Penshurst Flax Mill to close

The Decline of the Flax Industry - 29th September, 1950.

Commonwealth Government files.

For Cabinet - Flax

Mr. McBride, Mr. Beale and myself have met and considered in some detail the matters raised in Cabinet Submission 139A dealing with flax. We had before us further information dealing with the size of the industry and the estimated requirements during a war period. We agreed that it was necessary as a defence measure to preserve the flax industry and that a potential in peace of 2,000 tons of fibre per annum was a reasonable nucleus for war production. We obtained from the Solicitor-General an opinion that in view of the importance of flax production to military requirements, the Commonwealth had power to engage in the manufacture of flax fibre both for direct military requirements and also for sale on the local market. We think that the system of tank retting is considerably more efficient than dew retting and we believe that it will be necessary to spend something in the vicinity of £254,000 in changing over from one system to the other at some of the mills.

During our discussion it was ascertained that the present book value of the mills is the value which it was considered would be realised if the mills were disposed of for purposes other than flax production. This basis of valuation was agreed to by the British Government in 1946 in the course of negotiations to determine the capital loss to be shared between the two governments on termination of the wartime agreement. It was agreed by the Committee that if at any time private enterprise should desire to purchase or participate in the industry, the value of the assets should be written up to their true value for flax production purposes. We are of the opinion that for the present at least the Commonwealth should carry on the industry and that the precise manner in which control is to be organized should be left until the return of the Minister for Commerce and Agriculture. It was a matter of some urgency that a public statement should be made to the effect that the Government regarded the continuance of the industry as necessary for national defence and therefore urged farmers to proceed with their sowings of flax. Accordingly, we advised the Prime Minister to do this and a statement was issued on Friday last.

The Committee recommends to Cabinet that -

(1) Cabinet endorse the action already taken in issuing the statement.

(2) The Commonwealth should continue to direct and control the flax industry,

(3) Conversions and additions at an estimated cost of £254,000 be approved;

(4) The form of organization for direction of the industry is determined by the Minister for Commerce and Agriculture and the Treasurer after consultation.


Acting Minister for Commerce and Agriculture - 29th September, 1950.

Free Press (Penshurst Vic.) 21st February 1951

Flax Mill Future.


Flax growers in the Penshurst district were pleased when, on the 7th February, the Minister for Commerce and Agriculture, Hon. J. McEwen, announced that he had approved of the payment of £13/10/ per ton for standard flax straw harvested from the crop sown in the year 1951. This price was subject to the usual bonuses and dockages.

The Minister appealed to farmers in flax growing districts to give full support to the industry, principally because of its defence significance. "The price offered this year;" he said, "should be attractive to growers and should ensure the booking of a greatly increased acreage.''

Local Growers to Deliver to Strathkellar.

Advance advice to Penshurst and district growers wishing to carry on or commence flax growing operations give a direction that growers contract "on present intentions, to make all deliveries of flax to the Strathkellar flax mill”

Growers immediately called a meeting on learning of this clause. Mr W. E. Burger, president of the local growers, presided at a meeting on Friday night and opinions expressed showed that all present '' were growing flax for the express purpose of keeping the Penshurst mill working. '' Several stated that they would not be growing if they had to deliver to Strathkellar. It was agreed that the delivery of flax to Strathkellar would mean the end of the Penshurst mill.

It was decided to contact Mr E. D, Mackinnon, M.H.R, for Wannon, immediately to enlist his help in having this clause altered and the future of the Penshurst mill put beyond doubt as a fully operative unit in the Commonwealth flax fibre production scheme.

The chairman was instructed to contact Mr Mackinnon personally at the Portland Show on Saturday.

Mr. Mackinnon M.H.R. Will Visit Penshurst On Saturday.

Mr Mackinnon will be at Penshurst next Saturday morning (February 24) at 11 a.m. to hear the growers' case and it is also expected that R.S.L., A.P.P.U, Ratepayers' and Citizens' Association and public bodies interested will join in pressing for the retention of the mill.

Free Press (Penshurst Vic) 28th February 1951

Flax Mill Future.

