant 10 acres of beet. The next year (1911) the factory was opened, and since that date has continued in operation with varying fortunes.

After several years of unprofitable working the operations of the years 1917 and 1918 resulted in a profit, but the balance-sheet for the year ended 30th June, 1919, again shows a loss. The losses from 1911 to 30th Jrine, 1916, were £19,858. Since that time the profits, after deducting the loss made last year, have been £8,099, leaving a total of accumulated losses for the period 1911-1919 of £11,759. It should be stated, however, that these losses have only been registered after providing for interest on capital, amounting to £20,625. · On the other hand, no interest is debited on the advances in the nature of an· overdraft made by the Treasury to meet working expenses. If interest at ordinary rates had been charged on the average debit on this account, it appears that, roughly, the position would have been that during the years in question, 1911-1919, the factory would have met all its expenses, but there would have been little return upon the capital, viz., less than 1 per cent. per annum.

The following additional facts may be mentioned:-First, that in 1912, a valuation was made for the purpose of determining the amount of capital account which should appear in the balance-sheets. The amount adopted was £64,000, or £2,000 more than the original Government advance. The capital account at the 30th June, 1919, stood at £82,068. Second, that the works had cost about £31,000 more than the amount of the Govern­

ment advance (the originallVIaffra company appears to have lost the whole of its own capital). . .

Third, that a loss was incurred through unpaid interest during the period when the factory was closed, 1899 till 1911. F'ourth, that special freight rate concessions are now made on the Victorian railways for carriage of beet-root and sugar. Within the radius in which most of beet-root

supplied to the Maffra factory is grown the concessions arrwunt to over 50 per cent. of the rates, while the rates for sugar between Nfaffra and Melbourne are about 42 per cent. below the schedule rates. A witness suggesteq that an important stimulus would be given to the growing of beet if railway freight at the lowest net freight rate were extended to a zone of, say, 100 n1iles around the Maffra factory.

The approximate area under beet in the Maffra district at present is about 1,200 acres. The acreage has varied considerably year by year, the maximum having been 1,600 acres .. The Director of Agriculture, Victoria, said that in the Maffra district the seasons were very vanable; about every second year there is a poor seaspn. Maffra has only an average rainfall of 22 inches, and even that is erratic, as sometimes it is down to 14 inches. Witness said also that farms Inust have irrigation so that they may be insured a supply of water when the crops are growing, and that, with irrigation, success at Maffra would be assured.

A scheme of irrigation is about to be undertaken which it is estimated will serve an area of 10,000 to 12,000 ac!'es. Farmers within the irrigable area will be rated to the extent, it is stated, of not more than £1 per acre, the supply given for this charge being 2 acre-feet for each acre. There will be no compulsion to plant any definite area with beet within the irrigable area .

. The estimated area with which the factory could properly deal is 4,000 acres, and if the proposed irrigation scheme were constructed, it is estimated that about 1,000 or 1,500 acres of land suitable for beet-growing would becmne available. Even that would not bring the area up to the full capacity of the factory. Anot-b.er thousand acres would be required for that purpose. An insufficient and irregular supply of beet is the greatest difficulty with which the factory has to

contend.

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. Witnesses concurred in the opinion that this difficulty is accentuated by the large increase In the rents demanded for land suitable for beet growing. It was stated that on the average rents have been forced up to double the original rate. One -vvitness stated that he is now

paying a rent of £2 4s. per acre, while for three years ending last year he was only paying £1 12s. per acre. There was son1e complaint also that the landowners of the district in some cases are unwilling to lease land for the purpose of beet-growing. The manager of the fa ctory sug­ gested that the State Government should provide the means of expanding the industry by

obtaining control of suitable land to be leased at a moderate rental. Although some growers have made good profits, farmers generally appear to prefer other forms of cultivation. - One _ reaso·n for this preference may be found in the character of the cultivation required. Professor Russell Smith, in Irtdustrial and Commercial Geography, says:-

" Caring for the crop is most laborious because of the large amount of hand labour required. The young plant is so s1nall that only human fingers can rescue it from the upspringing weeds, so that men, won1en, and children-especially women and children-go into the fields in nearly all beet regions, ineluding the United

States, and spend days upon their knees weeding the young beets." A witness, speaking of the work generally, stated that "the work of weeding and thinning beet is done here by contract, and the man who tried to thin beet out on his knees would not make any money at it." The same witness stated that the only processes calling for hand labour . are beet thinning and beet topping (including lifting). He had recently seen in America two

machines which were considered to be satisfactory for harvesting work, and believes that these machines are likely soon to be perfected. If so, they will greatly reduce the an1ount of labour required. . _ •

An official witness stated that in Australia only adult labour is employed, and that there has.never been any difficulty in getting sufficient labour at Maffra.' The production in tons of beet-root per acre has shown continuous increase during the last five years, having been respectively 5, 8, 8 · 9, 9, and 11 · 8 tons. The greatest quantity of

sugar produced at lVIaffra was in the 1916-17 season, when the output was 1,948 tons. Only three times 'in its history has the output exceeded 1,000 tons. The sugar-content of the beet-roots sometimes exceeds 15 per cent., and in 1914 returned up to 19! per cent. on some portions of the crop. In 1918 the average was 13 · 49 per cent.,

and it was stated that about 12 per cent. was recovered as crystallized sugar, the greater part of the balance being in the form of molasses. Molasses are bought to some extent by the _farmers, but not very freely. The greater portion 1s sold to distilling companies for the manufacture of spirit.

As far as distribution is concerned, the factory is in a favorable position, delivery being given at the factory door. The _ whole of the sugar produced is consumed in the district. As to possible competition of locally-grown beet sugar with the sugar-cane industry, the General Manager of the Colonial Sugar Refining Company expressed the opinion that there is

not the least chance of the maker of sugar from beet-root being able to compete on equal terms with the man who makes cane sugar. The same witness also said he felt sure that private investors would not take part in an extension of the beet sugar industry, and that State support could not make it a profitable one if the interest on the investment be a first charge on receipts. The Superintendent of Agriculture, Victoria, expressed the opinion that beet sugar will hoJd its own as against cane sugar where there is no discrimination against beet.

The milling season or " campaign" at a beet factory is generally considered to be about 100 days. Mr. A. N. Pearson, formerly Chemist for the Department of Agriculture, Victoria, suggested the establishment of juiceries in districts distant from lVIaffra · to act as supplementary sources of supply to the factory. The idea was that in those districts beet would be grown, the

roots treated at the juiceries, the extracted juice being then evaporated to dryness and stored until the end of the normal campaign at 1 \!Iaffra. it would then be forwarded to the 1 VIaffra factory and refined during the off-season. The Minister for Agriculture, Victoria, appointed a Committee to investigate and that Committee's report is printed in the Journal of the Department of Agriculture of :V for

July, 1919. The Committee----found the proposal to be technically feasible, but the maJonty- JYI:r. Pearson dissenting- stated that, in the absence of precise knowledge as to the cost ?f the juice, the Committee is not in a position to recommend juiceries as an propositiOn. Mr. Pearson, in his dissenting report, stated that if his as to fuel required was confirmed the proposition would be profitable, and he asked that an evaporator be made and tested at 1a:ffra

with a view of determining the question. It appears that no further action has yet been taken. There is no substantial indication that in the near future any iinportant extension of the beet industry will take place in Australia, nor that there is any present necessity. frmn the Commonwealth point of view to suggeE!t any special measures relating to the production of -beet sugar. As to control of beet sugar prices see page I.

•

I

•

xl

DISTRIBUTION TO RETAILERS.

Com_plaint of inequality of distribution of sugar was made by the Secretary of the Retail Grocers Association, 1\tJ:elbourne, but no witnesses can1e forward to give first-hand evidence on the subject.

One case brought under notice by a country ret ailer broke down when investigated.

EMPIRE PREFERENCE.

It is not considered probable that a policy of Empire preference expressed in any British tariff in respect to sugar will lead to t he encouragen1ent and extension of the industry in Australia. The Brit ish Budget resolutions in l\1:ay last, embodying I rnperial preference, included a tariff advantage for raw sugar of 16i per cent., on general t ariff rates. This becan1e effective on 1st September, 1919. As this preference applies to sugar grown in the Empire by coloured labour, it is practically certain th?>t it could not create export openings for Australian sugar.

If, on the other hand, in regard to imported- sugar, the Commonwealth subscribes to the policy of En1pire preference, to give effect to it either the present t arifi must be reduced in favour of other parts of the Empire (which might be attended with serious injury to our own industry) or a special rate appreciably higher than the present levied on all other than

Empire sugar ; or a third course is to impose a higher duty than the present on Empire-grown sugar, and a correspondingly higher rate on foreign sugar. It may be pointed out that at least fur many years to con1e it is not at all likely that the Empire will be able to supply its own sugar requirements. It therefore follows that Australian importations will continue to consist largely of foreign sugars, -and that high tariff rates on those ·sugars will necessarily increase the cost to the domestic consumer and to the Inanufacturer.

