THE IAR EVIEWINSTITUTE OF PUBLIC

289 Flinders Lane,AFFAIRS VICTORIA

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Vol. VI

JANUARY-FEBRUARY, 1952

No. I

CONTENTSPage

A National Pride 1The Wide Spread of Property

Ownership in Australia .... 9Charts 16The Mad Spiral ... 18"A Richer & Stronger British

Commonwealth"— commentsby Sir Herbert Gepp, E. F.Atkins & S. J. Gandon 23

COUNCIL OF THE INSTITUTEG. J. COLES, C.B.E. (Chairman).Sir W. MASSY-GREENE. K.C.M.G.Sir LESLIE McCONNAN, K.B.C. A. M. DERHAM, C.B.E., M.C.H. R. HARPER.HARRY HEY.W. A. INCE.F. E. LAMPE, M.B.E.C. N. McKAY.W. I. POTTER.HERBERT TAYLOR.Hon. A. G. WARNER, M.L.C.

EDITORIAL COMMITTEEF. E. LAMPE, M.B.E.HERBERT TAYLOR.C. D. KEMP, B.Com. (Director of the

Institute).G. R. MOUNTAIN, M.A.H. N. WARREN, B.Com., A.C.I.S.

(Secretary).

__A national

"Every nation may be said at every time to beat the parting of the ways. To say so of Aus-tralia today may then border on the truism.And yet it would appear closely to fit a nationwhose immediate decisions may lead to widelydifferent . futures. Is Australia to be one of thenations that shape the destinies of the world; oris she to remain one of those whose doctrines areshaped elsewhere?"

(Salvador de Madariaga)

THESE are the words of a distinguished visitorrecently in Australia, a great and wise

scholar, a world-renowned economist-philoso-pher, a one-time President of the Council ofthe League of Nations. Most thoughtful Aus-tralians would probably admit that they pene-trate to the core of the Australian dilemma to-day. Over the next few decades will Australiaemerge from the small-nation class to become oneof the leading influential nations of the globe,a centre of English-speaking culture and powerin the Pacific? Or will she remain a small andnot over-significant member of the world family

Page I

A NATIONAL PRIDE (continued)

of nations? Is she to be a nation with a great and expansivedestiny, or is she to be content with a future of small-timemediocrity, a nation which the rest of the world may continueto regard with a paternalistic tolerance, but which will countfor little or less in the pattern of things now unfolding?

But perhaps even that choice is not vouchsafed to us!Perhaps the real alternative confronting this country is thegrimmer one defined by a member of the Board of Editorsof a leading American journal:* "Every Australian who knowsanything at all knows that his country must become great orgo under."

Certainly, at the present time, there is manifest amongsome Australians a feeling that their country must attemptto scale the mountain tops of greater achievement, to fulfila higher destiny, regardless of the hazards and stresses andeconomic sacrifices certain to be encountered. The mood ofnational expansion is upon us. How else account for the de-termination to increase the Australian population at the rateof 3% a year (a rate faster than the United States achievedeven at the peak of her great period of development) ? Or forthe resolution to have, by 1960, 10 to 11 million people on theAustralian continentand beyond that . . .? How else ex-plain the surge of enthusiasm for ambitious costly projectsof development—such as the giant Snowy River project—which can bear fruit only many years ahead—and this at atime when the immediate demands of defence press urgentlyand insistently upon us! All these are no more, surely, thanthe outward expression of a nation's instinct that its hourof destiny is close by.

And yet it cannot be said that this realisation is accom-panied by any strong confidence that Australia will rise tothe occasion. There is a feeling, widespread, that all is. by nomeans well with Australia. On every hand, we meet withdoubts and forebodings. There are deep-rooted destructivedivisions eagerly fostered and viciously aggravated by thosewhose, allegiance is not to Australia, but to another power.There is, among some, talk of a moral sickness that threatensthe very foundations of the social and economic order and ofour national security. There are the almost daily accusationsthat Australia is a nation "on the darg," on a universal "go-* Gilbert Burck in "Fortune," September, 1950.

Page 2

slow," with a constitutional aversion to hard work that wouldbe difficult to parallel among any other of the English-speak-ing peoples, or indeed among the non-English-speaking peoples.Is it that we harbour grandiose ideas and intentions but lackthe will and fibre to achieve their successful realisation? Weare, perhaps, not unlike the batsman who has set his sights onthe century mark, who knows, indeed, that he must score acentury to retain an honoured place in the team, but who iswithout the firm resolution and the quiet confidence in hisown technique necessary to the attainment of his ambition.

What, then, do we need to give us the drive, the over-mastering will-power, the inner self-assurance, which at pre-sent, as a nation, we seem to lack, and without which ourhigh ambitions will remain an idle dream?

A BELIEF IN AUSTRALIA

Perhaps it is no more, and no less, than a belief in Aus-tralia herself. Perhaps many of our troubles would disappear,many of our problems be overcome, if we had a firm unshake-able sense of national pride, a faith in Australia's greatness,a confident belief in her destiny. Certainly if we had such afaith, we would have something outside of ourselves to con-sider and to work for. If our loyalty to Australia took prideof place over our narrower group loyalties (commendablethough they may be) , over our loyalties to our particularpolitical party or creed, or our fellow employers or tradeunionists, how much of the fierce destructive conflicts whichare at present inhibiting our national progress would begin todisappear? If Australians could be caught up in the irre-sistible enthusiasms of a great national purpose and endeavour,based on an over-riding national pride, how many of thegoals at present so far distant would rapidly come within ourreach?

The great periods in the histories of nations have invari-ably been accompanied by an all-consuming sense of nationalpride and national destiny: Elizabethan England, 19th CenturyEngland, or to go back further in the pages of history, thegreat days of the Roman Empire. And how greatly noware the English people, passing through dark and desperate

Page 3 -

A NATIONAL PRIDE (continued)

times, sustained and strengthened by the Englishman's tradi-tional love and faith in his native land! What aboundingvirility and impulse is lent to American life today by thesuperb pride of Americans in America, and by their spreadingsense of American destiny!

Can we capture something of the American spirit inAustralia?

OUR ASSETS

Truly we have much to be proud of. Few, if any, coun-tries in the world equal Australia in the natural amenities ofenjoyable living. Returning travellers are unanimous on thispoint. There would be far less grumbling and grouching inthis country if Australians were only able to see for themselvesthe conditions under which the great part of the rest of theworld have to live. Aware of their unique advantages,, theirincomparable national assets, would Australians not determineto make the utmost of a land which offers so much?

We have, for instance, a truly glorious climate, a climatein which it is possible to go out-of-doors in relative comfortall the year round. This is not possible in most countries,even in some parts of the United States and Canada. Wehave the priceless advantage of being a new country. Wecan start afresh. We can plan our cities, industries and civicservices, in the light of modern science to provide the basisof healthful and efficient living, without the ,tremendousphysical drawbacks and discomforts imposed on other coun-tries by the legacy of past ages. We are largely free, too, ofsome of the stifling traditions and anachronistic social rela-tionships which at present so heavily burden the older nationsstriving to adapt themselves to the world of the middle '20thcentury. We have the glorious gift of space: "the visionsplendid of the sun-lit plains extended." We are fortunateto be able to look into big distances and dream big dreams.The very spaciousness of our land should encourage a corres-ponding spaciousness of the mind, an enthusiasm for broad-ranging projects, both spiritual and physical. Unlike themajority of countries, less happily-placed, we have immensenatural resources still to be exploited, the frontiers of whichare constantly being pushed back by scientific discovery.