A conference was held at Penshurst on Saturday morning which may have far-reaching effects on the future of the Commonwealth Flax Mill at Penshurst.

Mr W. E. Burger, J.P., president of the Penshurst Flax Growers' Association, welcomed Mr E. D. Mackinnon, M.H.R., for Wannon, to a meeting with growers' representatives and representatives of local public bodies. He explained that growers wanted the clause on the new season's flax agreement which stipulated delivery to Strathkellar mill eliminated and deliveries made as usual to Penshurst mill which they wanted to keep operating. They desired Mr Mackinnon's assistance in this regard.

Mr Burger pointed out that delays of up to five and six hours had occurred in getting loads off when deliveries had been made to Strathkellar before the Penshurst mill was erected and cartage had to be made over rough roads. As they were within the 20 miles limit no cartage bonus would be available. Another point was that many new settlers to the east of the district were keen to grow flax but would not be happy to cart it a long distance.

Cr. R. Schramm, Mount Rouse Shire Council, briefly outlined earlier meetings with flax controlling officials. He stated that he could quite understand growers not wishing to supply Strathkellar after the tremendous battle they had had to get the mill at Penshurst. Most of them had grown flax to keep the mill going when it would have been more profitable to have sown other crops. It appeared as if the water retting plant had been put at the wrong mill as there was a water shortage where it is and plenty of water at Penshurst. So far as the Shire was concerned, they would not like to lose the mill as it was the only industry here.

Mr P. Linke, present of the Australian Primary Producers Union branch and a grower, "stressed the fact that they were growing to keep the mill here going. It must be realised that all also have a few sheep and were not relying on flax for a living. It was a very up-to-date flax mill at Penshurst and facilities were here for water retting. They were told that installation of retting tanks would cost £40,000 but he could not see where the money would go. He stated that 75 per cent, of the growers here would drop out if the mill were to close. Mr T. Tischler endorsed Mr Linke's views and pointed out that it was definitely against the interests of growers to the East of the district to cart the long distance to Strathkellar.

In reply to a query by Mr Tischler as; to the position as He knew it, Mr Mackinnon gave the following reply:

The present recommendation by the Flax Production Committee is that Penshurst Mill will be closed before the 1951 harvest and this will go to Strathkellar.

Additional water is to be provided for Strathkellar by increasing capacity of existing lagoon (cost approx. £4000).

IT IS LIKELY that existing Mill, machinery etc, at Penshurst will be retained complete as a unit against possible eventualities. It is also possible that the International situation may cause it to continue operating.

The economics of the industry are very much against dew retting Mills. Over a three-year period, water retting Mills made £105,000 profit and dew retting Mills lost £125,000.

Either Strathkellar or Penshurst (if equipped for water retting) could handle comfortably all flax grown in the district at present but if war demanded increased plantings additional Mill space and machinery would be required.

For those growers who would normally supply Penshurst it is probable that arrangements will be made in regards to transport so that delivery would be on a basis of a weighbridge at Penshurst. Those growers situated between Penshurst and Strathkellar would be met.

Free Press 2nd May 1951

Flax Mill Review.


Mr P Linke, secretary of the Penshurst Flax Growers' Association, stated yesterday that a very important meeting concerning the future of the Penshurst Flax Mill would be held in Penshurst to-night (Wednesday).

Mr Wiegall, a member of the executive, of the Flax Production Committee is visiting Penshurst as part of the review of the decision to divert flax and staff to Strathkellar made some time ago. Local representations resulted in the Flax Production Committee promising to thoroughly review the Penshurst mill operations and mean while keep it functioning.

Not much time is, apparently, going to be wasted in starting these investigations and Mr Linke's view as to the importance of this meeting appears justified.

Local growers previously stated that they would not grow for Strathkellar and were growing to keep the Penshurst mill working. It can safely be assumed that growers will be asked what quantity they intend to grow if the local mill is kept operating. Economics of water retting against dew retting do not mean a thing if no flax is guaranteed in any case.

All the say seems to be in the hands of the growers. Moral support may be given by local organisations but their ideas amount to no more than telling an organisation how to run its business— a task for which it pays highly qualified staff.

