Gift 
 
 Trading With Australasia 
 
 COMPLIMENTS 
 
 FRANK KENNEDY 
 
 R EPRESENTATIVE 
 
 907 KOHL BUILDING 
 SAN FRANCISCO, CAL 
 
 Guaranty Trust Company 
 of New York 
 
Trading With Australasia 
 
 Guaranty Trust Company of New York 
 
 140 Broadway 
 
 FIFTH AVENUE OFFICE MADISON AVENUE OFFICE 
 
 Fifth Avenue and 43r<l Street Madison Avenue and 60th Street 
 
 LONDON OFFICES LIVERPOOL OFFICE 
 
 32 Lombard Street, E. C. 27 Cotton Exchange Buildings * 
 
 5 Lower Grosvenor PI., S. W. 
 
 PARIS OFFICE HAVRE OFFICE BRUSSELS OFFICE 
 
 1 and 3 Rue des Italiens 122 Boulevard Strasbourg 158 Rue R ovale 
 

 COPYRIGHT, 1910 
 GUARANTY TRUST COMPANY OF NEW YORK 
 
<&L^ 
 
 Trading with Australasia \ 
 
 WE have made rapid strides in build- 
 ing up commercial relations with 
 Australia in the past year, yet the people 
 of the United States know little about 
 the vast resources of the island continent, 
 a country larger than the United States, 
 excluding Alaska, and with a population 
 less than that of New York City. We have 
 only a vague conception of its millions of 
 acres of grazing lands in a climate 
 which permits the stock to feed on the 
 natural pastures the year round and of 
 its enormous tracts suitable for the grow- 
 ing of practically all agricultural products, 
 such as wheat, alfalfa, oats, rye, sugar 
 cane, bananas and pineapples, and other 
 tropical fruits. 
 
 In 1913 Australia bought German 
 
 goods valued at $35,000,01)0, VncTtne 
 United States sold her only $25,000,000. 
 In the year ending June 30, 1919, Amer- 
 ican exports to Australia amounted to 
 $109,000,000, there being of course no Ger- 
 man exports during the war. Sentiment 
 against the Germans is still very strong in 
 Australia, and the United States will prob- 
 ably import a large share of the commodi- 
 ties formerly sent to Germany. Before the 
 war British exports to Australia amounted 
 to about $250,000,000 yearly, and the 
 principal exports from Australia wool, 
 gold, wheat, meat, hides, and skins were 
 shipped to the English market. The sub- 
 sequent curtailment of exports from Eu- 
 rope resulted in a large increase in trade 
 with Japan, which supplied Australia with 
 
 Parliament House, Melbourne, Capital of Victoria 
 
 [8] 
 
 SJ48851 
 
The railway viaduct in Melbourne 
 
 quantities of glass, china, metal goods, 
 chemicals and matches, hosiery, under- 
 wear, calico, prints, and other cotton 
 goods. 
 
 Australia's Resources 
 
 The greatest producer of wool in the 
 world, and ranking high among the na- 
 tions exporting wheat, Australia is also a 
 metallurgist's paradise, containing rich 
 workings of iron, zinc, gold, copper, 
 tin, silver, molybdenite, tungsten ores, 
 platinum, and radio-active uranium ores, 
 as well as deposits of diamonds, sapphires, 
 emeralds, opals, turquoise, tourmaline, 
 and rubies. 
 
 Australia's resources are such that she 
 could easily support a population of 50,- 
 000,000. The Eastern states, New South 
 Wales, Victoria, and Queensland, have 
 comparatively little arid interior. All the 
 states are undoubtedly capable of great 
 development. In Queensland, which 
 runs into the tropical and subtropical 
 ?ones, practically anything can be grown 
 -^-dairy products and grain abound in the 
 
 South, and a few hundred miles north 
 pineapples, bananas, and sugar cane grow 
 in abundance. South of Victoria the 
 small island of Tasmania has a climate 
 probably unequalled anywhere in the 
 world, with fine resources of minerals and 
 grain. 
 