Page 4

And then we have rare human material to work with.Admittedly, the average Australian has his defects—but so,too, have the people of every country. He is perhaps tooeasy-going. His ideal of "mateship"—a fine one in itself—overspills into a passion for equality at all costs, which leadshim to level down rather than level up. He delights in put-ting down the mighty from their seats, in bringing back thefastest runners to the pace of the field. All grades of societytake a grim satisfaction in seeing their leaders fall. It hasbeen said that in Australia every man thinks he is twice asgood as another. . We applaud and glamorise the great incricketers or race-horses; we could learn, with advantage, todo likewise in our political and business life. We dislike theunusual in ideas or men and thus impose on ourselves a dis-tressing uniformity of outlook, customs, clothes and manners.

The Australian is lacking, perhaps, to some extent inappreciation of intellectual pursuits. But he is a creature ofhis environment. He is unsophisticated and unpretentious.He dislikes the showy or artificial. He is simple and whole-some in his tastes. If he is hard and sceptical on the surface,he is generous at the core. His sympathies lie with the under-dog. He has a sense of sportsmanship and fair-play equalledby few. If his pleasures are more of the body than of theintellect, this may be attributed to his ingrained love of theout-of-doors. He glories in the great open spaces of his con-tinent and although he lives mainly in the cities he is neverfar from nature. There is no keener sporting nation in theworld and the Australian is able to claim, in all modesty, thatfew, if any, nations so excel in competitive sports. In Aus-tralia, sport is an integral and essential part of the nationallife, not something incidental and unimportant. The wholenation participates, not just a select circle. This is somethingthat cannot be changed, and perhaps it is better that it shouldnot be changed; those who deplore it might remember thatthere are less healthy and less worthy ways of spending one'sleisure time. The Australian love of sport is a product ofclimate, environment, opportunity and native vigour, and toa less extent of racial tradition. The accusation that the Aus-tralian is incurably indolent and lazy falls to the groundwhen one considers the startling concentration and energywhich he expends on his sporting recreations.

Page 5

A NATIONAL PRE DE (continued)

All these are virtues of great price, which we shouldplace to our high credit in any character stock-taking. Forthe Australian has a serious habit of self-depreciation whichcan hardly be helpful to his self-esteem. Indeed he subjectshimself to such a barrage of self-abuse (see the newspapersevery Monday morning) that his confidence in his own capa-cities of achievement must be dangerously weakened. Sincehe responds so badly to the lash of criticism, might it not beworthwhile, now and again, to try him with the stimulus.of a 'little encouragement?

LOYALTIES—RACIAL OR NATIONAL ?

It has been said that, culturally, Australia is not muchmore than a British colony. This is partly true; but is be-coming less so. For our intellectual interests and inspirationwe have drawn, and still draw, heavily on the Mother Country.This is natural enough, but the drawbacks of so doing shouldbe more frankly recognised. It impedes the Australian deve-lopment toward a distinctive culture of her own; it gives riseto a certain intellectual laziness and prevents the full floweringof our own creative genius; it imposes on the national lifestandards and traditions which are in some ways unsuited toit, indeed which obstruct the Australian ascent towards ma-ture nationhood. We are perhaps over-ready to copy othersand not sufficiently alert to create and build for ourselves.Up to the present this may have been excusable because ofour youth and our meagre numbers. But it is no longer so.

Regrettably, the loyalties of too many Australians aremore racial than national. Their pride in being "British"over-tops their pride in being "Australian." This is somethingwhich even visitors from Britain find hard to understand.Of course, Australians are rightly proud of their British bloodand connection and this pride has contributed vitally to someof the very best things in Australian life. We have a deep,unbreakable—and wholly desirable—sentimental attachmentto the Old Country, but with many people this is carried toexcessive lengths and is not consistent with a full sense ofpride and faith in their own land.

The important thing is that Australia is predominantlyof British stock and is likely for many years to remain so.

Page 6

Therefore, we should be keen to develop our own particularand distinctive brand of "Britishism," a brand thoroughlysuited to the environment, conditions and demands of itsnew home. Only so can the British peoples throughout theworld hope to attain to their maximum strength and stature.But this objective is retarded rather than advanced while, forfar too many Australians, sentiment for the Motherland spillsover into a sentimentality that tends to blind them to thequalities, the beauties and the magnificent potentialities oftheir own great country.

With the influx of vast numbers of new people intoAustralia as a result of the post-war migration schemes, it isnow supremely important for us to take conscious steps topromote the concept of Australian nationalism. How elsecan we expect the hundreds of thousands of new Australiansto capture the spirit of all that is finest and best and dis-tinctive in this country?

In this we have much to learn from the United States.What a contrast exists between the overflowing belief andfaith of Americans in America and its destiny, and the luke-warm evidence of national pride among Australians in Aus-tralia! .But the Americans have left nothing to chance. Theystart with the child and they are not content until they havemade him or her "110% American." They know theirAmerican history. The "Stars and Stripes" flies proudly overevery school and many factories. The factory worker thushas it visibly brought home to him every day that he is work-ing not for himself alone, still less for his boss, but for the.American nation. The extraordinarily impressive and beauti-ful monuments at the national capital, Washington, are visitedby "pilgrims" from all over America. Great newspapers or-ganise "I am an American Day," when tens of thousandscome together in scenes of indescribable enthusiasm. TheAmerican becomes greatly proud of his country's achievementsand "the American way of life" and, being proud, he isvigilant not to damage or besmirch it. He has instilled intohim a sense of national destiny, and from that sense springsthe abounding vigour and confidence and aspiration so evidentin the United States today.

Page 7 hEit

A NATIONAL PRIDE (continued)

"THE GRANDEST LADY OF THEM ALL"

It is not, for one moment, suggested that Australia shouldslavishly copy the American techniques. We can develop ourown ways of promoting our national sense. But if Australiais to rise to the great challenge now presented, it is imperativethat measures be taken to foster the spirit of national loveand pride. When all Australians have this pride, this mysticallove of country, this sense of an Australian destiny, we willbe much less inclined to push our own particular barrows atthe expense of the real interests of the Australian nation, orto indulge in activities detrimental to the welfare of the whole.We might begin to concentrate our considerable nationaltraits of aggression and vigour and improvisation on whollyconstructive purposes. With the awakening and stirring of astrong national pride, it is even possible that we might forgetour fierce group loyalties and divisions—at present so ruinous—in a wider and greater national conception. We mightbegin to say with a greatly respected Prime Minister of theCommonwealth, John Curtin: "I proudly proclaim my Aus-tralian nationalism; I am a nationalist before I am an inter-nationalist." Or with the poet:

."Now he has gone, and his sudden laughterLost in the hush that has followed after ...For he sleeps at Crete, beneath the seaWith his fingers curled as a child's might be.But I hear his voice, and I understandHow deep was his love for his golden land.`The convict's daughter', hear him call,`Is the grandest lady of them all!' "

It is not what we have been; nor even what we are; butwhat we can and, with God's help, will become.

Page 8

THE WIDE SPREAD OF PROPERTY

OWNERSHIP IN AUSTRALIA

OFFICIAL statistics do not support the stories spread by Communistsand others that the bulk of wealth is in the hands of a few indivi-

duals. On the contrary, published figures show that the great bulk ofAustralian property is vested in hundreds of thousands of small andmoderate income-earners, home-owners, farmers, independent businessmen and investors in all walks of life.

