Continuum: The Australian Journal of Media & Culture
Vol. 4, No. 1, 1990
The Media of Publishing
Edited by Albert Moran

Cartels, capitalism and the Australian booktrade

Richard Nile

It is a familiar observation in Australia that the Poms are champion whingers about just about everything; but news that they are beginning to complain about the retail price of books at home will bring a laconic smile to the face of many; well at least those who have been pressuring for changes in the Australian trade because books here are between a third and a half more expensive than they ought to be. Australian publishers Laurie Muller and John Iremonger and journalist Robert Haupt, who got the bit end of the stick two years ago for daring to question British trading practices in Australia, will no doubt be looking on with considerable bemusement at this little fall out in the old country. 'It serves them right', they might well say, 'at last the Poms are getting a dose of their own medicine back'.

In Britain the dailies have jumped on the bandwagon and clobbered the driver, just as newspapers in Australia back in 1988/89 reported the cantankerous mood then in the Australian trade. "Dillons Breaks Book Deal with Cut-Price Novels" the Independent blazed in one headline while the Guardian carolled, "Booker 'bargains' in Price Fixing Attack". In a characteristic response the Times bemoaned the world that was not as it should be - even after a decade of Thatcherite conservatism: "Cost of Booker Novels Cut in Breach of Price Agreement''. 1 The penny has dropped and the English have finally tumbled to the conclusion that they are being ripped-off by plenty when it comes to books. The realisation is slowly dawning that in the land of little sunshine the book trade is subject to the control of a cartel which regulates prices and makes bundles of money. Now, it seems, there is a rebel in the market place. The Pentos group, the second biggest book trader in the UK, owner of Dillons, Athena, Hatchards, and the Claude Gill chains across this soggy little island, has defied its retailing agreement and gone for the open market.

The sight of these headlines and by-lines is reminiscent of the storm whipped up in Australia in 1988 when Robert Haupt railed against complacency and the price of books in Australia, as well as the vice-like grip held over Australian trading practices by the British-based cartel of publishers. The cartel, Haupt argued, operates as ruthlessly in Australia as does any transnational oligopoly: "The British monopoly began as a natural consequence of colonial rule", he maintained, "but it was shored up immediately after World War Two by a crucial agreement between British and American publishers in which they divided the world of books between them rather as the Seven Sisters of oil divided the world of petroleum". According to Haupt: "It has been said of the Traditional Markets Agreement, as it was called, that it reserved for British publishers 'every territory that was coloured red in maps of 1898'". 2 How right he was.

The Haupt article began something of a mud-slinging match which resulted in a Prices Surveillance Authority (hereafter PSA) inquiry into the Booktrade in 1988/89, headed by microeconomic whiz Professor Allan Fels, followed soon after by new legislation pushed through the Australian parliament by the then Deputy Prime Minister Lionel Bowen.

The PSA Report argued that the Australian publishing market should, in the interest of book consumers and industry competition, become a deregulated 'open market'. It claimed that the present system encouraged publishers to charge significantly higher prices for books in Australia than would be possible in an open market: bestseller prices were on average 15% higher than in the UK and 27% higher than in the USA; British editions exported to Canada were on average 3% cheaper than in Britain making the same book landed in Canada some 31% cheaper than the Australian edition. Australian readers, it was claimed, were being charged what the market could bear rather than a truly competitive price. Additionally, paperback imprints were often not available in the Australian market for anywhere up to a year after they were made available to readers in Britain and the USA. Leading book-sellers Dymocks went further claiming their own survey of prices showed that Australians were paying 53% more for their books than were US readers. 3 The PSA's solution was the removal of the import provisions of the 1968 Copyright Act which prohibited the importing of overseas books except via the publishing house which holds the Australian copyright - inevitably a British company. This would give booksellers the freedom to order books from overseas publishers, particularly American imprints, and so break the twenty year monopoly held by British publishing houses over the distribution and pricing of imported titles. These reforms would, it was thought, create a competitive Australian market with book titles being made available in the Australian market in a timely fashion.

The PSA recommendations were bitterly contested by publishers and Australian authors. Of particular concern was the perceived loss of the concept of territorial copyright and the resulting instability in the Australian market as a major English language book market. Australian authors and indigenous publishers came out strongly against the proposed dumping of the territorial right concept. They felt it would undermine their fragile position within the Australian book trade. For their part the Australian operations of British publishers saw their control over the captive Australian market via Commonwealth rights being eroded.

After strong representation from authors and publishers a compromise proposal was adopted by Bowen. He opted for the recommendations of the milder Copyright Law Review Committee Report completed in October 1988. That report retained the copyright monopoly but allowed for parallel importing under certain circumstances. Bowen's amendments to the Copyright Act would afford copyright protection to books published in Australia within thirty days of their original overseas publication. If a title were unavailable for ninety days it would lose copyright protection and booksellers would be free to import other editions. Jill Kitson, writing in Meanjin, suggested that the reforms would lead to a number of developments: the airfreighting of some titles as publishers strove to meet the thirty day deadline (this would lead to an increase in the Australian retail price for such titles), the publication of an Australian edition, and the creation of a virtual open market for many American titles. 4

The inquiry and the legislation were intended to end the cartel hegemony in Australia; but in reality it changed little. In the final wash the British publishers came out looking a bit like the cat that swallowed the canary, Allan Fels showed that nothing sticks to teflon, while Robert Haupt looked pretty icky, if a tad sudsy. Almost across the board Haupt was criticised for getting his facts wrong and, in the conspiracy of intelligence which followed the interim report of the PSA inquiry, he was criticised for being over zealous in his call for reforms and, darn his cotton socks, for being too Australian.

