Australian Biography: Victor Smorgon
Victor Smorgon (1913–2009) was born in Heidelberg, Ukraine.
He was one of Australia's richest industrial entrepreneurs but he began his life in starvation and poverty in the turbulent years when Russia moved from a tsarist regime to communism.
In this interview, he reveals the secrets of his phenomenal success in business as he tells the story of his extraordinary life.
He was interviewed for Film Australia's Australian Biography series in 1998.
Interviewer: Robin Hughes
This is a transcript of the complete original interview conducted for the Australian Biography project.
Let's begin at the beginning, and would you tell me when and where you were born?
I was born in 1913, 2 January, 1913. It was one of those little village in the Ukraine, [which] at that time was Russia. Now the Ukraine, as you know, is an independent state. And the name of the place was Heidelberg, which was a German settlement, which [had] farmers living round there, and my family lived there.
Your family was Jewish. What was it like for a Jewish family in a village in the Ukraine in 1913?
In 1914 it was reasonably good. It was ... the big problems were in the big cities where the revolutionaries were working. So the army and the bandits and whoever there were, and the politicians, were concentrating in those areas, so the villagers were left alone. So I don't remember ... [there was trouble] during the revolution later, but not at the time I was born. At that point it was quiet. It was quiet, there was no disturbances. It was later that, when I was about three, that the disturbances started.
And what kind of disturbances were they?
Well, they were ... They were usually armies or hooligans or bandits roaming round the villages, killing, raping, stealing anything you got in the house. And they would ... a lot of the villages at that time were Jewish, and so Jews were supposed to have all the gold, so there was the gold, you know, the perception of people, generally anti-Semites, was that Jews had everything. And they had the wealth, and where is it? Where is the gold? And of course, by that time it was already used up if there was any. It was used to make a living or start a business or something like that. So there was none of that. And by 1914, there was very little of that type of Pogroms. There were a lot before, of course, and after.
What kind of work did your father do?
My father was a butcher, together with his brothers and his father in that village. And so was his probably four or five generations before that were butchers. And if you saw the film Fiddler On the Roof, it was exactly like that, the village that I lived in, I remember as a child. And so he was ... each brother would have a horse and cart and go round different districts to the ... round the village, and round, ten - fifteen miles around it, and sell meat to the peasants, to the German settlers there. Those settlers were there for about two or three hundred years. They weren't just new immigrants, they were actually well settled. They were brought there by the Tzars at one time to develop Ukraine, develop all the fields, all the food, which ... Ukraine is very wealthy and [has] beautiful black soil and they were very rich because they were able to produce things. The Russians themselves were just slaves to the royalties, to whoever owned the land, and most of the land was owned by nobility.
So what language did you speak growing up? Was it German?
Well, the first couple of years that I was born there you spoke German.
What kind of language did you speak as you were growing up?
Well when I was very little, up to age probably aged three, I spoke German and Yiddish and a little bit of Russian. But then, as I grew, started growing up and started talking Yiddish or mostly Russian. And so really Russian was the main language from about age of two to three or four or something. Something like that. And then I had all the brother and sisters, so it was easier too. And they already spoke Russian, so I just picked it up very quickly.
How much influence on your life was there from the fact that it was a German community?
None at all, because they were very friendly. My father and uncles had German friends. They used to visit one another. They used to deal with each other. They borrowed money from the Germans. They weren't borrowing money from the Jews, the Jews were borrowing money from Germans. Every time you needed [something] because you got to work, you got to make a living. Then you sell the wheat back to them. So you had to make money to pay back. I mean very often my father used to talk about certain friends, certain German friends of his, German village friends. Not village, but German farmers, who would lend him any time any money he wanted because they always trusted him, trusted the Smorgon family. They established their name very early, probably several generations before. They were known as honest people who paid their debts.
So the situation was that there were German farmers and then the Jewish people sort of ran the businesses in ...
Well, the little businesses there like bakers, butchers, sausage makers, knitters, tailors, everything you saw on the film in Fiddler On The Roof. Exactly like that. There was the milkman, there was the man who makes dresses, bought himself a machine. And that was the tradesmen. They are tradespeople actually. Boot makers.
Now, was your father reasonably prosperous throughout your whole childhood? Throughout your childhood, was your father reasonably prosperous?
Well, in a sense of the times yes. Not in the sense of the times later, it's ... all the Jews, all the village people were more or less equal. There was no seniority from one was wealthier than the other. If he was wealthy, he might have had twice as much, which is that means nothing. And some people saved up more than others, depending on the familles, how many members of the family and what they did. But there was no wealthy people there.
Was there a period of ... what effects ... What effect did the revolution have on your lives?
Oh, the revolution had a real tremendous effect on the total life of the villagers, and particularly Jewish people. Because the first thing that the revolutionaries did was free the country of the system of people having to be locked away in villages and all the Jews just ran out of the villages. Not all of them but most of them. And went for all sorts of little businesses that were in much bigger towns. Very similar to what's happening today in Russia. And they became ... some of them became very big businesspeople, some middle class and that's where it started, to answer your first question, that's what ... with the wealth. My father was like me, or I'm like him - always entrepreneurial, always had new ideas and always would start something new and the first thing he did is start a flour mill outside of the town where we lived. And then when the Communists came, he ... they allowed him to buy that mill. They had enough wheat for one shift, but they had to employ people for three shifts by law. So money doesn't last very long when you only produce one third of what you should produce. So he went broke. And then he went round to his friends, and because of his name, they all leant him money and he just start all over again. And he particularly went to all the women, all the wives, whoever had the bit of jewellery, and said, 'Give it back, we've got to sell it to pay our debts'. And everybody did that. Everybody gave: took their wedding rings off, took everything off and sold it to pay debts. And that carried through to Australia eventually, to the people who knew us in those times in Russia. From then, Lenin introduced the New Economic Policy in Russia. That would have been about 1921. And then things started getting much better. Business became normal, you do any business you like, you could do whatever you wanted to. As far as I was concerned it was no different to what it was here. It was free during that period. But in 1926-27, Stalin came into power and he destroyed all that. They started moving out all the farmers, particularly because they were German, because they couldn't be Fifth Column, so they were the first ones to go. They were either murdered right on the spot if they didn't move, or they were sent off to Siberia. And anybody who resisted anything that Stalin wanted was killed. They didn't mess around with courts or justice or democracy. They just simply killed. And they can't move again. And that's when my father knew ... you heard my sister speak, to tell the story how our father ... she went to school and she was about fifteen or sixteen, and school started because everything settled down slightly and the teacher said that, 'You have to report everything that you hear at home to me, and I have to report it to the commissar and he will re-educate your parents how to be real Communists'. And that's when my father decided it's time to go.
Going back to the village, do you have any early memories of the fights that took place between the Red Army and the White Army during the revolution?
Yes, very much so. By that time my I'd be about five, six, and we were hiding. Children were put in cellars when the fighting was on. It wasn't continuous fighting like for months. It was two or three days and then they won, either the Red Army or the White Army. The White Army were the royalists, the imperialists, the Red were the revolutionaries. And Bolsheviks were the majority of the revolutionaries. The Mensheviks were the minority of the same group. They fought as well. So there was about four or five different groups were fighting. So they've come in, into the town. We lived in a double storey house, and we could see all the fighting from ... approaching to town as either one, either the Whites or the Reds, were advancing and the flags, once it was over, the shooting was over, everything stopped, become silent. People start coming out on the streets. If you wanted to put a white flag or a red flag depending which particular army won. And then our game, the children's game, was to collect the empty shells. You know, it was 'How many have you got?' sort of thing. Like kids play today with marbles. And so it was, you just accepted it because that's the way of life.
Were the villages ever themselves under threat?
Yes, they were destroyed. Anything in their way was destroyed.
Were you frightened? Do you remember being frightened?
I don't remember being frightened myself. No, I wasn't frightened. Not that fear in the meaning that you have of frightened. It was just fun, it was ... you ... After it's over you go out and play and you see dead soldiers in the street without taking notice of it. It was normal.
Did you see anybody actually getting killed?
Yes, a number of times. You see it, very much like it is today in Europe and Eastern Europe - all over the world as a matter of fact. The ... usually you were ... you could walk on one side of the street and everything's peaceful. On the other side of the street they're fighting and you got to pass through it, so if somebody falls over you know he's dead. But you accept it because that's where you live. It's not that bad. [Laughs]
Tell me the story of your seeing someone being taken off to be shot.
That story - I was probably six. And there was ... we were living at a village or little township - not the village I was born in, it was a little bit bigger. Probably had about 2,000 people. And there was a crowd walking through a street with a horse and cart with two men tied up together by chains to the what it's name, and they're singing. They're singing Russian songs, revolutionary songs or whatever they were. I'm not sure what songs they were. And the cemetery was ... we used to have a tannery, and my father had a tannery in that town, and the cemetery was just behind that and so we children weren't allowed to go into the cemetery, but we were round the corner at the factory. And we heard two shots. But what impressed me mainly was the fact that they were singing. I couldn't understand how they could face that, they know they're going to be shot and they're singing the songs. And now I understand it, because I understand what they mean by when dedicated to something you really believe in and you accept it because that's part of the thing that you're doing. But it wasn't sad in the sense that you cry. You just accept it. You just ... you're impressed with the fact that ... what impressed me was the fact that they were singing.
Was your own family ever a victim of anti-Jewish feeling?
Continuously. Almost everywhere. There was always that right through the Jewish life in Russia, in Europe, everywhere else except possibly Australia.
Was there ever an incident where you, as a small child, saw your family being attacked?
At the time of the revolution, but that's not because ... well, partly because we're Jewish, because Jews were precasted to be rich. So therefore ... and by that time my father and mother had a little ... within the house, they had a drapery shop because Jews were already not allowed to go out of town. And Father was away, and a mob - I don't remember who they were - but there was a mob of men, a hundred people, surrounded the house and demanded to my mother to ... I would have been about ... my sister was six months. I was two and a half and they demanded gold, demanded anything so they'd come into houses, start pulling everything apart looking for gold. And they didn't find any. My father wasn't there. Father was the personality that would have quietened them down - would have given them something and they would have gone away. My mother couldn't handle them and that's when she broke down and become paralysed.
Well, nobody knew what happened, but eventually before she left Russia, about four or five years after we did, she stayed with her brothers, and her brother took her to one of those health healers. And they put her on a table and went through the ... went through the thigh and he found a lump. He just broke the skin with his nail and picked up that lump, a clot, which was stopping the blood from going to the system. And after that she started getting better and became well. She could remember everything from the past, but if you said something to her today, or she asked you a question when she came to Australia, and you ... she'd ask the same question the next day. She forgot that she asked it. She'd lost part of her memory through being paralysed. But she was completely paralysed. Her eyes were the only thing that worked. And my father took her to every possible doctor they had in those days. He only had his horse and cart and she'd go with him, 100 kilometres or something. And every doctor said they don't know, there's no cure, they don't what to do. Don't forget that was ... they didn't have the science that they have today. Today that would have been done very quickly, wherever you lived. But they'd put you in helicopter and bring you to hospital. But those days they just didn't have conveniences in the hospitals and the doctors were not well educated. They just didn't know what it was. And she lived like that for about twelve, fifteen years and then she became good and then we moved to Australia. And you can imagined what it was like for her. But that's another story.
Now, going back to the incident when it actually happened. Do you remember it?
Yes, I remember it vaguely. My sister remembers much more - she's four years older. And so she felt much more about it than I do ... I did. But I remember bits of it that I remember - parts of it. I remember more about the ... around about the same time I was also, had an accident. I fell over some of our samovar. You know what a samovar is? The Russians have it for putting the charcoal in the middle ... it's a sort of a kettle with a pipe in the middle, and underneath that there's charcoal and the charcoal keeps the water hot. And it's put on the table. Russians are great tea drinkers. So it always stands on the table, you can always ... instead of using Coke, drinking that Diet Coke, they have a cup of tea, usually very weak tea with a lump of sugar which you suck through the tea as you drink it. And so anyway, I fell over about two gallons of boiling water and I fell over that and all the water went over me. And again, my father was away, and my mother picked me and she's already partly sick, part of her paralysis started, and she hugged me and wrapped me up but whatever the clothes were, left scars. So I'm all covered in scars, oh about more than a third of my body is covered in scars. Every time a doctor sees me, he says, 'You shouldn't be alive'. When my father took me to the hospital, which was about thirty, forty kilometres away, the doctor said to make arrangements for the funeral because according to what they learned at the time, that if your body's more than a certain percentage burnt, you die because you proabaly can't breathe. And he came back about three days after. He says 'He's still alive. Come back later. I'm still waiting'. I'm not in a hurry to let that happen.
And I remember very much about that. I was about three, around about that age. It all happened at the same time, that my mother started getting sick. Because it wasn't an immediate paralysis, it was gradual, it took about six months. But then she became completely immovable. Just her eyes were the only thing that worked. Her eyes worked but no other part of the body worked.
Well, she got fed. I don't which way they fed her but she was obviously being given some food.
No, she couldn't talk, she couldn't express herself, couldn't say anything. She was just eyes was the only part of the body that worked. So she'd cry, and you'd see the tears and she'd look at you and you'd know that she was looking at you. And you were, again, there was nothing much you could do. And so my father tried very hard to ... because theirs was a love marriage. Usually the marriages at that time were organised by the parents. But theirs was - as you heard before - was a real love affair and so it wasn't a question that he didn't love her. But he had four children to look after. And he had to have maids, had to have people, we could always afford it but nobody would stay with four young kids, well, particularly my brother and I. We were really really ... That's why I understand the kids of today who are homeless and run round the streets. We used to be like that.
So when your mother was completely paralysed, was it just because of the intensity of her fear when the house was invaded?
Yes. Well, we presume that. I mean there's a lot of other things. It's not just one incident. There's many of these incidents. You'd see it, you'd look out from ... you'd see it from your window that somebody's being ripped apart, killed, and all this sort of thing going round you. It's not just one incident that makes it. It's a series of incidents that happened at that time. It's happening today in Bosnia, where the Christians are killing the Muslims and Muslims and are killing Christians for no reason. And then because one of - the minute they kill somebody they grab the house and then they always come back and want the house back. And same old story. It's just intolerance of each other.
So what happened to the children with your mother paralysed?
Well father always organised somebody to look after us. But we were so badly behaved that they wouldn't stay very long. So he had to keep on going and getting new ones all the time. Until he met this woman who was educated from ... she came from ... lived in Siberia. She was also Jewish but she was ... didn't know anything about Judaism. She was brought up like my kids are brought up. She was Jewish but she didn't practice it or know very much about it. But eventually ... so she's then accepted my father, who bought her for a bottle of oil for her mother, so her mother could survive all through the years when starvation was on. You know, part of it was that a lot of people were dying from starvation. Some didn't. We did. You heard my sister tell the story about ...
There's ... my father bought ... sold a piano to buy a cow so we could have milk. With milk you can trade the milk for bread, for anything, for whoever had some food, and the cow was stolen, and I remember that very vividly. We were all asleep and we woke up and there's no cow. And father, my brother and I went out ... it's winter, it's January and my father and I and my brother went and followed the footsteps of the cow for about a mile. And oh, those days it was miles, not kilometres. And then it stopped. Obviously the cow was put on a sled and moved away and we never found it. So we were left with the food that was put away for the cow, which is sunflower seeds which are pressed out ... the oil's pressed out from it and the cake itself is left. And that's what we were left with to eat. My father was ... it was not a question of not having enough money to support the family, but a question of being able to get it. Transportation particularly, particularly in that part of Europe, in that part of Ukraine. And so about a hundred odd kilometres away you could get wheat or bread or flour. So there's no transportation, so you'd go on a horse and cart, borrow some, or get a lift with somebody, go out and buy it, come back, bake the ... in those days every household would bake their own bread, and bake the bread from the bag of flour, because how much can one man carry, about forty or fifty pounds, or twenty kilograms. And he'd bring that back and he would then divide it up, not only amongst his immediate family ... [INTERRUPTION - PLANE]
Were you ever hungry as a child?
Yes, I was . I was always hungry. I always liked food, and was always big. And I probably needed more - my brother's very thin and my sister is very thin, but I was always round and thick, big bones and big and so I was hungry. But I was hungry mostly because of the lack of food. I must tell you the story about the cow, but we were not the only ones. There were many people because of the revolution, because of destruction, many people were starving. And in 1921, it was cannibalism that was practised. Many people had been caught killing their own child, like a mother and her older daughter would kill a younger child to eat. None of us know what we will do when we are hungry, really hungry. And many times. It happened that my uncle went to a bazaar - usually every village and town has a bazaar - selling sausage. And when they cut the sausage in half, a child's nail came up. And the man was raped right ... was ... what's the word - lynched right on the spot. Because he was caught, obviously he'd used humans for flesh. But there was many stories like that at that time. So we weren't the only ones that were ... We were probably better off in many respects than most other, than a lot of other people. But the ... my father sold a piano to buy a cow, so that we had something to barter with. And with the cow in the house, it lived actually inside the house, in the bathroom and it was stolen. It walked away, we don't know how. But my father and I followed the footsteps of the cow for about a mile and then we stopped and obviously it was taken away on a sledge and we never saw it again. So we were left with the food that was left for the cow, was put away for the cow. Which is sunflower seed cakes which were pressed for oil. It's still done today the same way. And that cake has some nourishment in it, including all that rough stuff, all the seed outside, and you break it up and powder it up and mix it with water. Put it on a hot stove. You know Russian stoves are flat. And that was your breakfast, lunch and dinner. And when my father used to go out to get the flour. Because there's no transportation, he had to walk and sometimes get a lift from somebody and go and get a bag of flour, which weighs about twenty kilograms, bring it home, get it baked. Everybody would bake their own bread, and divide it not only amongst just his near family, but his brothers and sisters. They all had to have their share. And I ate mine and then you had to wait until next time he goes away again, which is about two days after. But I used to finish my bread immediately and go back to what was called the mukuha, where these sunflower seed cake are.
