season): Walking plows, one-horse cultivators, lever harrows, hand corn shellers, and similar small machines.-One-half cash and onehalf January 2, 1917. Gang plows, including stump-jump and disk plows, disk harrows, riding tooth harrows, land rollers, reapers, rakes, stackers, hay loaders, baling presses, cream separators, large corn planters, mowers, and power corn shellers.-One-third cash, one-third January 2, 1917, and one-third January 2, 1918. Drills. One-fourth cash, one-fourth January 2, 1918, one-fourth January 2, 1919, and one-fourth January 2, 1920. Binders, stripper harvesters, reaper thrashers, gas engines, and tractors.-One-third January 2, 1917, onethird January 2, 1918, and one-third January 2, 1919. When machines are sold on such extended terms of payment the sales are made under a contract known as a "hire agreement," to which contract nearly all the Australian merchants adhere with slight variations. According to this agreement the machinery sold remains the property of the seller until fully paid for. The following is a typical sales contract when goods are sold on these terms: HARVESTER Co., Please forward to me on hire the following machine or implement, namely: No. (hereinafter called "the machine "), to be delivered at my risk at the wharf or railway station at Melbourne, and to be consigned to me to the-. __railway station, or at your option to be delivered to me from any of your agencies or depots, on or about the --- day of 19. The freight from the said wharf or railway station to be paid by me. Such machine shall be hired and held by me from you for a term until the day of 19--(determinable as hereinafter mentioned) on and subject to the terms and conditions following: 1. I shall pay you at your office at Melbourne as rental for the hire of the machine (here during the aforesaid term the sum of 66 in cash on delivery for the period of the hiring terminating 30 days after delivery of the machine. for the period terminating on the for the period terminating on the for the period terminating on the for the period terminating on the day of 191___ - day of 191___ for the period terminating on the for the period terminating on the for the period terminating on the for the period terminating on the For which respective instalments of rental (other than the cash instalment) I will on delivery give or send to you at Melbourne as collateral security for the payment thereof my duly stamped promissory notes payable to your order at last day of such respective periods of hiring. at Bank -- on the I am to be allowed a discount of £_ off the said total rental in the event of my exercising the option of purchase contained in clause 6 hereof within 14 days of delivery. 2. If I fail to pay, give, remit, or send to you at Melbourne such cash payment and or promissory notes within 14 days after delivery as aforesaid, or if I at any time countermand delivery or refuse to accept delivery of the machine you are to have the option, by written notice to me, of determining the hiring and treating the transaction as a cash sale to me of the machine in Melbourne for the said total rental (less any amount then paid) which notice may be given to me personally or sent to me by post by registered letter at my postal address hereunder written, and thereupon the said total rental (less any payment as aforesaid) shall immediately become due and payable by me to you at Melbourne, and may be sued for in any court of law having jurisdiction, and the production of this order and proof of the delivery of the machine and of the giving or sending such notice, shall be conclusive evidence of the said total rental (less any payment as aforesaid) being due from me to you. 3. If I shall at any time (after this order becomes binding upon you) prior to the date for delivery of the machine countermand delivery thereof (otherwise than under and in accordance with the provisions of the endorsement hereon, if signed by me), or if after the said date I shall refuse to accept delivery thereof and you should not exercise the aforesaid option of sale, I hereby agree to pay you in Melbourne one-fourth of the said total rental (less any amount then paid) as and by way of liquidated damages. 4. At any time after payment by me of one-half of the said total rental I am to have the option of determining the hiring by returning the machine in good repair, order, and condition to you to the said wharf or railway station (carriage paid by me), and paying to you such further rental as may be due to the date of such determination as aforesaid, in which case the hiring shall be determined, and you shall return to me all promissory notes then unpaid. 5. I will not during the hiring offer for sale or part with the possession of the machine or remove it to any locality distant more than fifty miles from my said postal address without your written consent, and I will not allow the machine to be used or worked by any person or persons other than myself, my workmen, servants, and employees, and I will, during the hiring, keep the machine in good order, condition, and repair, and, when not in use, protected from the weather, and I will indemnify you from its loss by its seizure under distress for rent or other legal process, and also from its loss or injury by fire, accident, or any other means. 6. Until either a breach by me of any of the terms hereof or the occurrence of any other event determining this order and entitling you to immediate possession of the machine I am to have the option at any time during the hiring of purchasing the machine by paying to you the difference between the amount I have then actually paid and the said total rental, and you shall thereupon return to me any current promissory note or promissory notes. If I shall fail to comply with or perform any of the provisions hereof, or if I shall, during the hiring, sell or attempt to sell, or shall part with or attempt to part with the possession of the machine, or if I be now an uncertificated insolvent, or if I shall become or threaten or attempt to become insolvent, or if my estate become sequestrated or threatened with sequestration, or if I shall assign my estate for the benefit of all or any of my creditors, or if I shall make a composition with them, or if any rent for the premises whereon the machine for the time being is shall become in arrear, or if any execution be issued against me or my goods or