Nothing substantial has changed in Australia since the PSA findings and the Bowen legislation, save that the cartel operations have become more hard edged and small and middle range Australian publishers have defaulted one after the other in the face of the rejigged domination. Only the buyout of Allen and Unwin by Australians seems to be a step in the desired direction. The PSA recommendations and the legislation have now been absorbed and accommodated by the transnationals and the London book publishers and distributors are back doing a roaring business in Australia. The proposed great reforms have petered out to a phutt.

In 1988 Jan Paterson, then of Hodder and Stoughton (London), was awarded the prestigious Unwin travelling scholarship to go to Australia and report back to the cartel on the murmurings of discontents in antipodes. Paterson's report, The Future of Australia as an Export Market (1989), became almost immediately valued as an accurate piece of intelligence. Tactically outmanoeuvred, the PSA seemed almost entirely ignorant of the Cuckoo in the nest. Paterson arrived in Australia just as the first of Robert Haupt's articles broke the silence on publishing practices in Australia. Either this was a case of genius on the part of the British book men or a stroke of tremendous luck - probably a mixture of both - but in any case it demonstrated that the metropole knows its business when the locals are beginning to muck-up. Almost the moment Paterson swaggered into Mascot airport, as Clancy might have nonchalantly appeared on a set filled with mountains and mountain men, the game was on; the empire was fighting back.

A bit twee, perhaps, Paterson reported: "the Australians are asking once again why they can only buy British versions of books in their shops". 5 But you do not have to be a Sir Stanley Unwin Scholar to know why the locals were cranky. For years the British trade in Australia has been a running sore with native book men and women, as Laurie Muller of the University of Queensland Press has confirmed time and again during his couple of decades at the forefront of publishing politics in Australia. "What happens to a country, a culture, when one if its most enduring influences, that of its native literature, is in the hands of another culture?" - might in other circumstances seem pointless rhetorical posturing but, as Muller has gone on in all earnestness, "Should we be put in the ignominious position of having to import our own culture?". 6 This was more than rust in the wheat; it was a moment of some seriousness.

A point of annoyance with Australians is the ownership of the fiction industry, which Paterson noted:

The foreign owned firms or branch plants have huge advantages over the indigenous Australian publisher. As they function as an importer, they have a ready-made turnover and cash-flow budget, the profits of which can be used to invest in a local list. Should the company be unprofitable for one reason or another the overseas parent company can bail it out and keep it afloat. The local list will have the support of the imported list when selling to the retailers and also the distribution, sales, marketing, publicity etc will be handled by established channels. 7

You don't have to be Henry Lawson to know what this means but Paterson's bosses might have been a bit concerned that the boy had gone a bit native. As a palliative and corrective Paterson reassured his bosses that it was in their own best interest "to labour the point that profits derived in Australia should be reinvested in Australia". Now in the employ of Penguin and, with the King ready to jump the Fairy and gobble up McPhee Gribble, it was good sense also to labour the point that Ringwood was not only one of the most impressive publishing operations in the southern hemisphere; it also served its clients well.

Pete Townshend stopped being a radical some years ago - or else he just got old - but some of his early stuff still rings true. 'Meet the new boss, same as the old boss' has passed into hippy yippy parlance but it does contain that kernel of universal simplicity which comes from the era and its songs which makes it relevant today. Forget the hoopla and remember the role; when Collins and Angus and Robertson were merged in 1989 the editor of the Australian Literary Review, Rosemary Sorenson, diagnosed the problem as less hysterical and more historical. In her editorial "Blinky Bill in the Balance", she reasoned: "When the patriotic bells tolling for Blinky Bill and Co had expended its first energy, the attitude expressed by people who are in a position to anticipate at least some of 'what it means' for Australian publishing is, perhaps surprisingly moderate". According to the editor, "the crossness from some quarters" was more "reactionary rather than expressing any concern for the future of our industry". 8

This essay, like Robert Haupt's articles in 1988, is something of a polemic but also like Blinky Bill himself it is probably a bit cheeky in that it argues that historical perspectives cast a better light on recent manoeuvrings in Australian publishing - more so than the hocus pocus economic focus of the PSA's one fell swoop. This essay maintains that the PSA report was almost completely devoid of any proper understanding of why publishing is the creature that it is in Australia. Finally, as hopefully more than an allegory of the historical lesson, this essay tells the story of previous failed attempts to reform the beast in Australia, only in those days British books were not as exaggeratedly priced as they are now, but rather dumped stock which made a soft landing on the firm undersoil of terra Australis. The essay is written in full awareness of Henry Lawson's lament that Australian writers should suicide or emigrate rather than write.

British publishers have been a fact of commercial and cultural life in Australia much in the same way that British, European and American financiers and industrialists have presided over economic life. The publishers and the book trade, generally, make plain the adage that Australia is a client of British, European and American capital. 9 Like so many features of Australian life, Australian literature has traditionally served in a compliant position when it comes to international capitalism. In the nineteenth century it was suckled in the colonial cleavage whose influence was carried over into the twentieth century and whose continued nurturing will also help usher in the twenty-first century. It was around the beginnings of the twentieth century that London-based companies, their go-betweens, and Australian book traders, got really serious about domination. Protected by local and international commercial and legal arrangements which were sealed in the late nineteenth century, the publishers were in themselves a savage riposte to any suggestion of reform.