The Commission is of opinion that the adoption by Australia of the policy o£ Empire preference in regard to sugar could not result_ in any encouragen1ent or extension of the local sugar industry, and that in regard to importations (when importations are necessary) it is not likely that any advantage will accrue to the Commonwealth by adherence to such a policy unless

reciprocal tariff concessions in respect to com1nodities other than sugar were obtained.

WORLD PRODUCTION OF SUGAR.

In the account of world production of sugar, beet sugar and cane sugar had before _ war reached a position of approximate equality with regard to volu1ne, the preponderance in 1913- 14, the year of maximun1 production, being in favour of cane. The figures for tha;t year were :­ Cane sugar, 9,821,413 tons ; beet, 8,845,986 tons- a total of 18,667,399 tons.

The principal beet-producing countries are Germany, Austria-Hungary, United States, Russia, and I-Iolland. France, Beigium, Denn1ark, and Sweden are the other chief contributors to the beet sugar market. ,

The foll_ owing table will afford a comparison of the Australian production with estimated world productiOn of sugar for the period 1909- 10 to 1919-20. :- .

E stimat ed World Production.

' Austi·aliah Pr6ductlci!i Year. included in

Cane Sugar. Bee t Sugar. Total. Foregoing Figures.

Tons. Tons. Tons. Tons.

1909-10 .. . . 8,327,000 6, 597 ,000 14,924, ClOO 147, 403

1910-11 .. . . 8, 422,000 8,560,000 16 ,982,000 230,8 71

1911-12 .. . . 9,066,000 6,820,000 15,886,000 190,5 95

1912-13 .. . . 9,232,000 8,976,000 18,208,000 129,877

1913-14: . . . . 9j821,000 8,845 000 18,667,000 265,029

1914-15 .. . . 10,171,000 8,24.3,000 18,4i 4,000 245;876

1915-16 .. . . 10,525,000 5,983,000 16,508,000 159, 640'

1916-17 .. . . 11,243,000 5, 603 ,000 16,846,000 193,037

1917-18 .. . . 12,276,000 4-,5 17,000 16,7 93,000 327, 589

19]8- 19 . . . . 11,965,000 4:,355, 000 16,320,000 ;- . 202 ,112

1919- 20 12,261 ,000 4,339,000

L

16,600,000 .. . . . .

0

'·.

On an average, Australia has contributed less t han 1·25 ner cent. t o the world's total sugar production, and if the 6ompari on i confined to the world',· production o_f et1ne ,·ugar, the Australian share is but 2·06 per cent. ·

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The influence o£ the war is reflected in the diminution of production of beet sugar, the output of which diminished from 8,976,000 tons in 1912- 13 to 4,339,000 tons in 1919- 20. On the other hand, the production of cane sugar had increased by about 3,000,000 tons, and there is evidence of continued expansion of cane production. · .

The Con11nission has sought ·nformation from various authorities in regard to the -con­ ditions of clin1ate, soil, labour, fiscal policy, and other factors affecting cultivation cost in the several sugar-producing countries of the world. Australia is the only country in the world growing and n1anufacturing sugar by white labour. The rates of wages, hours of labour, and conditions of employment in Australia represent features so distinct other sugar-producing countries

that no precise comparison appears to be possible ·in respect to production cost s.

There is good rea on to anticipate a ·material increase in the consumption of sugar in European countries, and also in the East, while in the 1Jnited States the adoption of prohibition as a national policy is said .to have resulted in a_ reinarkable increase in the use of sugar. Also, the world-wide movement for increase of wages in agricultural as well as in other pursuits 1nay have a lin1iting effect upon the production of sugar beet, in which labour is a more important

element than in 1nany other crops. These t wo probabilities make prediction more than ordinarily uncertain, but it seems likely that if in the near future beet sugar is produced in approximately the same quantities as before the war, vv-orld -surpluses of sugar will occur in good · seasons, with a resulting lowering of prices. (On this point see also page xlii).

PRESENT _ STATUTORY AND ADl\1INI STRATIVE CONTROL OF TI-lE INDUSTRY. -The question whether the sugar industry should be free from all control cannot be approached as if there were a clean slate to write upon. Apart altogether from the agreements (further referred to below) expiring in 1920 for the purchase by the Commonwealth of raw

sugar from the Queensland Government, and for the refining and marketing at prescribed prices of all raw sugar- Australian or imported- there exists now in permanent statutory form a great actual measure of control by the State of Queensland, and a great potential measure of control by the States generally through their power of establi. hing price-fixing. machinery. That power

is being exercised in some of the States.

'rhe State (Queensland) exercises authority--(a) in fixing wages and conditions of employment through the Arbitration Court; (b) in determining the nature of the accommodation t o be provided for workers in the industry under the Shearers and Sugar \Vorkers' Accommodation Act ; (c) in fixing the prices of cane through the Central or Local Boards appointed under

the Regulation of Sugar Cane Prices Act; (d) over the Bureau of Sugar Experiment Stations ; (e) over certain central mills which have been t aken over by the Government; (j) in the compulsory acquisition of raw sugar under the Sugar Acqui sition Act.

The Queensland grower cannot contract as he likes with his employee, because he must obey the Queensland Arbitration Court's award, nor can growers and manufacturers contract as they like, because they _must accept the Cane Prices Board's a ward. Thus the grovver's production-cost is determined by wages he is compelled by Jaw to pay, his returns are det ermined

by the price the miller is to pay him for cane, and

are deternlined by the operatwn of those factors and by the Arb1tratwn Court s determn1atwn of mill wages. -

Again, the Sugar Acquisition Ac.t in Queensland is a measure of any war

powers, and under it the State can acquue the whole sugar output . Th1s 1t has so far done a a step to the Commonwealth Government the sea on's yield of raw sugar _by _ an

agreement as to t he price of raw sugar w1th the Queensland Government. Under legL latwn dependent upon war powers the Commonwealth Government made agreements with and ha. · paid the refining companies for refining and sugar refined from ,the s?-gar

acquired, and has fixed both the retail pnces of

'Ihe pnce bemg pa1d

for raw sugar is £21 ton, and the reta1l pnce of refined sugar 1s 32 d. lb. Up to the date of this no action has been taken in regard to t he 1920

crop, the Queensland Government not having used it power under the ngar Acqui ition Act, and no agreement ha ing been made between that nt and the mmonwealth.

When the p riod of price-fixing t he om s t o an end_, th

legislation passed by various wh1eh perrruts of fixing ,t he of sugar may a 'aln be

acted on by the State tribunals, 1ndepend ntly of each ot h r s de 1. wns.

xlii '

Wages in the sugar industry in New South Wales are not the subject of Awards (except as to workers), nor is there any statutory control of cane prices in that State, though those pnces as well as the wages paid for cultivation and harvesting and in raw sugar mills are largely affected by the rates ruling in Queensland.

Apart from the provisions of the War Precautions Act (an expiring Statute), and the Commercial Activities Act, a tmnporary n1easure, the power of the Commonwealth is limited to the control-a control of fundamental importance, however-exercisable through the Tariff and through the Customs Act. _

Under the Customs Act a Proclamation was gazetted on the 9th September, 1915, pro­ hibiting the importation of raw or refined sugar, except with the permission of the Minister for Trade and Customs. Since that time sugar has only been imported (and then with Government control as to distribution) to make up any shortage in the Australian crop.

At present, under the authority of the War Precautions Act, as already the Com­ monwealth fixes the prices of raw sugar and refined sugar throughout the Commonwealth. The Commercial Activities Act recently passed by the Commonwealth Parliament gives power to the Commonwealth to continue the controi of sugar prices until 30th September, 1920. At that date it is assumed that the Commonwealth power over sugar prices will cease, unless in the meantime the Commonwealth acquires additional legislative powers. -

FUTURE CONTROL.

In discussing the question of future control of the industry, it may be in mind that, as will be shown later, control in this case includes the use of authority to confer the benefits of stability and progress which are the main_ needs of the industry.

NEW ELEMENTS OF CONTROL-PRICES.

Assuming that control as to wages and cane prices will be continued, the important question remains as to continuance or otherwise of fixed pric_ es for raw and refined sugar. Once the existing arrangements expire (Septen1ber, 1920), these prices will either be fixed at the discretion of the various State price-fixing authorities or be determined by ordinary n1arket considerations. The ordinary position _ in Australia justifies the staten1ent of the General Manager of the Colonial Sugar Refining Company that the public "will pay every shilling of protection which is given by the duty on imports, together with the distributor's profit on the increased cost."

It becomes, therefore, of great practical importance to consider the present and prospective prices of sugar in the world's markets, since those prices plus the duty would be the prices paid by the com1nunity in the absence of regulation by public authoritJ!. The present world's price is higher to a phenomenal extent than the normal prices before the war.

INFLUENCE OF PRESENT ABNORMAL WORLD PRICES.