estate, my rights under this order shall be thereby terminated and I will forthwith return the machine to you at Melbourne at my expense in good order and condition, reasonable wear and tear excepted, and you shall be entitled to immediate possession of the machine, and to enter by any person or persons at any time or times, and, if necessary, from time to time upon any land, building, premises, or place where the machine may be and to take back and retain the same as if this order had not been given, and for that purpose to break open and enter any building, premises, or place where the machine may be, of the leave and license to do which this order shall be conclusive evidence in any court; but you shall, nevertheless, be entitled to retain all moneys previously paid in respect of the machine whether by way of deposit or rent for hire or otherwise howsoever, and to receive and recover all moneys herein agreed to be paid for the hire of the machine, and which may be owing or accruing, due and unpaid at the time of such return or seizure. 8. In the event of your inability to supply the machine through industrial disputes or disturbances, accident, fire, nonarrival of shipment or customs or any other seizure or detention or through any other reasonable cause, this order shall be and be deemed to be cancelled as from the date of the happening of any such event or casualty, and you shall be under no liability in respect thereof. 9. Until I shall have paid the whole of the said total rental I will hold the machine solely as your bailee, and I shall not have any property or interest as purchaser therein. 10. If any of the said promissory notes shall not be paid by me on or at their respective due dates and place of payment, I will pay the amount thereof to you at your Melbourne offices. 11. In the event of a variation or extension of any of the monetary payments or of any of the due dates thereof being agreed to by you during the term of the hiring such variation shall not prejudice or affect any of the other provisions hereof save and except that clause 1 shall be then read and construed so as to accord with such variation or extension. 12. The provisions of the endorsement hereon (if signed by me) and of the warranty (also endorsed hereon) shall be incorporated with and form part of this order. 13. I hereby acknowledge that I have signed this order irrespective of any representations made to me by any of your travellers or agents, and that this order, when accepted by you, or when the machine is delivered, together with such of the endorsements hereon as shall be executed, shall be the only evidence of the agreement between us. 14. If I shall make default in payment of any moneys payable under the provisions hereof the same shall bear interest at the rate of ten pounds per centum per annum until payment thereof. 15. Whenever the context so requires any words importing the singular number shall include the plural. 16. This order shall not be binding on you until received and ratified by you in writing or until the delivery of the machine as hereinbefore provided. Dated this day of 191___ Hirer. Postal Address__. The merchants' price lists almost invariably show the different prices of the machines in accordance with the varying terms of payment, which the buyer is permitted to select. For example, a 13 by 7 fertilizer disk grain drill is sold at $215 if paid for in cash; at $230 if paid for one-half in cash and one-half January 2, 1918; at $243 if paid for one-third in cash, one-third January 2, 1918, and one-third January 2, 1919; and at $257 if paid for one-fourth in cash, one-fourth January 2, 1918, one-fourth January 2, 1919, and onefourth January 2, 1920. As a rule, 9 to 10 per cent interest per annum is charged when such credits are given. Settlements are generally made by promissory notes given by the purchaser at the time the machinery is delivered to him. While the Australian farmers often purchase their machinery on extended terms of payment, they are considered, on the whole, as good credit risks, and the interests of the seller are further safeguarded by the "hire agreement" referred to. It has been said that such long credits could be considerably curtailed if the merchants would agree to make adequate efforts in that direction. It was indicated in some quarters that wealthy capitalists are often connected with the firms devoted to the sale of agricultural machinery, enabling them to give the long credits. The further statement was often made that it would be difficult to find in Australia a more profitable and safe means of investing money than by taking over the promissory notes given by farmers when effecting purchases, considering the satisfactory interest charged and the methods adopted to safeguard the interests of the merchant. The smaller houses (and these are the ones with which most American manufacturers do business) are in certain cases at a disadvantage in meeting the requirements of the trade in this respect, and they would welcome any assistance that the manufacturers might extend to enable them to obtain the larger share of the trade that they could secure if placed in a position to meet the practices of the larger firms in giving such long credits. It is claimed that the manufacturers would benefit if, instead of insisting on selling the goods on the basis of payment f. o. b. New York, they were to agree to ship their goods on more liberal terms-say 90 days' sight drafts. The importers would be prepared to pay an adequate rate of interest for the time of the credit, and, since they would be able to get the orders that they sometimes must give up owing to their inability to give the farmer the terms that other houses are ready to give him, they would sell a greater number of machines, which in turn would mean greater orders for the manufacturers. In discussing this subject several merchants expressed doubt as to whether American manufacturers realize that the cost of ocean freight and the duty on imported goods often amount to more than 50 per cent as much as the f. o. b. value of the goods at point of embarkation in the United States--in other words, that when $5,000 worth of goods are shipped by an American manufacturer to an Australian firm the importer will have to pay $7,500 before the goods reach his warehouse. In the case of harvesting machines and several others, furthermore, all these expenses incident to the