What did it taste like, the sunflower seeds? They were just the husks.
Delicious when you're hungry. It really is. No, it was quite nutritious. It's a ... you accept it, you must think in terms of if there's nothing, something is better than nothing and that becomes the important thing. You don't think about caviar or sausage or meat pie. You just see what you've got and that's what you eat.
There was a lot of starvation and deprivation during those years of the revolution in Russia. Did things get better for you?
They did during the NEP, which was about two years before we left, where it was quite normal. Things were normal. People started new businesses and everybody was working. And it was very normal.
NEP meant New Economic Policy, which Russia is trying to introduce now again. Except it was easier at that time because they didn't know about Communism. So for Lenin to introduce that system was easier, because there was no other system. And then that was destroyed by Stalin. Then when Gorbachev came in, he wanted to restructure it. And now, Yeltsin came in, he wants to do ... go really democratic. It's very hard to do that because the people - every time I visit my relations - they have enough to eat, they live very poorly on our standards, but on their own standards, they live quite well, from their point of view. They never saw anything else. They never saw any other type of living, so they were ... some were better off than others. Some of them were smarter than others. They deal on the side, and everybody dealt in Russia on the side, on the black market. And you can get anything you wanted to, as long as you knew how to get it. And a lot of people did or if they didn't, they just remained workers, and pretty much the same as in Australia in a different sense, in that the smarter people - not necessarily smarter - but the people in business want to do something, they go ahead and do it. Well they were doing that same thing at that period. At that period my father started a tannery in the town we lived in, together with his brothers.
A tannery to make leather. And you know, one ... meat leads into hides. And he had the ability to talk the people into selling things. And my uncles tried to do it on their own, and they weren't successful. But they had a plant. My father didn't have a plant. He went to all the butchers and he said, 'I'll buy all the hides from you', and he made a deal with them. So my uncles were left without any hides. So he said, 'Well, let's make partnership'. So that's how they got together again. And so ... because the brothers thought that they could do it on their own but they didn't have that ability to do it on their own. So then when my father decided to leave, I remember working in that plant after school. My brother and I used to run round there and watch the workers and watch the whole process and it was quite profitable. Father was always able to make some money. And when a Communist friend of his saw him one day, he said to him, 'We know that you're leaving. In the big capital cities they're already chopping off the heads of the heads of the firms. You go and go. Go now'. So Father gave the keys to the workers and he had everything - all the papers were all ready - and we left the next day. We left everything behind and went on to Moscow. From Moscow to Berlin. Or rather, Riga first. And then Berlin. Then Marseilles. And then on the ship, a cattle ship to Australia.
Why do you think your father read the signs when so many other people didn't?
Because he had the sense of seeing it there. He had the ability to see it, because not everybody has visions. Not everybody understands everything. A lot of other people have the same visions, have the same ability. They want to get out but they couldn't find a way to find out, to go, how to leave. But my father, like I, persisted about doing things. He was like that. So he kept on talking to all these ... to anybody he met. And then he found out that his sister - her husband had an uncle in Australia. First of all he wrote to his relations in Canada. They said, 'No visa', like Australia is today, you couldn't get into Canada. The relations in America, in USA, in New York in fact - I met them later, many years later - and the same thing, they couldn't get a visa, because the people were not allowed to come in. So then he started talking to his sister, and found out that her husband's got an uncle in Australia. Asked her to write to him. And so she wrote him and he organised for her to go first with her family. And they went there first. They arrived about eight months before we did. And that's when, with persistence he got here. That uncle ... that uncle of the uncle couldn't get any more visas, because he was a kind man, he signed for so many people and the government said to him, officials said to him, that, 'You can't have any more visas. You can't even support the ones you already signed for', and the next Sabbath, as usual, he used to go to synagogue, and he sat next to a man that he didn't know, just started talking. And he was telling him the story about these distant relations in Russia. There's twenty of them and they want a visa and it was refused. He says, 'Give me their names and I'll sign for them', which he did. That's how we came to Australia. So you know, it's persistence. It's the will to do it and finding ways of doing it, that you succeed. Whether it's business, whether it's this sort of escaping, whatever it is. But you got to see it, you've got to have the vision, you have to have the will to do that. And he had all that. He organised for everybody, not only for himself. The whole family that you see on that photo.
So Australia was the place of last resort.
Not really. Australia was the only country that ... we could have gone to New Zealand, probably if we had somebody there. We could have gone to South Africa. There were several places that you could go to.
I asked that question because ... I asked that question because America always seemed to be seen by people who were thinking of emigrating at that time, as being the place to go.
It was before that, in the early century - late last century and beginning of century, up to about 1920. But not after that. But then they got too many. Millions of people arrived at that time, including some of my relations - my father's cousins that he wrote to later. And they all came at round about 1900 and 1905, 1910, 1920. During Japanese ... particularly Jewish people. But there was a lot of Poles and Irish and every nationality you can think of because poor Europe was completely poor everywhere and America was the golden country and everybody wanted to get there. And they did, because they were allowed in. But that's stopped. That's stopped now again. Same as Australia.
Before we leave this period of your childhood that was spent in the Ukraine, what are your memories of your father from that time? How do you remember him as the father of your childhood?
I remember him as a person that always loved ... he loved me. I have no problems. I didn't feel, oh that there was no mother. But he looked after us. He cared, he cared where we were. He fed us, or produced the means to feed us and there was a very natural father-son relationship, with me. My sister was very angry with him. But that's another story. That's her story but both my brother and I were around my father all the time.
Why was your sister angry with him?
Oh, I don't want to go into that. Let her tell the story.
When ... what about your mother? What are your main memories of your mother from that time? Your mother: what kind of a person did she seem to you?
She just didn't mean anything to me. I just ... I wasn't conscious that she was sick. Just I probably neglected her. I remember when she was taken away, when she was ... and she was crying. I couldn't understand why she was crying. And I was about eight or nine, eight. And you know, I wanted to play, not to go and see my mother off. Because she was sick all the time, so we had very little to do with her. Because she couldn't answer, she couldn't talk. What I remember, before we left, about two years before we left, my brother and I went to see her, because she lived in another town with her brother, before that with her mother. Her mother, by the way, died from starvation in 1921. And so she lived with her brother. And so we went to visit her. By that time she started already to moved and she was able to talk, she was able to ... she'd recovered slightly. But she was still very sick. And she cuddled us and she hugged us and she'd you know, like any mother does. And we were ... we slept in the same bed, and you know it was ... in Russia it's normal because there's only one bed anyway. And it was just, you loved it, it was your mother. But I had no special feelings about my mother. My brother and sister, they're older, they have different feelings. They are much closer to her than I was.
Why did she move back to live with her own mother?
Well, because my father arranged it. Because father had to reorganise his life and you can't have two wives in the same house, or two women in the same house. So he had to ... that's why my sister's angry. She was older, she understood it better.
Well, the new woman was the one you see on the ... you know, I'll show you on the pictures later: my stepmother. He eventually married her to come to Australia. He had to marry her. But he promised my brother and sister that he will bring her to Australia, because my older sister, and Eric, they didn't want to go out to Australia unless he promised. They didn't want to stay in Australia with[out] mother and I was too young to understand that. And I learned all that later. And my father said, 'I'll give you my word that I'll bring her over'. But the problem was that you couldn't get a visa out of there. That's another story you can ask me about later.
Could we get this story straight, because you hadn't yet told us about the relationship that developed between your father and the governess, and the effect that had. So could I just ask you about that again. When your mother became ill and was unable to look after you, and eventually you got an educated governess to come and mind you, how did things then go on in the household. Did she manage to tame the wild children?
Yes, eventually. I must tell you a story about that. I was always bigger than my brother, although he's older. You see in the pictures ... as you will see in the pictures. And so anything I wanted I just grabbed ans took and we always fought. We were wild like street kids today. Really wild, you know, pulling out a knife on somebody didn't mean anything. You'd just run around, you'd do whatever you wanted to do. I can relate to today about people in the street.
That was me. That was me and my brother. And so when she came into the house and took over the management, and she said that, 'You've got to be polite. You've got to learn to be polite'. We said, 'Okay'. She said, 'Now you've got to say please'. So yes, okay, we'll say please. So the next time I wanted something from my brother, he didn't give it to me. I grabbed it and he went complaining to Auntie - we called her Auntie Vera. Or Vera Smorgon[?], which means, you know ... her father's name was Smorgon[?], same as my father. And you know, Russians have these double names. And I said ... he said to Vera, 'Victor ...'. My name wasn't Victor then, it was Abrussia. '... and he took it away from me'. So she called me and she said, 'Why did you take it away'. I said, 'I said please and he didn't give it to me. You said say please, you get it'. I learned that you have to do more than that. So gradually we became more and more civilised and quietened down, because life became more normal. We had proper meals, we had proper food and proper sleep, and there was no more running around and that stopped. Besides that, we got older too, which helped. So life became much more ... maybe not as exciting, but much more normal. Our father was also more strict with us. He said, 'You've got to do what she says'. Otherwise there was an uncle, the youngest - one of the younger brothers, who was, used to never, ever touch me. I was scared of him. And somebody would say to me, 'I'll tell Uncle Abram', and I'll do whatever's necessary to do. And he never, ever touched me. His granddaughter is my ... his granddaughter is my granddaughter. That's right, yeah. His wife's ... his child ... his daughter married another man, and they had a child and it became my grandchild, through that relationship.
Right, right. So did you like your stepmother?
Well, there's that feeling of both. It was a feeling of anger at times, not because we didn't like her or anything, but she was strict and she had no sense of humour. And I like to talk to people with a sense of humour and my father had a lot of sense of humour. And, but with her it was very difficult. And she's, you know, very straight, very correct and tried to teach me music, which I didn't particularly like ... [ROBIN COUGHS]
Yes and no. I had great respect for her, but then I have ... but she was very strict with us. When she was strict with us I was angry, and didn't always do what she wanted me to do. And so there was clashes of personalities. She had no sense of humour and I liked a joke and I'd drop of funny line and didn't get any response, and it gets very awkward. But she'd order me to do things and I didn't like doing what she wanted me to, and I'd have arguments with her. But basically I liked her. I liked her very much. She brought us up. She looked after us for over thirty years, and when she died ... when she died at ninety-one, she lived on her own, we still considered her as family. But her brain started going from about eighty on, eighty on, when she became eighty. And I was always the leader as far as she was concerned. And she, whenever I'd visit her - we used to visit her about once a week - and very often I'd bring the grandchildren to see her. They would look on her as grandmother there. She has always been part of the family. And she accused me of changing her name. And I said, 'When did I change your name?' She says, 'I get letters spelled S-M-O-R-G-A-N'. I said, 'That happens to me too'. She says, 'No, no, you changed my name because you don't like me, because you're embarrassed about me'. I said, 'No such thing. I have great respect for you. Why am I visiting you if I felt like that?' But she never accepted it. In her mind it was a fact that I changed her name. But then at the end of her life, and she was ninety-one when she died, I happened to be in America at the time, and she asked my sister to ask me, before she died, to ask me to forgive her everything, whatever I held against her. I had nothing against her whatsoever. But I was very sorry that I wasn't there when she died because I did have a great respect for her. She brought us up and she was a very nice woman.
Your father lived with her without being married to her for a while. Did that bring any criticism from the village?
Well, the people who knew were her brothers and sisters and my father's brothers and sisters, and his brothers and sisters were always very kind to my mother. They always considered her as their relation, their sister-in-law. Even when she came to Australia, they always looked after her. As far as Auntie Vera is concerned, or Vera was concerned, my aunties and uncles, they were normal to her. It's their brother's wife, so you know, it's a sort of double situation where there's two different personalities. They're never together. It was always arranged whenever the weddings were on, my mother sitting one end of the table, my father sitting with his wife at the other end of the table. But she never ... when she came to Australia, my father wanted to see her to apologise, to make peace. And she said ... so she wouldn't talk to him. But I know she loved him very much. She always used to ask me about him, how's his health was, how is he. And that love was there 'til the end. It didn't stop. But she was very hurt because, as a woman, in those days ... today probably it's a lot more natural, but in those days to see your husband live with another woman, and to her ... he had to have her to look after his children but in the first place it didn't enter her mind that situation. We of course ... Later when we grew up we understood that: why father did it, why he left, why he remarried. And it's natural. He didn't marry her straight away. That took a while. Took a while before they lived together, took a while before they ... the only reason they got married is because we came to Australia. Because he had to have - couldn't have two wives on the same passport.
He divorced my mother, both legally and in the Jewish way, and the civil way, to make everything correct. And otherwise you have trouble here. And when he came here, there was some people who accused him of - who knew him from Russia - of not ... his wife's not Jewish. But her name was Feldman. We knew she was Jewish. So [coughs] he then got the papers to Australia, from Russia, to show that they were legally married, and that she is Jewish. And they didn't get married in a synagogue, but by a rabbi, and so then they all ... [He had a] butcher's shop, a Jewish butcher's shop. So rumours start very quickly and you lose business. So you have to straighten those things out. And he sent people to his friend, his name ... who came to Australia about five years before we did, and he became a rich man. Rich: he was probably worth about £10,000. In those days that was rich, very rich, and we had nothing. So he knew father, knew the woman, so he told everybody that she is Jewish, stop worrying. So that quietened down. But that's a side story. It's not really important.
Do you think that your father felt guilty at all about your mother?
Yes, I think he did. And he felt guilty all his life about that. But there's more stories about my father. Let's not get into that.
So he decided to come to Australia and organised a way to get out and to get to Australia. What was the actual journey like for you?
Well, the journey was in the first place, we got on a train. We'd never been on a train before. And but ... then we got a Russian train, which is totally different to the European trains. And in Riga we changed the trains to go to Berlin, to Germany. And [cough] we stayed there for a couple of days. And we went to the famous street there and to us it was all wonders. And one of the things, in the trains, they have bottles that you probably know that have liquid in it for soap. And he said to us, to all of us, 'I'll give you whatever it was, if you find out where the soap is'. So I went in and started touching everything, and found out it was soap so I got that shilling or ten cents or whatever it was at the time. There was quite a friendship between my father and his children, except for my sister, who was friends but was angry at the same time. And from then on, everything was completely new to all of us, including him. The first time when we got to Berlin, we went to a cafe to have a meal and we were given the soup, ordered soup. He didn't know what it was. Nobody knew what it was. And later he found out it was oyster soup. It wasn't kosher so it didn't matter. It was the first time that I'd tried oysters. I didn't know oysters existed. Then there were so many other foods that we suddenly discovered. And the fourteen there's so much space in the mind to absorb so many things - no problem in absorbing it. Particularly ... I remember particularly later on [cough] when we got to Colombo and the boats were going on the Suez Canal [sic], and they were selling bananas and father bought the whole bunch of bananas. We never saw bananas in our lives before. Suddenly we had bananas. What are they? We start eating it, they're nice. And everything was a new experience. And it still is, to this day, whenever you come across something that you haven't seen before. That certain feeling of excitement about it, when you discover something new.
Do you remember what you felt when you first arrived in Australia, and what it was like for you?
Well, the ... When we arrived in Fremantle - there was many experiences before that - but particularly in Fremantle, the Jewish community picked us up from Fremantle, and took us into Perth. All the Jewish passengers that were on that boat. And they had an afternoon tea or lunch or whatever, the table was laden with food. I hadn't seen that before. It was a table full of food. I knew it's a Russian custom, by the way, but I came from an era where there was no food to put on the table. And everybody was so nice. And the first time I ever had a ride in a car, which to me, in itself, was a great excitement. Just sitting in a car and somebody's driving it, and you're sitting in it and you're moving. Fremantle from Perth is round about ten, fifteen miles. So you know, it takes a while. And then we were brought back to the boat. And they did that to every boat that arrived, the Jewish community there. That was the first welcome. And so you'd see ... you didn't see Australians at first, only saw Jewish people in the first place. And then in Melbourne again, when we arrived in Melbourne, there was the relations that were already here. And these people that organised the visas for us, the uncle of the uncle and his children. And we were taken to my auntie's place. And then they had the house ready for us, which we moved into, all excited about meeting the cousins again and all that. It was all very exciting. And then you settled down after a while. That's normal.
It was in Carlton, up in Lygon Street, near Ames Street, A-M-E-S. And it's sort of, like it goes up steps, high. And my cousin, who was here before me, he learned to dance the Charleston. It was the fashionable dance. And I tried to copy, but I'm not a good dancer. So I was very envious that he could dance and I couldn't. But he already spoke a bit of English. And he ... he spoke good English and he told me two words to use. They were both swear words. And one was Russian, one was Jewish. I won't start repeating them in this. The first two English words I learned was swear words.
Definitely, I still use them.
Now, what happened then, did you go to school?
Well then, yes, I went to Princes Street High School. Not Princes High School, Princes Street School, in Carlton. I was there for about three months and there was ten immigrant boys, who were all round about my age, fourteen, fifteen. I'd just turned ... I was born on the second of January. We arrived in March, so I would have been fourteen, fourteen-and-a-half, and they were around about the same age. And there were ten of us sitting right across in line this way, and the teacher is there. All the kids in front of us and the back of us - the kids are all ten year olds, because none of us had learned English. And from time to time we'd make a noise and the teacher would call somebody ... one of us out and smack with a strap. And one particular fellow was pretty big, and when the teacher called him up, he started fighting the teacher. After that, the teacher didn't touch us. He got a hiding from that fellow.
So how did you get on in class without English?
You just ... you didn't learn anything. You just talked Russian to all ... they all spoke Russian. Some were Polish. Polish and Russian is similar, so we could communicate very easily. And so you really didn't learn anything at all until we shifted to Carlton itself. That was North Carlton. And we ... that's where the butcher's shop was at. And then we lived in a ... I went then to Faraday Street State School. And at Faraday Street School, they put me next to a Jewish fellow, who didn't speak Russian. He spoke Yiddish and I didn't speak Yiddish at the time. So I had to learn English and it didn't take long to learn English, to understand it. I already had the sound of it in my ears and all that, but I didn't have the words. I never learnt the words. And got into the usual fights, which kids do. But at that school ... I met my own age group in that school. They weren't these little kids that were in first school and at the end of that year, my father decided that I should go to the workman's college, which is now called RMT. What ...