The main conclusions to be drawn from a survey made by the Institute are sum-marised below:—

• 90% of all property is vested in income-earners receiving a total income fromall sources of less than £5,000 per year.

• Out of 2,831,000 taxpayers in 1948-49, only 8,300 persons had incomes (beforetax) exceeding £5,000 per annum.

• 83.6% of private incomes in 1948-49 was derived from wages and salaries, per-sonal efforts of working proprietors and social service payments.

• Only 16.4% of total income was attributable to property ownership-1.6% toincome-earners above £5,000 per annum and the remaining 14.8% to peopleearning below £5,000 per annum.

• Over 40% of the private wealth in Australia is in the form of farms, shops andsmall factories and businesses owned by over 600,000 persons working on theirown account.

• There are over half a million shareholders in Australian industry and the sharesthey own represent about 20% of all private wealth. A great many more peopleare indirect beneficiaries from shares held by institutions such as life assurancecompanies.

• Nearly 40% of all private property represents homes, rented property andincome-earning assets, such as government or semi-government securities, andbank deposits.

• Over 1,000,000 Australians own or are in the process of owning their own homes.Of the further million tenanted homes the great majority are owned by govern-ment housing authorities or people with modest incomes. A recent survey showed.that 67% of tenanted houses in Victoria were owned by persons with only onehouse,and 22% by persons possessing only two houses.

• National Income Statistics suggest that, of every £ spent by the consumer,shareholders' dividends take about 6d. On the other hand, wages, salariesand remuneration of working proprietors take about 15/-.

• An analysis of company share registers reveals that the great majority ofshareholders are small investors with holdings of 100 to 500 shares.

• Since 1938 there has been a great expansion in company investment. Owingto the inroads of high taxation, the savings of top income-earners could notpossibly provide all the funds required. It is on the ever-widening circle ofsmall investors that companies have relied to finance this great expansion.

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The Wide Spread of Property Ownership in Australia (continued)

THE facts about the distribution of theownership of property among the

community are very imperfectly under-stood. Many people still believe that pro-perty ownership is largely concentrated inthe hands of a few rich capitalists, andthese beliefs are fostered by propagandists,contemptuous of the truth, whose chiefconcern is to foment discontent and classhatred.

Here is a field in which the case forfree enterprise is seriously weakened, notbecause of any inherent defects in thesystem, but simply because of the failureto make the facts widely known. Up tothe present there has been an almost com-plete lack of reliable information aboutthe spread of property ownership in freeenterprise countries. It is only now thatresponsible authorities are awakening tothe danger of public ignorance on thesevital issues.* Whilst the facts are notavailable to refute him, the Communistagitator is safe in making the wildestassertions in his efforts to stir up classbitterness and to detract from the nationaleffort. The rare instances of great in-dividual fortunes are constantly cited asevidence of exploitation of the rank-and-file worker, when a proper analysis woulddisclose that such fortunes are but a dropin the bucket of total national wealth.

*

It is possible to obtain a broad pictureof the true position in Australia by exa-mining the National Income Estimatesand income tax statistics presented tothe Federal Parliament with the BudgetPapers. The National Income Estimatesshow the following details of incomes re-ceived by property owners in 1948/49.

* For example, the New York Stock Exchange iscircularising 5,000 listed companies requesting themto provide detailed data on shareholdings. Themain purpose of the census is to demonstrate thatmillions of Americans own the country and not atiny segment in Wall Street.

TABLE I.Dividends on Company Shares .... £57,000,000Rent and Interest £114,000,000Incomes of farmers, shopkeepers,

professional men, derived fromtheir own businesses £550,000,000

£721,000,000

Dividends from company shares, andrent and interest, are clear instances ofincome received from the ownership ofproperty, that from investments incompany shares, government securities,real estate, savings bank deposits and soon. The incomes of farmers, shopkeepers,members of the professions, etc., derivedfrom their own businesses, are in a diffe-rent category. A large part of the in-comes of these people represents a rewardfor the planning and work they themselvesdevote to their businesses. But, somepart represents a return on the capitalthey have invested in their business fromtheir personal savings. Mr. H. P. Brown,former Director of Research of the Com-monwealth Bureau of Census and Statis-tics, has suggested that of the incomesreceived by these people about three quar-ters can be regarded as a payment forlabour and skill, the other quarter repre-senting a return on invested capital.

On the basis of this estimate, propertyincome in 1948/49 may be said, therefore,to be made up as follows:—

TABLE II.Property Income of Farmers, etc.

(i of total return)DividendsRent and Interest

£308,000,000

This figure represents about 16% ofthe total of all personal incomes. Allother income consisted of wages andsalaries, incomes going to the proprietorsof businesses representing a return fortheir personal efforts in their business, andsocial service payments.

£137,000,000£57,000,000

£114,000,000

Page 10

2.Income

from farmsand

businessesother thanprivate or

publiccompanies.

3.

Dividendincome from Rent and

shares in interest, etc.companies.

1.

IncomeGroup.

4. 5.

TotalPropertyIncome.

The manner in which this income, de-rived from property, is distributed amongthe various members of the communityis of great social significance. Are thebenefits of property ownership concen-trated in a few hands or are they sharedby many people?

Fortunately sufficient data is availablefrom the income tax statistics accompany-ing the Federal Budget to make the fol-lowing analysis of the receipts from pro-perty shown in Table II.

TABLE III.

DISTRIBUTION OF PROPERTY INCOME IN AUSTRALIA 1948/49.

%per annum

of total %propertyincome.

of total %propertyincome.

of totalpropertyincome.

Untaxed Income105- 250251- 500 ....501- 1,000

1,001- 2,000 ....2,001- 5,000 ....

11.90.84.37.37.48.6

10.00.30.81.41.72.2

19.62.34.14.63.12.2

41.53.49.2

13.312.213.0

5,001-10,000 ....10,001-15,000 ..Over 15,000 ..

2.80.70.7

1.00.40.7

0.70.20.2

4.51.31.6

44.5 18.5 37.0 100.0

Source: Budget Papers 1951/52, page 166. National Income Estimates 1950/51, page 6.

NOTES:(a) The figures of property income in the National Income Estimate.; are ob-

tained from various sources, of which income tax returns are but one.They include the following classes of income not assessed for taxationpurposes:i. An amount for rent imputed by the Commonwealth Statistician to owners

occupying their own dwellings-about 13% of total property income.Interest payments by people in the process of becoming home ownersmay however be taxed in the hands of recipients and may be reflectedin column 3, if paid to companies, or column 4, if paid to persons.

ii. Quite significant amounts of dividends, savings bank, bond and otherinterest and income from unincorporated businesses and farms receivedby persons below taxation exemption limits or by charitable,religious and other non-profit making bodies and funds.

iii. Dividends specifically exempted by the Income Tax Assessment Actfrom taxation because they are derived from gold mining operations orfrom private companies which have prepaid taxes on dividends on behalfof their shareholders.

iv. Small amounts of savings bank and bond interest omitted by wage andsalary and other income earners from taxation returns.

v. Any other property income omitted from taxation returns or understatedincome or income not yet assessed.

Page II

The Wide Spread of Property Ownership in Australia (continued)

(b) The figures in column 2, being one quarter of the total personal exertionincome of each group shown, represent a return on the capital invested byall proprietors of businesses and farms, other than companies. Income onadditional capital employed, i.e. rented property or borrowed money isreflected in columns 3 and 4.

(c) The figures in this table represent all incomes received by people in theirprivate capacity and in virtue of their ownership of property.