Before the war, Java raw sugar could be landed in Australia duty paid for £17 to £18 per ton. On the 4th February, 1920, sales of Java raw sugar were made at £57 per ton nominal. The exchange was at that date adverse to the Australian buyer to the extent of about 35 per cent., and this of course adds to the cost accordingly. Leaving out of account, however, the effect of the adverse exchange, and adding £6 12s. 9d. per ton, the present difference

(after allowing the maxin1um discount) between raws and refined, for refining and distributing wholesale, that would bring the price of refined sugar to £63 12s. 9d. per ton wholesale, which would mean nearly £35 per ton above the present fixed price. At present grocers sell for 3ld. a lb. or £32 13s. 4d. per ton what they receive for £28 12s. 10d. (nett after allowing discount) per ton. The selling price is, therefore, 14 per cent. added to the cost price (£4 Os. 6d.

on £28 12s. 10d. ), and that percentage involves the retailer in loss. Assuming that say 10 per cent., be added to the price of £63 12s. 9d. per ton wholesale, the retail price of sugar, if liberated from control, and apart from the added cost due to an adverse exchange, would now be about £70 per ton. This would involve a retail price of nearly 8d. per lb., more than .twice

what the community is now paying. These figures leave out of account any effect upon prices brought about by the local speculations bound to occur in a market so abnormal.

On the other hand, such world prices are not likely to continue. It will _ take some time for the beet growing countries of Europe to produce what they produced before the war, and in the meantime, the cane-sugar countries are still increasing their output. The result will be, in the opinion of the American expert, W. D. Horne, that" when Europe resumes her large production there will be a great surplus, with corresponding competition to. " (Journal of

Industrial and Engineering Chemistry, October, 1918, p. 812). In the op1n10n of an expert witness it is not improbable that the world's price of sugar will recede to something like its

947

xliii

pre-:war level, plus an increase due to higher wages and to some increase due to higher freight charges. Another element, it is true, will tend to keep up the price of sugar, viz., the increased consumption to which the millions of soldiers in Europe became accustmned during the War and the general movement towards a higher standard of food supply; The Chairn1an of the

9onference on Empire Sugar (Journal of the Society of Chemical Industry, 15th August, 1919) said 1n concluding the -proceedings:-" I do not think there will ever be a glut of sugar, for as production increases consumption in the lower countries will also increase." As the industry stands, nothing is more certain than that a phenomenal rise in price

such as would occur, i£ the world price applied without n1odification to the Australian market, would be at once used before the Cane Prices Board by millers to claim a better rate of profit, and by growers to obtain a higher cane price. Assuming .those claims to be granted, employees in mills or on farms would apply .to the Arbitration Court for increased wages. The probable result would be that the large proportion of this temporary rise in price would go to increase the wages, cane prices, and factory and refining profits of the industry. But the

basis of this improvement would be evanescent, while it has to be remembered that once wages or prices are advanced there is always opposition to their reduction. The only way in which wages and prices could be kept with any permanence at a level approximately corresponding with the present inflated world-price of sugar would be by a duty of over 200 per cent. ad valorem on a c.i.f. price of £20 per ton-a price in advance of normal prices before the war.

· The abnormal world prices which now exist and which may continue with fluctuati?ns for some time to come, coupled with the existing statutory control of wages and cane prices make it in the interests of stability for producers, as well as in the interests of consumers, that prices also should be controlled.

On present world prices, and without Governn1ent control, sugar would cost about 8d. per lb. for domestic consumption. The average consumption of sugar in Australia per head is about 120 lbs. per annum. The increase of 4!d. per lb. would, therefore, represent £2 5s. per head per annum or, in a family of five, £11 5s. per say 4s. 4d. per week-a formidable additinn to the cost of living.

Any large increase in the retail price of sugar would almost certainly cause a diminution of ·. the present average consumption, which includes sugar in jams, confectionery, condensed mille, biscuits, &c . The manufacture of these for local consumption would fall off accordingly. If sugar rose by £30 per ton, then as jam contains 50 per cent. of sugar, the price of jam must advance by over £15 per ton, or about 2d. per lb. This would adversely affect both the jam and the fruit industry. ·

Though the present striking advance of the sugar price was well known to the sugar '; producers who gave evidence before the Commission, they made no claim for a return to uncontrolled prices. It is evident from this that the producers qf sugar that a steady and fair price is the best policy.

vVhile the Australian cane farmer enjoys an effective Tariff and is

quite unable to compete in the world's markets, it is also true that, dunng the recent and st1ll continuing period of abnormally high world prices, arrangements n1ade for the compulsory acquirement of the whole sugar crop have prevented cane growers from sharing in the_large profits which would have been obtainable if export of Australian sugar had been

profits, of course, would have been in effect a direct tax upon sugar as u;nportatwn at the high outside prices would compel corresponding increases in the retml seJhng pnce. The following figures recently supplied to the Commission show the prices indiffArent countries as at 31st December, 1919 :----

Price per lb. (including duty).

United States 5it. ..

Canada 6;fd.

Australia 3td.

New Zealand . . 4d.

France 7-_id.

Belgium 7! d.

United Kingdom 7d. (and 7! d. cubes)

South Africa . . 5d. (for granulated)

Jamaica 5t d. (for "White Albion " )

Duty p er lu

. .About l d ld. v

. .About ! d. . .No duty l i d. i d.

l *d.

These figures make it clear that the Australian consumer is in the fortunate position of obtaining sugar at the lowest rate in the world. · .

That this is still the case is due to the existence of the Australian Sugar Industry and to the p:J;evision of the Federal authorities in making early purchases ?f sugar to an extent sufficient to supplement the Australian crop, which for the season JUSt t erminated fell far short ·of the full .requirements.

xliv

If .the Australian sugar crop to be harvested during the present calebdar year proves to be m_ atenally below the quantity needed, it n1ay be impossible to avoid an increase in the price to the consu1ner.

COMMONWEALTH CONTROL NECE SSARY. If, then, the control of prices is to continue, there can be no doubt that it can­

only be effectively exercised by a Commonwealth authority. Though nearly all the production of sugar is in Queensland, the bulk of the consumption is in the other States, and the balance between the claims of the producers and those of the consumers can only be fairly held. by the authority that represents them both. The anomaly of State control was made manifest. when the Government of Queensland acquired and for raw sugar -while the State pnce-fixing authorities of New South V\Tales and Victoria fixed the retail price of refined sugar at a figure whjch caused alarm t o the sugar industry. It is obvious that if State tribunals fix the price of sugar· within t heir own boundaries, only a corresponding price can be paid in the Queensland factories, and thus the determinations of the Queensland Arbitration Court and the Cane Prices Board would depend upon the price fixed for sugar in. other States. It was indeed anomalies such as this, and the sense of injustice linked with the anomalies, which _ led to the leaders of the Queensland industry invoking the Commonwealth control which they now, for similar reasons, desire to see continued .

. The next point in the .question of control- using that term in the wider sense already explained as including assistance where desirable-is in regard to experiment and education on the cultivation side. Allusion has been made to the work carried out by the Queensland Bureau of Sugar Experiment Stations. _ In New South Wales, where the industry is s1nall, there is no corresponding bureau, though the subject has not been neglected by the Agricultural Department. !,his work is susceptible of considerable expansion both on the research and experimental side and, In ;:tn even h igher degree, upon t he side of demonstration and the dissemination of instruction.

It could hardly be expected that the State Governments would desire to continue and extend the expenditure needed after the Cmnmonwealth has undertaken the duties already n1entioned, and it is therefore suggested that the func.tions of the Bureau should be taken over by the Cornm_onwealth in connexion with the scheme of control described later in this Report . _

Similarly with regard to the most important deficiency at present existing in the organization of raw sugar manufacture, viz., that there is no general chemical or engineering supervision operating over the working of all the individual mills. The advanta,ges of such a general control are obvious. By comparing the results of diffe rent installations or rnethods, the knowledge gained in one mill enures to the beneftt of every other mill in the of

supervision. This has been demonstrated by the centralized control of the Coloniatl Sugar Refining Com.pany's mills under which e-ach mill reports to the advising chiefs of the Company, and obtains - directions or suggestions based upon the aggregate knowledge of the work; of all the mills . Some steps in this direction have recently been taken with regard to the Governn1ent Control Mills.

So, too, in the " Mutual Control" of the J ava mills and in the Hawaiian factories, the sanl8 end is achieved. - Somet hing might no doubt be done in Queensland by voluntary inter­ communication, but the obstacles of distance (so far as personal interchange is concerned), lack of authority, and trade reticence.-have so far prevented any but fortuitous and scanty knowledge being thus disseminated. Such difficulties would not exist with a general Commonwealth body or tribunal receiving inforrpation from each of the factories and imparting the lessons drawn from that information to all. No injury to n1anufacturers .could result since with the control over

prices now existing, and which, it is proposed should continue, cornpetition between manu-facturers in the ordinary sense is and would be non-existent. ·

The value of central control in the promotion of efficiency needs no emphasizing. Authorities agree in ascribing the high efficiency of J ava manufacturing largely to this cause, and the attitude of the Hawaii sugar men is well illustrat ed in the following quotation from the Report of the U.S .A. Department of Commerce on the Cane Sugar Industry (1 917) at page 69 .