 The Australian market is especially de- 
 sirable to the United States, as the sea- 
 sons are the reverse of those here, the 
 Australian summer being at the time of 
 the American winter. Owing to the cus- 
 tom of Australian merchants of placing 
 their orders about nine months before the 
 goods are required, orders in sufficient 
 volume would enable American manufac- 
 turers to run continuously in the domestic 
 "off season." Australian orders could be 
 filled during the dull season which occurs 
 in the United States between the regular 
 seasonal shipments for domestic trade. 
 
 Credits a Drawback to Trade 
 
 "One of the great drawbacks to trade 
 relations between the two countries is the 
 question of credits," writes American 
 
 4] 
 
Trade Commissioner Ferrin from Mel- 
 bourne. "American manufacturers would 
 hardly consider appointing an Australian 
 representative and allowing him to take 
 orders on open account, with thirty to 
 sixty days' sight draft after arrival of the 
 goods. The American salesmen would 
 find considerable difficulty in ascertaining 
 the financial standing of local merchants, 
 and, on the other hand, Australian mer- 
 chants accustomed to the liberal terms 
 granted by English and German houses, 
 would not be inclined to make purchases 
 and pay cash when the goods were shipped. 
 Some Australian bankers realize the situ- 
 ation and are willing to make arrange- 
 ments with New York banks to pay Amer- 
 ican manufacturers for their goods upon 
 receipt of the invoices and shipping docu- 
 ments, when properly authorized by the 
 Australian merchants, who will pay the 
 interest, exchange and collection fees upon 
 terms prearranged with the bankers. This 
 
 gives the American merchant the cash 
 payment which he desires, guarantees the 
 Australian that the goods have actually 
 been shipped, and in addition local banks 
 provide the credits necessary for the Aus- 
 tralians to do business." 
 
 Australian merchants feel that while it 
 is advisable for representatives of Amer- 
 ican firms to make trips to the Australian 
 market, in order to establish connections, 
 local agents can conduct the business 
 more satisfactorily, as they know the 
 financial standing of the prospective pur- 
 chasers more intimately, and also the best 
 time to make shipments and the grade of 
 goods required? 
 
 Articles Australia Imports 
 
 The principal articles exported from the 
 United States to Australia are listed be- 
 low: 
 
 Foodstuffs of animal origin preserved fish, 
 meats 
 
 The business section of Melbourne 
 \5] 
 
In the Botanical Gardens of Melbourne 
 
 Rosin, cork and fibres 
 
 Wearing apparel and textiles of all kinds 
 
 Oils, fats and waxes 
 
 Paints and varnishes 
 
 Lithographic oil and whetstones 
 
 Aluminum and bronze 
 
 Copper tubing 
 
 Iron and steel 
 
 Cash registers and computing machines 
 
 Gas and oil engines 
 
 Agricultural and dairying machinery 
 
 Electrical appliances 
 
 Mining machinery and tools 
 
 Sewing machines and typewriters 
 
 Metal manufactures of all kinds 
 
 Corrugated and galvanized iron wire and 
 
 wire netting 
 Lamps and lampware 
 Nails and all tools of trade 
 Boots and shoes 
 
 Rubber and leather manufactures 
 Furniture and dressed and undressed timber 
 Glass and glassware, earthenware 
 Paper and stationery 
 Fancy goods and jewelry 
 Chemicals and fertilizers, drugs 
 Brushware 
 Oilmen's stores 
 Soap 
 
 Automobiles, bicycles and tricycles, and other 
 vehicles 
 
 Pianos and musical instruments 
 
 Foodstuffs of vegetable origin fresh and 
 
 dried fruits, infants' and invalids' foods, 
 
 hops 
 
 Tobacco (mostly unmanufactured), glue and 
 gelatine 
 
 Broadly speaking, there is a preferen- 
 tial tariff in favor of the United Kingdom, 
 of five to ten per cent. In some items it is 
 much higher. 
 
 What Australia Needs 
 
 There is a great scarcity of many goods 
 in Australia. The chief shortage in stocks 
 which must be replenished by importa- 
 tions is found in tin-plate, galvanized iron, 
 wire and copper cable, steel and iron gir- 
 ders, joists, plates, sheets and bars, gas 
 tubes and fittings, paints, shellac, putty, 
 cutlery, tools, aluminum, enamelled and 
 hollow ware, gasoline engines, motor 
 goods, builders' hardware of all sorts, com- 
 position roofing products, chemicals, food 
 products, and office appliances. 
 
