Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-28
AUSTRALIA FINDS
TARIFF |SFA|LURE
Steel Industry Illustrates De-
preston Effect and Huge
Production Costs.
Special Dispatch to The Star.

Special Dispatch to The Star.
MELBOURNE, Australia, November
% (N.A.N.A.) When the Scullin Labor
government came into power, less than
IL months ago. it set about revising the
| customs tariff to protect Australian in
dustries and incidentally to provide
work for the unemployed.
The tariff wall has been heightened.
Prohibitions have been imposed on a
range of imports. Yet unemployment
Is greater than ever before in history,
and industry, protected and pampered,
Is languishing as never before.
High Tariff No Panacea.
This condition cannot be attributed
wholly to manipulations of fiscal policy.
The depression which has settled upon
the commonwealth is taking heavy toll.
One fact, however, emergeS above all
else-high tariffs are not panacea for
industrial sickness.
One effect of the high tariffs imposed
by the Scullin government is the seri-
Gus contraction of revenue from the
customs. For the first three months Of
the financial year the receipts from this
source, the handspring of income, are
more than f3,000,000 below the treas
urer's estimate. During the September
quarter federal expenditure was $780,
customs has failed, the government is
at its wits end to find money to carry
on the ordinary services and pay sala-
rieS Of public servants. In other words,
the government by shutting out imports
has KILLED the goose that lays the
golden eggs"
While the tariffs have been continu-
ously raised to assist industry, indus
trial legislation, following In vicious
- L. LIN PT1l. -
industry furnishes perhaps the best ex-
ample Of industrial paralysis. Austria
lie has blast furnace capacity Of 600,-
600 tons Of pig iron q year at Newcastle
and Port KempSey (New South Wales).
Yet despite tariff and bounties the
plants are rarely operated at capacity.
AssembIage Cheaper Than U. S.
In the year ended June, 1929, no
steel, with 4 value of 'f5 800 900, were
imported. When the Newcastle works
were projected in 1912 David Baker, an
authority, reported: "You can assemble
the iron ore, coke and limestone for
pig iron production at lower cost per
unit of iron produced than is possible
for the United States Steel Corpora
ton, the largest and cheapest producer.
in its country"
1AdI cApSCIdIIOtlS nave IlOI UccIl ICd1-
lied is largely the fault of the new
protection, with its arbitration court, its
coal tribunal, its cost Of living wage, its
workers compensation act and its A
hour week. This Is the observation of
Gerald Robinson, spokesman for a
group of Australian financiers largely
interested In the iron and steel in
dustry.
Included among the fruits of the new
protection are excessive nominal wages,
excessive costs and excessive prices. As
81 tons Of coal are needed to produce
q ton Of steel coal must be cheap to
insure success. The following COM
parative figures speak for themselves:
Coal cost per ton at works, 1912, 6s.;
1929, les! increases per cent, 217.
Cost of coal per ton Of steel, 1912, lbs.
ID; 1929, 3os. I'D; increase per cent,
Ore Cost Not Abnormal.
The increase in the cost of coal thus
represents an addition Of 27s. I'D. a ton
to the cost of producing steel. Though
q reduction was recently made in the
price Of coal, it has been too small to
have much effect. The other impor-
tant raw material Is iron ore. AS this
can be shipped to steel makers in the
United States, Europe and Japan from
Australia, when freights are normal, 1t
Is clear that the costs of ore are not
abnormal. Australia coastal freights,
inflated by the Arbitration act and the
NAVIGATION act, are excessive and con-
tribute to the Gripping effect Of the new
protection on industry. 1t costs more
to ship steel from Newcastle, New South
Wales, to Freemantle, West Australia,
than to bring it from England to Aus
tralian ports.
In 1912 when the Australian steel
works were projected the basis wage was
ass q week of 40 hours. In 1929 1t was
S5s. week of A hours. This Is eQuiva-
lent to 92s. Sd. for 48-hour week. The
Workers Compensation act, family en-
dowment, special shift rates and other
benefits have to added to the basic