In the month of J uly, 1915, a special agent of the Bureau of Foreign and Domestic C0mmerce, with a corps of assistants, called upon the principal sugar planters of the Hawaiian Islands at their offices in Honolulu and discussed wit h t hem in detail the desire of the Bureau to make a complete investigation of the cane sugar industry.

* * * * * * * *

Assurances were given that the manager and general bookkeeper of each plantation would be instructed to furnish every fa cility for the inspection and verification of cost and other data, and that all books and records would be placed at the disposal of the agents of the Bureau. The Hawaiian sugar planters stated t hat it had been their po licy for years to give the widest publicity to details of production and costs, an1 that they had established " clearing houses " of information through which every scient ific and me?hanical improvement having for its ob ject the advancement of the industry and the reduction _ of cost of productwn was made common property. In addition to this, details of the fiscal condition of each plantatwn and of its costs and profits were exchan ed by plantations1 and were of general knowledge .

949

xlv

_ .. There. can _ be doubt. that the industry has suffered for i\rant

of this enlightened attitude towards the comparison of results.

. While many withesses expressed themselves ih favo'ut of this feature of prdper organiza-ti?n; they considered that- it . should en1brace the Colonial Sugar Refining Con1pany's tnillq. It Wlll be seen that the Cdmpany is. bpposed to form of _gover:hn1ental control. The Commission sees no reason why any distinction should be made between this Compa;ny and other of taw sug3ir: The suggested control would not extend t o trade secrets or

patent ptbcesses.

A practicable means of dealing with the questioii of .mill efficiency 'vould be to prohibit t he of sugar except under licehce, providing for tlie issue of litences to raw sugar nlills

and refineries at a reasonable fee, and subject to condjtions such as, e.g., that periodical chemical and other returns be ftunished in a prespribed forn1, and that the machinery and plant should be kept up to an approved stamdard: Expert engineers and chemists would be needed to the necessary insp ections and to exercise the requisite , crutiny and con1parison of results.

Some part , of the prevaH1ng reluctance t o spend money on improving factory would probably disappear if prices and wages "vere rendered stable for a definite period o£ three years. ·

S.o far as farn1ing :ls concerned, assun1:lng that the t'ecently jnt;roduced methods of paying fm; cane aocording to its will be continued, it p.1ay fa irly be

expected t hat a campaign of field demonstration and would result in n1arked the place which .co-operative buying of fer:tilizers and of other supplies would take

if tl:ie industry ,;;epe organtzed in a coherent vv;ay, n'iight be taken by go'\r(jrninen'tal actio-n having the atlvant·ag·es of a review of aJl , the sug·ar afeas, of -vvholesale purchasing of suitable and of tlieit distribution under skilled advice at the lowest reasonable price' . .

Again, occasions occur when experin1ent -tvith some invention is desirable, but is too expensive an undertaking for a private concern. The discovery of a new cane harvester or the perfecting of an existing machine furnishes a case in point: Without such a stimulus as the Conttol arfa·fige (\iVith or without the financial co-operation of parties interested),

by the offer _ of a .. Prize fot ai1 Australian invention, or by obtaining and testing a foreign

harvester, the practicability of so great an ifnprove:p1ent to the industry n1ay not even be tested.

ATTITUDE OF TI-IE INDUSTRY TO FEDERAL CONTROL.

The evidence discloses a widespread desire to se0 the Sugar Industry brought under a co-oTdinated control, and it was generally agreed that such must be by the Con1mon­ wealth Government, the rea;s011' assigned being t hat the Cornnwnwealth Parlian1ent holds the key to the eantinuance of the iridusttyunder white labour, nan1ely, the Tariff. How far control should go

was a ·matter upon which there was not this general agreeinent, the main difference being as to the control of industrial conditions. The two Associations representing the growers-the Australian Sugar Producets' Association and the United Cane Growers' Ass ociation-wish to see industrial n1atters under Comruonwt5alth COiitrol, while the Australian Workers' Union is said to desire t hat the Court o-f t4e State should retain its jurisdiction over sugar workers. All

t hree bodies' were agreed that the Commonwealth should detennine through some tribunal the prices of raw and refined sugar and also the price paid to the grower for cane.

The advanced by the growers or their representative ,. itnesses for transferring t he regulation of industrial rnatters to the F ederal Governn1ent were that the wages paid for g:ro,ving and harvesting caue are the fo undation of the grower's cost of ·production, and these he 1nust be able to recover' in the price he gets fo r hi, canv. If, herefore, ' ''tate tribunal d · tern1in es

wages, while a F edetal body determines cane-prices, the door is op :h to serjous confusion. If the Federal authority fixed the cane-pric-e first, the State Arbitration Court would 1e lw uncl to . ftatne it 3Jwarrd to meet tha;t situation. l f the State tribunal fir t determined the wages, the Federal authority could not ignore that detern1ination in fixing the .. ane-price . • 'o that

everything would depend o-n which tribunal succeed d in announcing its deciaion first.

The objection of the Australian vVorkers' Union to Federal ontrol in industrial Inattcrc 'vVets vaiced by the Queensland General Secretary of the nion, lVfr . .B'. \V. 1artyn, who said :-

. As to how Government control a:ffcct the waac; earner , under the GJnditions we would not be

in' favour ot handing ov2r t he control of industrial a:ffairs o the F deral Government.. incty per cent. of -he workers in the industry, I , upposc, are members of our union. · am speaking on behalf of the union. I do not know tha-t it is the province of our orga'nizati.on to d al wi h he price of ca11e ; we have OJ?.ly ·on :-5idcred it as it our members . The rea. ·on we are not in favour of handing over conLr l to the Government at pr sent is there IS insu-fficient power unclet t he F de1al Arbit ration ct to effectively leal with the matter. Our next rca ·on i. that , the proceedings are too cumbers-ome and expensive and not as expeditious in handling dis putcs as the State courts.

xi vi

- 1 t does not appear that the opinion thus expressed has ever been the subject of a · definite decision of the Union, but assuming that the witness rightly interpreted the Union's wishes on this point, it may be pointed out that the view expressed is based on a misconception. . It appears to have been thought that the only way in which the Commonwealth could control industrial conditions in the Sugar Industry would be through the Comm.onwealth Court of Conciliation and Arbitration, and that as a consequence the claims of workers in that industry would be exposed to the limitations and restrictions (e.g., the inability to make a common rule) which the Constitution imposes upon that Court, and further to the delay involved where numbers of other unions are suitors in that jurisdiction.

If, however, the Commonwealth acquired general powers of legislation over the sugar industry, any such limitations would disappear. On the part of manufacturers of raw 'sugar the attitude was in general one of

approval of Cmnmonwealth control throughout the industry. The Australian Sugar Pro­ ducers' Association includes practically all the Queensland raw sugar n1ills except those directed and taken over _by the Government. The Colonial Sugar Refining Company occupies a somewhat anomaloue position with regard to the Association. The Company contributes to the funds of the Association a sum equal to the contributions by grower members who supply cane to the con1pany. Each milling company which is a member of the Association is entitled to have a representative upon the Council of the Association in respect of each mill, but the Colonial Sugar Refining Company does not avail itself of this privilege nor take any part whatever in the management of the Asssociation. ·

As to refiners of cane sugar, there are only two companies in the Commonwealth, the Colonial Sugar Refining Company Limited and the Millaquin Sugar Company Limited. The General Manager of the latter Company (who is also the General Manager of the Queensland National Bank) expressed himself in favour of a continuance and extension of the . Commonwealth control at present existing. He said:-

Personally, I am in favour of Commonwealth control of the industry if it were under a Board free from political influence, in order to give stability to the industry that we may know what we are doing. I do not think nationalization would be at all necessary. I would prefer the Commonwealth taking control over everything connected with the industry from start to finish. That is to say: some Commonwealth authority should fix the wages and conditions of work, and the same authority should fix: the cane-prices, and the prices of raw sugar and refined sugar, say, for a term of not less than ten years, because at present we hard1y know where we are. . . . . . . . . . .

When I say it should be for a t erm of years, I mean the system should last that long as a minimum, personally I should like to see it made permanent ; then we would know what we are doing from all points of view, financial and otherwise. Stability is the whole thing. Its determinations, I think, should extend over a period of years at any rate. It is probably not practicable to fix fairly reasonable wages and prices for cane for years ahead; th03e might be reviewed every three years, just as it is done under the wages awards now. .My own feeling is that the price of sugar must eventually come down, and in suggesting the Government should fix the price of raw sugar, I was assuming that they would so control the qbestion of imports as to see that price was obtained.