But it was called the Working Man's College then?
Yes, in those days. And my father decided I should take bookkeeping, typewriting and shorthand. And as you know, shorthand, most of the time you've got to know how to spell. I didn't know how to spell, so I couldn't write shorthand. Couldn't learn shorthand. Typing was easy, I just copied whatever was necessary to copy. And the bookkeeping was simple. On one side of the page all what you bought, the other side you put all the expenses and you add the two together, at the end you got your loss or a profit and that's the first stage of learning about bookkeeping. So that was easy. So most of the time I had nothing to do. I learned to play some sport with the students. At that time I spoke a little bit of English. And I used some word ... I remember I used some word. I don't remember the word, but it was German and in 1927-28, it was only about ten years after the First World War. And they thought that I was German, so they started - not hitting me, but teasing me about being German. I said, 'I'm not German, I'm Jewish, I'm Russian'. They insisted on German because I used the German name. I don't even remember what the name was. But then I learnt to play cricket and learnt to play football and I didn't like either of them. I was not a sportsman. And ... but during the other times, during the rest of the day, there was nothing to do so I used to go around, roam round the city. Because if I went back to home, I'd have to work in the butcher's shop and I was lazy. So I didn't want to go back 'til four o'clock, when school usually finishes. And I used to go round the city and I saw ... I got down to Flinders Street, or Flinders Lane, actually. And there's a group of people, about thirty or forty people going together, so I followed them. And we came to the end of ... turned into one lane and went into a shed, and I see a lot of chickens - fowls in cages. And a man there picks out a pair of fowls and he says, '[GARBLED LANGUAGE]', and I don't know what he's talking about. And gradually I found out that it's 'Two bob, two bob, two pennies, two and threepence'.
You'd walked in on a chicken auction?
Yeah. There was two places like that, I found out later. So then I saw an opportunity - my first opportunity of going into business. Because after school I used to go to the butcher's shop to work with my father and my uncles and there was a Jewish woman we used to buy live fowls at Victoria meat market and bring to the ritual slaughter man. He killed kosher, and then they'd pluck them there or take them home and pluck them. So I thought if I plucked them myself, bought them and plucked them and sold it to them, save them the job and I could make some profits. So I asked my father would he lend me two pounds. He said, 'Yes'. And I want the horse and cart, and I asked my uncle can I borrow the horse and cart. He said, 'Yes'. So at the back of the yard where we lived, I found bits and pieces of wood and built a cage. And next market day - it usually used to be on Tuesdays and Thursdays. I went on the Tuesday I went to buy my first purchase and I picked out a cage of birds that were good. The Jewish women like all fowls very fat and they make soup out of it. They make a number dishes out of them.
So what happened when you went to buy the chickens?
Well, I started ... I picked out a pen that I thought would be the right pen for the Jewish women like that type of fowl, very fat, and which they boil down the fat together with onions and they make a special dish out of that. And they make soup with the rest of it. They make all different dishes. Poor people make a lot of things out of very little. And they ... So I asked several of them would they like me to be buying chickens ... fowls and would they buy them from me and they said, 'Yes'. So I knew roughly what they were paying for them, but they didn't want to pluck them themselves. So the first day I got an order for six fowls, the first order. And I bought ... at the auction I have picked out one cage with six fowls and I kept on saying ... waving to the auctioneer like this and he wouldn't take such notice of me because he saw me so many times before, and I'd never bought anything. So he knocked them down to somebody else at two dollars ... two and threepence or whatever it was. And so next one came along - the next cage that I wanted: my second choice. And I started that time, making sure that he heard me. [POINTING] I said, 'Me, me, me, me, me, me, me!' to take notice of me, to ... that's my bid, to realise that I'm buying. And then he knocked it down to me, whatever the price was - two and tuppence or two and threepence. And I'm a millionaire, I've got six chickens. And I go back to the office - to the shop rather, harnessed the horse, and the horse and cart and drove the cart back and paid for the chickens, put the chickens in the back of the cart and bring them home. Put them into the back yard and bought some wheat to [coughs] feed them with. And now I'm in business. Now I've got six orders and I bring them back to the shop and get the ritual slaughter man to do it the proper way. And I started plucking from about five o'clock in the evening, 'til about two or three o'clock in the morning. I'm not sure, maybe five o'clock in the morning. I stood there. I sat there and I was plucking chickens 'til they were plucked, in the morning. It had to be on Friday, so it would have been Thursday that I had them slaughtered and Friday I had to deliver them. Put them in the chiller meanwhile, because my uncle allowed me to do that. I didn't ask him. And then I presented them ... When the women came in, I sold them the chickens at a very high price. For me it was a high price, about three times what I paid for it, and they didn't mind. They paid me and then from then on, for the next few weeks, 'til the end of the year in fact, I was dealing in chickens and going and buying six or ten a week and making 'round about three or four pounds a week. In those days, a working man was only earning thirty shillings - a pound a half, so I was very rich.
How much was your father making at the time?
At that time my father would have been living on about four pounds a week.
Were you doing this as well as going on at school?
Well, I wasn't doing very much at school, so it was easy. I'd go to the school and I'd do the typing that's supposed to be done, do whatever the teacher gave instructions about the bookkeeping. And I did that and then I'd disappear. He'd say to me, 'Go and play', because I was a nuisance staying there, interrupting, talking to the other people that were doing their shorthand. So he didn't mind me leaving. So I'd leave round about 10.30 or that time, go back to the city, walk around, look for opportunities, and then get my chickens and get them plucked. And I had pocket money. And [most of it] I gave to my father. Father put it in the business, and saved it for me. That's the old Jewish way, Greek way, Italian way, all the immigrants way. They all work that way. All the money, whatever's made, goes into one pocket. After that you can get it back, but meanwhile it's being used. And that's how I became ... that became ... that was my first business.
Now let's go back and pick up your father's story, and the family's story. When the family arrived in Australia, how did you father set about making his living?
Well, he was originally, when he had a letter from his brother-in-law, that the brother-in-law has bought a hand knitting machine, for making socks. And so father wrote back to him and said there was some money at that time he could send over and buy more machines. And when my family arrives, we will all have a machine each, all the children and all the wives and all the relatives, and we'll make a lot of socks and a lot of money. But by the time we got to Australia, which took about two months - about two months, about six or seven weeks we were on the ship travelling from Marseilles to Melbourne - and we arrived, the uncle, my father's brother-in-law, said that he's not doing that any more, he went broke doing that and he's now hawking. He was making twenty pounds a week. The same way as Myer started, Sidney Myer. But he was a good salesman and he could do it. So father thought that he would do the same thing. But father didn't have the ability to sell that, like my uncle did. And so he went to ... he bought the same suitcase, or two suitcases, went to the wholesaler, the Jewish wholesaler, and the Jewish wholesaler gave him the socks. They were all on credit, and payed for after you sell and every week he'd go off on the train, and for two or three days, and if he pulled up at the ... he was at it for about two months. And one day he came into a street and there was a butcher's shop and he start looking at the meat, which funny thing is I do exactly the same thing today. I still, whenever I pass a butcher's shop I've got to have a look at it - and the butcher came out to talk to him, and the butcher talked German. And my father spoke German, perfect German, because he comes from a German village. And so they started talking about politics, all this sort of thing. Then the man said ... the butcher said to him, 'Well what have you got to sell?' He did it out of pity. He didn't really want a pair of socks. So he sold him a pair of socks. My father burst out crying, because he knew that he had only bought it because he felt sorry for him and he didn't want to be in that situation. He was too proud to be in that situation. And he said ... he told him straight away, he said, 'I'm giving this up. I'm going back, and I'm going to do something professional and I've decided to become a butcher again'. He came home. His brothers were doing different things: one was collecting scrap iron, another one was collecting wool - brothers, different brothers. None of them were making a living. So father said, 'Let's go back to what we know - be butchers again'. And then we bought ... he bought ... he and his brothers, and one who was still in Russia, the younger brother, was a partner to it. And they bought out another Jewish man's business, who already had a shop in Lygon Street, Carlton.
Where did they get the money from?
That's another story. You borrow. If you have a good name, you can always borrow. And the Smorgons always had a good name, going back for probably ten generations before my father. It goes in the family. The reputation follows the family as you go along. And the Smorgons always had a good reputation, so people that knew us from Russia, that knew - not me but my father and my uncles - they knew us as honest people, hardworking people who always paid their debts. And whatever happens, my father always pays his debts. I think I told you before about the story about how he sold everything to pay his debts in Russia. And that travels with you, because if you do bad, the same thing travels very quickly too, in Australia. That's the time when he told me, always protect your name. Because that's the only thing you take away with you: name. The rest stays behind. Money is nothing, your name is important. In ten seconds you can lose your name, if you do the wrong thing. He always kept on telling us, 'You must look after your name. Do everything right, because you can lose it and you can never replace it again'. And so therefore you go to people that you know, you say I need to borrow ten pounds or two pounds or whatever it is. So you collect enough money and then you pay it back. And there was also a society which later was formed in Australia, which we then helped other people the same way. The family helped other people to get on their feet, which we guarantee them ten pounds or twenty pounds or whatever. That was a lot of money in those days. So it's the equivalent probably to £5,000, $5,000, and we've been doing it all our lives. Later on, when we became employed people, all the Jewish and non-Jewish people used to borrow from us and start businesses. And we never charge interest, because we went through that ourselves. And when you go through that system or through that hardship, you understand that and you try to help other people.
How successful was the butcher's shop? How successful was the butcher's shop?
Oh, it was very ... quite successful. Because immigrants were coming in and they didn't know the value money. They all got jobs straight away. Most of them were Polish. Most of them were Polish Jews. They all had professions, mostly furrowing and that type of thing and a lot of them worked for a while for somebody else and then started their own factories, and became reasonably well off. And so they had money to spend. So they had the money to lend. And that ... so they lived reasonably well within months. When ... later on when the immigration started after the last war, the Second World War, we used to pick up the ... we went to the welfare society and told them any Jewish person who wants a job, send them to us, the job's available. And most of them came ... Probably half of the immigrants who came at that time had a job with us and worked for three or four months and saved up some money. Then they'd say, 'Can you lend another £500?' 'Yes'. And so each one who would ask would get, so they'd have about £1,000 and he would start a fruit shop or deli shop or something like that. Or start a little factory. And they all, to this day, if they meet me they say, 'Your father helped me. You helped me. Remember when you lent me the money?' I don't remember, there's so many. We also used to do the same thing with Greeks and Italians, who were coming in at the time. It might have been more than Jewish people. Labour was very scarce, and we were building up our business at that time, the meat business, which is a story I'll tell you later. And we would send two people, one Italian speaking person and another a Greek speaking person, over to Perth, to board the ship, to come with the immigrants, sign them up to come to work for us. And they came up from the ship directly to ... We'd have a bus ready for them, bring them over to the works, put them to work and they started making money. And some of them became business people. And they also did very well.
You arrived in 1927. Not long after that, the worst of the Depression started to really hit. Do you remember that and the effect it had on life in Carlton?
I learned about that when I was much older. I didn't know. For us there was no Depression. For any immigrant there was no Depression. Because you come with nothing and every time you make a penny you're already better off than you were yesterday. Where people that had money during the Depression lost it, for them it was very hard. And today, if I lost what I've got, it'd be very, very hard for me to get ... to do the same thing. Because you know, you already had something, it's very hard to repeat the performance again, if you don't have any money. But when you start with nothing, it's very easy. You accept it. We didn't know there was a Depression on. My father didn't know there was a Depression on. It was no Depression, because it was a separate business, the Jewish kosher business. The immigrants were coming in and they were the same, as I said before, they immediately got some job. And the Depression was only for people, like today, that don't want to work. Everyone could find a job - to do something if they wanted to. And a lot of them did, a lot of them didn't. But that Depression that they talk about, the 1929 Depression, as I learned later, is not as horrible. We had worse ones in 1960. We had the worst Depression. It wasn't 1929 in Australia. At that time it was a different standard of living. You've got to understand that the standard of living was very low too. People didn't ... you didn't have to have anything, except possibly a roof over your head, somewhere to live. Because you can pick up of the trees, you can pick up any food, very, very cheap. They'd sell their shoes or socks. They'd sell something. Nothing was being produced, so there's a market something. Always a market for something. And that's how they survived. That's how most people survived. I mean nobody really died in 1929 from starvation in Australia, at that time. And they're still not dying today. I'm told that there is a lot of people live below the living standard. It depends what you call a living standard. At this point I must tell you a story you might have to fill in later. I brought in my friend from Russia. He left there when he was twenty-one. I met him again in 1960 and I invited him to Australia. He spoke very good English. He was an English teacher in Russia and he came and he stayed with us. And he came one day, and he said, 'Somebody told me that there's a lot of people in Australia, Melbourne, living below ...
The poverty line. I said, 'Yes there are people. It all depends what you call poverty'. I said, 'You take me, in relation to a Rothschild I'm a very poor man. Go, do me a favour, go and get that man to take you to where there's people living below standard, below the living standard or whatever you call it'. He came back, he didn't want to talk about it because in Russia it was so much worse, that he couldn't even compare with it. To him they were millionaires, the ones that lived under that - what's called the living standard. It all depends where you are, where do you live, where do you measure the living standard. If you go to Africa today, their living standard on three dollars a week is very low, but they still live, they still manage. It all depends on the context of where you are at the time and where you're starting from.
And who you have to look at to envy. And who you have to look at to envy.
That's right, that's right.
Did you father and your uncles work very hard in that shop in Lygon Street?
Yes, yes... When I left my great education period and training period, father said to me ... My father wanted me to be a lawyer. I said, 'I don't want to be a lawyer, I want to be a businessman'. He said, 'If you're a business man, go to work. Go to the butcher's shop'. So right, I'll go to the butcher's shop and we started about six o'clock in the morning. Go to the butcher's shop: work all day. I was delivering parcels or helping to clean up, to sweep the floors and all that at first. And about seven, eight o'clock at night we'd walk home and dream about what we were going to do in the future - father and I. Because we were both the same type, saying, 'What I'm going to do in future ...', Because he already knew that I have some business sense and he used to talk in terms of tens of thousands, and I used to talk in terms of hundreds of thousands. And he said to me, 'Why do you always talk in hundreds of thousands?' Because in those days ten thousand was like a billion today. I said, 'If we achieve ten percent of what we're dreaming about, look how much more money I'll have than you', and he appreciated it. And that's really ... I really mean it. The bigger you think the better chance you have of making it big. Maybe not all the way big, but half way big is big.
Why did you want to be a business man rather than a lawyer?
Because I thought it would be much more fun. When I started off the chickens it was a lot of fun. It was all excitement. Every time you'd buy something, every time you'd sell something, it's exciting. It's alive. It keeps you alive, keeps you dreaming more. Not more for money's sake, but more for success, which is measured by money. You don't measure it by money, you can measure your success as a professional at a certain level, but as a businessman you can only judge by what money you're making in the business you're in. That makes you successful or not successful.
So it's honestly not the money itself.
Not at all. Now, I have plenty of money and I can't spend it before I die. My children will spend it. But I still want to achieve. I want to achieve huge amounts. I want to repeat what I started with, what I did up to the age of eighty, when we were partners with the rest of the family, when we built up the business that I'll show you later in the journal. And I want to repeat the same thing again before I kick the bucket, before I die. And if I'm lucky enough to live another five, six years, maybe ten, I'll make it. It's that will to succeed. Nothing to do with money whatsoever. But without money it's nothing. What have you done in business? If you're an educator, it's how many diplomas you get, or however high you get into the profession itself. You take lawyers, they can only go up to a certain point and become judges. That's their usual aim, most of them. In your profession, you like to make a beautiful film, like Titanic, wouldn't you?
Back there in the butcher's shop, were you regarded by everybody as a hard worker?
Not quite. My uncles thought I was lazy. My uncles thought I was untidy. And all that is true. Because I was dreaming. I was talking about what I'm going to do, which I did. I did very early. And my uncle had a ... I must tell you that story, because I've been telling it a long time. The ... I'm about sixteen, and I'm working in the butcher's shop and I'm not allowed to cut meat until I learn. So uncle gives me an old knife, that thin [GESTURES A FEW CENTIMETRES], and the knives are usually about that wide, [GESTURES FIVE OR MORE CENTIMETRES]and he wants me to cut the steaks, which are cut very ... you've got to learn how to cut it. He ... great decision that he made - a new knife's got to be bought. Naturally as a kid I think I've got the worst knife, I'm going to get the knife. And the knife arrives - beautiful long knife, curled. My uncle takes it and sharpens it. I said, 'Lovely uncle'. He puts it in his pouch and gives me his old knife and that cost him millions. I never forgave him for it. And that's why I became the largest partner in the business. I'm the biggest shareholder because the uncle ... every time my uncle wants to make peace with the family - well I didn't get to that story where we broke up. But we'll pick it up later. But ... and I said to him, 'If we're going to be partners I want a pound more than you'. He says, 'Never'. I said, 'Okay, then we're not partners'. By that time I was partners with my father and my brother. And eventually my father came one day and he said he spoke with the uncles, and they said that they'll agree to have twenty-five percent of the business and pool everything together. They were called Smorgon Brothers and we were called Norman Smorgon & Sons. We put the two companies together without counting anything - put them together and became partners. They kept twenty-five percent, we get seventy-five percent. There's three of us and there's two of them. So I became much ... well five times the value-wise partner in that business and that's when I didn't ask for that extra pound anymore, and then after that we had no problems. I had no problems with my uncle. He never had problems. I loved him. He was a very nice man.
The ... Moisey, which is .. He's got two sons: one is Sam, one is George. And I really liked him. Really, I was very fond of him.
