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CSR in Politics

The Politics of Sugar

As CSR became an industrial giant, political crises emerged which demanded that “the sugar company” become a political actor.  For the first eighty years these crises were negotiated mainly by the first two general managers, Edward Knox and his son Edward William Knox.

The first serious threat blew up as CSR emerged from the wreckage of the Australasian Sugar Company.  In 1857 Edward’s fellow director, Ralph Robey, raised £30,000 to build a rival refinery at Lavender Bay. Until the machinery arrived, he relied on an overdraft with the Australian Joint Stock Bank on fixed terms. When the Bank reneged, he had to sell to CSR. Robey went to court and won - but lost his refinery, and later died of apoplexy.

Sydney merchants posed a more serious threat. While refiners imported raw sugar from the Philippines, China or Mauritius, merchants imported processed sugar and saw no reason to refine it locally. If their view had prevailed, there might not have been a CSR.

Argument came to a head in 1862, when the Legislative Assembly debated import duties. CSR argued vigorously for taxing raw sugar imports at a lower rate than refined sugar imports, and The Herald agreed that “the present system, instead of affording protection to the colonial manufacturer, offers a bounty to those who are in competition with him”. (Sydney Morning Herald, 30 June 1862)

 After a sour debate, the tariff was revised in favour of refiners.

In 1875 CSR moved out of Camperdown and built the Pyrmont refinery. By then the company was encouraging Australians to grow cane, to overcome the need to import raw sugar.  Farmers in northern NSW agreed to grow cane if CSR would process it, so in 1869 CSR held a spectacular launch of the Southgate mill. 

Hundreds gathered, and the catering was typically lavish. The Clarence and Richmond Examiner rejoiced. So did Edward Knox:

Farmers … had by the promise of the erection of the mill been induced to plant a large area of cane…; and…this new industry… would ere long be productive of the greatest benefit to the inhabitants of the Clarence River, and of other districts. (Sydney Mail, 3 November 1869)

Sugar’s prospects were even better in Queensland. After 1863 farmers employed Pacific Islanders for heavy work, and CSR built a mill at Darkwater. By 1870:

[The mill was a tribute to] the enterprise and spirit of the Colonial Sugar Refining Company, and the advancement the district of the Macleay is making in the sugar industry. (Sydney Mail, 29 October 1870)

The Knoxes surely knew how to cultivate the press!

The Governor of Fiji encouraged CSR to guide the colony’s fledgling sugar industry, and the company quickly became the dominant player in Fiji’s economy (see CSR in Fiji.)  By 1900 CSR controlled raw and milled sugar from Queensland, New South Wales and Fiji, and had built political support to match its market dominance.

But its position was fragile.  Federation was designed to create White Australia: an early Act of federal parliament created a bounty to be paid to sugar produced by white labour only.

Thousands of South Sea Islanders were dismissed and most were deported.  A system evolved around small farms, whose managers brought cane to central mills which processed it and usually sent it to CSR for refining.  That arrangement was entrenched in 1923 when the Queensland government contracted CSR to refine all its sugar.  That agreement became the cornerstone of the company’s dominance throughout the South Pacific.

But CSR faced an existential challenge. In 1912 Billy Hughes -  now the federal Attorney-General - appointed a Royal Commission into the sugar industry, aimed squarely at CSR’s dominance. The hearings were a platform for CSR’s enemies and rivals – beet sugar growers, Labor Party figures (and jam makers) who wanted cheaper sugar for cheaper jam (“a free breakfast table”), and unionists who resented an over-mighty employer. Edward William Knox, as General Manager, refused to reveal CSR’s accounts.  When pressed, he appealed to the Privy Council in London, which upheld his position. In the end the Commissioners supported CSR and fully endorsed the status quo. 

The Adelaide Register observed that (6 December 1912)  

The policy of a 'white Australia' must be loyally adhered to and that the cane sugar industry should be supported, because it involves the occupation of tropical and semi tropical areas by whites, who are a factor in the defence of the north. Relative to questions of settlement, and defence, 'all other issues,' say the Commissioners, 'are of minor importance.'CSR emerged from this trial as a pillar of White Australia. During the Great War it became an ally of Prime Minister Hughes and a player in Imperial politics.  In 1919 the Government of India abolished the indentured labour scheme.  Knox discussed with Colonial Secretary Winston Churchill how to transform labourers into smallholders. Churchill then sent his instructions to the Governor of Fiji. 

Secure in the sugar market and well connected politically, CSR also employed the country’s leading engineers.  They diversified into by-products – rum from 1900, tablet sugar from 1910, caneite in 1936.  The next step for distillers was industrial chemicals.  CSR became Australia’s second largest industrial concentration (behind BHP). During the Second World War therefore CSR engineers could even produce war materiel.

That flexibility allowed CSR strategists to think about life after sugar, in building materials. Despite a disastrous venture in asbestos (at Wittenoom from 1948 to 1966) this focus was highly productive.

But sugar became problematic.  In 1975 Fiji became independent from Britain – and from  CSR.  During the 1980s world sugar prices fluctuated alarmingly: the industry needed, and received, financial support from the Commonwealth and the states.  However, as neo-liberal ideas prevailed, governments grew reluctant to protect sugar from competition.  In 1989 Australians began to import sugar, and Queensland terminated its agreement with CSR.  As these defences fell away, sugar refining was doomed.

In 1992 CSR decided to close its Pyrmont works. Industrial activities had departed already. The Colonial Sugar Refining Company had morphed into a building materials firm and Pyrmont fell silent.

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Further Reading

  • Bruce Knapman, Fiji’s Economic History 1874-1939: studies in capitalist development. Canberra, NCDS, ANU, 1987