On the other hand, the General Manager of the Colonial Sugar Refining Company was opposed to any control of the industry. His views were as follows:-Go vernment ControL-Extent to which necessary or desirable in the interests of- (a) Wage earners; Unless it be intended that the Commonwealth shall attempt to fix statutory conditions of employment for all men engaged in producing industries in Australia, there would be no justification for thus dealing with those concerned in the

production of sugar, for' there are no special circumstances calling for such interference. . . . (b) Producers.­ !£ all interference between mill-owner and grower should cease, there is no reason to doubt that they will forthwith again come to reasonable and fair terms for the conduct of the industry. The only effect so far, on their relations, of the Government control now existing is to tear the two parties apart, and the closer the control, the more difficult would be

the settlement of their differences, because it would be exercised by men who had not the requisite knowledge of the conditions of the business. . . . . (c) Consumers:- So far as the consuming public is concerned, there cannot be the least doubt that they will pay every shilling of protection on sugar which is given by the duty on imports, together with the distributors' profit on the increased cost. Nor is there any prospect of the industry being so ordered as to put the sugar on the market at a price less than that of the imported sugar, duty paid. There is thus no possibility of the consumer deriving any advantage from the Government controlling either the making or refining of the sugar. He

will undoubtedly pay more if the. business were made a Government monopoly. ·

Speaking of the control of cane-prices under Queensland legislation, the witness condemned it in the following terms :-But before then the Queensland Parliament had passed an Act for fixing the price of cane and this method of control is still in fo rce in that State. The expressed intention of the promoters of that measure was to force the owners of the private mills to sell their factories to the farmers who supplied the cane to them, and, from the inception of the proceedings under the Act, the administration of it has been directed to the attainment of this end by awarding to the · growers an undue share of the gross profits fro m the sale of the sugar so as to diminish, not only the income ofthe mill­

owner, but, by the same process the value of the mill from which the Government wish to oust him. For four seasons, this scheme has been in operation (the Act had the retrospective effect for that of 1915), and very serious mischief has resulted ; not only have the friendly relations between mi.llers and growers been in many cases, broken up, but the co ntrol hitherto exercised by the former over the areas urider crop, and the varieties to be grown, and the mode of cultivation, has been abolished. And all improvements and additions to mills and tram lines have been stopped. Indeed, we cannot even venture to provide the tanks and other 1naterial required for the removal and utilization of the molasse.s, now burned or run to waste.

951

xlvii

. ' '

\Vith regard to Commonwealth control during the war, the san1e witness said :-. As to that by the Federal Government, we are now a]:)Out to enter on the fifth year of this. It has been exercised throughout in a temperate and reasonable way- an attitude of the authorities which may be, in part, the consequence of their having ascertained that the expenses of refining and the return to the refiner have been less than in the United States. We believe that this is also the case as regards Great Britain, but the de' ails of the arrangement

there we have not been able to discover . . . . I have the profound conviction that this method of governing the flow of trade is not only an economic mistake, but is injurious to the three parties concerned. To the Government, because time that would have been given .to general administration is devoted to discussing points about a business matter which can only be fully understood by thos0 conducting that particular trade. To the consumer, the system brings a higher cost of living; first, because in purchasing raw sugar supplies the need for reference to the authorities a and, again, because where the factory-owner gains nothing by economy or improved work, it

1s certam that, m the end, the cost of the product will increase, while the quality, vvhen competition is excluded will fall off. To the manufacturer, the co ntrol is really destructive ; not only does he suffer in character and the power of management under the heads iust mentioned, but he cannot venture, by reason of the uncertainties of political life, to make costly changes in, or additions to, his factories, which are called for by the developn:tent of the country or of the particular trade in which he is interested. An instance will explain this point: Our refining business has now reached a point where some far-reaching alterations will be necessary iri the early future if we are to keep an increasing population supplied with white sugar. At one factory and in one department such a change would inv.olve an outlay ?f between £75,000 and £100,000 during the next year or bvo, and it could never be expected that our company would mcur an expense such as this under a system of control like that now in forc e, where the possible profit is a very moderate

one, and the continuance of it will depend on the whim of the Minister and Parliament ..

Upon a review of the whole evidence, it would appear clear that should Commonwealth control be determined upon it would, · if it were operated on similar moderate lines as heretofore, be generally approved, with the exception above indicated.

PERIODICAL FIXING OF WAGES AND PRICES.

Both growers and miHers emphatically claimed that the industry should be given a stability as to wages and prices which is at present lacking . . The Commission is satisfied that this claim is reasonable, and that wages, cane prices, and the price of raw sugar should be fixed for a definite period of not less than three years.

CONTRACTING OUT.

So far as cane-pnces are concerned, the Queensland Statute annuls any contract for payment for cane between grower and miller. This is a common provision in many statutes passed for the protection of a particular section and is known as the prohibition of "contracting out." The prohibition is designed to prevent pressure being brought by the powerful upon the weak to deprive the latter, by an agreement apparently voluntary, of the benefits conferred by statute. As a general principle, this is no doubt sound, but where the benefit of the statute is conveyed

through a tribunal, there seems no reason why agreements subject to the sanction of that tribunal should not be allowed. Such agreements should, however, be for . the same period as the awards governing wages and cane prices.

WHETHER EXTENDED POWERS ARE NECESSARY. This Commission is directed inter alia to inquire, in the event of Cominonwealth control appearing desirable, "what extensions (if any) of present powers are necessary." This question has already been answered, in so far as it may be taken to refer to the extent to which the present degree of eoncrete control should be continued or extended. Another possible

meaning of the above phrase may be that it refers to extension of the Parliame.nt's power to legislate, but it was probably not intended that the Cominission should discuss the Constitutional methods by which such an extension of legislative power may be acquired.

HOW CONTROL NIA.Y BE EXERCISED.

At present national control of the sugar industry is shared in piecemeal fa shion by both State and Federal legislatures, departrnents and tribunals. To unify properly the scattered functions now performed by these authorities, as well as to secure stability and efficiency, it is necessary to establish one controlling body having statutory a fixed tenure. . A_ body, which might be called the Commonwealth Sugar Control, consisting of three Comnnssioners,

would, in the opinion of the Commission, be the most suitable. The suggestion made in evidence by the Australian Sugar Producers' Ass?ciation and U:nited Ca?-e Growers' Ass?cia?ion for a larger tribunal to consist of representatives of the vanous Interests IS open to the obJectwn such representatives tend to regard their function as largely one . of advocacy- a vww prejudicial to success in judicial or adininistrative tasks. None of the Commissioners should

possess any personal interest, direct or indirect, in industry. In the opinion of the

Commission, the head-quarters of the Control should be 1n Queensland.

:ilvii!

The Oohtrol should be charged wltli the folltlwing respoiisibilities .-1. Industrial Arbitration. 2. Effi.ciency in cuftivatio.h . 3. Price to be paid by millers for sugar cane. 4. Conditions iihdet which cane may be delivered to the niiJL 5. Efficiency of sugar mills. .

6. Price of Raw Sugar to be paid to 7. Recommendation of new areas suitable for cane cultivatiori. 8. Recommendation of sites for mills. 9. Sugar Experiment Bureau and Stations.

The Control should have authority over the Carte Sugar Industry throughout the Australian Commonwealth. It has been pointed out in an earlie1' part of t his Report that wages and carie prices are by separa.te tribmials acting tinder' State statutes. During the four years bf the operatib11

of that legislatibil these tribunals have had as a . basic fact a fixed price fot raw sugar. If there were uncertainty as to the price of raw sugar, the fixing o£ cane prices would beconie almost impracticable, and the difficulties of the Arbitration Court in determining wages would be materially increased.

The . question of financing tlie Contr

even if it were not so, it could not be readily adapted to meet the requirements df the proposed administration. The expenditure of t:he Cane Prices Board for thE\ financial year ended 30th June, 1918, was £11,433, and under the Sugar Experiment Stations Act fot the same peribd, £12,368 . The cost of the Industrial Arbitration Court in respect to the Carte Fields and Sugar Mills Wages Awards is not available.

At present the expenses of the Cane Prices Boaid are rflet by an assessment levied on the cane farmers. Those of the Sugar Experiment Stations are met by a levy on the farmers, by subsidies from the Queensland and Governments, and by sales -of sugar cane from the Experiment Stations. These levies c;m the farmers are varied from year to year. .They atb.ounted tb £27,915 for the year ended 30th June, It will be ob §f5fved they were in excess of what was requited, owing to the levy being made on the of carte crushed; which tvas exceptictnally large: Tlie above amount :t·epresented an exceptionally gbod seaso:rl . These levies have been a continilal source of irritatidn to the farmers not only ih respect to their uncertain amounts btit because the contributors have had no voice in regard tn the rate o'f a\ssessinent ot the manner in which their cOntributions afe expended.

, While the :fnaintena:hce, and the expansion, of the w?rk of Bureau. of Sugar

Experiment Stations is essential to the progress of the i:hdtistry; the Commission is of opi:hio;n that the evidence also proves conclusively the necessity for providing so:tile means of assisting the raw sugar mills to obtain a higher standard of efficiency. It is suggested that perhaps the best method of raising sufficient t evenue would Be tb ptd ide that, say, 1 per lie added to the cost o): refined sugar, whether. of Australian or other origin, and that this amount be set apart for the purposes of the tribunal. With the fund thus obtained 5 not only could administrative costs be met but there would be a sum ava{lable fo r financial assistance of the raw sugar m{I1s, :fnd it {s suggested that the Control should have pmver to iend at current banking rates, at low rates, or in cases 1vhere in its opinion the special circumstances justify such action, lend without interest, upon the security in each case of the raw sugar factory.