As the income figures dissected in TableIII above are directly related to the valueof the company shares, bonds, real es-tate and other property held, they mustgive, at the very least, a broad indicationof the various ways in which property inAustralia is owned by different incomeclasses. It is also fairly clear from astudy of the notes to the table that avery large part of property income notassessed for taxation accrues to personsin the lower income brackets or to charit-able and other institutions exempt fromtaxation.

For the purpose of showing the relativeproportion of property owned by the

"wealthy," a dividing line may be drawsbetween incomes of over £5,000 a yearand less than £5,000. Out of 2,831,418taxpayers in 1948/9 only 8,282 personshad incomes exceeding £5,000. Untaxedincome received by this group, other thantax exempt dividends, would therefore bealmost infinitesimal. Even with the libe-ral addition of a further 2% of total pro-perty income to cover tax exempt divi-dends which may have been paid to in-come earners above £5,000 per annum,Table III would still show a great prepon-derance of property in the ownership ofincome-earners below £5,000. Table IIIhas been redrafted to show the followingapproximate comparisons.

TABLE IV.

PROPORTION OF PROPERTY INCOME IN AUSTRALIA RECEIVED BYPERSONS IN RECEIPT OF INCOMES ABOVE AND BELOW £5,000 PER ANNUM.

Incomefrom farms

andIncome businessesGroup. other than

companies.

DividendIncome.

TotalRent and Property

interest, etc. Income.

Below £5,000 p.a. orexempt charitablebodies, etc.

Above £5,000 p.a. .40 141

4135R

119010

44i 18i 37 100

The main conclusions to be drawn fromTables III and IV are :-1. Over 40% of the national wealth of

Australia, owned by people in a privatecapacity, is comprised of the equity ofproprietors in farms, shops, factoriesand other premises and equipmentused in carrying on their own busi-nesses. The 1947 Census showed that

there were 640,000 persons engagedin their own businesses.

2. About 20% of all private wealth re-presents the value of shares in publicand private companies. Possibly half-a-million people are directly interestedin dividends from company shares,but a great many more are indirectbeneficiaries from shares held by in-

Page 12

stitutions such as life assurance com-panies.

3. Nearly 40% of all private propertyrepresents homes, rented property andall other income-earning assets otherthan in columns 2 and 3. A large partof the income from this property isexempt from taxation because it in-cludes imputed income on owner-occu-pied dwellings, and interest and rentreceived by non-profit organisationsand very low income earners. Overone million Australians own or are inthe process of owning their own homes.The 1947 Census revealed that 838,000people owned their own homes andanother 148,000 were purchasing homesby instalments. Of the further mil-lion homes occupied by tenants thegreat majority are owned by govern-ment housing authorities or peoplewith modest incomes. A recent surveyconducted by the Real Estate and StockInstitute in Victoria disclosed that67% of tenanted houses were ownedby persons with only one house and22% by persons possessing only twohouses.

4. Only 10% of total property wealth isowned by persons in receipt of incomesabove £5,000 per year. 45% of thiswealth is represented by farms, shopsand businesses ; 42!,% by shares incompanies, and the remaining 12%by all other property.

Statistics of the distribution of incomearising from the ownership of property

thus do not bear out the stories aboutthe preponderance of wealth in the handsof a few individuals. The great bulk ofAustralian property is vested in hundreds

of thousands of small and moderate in-

come-earners—home-owners, farmers and

independent businessmen and investors inall walks of life.

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SHARE OWNERSHIP.

Share ownership has a particular fas-cination for many propagandists ; forhere they imagine are great fruits derivedfrom exploiting the worker and the pub-lic. No one wishes to pretend that thereare no instances of excessive dividendpayments. But over the great range ofindustry, company dividends are a legiti-mate and, in some cases, an inadequatereturn for the risks and sacrifices incurredby investors. The National Income statis-tics suggest that of every £ spent by theconsumer, shareholders' dividends takeabout 6d. and wages and salaries and otherpayments for labour about 15/-.

The figures in Table III indicate thatthere is a wide spread of shares through-out the various income levels of the com-munity. Indeed the aggregate holdingsof income-earners, in the £1054500 perannum group, exceed the total holdingsof the very wealthy with incomes over£15,000 per annum. The device of thejoint stock company was instituted pre-cisely because of the inadequate capitalof the founders of businesses and theirneed to tap the savings of the mass ofthe people.

Analysis of company share registers al-so reveals a great preponderance of share-holders with holdings of 100 to 500shares.* The following table shows theaverage size of holdings in miscellaneousindustrial companies listed on the Mel-bourne Stock Exchange :—* From details published in certain company AnnualReports and a study of 30 representative public com-panies by R. K. Yorston (Page 18 "Some AccountingImplications arising from the Corporation viewedas a Social Unit," The Sixth Commonwealth Instituteof Accountants Research Lecture delivered at SydneyUniversity, 6th September, 1951).

Coc,Vit4-

The Wide Spread of Property Ownership in Australia (continued)

1.Paid-up

Capital of'Companies

Under £3,000,000

£3,000,000 and over*

TABLE V.2.

Total Paid-up Capital

225,000,000

132,000,000

357,000,000

3. 4.

Estimated

Average

No. Share. Shareholdingholders units

600,000 375

185,000 714

785,000 455

* Excluding two large overseas companies and an interstate electricity undertaking listedon the Melbourne Stock Exchange.

SOURCES:Columns 1 and 2, Melbourne Stock Exchange Official Record.

Column 3. For companies with paid up capital of f3,000,000 and over—actual figures pub-lished or provided by the companies concerned. For companies with paid-up capital belowf3,000,000—a representative sample of company shareholdings, comprising about 1 in 10 of

the total number of companies in the group.

The information in Table V, whilst in-dicative of a large number of individualnames recorded in share registers, doesnot of course reveal an exact picture ofshare ownership. Some duplication is in-evitable as many people hold shares inmore than one company. The figures arefurther complicated by the fact that share-holdings may be registered in the nameof brokers and other nominees, such asbanks and trustees, or represent joint in-terests as in the case of married couples.Large blocks of shares may also be heldby public companies (notably overseasand local parent companies establishingor acquiring an interest in Australianconcerns), trust estates, superannuationand employee share-purchase funds, lifeassurance and investment companies inwhich many thousands of persons arebeneficially interested. The average share-holdings in Table V are probably, in mostcases, materially overstated, because ofthe presence of these corporate interests.

The average shareholdings of the groupof companies having paid-up capital of£3,000,000 and over are particularly sub-ject to exaggeration because of sharesheld by overseas and local companies andby institutional investors which regard"market leaders" as safe investments. Forexample, the average shareholding ofBritish-Tobacco (Australia) Limited withpaid-up capital exceeding £12,000,000, isreduced from £900 to £400 if corporateinterests are excluded.

THE WIDENING CIRCLE OF SMALLINVESTORS.

An observation made in 1945 by theCommittee on Company Law Amendmentin England is equally applicable to Aus-tralia. "In the last hundred years therehas been a great redistribution of wealth,so that many small investors have hold-ings in companies. The tendency is grow-ing at the present time, and the numberof shareholders is likely to increase fur-

Ppge ,I4

ther, with a corresponding diminution inthe size of the average shareholding."Participation in the new share issues ofpublic companies and the breaking up ofthe estates of original investors is simi-larly leading to a wider diversification ofproperty ownership here.