I wanted that knife. And he didn't understand people. He didn't understand young people. It wasn't the two shillings, it wasn't because he ... but he didn't have enough sense to understand that there was a kid, an ambitious kid there that wants a knife. I kept on saying, 'How do you expect me to work with a knife like this?' and you know, not once, many times. And so I automatically expected to get that knife and that was a great disappointment to me that I didn't get it. And I'll say here too, I was very stubborn when I want to win.
Could I ask you something, you work with the younger generation now ... Do you find it easier ... You do ...
I give them ten knives. The answer's yes. In fact I'm the one that's been pushing all those people you saw in the what's it's name, I've been pushing them into bigger and bigger jobs and bigger and bigger money. Because I understood it, because of what happened to me. They wanted something equivalent to a knife, they got it. [INTERRUPTION]
Did you learn all the butchery that you knew at that time from your father and uncles?
Yes, but there wasn't very much to learn. At the time in the butcher's shop itself, it was ... you just simply cut off slices of meat. But then to be a butcher, to be really in the meat game, you have to know how to slaughter the cattle, you have to know all those parts: how to buy cattle, you have to judge the weight of the cattle, all that you've got to learn yourself by going to the market. And it happened that I ... I have to tell another story, because otherwise you won't understand it. One of the things that I did very early, with my father, when they bought two non-Jewish shops, one in Bridge Road, 14 Bridge Road, Richmond. The other one was lower down in, also in Bridge Road. And the first shop did very well, very profitable. The second shop was put over my father by the fellow that sold it to him. He put in false sales, which is usual thing to do - build up the sales which weren't there. His friends gave money. Father was watching the people coming in, a lot of people coming in, and he fell for that, and once he paid him, suddenly the people are not there any more. He wanted to get another manager. The manager was hopeless, so he said that I should work in the butcher's shop. So I worked in the butcher's shop. Like I said I'm not a manager, I don't know enough about it. So ... but there was a manager in a butcher up the street whose shop was always full. His name is Harry Eames and he worked for a shop owner called Bill Zoppo. And my father said to me, 'Go and see him, and see if he can ... we'll make him a partner. We'll go halves to give him a job'. So I went to see him and then father went to see him, and he decided to join me, and it became Harry Eames & Company. And he's probably the hardest worker that I ever met in my life. First of all, he started about five o'clock in the morning every day, 'til about seven at night. Saturdays he started at two o'clock in the morning and worked 'til about two. And being ambitious I had to keep up and there's no way I could keep up with him. He taught me how to cut the meat. And then, I'll show you the book later. There's a story. My daughter interviewed him and he gave ... wrote out a story about how we offered him - father and I offered him a job. And so we were partners and I had to ... and that's probably the hardest, physically hardest time of my life at the time. And I would have been about twenty, twenty-one.
No, no. They were very Australian. And when you read the story in his own words, you can see how Australian he is. He's fair dinkum.
And how long did that partnership last?
That lasted about, roughly, about a year and a half. And then I had ... that's where the story starts to answer your question. I went to Daylesford with some friends in a truck, and on the way back we had an accident and I had a shoulder broken, a broken bone in the shoulder. Or a strain or whatever it was. But I had to have my arm in a sling. My sister nearly ... in fact she died from that eventually. You know, the gristle that you have back here, she just ... she ... for months she had to lie between two sandbags on the floor, 'til it heals. And there's about eight of us in the truck ... we were going ... that got hurt. So I couldn't work in the butcher's shop. Can't work with one arm. My father said to me, 'Will you come with me to the market, and learn about buying cattle?' So I joined my father buying cattle and buying sheep, buying lambs. And it's ... I followed him, and I used to write down what he bought. And by that time we were already getting bigger, which is another story. And at the same time, after ... so the market lasted from about eight o'clock in the morning 'til about two o'clock in the afternoon. At two o'clock my father had contract slaughter men doing the slaughtering for us, for the cattle that he was buying and sheep that he was buying. So he said, after he'd finished at the market, 'Go and learn how to be a slaughter man'. So I'd go up the slaughterhouse in Flemington Road, and work there alongside the other men to learn how to take the hides off and all that. And it's not very hard. It's hard work, but you don't have to have brains for that. You have to have strength. And so I worked for about three or four months there and learned about slaughtering. Then that gave me the opportunity to see that there's a wholesale market. And I saw that we were doing kosher meat, and the kosher meat, it's only the forequarter you're allowed to have. The hindquarters are not allowed because there's too much blood in it, and most of the Jewish laws are health laws. And when it's killed kosher it means that it's much, much stricter than inspection done ordinarily by normal standards. And particularly the lungs. They blow up the lungs to see if there was any air when the animal was killed. They blow it up and it's rejected, because it could be tuberculosis. So if the part was rejected it had to be sold and the hindquarters had to be sold. The hindquarters can be eaten but they've got to take all the veins out and there's a lot of veins in the hindquarter. And so the only place it's used is in Israel, because they have no other chance to get rid of it and they didn't have things like steaks or anything like that, it was just meat, which is used in stews. And so I had to ... I thought that was being sent to agents, which were in North Melbourne. There was a meat hall where people like us used to send their meat, and it was sold on commission. Agents were selling it. And that was quite profitable. And then I said to my father, 'Why don't you let me buy a truck?' I was still working for all the brothers, out at the old company. 'And I will try and sell them wholesale, and make more money'. So I talked to uncles. Yes, everybody agreed. In those days, a truck cost about a hundred dollars ... a hundred pounds, and with twenty pounds deposit you had a truck. So I bought the first truck and I went raound looking for customers. I found the customers within weeks and started selling wholesale meat. Now that built up. Within a year it built it up to three trucks. And my head got a bit swollen, because I was making more than the five partners put together. And I said ... that's when I said I wanted a percentage of the business.
And my father said, 'You're my son, I can't give it to you', although he was the leader. 'But you had better ask uncle'. I went to uncle, he said, 'I'll give you one percent the same as your brother gets'. My brother was a hard worker, I wasn't. I said, 'I don't one percent, I want ten percent'. He said, 'You're not going to get it'. So that's when I said to my father, 'I'm leaving. I'm going to ...' By that time I had about forty pounds saved up and I said I wanted my forty pound back. I can buy a deposit on a truck, and I've got enough money to trade and I already know the business. I know how much profit I can make. And father understood that and father said, 'Well if you are really going to be successful, the family's going to break up and then there'll be no Smorgon family anymore'. So he says, 'I'm coming with you'. And we ... Eric, my brother said, 'I want to be with you too', because father tried to fix up a partnership with one of the uncles. In the end my brother and sister - they wanted to be with us. So we then stood it up, each one. My father put up one fifth part. We still stayed friends. We used to buy cattle together. We used to buy sheep together. That's what I was telling the story before about my uncle and my dispute with him, over that knife.
When you discovered that wholesaling was much more profitable than the business that your uncles and father were in, and you decided to set up on your own, and your immediate family came with you, was that really the start of the break-up?
The first break-up. In the Smorgon family, it happened many times. It's not ... nothing new about that. The brothers ... before that the uncles, their uncles in Russia were all together and then separated. Families get too big and then become ... they got children who bring their children in and not everybody has the same temperament and so there's quarrels and it breaks up. In our case it was purely the financial or commercial situation, not any other situation. At that time we were reasonably well off. We weren't poor, whatever you think poor is. It's about the poverty line, well above the poverty line but by that time we'd already developed the business. Because the next business we went into was export.
Very simply. Persistence. My father and I used to go round the market and see there was half a dozen exporters and they were buying hundreds of thousands of sheep and cattle and they were exporting. Where are they getting money? We know they're not very rich. Where are they getting the money from? And we kept on saying to each other, 'Where are they getting the money from?' Because you can't do anything without money. So one day ... and I kept on. As you notice, I'm a good talker and one day I talked to somebody and I said ... was telling them that we'd like to get into export, but we don't have enough money. So they said, 'There's a man here who's an agent for an English company. Talk to him and he'll arrange it for you'. So he introduced me to him. His name was Spittle and so I started talking to him, and I said ... he asked me what numbers were we doing. I said, 'We're doing six thousand sheep a week', at the time. He said, 'Well sixty percent of that can be exported at a much higher price than you get locally. And forty percent can be local. But the more sheep you kill, the more sixty percents you get'. I said, 'We don't have any money'. He said, 'Don't worry, I'll fix it up'. I said, 'How are you going to fix it up? He said, 'Well, I will lend you my brand name. Use my brand name. You can use my license to export. I want a percentage of, so much of whatever it was, three percent or five percent of the sale'. And I said, 'What about money?' He says, 'Well what you will do is when you slaughter your cattle, your sheep, you put them in a stockinette which I'll supply you with, with my brand on them, and you'll take them to a freezer. The freezer will give you a note, a docket that will say that you brought in so many sheep at such and such weight, and such and such quality, and you'll take that to the bank. I'll sell them before you go to the bank, the same day as you buy them, or even before. And you then ... the bank will give you ninety percent against that invoice'. Crazy. 'How can that be?' He says, 'Well, that's how it works'. So I came home, I told my father. I rushed home. I told my father. Father wouldn't believe me. I told my uncles. They wouldn't believe me. I said, 'I don't believe it myself, but I made an appointment for tomorrow to see this man [coughs] who told me all this'. So we go ... so they didn't want to go. So I said, 'What are you going to lose by going? Let's go and listen to him. Maybe it is the truth. Maybe it does work like that'. So we went to see him, and he told exactly the same story, and then you realise it's very simple, because the bank is not taking a risk, because there's a letter of credit already in place for whatever he sold for us, and he gets his commission from that. And so the whole thing opened up like a picture, like a painting. So it became clear how it works. Exactly a day after we became exporters.
That's quick. We've always been like that. Always quick organisation. Because there's plenty of slaughter men around and plenty of room at the city abattoirs. And we immediately put on more people and organised immediately. But then we had to get rid of the meat. You've got to sell the the rejects. So that's when the canning came in. So we started a meat cannery. And we became bigger and bigger and bigger and bigger, because we could use up the cannery. At that time it's 1930 odd and Britain is looking for meat, for anything, any food, because war is coming. So whatever they wanted to we gave them. We started producing more and more and more, and the more we exported the more canned meat we made. We made all sorts. We used to make luncheon meat. You know, like Spam? Only it was mixed with flour instead of ... Spam is usually 100 percent meat and pork. But this is mutton or beef or whatever there is.
There used to be this awful thing called ...
Remember Camp Pie? We made Camp Pie.
It's beautiful. [NOISE] The first ... My father went to Europe to pick up a master canner and he brought this Jewish man, who knew the industry, knew the what's it's name, and wanted to get out of Germany, because Hitler was already started playing up. And he made the first lot of Camp Pie for us. And he put nutmeg into it, you know, the European flavours. Couldn't sell it. We nearly went broke. Because it's not a taste Australians [like]. All they want is salt and pepper. So then we realised the we made a mistake, and we started producing it the Australian way. In fact we pinched one of the men from Vestey's or Angliss's. Angliss's were the big butchers. They started exactly the same way as we did, only a generation before.
And so we took the canner, the master canner, and paid him double the price that he was getting over there, and we started. We then showed him how to do it because we started practising before that. He started learning from us, because we started using meat that he never dreamt of using. And it's still the same Camp Pie. And you know, we used to take cuttings from the butcher's shops and bring them in, to mince them up, and put together with the other meat. Very hygienic. Nobody gave a damn about it. Anyway it all gets cooked at 400 degrees to get it sterilised, so whatever you put in you can eat, it doesn't matter what it is. And we used to then, just before the war started, England wanted anything. And after the war particularly, they wanted even more. They wanted eggs. They couldn't import eggs. So we boiled the eggs, put them in a big can and exported eggs. They wanted bananas. We put bananas in a can and we export that. They wanted sausage meat. And they're not allowed to import meat. But they're allowed to import sausage meat. And one of the brokers ... one of the people that we were dealing with in England, said, 'Put one percent flour and call it sausage meat'. Because it's sausage meat because it's got flour in it. So we minced up the meat, mixed up with one percent of flour and shipped in thousands of tons at a high profit. And then he was very happy because he had meat. He could make sausages or whatever he made out of it. And we were very happy. And there's many thing like that. We were always innovating. We were always picking up ideas of how to do it, and which way to do it.
Now you did your slaughtering at the city abattoirs, you said. Did you decide that you'd like to have your own meat works?
Yes, we did. And we started building one - not the meat works, but a cannery, just opposite the Royal Melbourne Hospital. And the unions objected. And then the Lord Mayor got mixed in it, and the Premier got mixed in. And we said to them, 'Well you don't like us building here, give us some other place'. So we made a deal with them, with the Lord Mayor of Melbourne and the Premier at the time, and they gave us five acres of land at Flemington, alongside the abattoirs. There was empty land there. And so we stopped straight away - stopped building. Because we accepted. That's one mistake we made: we trusted. Don't trust politicians. That's the first thing you learn. Once we stopped, yes. We were promised it but what happened in five year's time - might have been ten year's time - all sorts of excuses. Then we decided, to hell with them, we'll buy our own land. And we went out to Somerville Road and we bought about thirty acres of land, which is outside of Melbourne at that time. It was like another world. And started building our own plant. And that's when I got involved with the politicians in a different way - using them instead of them using us. And I ... we built an abattoirs, built a meat works, but everything was there except the ramp for the cattle and the sheep to go up to the slaughterhouse. Father went to America and bought the machinery for the rails and all the different things that we needed for beef slaughtering. And we waited for the opportunity for the government ... we knew the government thought there was not enough being slaughtered. People wanted more food. And meanwhile the city abattoirs decided that they're going to build another place to increase their slaughter, by I think 500 head a day, and for something like thirty, forty million dollars, pounds at the time. And when we read that I decided that I'd better use ... I'm going to use politicians. And the politicians started off in the first place, you know ... I'm sure you know about Calwell, Arthur Calwell. Arthur Calwell was just taking over the seat of Melbourne, Melbourne seat of Dr. ... can't think of his name. He's a very famous Labor man. And at that time we already had the small cannery, and we were in North Melbourne, and I get a phone call and a man says to me, 'My name is Arthur Calwell. I'm a politician and I'm going to stand for Melbourne and I need help. I need a car and a man to help me'. So I turned round to my father. I said, 'There's a man on the phone that's a politician, and he wants a car and a man to help him in election time, to go around with him'. He says, 'You have a car, you're the man, go'. So I went. And I spent two weeks with Arthur Calwell, standing alongside. People were asking me questions that I couldn't answer. I stood alongside him and I drove him everywhere he wanted to go, with pamphlets. I was his assistant. And he appreciated that. And he says, 'One day anything you want, just call on me'. And when this opportunity came that I talked about, the abattoirs, I went to see him and I said to him, 'We could do the same thing just by putting the ramp up and it would cost 750 pounds instead of millions. And we could produce twice the amount but we've got to get a license'. And a license was not given to us politically because of a fellow named Dedman. He was Minister of Post-War Construction and he was in Geelong and Footscray, covering that Federal area.
What year are we talking about?
We're talking about 1942.
Middle of the war. And as I say he politically refused it, otherwise it wouldn't make any difference to him. The ... So then we started again. We learned that we got to use politicians. That's when I went to see Arthur Calwell. And I said, 'You've got to help me'. So I told him the story. He says 'Come over the Canberra, I'll introduce you to the right people'. I went over to Canberra, and I saw him. He said to his secretary, 'Look after Victor. Anything he wants provide for him. Make any appointments he wants'. And particularly the Treasurer, which was ... Chifley was the Treasurer. Curtin was the Prime Minister. And he made an appointment for me with ...
Ben Chifley. And I walked into his office and introduced myself. And my slight, slight ... I still have some accent, I still have a little bit, but not as much, and I told him the story more or less what I'm telling you: how we started and how we arrived and how the family worked together, and how we're building an abattoirs. He was fascinated, the same as you are. More so. And he just couldn't believe that that could happen. Immigrants like that, and already building an abattoir. And so meanwhile Curtin walks in. So he introduces me to Curtin. He says, 'This is Mr Victor Smorgon. He's from a big family. They're in the meat business and he wants to ...'. He told him the whole story as I told. He got very interested and wanted me to tell the story again about the immigrants ... success of an immigrant. At that time it was great success and he was fascinated. So when Chifley said to me, 'Well leave it to me, I'll try my best. I can't do it on my own but I'll do ... I'll try to do it for you'. Father also met another fellow from New South Wales, another Minister, who was Minister of Agriculture. He was ... Father approached him as well. So there was ... now we had three friends there. Now I stay in Canberra overnight because the meeting is the next morning, and I start ... I was there at nine o'clock, and I wait in the passages around the Prime Minister's office and Treasurer's office. They're more or less together in the old building. And one o'clock, two o'clock, two-thirty. Maybe they walked around the other way, maybe I missed them, I don't know, because I didn't expect it to be so long. Eventually at about quarter to three they're all walking out and one of the Ministers came up, the one fellow that knew Father. He said, 'It's okay. It's fixed. Go and see so and so'. And I went down to see this man, who was one of the bureaucrats. He says, 'Yes, it's been passed in Parliament and you can have your license. You can start tomorrow'. And it happened to be on the Jewish holiday there - Yom Kippur, you know the Holy Day, the Fast day. And so I caught the plane and went back to Melbourne and went straight to the synagogue where all the family was, and broke the news to them that we got it. God helped somewhere, I think. I think Chifley helped. He was the God. And so you learn these things as you go along. You ... but you have to have that personality. You have to be able to do that. You can't always do that. You can't ... You've got to be a certain type, [have] certain ambitions.
You were only about thirty when this all happened.
Probably less than thirty ... much less than thirty.
And so for a young man to be in this situation where you were able to do this, did this set a pattern for you? Did you learn from that ...
I learned a lot of times and I'm still learning. It's continuous, it's non-stop. You learn every day something. And as I told you, I'm doing [?] and I'm learning. It's a new business, but it's completely new - never been done before, ever. Completely new, completely. I went away from the principles of whatever has been done before in that particular industry.