For instance, it is estimated that the consumption of refined sugar in Australia in 1920- 21 will be about 300,000 tons, which, at say £28 per ton, represents £8,400,000 . If_ 1 per cent. was charged on the value of this refined sugar, it would yield £84,000, which after administrative expenses have been met shoi.1ld provide about £50,000, of more, for the purpose of loans to improve mill efficiency. This slight addition to the wholesale pl'ice of sctgat co11ld be progressively reduced as the desired efficiency bf the mills and other branches of the industry is attained.

Whilst the suggested Control should t end to develop the industry on more pern1anent lines, and tb remedy the present wasteful methods , thus indirectly bri:hging about a substantial financial gain to· the industry, it is cdnsidered that the adtninistrative expenditure, after amalgamating the varidus services, will not greatly exceed that at incurred .

The Control would thus be an administrative body with adjudicatory po,vers irt respect of the determination of wages, cane prices, and raw sugar prices . On its administrative si8.e it should completely control the Bureau of Sugar Experiment_ Statioiis . . For the.purpose orsecuring mill efficiency it is very necessary that the Control should have certam authonty over all _the raw sugar

m:llls. Through its engineering and chemical advisers, the Control would He iri a to exercise

953 xlix

a supervising authority which should be value in raising the standard of efficiency. The Control would also be in a position to see that any financial advances made were applied to the best advantage.

CONTROL OVER REFINERIES. WHOLESALE REFINED SUGAR PRICES AND IMPORTATIONS. In regard to refined sugar there are special features which make it impracticable to fix the price for any lengthened period. · Owing to our variable production and inability to supply the local demand, importations are generally necessary. Thus, although the price of At.rstralian raw sugar might be fixed for a definite period, there will be an absence of uniformity in the cost of imported raw sugars, and consequently the wholesale sel!ing price of refined sugars must take this

variation into account. The present scJ!eme of Commonwealth control provides for this by pooling all sugars passing through the refineries in order to arrive at an average wholesale price and a similar arrangement will be necessary in the future.

The present method, which appears to have worked well, is one in which the refiners who have at their command the necessary machinery for distribution, have acted in co-ope­ ration with the Government. It is suggested that an arrangement to effect the same purpcses be carried out in

the future. .But in the event of the refiners declining to co-operate, then the only alternative would be to constitute an authority to directly control the wholesale price of sugar and its distribution. In this connexion attention is invited to the managing charges paid to the Colonial Sugar

Refining Company and the Millaquin Company of 20s. and lOs. respectively per ton of Australian raw sugar melted. The agreements in the case of each company allude to this charge as repre­ senting " depreciation and interest on plant and stocks and the payment for the services of the company in connexion with the refining of. the sugar." :En the first agreement (1915) with the

Colonial Sugar Refining Company, clause 8 provides that " to meet the exceptional situation created by war conditions and to enable the Government to provide the community with st1gar n.t a unif_orm price throughout the period covered by this agreement the company agrees to return to the Government one-half of the charge of 20s. per ton" above referred to. In all the agreements

since 1915 the provision as to reb3:te is omitted, but the company after some negotiations refunded £60,000 in connexion with the 1916 crop, as appears fr om answers to questions in the House of Representatives (Hansard, vol. LXXXI., p. 11701.) No refund has been made since that year.

The Commission recommends that a thorough investigation into managing and refining costs be made before any new agreement be entered into with the refining companies. With regard to the Colonial Sugar Refining Company, that investigation should include an examination as to the actual capital used in the company's business in Australia, more particularly in view of the evidence given by the General Manager on' 15th December, 1919, which suggests that a very large writing up of assets occurred in connexion with the nominal separation

of the Australian business from the business in New Zealand and Fiji. Such an examination being within the terms of reference, and being essential in order that the. Government may. be placed in a position to ascertain what is a fair amount to allow for refinmg and for managmg services including profit, would have been made by the Commission, but the company's refusal to supply information has so far prevented the Commission from dealing with the matter.

Assuming that the and the refiners come to an agreement, then the following arrangements will be necessary:-1. The importation of refined sugar, other than for purposes of manufacture for export under Customs regulations, should be prohibited.

2. Excepting as above provided sugar should be imported only for the purpose of being refined in the Commonwealth. .

3. The wholesale prices should be calculated on the total cost of raw sugar (Australian and imported), plus agreed cost of refining and other charges, plus 1 per cent. of the total of such costs for Control ·Fund. 4. The wholesale prices and trade discounts when decided upon should be notified

by the Minister from time to time. 5. For the above purposes, all refiners' accounts, and trat;tsactions

must be available for inspection by the Minister or h1s representatives and by the Auditor-General. It is not thought that it .is necessary to O.x the price of .sug3:r. This commodity is used by grocers as -a cut line and it is considered that the public .will probablv be amply protected by the competition of retailers.

F.5618.-4

1

Should, however, it be found at any future time that a combination is formed for the purpose of fixing the retail price of sugar at an amount which involves an unfair charge, steps may then be taken to remedy the evil. Special provision is necessary in respect to the beet sugar manufactured at Maffra, Victoria, as otherwise this class of sugar may obtain exceptional advantages and thus occasion justifiable discontent amongst the cane farmers.

If the arrangements above recommended for dealing with the cane sugar industry of Australia be· adopted it is important that the Maffra factory and any extensions of beet sugar production, either in Victoria or other States, should be included in that part of the scheme which relates to wholesale prices so that an equitable arrangement may be made. At present practically the whole of the sugar produced at Ma:ffra is distributed in the surrounding district and the quantity has never been great enough to constitute a serious item of competition with cane sugar.

It is suggested that as a preliminary to entering into an agreement dealing with the Maffra output an investigation should be made to determine the cost of manufacture and the costs of transportation and distribution. It may be that an investigation would disclose that as compared with cane sugar, the Ma:ffra factory is, in effect, receiving allowances for manufacturing costs and for distribution in excess of what is reasonably necessary. It is clear that if the factory were left out of the general scheme and in consequence the profits from beet were on a much higher scale than those derivable from the production of cane, an artificial stimulus might be given to the beet sugar industry, which place it in a position of special privilege.

The output of beet sugar can only be equitably dealt with as part of the general production, and the method of agreement after investigation as above suggested should place the matter on a proper basis. If in any year importations supplementing the Australian necessitate an all-round price higher than would be required if the Australian production were sufficient for the total demand, the Ma:ffra factory would not be entitled to retain the excess due to the extra price so caused, but that excess should be handed over to the Sugar Administration. Otherwise the Maffra factory would be deriving an advantage not sharedby the manufacturers of cane sugar.

The duty on beet sugar is £10 per ton, but in view of the changed conditions of the beet industry outside Australia the Commission is of opinion that there is no present necessity for imposing a higher tariff rate upon beet sugar than that upon eane sugar, which at present is £6 per ton. The beet industry has received the advantage of the higher prices fixed for refined sugar during the last four years.

SUMMARY.

NATIONAL VALUE oF THE SuGAR-CANE INDUSTRY.

1. The total area under sugar cane in 1918-1919 was­ Queensland, 160,534 acres; New South Wales, 10,566 acres; the total being 171,100 acres. For the five years ending with the 1918-1919 season, the average

was 17 4,535 acres for the Commonwealth.

2. This area is not all fortunately placed for cane cultivation. It occurs along a narrow coastal strip in localities far apart, and a great deal of the area is so far south as to be seriously hampered by frost conditions. South of Mackay dairying and other industries are displacing sugar to some extent.

3. North of Mackay soil and conditions are favorable, and no other crop is likely to give such good returns or, therefore, to afford such prospects of continued and increased settlement, as sugar. This crop is, therefore, the sheet anchor of settlement by a white population in the coastal tropical areas.

4. Nothing like a confident estimate can be given of the. capital invested in the industry: There has never been any systematic valuation either of the lands or the factories engaged in sugar production. The following figures are, in the Commission's opinion, approximately correct:-

Lands and improvements Mills and machinery Refineries

Total

£5,541 ,000 5,000,000 1,542,000

£12,083,000

955

li

5. The total number of persons directly employed in the industry is estimated to be-Mill and refinery workers 6,600

Other . . 15,400

Total 22,000

Many of these workers are only engaged in the sugar industry during a portion of the year.

6. Wages in Queensland are determined by Arbitration Court awards. The wages are necessarily high, to attract men to work under severe climatic conditions. The hardest work is in cutting, and at that calling the average worker can earn from 25s. to 30s. or more per day. 7. Coloured labour has now practically disappeared from the industry, and under the most

recent award the remnant of this class is almost excluded from employment in the cultivation of sugar cane. . 8. The white population adapts itself to the tropical climate with success. Certain tropical diseases, such as hookworm and· sprue, are a menace, but the former is in course, it is believed, of extinction, as a result of the campaign initiated by the Rockefeller Foundation, and supported by the Commonwealth and State Governments. Medical testimony is to the effect that the over-free use of alcohol, though not so formidable a drawback as it was, is still a more serious menace than all the tropical diseases.