There could 'be no better mirror of thegreat industrial development made pos-sible by joint stock company investmentthan the comparative statistics of thelistings of investment shares (excludingmining) on the Melbourne Stock Exchangesince 1889. Here are the figures:—

TABLE VI.Year

ListedCapital

Lm.1889 311919 701930 1941938 2091948 2801952 .... 430

NOTE: The figures in later years reflect to some,extent the falling value of the £. The table in-cludes' :all companies—banking, financial, pas-toral, etc., besides miscellaneous industrials.Source: Monthly Guide on Investments, 1889.Annals of American Academy of Political andSocial Science, November, 1931. MelbourneStock Exchange.

In the pioneering stages, the volume ofsavings in Australia was meagre and ittook 30 years to double listed capital. Butin the great 10 years of development fol-lowing World War I, share capital nearly.trebled, to slacken abruptly with the on-set of the depressed thirties. Companyinvestment since 1938 has been unparal-leled. At a time when taxation was mak-ing very heavy inroads into high incomes,listed share capital doubled. The sav-ings of top income-earners could notpossibly provide all the funds required.It is on the ever-widening circle of smallinvestors that companies have relied, andmust look to in the future, to finance thegreat developments ahead.

(See Charts and Notes on pages 16 and 17)

* * *

Page 15 ',7A." "'ILYAY,2ri

4MILLION1.0 20 30 40

INCOME GRADEALL 0

E

1053-00

301.600

601.1000

1001.2000

2001.5000

OVER 50001111111111

CHART No. 1.Showing how total income is divided between persons earningabove and below £5,000 per annum.

Property Income

E] All other Income

CHART No. 2.Showing how income derived from ownership of property(after tax) is distributed amongst taxpayers, in various in-come grades.

Page 16

NOTES ON CHARTS

The charts on page 16, based on information published in the.National Income Estimates 1950/51 and the Commonwealth BudgetPapers, 1951/52, demonstrate clearly that persons in receipt ofincome from all sources above £5,000 per annum, draw a minor proportionof the total income of the community as a return on property owned bythem. Chart No. 1 reveals that 83.6% of the incomes of private individualsin 1948/49 was derived from wages and salaries, from the personal effortsof working proprietors running their own farms and businesses, and fromsocial service benefits such as child endowment, maternity allowances andsimilar payments to breadwinners, together with age, widows' and invalidpensions paid to those not working.

Only 16.4% of all incomes is attributable to property ownership, i.e.,rent from real estate (including imputed rent of persons occupying theirown homes) ; interest on bank deposits, government loans, mortgages andother loans; dividends on shares in private and public companies, and areturn on capital invested by working proprietors in their own enterprises.Of this amount only 1.6% went to people with incomes above £5,000. Theremaining 14.8% went to the great mass of wage and salary earners andself-employed and retired persons receiving less than £5,000 per annum.

The proportion of property income received by the high income groupsis even less when account is taken of the effects of progressive taxation.Chart No. 2 shows that property income (after allowing for taxation)is very well distributed over the lower income ranges. Unfortunately,data is only available covering taxable income (owner-occupied houserent and exempt or understated property income are omitted) and thebar lines on the graph, therefore, tend to under-emphasise the relativesignificance of property held by the vast majority (over 90% of tax-payers) who earned less than £1,000 per annum.

Page 17

• There is widespread dismay among all sections of the community at the magnitudeof the recent quarterly cost-of-living wage adjustments, unaccompanied by increasedproductivity. These wage increases have seriously weakened the competitive positionof Australian industry.

THE MAD SPIRAL ...

THE quarterly cost-of-living adjustmenthas become the chief point of weak-

ness and instability in the Australian eco-nomy. Twelve months ago it was the fan-tastic level of wool prices that constitutedthe main grounds for concern. But sincethen, wool at an average price of 78 penceper lb. has settled down—temporarily atany rate—to a saner level. There aresigns, too, that the pressure of internaldemand on costs and prices, caused byover-ambitious programmes of public andprivate capital expansion, has been some-what reduced by the CommonwealthGovernment's policy of tighter money andcredit, higher interest rates, heavy taxa-tion and curtailed expenditure from publicloans. Were it not, then, for the leap-frogging of costs and prices caused by thequarterly wage revisions, confidence couldbe felt that 1952 would see the end of thegreat post-war inflation, which hasbrought sleepless nights both to govern-ments seeking the goal of economic sta-bility, and to housewives confronted withthe unenviable task of balancing thedomestic budget.

The latest cost-of-living increase of 10/-follows- upon the increases of 13/- and11/- for the third and fourth quarters of1951. Clearly this is economic madness.Certainly nothing like adjustments of thismagnitude were contemplated by the ori-ginators of the system of wage revisionsin their well-meant efforts to maintain thepurchasing power of the basic wage ata reasonable level. In the past the sys-tem has worked without inflicting seriousharm on the economy. But over the last

year or two it has operated in such a wayas to bring severe hardship to many sec-tions of the community and to dangerouslyweaken the foundations of long-termeconomic stability.

There is widespread dismay at the mag-nitude of these adjustments, not leastamong the wage-earners themselves andtheir representatives. But up to the pre-sent the system of automatic cost-of-liv-ing revisions seems to have been regardedas one of the unchangeable laws of theUniverse—sacrosanct, immutable, un-touchable.

The responsibility for stopping thismadness clearly lies in the first place withthe representatives of employers andtrade unionists.

THE STATISTICS.

The statistics of the situation are worth,a moment's consideration. The table onpage 19 lists the adjustments made sincethe beginning of 1946.

For the first two years, 1946 and 1947,the increases could be regarded as ofnormal proportions. The rises in 1948,,however, amounting to 10/- for the wholeyear, gave birth to some disquiet. Thisalarm heightened as the experience of1948 was persistently maintained through1949 and 1950. In 1951, the increasestotalled 38/- and the system was com-pletely out-of-hand.

The total increase in wages, caused bythe adjustments, amounts to £4/7/- overthe last six years. If we accept the usualbasis of computation (i.e. an addition of£5 million per anum to the national

Page 18

•

COST OF LIVING ADJUSTMENTS.

1946

Amount ofAdjustment

Total forthe Year

1st quarter2nd quarter 1 /-3rd quarter 1/-4th quarter 2/- - 1st December-7/- interim

increase.1947

1st quarter .... 1/-2nd quarter3rd quarter 1 /-4th quarter 2/- 4/- 16/-

19481st quarter .... 2/-2nd quarter 3/-3rd quarter 2/-4th quarter .... 3/- 10/-

19491st quarter 3/-2nd quarter .... 2/-3rd quarter .... 3/-4th quarter 2/- 10/-

19501st quarter 4/-2nd quarter 2/- 61/-3rd quarter .... 3/-4th quarter .... 4/- 13/- 1st December—Basic Wage

Increase £1.1951

1st quarter 7/-2nd quarter 7/-3rd quarter .... 13/-4th quarter .... 11/- 38/-

19521st quarter 10/-

wages bill for every 1/- increase in wages);he total increase in Australia's wagesn11 since 1946, caused by the quarterly•evisions, would be of the order of £500nillions. During 1951, out of an overallncrease in the wage and salary bill ofE304 millions the cost-of-living adjust-nents accounted for roughly £200 millions.

At the end of the war the Australianbasic wage was £4/13/- (c.f. 1939 E3/191-).Today it is £10/10/-. Of this increase27/- is accounted for by the interim 7/-granted by the Commonwealth Arbitra-tion Court in December 1946 and by thebasic wage increase of E1 awarded in De-cember 1950. The cost-of-living revisionscomprise the balance of £4/10/-.