British publishers in Australia as elsewhere habitually argue that their trade differs from other forms of commerce, that they are dealers in ideas more so than product, but in practice they are governed by the same rules of capital as the financiers and the industrialists in other areas. First and foremost publishers are manufacturers, booksellers are merchants; in the Australian context both are linked by a highly organised transnational network of distributors, under whose conditions national literary development has never been independent but rather heavily reliant on the success of the metropole - London - and its publishing and trading practices.

As early as 1896 British publishers organised themselves formally into a global cartel. This alliance, the Publishers Association of Great Britain as it was called by 1900, agreed to regulate wholesale prices in the British domestic market, called the Net Price Agreement, by a system which tied retail prices to a more or less fixed percentage. It is the Net Book Agreement which has now made a maverick out of the Pentos Group. With the London distributors and merchants in tow, the cartel was able to regulate the wholesale market by effectively outlawing competition. Prices were fixed and any selling at lower or discounted rates led to expulsion from the trade. The Net Price Agreement survives in the late twentieth century as the standard manufacturing and trading mechanism. It forms the basis of the book trade in much of the English language world and has special implications for Australia.

Under the Net Price Agreement, trade rebels were rare birds and new manufacturers found it very difficult to break into the London scene unless they conformed to established rules. The specific aim of the cartel was to have power over the price of books and thereby protect the pecking order of manufacturers. The great twentieth century London publishing houses of Allen, Constable, Dent, Heinemann, Hodder and Stoughton, Hutchinson, Lane, Longmans, Macmillan, Methuen, Unwin and Ward Lock were among the principals who organised the cartel. Forty-six co-founders operated businesses within a stone's throw of the giants and only five publishers from the original association were located in regional cities. The hub of this powerful network was the publishers' quarter; that square mile of central London covering Covent Garden, the Strand and St Paul's.

In concert with the merchants and the distributors, the publishers' association pushed through the British parliament the Copyright Act of 1911, the beginnings of modern copyright agreements in English language literatures. Within twelve months virtually identical Copyright Acts were passed in all colonial and former colonial countries including Australia. In almost every respect these colonial Copyright Acts protected the British trading monopoly. The 1911 and subsequent Copyright Acts gave legal status to the British cartel in the Empire while the system of 'net' prices was regulated at home to maintain a balance between the existing manufacturers and their profit margins. The Net Price Agreement was the home guarantee by which domination of indigenous book trades in the outstations of the empire could be assured. Meanwhile the concentration of publishers in central London made the day to day running of the trade easier to organise than if individual members were dispersed around the city or throughout the country. Centralisation ensured tight control of all spheres of the industry from production to distribution to wholesaling and retailing. The publishers' square mile grew to be the nerve centre of a massive international trade that took in Australia.

The operations of the British cartel were sanctioned overseas by an undertaking between producers and suppliers from Britain, Europe and America, known as the Berne International Book Copyright Agreement which was ratified in the late nineteenth century. As a dominion Australia was represented by the British signature which meant that it was tied legally to decisions taken at London. The British signature in the international book trade held sway in Australia until the mid 1970s when a court challenge in America and an out of court settlement supposedly broke the British oligopoly in the English-language book trade. However, the publishers were able to maintain their share of the market by other means and, in particular, by tying up copyright into territories.

The first international agreement and subsequent conventions at Paris (1896) and Berlin (1908) and Berne (1913) divided the English-language book trade into two distinct blocs. United States manufacturers and traders were left with their huge domestic market of seventy-six million population in 1900. The Americans also traded into Mexico and Latin America but manifest destiny stopped short in the north at the Canadian border. The Americans were also quarantined out of the West Indies. The British trade commanded English-language rights in Europe and throughout the empire which included Canada and the Caribbean archipelago; but the jewel which shone brightest in the British trade lay beyond the Atlantic. Wedged between the Indian and Pacific Oceans, three and a half million greedy antipodeans, the population in 1900, waited eagerly for the procession of ships to discharge their valuable cargo. As the population increased to seventeen million by the late twentieth century so too did the demand for books.

The book trade from London to Sydney has always been controlled by the powerful British publishers. The Berne agreement protected the cartel's interests even beyond the 1975 US court case while fixed prices in the

British market subsidised discounting and dumping overseas. Although countries such as Australia, Canada, India, New Zealand and South Africa achieved sovereignty they were, until very recently, still referred to as dominions or colonies. The language has changed a little so that these are now called 'ours' in British trade circles. But while the language has changed the rules of the trade have remained the same. If books do not sell well in the British market they can always be off-loaded on the dominion trade, though this traffic has altered with the setting up of British companies in Australia.

One effect of the ability to ship books to Australia has been the discouragement of 'national' publishers with any thought of producing nationally inspired books for the local market. For much of the twentieth century, but particularly in the years before the second world war, Australian publishers were intimidated by the ability of the British cartel to land books at cheap prices in a trade where a single ship load of stock was enough to sink even the most enthusiastic of local or nationalist sentiment. Nowadays the transnationals simply trade as Australian companies.