9. It appears desirable that an educational campaign should be instituted, in order to encourage the introduction of simple improvements in the housing of settlers in the tropics. There can be little doubt that the women-folk in particular suffer in health owing to the unsuitable houses in which many of them are obliued to live. • n

PRODUCTION.

10. The figures of production of tons of sugar since the year 1910- 11 are as follows :-Season. Queensland. New So ut h Wales. Commonwealth.

--------

1910-11 210,756 20,115 230,871

1911-12 173,296 17,299 190,595

1912-13 113,060 16,817 129,877

1913-14 242,837 22,192 265,029

1914-15 225,847 20,029 245,876

1915-16 140,496 19,144 159,640

1916-17 176,973 16,064 193,037

1917-18 307,714 19,875 327,589

1918-19 189,978 12,135 202,112

1919-20 155,000 11 ,000 166,000

The average for the decade has been 211 ,062 tons. Excluding from the figures of local consumption the sugar contents of the following imports, viz., condensed milk (sweetened), confectionery, fruits (preserved), and jams and jellies, the average annual consumption of sugar for the years 1912 to 1917 was 274,471 tons. Ac?epting 275,000 tons as a fair estimate for local consumption in the last decade, it will be seen that m only

one season (1917) has the local production resulted in a surplus which might have been available for export, and that upon a range of years the Commonwealth produces nearly four-fifths of its local requirements, leaving one-fifth to be imported. 11. The evidence shows that there are suitable lands in Queensland to permit of the

acreage used for sugar cane being more than doubled. But the cost of production white labour so much exceeds the cost of production in all other cane-sugar countries that there Is no prospect in normal times of exporting Commonwealth sugar, except at a loss . It follows that an y expansion is limited by the normal local consumption, and it may even be unwise cultivate enough land to supply right up to the local requirements in average seasons, as a bountiful season

would then result in a surplus which ultimately would be exported only at a loss . At the san;te time, the figures quoted in paragraph 10 show that in the past ten years .there. have been seasons below the average production of the decade, and only one season m wh'lch. productiOn exceeded consumption. It would appear, upon the whole, safe to extend the of sugar

by nearly one-fifth, i.e., apart from the gradual expansion to keep pace w1th the growth of population. ·

12. Improved methods of cultivation and of manufacture would increase the yield of sugar without any expansion of the area under cultivation. Such improved methods, however, would not alone overtake the deficiency between the present production of the Commonwealth and the objective of production regarded as safe. . .

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13. There is in normal no prospect of a market for Commonwealth sugar outside Australia. 14. Government control, apart from the arrangements made by the Commonwealth during the war, which arrangements will be worked out by 30th September, 1920, now exists under various Statutes in the States. The elements of the industry thus controlled are :-

(a) Wages and Industrial Conditions.-Tbese are separately determined by industrial arbitration authorities in Queensland and New South Wales, but in New South Wales there is no award governing wages of the field-workers. (b) Cane Prices.-The price paid to the grower for cane is determined in the district

attached to each mill in Queensland by the awards of tribunals instituted by the Regulation of Sugar Cane Prices Acts 1915-1917. (c) Raw Sugar.-The price of raw sugar is controlled in Queensland by the Administration acting under the Sugar Acquisition Act by agreement with the

Commonwealth. (d) Refined Sugar.-The price of refined sugar is liable to determination by the various price-fixing authorities of the individual Sta.tes, and was so determined before Commonwealth price-fixing under the War Precautions Acts.

15. Government control, whether by Commonwealth or State-( a) Is both necessary and desirable in the interests of (b) Is necessary and desirable in the interests of growers, because they are in a differ.ent economic position from other primary producers in the fcllowing respects.

-(i) their product deteriorates rapidly once it is harvested ; (ii) they are entirely confined to selling to one buyer, viz., the mill in locality. Occasionally there may be a choice between two mills, but as a rule the means of transport and the distance for hauling tie the grower down to one mill as his market; the determinations of the Cane Prices BoaJ;d (in Queensland) include directions as to the mill to which cane from a given area must be suppliecl; (iii) the wages, or contract rates they must pay for cultivating and harvesting, are fixed (jn Queensland) by an Arbitration Court. (This is the case also as to some industries in some States) ; (iv) the price of

their product-sugar cane-is fixed (in Queensland) by a Statutory -the Cane .Prices Board (or by a Local Board from whose decision an appeal lies to the Cane Prices Board). No other primary producers are subject to control of this kind. (v) the conditions do not normally permit of their product being exported at a profit: ·

(c) The raw sugar miller finds his whole cost of production practically determined by authority expressed in. wages awards and cane prices awards. As this prnduction cost is much higher than it is in foreign countries, he cannot sell his product unless Government action operates to limit imports by a tariff or-as· bas been the case in the last four seasons-to acquire his produet at a reasonable price.

The present condition of the world's sugar price is so uncertain that it is impossible to say with confidenee what tariff will be necesE)ary to protect the raw sugar manufacturer. Just at the moment no duty at all is necessary. If outside prices fall to anything like the pre-war level, a tariff of £10 or £12 per ton might be necessary if importations were not otherwise restrieted.

A suggestion was made by the Royal Commission which reported in 1913 . of a fluctuating tariff to be declared from time to time, so as to equate the duty­ paid cost of imported sugar with a standard price for Australian refined sugar. The suggestion is logical as a basis for Government assistance per medium of the tariff only, but would be cumbrous and embarrassing in actual practice. And its objective-the maintenance of a standard price to the Australian sugar manufacturer-Dan be realized with simplicity and certainty by the control suggested in pars. 18 and 19. (d) rhe desirability of Government control being extended to the price of refined

sugar results partly from the eircumstance that refining in the Commonwealth is already a practical monopoly. (e) The present situation requires Government control of prices in the interests of · consumers, both ordinary and those engaged in seeondary industries depending

upon sugar. It has been shown on page xlii of this Report that if Government control were abolished the price of sugar would be over £70 per ton wholesale, br retail about 8d. per lb. This would be a se;rious itern in the cost of living to household consumers, and be equally menaeing to dependent industries.

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16. It is the wish of the majority of the growers and raw-sugar millers that the

Commonwealth Government should control the The Australian Sugar Producers' Association, which admits both growers and millers to membership, so resolved in February of this year, and was in favour of "amongst other things a tribunal or tribunals being appointed by the Commonwealth Government to fix upon an equitable basis (a) rates of wages and conditions

of labour, (b) price of cane, (c) price of raw sugar." The United Cane Growers' Association, consisting of growers only, favoured Commonwealth control to the same extent. The Australian Workers' Union desires to see Commonwealth control of the industry, except that its attitude · t') the industrial part of control is not perfectly clear (see page xlv of this Report). The

Refining Company at lVIillaquin 'regards control as necessary, but the Colonial

Sugar Refining Company is opposed to any control by either State or Commonwealth Government. . The necessity of Commonwealth control arises from the fact that it is the only way of securing unity of system or coherence of authority in an industry where every element is actually or potentially already subject to governmental regulation, but that regulation is in the hands

of different States, and even in the same State is in the hands of independent tribunals. The crop is acquirable by the Government in Queensland, but not at present, in the absence of a Statute on the in New Routh Wales. The price of refined sugar to the public is liable to State

·fixation in all the States. In Queensland, where legislation extends to (a) wages and industrial cop.ditions both for farmer and miller, (b) prices of the farmer's product, (c) acquisition and price of raw and refined sugar, the authorities controlling· these inter-related matters have no relation to one another. While one tribunal determines wages, another detern1ines cane prices,

and sugar price is determined by the Ministry upon exercise under statute of the power of compulsory acquisition. It is not to be expected that of decision will result from such a

separation of interdependent public authorities. 17. Commonwealth control would enable the industry to attain what is felt by all those interested in it to be the one thing needful, viz., a reasonably settled outlook for the future. The determination of cane prices and of raw sugar prices should be for a definite period, at least of three years, just as this is the period for which industrial arbitration awards may now be made.

At the same time agreements of the same duration between grower and miller for the sale of cane might be legalized subject to the approval of the controlling authority .. 18. It is obviously desirable that one and the same tribunal or authority should settle the inter-related questions of industrial conditions, cane prices, a.nd sugar prices. It is also obvious that such an authority should have an independent tenure. _ The Commission therefore suggests that the control of the industry be vested in a body to be known as the Commonwealth Sugar Control, consisting of three members or Commissioners, having a fixed tenure of, say, seven years, with power .to regulate wages, cane prices, and price of raw sugar.

19. In order effectually to control prices it will be necessary, seeing. that produqtion in Australia falls short of requirements, that the Commou,wealth should govern by a system of licences the importation of sugar.- In this way the standard price to be paid for raw sugar produced in Australia, as affected by the price paid for such sugar as must be imported, will be the basis of the fixed price for refined sugar.