'age 19

THE MAD SPIRAL (continued)

United States

Australia

NOTE: U.K. figures to April, 1951; alldata to March, 1951.

Source: U.N. Monthly Bulletin of Statistics.Commonwealth Bureau of Census and Statistics.U.K. Labour Gazette.

Most of the import competition withAustralian industry comes from the UnitedKingdom. The rapidly widening discrep-ancy between hourly earnings in Britishand Australian factories as illustrated bythe following table is therefore highlydisturbing.

AustraliaUnited

KingdomU .K.

Advantage

1938/9 2/- 1/10* 2d.

1946/7 3/1 3/2* —1d.

1948/9 4/3 3/8* 7d.

1950/1 5/11; 4/21 1/9d.

* October. t 3rd Quarter. $ April.

NOTE: All figures are expressed in Australiancurrency.

Source: U.K. Ministry of Labour Gazette. Com-monwealth Bureau of Census and Statistics.

Unfortunately no later figures areavailable. However, quarterly adjust-ments to the basic wage alone since March1951 have added 1/- an hour to Australianearnings whilst, under wage-pegging,hourly earnings have probably increasedonly slightly in the United Kingdom.Compared, then, with almost equal wagecosts in the immediate pre-war and post-war periods, Australia has now a wagecost disadvantage of between 2/- to 3/-an hour.

The figures suggest that Australia hasalready drifted into a most alarming costsituation. The competitive positiion ofAustralian industry—from the aspect ofwage costs—has become one of consider-able concern. Up to the present, few in-dustries have felt the consequences ofthis position because of the impact of re-armament on the world supply positionand restrictions on imports from hardcurrency countries. But the situation willbecome increasingly acute as time goeson, particularly in the field of consumergoods.

In all this process the system of cost-of-living revisions has been the mainvillain of the piece. Can anything be doneto destroy, or at the least curb, it?

TRADE UNIONS AND EMPLOYERS.

The answer rests primarily with tradeunions and employers. If the A.C.T.U.and the chief employer organisations coulddevise and agree upon some practical ex-pedient for terminating the fantasticgame of financial leapfrog, at present pro-ceeding with such destructive gusto,there is little doubt that the ArbitrationCourt and the Commonwealth Governmentwould ensure that it was given the neces-sary formal sanction. Such a majorachievement in the field of industrial re-lationships—for it would be that—wouldbe greeted with warm approval and ac-clamation by every section of the Aus-tralian public.

The attitude of the A.C.T.U. has beendefined on numerous occasions. Briefly,it amounts to a refusal to consider anyalteration to the system unless prices are"stabilised." This is hardly helpful. Ifprices were "stabilised" the cost-of-livingadjustments would, of course, automatic-ally disappear. But even assuming, forthe moment, that the freezing of priceswould be desirable, how would it be en-forced ? At present the CommonwealthGovernment apparently lacks the consti-

The rise in wage costs in Australiasince the end of the war is out of allproportion to that which has occurred inany other of the English-speaking coun-tries. The following are the percentageincreases in hourly earnings since 1946up to the latest period for which compara-tive figures are available.United Kingdom 33%

59%

45%

95%

other

Page 20

tutional power to control prices. The nervesof the public are hardly in a fit state asyet to stand up to the fantastic comedyof another referendum. And any attemptto obtain powers for the Commonwealththrough legislation by the States wouldbe long-drawn-out, and even then therewould be little probability of unanimity.

PRICE FREEZING.But, quite apart from these almost in-

superable practical obstacles, the "freez-ing" of prices would be a most undesirableexpedient. The prices on which attentionwould logically be concentrated would bethe prices of the everyday essentials com-prising the cost-of-living index. "Freez-ing" the prices of these commodities, whileletting other prices go free, would providean admirable incentive for producers totransfer productive resources to the lessessential industries. Thus, at the verytime when it is necessary to encouragethe production of essentials—the primeobject of the Government's financial policyand one approved by all—a first-classspanner would be thrown into the works.

The only means of avoiding this un-happy consequence would be to controlnot merely the price of essentials, but ofevery conceivable article of production.And even then, subsidies, possibly on agrand scale, would be necessary to offsetincreases in the prices of productive re-sources such as imported raw materials,outside of Australian control. This wouldmean a return not merely to price fixationon the scale practised during the war, buta return to a fully controlled economy.Since the allocation of resources betweenindustries, and of finished goods betweenconsumers, would no longer be determinedautomatically by the free movement ofprices, the Commonwealth Governmentwould be forced to undertake the controlof supply and distribution. A bureaucraticmachine of wartime proportions would be

necessary. Clearly there is no practicablesolution along the lines of overall pricefixation ; whereas partial price fixationwould be largely ineffective and, in anycase, have the most undesirable conse-quences. The argument against "freez-ing" the prices of essentials can be sum-marised thuS:

"Freezing" the prices of essentials would' discourage the production of these com-modities and encourage production of theless essentials. It could not, in any case,for any length of time, be maintainedwithout "freezing" the prices of every-thing including all factors of production.Universal price control would compel theinstitution of controls over supplies anddistribution and increase an already dan-gerously large and costly bureaucraticmachine.

THE ONLY PRACTICABLE MEANS.When all is said and done there is only

one practicable means of halting or slow-ing-upl the spiral of wages and prices.That is for the unions, on receipt of areasonable "quid pro quo" in some form,to agree to forego the cost-of-living ad-justment, or at least a substantial part ofit, for one quarter. What form could ittake? Since it would be the family manwho would be most adversely affected,the Commonwealth Government mightgive firm evidence of an intention to passlegislation to provide a special familyallowance or, better still, to providegreater taxation discrimination in favourof the family breadwinner. Generally, thesingle person is receiving today an incomeout of all proportion to that being re-ceived by the older, more skilled and ex-perienced family man, carrying greaterresponsibilities. This course would be in-finitely• less costly and far more equitablethan paying out subsidies on essentialgoods in order to freeze their prices. Sub-sidies would benefit every section of thecommunity—the millionaire with no de-

Page 21t„,x411,--#

THE MAD SPIRAL (continued)

pendants along with the family wage-earner with five children—regardless ofneed or financial position. Whereas dis-crimination in favour of the family manwould concentrate the assistance where itis needed most.

In addition to this, large employers oflabour in private and public companiesmight be asked to provide an undertakingthrough their representatives that theywill make every effort to hold down sellingprices and profit earnings to reasonablelevels.

The provisions in the new budget im-posing heavier taxation on public com-panies and abolishing the initial deprecia-

tion allowance of 40%, combined withfinancial restrictions, are already affectingProspective profit levels as shown by tillgeneral falling away of share prices itstock exchange quotations. The facto]which should be of most concern to theunions, however, is not the magnitude ofcompany profits, but the long-term abilityof companies to maintain their pay roll,at a level of wages which is rapidly becom.ing out of line with world levels. Stabilityof employment for their members is themain issue before the unions and shouldbe their guiding consideration in reachinga decision on whether the cost-of-livingadjustments should continue through1952.

*

Page 22

A RICHER AND STRONGERITISH COMMONWEALTH

—Comments on Sir Guy Garrod's article byleading Australians

THE November-December "Review" contained an article by a leading Englishman, Air Chief Marshal Sir Guy Garrod,

urging the need of a large-scale scheme of mass migration ofpeople and industries from Great Britain to the Dominions.The objects of the scheme are to relieve the pressure of popu-lation on Britain's own limited resources—which is at theroot of her economic difficulties; to develop fully the greatresources latent in the Dominions; and thus to restore theBritish Commonwealth of Nations to its old position of powerand influence in the world. In order to set the scheme inmotion, Sir Guy proposed a Conference of the Prime Ministersof the Commonwealth and then the establishment of a specialMigration and Development Organisation.