 Articles known as "tools of trade" are 
 purchased in large quantities from Amer- 
 ica, despite a natural preference for Brit- 
 ish goods. Australia is rapidly increasing 
 her manufactures, and there is an insis- 
 tent demand for certain classes of Ameri- 
 can machinery and machine tools. As a 
 majority of the engineering establish- 
 ments are also jobbing shops, the en- 
 gineers in charge are averse to buying from 
 catalogues and desire actual demonstra- 
 tions, especially of new machines. Most 
 
 [6 
 
of the sales are accordingly made after a 
 sample machine has been received by the 
 agent from the importer. A substantial 
 additional discount on introductory orders 
 should be allowed, especially on highly spe- 
 cialized lines; otherwise there is not suffi- 
 cient incentive to warrant the importer 
 taking the risk of adaptation of the ma- 
 chine to local conditions. 
 
 Good Agents Essential 
 
 Types of American machines, which sub- 
 sequently enjoyed exceptional sales, were 
 kept out of the Australian market for years 
 because our manufacturers did not put a 
 sample machine into the hands of a good 
 agent, and they were finally introduced 
 by an importer who took a chance on 
 their success. Unnecessary risk can be 
 
 avoided by the exporter by thorough in- 
 vestigation in advance through bank- 
 ing connections to discover the relia- 
 bility of the Australian agent. 
 
 The greater number of the manufactur- 
 ing plants and the largest engineering 
 shops are in Sydney, New South Wales, 
 and in Melbourne, Victoria, which places 
 produce an equal amount of manufactured 
 goods. The rapid expansion of the meat 
 and meat-canning industries of Queens- 
 land will result in an increased demand 
 for American machinery. The same is 
 true of Western Australia, with its gold 
 mining development. 
 
 Selling and Collection Methods 
 
 The exclusive agency is a popular Aus- 
 tralian means of selling and distributing 
 
 Government railroad shops at Williamstown, Victoria 
 [71 
 
Bridge Street, Sydney, the capital of New South Wales 
 
 machinery and accessories. It is a coun- 
 try where vast distances must be trav- 
 elled in seeking orders, and where modern 
 machinery is just being introduced, and 
 therefore the agent who stocks a new ma- 
 chine as an experiment usually asks that 
 he be protected by an exclusive contract. 
 Before closing exclusive contracts for any 
 line of goods, however, it is highly impor- 
 tant to ascertain whether the firm is really 
 in the wholesale business, and whether it 
 possesses the personnel and equipment to 
 produce results . Unfortunate results have 
 followed carelessness on the part of Amer- 
 ican manufacturers in this regard, in 
 some instances exclusive agency contracts 
 having been granted to firms in Australia 
 engaged in the retail business. 
 
 Cash Payments Against Documents 
 
 Since the war, many Australian import- 
 ers have arranged for cash payment 
 against documents in New York, and 
 
 there is little probability of an early re- 
 turn to the old method of sight draft with 
 documents. The price list in almost uni- 
 versal use in Australia is made on a 
 small loose sheet with 3% inch holes at 
 3 inch centers. The advantage of con- 
 forming to such styles of price-lists and 
 insuring the maintenance of complete 
 files of prices is apparent. Australian im- 
 porters are close readers of the leading 
 American machinery trade journals, and 
 information regarding new types of ma- 
 chines is often requested on the strength 
 of these advertisements. 
 
 Packing Goods for Shipment 
 
 Practically all machinery is subject to 
 customs tariff in Australia and must un- 
 dergo inspection, and for this reason it is 
 preferable to leave one board on the top 
 of the case not hoop-ironed or nailed, but 
 simply screwed down. This board should 
 be located so as to give a good view of the 
 
 [s 
 
machine. The loading and warehousing 
 facilities in Australia, outside of the State 
 capitals and one or two ports, such as 
 Newcastle, are not the best, and few 
 cranes are employed, so that strong 
 packing is desirable. 
 