Businessmen these days often employ lobbyists or get other people.
Always get other people, I never claim that I did it on my own. It's always together. It's always ... the principle of the Smorgons family was always to work together and rub off one another. Each one improves. When I talk about what happened, it just didn't happen that simply as I'm talking. There's many discussions and many of the ideas, and you talk to people, talk to uncles, talk to ... I always look for a pessimist. I'm an optimist. Optimists on their own can't do anything. They destroy, they don't make because they go without any thinking. They just want it, period. You've got to learn to balance it against somebody that thinks maybe you shouldn't be doing it. So always I had this uncle that I keep on talking about. He was a complete pessimist. And even when we weren't partners I used to go to him and say to him, 'I have this idea, what do you think?' And immediately he would say, 'It's no good'. Doesn't matter what I said, it was no good. 'Well, tell me how we should do it?' He'd say, 'Well go this way'. I'd say, 'I don't think that'll work', and I'd come up with an idea, then he'd come with an idea. And then the idea is born. And then it comes to a conclusion where we meet: yes, and we agree. And sometimes there were five or six people involved in the same thing, you know, depending what you happened to be in. And it works. No one person in the world of business can do everything. It's always somebody else, other people helping. I have certain qualities in business, as a businessman, but I don't have them all. And I need other people. For instance, I can't count. Nobody believes me. I know that two and two is either six or ...
I must tell you the story about this. There's a ... I met a Lebanese that's supposed to have a very sharp brain and be successful, particularly in Sydney. And it was in one of the papers in Sydney about this Lebanese family, a rich family. There's several of them there. And the Lebanese gentleman was being interviewed, like you're interviewing me, and he was asked, 'Well what is it that makes Lebanese people so different?' He says, 'I'll bring you my ten year old son, and ask him'. He brings in the ten year old son and he says to him, 'What's two and two?' He says, 'Are you buying or selling?' Simple. And that's really what life's about. That's what business is about. You know, when you buy, you've got to buy cheaply. You sell, you've got to sell for more. And then you make plenty of mistakes in between. You learn from mistakes. But it's always, whatever Smorgon accomplished in Australia is not a one man job. It was a collective job. It's always together with everybody. Everybody contributes something, everybody has some ... when we come into this world, we will bring in certain genes with us, and they're not all the same. If they're the same then there's quarrels, because there's competition. But if there's ... We have engineers. My brother was a brilliant engineer. My two cousins and their sons are brilliant engineers. My other cousin was a brilliant analyst, Sam Smorgon. I'd come to him and I'd say, 'This is what I think we should be doing'. He'd say, 'This is okay, this is okay'. He puts everything in squares, where I talk all over the place because my mind's rushing away. And his is a controlled mind that puts everything in a box. Say, 'Okay, let's take this box, how do we overcome that?' So by discussing it and bringing somebody else in, bring some experts in that know the job, and we'd work it out - yes we can do that. Or organise the whole thing another way. But the idea's still there. So sometimes one idea leads on to many other ideas and you forget about the first idea altogether and you get onto something else. But it starts off from that one idea.
From when you got that meat works put in and that big industry there, really, established, things started to really take off, didn't they and you started diversifying. How did that come about?
Well, in the first place we became the largest meat exporters, and meat can makers in Australia. We used to produce ... At the end of the period of the meat industry, we used to produce about a million cans of canned meat all going to England. England started talking about [the] Common Market. And [the] Common Market meant that Australia was going to be out of it. Australia would have to find another market. So we started talking amongst ourselves, and we said we have to find some other business. We have to ... not export, because all our business was export at that time. Because we used ... we forgot about wholesaling, we forgot about ... we had no retailing, no domestic meat business whatsoever. Everything was export. And we then realised that we had to do something else in Australia if we're going to stay in Australia. There was nowhere else to go, and nobody wanted to leave Australia. And we started looking at different businesses, particularly the big ones. Because we had the experience in the meat game, there was three big companies. There was Angliss, which was actually English, brought out by an English company called Vestey's, which is probably the richest family in England. And then there's Borthwick's, which also are another very wealthy family in England. And then there was Wilson's, or Swift's rather, who was very, very big in America. And they ... The bigger they are, the harder they fall. And we could run between their feet and pick up whatever they didn't want. They had clerks writing down all the purchases. They had buyers and clerks with the purchases. So I get friendly with the buyers, and say to the buyer ... and they kept a check what everybody bought as well. If I wanted to know what was bought, I used to go up to the buyer and say to him, 'How many sheep did they buy?' And they'd tell me, because they'd keep a record of that. Because the companies want to know what's happening everywhere else. Meanwhile, at ten o'clock every Tuesday, which is a sheep and lamb day, all the three chiefs from those three big companies would get together. I'd talk to them from time to time. I knew them, they knew me. And they would huddle and decide they're only going to buy first quality lambs particularly. Second [or] third quality was neglected. And we'd hop in. I was the buyer, and there were other buyers. So we concentrated on second [or] third quality. So [we would] buy them at half the price of the normal price. A couple of weeks later they'd say, 'Don't buy any first quality, we've got enough. Only buy second [or] third quality'. So we'd buy the first quality much cheaper than normally. But the same thing - when we became big the same thing happened to us. All the smaller people were running around our feet and doing the same things we used to do to the others. So when you get too big, you get in exactly the same situation.
What made you decide to move out of meat? Or to stay in meat, but to move beyond meat and take on other things?
Well, because of the English. England started talking about the Common Market, and [the] Common Market meant that Australia will be out of it so we have to find another industry. And that's when we got into paper. We looked for a monopoly, because we had the experience of working against big people. We knew that we could do very well in other industries with big people, because as a family we could do many things and make quick decisions and do whatever's necessary to do - improvise. And I went out with two APM, Australian Paper Mill people. They were ex-people, they were retired people, to buy second hand junk machinery, to start a paper mill.
So the Australian Paper Mills were a monopoly?
They were a monopoly. They were the only ones making paper. So we got that junk to Australia. My brother put it all together, together with some other engineers, and we started producing paper. We thought wrapping paper is the right job. It wasn't. But we made the wrapping paper, and APM in their wisdom had decided to drop the price by about thirty percent to punish us, to get us out of the market. But we were already making a profit from day one because we were using waste paper in the first place. We were using waste paper and making the same product as they were. Maybe not as good, but we were cheaper, about ten dollars cheaper, which was a lot of money at the time. And we were still very profitable. But the market was very small. There was only about 8,000 tons of wrapping paper was produced. So they could easily afford to drop the price. But two-thirds of their production is in box making. So we then said, 'Okay, we're caught'. One of my cousins, Charlie Holckner, went over to America and bought the other part of the paper making. One is ?? which is wire, long wire, and then it goes through a series of drums to dry. It stays thin, whatever thickness you make. And the other is board making for corrugated boxes and boxes generally you have to have solid board. So you have eight drums which all go on the felt and create the paper about that thick [GESTURES ABOUT ONE CENTIMETRE] which goes through the same system, same dryers. So we built a mezzanine floor and put that ... what we call the wet end on top of the other part and either produced one or the other one, whatever we needed. And then we started making ... To find a market we started making boxes. We brought in our cousins who were making shoes. Said to them, 'Go into this business and we'll finance it', which we did, and they did. And we started to build, and we built two plants: one in Melbourne and one in Sydney. And so we had ... also had another friend who was making boxes for us, because we were large users of boxes ourselves, so they were interested in supplying us with the boxes. So we said, 'Set yourself up and ...'. In fact we were going to do it ourselves. They said, 'Why should you make boxes? We'll make boxes for you'. That's the mistake we made, but that's another story. And so we had three customers really and then we started growing bigger and bigger and bigger. And when we filled up the machines, we then decided to buy fibre containers, which were on the market. Fibre containers had seven plants. Fibre containers belonged to the Coca-Cola people, what's their name? The company.
Amatil. And we paid a high price for it, and APM tried to stop us from buying. But that time we had the trade practice law in Australia, and so we appealed against them trying to shut us off and the case lasted about three or four months. And we won. And that was a big win. And ... but meanwhile before that, APM dropped the price on the ... oh, there's a story before that. When we couldn't sell the paper, we filled up our own plants, for our customers. APM had an agreement with all the plants, and there were about fifteen or twenty plants, that if they buy 100 percent from them, they get seven percent discount. If they buy one ton from somebody else, they lose the seven percent for the rest of it. So we couldn't sell. So I called ... I called all of those people into the head office for lunch, and I said to them that we have ... 'We're big in meat and we're making about a million pounds a year', at the time. I got accounts to prepare a official statement that that's what we're making before tax. And we said, 'We have that million to spend. It'll cost you fifteen or twenty million or thirty million. Buy a third of your paper from us and we wont' be fighting you, so go and fix it up with APM'. So it took about another three months. Most of them agreed. There was one of them that didn't and took a bit longer. And APM agreed [for them] to buy it - to allow them to buy twenty-five percent from other Australian paper mills. But then they claimed that they also are the 'other' Australian paper mills. So they were selling seventy-five percent at a higher price than they were selling twenty-five percent. That's where they were unfair. That's where the unfair trading came in and they lost the case. And from then on we just grew and grew. And then Pratt came in. And he mucked up the whole lot. That's the paper story.
And paper wasn't the end of it, was it?
You'd developed a taste for recycling.
Yes. We always recycled something. We recycled the meat. We used to take meat off the ... my brother learnt this system of when you have a lot of boning to do, particularly with people that are not experienced, you know, arrive off the boat from Italy or from wherever. They come in, immigrants, mostly women, and we'd give them a knife and a long belt, and there's probably a hundred women, fifty on each side of the belt, It's a very long building. And take the meat off the fat. And that meat went for canning. But there's still a lot of meat left on the fat. And my brother invented a system. He took that fat, which had meat on it, and put it through a double coil system: stainless steel pipes, double pipes, with steam outside, that melted the fat, and then [it was] put through [a] centrifuge, which separated all the solids, which is meat, and the fat went to the tank where it settled down and water was underneath, [to] runoff the meat and [it was] sold separately. And that meat we used for canning. And we were allowed. It was allowed to be used. Twenty-five percent of that. Maybe we cheated about ... about thirty percent.
Back in the Ukraine you'd learnt waste not, want not.
That's right. It's everywhere, not only in Ukraine, wherever you are. But you got to be innovative. You've got to do something else that nobody else does. What surprised me, it took about twenty years for other companies to wake up to what we're doing, and we didn't keep it a secret. We used to talk about it. 'Look at what we're doing'. We never kept secrets, we'd talk about it. People don't believe you. People naturally don't believe you, particularly business people. And I have a habit. I don't have a good memory, so I don't always tell the same story, [but] I always tell the same truth. And because nobody believes the truth anyway, so whatever story you tell people they don't believe you. But every time those people ask me the same story, as you notice now, I repeat the same thing because I don't remember what I've said ten minutes ago.
You said that you were very interested in areas where there was a monopoly and that that was a useful place to be in business. The obvious huge monopoly in Australia was BHP and steel. Did you find that an attractive target?
I did eventually. Not at first. We didn't think we could have enough resources to go as big as BHP. We debated whether we should go for paper, which is a monopoly because we came from out[side] [the meat] monopoly because there was three of them that had a monopoly. Really they dominated the whole market, probably get[ting] ninety percent of Australia's exports in meat trading, and we were very small. So we learnt the game of how to treat the position of the big boys and from that led us to think that we're going to go something. Let's go to something that's very big, because it's a lot easier to compete against the big boys than it is against the multitude of small boys, because there you've got to be much smarter than they usually are. So we then discussed whether it should be APM, or glass, or steel, or ICI [which] had chemicals, or they had all the box making. All these things were actually monopolies. So we decided on paper, because it was a lot easier to get the materials and we didn't know anything about any of those [other] industries at all. But then you ... my usual joke is if you can make sausages, you can make anything. And that ... [I have] several cartoons about it, which I'll show you later. And where I am ... When we went into the steel business somebody drew a cartoon of me: a sausage machine called Smorgon, and steel sausages coming out. But getting to the question you're asking is, we picked on steel eventually - the last of the monopolies that we attacked. And it started off [when] I was in New York, as I told you before, where I spent three months on, three months off, to give a chance to the younger people to carry on the business without me, although I was on the phone most of the time.
And one of the young people, his name is David Holckner. He's the son of my cousin and he's a brilliant engineer. And he took a year off to go round Europe in a Ferrari. I was very jealous. I wanted to go. I would have liked to go for a year. He took eighteen months. His contemporaries said, 'David, either you're with us or you're not with us. We're not going to work here and you go and play in Europe. Make up your mind whether you're staying in business or you're not staying in business'. So he decided to come back to the business. And by the way of [coming] back home he called to New York where I was at this time, and asked me what is he going to do when he gets back home. I said that, 'Of course your job is taken up by one of your other cousins. I can't take him off and put you back. It's got to be something else'.
I said to him, 'You know I always wanted to build a steel mill. Would you be interested in that?' So he says, 'Yes'. But he says, 'I only saw one steel mill in Sweden, a stainless steel steel mill'. I said, 'Oh you're one steel mill ahead of me. I've never seen a steel mill'. So he said, 'How do we go about it?' I said, 'Very simply, pick up a telephone and find out the publisher of any industry, particularly the steel industry. In the back pages of those journals are usually the second-hand dealers. Second-hand dealers know everything about everybody - about the whole industry'. And so he did that. That was immediate actually and I was listening in on the other phone and within an hour he found somebody. He got on to some publisher who publishes and [he said], 'Ring so and so and so and so', you know that's how it goes. And he found this man, who had ten mini steel mills for sale. So when he hung up, I said to him, 'Ring him back and ask him if he can make arrangements for us to go and have a look at the steel mill somewhere'. So within about an hour, an hour and a half, I got phoned back and the man [had] said, 'Yes', he just ... 'There is a man in Texas, about forty miles outside San Antonio, and he's quite happy for you to come and have a look'. So I said, 'Can we go tomorrow?' So he rang back again and said, 'Yes, he's happy to see you tomorrow'. It's winter, it's January, and we take a plane. There are a number of hold ups: snow here and hold up there. We arrive at three o'clock in the morning at the plant. And when I walk in ... we walk in and it's a sausage factory. It's exactly the same process. They take scrap and they put it into a big kettle and they melt it. They put some minerals, add, test what minerals they're short of, [then add a] particular pellet that they produce. It's like adding salt or pepper or whatever to a sausage. And then they put it in moulds - actually square moulds - that's the old fashioned way of doing it. Since then ours became a much modern system. And the next morning it shrinks slightly, so you are able to pull it out and stack it up, and then they put it through a rolling ... a separate rolling mill, which brings it down four inch or six inch billet into a wire if you like, a thin wire if you like. It's a gradual reduction in size.
So at nine o'clock the owner arrived, and he started ... we told him what we were about, and he was very happy to talk. David wanted to know all the costings and all the what it's name to compare with Australian costings. And David would have been about twenty-four, twenty-five at the time. And he was ... then this man had a nephew who couldn't visit other steel mills in America, being an American. So I suggested that David stay longer in America, go and stay two or three weeks longer and go and see a number of steel mills, so he'll get a better idea of what's happening. And so this man said, 'Do you mind taking my nephew with you, because with an Australian he can get in, but without an Australian he can't'. So both of them went off and they went through a number of steel mills. We came back to Australia and David did all our figure punches or whatever your expression is. Did the old economics on it and found that there was a profit in it, and the family then decided to go ahead. Then my brother, Eric, and he and I went back to America and bought all the equipment necessary for the ... some was new, some was second hand - for melting the steel to make it into billets. Meanwhile we bought that much in materials along the way, [and] the market had collapsed in Australia. The export of billet - we were only going to produce the billet - to South East Asia has collapsed, and BHP stopped producing it.
That would have been 1983-84, so that's twelve, fourteen years ago. And the ... so the family rings me to New York. I'm back in New York. They decided to call it off because of the market collapse. I said, 'I'm not going to argue with you over the phone. I'll make decisions when I come home. We'll discuss it and see what can be done'. When I came home I asked one of our important ... it wasn't a family person, but one of our chiefs, chief executive, a financial person, to find out what does BHP charge for finished product of angle iron, flats, wire, all these merchant type of things, which they produce in Australia and sell, and find out what prices they're selling at. When we saw what price they sold it at, and we knew the cost of the billet would be, the margin was huge. So we said, 'There's no risk. If we may make mistakes there's lots of room there to make mistakes'. And we then decided to put in a rolling mill. But then the question became about ... this boy's father is Charlie Holckner, who is a brilliant engineer, as good as his son, or the son is as good as his father. But they don't get on well together. So we had to make a decision that the son looks after the melt shop and produces the billet and the father takes over the billets and rolls it into whatever product we need. And that's what happened. And so then Charlie and I went to America and I forget, Indiana I think it was. Outside Chicago, the state next to Chicago. Anyway it's very close to Chicago. And we were offered a mill. We were offered numbers of mills, but one particular mill, had about eleven acres of machinery, about four machines, old-fashioned machines, with all the equipment on it. And we bought it for a million dollars after a few arguments, or a few discussions. And in that particular thing there was about two million dollars worth of new rollers, because rolling steel [takes] two rollers, depending what size you make your product, and both sides you make half of the product then when it goes through the two joined together, and the form is formed that way. So we still to this day, we're still using some of those rollers. There's still some of them left. So it was a real bargain from that point of view because for once those people couldn't sell that machinery. And Charlie stayed behind, and he took out the parts that he wanted for the rolling mill. Then I suggested that he stays there and has a look at the other rolling machines. He's very computer minded. He's modern in his outlook in machinery and very clever at it. Loves the toys, bells and knots and things. And he then ... he stayed there, stayed for about six months. He picked out really very little of that particular [plant], except for the rollers and the stands - the roller stands. We've still got them. Same thing for years, just as new, because there are number of plants which are much much modern, very very modern. And he picked up the best parts from every plant, and we made a completely new ... same process, same idea, but he took the best parts of every ... everybody has something new. Every plant has something that they had invented themselves. They took all these things and put them together and we build the most modern mill in the world twelve years ago. And he was responsible for that.