In recent months the economic vulnerability of Britainhas given rise to a great deal of public discussion in the dailypress and elsewhere on the problem of mass migration. InBritain, the movement for mass migration is led by the Migra-tion Council, an organisation sponsored by many prominentBritish people. The Chairman of the Council is Sir FrankWhittle, the inventor of the jet aircraft engine during thewar.

For this number of "Review," we have invited threeleading Australians to comment upon Sir Guy Garrod's pro-posals—Sir Herbert Gepp, who was head of the Developmentand Migration Commission set up by the Australian Govern-ment after the first World War; Mr. E. F. Atkins, Presidentof the Associated Chambers of Manufactures of Australia;and Mr. S. J. Gandon, General Manager of the Bank of NewSouth Wales.

I 11)I \

Page 23

Sir Herbert Gepp."The prospect of Britain

paying for its necessary im-ported food is very grim—indeedit looks impossible on the basisof 55 million people."

Mr. E. F. Atkins."One aspect of any organised

mass migration scheme mustnot be overlooked, and that isthe transfer of complete indus-trial units, complete with per-sonnel, plant and machinery."

Mr. S. J. Gandon."To recognise the problems is

not to be daunted by them.Their solution will require re-solution and tenacity, but if thecharacter of the race is what itwas, the challenge will be met."

Sir Herbert Gepp

YOU have asked me to comment briefly on the article on "A Richer and Stronger British Commonwealth" which ap-

peared in your November/December, 1951 issue—written byAir Chief Marshal Sir Guy Garrod.

In a brief comment, space does not permit a review indetail. Suffice it to say that whilst I agree with the purposeand intention of the article I cannot accept a number of thedata given in support.

Sir Guy Garrod makes three major points:-

1. The serious economic position of Great Britain causedmainly (but not wholly) by its tremendous efforts in theKaiser and Hitler Wars.

2. The need for greater productivity in industry—primary,secondary and tertiary.

Page 24

3. The urgency of a better distribution of population andindustrial power within the British Commonwealth ofNations.There are certain facts to be considered:

(a) Nations usually breed up to their food supply;(b) When the population is so great as to exceed the food

supply (for one or more reasons) , various things canhappen. For example—the birth rate decreases, or thedeath rate increases, or emigration increases greatly, orthe nation starts an aggressive war and, if successful, ex-pands its frontiers at the expense of the nation or nationsattacked, or the nation increases its productive effort infood production and in exports. Mostly several of thepossible things happen more or less simultaneously.The very rapid increase in the population of Great Britain

occurred in the 19th century, when that country took thelead in manufacturing based upon its coal, iron and steel andits textile industries, and consequently became the world centrein international finance, in insurance and in shipping. ThePax Britannica was due to the dominance of the British Navy.

The inevitable result was that Britain imported over ahalf of its food in spite of the fact that agriculture, in all itsphases, has always been the largest industry in Britain. Asthe manufacturing dominance of Britain was lost due to othernations developing their own industries, cracks began to showin Britain's economy even before 1914.

This economy was based upon Britain's ability to pay forits imported food and its imported raw materials by the in-come from its exports, manufactures and coal, plus incomefrom overseas investments, insurance and shipping.

The Kaiser and Hitler Wars destroyed this delicate bal-ance. There is no longer any net income from exported coal;therefore there is no longer any imports with low sea-freightsin ships returning to Britain for coal cargoes.

There is no longer the million of pounds sterling (or theirequivalents) being placed annually to Britain's credit fromoverseas investments—these were mostly sold to help to financethe two wars. And so, in spite of the valiant efforts of theBritishers in producing more, using less, and exporting more,

Page 25

A Richer and Stronger ritish. Commonwealth (continued)

' the prospect of Britain paying for its necessary imported foodis very grim—indeed, it looks impossible on the basis of 55million people.

It has been said that the population of Britain must comedown from 55 million to 30 million. Whether this be so,there is little or no doubt that the present population is muchtoo great.

The question under discussion is: "To what extent willthe proposals of the Migration Council assist?" I fear that theanswer must be—"They will assist but not to a major extent—other large and drastic lines of operation will also be neces-sary."

The Chairman of the Migration Council, Sir FrankWhittle, said recently in London that none of the Britishpolitical parties is prepared to get behind and support anymass migration scheme. Certainly let us have the PrimeMinisters' Conference on this vital problem. But the prepara-tion therefore is a major job requiring many months of hardwork and I am not hopeful of unanimity or of quick con-structive results. The problems are enormous and the extentto which the overseas Dominions can do more than at presentwill take many months to define, and even then only large-scale tests will tell us the best lines to follow.

The position is undoubtedly most serious. We are facedwith the fact that the nation which saved the world fromthe imminent dangers of Hitler's Germany and so made thedemocracies safe from dictatorship is now itself in danger ofeconomic collapse, of a still lower and lower standard of 'liv-ing and in fact of semi-starvation and economic degradation.The first job is to get the democratic world to rally roundand help—not in one spurt—but in a long, long hard pull.This involves sacrifices by all of us. I do not oppose the pro-posals. I support them strongly. Some years ago, in a publicaddress, I recommended moving part of the textile industryfrom Britain to Australia with the same general purpose inmind.

I believe that the people of the U.S. will help stronglyif the facts and proposals are put to them in the right way.The future of the world as we would like to see it may welldepend on sufficient numbers of hard-thinking, hard-workingpeople realizing the problem and helping to solve it.

Page 26

Mr. E. F. Atkins

I HAVE read Air Chief Marshal Sir Guy Garrod's plan for aricher and stronger British Commonwealth with great in-

terest, and there are many points which are worthy of atten-tion.

Every impartial student of history will agree that GreatBritain, and through Great Britain, the British Empire as it-grew in strength, has been a fine and inspiring leader in worldaffairs. Unlike the empires of old, who lost their leadershipmainly through decadence, Great Britain owes her presentdecline in prestige to honourable and unselfish devotion to herprinciples and international obligations—many of the latterself-imposed but regarded as none-the-less binding. What-ever country has come under British rule has found that rulejust and beneficent, and has developed to a status which hasprompted it to seek autonomy—not always with the happiestresults.

Far from becoming decadent, Great Britain has demon-strated through two world wars and the intervening and en-suing uneasy peace, powers of endurance and resilience whichmust be capitalised for the world's good. Moreover, no othercountry, however powerful and willing, today possesses thecenturies of experience in world leadership which has accruedto Britain, and it is unthinkable that this experience shouldbe lost or that it should not be exploited to the full, and aplan of development such as that outlined by Air Chief Mar-shal Sir Guy Garrod presents a practical operational basis fromwhich to work.

Apart from her allegiance to, and partnership in, theBritish Commonwealth of Nations, from purely selfish rea-sons Australia should actively support such a plan. To holdthis vast continent as a "White Australia," and to ensure thatit remains a British outpost capable of defending its own in-dependence and contributing its quota to the defence of thefree democratic world, we must increase our population rapidlyand our resources in proportionate degree so that one will notoutstrip the other. We must also ensure that our "New Aus-tralians" are of the right stock—and, while we are glad towelcome reputable members of some European nations, theideal Australian citizens are, of course, colonial-minded British

Page 27

A Richer and Stronger ritish Commonwealth (continued)

men and women. It is recognised that many of these arenot in a position to make the move entirely independently,and to these and to ourselves an organised plan of migrationwould be highly beneficial.