 Lathes are the most important essential 
 in the machine shops which are springing 
 up in Australia. As the majority of the 
 work in these shops is jobbing, the ma- 
 chine tool should be universal. Gap 
 lathes, for instance, permit one machine 
 to cover a wide range of work and are very 
 popular in Australia, one American ma- 
 chine of this universal type enjoying a 
 very large sale. Now that the war is over 
 there are exceptional opportunities in Aus- 
 tralia for the sale of construction mate- 
 rials, and many public improvements are 
 contemplated, such as additions to rail- 
 ways and new lines, bridge building, con- 
 struction of subways, extension of wharves, 
 opening of mines, establishment of manu- 
 
 facturing plants and building of grain 
 elevators. 
 
 American Shoes in Demand 
 
 American shoes are looked upon with 
 the same high favor in Australia as in 
 other parts of the world. Medium and 
 fine grade American shoes, although sell- 
 ing at higher prices than others on the 
 market, are preferred by most Australians 
 and they are quite willing to pay the dif- 
 ference. In men's shoes, three-fifths or 
 more of the trade is in boots (high shoes), 
 but with the younger men shoes and Ox- 
 fords are gaining in popularity, especially 
 in the capital cities. In women's shoes, 
 shapes that are genuinely new in America 
 will meet with Australian approval. Be- 
 cause of their style, American "low cuts" 
 are especially popular. Pumps are gen- 
 erally referred to as "court shoes" and 
 stray pumps as "bar shoes." For smart 
 American shoes from the best makers the 
 
 
 Orient Pier and Custom House, Sydney 
 [91 
 
Australia Is the Greatest P 
 
 Sheep yarded 
 for shearing 
 
 Double shearing board 
 and classers' table 
 
 Production and Exports of Wool 
 During the year 1915-16 Australia 
 produced 550,000,000 pounds of wool 
 and exported 491,000,000 pounds, of 
 which 80,000,000 pounds were scour- 
 ed and tops, with a total value of 
 $130,000,000. 
 
 Mustering sheep for shearing yards 
 
 r io] 
 
er Of Wool in the World 
 
 Australian Pastoral Industry 
 
 At the end of 1916 Australian flocks 
 numbered 73,000,000 sheep. For the 
 year 1915 the value of the pastoral 
 products of the Commonwealth was 
 estimated at $325,000,000. 
 
 Baling wool 
 at a station 
 
 A single board 
 shearing shed 
 
 A wool show room 
 [11] 
 
A steel plant at Newcastle, Mew South Wales 
 
 women are willing to pay fifteen dollars 
 and eighteen dollars a pair. 
 
 The Australian market for children's 
 footwear is simply a duplicate of the 
 American market, with the greatest de- 
 mand for cheap and medium grades, al- 
 though the better stores in the capital 
 cities find a ready sale for the most ex- 
 pensive lines. Moccasins (Indian slip- 
 pers) enjoy a good sale and are very pop- 
 ular so much so, in fact, that several 
 Australian firms have undertaken their 
 manufacture, but their production does 
 not seem to lessen the demand for the 
 American article. 
 
 Textiles 
 
 The importance of textiles in the Aus- 
 tralian import trade may be appreciated 
 when it is pointed out that this branch 
 furnishes about 25 per cent, of the total 
 net revenue collected from customs and 
 excise. The handicap in the past to the 
 development of trade with American 
 manufacturers has been their reluctance 
 to adopt British widths, and importers 
 have had difficulty in placing American 
 goods with local buyers accustomed to 
 cutting from the English goods. In tick- 
 ings the variations in widths are as follows : 
 American, 31 to 33 inches; English, 63 to 
 72 inches. For prints, the American width 
 is about 24 inches, while the Australian de- 
 
 [ 
 
 mand is based upon a 32 to 33 -inch re- 
 quirement. 
 
 Another complaint has been that Amer- 
 ican manufacturers will not cater to Aus- 
 tralian tastes in the matter of patterns, 
 whereas the British will make any pattern 
 the buyer desires. American packing is also 
 criticized by the Australians as in other 
 foreign countries and it is pointed out 
 that British exporters board the top and 
 bottom of each bale so that hooks cannot 
 penetrate, and the bale is kept in shape. 
 Australians have, however, the greatest re- 
 gard for the quality of the American cot- 
 ton goods and there is no quarrel about 
 prices. American cotton tweeds are also 
 in favor. 
 
 Quotations Should Be C.I.F. 
 
