Australian
Screen

Teacher’s notes

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This black-and-white clip consists mostly of a series of cartoons and a handwritten table that illustrate how the profit margin added on by manufacturers, then wholesalers and finally retailers inflates the cost of goods. The narrator says that price controls would protect people from this ‘daylight robbery’ and suggests that profit margins are so great that they could easily fund wage rises. The narrator links high prices and low wages to economic depression. The film is slightly damaged.

Educational value points

• The cartoons in this clip graphically illustrate a complex economic chain in simple terms, using the example of the process involved in the manufacture of a dress through to its retail sale. Via drawings of a moneybag that increases in size and of businessmen who become progressively more rotund with each transaction, the cartoons depicts the businessmen as ‘profiteers’ and makes clear how wage rises could be funded from profits.

• This clip comes from a film made to persuade viewers to support the 1948 referendum to give the federal government, rather than the individual states, the power to control rents and prices. The Curtin Labor government temporarily assumed this power during the Second World War in order to reduce inflation and profiteering from goods that were in short supply. But making it permanent required an alteration to the section of the Constitution that defines the legislative powers of the Federal Parliament.

• The narrator in this clip says that consumer price increases mean that people 'are unable to afford the things they need’ and that 'effective price control’ is the only way to prevent this. The Chifley Labor Government argued that federal control of rents and prices was a means of safeguarding people, particularly those on a minimum wage, from disproportionate rent and price increases. Under the system prices would only be increased if costs increased.

• Despite appeals such as the one made in this clip, the 1948 referendum was soundly defeated by a majority of electors in a majority of states. Opponents, including the federal Opposition consisting of the Liberal and Country (later renamed National) parties, argued that federal government control of rents and prices would undermine the private sector and free enterprise. However Australians have traditionally voted 'no’ in referendums, and of the 21 referendums held between 1906 and 1999 only six have been carried.

• After the Second World War, the trade union movement responded to an increase in consumer prices with a campaign demanding that wages be kept in line with the cost of living and, like this clip, suggested that better wages could come out of profits. The international demand for Australian goods and resources in the postwar period marked the beginning of an extended economic boom; however, unions felt that workers were not benefiting from this prosperity.

• Like the illustrations in this clip, political cartoons often consist of a few lines and symbols which, though apparently simple, capture the essence of an idea and make social comment. Cartoonists use basic objects to represent larger concepts, and exaggerate people’s physical characteristics to make a point. For example, in this clip the pound symbol and moneybag stand for profits, while the notion that businessmen are growing fat on these profits is conveyed through their rotund figures and smug grins.

• The Realist Film Unit, a group associated with the Communist Party of Australia (CPA), made Prices and the People, to support the ‘yes’ case in the 1948 referendum. However it was also used as a propaganda vehicle to disseminate Party doctrine. The CPA advocated the overthrow of capitalism and the socialisation of industry on the basis that capitalism exploited workers to make profit. The film contends that while low wages and high prices make profits possible, working people’s standard of living is eroded.

• The Realist Film Unit made films like Prices and the People in the tradition of socialist realism that focused on social justice issues such as poverty, homelessness and unemployment. It was established in 1945 by Ken Coldicutt and Bob Mathews, with the support of the CPA, which at the time was quite active, particularly in the more militant unions. The films were shown at trade union and other community gatherings. The film unit was the subject of John Hughes’s documentary The Archive Project (2006).

Cartoons illustrate the chain of supply for manufacture and the associated costs.
Narrator The manufacturer who makes the cloth gets a profit of 15 per cent. This is added to his overhead and, sometimes underhand, expenses. The price acorn is planted. The cloth wholesaler gets a 17 per cent rake-up. He contacts someone who makes cloth and someone who wants to buy it, makes an entry in his little book and collects. The price starts to grow. The manufacturer of garments gets 20 per cent on top of all the costs and profits which have accumulated so far. The price grows some more.

The wholesaler who sells the garment to the retailer also collects a 20 per cent profit margin for doing a little contact and pencil work. Still the price grows. The retailer who sells the garment to you or me gets a margin of at least 40 per cent after paying all the costs and profits of the four men who have so far handled it. No wonder the price equals the pay envelope.

It’s in the bag – profiteers delight – costs and profits doubling up in five different departments in this case. That oversized swag of goodies can stand a little bit off the top. That’s where wage rises can come from without any increase in price. But you haven’t seen it all yet. An inflated cost quickly snowballs. Suppose a garment manufacturer pays £3 for material and costs. He sells to the wholesaler for £3 12s. The wholesaler sells to the retailer for £4 3s, who sells it to you for £5 16s. But, if 10 shillings is added to the manufacturer’s costs, making it £3 10s, he sells to the wholesaler at £4 4s, who sells to the retailer at £4 16s, who sells to you at £6 15s, instead of £5 16s. The original 10-shilling increase is nearly doubled itself in three transactions.

Footage shows a dress in a shop window and goods in the window of a pawn shop.
Narrator Sooner or later, Mrs Smith must buy a dress. Small bank balances go down, prices go up, purchasing power decreases, good accumulate and the stage is set for Depression. Time payment business increases, pawn shop advertisements come back into the trams, the people are unable to buy the things that they need. Effective price control is the people’s only protection against this daylight robbery.