Free Press (Penshurst Vic.) 9 May 1951




Visit of Mr Weigall, executive member of the Flax Production Committee, to meet flax growers at Penshurst on Wednesday night was not a happy one in the opinion of his listeners. Local growers and township organisations have been pressing to have operations by the Penshurst Flax mill continued in face of closing down indications given by the Flax Production Committee over the last few months. A point in their arguments was that the mill should be converted to a tank retting instead of a dew-retting unit and thus become a paying proposition in the economic set-up desired by the Flax Production Committee.

In the course of a lengthy address, Mr Weigall made the following statements: — I am here to tell you what we are planning to put flax on a permanent footing in the Commonwealth. It was realised that we have to be in a position to supply needs of the Commonwealth for types of fibre needed and at the same time have the basis of an industry which could be expanded in an emergency. In economics of such it was realised that dew-retting was impossible in handling of flax. It was decided that by 1953 to have a permanent basis for water retting to supply needs. By new treatment methods it was estimated that 4 new tanks would produce 2000 tons of fibre needed. Twenty of these had been decided upon previously to 8 at Mt. Gambler; extend by 4 at Lake Bolac, Morphettville, Leura and Lismore.

Of four tanks still required the only thing remaining was whether four extra, should go to Strathkellar or be installed at Penshurst. The only decision reached after going into the economics was that it should go to Strathkellar.

At Strathkellar they had four tanks, boiler, water supply etc. Cost of extension (estimated) £20,000. At Penshurst, complete installation needed. Cost (estimated) £60,000. Saving £40,000. Don't think you could say anything against economic soundness of this fact.

Cost £3000 year to maintain two mills without extra capital involved.

Estimated cost £5000 a year or more to run Penshurst as an extra mill to Strathkellar. Because of these facts we have decided to continue with expansion to Strathkellar. We want to get seven to eight mills in good localities to work at a profit. I am bitterly opposed to anything which might be an uneconomical project to the industry as a whole. Plans are out for water expansion at Strathkellar and we are going to do it.


We have been advised by the State Rivers and Water Supply that the township would require all the output of the spring at Penshurst and we would be unwise to rely on it.

Trust Commissioner R. Schramm, at the meeting as a staunch supporter of the Penshurst Flax Mill, later in the meeting questioned Mr Weigall on the source of his information regarding the amount of water available for the mill from the Penshurst water supply scheme which is nearly ready to operate and was informed that they were definitely told last week or the week before by the State Rivers and Water Supply (he thought a gentleman named Mulvaney) that the supply would only be sufficient for domestic use at the mill and not for water retting.

Free Press (Penshurst Vic.) 7th November 1951


Investigating rumours that the Penshurst Flax Mill was about to close, this paper interviewed Mr C. Clark, manager of the Commonwealth Mill, on the matter.

Officially, no information to the effect that the Mill was closing had been received up until yesterday. Indications are to the contrary. Mr Clark pointed out that owing to the over-all shortage of flax due to seasonal conditions and unfavourable competition, flax grown in the Penshurst district would be going to other Mills for tank-retting as dew-retting has been discontinued.

The Penshurst Mill is engaged in scutching water-retted flax which is being carted from the Lake Bolac mill. A revival of interest in flax growing throughout the Penshurst area would prove the greatest inducement for the Flax Production Committee to extend operations at the Penshurst Mill.

20,000 ACRES REQUIRED. Mr Clark is still booking acreage in the Penshurst district for the 1952 crop. All growers have been circularised to the effect that flax fibre is much in demand and 20,000 acres are required to be planted to meet local Australian requirements.


Attention of growers was drawn to reduced production during 1951 due to unfavourable weather, in view of the expansion of the industry authorised by the Commonwealth Government as part of the defence programme. It was hoped that all interested would reserve as large an area as practicable in 1952 and subsequent years.

Mr Clark pointed out that now is the time to plan for next year’s planting and at present he is active in this matter. He would be prepared to interview prospective growers and tender advice to newcomers to this industry.

Continued page 6

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