 A gentlemen who has travelled the An- 
 tipodes very widely and conducted busi- 
 ness dealings in many parts of the world, 
 including Australia, has written the Guar- 
 anty Trust Company as follows: 
 
 Speaking with a man only last week who has 
 represented several American hardware houses in 
 Australia, New Zealand and New Caledonia for 
 eleven years, I was told that in all that time there 
 had been scarcely one instance of a bank draft 
 drawn in the United States on customers here to 
 whom he had sold goods but "there had been 
 some trouble in connection with it." 
 
 Further, he stated deliberately that if his prin- 
 cipals in America had only taken the trouble to 
 
 121 
 
quote him c.i.f. prices here instead of quotations 
 f.o.b. port of shipment, or, worse still, f.o.b. cars 
 at some inland point in the U. S. A., he would 
 have easily quadrupled the volume of sales in the 
 period named. 
 
 During the Russo-Japanese War 1904-5 I 
 was controlling the import department of the 
 largest merchandising firm in Yokohama, Japan, 
 and to give you an idea of the volume of business 
 we imported from Canada and the U. S. A. 
 780,000 cases of canned salmon in the first months 
 of the war, in addition to huge quantities of wheat, 
 flour, lumber, canned meats, saddles, horse 
 blankets, portable field forges, wire nails, gal- 
 vanized wire, fertilizers, railroad material, tin 
 plates, etc., most of which were sold by tender to 
 the Japanese Government departments. 
 
 I well remember the extreme difficulty we ex- 
 perienced in getting American and Canadian ex- 
 porters to quote us prices delivered Japan, al- 
 though we spent money lavishly in cabling them 
 to do so. On the other hand, representatives on 
 the spot of English, French and German manu- 
 facturing firms and also other firms in those 
 countries, made us firm offers c.i.f. and e. Japan 
 ports, in Japanese currency, including War Risk. 
 Despite the fact that in many instances we pre- 
 ferred the American product, our choice often 
 quite naturally fell to the European article be- 
 cause we knew what it was going to cost laid 
 down at our door. 
 
 With the approaching official declaration of 
 peace, and a gradual return to comparative nor- 
 mality, American houses must be prepared to 
 meet the thorough, active, keen, painstaking 
 methods pursued by competitive manufacturers 
 of other countries. 
 
 Temperamentally, most Americans want to do 
 things in a "hurry-up, shoot-it-along" style. It 
 may work in Kokomo or Kalamazoo or Keokuk, 
 but it doesn't get the business for United States 
 goods in Shanghai, Singapore and Soerabaya. I 
 have expended much effort to counteract this 
 tendency, and I know what I state to be true. 
 
 If American goods are to reach Persia, Siam, 
 Chile, Siberia, Australasia, China, or elsewhere 
 abroad, they will have to be quoted, packed, 
 shipped, insured, drawn for, and delivered as the 
 peculiar or particular circumstances require, and 
 only in this way will the United States manufac- 
 turers get their rightful share of that overseas 
 business which helps to lower the "overhead" of 
 factory production, and stabilize home industry 
 when domestic demand falls off. 
 
 The writer goes on to say : " Imagine a 
 salesman for Australian wines, eucalyptus 
 oil or jam calling on a broker in Los An- 
 geles, Kansas City, Chicago, Detroit or 
 Buffalo, getting favorable inspection of 
 his line, and on being asked the price re- 
 plying ' Seventeen shillings and ten pence 
 farthing per dozen, or gross, or case, f.o.b. 
 Adelaide or Perth.' It would not require 
 many banks to handle the 30 days drafts 
 he would draw; but if the salesman knew 
 {inter alia) the packing, gross weight, 
 cubic measurement, ocean freight, marine 
 insurance, exchange conversion from sterl- 
 ing to dollars, to add to his f.o.b. cost and 
 quoted a c.i.f. and e. price (and probably 
 
 Ostrich farming in New South Wales 
 113] 
 
with duty paid) in United States currency, 
 the prospective customer would grasp it. 
 Business probably would result." 
 