British publishers have been well advised to safeguard their interests in the old dominions and not simply because the former colonials are a convenience in soaking up remaindered or dead stock. Australians have a fetish for books and are easily seduced by bright covers and new titles, the latest to arrive from London. Per capita, Australians are the largest group of book buyers in the English language. Around Australia, from the cities to the outback, book selling is a lucrative business as the small population devours a quarter of all British books marked for export, a statistic that has delighted London book publishers for over a century now. Even the most morbid English writer can imagine royal ties coming in from the periphery. By the 1920s the figure of a few thousand sales every few months which was about right in 1900 had blown out to an average of three and a half million books annually. For British publishers that meant the repatriation of over a million pounds per year; a very big return for little outlay. By 1990 British books in Australia were worth a hundred million dollars in a market now turning over a billion dollars annually, most of which was accounted for by the British companies which set up at Sydney and Melbourne in the 1950s and 1960s. 10

In the first half of the twentieth century the Australian appetite for books encouraged a flourishing business for overseas second hand dealers, especially the Americans who were locked out of the lucrative new book trade. One American huckster in these decades was kept busy scrambling around the precincts of New York to make up his monthly quota of a hundred thousand books marked down for his Australian trade. From his depot the New Yorker worked off a loosely organised consortium of porters at railway stations and bell hops in hotels who collected discarded books to be sold on commission. The books were then collated, crated and despatched to Australia. The trade in second hand books irritated the British overlords and their colonial proxies but neither could manoeuvre to stop it. The cartel and the international agreement related only to the sale of new books and to this end British officers had been sent to the colonies early in the century to police against pirates. Used books were a miscellany and fell outside the cartel's jurisdiction. At cities around the country the publishers' customs officers watched on forlornly as dog-eared seconds from America took their stands at prices well below those set for new books. 11 Eventually the second hand trade was stopped and British and American publishers signed their traditional markets agreement. In 1955 Universal Copyright came into being but for Australians that simply meant traditional markets.

In the interwar years the new book trade in Australia continued to grow despite the competition from the interlopers but it was made all the more decisive by the destruction of the once profitable European market in the aftermath of the 1914-1918 war. Germany became the first casualty of the peace as the value of the mark fell from seventy-four in the pound in 1921 to twenty-one thousand million two years later. Such massive depreciation made the simple luxury of an English title far too precious a commodity for even the most indulgent Teuton while the richest of the endowed German libraries found it impossible to buy and stock books originating in Britain. Depreciation was not so spectacular in other European countries as it was for the hapless Weimar but there was little good news from this part of the world for the British book trade.

For London book publishers, so severely had trade with the continent been affected by insipid exchange rates, that proposed book fairs, one after the other, were cancelled; there were simply not enough sales to justify even the most modest exhibition. The cancellations, beginning in 1923 with a proposed fair to take place at Denmark, signalled a new phase in the European trade which lasted three decades. The war had extracted a heavy toll and was followed soon after by depression, more war and reconstruction. The great libraries of Europe to this day have comparatively few books of British origin covering the years 1920 to 1950 but half a world away the situation was quite different. In Australia British books continued to be gorged.

While British dominance of the Australian trade was a source of some aggravation among nationalists there was also a jingoistic pride in the peculiarly Australian ability to consume so many books. Book buying seemed to be proof of the country's dedication to culture though there was also criticism that this was further evidence of a materialist culture and its acquisitive population. In 1924 A.G. Stephens, the Bulletin's Red Pagan, revelled in the thought of the Australian trade and, enjoying the accepted truth that Sydney hosted the best bookshops in the world, he was reduced to Iyrics:

The Gilded Tomes Stand Proudly Up
The Sets are Ranged in Piles
The Small Octaves, Cheek by Jowl
Would Stretch for Several Miles
The Boxes Spill Their Dusty Wealth
The Windows Make Display
It is the Street of Lots of Books
Along the Castlereagh
Now Start with me from King Street Side
And Watch the Bookworms Curl'd
Where A&R extol,
The Largest Bookshop in the World"

Down Sydney's famous Castlereagh Street through several stanzas Stephens peered into the local selling of books and was convinced that the Australian book sellers were doing a splendid job. The names flowed easily from his pen, there was Wynmark, Mitchell, Jones, Shenstone, Robertson, Gillett, Bourne, Johnson, Wynn, Rowlandson and Gilmore; all were fine men and all were good traders. 12

If Stephens had peered beyond the window displays, had he entered the bookshops each in turn, and had he taken down a sample of the books on offer he would have discovered, though not to his surprise, that virtually all the books had come from Britain. However, this was not a cause for any great consternation; London was the centre of all that was great in western civilisation, Australia was more than just a far-flung colony, and Sydney was becoming a great metropolis with Castlereagh Street and its marvellous rows and rows of bookshops.

Yet, even as Stephens wrote, the Antipodean book men were becoming edgy; feeling then, as now, that the cartel was out of touch. The South Africans felt similarly disaffected and, in the days when court was held in the shadow of St Paul's, they despatched a representative to take their case up in London. The Londoners listened patiently and noted with appreciation the concern shown for the imperial market; however, they felt no compulsion to act. The trade was in good hands, they said, and was running smoothly, just as it had always done. Perseverance, application and a certain doggedness would overcome any problems; if the South Africans wanted to do better in the trade they should work harder. This was a reprimand the lone Springbok understood only too well. He realised there was nothing to be gained from persisting with his claims. He retreated from the meeting and returned to the periphery where the trade fell back into line.