And from then on our production costs was considerably less than BHP's, and we went into the market. By that time BHP already knew from our experience with APM, or Amcor as it's called now, that we're honest, that we are aggressive and that we will get there, because we'd done it before. But at same the time, they compliment us with things: honesty, you could trust them, and all that sort of thing. So we didn't fight very much with BHP. They let us in. They let us in, mainly mind you, because they wanted to, but their customers wanted to. The first person I went to see was Sir Eric Neal. He was ... at that time he was Eric Neal. He was the chief executive of Boral. And we started building the plant, and it was half built and we invited him for lunch, because nobody believed butchers would know about steel. Everybody else tried it, and they'd only fail. Just words, you know they're just talking about it. Nobody believed that we were going to do that. So I said to him ... that's the reason we invited him for lunch at the plant, at the office, and at the same time showed him what we've already done. And I picked him up and took him up to the site where the steel mill was being built. Half of it was built and he sees already machinery being installed. He believes that it's going to happen. He didn't have any doubts after that. So on the way back to the office for lunch I said to him, 'I'd like to ask maybe a rude question, don't answer it if you can't. What should we expect from the market as newcomers into the industry?' He immediately said, 'As far as I'm concerned you're going to get a third of my business. But you're going to get more', because I won't tell you the reasons now, it's rude. But he said ... so we got fifty percent of the business from ... his business, immediately.
Was it rude about BHP, was it?
I won't say that. He became a director of BHP later on. But he soon became a very good friend. And everywhere we went we had the same response. They wanted a second supplier. At that time BHP was very arrogant, being a monopoly. I wouldn't mind being in their place mind you, but they were there. And they demanded a payment before they delivered any product. You had to order six weeks ahead, amy product you wanted, which usually was delivered about four months later and not six weeks later. They didn't give any service whatsoever. You had to go up and pick up the steel at the railway in every city. They didn't deliver. And cash up front. So we said to our customers, 'We will deliver wherever you want it, in any city you want it, at a time that you want it. And we will give you seven days credit'. And of course, that helped a lot. And we started getting orders immediately. Just to this day we're getting orders on the same basis. Most of Melbourne under the river road, the ring road, under the tunnel that they're building, it's mostly all our steel. And I joke about it, 'Be careful how you drive over it, it mightn't be strong enough'. But there's certain standards for steel which are measurable, and you can't say it's strong enough, you've got to prove it's strong enough. So every piece of steel has a ... every roll of steel, bundle of steel, has a ticket on it, approval, all the technical qualities on it. So there's no questions, which is exactly the same as BHP.
We didn't look at the export market, because the market was big enough for us here. We've got thirty percent of Australia's market. And we didn't have the money to go into sizes. To give you an idea how big BHP is, they were producing seven million tons of steel. Not the type that we were producing, but all sorts of products: sheets, what it's name, rails, every possible type. And we were only in it for part of it, for the merchant side, which would be about fifteen, twenty percent of their total business, or probably less. And ... but we couldn't build up. Originally we started off building for 200 tons a year. We are now, ten years, twelve years later, we're now making 700 tons of steel a year, from scrap iron. And the market accepts us and the market is very pleased with us and they want more. It's not a problem of selling, it's a problem of making. Because you need a lot of money to build new plant. Every time you open a mouth in the steel mill business, it's ten million, twenty million, seventy million. It's all big money. We never had any problems with borrowing money, because we had the reputation with the bank and that reputation takes years to build up. So they knew that we'll get there. And we did, we are there. And we're still there. Steel is the only thing that our family owns jointly. But like with everything else, it was always an effort by everybody. It was not one man, it was always ... I started off most of the things, get them going, and then when it's finished, I walk away and start with the next story and introduce some new ideas, start debating that. But always together with the total family.
Of all the businesses you've been in, and there've now been quite a few, which was the most profitable for the family?
Paper was very profitable. Meat was very profitable. Meat was very, extremely profitable, because the times were right. Sometimes it's not only what you do, it's the times have to be right. And after the war the time was right for export, particularly, we were 100 percent export at that time, in meat. And we became very big in it, because we were able to organise very quickly, having all the qualities in the family to do that. And the leadership to do that. And so whatever the world wanted, the world at that time was England, and whatever they wanted we made it. And we made it in big numbers. And the bigger numbers you make, the cheaper it becomes, and more profitable it becomes. And then we got into paper. From first day we were making profit until the APM started dropping the price, and we started producing wrapping paper. And we made a mistake there, because wrapping paper was only about 8,000 tons of our total production. At that time they were producing about 180,000 of paper. Today they're producing round about a million tons or more of paper. We built it up to round ... about 200,000 tons of paper we were producing, 100 percent from waste paper. And ... but they resisted us, they were fighting us. I told you that story before, didn't I? Good. I'm trying to remember what I said. So there was a big fight on. They dropped the price on the paper. Well first of all, when we found out that we'd made a mistake, Charlie, who is the same man that I'm talking about in steel, he's the engineer, and my brother, they went and bought the wet end of the paper mill, made a paper mill that produced both board and paper. They were both needed for box making. One is needed for the corrugation, the other is needed for the top and bottom, which is two different papers. But it was all 100 percent recycled. And we found ways of talking to chemists, talking to people who supply different glues and different products for paper industry. We've always been innovative, always look for something that's different, something that nobody's done before. And you try that and it works. If it doesn't work, so you throw that away and start again 'til you find the right one. So we really developed a system of producing very strong paper for that purpose. It wasn't writing paper or white paper or printing paper, but it could be newsprint, but it's mostly for box making.
But I take it that there was no industry that you went into that wasn't profitable. But which was the most profitable of all of them, looking back?
Looking back, in meat.
Meat was the first love and the best.
The first love, meat. And now we're out of it. As a matter of fact, today it would be very bad to be in meat, because the whole market collapsed. The whole system's collapsed. America doesn't want to give ... It switched. The business in 1958 switched over to America. We started building the paper mill at the same time as we were still exporting to England and the American market opened up for Australian meat. And we also started selling rabbits there. And the rabbit story is another story. But we'll get to that. That was very profitable too.
What happened with the rabbits?
Well, rabbits was ... There was a need for ... In 1946 I went for a trip round the world to find out ... Father suggested I should go and have a look what's happening in the world, and what ideas we can pick up to do in Australia. And I was away for about four months and I visited about fourteen countries and in every country you learn something. We also tried to sell canned meats for export in different countries, which didn't work. But it did work in England. And in England I went through the meat market, which I think now is destroyed. I think it's a gallery now, I'm not sure what they make out of it. And there were stalls, and there was people selling meat on commission. And we then started ... Some of them were already customers that were buying meat from us. And talking from one to the next, and the next one, I saw rabbits on every stall. I said, 'Where do they come from?' 'Australia. Australia and New Zealand'. So, I'm from Australia, so why can't we get into rabbits. So I started finding out that it's all under license to import in England. Then somebody sold me there's only one firm that has a license but it is not importing. So I went to see them, and they said, yes, they'd like to get us into supplies. I made arrangements with them - before I sold one rabbit in Australia. I sold many rabbits in Australia before we started making them. And I came back and suggested to the family, 'Let's get into that business', and Sam Smorgon was the first one. He had just came out of the army and he's the one that looked into that and said, 'Let's. You can take charge of it and come with me and we'll start to organise it'. And we went round Victoria and found out how the rabbits are being gathered and we found that the mostly, right through Australia, [they were gathered] in chillers, home-made chillers, movable chillers. And my brother then made the chiller by insulating the back of a truck. What do they call the trailer, trailer, the ... you know the trucks that you see with ...
And so he built that platform from straw, which was bound with wire as insulation, and put canvas around that, and made it all wood to cover it up. And put a diesel engine in front of the ... that truck. Not the truck itself, but the truck was ...
I can't think of the word. And so we took that to ... then you go to find out a spot. First of all we had to find a man that knows something about rabbits. So we got him - got a man that knew all about rabbits. So he told us how to clean them, how to ... what to do, how to bake them. And we had to get a supply of rabbits. And there were a number of people that were around the country that were doing it - were collecting rabbits, and selling them to other packers like Vestey's and Angliss and the other, Borthwick's. They were all in exporting at the time. So we went ... so Sam and I went around Victoria, right round the edges of Victoria, and right inside of Victoria and every time we'd come into town we'd go to a dairy which has a refrigeration. And every time there's a rabbit collector there. So we start asking questions. 'Would you sell to us?' 'Yes. If you give us a price we'll sell to you'. So we started off buying from them.
Then we decided we could do it ourselves. There's a lot of margin in between. So we started building this ... My brother started building the chillers. And the idea was you go out to the country, you find the leader, usually go to the pub, ask somebody, 'Who is the rabbit man here?' and start talking to him. 'Would you like to take control of a station. We'll put up a chiller and you'll look after it and you'll get the trappers and we'll supply the trucks, supply the refrigeration'. So you get somebody like that, and if they say, yes, he'd take on the job, then we'd go in the convoy of about ten or fifteen people in jeeps and look for country for where the rabbits are. And you don't see one rabbit. I'm there and I can't see a rabbit. And one man, one of the trappers says, 'There's millions here'. I said, 'Where are they?' He said, 'I'm telling you, there's millions of rabbits here'. And I can't see one rabbit. I said, 'How do you know?' He said, 'By the droppings. Either they're small or big'. And so we said ... He picked the spot, he reckons that would be the right spot. We go to the station owner or land owner and ask permission to put the chiller on his land, usually around the water hole. And he becomes the manager, and then all the trappers in those areas were amused about that. All they have is a piece of canvas, and they dig a hole - and a blanket - and they dig a hole in the sand, over here, so that when you lie down sideways your hip is supported by the ground round it. So the canvas doesn't let the moisture through, [and they] cover themselves with a blanket and that's how they live, nothing else. Then they've got a knife and a spoon and they cook for themselves and the people go around collecting the rabbits. They also supply them with the meat - bring the meat in for them and any other groceries that they want. That's how they live, just on their own. They trapped them by one of those traps that open up like this [OPENS HIS HANDS, JOINED AT THE WRIST] and close if you touch it. It's usually put around rabbit holes, and every three or four hours they go around and pick them up. They gut them. They tie up the legs and put them on a fence in a certain corner. When the truck driver starts work about five o'clock in the morning, he goes round to pick them up, bring them back to the chiller. That's continuously every day during the season, unless it rains or some[thing else].
But the interesting part about the trappers was that the majority of them, not all of them, they'd get a cheque at the end of the month, maybe a cheque at that time for £500, which was a lot of money. They'd come into the pub, put the cheque down on the counter and say to the owner, 'Let me know when it's finished'. And kept drinking. And I saw some sights that are unbelievable. They just go crazy. They have hallucinations. There this constant drinking and they start seeing things that ... I know of one particular case, and I had two of my daughters with me, and we saw him at the pub, this young Irish boy, and he just woke up from the shed, and back to the pub. He started flirting with the girls, and meanwhile he went back to drinking, and we went on to see another one of our stations. And the head guns comes with us in the car. About three or four hours later, a man stops, because we knew him, he wanted to talk to us, and he was getting a lift to go to the station where he worked, to the land where he worked. And he says ... he runs out to the car saying, 'Get those snakes off me. Get those snakes off me'. It was an unbelievable sight. It was a great experience for my young daughters to see what drink does to a man. And you have many stories like that and I saw quite a lot of that. But generally, they were very happy living like that. They weren't exactly ... They wouldn't work that way unless they liked it.
You've said that if you can make sausages, you can make steel, or you can make paper, and the process is very similar. But one theme that has been there, in the Smorgon activities from the beginning, is recycling. What is it that attracts you about recycling?
Mostly for recycle, what you recycle you buy cheap, because people don't want it. It's finished, they've finished with it. Like paper. You read all the papers and everyday you throw them out. So there's a use for it, and it costs very little. You then build machinery to wash that paper and process it and get the fibres back into a proper size and proper clean. And then you do your economics and you know that there's a big margin, and therefore you can make a lot of mistakes. And therefore you start experimenting and you suddenly find that you can make paper. And paper itself, you read up a couple of books, and we know the Chinese started it. We know that you can take an ordinary piece of wire, mix ... take your piece of paper and put it in the vitamiser, and that's a pulp machine. That's the machine that makes up ... it's about half the size of this room, with a big thing going around smashing everything up and dissolving it in water. So you try that out first. It's very simple. Then you build machinery round it - make some machines available for other purposes. So you use the same machinery for this purpose. And one of the most important machineries is to separate the fibres after they're broken down and then there are machines today that you can separate the short fibre from the long fibre. So you separate that and put it into two separate parts and then you mix it together again. And then you put it with some other chemicals, all earth-friendly materials. We never used anything that was not. That would be objectionable from the environmental point of view.
Because we didn't want to get involved with politics of the environment and all the nonsense that goes on, because some inspector will come and say, 'You're not allowed to use this, you're not allowed to do that', because they're all individuals and each one has his own opinion what is right, [and] what is wrong. So we used mostly things that everybody else uses - everybody uses normally. Mostly it's water really, and some innocent chemicals.
So your concern about using environmentally friendly ingredients was a practical one.
Not because you were concerned about the environment.
I will not claim that. I do think that there should be protections for the environment, but I also think that they - at first, about ten, fifteen, twenty years ago - it was much too early from an economical point of view, because people couldn't afford to build those new machines to protect the environment. Today, you allow in your costings for so much for your environmental protection. But those days it was very new, and it's ... but it was coming in, and so you became conscious of it. So you start early, when you start in your industry you make certain that you have a friendly environmental product, earth-friendly product. And we were always careful about that from commercial point of view. I won't claim that it's from heart. It was not. It was just practical.
But it only became practical because of the political pressure.
Yes, yes, it's the political pressure that's created. At the same time, they spoiled a lot of economics in many industries. [They] had to shut down because they just couldn't afford to do what the law wanted, because they weren't able to. It can be done, but it's got to be done gradually. My daughters were a great pressure on that too. They were the ones that kept on saying to me, 'You're polluting the world'. They used to come, particularly to the paper mill, and play, pick up comics, pick up all the books, everything that they wanted. Used to come every Sunday. They used to come to the works to play in the heap of paper. Not only my kids, all the family kids. And ... but they were all conscious very early of the environment, because they learnt that at school. And that created a certain influence on us.
You ran into some problems too, didn't you, with the paper factory, with local residents getting upset.
Yes, but that was for a different reason. That was ... we had to get rid of ... when you ... We started using wood, as well as paper. We started growing our own trees and we also bought wood chips. And the wood chips use difficult chemicals. And those chemicals are then mixed together, and they used to down into the gutter, into the sea, before the laws came in. We can't do it any more. So we had to build a machine to dry out that water and to make into powder so that it becomes some material. It becomes dust. And that turned off the smell of the chemicals from the process itself. Because those chemicals that were in it, under a certain heat, became objectionable from not so much environmental point of view - it didn't do any harm to the environment - but people didn't like the smell. Those chemicals in concentrated form became objectionable.
And when the people started to object, you felt the necessity to find the money to fix the problem.
Well, we fixed the problem another way at first, and then later on we build the machines for it. But we made arrangements with the shipping company, one of the shipping companies, to take the bulk of the ... they all need bulk water for when they leave the country, because they have nothing to carry. What's it called? The ballast.
And they were very happy to take it. We'd deliver it in the trucks, in the tanks, to the port, to the ship, pump it into the vessel, wherever they wanted it. And that would go out about a hundred, or fifty five, hundred miles away right in the middle of the ocean and [they would] drop it there. So that's how we got rid of it at first. But then it became more and more ... We became bigger and bigger and we had more and more water and they were not as happy as they were in the first place. So we then started to ... Of course we had to pay for that too, so we looked at the economics and found that we could invent our own machine, which we did. It didn't work too well. And it created smell. And then we had to stop that. And eventually we found we just could concentrate it to a lesser extent than we did before, cut out the smell and still do the same thing by taking it out to sea. But then we changed the chemicals as well. That forced us to look into other chemicals, 'til you find today, nobody objects to that because the chemicals are all earth-friendly again. So the force of opinion, of public opinion, or this pressure by the government, pressure by the environment, has played a big part in that. And people find different ways of avoiding it. For example, we recently built a chemical factory to make ingredients for paint. And we built a modern plant. It's not a large plant. That's since the break-up with the two partners that we were in that business before. And we have a hundred percent environmental free chemical factory, which is a showplace today. We're the only one in Australia. And we're getting a lot of orders from other people because they're being shut down because they won't spend the money to improve their processes to cut out all that waste that there usually is. There's no gutter to take the water out. Everything's evaporated. So it becomes solid. So whatever's dropped on the floor runs in certain section, and we have boiler and that boils it down and reduces the ... steam is always friendly. It's just steam. But the residue is very, very small. And then that gets ... We have a special oven where we burn it all, so it becomes ash.
So you say that your motivation was commercial, and in fact that's worked out for you, that by being ... by responding to the environmental climate, you've actually made money.
Yes. But not at first, but eventually we did. And it ... By that time prices go up because everybody has to put price up, because everybody's doing the same thing. Everybody has to improve. I'll give you an example of that, that I just gave you about the chemical company. There's a French company that has a plant in Sydney and they're a very huge chemical company in France. And they were going to shut the plant down in Sydney because it's not environmentally friendly. And they didn't want to spend the money. So we suggested that we'd make it for them. And it was a talk job: you supply us the material, and we will make it for you. And we have some machinery making it right now. And they then take the product that is then used with other products. They make the sticky stuff, the tape, you know, all that type of stuff. I forget the technical names for it. And particularly for paint, it's made from ... basically it's made from oil. Not oil itself, but the by-products of oil. The chemical that's the same as petrol - not petrol, but that you dry-clean clothes with.