 The National Foreign Trade Council 
 recently called the attention of the Amer- 
 ican manufacturers and exporters to the 
 confusion resulting in Australia over the 
 use of the term "F.O.B." The Council 
 writes in part as follows : 
 
 As a result of the practice complained of, a sit- 
 uation has arisen which may easily prove seri- 
 ously detrimental to American commerce with 
 Australia. The Australian complaint is that the 
 American manufacturers and exporters who have 
 quoted F. O. B. New York have interpreted that 
 quotation to include merely delivery within the 
 limits of the port of New York, and not neces- 
 sarily actual delivery of the merchandise on board 
 the overseas vessel. The Australian contention 
 is that the term F.O.B. port has only one mean- 
 ing, namely, " Free on board overseas vessel " at 
 the port named; and that a quotation F.O.B. 
 port means that the purchaser has no charges to 
 meet except those connected with ocean freight, 
 and insurance. 
 
 It appears that some American manufacturers 
 nd exporters who have quoted prices F.O.B. 
 New York, or other port, have contented them- 
 selves with the delivery of the goods within the 
 limits of the port named, instead of on board 
 overseas vessel, with the result that charges for 
 cartage, lighterage, storage and other items, have 
 
 been passed on to the Australian purchaser who 
 had understood that the F.O.B. port quotation 
 covered delivery of the goods on the overseas ves- 
 sel. The possibility of adverse effect upon Amer- 
 ican foreign trade in this situation is obvious, and 
 leads the National Foreign Trade Council to urge 
 upon American exporters generally the wisdom 
 of following invariably a practice under which 
 complaints cannot possibly arise. 
 
 New Zealand Trade 
 
 Trade with New Zealand a thousand 
 miles from the Australian continent is 
 quite different from that with Australia, 
 with the exception of engineering appli- 
 ances and machinery. The climate is very 
 similar to that of California. As to the 
 consumption of merchandise, it may 
 serve best to say that most of the goods 
 sold there are similar to those marketed 
 in the smaller cities of Pennsylvania or 
 Illinois. The population is largely en- 
 gaged in farming, only a small percentage 
 working in factories. There is a great de- 
 mand for cottons, flannels, gloves, velvets 
 and trimmings, automobiles, labor saving 
 machinery of all kinds, hardware, espe- 
 cially stoves, axes, saws, picks, spades, 
 forks, carpenters' tools, lamps, wire net- 
 ting and galvanized iron, and there is a 
 
 In the heart of Brisbane, the capital of Queensland 
 f!4l 
 
A view of Adelaide, the capital of South A ustralia 
 
 good opening for the sale of American 
 laces and embroideries. 
 
 When speaking of Australia and New 
 Zealand collectively, the Britisher says 
 "Australasia." Almost every article 
 made in Australasia is protected by an 
 import duty. It must be remembered 
 that Australia and New Zealand are pros- 
 perous countries and that the quality of 
 the goods sent there from America must 
 be equal to those sold in New York or Chi- 
 cago. The Australasian wage earners are 
 well paid comparatively and can afford to 
 pay for the best quality. In selling to the 
 agricultural population outside of the 
 cities, the American exporters have to 
 deal with storekeepers' associations, 
 through which source the up-country 
 stores buy large quantities of goods. 
 
 The list of American goods advertised 
 in Australia ranges all the way from mo- 
 tor trucks to chewing gum, and includes 
 typewriters, clocks, patent medicines, 
 pianos, cameras, fountain pens, corsets, 
 toilet articles and soaps. California ap- 
 ples, asparagus, sweet corn from the Mid- 
 dle States, canned salmon and herring, 
 sardines and lard compounds find a ready 
 sale in Australian markets. A large trade 
 has grown up with the Pacific Northwest 
 in lumber, principally Oregon pine, as the 
 
 [15 
 
 result of the lack of native soft woods 
 suitable for building purposes. The ex- 
 tensive forests of Australia are made up 
 almost entirely of hardwoods and are 
 largely of the eucalyptus or gum species. 
 
 Australian Business Methods 
 
 Business methods are somewhat differ- 
 ent from our own. The Australian takes 
 life more easily. He will import almost 
 everything we have except our nervous 
 hurry and tenseness. In the principal 
 lines of trade there are wholesalers in the 
 capitals of the different states. These 
 wholesalers, who have branches in all the 
 smaller cities, buy direct from manufac- 
 turers, domestic and foreign. They sell to 
 the retail trade and to other wholesalers, 
 and maintain a force of travelling sales- 
 men. 
 
