With the exception of a few stripper harvesters shipped to South Africa, all the machines of this type exported by Australian manufacturers go to Argentina. Various causes, such as shipping difficulties, unfavorable agricultural and financial conditions in Argentina, and the advent of the reaper-thrasher in the United States and Canada (which has undoubtedly been offered to the Argentine importers as a better machine) have combined to deprive Australian manufacturers of the excellent and growing trade they had created in that country, and, owing particularly to the cause last mentioned, it is extremely doubtful whether they will ever again participate in the trade of Argentina. Plows (chiefly disk plows) and harrows largely constitute the machines grouped in the second column of the above table. South Africa, the Pacific Islands, and New Zealand are the chief countries to which these goods are exported. While Australian manufacturers will probably continue to supply that trade, it is not believed that they will succeed in increasing it. SYSTEM OF CONDUCTING TRADE. The agricultural machinery business of Australia is chiefly done by the local manufacturers and by several importers, who almost invariably sell the machines directly to the farmers. The largest firms maintain branches in all the capital cities of Australia-namely, Sydney, Melbourne, Adelaide, Brisbane, Perth, and Hobart. In a number of smaller towns (see p. 12) smaller firms are also engaged in the implement business, either as agents for the domestic manufacturers or as direct importers. These concerns are so few, however, that the statement that all the business is done from the capital cities and directly from importer or manufacturer to user can be accepted as literally correct. Neither country firms, therefore, nor branches of the local manufacturers or importers are to be found in the interior agricultural centers of Australia. Commission agents, however, are to be found in the rural districts. As a rule these are widely known farmers or, to a less extent, country storekeepers; in neither case do they carry stocks of machines, and they are seldom provided even with stocks of repair parts except, in a few cases, such standard parts as plowshares, disks, binder knives, guards and sections, stripper combs, and the like. The principal and almost the sole function of these agents is to keep the manufacturers or importers they represent advised concerning the prospective needs of the neighboring farmers. In a few cases they may also effect sales and start the machines they have sold. All these transactions are always performed in the behalf of the houses they represent, and in no case do they take any financial or other responsibility. In compensation for their services they are paid a commission ranging from 5 to 15 per cent, according to the character of the service they have rendered. It appears that in the majority of cases a commission of 10 per cent is paid to them. The severe competition of former years is said to be chiefly responsible for the present existence of these commission agents, and there appears to be an increasing feeling that they occasion an unnecessary expense with which the implement houses could easily dispense if all of them agreed to discontinue the practice. The largest Australian manufacturer and the Australian branches of the two American and Canadian firms referred to on page 69 control possibly 65 per cent of the entire implement trade. These three firms have been established for many years. Their large resources, together with the application of progressive merchandising methods, have enabled them to create selling organizations so effective that the existence of other houses in the implement business has become rather precarious-so much so that a number of firms have gradually given up their interest in that trade. For this reason no new firms have taken up the sale of farm machinery in recent years, nor are any likely to do so as long as present conditions prevail. Under such circumstances the average American manufacturer will find it extremely difficult to build up a large business in Australia. The establishment of branch houses offers the only alternative, yet this procedure would involve such an outlay of capital that it can not be considered advisable unless some exceptional circumstances are involved. The practice of selling goods directly to farmers and giving them extended terms of payment (as is often done) forms one reason for cautioning American manufacturers against entertaining such a project. Half a dozen other manufacturers are also important factors in the distribution of farm machinery in Australia, and some of these maintain branches in two or three of the largest implement centers of the Commonwealth, such as Sydney, Melbourne, and Adelaide. Otherwise they dispose of their goods through large merchants in the other capitals of the country. It may be roughly figured that these six local manufacturers do about 20 per cent of the trade. The remaining 15 per cent of the business is done by the other Australian importers and by the smaller local manufacturers, who, with a few exceptions, are of rather slight importance. Some of the more standard lines of farm machinery, with which all farmers are more or less acquainted and which they are willing to buy without expecting the sellers to start them or to furnish other field service and assistance, are sold by some of the largest generalmerchandise houses of Australia. These sales are generally effected by means of catalogues and with the assistance of travelers, who, being interested in the sale of all types of merchandise, are not expected to know a great deal concerning farm implements. They are made in some cases on a wholesale basis to general storekeepers. The articles comprised in transactions of this character are chiefly walking plows, disk harrows, mowers, and such other machines as are largely sold in closely settled areas and are not likely to prove difficult to handle. PRICES. A number of circumstances have combined to cause very high prices for farm machinery to prevail in Australia. The cost of ocean freight; the length of time required for foreign goods to reach the country; the high rates of duty paid by imported goods; the effect of the labor situation on domestic manufacture; the large selling expenses in a country where distances are great and the farms, being relatively large, are widely scattered; the fact that, because of the lack of country implement dealers, the importers are compelled to employ high-salaried salesmen to seek the farmers' business; and the keen competition, which causes the importers to try to excel each other in the matter of service-these, among other things, are the factors responsible for the high prices that the Australian farmers have to pay for their farm machinery. Prices have changed so frequently during the past three years that no prices will, as a rule, be given in the subsequent parts of this report, where the demand for the machines more largely used in Australia is individually reviewed and discussed. To substantiate the statement that extraordinarily high prices for farm machinery prevail in Australia, the following prices are quoted as applying to the goods sold for the season 1916-17. These may be considered as only 10 to 25 per cent higher than those in force before the war, for the Australian merchants ordered the goods in the early part of 1916, before the prices had been materially advanced by the manufacturers. They are also to be understood as being the cash prices quoted by the importers to the farmers themselves: Weight in pounds. Price. 7-inch walking plow, steel beam and handle, without any extras 20-tooth (spring) riding harrow with two poles, steel wheels, and forecarriage_ 13 by 7 fertilizer disk drill_. 1, 350 225.00 6-foot left-hand binder with sheaf carrier and transport truck 2, 100 250.00 1,000 375.00 14 by 18 baling press, one horse, hand feed__ Owing to the highly competitive character of the business, it is not to be inferred that the prevalence of the high prices quoted above means that the farm-machinery merchants are making large profits. On account of the high duty paid by this class of goods, the importers are not believed to make anything like satisfactory profits, except in the case of the one or two most successful firms in the business. There have been a few failures among the Australian manufacturers in the past, but it is believed that, when the business is carefully conducted, the profits made by them have been, on the whole, quite satisfactory. The largest manufacturers, in particular, convey the impression that their business is highly profitable and successful. TERMS OF SALE AND PAYMENT. Australia has long been known as a country in which long credits are given in the sale of farm machinery. While this, in general, is the case, the practice does not prevail to the extent commonly believed. Several of the largest firms in the business have concurred in the opinion that at least 60 per cent of the agricultural machinery sold in the country is paid for within the year of its sale. On the other hand, the goods not paid for on this basis are generally subject to long credits, as evidenced by the following terms at which some of the merchants offer them for sale (these are taken from the contracts of several importers and are such as prevailed during the 1916-17 |