There's a name for it, for that particular, that type of spirit. And that's what's used by adding other chemicals to it, and under pressure, cooking it for three or four hours under pressure, very high pressure, with pressure and heat, which creates another product, which has become sort of a product they use for paint. They put their colour into it and they put other chemicals in it, and every paint shop has to have it. Any paint-producing shop.
This was one area where you were ahead of the game. How important in the history of the Smorgon business has it been to think ahead and see what was coming before everybody else did? Could you give me examples of where you've done well, either through buying in or getting out businesses, or looking for new markets, because you looked around and predicted what was going to happen in the world.
It was a habit from day one when we started the business to make things economically as possible. And make quality. We were always quality conscious because the customer wants certain standards. You have to satisfy the customer and so we would look at new ways of doing things. And you always find something that's different, having a family that's entrepreneurial and qualities ... different qualities in each family, and knowing the different jobs which are more or less the same, different materials, but the same processes. Or same processes, different material. And we always made certain that we innovated something. So everything we ever touched we innovated. But we also were ahead of the other people, because the other rest of the businesses were in big hands, and they were too lazy or not capable, or not ... You mentioned BHP before. Their problems today are problems of management, not problems with the material. It's problems with management, because [in] the management, one man is looking after billions of dollars of businesses and it's spread all over the world. No one man can do it. You have to have a team around you. You have to have the proper team around you. But that's not the system in big public companies and big companies generally. And that ... We always had a feeling. We're always interested in what is the other fellow is doing. And we always find out what other people are doing and we try to improve on that, to be ahead of them. And we, most of the times, have succeeded. Very seldom have we failed to improve the product.
How important is it to analyse markets? For example, you were very dependent on your market in England and the European Common Market must have been an issue there. When did you realise that it was going to be, and what did you do about it?
Well, the meat market, it was after the war, and before the war, it was easy. Because England wanted anything, any food. And we were in [the] food business. And so anything they wanted, we being able to organise very quickly whatever they wanted, we produced either frozen or in canned form. But the market was so short of things that they were paying us the top prices. There's a system in England for instance where they were ... You had a price for importing, for the importer; you have a price for the wholesaler; you had a price for the retailer. And we used to sell our products through brokers at the retail price. And the retailers used to sell ... they allowed the customer to buy it because it was so short. I must tell you a little story about this at this point. I was in London. My father was mostly in London selling the meat at the time, canned products. We used to exchange time. He wanted to go back to Melbourne for a couple of months, so I'd go back ... I'd go to London and live there and do his job, which was marketing. And we had our own stalls in Smithfield Market. And we had a lot of customers, a lot of brokers that were distributing stuff. And the period I was there for three months, I had two phones. One phone was a private phone which was in the bedroom, and the other one was used as an office [phone]. And the girls at the ... In those days the telephone wasn't automatic, it had to be plugged in by the girl. And my customers tried to bribe the girls. They'd buy them chocolates, they'd buy them perfume, to put them through to me, or to Father and to get ... otherwise we don't accept calls, because we just don't have the product ... enough product to distribute to everybody. And then when they get through, they say, 'Oh please give me another thousand cases of stewing steak or luncheon meat or corned beef or whatever'.
So it really was a seller's market.
It was a seller's market. It's beautiful, a seller's market, which is an entirely different situation to what I told you about the steel.
But, but I'm interested in this whole question of analysing markets and when did you realise that talk of the European Common Market was really going to affect your business?
Well, probably from the first day, because we spent a lot of time in England. Father lived there for a number of years. And even in Australia [they] talked a lot about it in the press. They talked continuously about the Common Market, [and] what is going to happen to Australian agriculture. And we were part of it. We were processing Australian product, Australian grown product, and so we were very, very concerned, from almost day one. What are we going to do? How are we going to exist? How are we going to reorganise ourselves to stay in the business?
Well, what we did about it was wait 'til ... start planning to do something else, which was the paper mill. That's how we got in the paper mill business in the first place, because we were getting ready to do something else. All those things take time. It just doesn't happen overnight. And so you prepare yourself for the next stage of your life, of your business life. And we decided that what are we going to live on if the market collapses? Why should we expect the market to collapse, maybe two years later, five years later, but we knew it was going to come. So we then decided to go to into another industry, which was paper, which was the first thing that we did after meat. And we found that you can make a living out of that just as well.
Did you try to find other markets for your meat products?
Yes, we tried. There was no other markets for meat. There was only England. America would not allow anything in. South Asia wasn't buying - well they were buying but very, very small amounts. And to be in meat business, in the export meat business, you have to have volume. Because it's the same, whether you process one carcass or five hundred carcasses. And at that time, we used to put in all our plans. We'd be doing round about five or six thousand head of cattle of day, [which] would be processed from slaughter to breaking down cuts to ... We also introduced in England in the first place, the individual cuts. And we always did something different to everybody else. And I remember how it started. My father and I were walking through Smithfield Market, and we saw Argentine beef being brought in frozen and they were cutting off the different cuts from the hindquarter with a saw. And I'm not sure whether father mentioned it or I mentioned it, but we both got the same idea at the same time. Why can't we do that while the meat is fresh and pack it separately? In those days we didn't have polythene or things like that. It had to be wrapped in greaseproof paper. So we said, 'Let's try it'. So we telegraphed Melbourne and said, 'Break up a body into cuts, and wrap them up into greaseproof paper and put it in a box, freeze it and send it over', which they did. And we introduced that to the market, and the market thought it was terrific.
It's value added. Not only that, when you buy a side of beef, you've got everything from the neck to the leg, including the brain and so you separate every piece. So you have your shoulder blade, you've got your ... the rib steak, you have your bits of meat that you mince or do whatever you like with, pack it separately. Then you have rump, you have loin, you have the fillet, you have topside, inside. I'm using American terms but topside's an Australian term. Topside's this, the inside is this and then there's the knuckle. This part. [POINTS TO VARIOUS BODY PARTS OFF CAMERA]
You haven't forgotten any of it, have you, really?
I can do it as I did fifty years ago.
You did manage to sell your rabbits into America though, didn't you?
Yes, yes. Well, that was a pure accident, it wasn't planned. It was ... Loti had problems with her ear. She went to a number of doctors here, and each one couldn't cure it. They didn't know what it was. Eventually she got on to some Austrian doctor in Sydney who recommended ... He said, 'Cut the ear off, and then take out whatever's troubling you and put it back again'. I said, 'No way'. Loti said, 'No way'. So we started talking, finding out what's happening in America. We heard about the Mayo Clinic ,so we decided to go to the Mayo Clinic. I couldn't go too. She had ... In those days you couldn't. It was the early fifties, and in those days you had to have a permit to leave Australia. You have to have a ticket to go. You just couldn't go on a plane like you do today. But she couldn't go on her own, so I had friends in the department. It was the food department. They were very good friends. Not from business, we just happened to be friends that ... we knew each other and we did some business together. I went to see them, particularly one particular person. And I told him ... who knew Loti very well, and I told him the story that Loti's got to go to America and I've got to go with her, but I needed sponsorship. So he said to me, 'Well you have to export something for me to give you ...'. He said, 'You want to export rabbits, don't you?' I said, 'Yes, I want to export rabbits'. And that's how it started. So he gave permission, or recommended we get permission to go to America to research the market for rabbits. But to make it look right I put two cases of rabbits in with me, on the boat and when we arrived in San Francisco, a friend of ours with whom we were trading in other things - the Americans were buying all the casings from the sheep and cattle - and he was our agent and he our buyer there, and he met us at the boat. And I'm bringing out those two boxes of frozen rabbits. He says, 'What's that?' I tell him what it is. He said, 'What are you going to do with it?' I said, 'Let's put it in the freezer and forget about them'. So we went up to the freezer, straight from the boat, and it was a Saturday. And there's a man, with a sticky nose, he says, 'What's that?' 'Rabbits'. 'Oh, we love rabbits in America. There's a big, big trade in rabbits in California'. I said, 'Do you know any people that deals with them?' 'Yes, there's a firm by the name of Berylson Brothers. They handle rabbits'. 'Can you get them for me? He said, 'I'll ring up and I'll get a phone number'. So he gave me the phone number. I rang them up. I told them who I am, 'We just came from Australia. I've got some rabbits here. I'm looking for an agent'. The two brothers came out straight away. They were just starting the business themselves and they didn't know what rabbits were, no more than anybody else. So they said, 'Put them in the freezer'. They were without skin. They were already skinned off and ready for cooking. Frozen. And he said, 'There's a convention in Chicago of frozen food and we'll arrange to send them over there. You come over to Chicago, and we'll see what we can do with potential buyers'.
So we did that. We went to Chicago, we went to the convention. And that was my first experience of convention, where most people have two or three rooms and three or four salesmen in each room, and you deal with somebody that buys it. And my rabbits were displayed. People look at it. Don't forget it's soon after the war, so a lot of Americans soldiers that used to be in America [Australia?] said, 'That's the underground Australian underground mutton'. They referred to the rabbits like that. So ... but nobody wanted to look at them. So I decided that I better take some action. So I said to the agent, to Mr Berylson, 'Can I have permission, your permission to call the chef? I want them cooked'. He said, 'Yes'. So he called the chef. The chef came up and I gave him six rabbits and I said to him, 'Use them exactly the same ... Bake them exactly the same as you would a chicken, but put a piece of bacon on the top of each one and they won't be dried out. They'll be moist'. About an hour or so after he brought in one of those huge silver dishes with a lid, puts it down on the table, and lifts up the lid and there's six beautiful brown cooked rabbits. Everybody started ... then they started looking. Then I started cutting it up into pieces and I picked up one piece to eat it, and within five minutes the lot was gone. And we start selling rabbits. Everybody got interested. So we then ... These people had arranged for agents in every state, and we're selling mostly to German people, who used to cook hasenpfeffer, a dish of, sort of, rabbit stew. The black people were buying it. The French people were buying it. The Eastern European people were buying it. The English people were buying them. So we developed a market there and quite a big market. That's how we started exporting there.
And what brought it to an end?
Well, the same old question of the whole business. It died because myxamatosis was introduced to kill out the rabbits, and the rabbits disappeared within about two months, three months. So we struggled for the first month or so, then gave it up, because the disease ...
The farmers gain was your loss.
Exactly, that's exactly right. The main loss was not so much for us, but the trappers. They all disappeared. And then it became uneconomical for them, because there wasn't enough rabbits that were good enough to catch. They caught a lot, but most of them were diseased. At first there wasn't. It took some time for myxamatosis to spread. Now they're introducing another one. Rabbits became again a nuisance, and they're introducing some other chemical now that is killing them off. And they are a nuisance. They destroy a lot of the ... Problem with the rabbit is that they go for the root, and they kill the root. Nothing grows after that. So if they ate the top it wouldn't matter, but destroying the root of the plant, that is the ...
Coming to Australia as a young boy, and then growing up as a Jewish boy in Carlton, you were just about ready, as your career began to take off and your business started to work for you, to start getting interested in girls. Did you find that there were plenty of girls to be interested in, in the community in Carlton at that time?
Yes, I did. And there was particularly two girls. I was probably about seventeen, sixteen. They were twelve, fourteen. And we ... My Russian friend that went back to Russia, he's the one that introduced me to them. And we became great friends and there was a Jewish club in Carlton called Monash Hall. And every Sunday we would be meeting there, a whole group of us, of friends in there. Each one had their own group of friends, and each one had different corners. Every Sunday met at exactly the same spot. And that's where we dances and that's where we had our discussions and our life around Sundays was surrounded round that particular place. And that's where ... But then we used to also visit those girls quite often and see them during the week. And with some of them you fall in love with, and some of them reject you. So I had both. And then Loti came on the scene, to the same club. Well I knew who she was, and I came up and asked her for a dance. That's when romance started. And then the next thing I asked her out. I said, 'Do you want to go in a sedan or a single seater car?' She said, 'A sedan'. A single seater was the truck, my meat truck. That was my sense of humour. But luckily she picked up the sedan, which I had bought together with my father at the time. We bought it jointly. I was using it on Sundays. I was using it on Saturdays, and he was using on Sundays, on the weekend. So the romance started from then on. But then later, my stepmother, that I keep on talking about, Vera ... We often had parties at home and she said, 'That girl is in love with you. If you're serious do something about it, and if you're not serious leave her alone, because it's not nice. You shouldn't', so I said, 'Well I'm not ready for marriage yet'. So I said to Loti [that] I'll stop asking her out for about six months or eight months. And then I came back again, invited her again. Then we started going out together. Six months after we got engaged and then got married. Got married in a very ... in a Jewish cafe with about fifteen people present. For a Jewish wedding it was a very low key wedding. And we have lived very happily ever since.
What made you decide that you were ready for marriage after all?
Well, you know, you get a feeling inside: enough is enough running around. And it's time to settle down. And a businessman, he wants to be settled down anyway, because it's time to settle down. You don't want to ... You want to get more serious and more involved, and in both in business and in personal life. And steady up on the going out every night 'til two or three o'clock. Because very often, we used to, being a wholesale butcher, you have to get up at three o'clock in the morning. And then you'd take a girl, somebody out for ... to the pictures, and fall asleep, because I couldn't stand up to it. Had to get up two hours after. Very often we used to go to a party or a ball, and in those days you had tails, you know, with a white tails like the orchestra leaders have today. And go straight to work from the party that we went to. And then, so you decide to start to settle down. So that's when I decided to go back to Loti.
So you got married so that you wouldn't have to stay up so late.
That's right. Not quite like that, but near enough.
What was it about Loti that drew you to her?
It was some unexplainable connection that you just like one another. I was surprised that she liked me. I wasn't surprised I liked her. I always liked her, since her age of eight, when I first saw her when she was a little girl. And I saw her very often. Her mother died very early. Her mother came about ... she and her mother came about two years after her father came. And then about twelve months after, she was having a child. She was pregnant having a child at the Melbourne Women's Hospital, and she was a bleeder. And she died, not from any sickness, just from loss of blood. And so the child was stillborn. And so Loti became an orphan, and her father became a bachelor. And he had no way to feed her, and in Europe as you know, midday is the main meal. And she used to go to Faraday Street State School, to which I went to before. And she then used to go to Cohen's Cafe, which is now a very famous Italian cafe in Drummond Street, just round the corner where we both lived. And the owner there was a friend of Loti's father and he was the one that gave us the wedding ceremony ... place. We got married at this Melbourne synagogue. And she was completely ... had no say whatsoever about her wedding dress, [no] say in it. She hated it. But she wasn't ... she's not strong enough to tell people, 'That's not what I want, I want this', and so she didn't care really. The same thing happened to my daughter later. She left it all to Loti to prepare her wedding, prepare everything. She ... All she wanted was to get married.
Why do you think your marriage has been so successful for so long?
I think it's a question of give and take. I take, she gives, or vice versa. And just personalities, I think, is the most important part.
What is it about your personalities that make you ...
Well, she likes me, I don't know, but I know what I like about her. I like her because I'm loud and I'm wild. I was wild. And she was quiet and without saying so she'd quietened me down. In her presence I'd be quieted down because I didn't want to embarrass her, so I'd control myself. I'd control the way I speak, the way I behave, all that because I know she doesn't like it. So you do for her because you love the person, because you want to please the person. So it gradually becomes a habit. And then you ... And also we travelled a lot together because of the business I was involved in. And it was a question of ... and I insisted, well I didn't insist actually, but the first time I went was on my own, and when I came back, I said to her that ... we had three children by then ... and that if I go on my own ... I see I have to travel a lot because of the business we're in. My vision was to build up all these businesses, and you learn so much when you go overseas and see other businesses, and talk to other people. So I said to her that, 'If I have to travel then I want you to come with me. Don't expect me to be faithful, because I won't be'. So she said, 'Who's arguing with you? We're all coming'. So ever since then we would travel always together, every trip. And so she used to go through the day to the galleries. I used to go off in the business, then we would meet and have dinner together and go to theatre or pictures or sleep or whatever, and so it was a very pleasant life for both of us. She wasn't bored because she was doing her own thing. She was ... as I said it was very pleasant. You didn't come home to a woman that was very displeased with herself because she had nothing to do all day and her husband's away on work. In our case she worked as hard as I did in her own things that she was interested in. And she'd find every gallery, both commercial and public galleries, wherever we went. And then she also read a lot. And she read a lot about art and read a lot about ... and she had a memory about what she reads. I don't have a memory. So ... but she's not the type of person that passes it on. I said, 'Explain it to me what is it. Explain me in a few words, because', I said, 'I want a discussion about it', but she can't, she can't do that. She's shy. She's not confident of herself. And I'm the exact opposite. And then she was a wonderful companion for me in business in the sense that when you're always invited for dinner by people you do business with, or we invite them, and she's very ... people like her and whoever sits next to [her], she listens. She doesn't actually talk, but she listens and not a lot of people like listening rather than talking. So ... but then later on she started developing her art interests and art friends. I started going with her friends for dinner. And I loved it. I loved it much more than the people I worked with, because they were much more fun, all the artistic people. So I got involved in that over many years with her. So a lot of our interests were similar.
Given that you are or have been represented as the sort of classic Jewish patriarch, it seems like a very equal sort of marriage. Is that true? Do you feel that there's a lot of equality?
Well, first of all I don't think I'm a patriarch, and I don't think that I'm so important. But people say, I don't know why, but obviously people think there's something there, whatever it is. But Loti has the same reputation. Except I talk about it, she doesn't. And in the art world, people immediately assume that I'm the one that's the art person. I tell them I'm not, my wife is. I support what she does. I love what she does, but she's the one, the important one in the arts, not I. I'm a follower, I'm her follower, I'm her support. I give her support, but I don't know very much about art. Only a bit that I learnt through Loti. So I was too busy with other things to be involved with anything else. And ... but once you get used to it, and come into somebody's house - usually on those trips somebody invites you home - and there's no paintings. And I felt very strange there's no paintings around the walls, because I got used to having paintings around the place everywhere, wherever we lived. And it was ... at times it was very strange for me. I don't understand very much about it, yet I miss it. Why do I miss it? Obviously because you ... you get ... your culture changes slightly and you like what's being done, what my wife does, or what she likes. So you adopt the same attitude, you have the same need after a while. I think that's another way of expressing it, because I do like art but I don't ... I can't say that I understand it. Some paintings I love around here. Some paintings don't mean very much to me. I like bright colours. She likes subdued colours, as you see here. The brightest one, probably that one there, [is by] an American artist, but generally, as you see round the house it's all subdued colours. They're not very bright. The brightest one I picked out, and I mean bright in the sense that they are colourful.