 One of the most striking characteristics 
 of Australia as a market for goods is the 
 concentration of about 40 per cent, of the 
 population of the country in the capital 
 cities. A similar condition cannot be 
 found in any other part of the world. An 
 even distribution of American goods may 
 therefore be obtained by arrangements 
 with the wholesalers in Brisbane, Queens- 
 land; Sydney, New South Wales; Mel- 
 bourne, Victoria; Adelaide, South Aus- 
 
 1 
 
tralia; Hobart, Tasmania; and Auck- 
 land, Wellington, and Dunedin, New Zea- 
 land. Each state in Australia handles its 
 own business and there is not much com- 
 petition. One of the reasons for this is 
 that the railroads in the various states 
 have different gauges, which makes it ne- 
 cessary to transfer freight, at high cost, 
 at the boundary lines. 
 
 The importing, or so-called "indent" 
 broker is an old established institution in 
 Australia. He is the middleman who ar- 
 
 goods said recently that the quality of 
 Japanese merchandise is rapidly improv- 
 ing. Last year a Japanese trade com- 
 missioner spent several months in Aus- 
 tralia and while there collected large 
 quantities of samples and made a careful 
 study of Japanese methods. Many of the 
 large Australian buyers in Japan are es- 
 tablishing houses there, to which all their 
 purchases are sent and examined to ascer- 
 tain whether goods conform to contract 
 and sample. Other houses in Japan un- 
 
 Hobnrt, the capital of Tasmania 
 
 ranges the sale between the manufacturer 
 abroad and the buyer in Australia. These 
 indent houses have salesmen and sample 
 rooms and are an important factor in the 
 Australian trade. 
 
 Japanese Competition 
 
 One of the leading importers in Aus- 
 tralia of American, British and Japanese 
 
 dertake to perforin a similar service for 
 foreign- purchasers, for which a commis- 
 sion of five per cent, is charged. It is said 
 that when an Australian importer com- 
 plains to the Japanese Consul General at 
 Sydney or any other state capital that 
 purchases are not according to sample, the 
 Japanese consular officer immediately re- 
 ports to his Government and the defec- 
 
 161 
 
tive purchase is traced at once to the fac- 
 tory where the article was made. The 
 Japanese consular officer in some instances 
 guarantees on behalf of his Government 
 the quality of the merchandise. 
 
 Combinations Favored 
 
 Australian business houses lately have 
 been seeking agencies for combinations 
 of American manufacturers organized 
 under the Webb Law, handling allied lines 
 of goods from different groups of manu- 
 facturers, in order that they may be able 
 to furnish full lines to the retailers who 
 deal with them. Australia fully recog- 
 nizes the advantage of combination in 
 dealing with foreign trade and she is ap- 
 parently prepared to utilize every re- 
 source in aiding her own people. Business 
 combinations to safeguard special inter- 
 ests are easily initiated and are fostered 
 by the Australian Government. 
 
 A good example of this is the case of the 
 Australian Zinc Producers' Association, 
 organized April 3, 1916, which brought into 
 one group all the Australian mining com- 
 panies producing zinc concentrates. This 
 monopoly was organized by the Federal 
 Attorney General, the Honorable Hugh 
 Mahan. The two largest producing com- 
 panies did not wish to join the combina- 
 tion, but a forty -eight hour ultimatum was 
 sent out by the Government and within 
 that time the organization, which includes 
 all the Australian companies, was com- 
 pleted. The specific object was to pre- 
 vent a repetition of the old foreign (mostly 
 German) control of the metal markets. 
 
 The organization is a cooperative insti- 
 tution, the members of which are pledged 
 to sell the whole of their output of mar- 
 ketable ore, concentrates, spelter or elec- 
 trolytic zinc, through the medium of the 
 association for a period of fifty years. The 
 association is not established for the pur- 
 pose of unlimited profit or gain, as in the 
 case of the ordinary trading company, but 
 primarily as the medium for the disposal 
 
 [ 
 
 of the members' zinc products. A small 
 commission is charged on all transactions, 
 and if the revenue exceeds the amount 
 necessary for a ten per cent, dividend, any 
 balance is rebated to the supplying com- 
 panies in proportion to the value of the 
 products realized. The head office is in 
 Melbourne, with an office in London. On 
 the Melbourne directorate the Common- 
 wealth is represented by a nominee, and 
 the Imperial Government is represented 
 on the London board. 
 