In 1923 New Zealand book men took their case to London and argued that the publishers had become too aloof from a trade that was becoming increasingly sophisticated. They argued there were special circumstances within different regions and the New Zealand market was the furthermost of any within the far-flung trade. The New Zealanders emphasised their loyalty to the manufacturers and on that basis lobbied for a formal bilateral trade agreement between London and Wellington. However, the cartel was unmoved by the plea for special dispensation and unimpressed by the palaver. As it had done for the South Africans, the cartel offered the free advice that the New Zealand merchants become more diligent in plying their trade. The Kiwis returned home without so much as the hint of concessions from the manufacturers. 13

Paternalism may have been an immovable object but that did not discourage an Australian delegation from making its representation to the cartel at London. With caps clenched firmly in hands and well aware of the two previous failed representations, delegates from the recently formed Australian Booksellers' Association, pleaded that Australian merchants were placed at a disadvantage because they had to carry large stocks just to remain commercially viable. The merchants argued that many of the books they imported from London did not sell and they were left with dead stock while at the other end of the market were books which sold quickly but which had no chance of being replenished in time to take care of the demand. It took anywhere between three and twelve months for books to arrive and the Australians complained that they had to meet all landing charges. Finally they were susceptible to the sometimes erratic movements in the wholesale prices for books created by the practice of dumping, which was a particular concern.

The Australians wanted their own 'net' book agreement similar to that which operated in the 'home' market, so as to eradicate the practice of discounting and dumping. They wanted books sold wholesale and retail at the same price as they were sold in Britain, "except with regard to colonial editions of works of fiction" which were retailed at a "lower price in Australia than in Great Britain". The traders pointed out that they lost almost a third of their books which ended up as remaindered or dead stock and registered their dissatisfaction with the existing practice which left them with the bills for the landing charges and advertising. The Australians were also unhappy with a new mail order system which had brought interlopers into an already cluttered field. In just a few short years department stores had become competitors who were destabilising the structure of the Australian trade.

This was the most detailed submission yet to be received in London but, ever reliable, the publishers responded in the same terms used to address the South African and the New Zealanders. The publishers were reasoned, direct and firm. There would be no negotiations: "Overseas prices must be governed by English published prices" and the trade with Australia, as with the other dependencies, would continue as usual; there would be no price fixing agreement and there would be no consideration given to special circumstances; as regards non traditional outlets for books, it was concluded that department stores had become "most valued customers" and there was no question of "refusing to trade with them, either at home or abroad." 14

Like the New Zealanders twelve months earlier the Australians were put out by this manifest display of parental authority. The president of the merchants association, George Robertson of Angus and Robertson, told his members that he had never read "anything more callous" than the publishers' rebuke. Robertson maintained that hard times would wipe out the local traders unless they persisted with their actions in trying to tum around English opinion. In 1925 booksellers from Australia and New Zealand joined forces at a meeting convened at Sydney which re-established correspondence with London. The Association of Australian and New Zealand Book Sellers, as it was now called, tried a slightly different approach and requested the British publishers to consider a twelve month moratorium on the sale of cheap reprints of standard priced colonial editions already in the market. The reasoning was that different editions of the same book could arrive in Australia or New Zealand on board the same ship to the detriment of the merchant who made the first (which was the more expensive) purchase.

Hastily arranged meetings between local representatives of British companies, local department stores and local booksellers followed. Beginning to feel some confidence that things could change for the better, the local traders advised the publishers to see the good sense of working as a partnership instead of insisting on a relationship framed on the basis of authority and dependence. The sensation of cooperation, however, was short lived. The Australasian book sellers were unprepared for more bad news and were further frustrated when their offer to provide a thousand pounds annually to pay for the supervision and maintenance of a net book agreement was refused. 15

At Sydney the merchants regrouped and decided to persist with bargaining. Over the next six years they were able to move the reluctant publishers around to a more accommodating view of the Australian and New Zealand trade. Eventually the publishers acceded to some of the demands made by the sellers. In 1929 the British cartel agreed that arrangements resembling those in the home market should also be admitted. On January 1 1930 a "Statement of Terms for the Sale of Net Books in Australia", so painfully and slowly extracted over six years, was signed but the local book sellers might have wondered about their luck when the depression intervened and dashed any hope that fixed price trading was viable. The problems that had beset the British-European trade a decade earlier now dogged the British-Australian trade. The Australian pound that had appeared so solid in 1920 was now looking sick and fluctuations in the exchange rate put in doubt the net book agreement. The Australian currency eventually stabilised after government intervention but the agreed devaluation of twenty five percent in late 1931 automatically increased the price of British books by the same proportion. Ironically, perhaps, the bad economic news which halved British sales in the antipodes, actually increased the fortunes for Australian-based publishers a point to note in contemporary circumstances - as did the 1939-45 war in Europe - though it must remain a hope that renewed imperialism in the West and the current dispute over oil does not spill over as a cause in favour of Australian publishing.

There may also have been some benefits for Australian literature as Angus and Robertson took over from Hodder and Stoughton in the 1930s as the single largest publisher of Australian novels so that by 1990 it was probably the largest single holder of Australian copyright anywhere in the world. However, Angus and Robertson also worked very closely with the cartel arrangements as a publisher and a bookseller and in that respect there is some doubt about its credentials as a truly indigenous operation. For a brief few years in the mid 1960s it did look the goods but by the end of that decade it was owned by a transport group (which had less interest in publishing than it did in selling) and then by a newspaper conglomerate. Since the late 1960s Angus and Robertson has wobbled as a publisher though it remained influential. The effect of the merger with Collins who first bid for control in 1969 is yet to be seen though it can be maintained that this has simply officially endorsed Angus and Robertson as a member of the British cartel.

Up until the time of the signing of the Australian Net Book Agreement and its implementation in 1931 many local companies acquiesced when confronted with the British negotiating position while others felt they had little reason for complaint as long as they continued to earn decent livings as retailers. However the traders' association had demonstrated for most the good sense of organisation and that was also true elsewhere in the Empire. Canadian traders from time to time threatened renegade action if the British were not more accommodating and sensitive to local concerns. They were urged on by publishers to the south who saw substantial profits to be made in this market but the Canadian sellers saw little sense in throwing over one master to simply replace it with another.