20 .. As well as taking over and harmonizing the heterogeneous elements of regulation op_erating under various State laws, a permanent Sugar Control could render valuable ·servi?es in extending and applying the work of scientific research, experiment, and instruction now earned on to a limited extent. Tn two of the le<:tding countries in cane-s-qgar prodnetion, Java and

Hawaii, great progress has been made, as the result of organization for such purposes unrler. in one case The Mutual Control, and in the ntheT rase rrhe Hawaiian Association. The modes of organi7ation suitable to those countries of large estates and of coloured labop.r seem impracticable under Australian conditions. · 2l. In addition to stimulating production by the a.gencies referred to in paragraph 20

the Sugar Control might be of great benefit to the growers either by organizing co-operative of manures and other requirements, or by purchasing. on fav?rable terms and them at cost price, a system followed by some progressive mills. This fill one. of the chief wants of a large section of the industry which lacks the ca.pital necessary to Improve 1ts

The Sugar Control could also stimulate invention by the of prizes or arrange for expenments (such as the trial under conditions of a harvester), which private individuals or

societies may consider too costly to undertake. 22. At present world-prices the industry for to ?e inde­

pendent of any tariff assistance. Even allowing for a subst antial fall In world-pnces, It would appear that the present tariff rate will be adequate for some time to come . . 23. The cost to the consumer under tariff duties has in the past been in industry the amount·- of the· duty, ·phis an . increment for profit. Under t.he present tariff, the duty is £6 per ton, which is equal to about !d. per lb. On a consumptiOn annually of 275,000 tons,

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this has represented £1,650,000. At the moment, even leaving out of account the adverse :xchange, the consumer is benefited to the extent of about £28 per ton, because the fixed price IS lower by that amount than the import price (without duty).

24. The beet-sugar industry is at present confined to the Maffra district in Victoria. At present only 1,200 acres are occupied by beet, the maximum having been 1,600 acres. The district was not wisely chosen for the production of beet as the rainfall (average 22 inches) is often insufficient. It is expected that the irrigation scheme recently determined upon will partly overcome this drawback. The Government of Victoria is fo stering the industry, and aims at expanding it, but there is no present indication of extension to a degree which would make the competition of sugar beet with sugar cane a reality. It is considered, however, that as to prices,

beet sugar Rhould be brought within the general scheme of control. 25 . The British Budget resolut ions of lVIay 1919, provided a tariff preference for· Empire raw sugar of 16! per cent. on the general tariff. This came into force as to import of sugar in September. As it applies to sugar grown by coloured labour, it is practically certain that the Commonwealth could not derive any advantage from the new policy.

26. If, in regard to imported sugar, the Commonwealth adopts Empire preference, it may do so either by giving preferential terms as a buyer (assuming the establishment of a Sugar Control), or can frame the tariff to the end desired in one of three ways-( a) By a reduced duty on Empire-grown sugar. (This, however, might defeat the

·principal object of the sugar duty.) (b) By raising the duty on foreign sugar. (c) By raising the present duty on Empire-grown sugar and imposing a still higher rate on all other sugar. 27. The last two methods would necessarily increase the cost to the user of sugar, whether for household purposes1 or manufacturing. There would be no balancing advantage so far as sugar production is concerned.

28. The Colonial Sugar Refining Company refused to furnish the Commission with information as to the cost of raw sugar manufacture and co.st of refining, &c., in respect to its ra_ w sugar mills and refineries, thus for a time at least depriving the Commission of data considered essential to the completion of its inquiry. As indicated on page x, this will necessitate the

furnishing, at a future date, of a Supplementary Report.

RECOMMENDATIONS.

PRELIMINARY NOTE.

In these recommendations, where legislative action would be necessary to .. give them effect, it is. assumed that the Commonwealth will acquire the requisite powers. It is further assumed that where agreEment with State Governments or other bodies would be essential, there will be a readiness on the part of such authorities to enter into the necessary agreement.

CANE SuGAR INDUSTRY.

1. That a general control by the Commonwealth over the cane sugar industry be established. 2. That the control be exercised chiefly through a body which might be called The Commonwealth Sugar Control, consisting of three Commissioners. 3. That members of The Commonwealth Sugar Control be given statutory powers and a fixed tenure of, say, seven years, and be eligible for re-appointment. '

4. That the statutory powers to be given to the Commissioners should include-Adjudicatory Functions. (a) In relation to the cane sugar industry all the powers usually given to Gourts of Industrial Arbitration. (b) Power to determine the prices to be paid for sugar cane by raw sugar millers. (c) Power to determine the price to be paid by refiners to raw sugar millers for raw

sugar of specified net titre. With regard to the preceding sub-clauses (a), (b), and (c), the Commission is of opinion that wages, cane prices, and the price of raw sugar should be fixed for a term of three years. Further, that pending determination by The Sugar Control,

there is justificaticn, as an interim measure, for raising the price of raw sugar to £22 per ton (vid e p. xxxv) .

Administrative Functions.

(d) Power to prescribe the conditions under which sugar cane may be delivered to the mill.

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(e) Power to issue licences, subject to prescribed conditions, to raw sugar millers and refiners. This necessarily implies that the possession of a licence shall be a condition precedent to the lawful operation of any raw sugar mill or refinery. ([) Administrative charge of the Sugar Experiment Bureau and Stations, and general

authority to establish new Stations if thought necessary, and to encourage efficient cultivation by all reasonable means. (g) to approve or disapprove of sites for new raw sugar mills and of new

areas to be made available for cane cultivation. These two functions are inter-dependent and, apart from any other sanctions, might be made effective by an announced policy of refusing to issue li cences for a raw sugar mill in any new or altered location unless the site of such mill had previously been approved

by the Commissioners. (h) Power to render financial assistance to raw sugar mills by lending at current bank rates, or, in special circumstances, at specially low rates or without interest, upon the security in each case of the raw sugar factory. (See para. 7 as to

creation of a fund.) (i) All the incidental powers requisite for the proper discharge by The Control of its adjudicatory and administrative functions. ·

5. That for the purpose of dealing with the refining of raw sugar and of controlling the wholesale selling price and the of refined sugar, an agreement, preceded by a thorough investigation of capital accounts and of managing and refining costs, be made with the refining compani Should those companies be unwilling to co-operate with the Government, an

authority should be constituted to control the wholesale price of sugar and its distribution. In view _of the recurring necessity for importation of a part of the sugar supply, the present scheme of pooling all sugars passing through the refineries to be continued.

6. Incidental to the control suggested in the preceding paragraph, it is also recommended-( a) That the importation of refined sugar other than for purposes of manufacture for export under Customs regulations should be prohibited. It is assumed that under normal conditions the former practice will be resumed of allowing full

drawback of duty to manufacturers for export, of goods containing imported sugar. (b) That excepting as provided in the preceding sub-clause, sugar should be imported only for the purposes of being refined within the Commonwealth.

(c) That the wholesale prices be calculated on the total cost of raw sugar-Australian and imported-plus agreed cost of refining and other charges, plus 1 per cent. of the total of such costs for the Control Fund (see para. 7). (d) That the wholesale prices and trade discounts when decided upon be notified by

the Minister from time to time. (e) That for the purposes of this scheme, all refineries' accounts, correspondence, and transactions should be available for inspection by the Minister or his representatives and by the Auditor-General.

7. That for the purpose of financing The Sugar Control, an amount(say 1 per cent.) be added to the cost of refined sugar (see para. 6 (c), and· that the sum thus obtained be set apart to defray the administrative costs, and to provide a fund from which The Control may make advances to raw sugar millers. (See para. 4 (h).)

8. That for the present, at least, the retail price of sugar be not fixed. Itmaynot be necessary under ordinary conditions to fix the retail price of sugar, but if for the purpose of preventing exploitation of the public, or for other reasons, such a course became necessary, action could be taken.

9. That, in of the advantages accruing to Australian manufacture!S of jams, &c., for export, through the present high price of sugar in the world's markets, the Sl)ecial concessions in the price of sugar now made to those manufacturers for t he purposes of their export trade be reconsidered.

10. That with regard to all Crown lands made available in the future for the purpose of cane sugar cultivation, arrangements be made for the sale or leasing of such lands under conditions which will prevent the future hampering of the industry through excessive loading of land values. It will, of course, be necessary to provide that the first and any subsequent owner or tenant

upon transfer of ownership or of tenancy, be compensated upon just terms for the value of h1s improvements.

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SuGAR INDUSTRY.

. 11.· That for the purpose of placing the output of beet sugar upon the same price-footing as that of cane sugar, an investigation be made of the cost of manufacture and distribution of beet sugar.

12. That an agreement be entered into with the State of Victoria as proprietors of the Maffra Beet Sugar Factory, similar in effect to that proposed in respect of refined cane sugar.

· 13. That such agreement should provide for the handing over to the Sugar Administration of excess profits derived from beet sugar when the ;:tverage cost of sugar is owing to the landed cost, plus refining charges, &c., of sugar imported to supplement the Australian _supply being materially higher than that of sugar pr.oduced and refined within the Commonwealth ..

We have the honour to be,

. Your Excellency's most obedient servants,

A. B. PIDDINGTON, Chairman. N. LOCKYER, Commissioner.

(Sgd.) A. G. BROWN, Secretary.

(Sgd.) (Sgd.) (Sgd.) S. MILLS, Commissioner:

Melbourne, 27th February, 1920 .

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