One aspect of any organised mass migration scheme mustnot be overlooked, and that is the transfer of complete in-dustrial units, complete with personnel, plant and machinery.

Experiments in this direction have already been mostsuccessfully carried out in Australia—and these are not beingconfined to British firms alone, but are expanding to well-established Continental businesses. In any developmental planintended to safeguard the free democratic world, decentralisa-tion of industries—not only of those regarded as essential froma defence point of view, but of all industries necessary tosupply the wants, and even the luxuries, of life—is as impor-tant as the dissemination of people.

One of the most pregnant points of Chief Air MarshalSir Guy Garrod's plan is contained in the last few paragraphs—and that is the possibility of imbibing, with the new popu-lation, a revitalised attitude towards work. It is unhappilyan indisputable fact that many Australians—in both theManagement and Labour fields—have become lax in their out-look regarding the production necessary to maintain the in-dustrial and living standards we have attempted to establishin the past, and also concerning the personal effort requiredfrom each one of us to this end. If newcomers arrive insufficient numbers and of the right calibre, there is everychance that their fresh enthusiasm may rekindle the fires inthe "old inhabitants" so that we regain that "will to work"which was such an important factor in our early achievementsand without which neither manpower nor infinite resourcesare worth anything.

Like Great Britain, we are grateful to America for hersplendid allegiance to and championship of the principles ofdemocracy. Such a people, allied by ties of kinship to astrong and united British Commonwealth, could in reality de-fend the rights of all free peoples of the world and with suchan alliance we could look forward with confidence to an eraof peace, security and progress.

Page 28

Mr. S. J. Garadon

THE ideas which have been so well presented by Sir Guy Garrod deserve close consideration by the people of the

British Commonwealth.It is, of course, a fact that the problem is occupying the

thoughts of many people and in the case of Australia thoughtshave been translated into action. Doubts remain as to whetherthe operation is being carried on in a manner calculated tosecure the maximum effect in the shortest time.

To emphasise the urgency of the situation it is well toreview very briefly the circumstances in which we find our-selves. Our community of sister nations is somewhat in theposition of an individual accustomed to exert power and in-fluence on those around him, and who, for various reasons,finds himself apparently losing his capacity to put forth hisstrength and exercise that influence as in former times. Anuncomfortable and disturbing experience. Notwithstandingthat British power was attained by methods sometimes subjectto criticism, that there have been mistakes and defects in ad-ministration and other weaknesses apparent when we reviewthe record, it still remains a fact that the world owes a tre-mendous debt to the influence, ideals and ways of life of theBritish race. The trend has been towards the preservation ofliberty and justice, opposition to tyranny and despotism, sup-port of moderation and compromise as opposed to extremism;in other words, towards the development of a better andsounder civilisation. No greater proof can be found than inthe fact that Britain has been, on so many occasions, thebalancing influence in world affairs and the final barrier againstdomination by tyrants. We may well be grateful that theUnited States of America with her great power and resourceshas taken her stand for a way of life so similar to that whichBritain has tried to uphold for so long. Nevertheless we mustnot allow that circumstance, or any other, to weaken our as-pirations for the maintenance of the character and influenceof the peoples of the British Commonwealth.

It is against this background that we in Australia, andBritish people everywhere, should view the ideas put forwardby Sir Guy Garrod.

Page 29

A Richer and Stronger ritish Commonwealth (continued)

In changing world conditions it has become clear that nopart of the Commonwealth, standing alone, can hope to assertadequate authority and influence in international affairs. Theeconomic situation of Britain herself has become subject to aseries of recurring crises, and there is no need to stress hervulnerability to modern methods of warfare. The other mem-bers of the Commonwealth are separated by great distancesand in a comparatively undeveloped condition.

How, then, can Australians view the situation and theremedial measures proposed by Sir Guy?

In the first place, I think that we have to recognise notonly the difficulties and dangers of the position, but also themany problems involved in the proposals now under considera-tion. To recognise them is not to be daunted by them. Theirsolution will require resolution and tenacity, but if the charac-ter of the race is what it was the challenge will be met.

Transference of industries from Britain is a complicatedbusiness, since attention has to be given not only to the cir-cumstances of the industries themselves, but to the overalleffect on the economics of Britain and the transferee coun-tries. If we concentrate on the movement of skilled workersthe capacity of Britain to rectify the weakness in her tradebalance and general economic structure might be adverselyaffected, for though her population might decrease, thus eas-ing the food difficulties, she could not look with equanimityon a fall in productivity per man due to loss of her bestworkers. Therein lies the necessity for maintaining a flowof Continental migrants of the right type even though thegood British worker is most welcome in Australia. Sir GuyGarrod has included this aspect in his consideration of thematter.

So far as this country is -concerned comment would beincomplete if there were failure to emphasise a vital feature—the necessity to build up our primary industries, the produc-tion record of which has been so poor in recent years. Itseems quite essential that a considerable proportion of ruralworkers should be included in the scheme.

Page 30

- As to the population carrying capacity of Australia, itwould seem that this should not be a matter of concern forvery many years. However, it is interesting, and perhapsamusing, to recall that some years ago a number of wellknown people who had given close attention to the questionwere asked to give their views. Their estimates varied between15,000,000 and 250,000,000! The truth is that the matterwill be decided by standard of living and the aid which canbe given by science in solving some of our major problems,such as those relating to water conservation, power, soil, andpastures.

We should not omit from our thoughts some questionsbearing on our own standards and way of life. If we inAustralia are to play our proper part in the great schemeenvisaged by Sir Guy Garrod (and though they cannot betouched upon in detail there are good reasons for thinkingthat we should have priority in the development of the scheme)considerable readjustment of outlook must take place if weare to provide a suitable "atmosphere" and conditions for thereception and absorption of those coming to us. Old pre-judices should be thrown aside and an end put to the stupidhostility between classes and factions. We must try andeliminate the distorted outlook towards work and achievementinduced by false propaganda, and to a considerable extent bythe influence of an "easy" climate and remoteness from themore densely populated parts of the world.

Briefly summarising the views of the writer:-

1. The dangers of the situation are obvious and the need foraction is clear.

2. While we may well work for the eventual closer relation-ship of the English-speaking peoples, in the meantime thestrengthening of the British Commonwealth is a•matter ofurgency.

3. Consideration should be given to enlisting the aid .of theUnited States of America. It seems certain that, in duetime, the surplus energy and resources of that country willbe seeking further outlets. NO channel would be better

Page 31

A Richer and Stronger ritish Commonwealth (continued)

than that leading to the development of countries alignedwith her in the struggle against Communism and otherforms of tyranny.

4. There is need for the formation here and in Britain of anorganisation of first-class minds to consider all aspects andadvise the respective Governments.

5. No doubt broad-scale planning will be necesary, but whilesome of the questions involved will be for Governmentsto handle, every possible help and encouragement shouldbe given to private enterprise to engage in and to pushthe scheme to fulfilment.

6. Time limits should be fixed for consideration and action.

Contributed articles by noted authorities in Australia and

overseas dealing with matters of public interest are published

from time to time in the I.P.A. Review. This Institute is not

necessarily in full agreement with the views expressed in these

articles. • They are published in order to stimulate free dis-

cussion and inquiry.

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