Eventually the Canadians would win concessions as did the Australians but it was another organisation employing the principle of collective bargaining which created most notice in London. In 1927 the Canadian Printers and Lithographers Union lobbied its federal government to introduce a tariff on imported printed matter as a means of protecting the local industry. Convinced that a more efficient printing industry catering for local needs could only result from some form of protection the union pushed for a twenty-five percent tariff on imported novels and unbound books. They also argued for a fifteen percent impost on non-fiction. The British publishers were alarmed at the thought of a tariff and applied pressure on local sellers to argue against the duty. In 1927 the Canadian printers and lithographers failed in their attempt but the example inspired attempts to introduce protection in Australia.

In 1929/30 the Australian Printing and Allied Trade Unions pushed for protection. A governmental inquiry ensued into the printing union's Proposal of Duties on Books, Magazines and Fashion Plates with hearings convened in Adelaide, Brisbane, Melbourne and Sydney. Evidence to the inquiry was submitted from the three corners of the industry with representations by producers, distributors and traders who were all opposed to any form of protection. The case for the tariff was a lone voice sounded by the printing union which argued that local manufacturing was placed at a serious disadvantage by the practices of British companies. The union maintained that production centred on London had obvious disadvantages for the local industry.

Closely related, though treated separately, the printers argued that distribution was organised as a monopoly in Australia and that had a similarly detrimental effect on local production. The union estimated that tariff protection would lift Australian manufacturing by two hundred and fifty percent with the addition of eleven thousand new jobs nationwide. The argument was "overwhelmingly in favour of Australia being enabled to do its own printing" which could be accomplished without "increasing the price to the Australian consumer". The printers complained that duties existed on essential material in printing, strawboard, glue, thread, ink, metal and all "accessory material", but did not apply to finished product which was allowed into the country duty free. The printers did not mention that all the paper needs for local production were also met by overseas manufacturers and suppliers but did argue that it was wrong to allow imported books free access into the country when essential goods for local production were subject to duties. 16

The local printers believed they were placed at a double disadvantage because of the continued practice of dumping. Imported books which normally retailed at the subsidised 'colonial' price of six shillings could be found dumped at the retail price of three for one shilling. Australian printers were hard pressed to compete against subsidised prices. Books normally retailed at seven shillings six pence in Britain, but nowhere "in the world" could books be produced to be sold at four pence. Any moves a government might make to outlaw dumping, it was maintained, were rendered useless without a strong local industry and only a tariff on books would foster such an industry.

Giving substance to the union claims that British publishers were using unfair tactics, the printers drew the inquiry board's attention to the recent example of the Anne of Green Gables series of six books whose Australian rights had been secured from American publishers by Angus and Robertson in 1923. The series was a run-away success in Australia as multiple print runs sold out through bookshops and seven thousand newsagents around the country, retailed at three shillings and six pence per title. British publishers realised the potential in the Anne of Green Gables series and bought the English publishing rights from the same Americans. These rights gave the British publishers automatic rights to the colonial trade and, realising the presence already established by the Angus and Robertson production, made copies available to local retailers in 1929 at a discount of six pence below the local wholesale price.

Undercutting, which had been outlawed in the British domestic trade since 1900, was still a fact of life in the colonial trade: "In this case the local producer has built up a demand for the sale of these books", argued the printers, "now to be seriously undercut by an importer". Yet the benefits were not passed onto the consumer as Anne and her sister volumes still retailed at three shillings and six pence in Australian bookshops. However, under these conditions the local merchants were reluctant to see regulation introduced into the local trade unless it was at their bidding. Angus and Robertson was a book seller and a publisher and Anne was saved as an Australian title only by the implementation of the Net Book Agreement which was a saving grace for George Robertson who was called to give evidence and argued against any tariff. 17 The problem of parallel imports still dogs the Australian book trade. Australian publishers are often stuck in the middle as their locally produced version of a title is forced to compete for bookseller attention with the imported version of the same title. This happened, for example, in the 1980s with Peter Carey until he negotiated three separate contracts for Australia, Britain and the US. Copyright provisions apparently permit parallel importing so long as it is the British produced version undercutting the Australian one - and not the American version undercutting the British!

In the 1930s Australia's largest importing book seller was the Dymocks chain of book shops which led the charge against any form of protection for local publishers. Also the on-site representative of a number of British companies in Australia, Dymocks maintained that Australians were tremendous readers but that a population of five and half million was not sufficient to support a local publishing industry that could promise books of a comparable standard to those from London. British publishers traded effectively in Australia simply because they were bigger, producing goods for a home market of forty million population and an imperial reach that numbered in the hundreds of millions; it was ludicrous to imagine that Australian printers and publishers could compete against those odds and it followed that Australian book buyers were better served by imports than they could ever dream of being served by a local industry. These arguments are used even now to the extent that they pass as uncritical incantations in the trade.

It is said of the Australians, unlike the Americans who are supported by a large domestic market, that they are and will always remain at a hopeless loss in the world of the larger trade. Australian booksellers, it is concluded, are dependent on overseas companies not because those companies are badly intentioned or manipulative but because Australia is poorly endowed with population. Cartels and monopolies are necessary evils and the loss of any trade with Britain would have severe ramifications in Australia. Investment would collapse overnight and a complete industry around it would disappear if Australians became too nationalistic in their thinking. The benefits derived from increased local production could not in any measure compensate for the losses. In these moments all acknowledgment of Australia as one of the most lucrative book markets in the world falls into an ignorant silence while any challenge on this score gets a muddled offering that Australia as a market is complicated by the huge interior distances. It is better catered for, it is said, by publishers twenty thousand kilometres away in London.