 The Broken Hill Combination 
 
 In the same year (July 3, 1916) the 
 problem of the treatment and realization 
 of the large output of the silver-lead con- 
 centrates from Broken Hill companies was 
 settled permanently. Every mining and 
 trading company was brought into the 
 Broken Hill Associated Smelters Proprie- 
 tary, Limited, which is now practically a 
 huge cooperative smelting, refining, and 
 realization institution for the treatment 
 of silver-lead and gold ores and concen- 
 trates probably the largest metallurgical 
 establishment of its kind in the world. 
 
 A majority of the members of the Brok- 
 en Hill combination made contributions of 
 capital, and the value of the land, plant 
 and equipment is about one million 
 pounds sterling. The companies unable 
 to contribute financially were admitted as 
 "suppliers" of concentrates, and were 
 placed on exactly the same basis as the 
 most important members of this great 
 cooperative smeltery as regards the smelt- 
 ing, refining, and realization of silver-lead 
 concentrates, provision being made for 
 these companies to contribute capital 
 when their financial position permitted. 
 The mine with the small output was 
 placed on almost a better basis than one 
 with a large output, because it secured for 
 its small tonnage of concentrates all the 
 advantages and economies of the largest 
 ore-supplying companies. 
 
 The Australian banking business is di- 
 
 17J 
 
vided among twenty-seven strong banks 
 with numerous branches. Unity of action 
 on the part of the banks is common. All 
 banks doing business in Australia quote 
 the same exchange rate on London, all 
 charge the same rates of exchange be- 
 tween different cities in Australia, and all 
 ask the same rates of interest on loans. 
 The export trade of Australia is in strong 
 hands. The meat export trade is handled 
 largely by a relatively small number of 
 private packing firms, and cooperation 
 among them exists to a limited extent. 
 The wool trade is handled mainly by a 
 number of large firms with an extensive 
 organization of wool stores and banking 
 facilities. 
 
 The growing of linseed in Australia 
 furnishes the "key" to the linseed oil in- 
 dustry. Among other " key " products, of 
 which Australia has many, may be men- 
 tioned coal, from which springs the coal 
 tar industry, with its many ramifications. 
 Coal tar was not distilled in Australia be- 
 fore the war, and its valuable by-prod- 
 ucts were wasted, but the process was un- 
 dertaken during the war, and will prob- 
 ably never be discontinued. The produc- 
 tion of wolfram ore provides another 
 "key" industry leading to the manufac- 
 ture of tungsten steel for all sorts of mod- 
 ern machine tools. Tungsten is also used 
 for electrical purposes, such as contacts 
 
 for magnetos, while tungsten alloys are 
 used, among other things, in propellers 
 and automobile parts. 
 
 The treatment of zinc concentrates is 
 another "key" industry from which 
 springs the production of zinc and many 
 valuable zinc alloys used in the industry. 
 Zinc is largely used in the building indus- 
 try, in the production of galvanized iron. 
 and from it spring the chemical and paint 
 industries. The production of manganese 
 ore is carried on in Australia, and is the 
 "key" to the production of ferro-man- 
 ganese alloys and manganese steel. 
 
 During the last three years, owing to 
 war conditions, a greater area has been 
 sown to wheat in Australia, the 1917-18 
 crop being approximately 122,000,000 
 bushels. The wool clip is estimated at 
 approximately 2,000,000 bales annually. 
 In 1918 Australia had 10,500,000 cattle, 
 2,500,000 horses, 8,000,000 sheep and 
 1,006,000 pigs. 
 
 The gold production in the Common- 
 wealth was valued at $30,000,000 in 1917. 
 
 The sugar production in Queensland for 
 the year ended June 30, 1919, is estimated 
 at 190,000 tons, and that of New South 
 Wales at 12,000 tons. 
 
 Note : The Guaranty Trust Company of New- 
 York maintains direct, personal representation 
 in Australia, with headquarters in Sydney, New 
 South Wales. Credit data and special trade in- 
 formation of all kinds from this source are avail- 
 able to our clients. 
 
 Perth, the capital of Western Australia 
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 THE UNIVERSITY OF CALIFORNIA LIBRARY