importations occur when the importer's collections are lowest, since the farmers are in the midst of their agricultural operations, and his expenses are highest, since he has to maintain a large number of salesmen and machinery experts in the field at that season of the year. 497860-18- -6 VI. MARKET FOR PARTICULAR LINES OF EQUIPMENT. PLOWS. The plows used in Australia in connection with wheat growing (which, as stated elsewhere, is the most important agricultural industry of the country) have several distinctive features seldom embodied in American plows or in those of other countries. The fact that stumps and roots are not systematically taken off the land where wheat is grown makes it necessary that the plows should be provided with some device whereby they will suffer no breakage or other damage when the bottoms encounter such stumps and obstructions. The question of constructing plows to meet the requirements in this respect has from time to time received a great deal of earnest consideration on the part of several American manufacturers. In every case, however, the peculiarities of the demand and the marketing conditions prevailing in Australia have caused them to regard the prospects of success as altogether too uncertain to justify their taking up the actual manufacture of plows of that type. One of the chief deterring elements may be found in the fact that the local manufacturers still largely adhere to the practice of catering to the whims of individual users. This operates against the sale of the standardized stump-jump plows that American manufacturers might advantageously supply. It is not uncommon, as a matter of fact, to find that local manufacturers advertise that "all classes of plows are made to order." One of the leading plow manufacturers of Australia stated that if different types, sizes, and particular equipment were considered, his factory could display more than 500 plows, every one more or less different from the others. Obviously, so long as such conditions prevail American manufacturers can not hope to secure a share of the stump-jump plow trade of Australia. This would be desirable otherwise, for, owing to the large amount of hand work done on the locally made plows, the farmers are accustomed to pay high prices for them, considering the amount of material used in their construction and the fact that many parts of one kind are used in every plow (since the bulk of the demand is for plows with three, four, and five bottoms). If it were possible, therefore, to manufacture them in accordance with the large-production methods that obtain in American factories the farmers could purchase them at lower prices and still leave a very good margin of profit to the manufacturer. It is widely admitted that there is no good reason why the local manufacturers should produce so extensive a range of types, and that this practice is due more to precedent than to actual necessity. Believing this to be the case, one of the largest American farm-machin ery manufacturers recently conducted a systematic investigation and study of the factors bearing upon the plow trade of Australia and arrived at the conclusion that, in all probability, the number of Australian farmers who could be induced to take up the use of standardized plows would be sufficiently large to justify the construction of a limited line of plows to suit at least the average requirements. It must be carefully noted that the American firm mentioned has its own retailing branches throughout Australia and, therefore, it does not follow that its success should encourage other American manufacturers to follow the example. American manufacturers without their own retail sales organization in Australia (who consequently would have to depend on the local importers to sell their plows) are not recommended to take up the construction of stumpjump plows without first giving careful consideration to the many disadvantages that they would have to overcome to make a success of the undertaking. In general, a study of the market strongly suggests that American manufacturers will do well to look askance upon the manufacture of plows of that type. In the districts that have been settled for a relatively long time, where after a few years of cultivation with stump-jump implements the inert stumps and roots have become loose, so that the farmers can take them off the land by simply picking them up, the regular types of plows are generally used. In such districts American disk plows, and to a smaller extent moldboard plows, have been used for many years. However, the competition and increasing ability of the local manufacturers, aided by a duty of 25 per cent, has made it more and more difficult for our manufacturers to retain the trade that they once had. A good trade is still done by several American manufacturers of disk plows, but their future is both uncertain and precarious, being largely dependent on the turn that labor conditions may take in Australia in the next few years. Moldboard plows for orchards, truck farming, and mixed farming, with one or two bottoms, are also sold by American manufacturers in appreciable quantities, but the trade for larger moldboard plows, with three, four, and five bottoms, which is much the largest, is largely supplied by the local factories. The size of the shares, and the long turning English or "colonial" moldboards (which are preferred by the Australian farmers and which are made in the United States only by one or two manufacturers), account for the small American trade in plows of this type. Wherever land is irrigated-chiefly in districts of New South Wales and Victoria and also parts of Queensland and TasmaniaAmerican walking plows, and other plows of sizes smaller than those generally used on the wheat farms, are also sold in relatively large numbers. One should not lose sight of the fact that a duty of 30 per cent is paid on imported stump-jump plows and of 25 per cent on all the other plows. This is undoubtedly a severe obstacle to the sale of imported plows. That, on the whole, the trade in imported plows is altogether unimportant is shown in the statistics given on page 65, where the group of machines in which plows are included shows an average annual importation valued at $635,000. It is not improbable that if the value of plows were given separately it would be found that the annual importation of these amounts to less than $300,000, |