Yet the Australians have not been completely hoodwinked and there were sometimes rich pickings for an indigenous industry to be had in the gaps created between the larger international conglomerates. In the decades leading up to the second world war printing in Australia was valued at more than seventeen million pounds in plant, machinery and buildings. Occupying over fifteen hundred factories, it employed thirty four thousand workers who made up an annual wages bill totalling seven million pounds in the conversion of eight million pounds of raw material annually into twenty million pounds in finished product. In these decades printing emerged in Australia as the fifth largest manufacturing industry. But it was also hamstrung. The importance of printing in the national economy might well be emphasised but its vulnerability in the face of the larger British companies and, later, factories set up with cheap labour in Asia, made it a tenuous operation.

The biggest book-printing operation at Sydney in the 1930s employed a staff of just over fifty from the most senior manager to the most lowly paid apprentice. Its undertakings were dwarfed in comparison with even the older British factories which included the Allen and Unwin plant at Woking, one of two printing operations for this London publisher employing in excess of three hundred workers. Inside the front entrance of the Woking factory the deafening "growling roar of the turbine gears resembling that of a gigantic modern dishwasher" could be heard above all else as a potent reminder of capacity. These two hundred and seventy horse power turbines powered the factory's machines, Meihle Projectors and Wharfedale and Dryden and Ford Presses. The roof of the factory was pitched to let in sunlight, an innovation in keeping with the principles of scientific management which included open planning and streamline production at ground level; a mezzanine floor housed rolls and rolls of paper, while at a lower level several rooms concealed the specialised tasks of publishing. This massive printing operation, one of many in Britain, overshadowed the largest Australian production. Whereas Angus and Robertson's operations could pump out three hundred and fifty thousand books in a good year, Allen and Unwin's Woking operations produced millions of books, many of which ended up in shops in Australia. Ultimately publishing bounties were introduced as an incentive for local publishing. The large British companies which established themselves in Australia in the post-war years profited especially by the protection but even they were inclined to send jobs into Asia when they could get a cheap price.

Christina Stead's Seven Poor Men of Sydney (1934) was written, at least in part, as an ironic tribute to Australian printers. The front of the novel lists seven men: Joseph Bagenault, a printer; Tom Withers, a printer; Baruch Mendelssohn, a printer; Gregory Chamberlain, owner of a press; Michael Bagenault, a ne'er-do-weel; Tom Winter, a librarian; and Kol Blount, a paralysed youth. In one way or another each of the poor Sydneysiders is connected with the book trade and, while Stead had plenty of British and European experience to draw on, her example was local. Chamberlain's press is threatened with closure because it cannot compete with the larger companies. He hopes that Australian writers might privately finance the publication of their books through his press and sell them by subscription but a more realistic alternative is that the press will be taken over by the larger operations. The factory floor of Australian publishing is crowded with many real examples including, more recently, Penguin's absorption of Australia's most successful indigenous publisher in the fifteen years to 1989, McPhee Gribble.

While book production has fluctuated for much of this century the

printing industry in Australia has been sustained by advertising brochures, pamphlets and other material, magazine and newspaper production. Australians habitually buy more newspapers per head of population than any western industrial country excepting the United States which annually accounts for a half of the global commercial tonnage. In the 1930s Australians took out a yearly average of one hundred and thirty five thousand tons in newspapers. This figure took a dive with paper shortages in the 1940s but circulation figures rapidly increased in the 1950s and 1960s. Yet as circulation increased so too did concentration of ownership, a factor also discernible in the book trade where the two later intersected as newspaper proprietors bought up publishing companies, especially in the 1970s and 1980s.

As well as holding the franchise over the majority of magazine titles in Australia for much of this century, the English firm Gordon and Gotch, enjoyed a virtual monopoly in book distribution. There was local concern that the control of distribution by a single company was tantamount to control of outlets. In trade circles the takeover of Rigby's distribution network in South Australian was well known. At the end of the second world war new players came into the field, including Penguin. The demise of McPhee Gribble into Penguin is a modem version of a well worn tale. Although Rigby's had traded for over seventy years up to the mid-1920s it was forced to sell its distribution business because it was unable to compete with Gordon and Gotch for outlets. McPhee Gribble's dependence in the late 1980s, like Rigby's dependence in the 1920s, was a crippling financial reality.

In Australia local distributors have never been able to offer local traders any substantial alternative to the transnationals. Many bookshops and newsagents, in particular, feel threatened with being frozen out of the market if they do not comply with the transnational hegemony. In the 1920s and 1 930s heavy pressure was brought to bear "upon all local selling agencies to carry and display stocks and to carry out methods and propaganda for the continual pushing of overseas publication". The supply and sale of books and periodicals, magazines and journals were "visibly influenced by the continuous push of the large overseas publishers expressed through efficient organisation of Messrs Gordon and Gotch Ltd"' P.R. Stephensen was particularly critical of Gordon and Gotch and blamed the distributor for his failed attempts to establish a national book publishing company in the 1930s. 18 Into the 1990s, even Australian university presses and state subsidised presses such as Fremantle Arts Centre Press are dependent for their commercial viability on transnational distributors.

In the 1930s and 1940s, cultural nationalists became increasingly vocal over these matters. They argued that local producers and merchants were little more than minions operating within a British protectorate. Writers and publicists such as P.R. Stephensen complained that while publishers shied away from local writing, local book-sellers only reluctantly displayed works by national authors. A request for a local title by an Australian writer was greeted with the supercilious smile of the native book man: "Oh now madam, if you'd said at once it was Australian! But you know our customers take only the best imported". Misguided patriots were encouraged to sample enticing overseas titles rather than waste time: "You won't like it dear" was a familiar turn of phrase; but at least one bookseller was given a hard time by a reader when her request for a book by Miles Franklin was sneered at. Insistence on service had attendants diving into obscure corners until a copy of the appropriately titled Up the Country by Franklin could be retrieved. 9 Nationalists persisted in arguing that Australian traditions of writing were being robbed by the British presence in the Australian book trade. From time to time talk emerged about the possibilities of establishing national bookshops in the capital cities but nothing ever came of this and credible stocks of Australian titles were only a feature introduced to the commercial trade in the late 1960s. Since the 1970s the Australian public has bought Australian books in large numbers but too few bear Australian imprints.

In closing it is worth looking briefly at that Australian-based transnational, Penguin, the company responsible for introducing the paperback into the English language trade in the 1930s. Although not a significant publisher of Australian fiction until the late 1960s and 1970s, Penguins were well known in the Australian market. They were mass produced but made of paper that would survive several readings. Each paperback had been carefully costed at six pence, a price which was calculated on the basis of what a middle-age bank clerk could reasonably expect to earn in twenty minutes of work. In Australia a reader could purchase six bottles of beer and a Penguin for the equivalent cost of a hard covered book, perhaps a more appropriate measurement.

Whereas before this time books were sold mainly in bookshops and at bookstalls and were made available through lending libraries, they now appeared in ever bigger quantities in department stores and by 1990, so complete was this revolution, that the large majority of paperback books were being sold for personal use from a series of non-specialised outlets while an estimated eighty percent of hardback novels were sold to institutions such as libraries. By the 1990s some stores were selling books by the kilogram. Australian novels were marketed as paperbacks but it was not until the 1970s that they commanded a large enough audience for continuous paperback production. Previously Australian books had been produced in hard covers with the lending library in mind.

In Australia, as elsewhere, capitalism triumphed between the covers in the guise of Penguins. In the 1950s and 1960s the number of British companies which established operations in Australia also increased dramatically. Among the largest was the Penguin printing works at Ringwood which by 1960 employed more workers than the entire international Penguin operation only twenty years earlier. Within a few years so popular had Penguins become in Australia that the Ringwood factory became the company's biggest operation outside of Britain. Yet its owner, Allen Lane was almost entirely ignorant of Australian geography. A letter to his Australian manager in the 1950s advised the local representative to "give coffee some morning in Perth to a West Australian girl", another letter instructed him to collect Lane on his first trip to the antipodes at Fremantle and "drive him back to Victoria for a cocktail party".

Depressingly, it seems likely that Australia will continue for some time yet as a client state of European and American capital but its cultural independence is a necessity which needs immediate action. Robert Haupt was right in 1988. The Prices Surveillance Authority got it wrong in 1989. It can only be hoped that Australia will not wait several decades before looking into the issue again but insist on finding the right corrective - it is not to be found in microeconomics. The independence of Australia's culture industries cannot be hoped for in a monopoly situation and no amount of tinkering at the margins will change that fact. The cowboys in the stockmarket seem to have a better grasp of this economic essential than do the supposed beacons of economic knowledge who look more and more like ideologues in search of mammon. Culture is the public, all else is nonsense. Culture is not just a commodity to be traded and alienated in the obsessive mumbo-jumbo about deregulation, privatisation and microeconomic reform.

Notes

1. Reports 13 October 1990, Independent, Guardian, Times .

2. Sydney Morning Herald, Age November 5-6,1988.

3. See Australian, 30/11/1989).

4. See Jill Kitson, "Towards Global Publishing (2)", Meanjin, 4/9/1990, pp. 67-71. Kitson also provides a useful overview to the PSA inquiry and to the subsequent controversies surrounding it.

5. Jan Paterson, The Future of Australia as an Export Market (Sir Stanley Unwin Foundation, London 1989), p. 5.

6. Sydney Morning Herald, 26 March 1986.

7. Ibid, p. 15

8. Australian Book Review, September 1989

9. Greg Crough and Ted Wheelwright, Australia: A Client State (Penguin: Middlesex. 1982.

10. Work in progress, Richard Nile, The Fiction Industry: the Literary

Imagination Under Capitalism in Australia.

11. Federal Inquiry "Proposal of Duties on Books, Magazines and Fashion

12. A.G. Stephens, "Along the Castlereagh", (Limited edition, 60 copies Sydney 1924), Mitchell State Library of NSW.

13. Archives The Publishers Association of Great Britain and Ireland, Senate House Library, University of London.

14. Ibid.

15. Also Correspondence the Booksellers Association of Australia and New Zealand, Mitchell State Library of NSW.

16. "Proposal of Duties on Books, Magazines and Fashion Plates" op cit.

17. Ibid.

18. Ibid.

19. P.R. Stephens "Address to the John O'London Society", Sydney Branch February 25 1936; Nettie Palmer to Miles Franklin, October 41931, see also Richard Nile and David Walker, "Marketing the Literary Imagination'' in Laurie Hergenhan (ed), The New Literary History of Australia (Ringwood: Penguin, 1988).


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