You said that you enjoyed the company of artists and artistic people more than businessmen. You've met some quite famous artists in the course ...
I've also met famous businesspeople. But I have, through Loti. And I enjoy their company tremendously. They are so much more interesting for me because it's a new subject for me. And they talk about things that ... I listen to them, I don't do much talking because I don't know much about the subject. And I don't like to pretend that I know. So I tell them I don't know much about it, but I tell them that my wife does, and through her I understand a little bit about it. And I know what the particular artist was, particularly when we went to see Chagall in the Victorian National Gallery [and I] wanted to buy a Chagall, and so I went together with ... Loti and I were in Europe and the director at the time was ...
Doesn't matter. And his wife is an artist. So we invited them over to south of France and made arrangements through him to see Chagall, because you can't just go and see Chagall. And we walked in by appointment into his house in the south of France, and it was just beautiful. And he spoke both Russian and Yiddish, so we could converse with him. He didn't speak English, his wife spoke English. And then - he was a charming fellow, just like his paintings. And we just got on immediately on a friendly basis. Then he excused himself to go upstairs. His wife said, 'There's a film being shown about him, one of the documentary films. He loved to watch it'. And she said ... I asked her, 'Whenever there's a show opening, how does he feel'. And she says, 'He gets very nervous before the show'. 'But he's famous, he's so well known'. She said, 'That doesn't matter, he still feels that something might go wrong'. And he travelled a lot. And his whole history started off in Russia, but he's recognised as a French artist. He's also recognised as a Jewish artist, or Israeli - not Israeli really - but Jewish. But he did a lot of work in Israel. His windows, for instance, in the hospital there are beautiful. The paintings in his own house were just huge, outstanding. You don't really see them like that. Usually that smaller size. But then we ... the person I was with asked her to show some of the paintings that we wanted to get for the gallery and one particular painting that was offered. But he didn't like it. And Loti didn't particularly like it. But they had the whole, oh probably as high as this ceiling, and probably much wider and much longer, on rollers of storeroom, which is fireproof and locked up and all the paintings are hung on the frames. And she kept on calling out, 'Come and ask her how much does that one cost'. She says, 'We don't sell directly to the customers, we only sell through two galleries. And we sell them by the inch, every square inch, depending how many square inches a painting there is'.
You buy Chagall's by the inch?
You buy Chagall by the inch. You buy all artists by the inch.
It's very understandable that you would get on very well with Chagall, given your background. Andy Warhol ...
Oh, he was fun. Well he was not really fun, he was ... A friend of ours suggested that - he's a dealer. Most of the European art that you see here we bought through him and he suggested that I should be painted by Andy Warhol. So I said, 'No, Loti should be painted'. So we made arrangements to paint Loti. And he painted two. And so I said, 'I want both of them'. He could afford it because he did them in numbers. Some of them are eight of the same person, that he painted. So it was ... but he was a very silent, very strange man. He was a man of very few words. You can't have a conversation with him. But we saw quite a lot of him because of living in New York. We used to bump into him everywhere. He used to come to our place occasionally. We lived in the Pierre Hotel, we had an apartment there. And it was a very cultural, interesting life, as well as business life. So I had both sides of it. Possibly that's what makes a marriage too, work.
Do you think that there is something creative about business?
I think business is much more creative than anything else in the world. You have a look at businesses. Each one of them is different. Same as paintings are different. Every businessman creates something new, something innovative, something. You take any of the Australian companies, or any other companies in the world. The companies usually buy from the people - families that break down or break up. And then they take over the businesses and then they improve them, and they add to that. And they make, put two or three together. They ... how do we reach the world of science today, it's all through businesspeople. If there's no market, there'd be no advance in anything, including culture like paintings. Somebody's got to buy it. Somebody has to make the money to buy it. And so you need ... but apart from that, every business has its own ... contributes something, some new innovation somewhere in every field. You take the technology of mining today. It's completely different to what ever it was before.
For you personally, do you think it's been more important for you to have intelligence, brains, intellectual ability, or creativity?
Definitely creativity. The brains come ... The brains is common sense. A businessman, all he needs is the ambition to make it, and common sense. They're the two ingredients that are necessary: ambition, because without ambition you don't get anywhere anyway. And to complete your ambition, not just have a dream and think and talk about a dream but not creating the dream. You don't always succeed, but you succeed eighty percent of the time of the dream that you have. I had that dream that I just talked about, about the pallet, and I've got to keep on ringing up the office all the time, 'What is happening? When are we going to get that part? When is it going to be ready? I want to see that product'. Then I'm planning to go to America to introduce that product to people that need it. And they need it badly, because hygiene today is becoming a most important word in the business world, particularly in the food industry. And so I'm involved in that. So I want to prove that we are the best in the world, that we have ... nobody can produce a pallet like ours. And so it's all patented by ourselves, all designed by ourselves. We're not talking about ourselves - other people as well, not only me. It's ... I have a Russian engineer, who is very clever. But he's only clever if I push him, if I push his brain up a bit. And we have so much space between here and here [POINTS TO FRONT AND BACK OF HEAD] that's not used and I say to him, 'It can be done'. But people who have certain knowledge in certain industries, or education in a certain field, they're narrow-minded. They think in those terms of what they learnt at school. I didn't go to school, I had very little education, so for me everything's possible. I've no restrictions on my mind that it can't be done. Everything can be done. As long as the person wants to do it. They said this latest idea, this pallet I got involved in, it's [not] going to happen. Well, part of it has happened and we've made ...
I'm going to get you to talk about that later. While we're on the subject of creativity, when you talk about creativity in business, people understand about creativity in the visual arts. Could you be more specific about how your creativity has worked for you in business. Is it about dreaming that you're talking about?
It's a ... you have an idea. To create that idea is in your mind in the first place. You start talking to other people, who might or might not understand you, but you start talking about it. They contribute something to it. Say, 'Why don't you do it this way? Why don't you do it that way'. So you start thinking, yes, that might be the way to go. But you have that aim of reaching that point over that. And you fight that 'til you reach that point. It's climbing the stairs if you like. It just ... what you said the other day about me climbing the stairs, same thing. I'm very determined to get to the top. And that's how business people work, creative business people. And there are other business people, who are just machines. They just do what they're told and they're very good at it, and they do the same thing over and over and over again. And their nature allows them to do that. But they're not creative. They're just running a business. That's not what I'm about. I'm about creating businesses and have been all my life. And again, I'm saying not by myself, but always with other people. Using other people's abilities. A painter uses his own knowledge, or his own imagination, his own paint, but he still has to buy the paint from somebody. He has to buy a brush from somebody. So somebody helps somewhere. Somebody has to prepare the canvas for him. Some people do it themselves. But whatever field you're in, there's always some help on the side. It's not ... There's no person in the world that can do it by himself. Even the famous Einstein, the famous professor, he had help. He had students around him who'd say, 'Why don't you do it this way, why don't you do it that way?' or 'You're going the right way or the wrong way' because once you start discussing these things, ideas get born continuously. It's a rolling thing, it's a continuous thing. It's not just idea. The idea becomes split up into many points and gradually come together like a birth. The cells get together until you reach that point that you aim for.
In relation to the community, and in your personal life dealing with the community, you're very famous, and unusually so in the Australian context, for philanthropy. What's the philosophy behind your giving?
Well, I think it's very simple. There's no mysteries about it. There's no ... Everybody can do it. It's a need to do it by most people that [think] I have started from nothing and I want to share with whatever country they settled in. In our case, we settled in Australia and we want ... we felt that we have to pay back our debt, to Victoria particularly, and Australia generally. How do you help that, how do you do that? You can't give just a person some money, because that's ... you can give it to ten, fifty, a hundred people, five hundred people, a thousand people but you can't give it to the community. And the only way you can do it to the community is to be generous with larger sums to hospitals, particularly. Because in hospital, whether you're black, white, Jewish, Irish, whatever you are, whatever religion you are, whatever colour you are, whatever language you speak, we all ... once we get to hospital, they put a gown on you and you're all the same, you're all equal. Equal is everybody, doesn't matter how rich you are or poor you are, you are a number over there. And you're treated exactly the same way, whoever you are. So therefore you're looking after a lot of people. They get use out of your generosity if you like, [if you] call it generosity.
When you decide to give to hospitals, how do you decide which hospital?
Well, you don't have to do much. Every hospital appeals to you to give them something. So it's not very hard, you don't have to choose. We chose in the first place to concentrate on cancer, because we felt that cancer is the most important thing in the human, in death, in tragedies, and in young people and old people. The ... so we always wanted to help them. When we started off with Macallum's, Peter Macallum's institute or whatever, the cancer institute, when they were in William Street. And at that time we decided to give them a million pounds. And we spoke to the committee. And committee said, 'Yes, yes', they'll accept it. But now they moved. For two years now they've been moved. And we kept on saying that we're ready to give it to you once you start working on it. We want a piece of paper, because you just don't give, you have to arrange it to be done properly. The government was criticising us, the Labor Government was criticising us, 'Smorgons gave a million but they didn't pay'. We're ready to pay but the hospital wasn't ready to accept, because the management was wrong. Eventually the management was right. But meanwhile we decided that we have to give it away, it's getting embarrassing because we promise something and then we're not delivering. So one of my nephews knew a dentist or an eye specialist. He says, 'Why don't you give it to the Eye and Ear Hospital?' We said, 'Okay. We'll give it to the Eye and Ear Hospital'. By that time with the added interest that we were ... because we didn't give it away at the time ... that we earned money on it, interest in the bank. So we added interest from the bank and gave them 1.6 million instead of a million and they built a whole new wing in Victoria Street, Victoria Road. And that was our first big donation to a hospital and after that there was many others. Almost every hospital in Victoria has benefited by our ... both family in the first place, and Loti and I separately. Supported many hospitals and of course, many arts institutions.
Yes, you give generously to the arts too, don't you?
Yes. For the same reason. Because it's in a different way, but it's the same reason. Help the people that are interested in art. And also you're dealing with hundreds of thousands of people, millions of people. Everybody who goes to the gallery gets the benefit of seeing the art. And we specifically bought that art that we gave away to, in Sydney, to the ...
Museum of Contemporary Art, because Victoria wasn't ... there was nobody to talk to. The Government here wasn't very interested. We were involved with ACCA, which is a small little place, and Loti supported that and has got her name on it, and now it's being destroyed, being moved from there to somewhere else. But it's very small, it should have been much bigger. But then we gave to the ... we felt that we had to give something to Australia as well as to Victoria. So we approached the National Gallery and we started talking to them, [that] we want to do something, to what's his name, the director ...
No, before him, before her.
He's very well known.
James Mollison, correct. And [with] James Mollison [we] had a very wonderful connection with him, communication with him. And then when they started an appeal to build up the gallery - actually Whitlam held the meeting in the first place. Invited many people. And I told him straight away, 'You can have a million'. And they took it. And then we also gave them several works from America that I organised to buy for the ... Larry River's painting is there, which is given by us. And so ... but particularly getting back to the collection of about 160 paintings at the Museum of Contemporary Art ... was specifically bought for that purpose. It wasn't bought to hang on our walls. This is what ... Everything you see here is something Loti loves personally. And she wants that. And that's hers. It's a mixture. It's not a collection really because usually collections go on a narrow roads in one particular section of the art. This here - you see all kinds of art. And they were pleased, and the Victorians were very upset about it because we gave to Sydney. And we said, 'Sydney's Australia, isn't it?' They admitted it's Australia, and they promised the other art galleries anyway to pass it around Australia and the world, wherever it was showing. But it helps the artist as well as the public to understand more about art and to like it and to watch it. And like I told you about myself, when people get used to it, they start taking an interest in it, and then they start liking it.
Owning art has its hazards though, doesn't it, in that other people want it. And you had a famous robbery. Could you tell me about that.
Yes. That particular robbery was very sentimental. When we were young and couldn't afford anything, Loti had cuttings out of the paper, out of the magazines and she'd hang that. And I said to her one day, 'I'm going to buy you ...' Her favourite painter's Renoir. I said, 'One day, when we can afford it, I'm going to buy you a Renoir'. So the day came that I could afford to buy a Renoir, and we bought it and we hung it in the house in Holyrood Street, Toorak. For some reason somebody obviously wanted it, because they broke through the house, they took out a whole glass about the size of this door here, right in front of the passage. And we were away in America. And our daughters rang up and said, 'Somebody's broken into the house'. They asked Loti whether she put that painting away or not, because that painting was missing. It was called Coco. That's one of the sons of Renoir. And the ... Loti didn't remember whether she put it away or not. Anyway we came back and I said to the girls, 'That can't be, nothing is broken. How did they get in? And there's only one painting missing. It's not as if they took half a dozen paintings'. It wasn't an ordinary robbery, it was just that particular painting. And then one of my daughters came into the house to have a look. Maybe Loti put it away somewhere else, and she felt a draught and she then looked around and there's no glass here. A whole pane of glass. So they removed the whole pane of the glass, and we found it later. When we came home we found it around the garden. The thieves put it away around the garden. It was a planned robbery. And sometime later, about ... Meanwhile the police ... I went to the police and told them and gave them the picture and there was a lot of publicity about it at the time. And then about six or eight months after I got a call from a Dutch person from ...
Was the painting ever recovered?
Yes, the painting was eventually recovered through the police, international police, whatever you call ...
Interpol. They had actually found it in Holland. And that painting was then ... It took some time before it went to the court. The man denied it, but he was eventually ... he admitted or was accused of stealing it. The painting was taken away from him, and was given back to the insurance company that paid me for it. And the insurance company said, 'You can have it, but you have to go to auction to buy it', and at the auction at that time it was worth about three times as much. And besides that I said to Loti, 'I'll buy it back for you', she said, 'I don't want it'. She says, 'It's dirty. It was right at the time you gave it to me, but now that it's been stolen and gone through so much history, I don't want it any more'. So I said, 'Okay we'll buy another one'. The one that's in the other room is the replacement of the original one.
And which one, which Renoir did you buy then?
I don't know the name of it but it's in the next room. But Loti definitely didn't want to have anything to do with that painting because of its history.
Is it a problem about having beautiful, beautiful possessions that you have to worry all the time that someone might want to steal them?
It's not a problem if you accept it, like you accept everything else in life. If it's going to happen, it's going to happen. There's nothing you can do about it. And it's ... money itself doesn't mean anything, because you can't replace any of the paintings you see, any of the works of art you see here, you can't buy them again. You'd have to spend a lot more money than we paid for originally. And every time they go up and up and up. And besides that it becomes uncomfortable to ... you can buy other paintings but not the same one. So you go without it. You can live without them.
Going back now to your life as a businessman. How far for you has business and family been about the same thing?
How long, you mean?
Well you talk about you've had a family business, and the family has been quite a big concept. I want you to really tell me about how the relationship with the Smorgon family and the relationship ... how that relationship developed and changed, and how you handled it in terms of the business over the years that you operated as a family business.
Although it started off with the father being the leader, and my father was. About five or six years before he died, he lived in London. He remarried so he had two wives in Australia, so we didn't want him to have a third one here. So he stayed in London and he died in London. About two weeks before he died he came to Australia to visit us, and then he died from a stroke. He was very lucky, he died immediately. He didn't know he was dying. Usually people from a stroke suffer for years before they die. So in that sense he was very lucky. So I became automatically the leader. That was the time when the test came whether the family would survive without him or not. And it went on the same way because automatically - nobody said, 'You're the leader'. Nobody said, 'You are replacing your father', or anything like that. It just [went] automatically. You went on doing the same thing that you always did.
But you weren't the eldest, Victor. Why was it you rather than someone who was the eldest?
Because again it's a question of personalities. My brother, or any of the other cousins, they didn't have the leadership genes, if you like, which I had. Obviously I had them otherwise it wouldn't have happened. And you're not aware of it, you're not ... you don't say to yourself, 'I'm the leader, I'm going to do this'. You don't know that, you just automatically ... other people perceive you that way and so they look to you to lead. What are we going to do next day? What are we going to do now, and so on. Not quite in those terms, but ... so you become the centre of attention, centre of things happening, which it was natural for me anyway. I was doing it for many years before that. I was it together with my father, and then when my father died I did it, just went on doing the same thing. And business ... and again I must repeat that I didn't do it on my own. There've always the help, there's always people around me that were capable of doing other things, because business is not the result of one point of view, business is a really wide affair. It has many, many aspects of it. There's finance, there's production, there's engineering, there's information flowing, there's the administration and all those things. And family have all those abilities. But it's putting together that was important, that I played the most leading part in. In getting those thoughts together and pushing them into one way to make it happen. And that's how many things happen, together.
But you were the one who had to formulate the big picture.
Yes, I was always the one that saw the big picture. And I was pushing for that picture, and very often not knowing what ... used other people with the knowledge of ... like I told you before, about Charlie with the steel mill. I certainly created it, but he's the one that made it physically, or he and his son. So I used them to create it. I used other people to create it. So you use that as a painter uses a brush, to put it together. And you sit and you talk about it and you direct it, and you say, 'Well why don't we do it that way, why don't you do it that way?' And their turn and their particular field, they talk the same way amongst the ones that understand engineering, or understand the ...
Well, I was part of the financial group as well, but particularly where I was weak was in administration. It's too much detail. And I'm not a detail man. I'm the idea man. I'm a creator. I can create things, but I don't create it all myself, I have to have other people to create it with me. So it's ... I'm not like painter. He does ... that artist that did that is from his mind right down to the canvas. I don't do that. I use other people to help me to create what my ideas are. And a lot of their ideas come into the success. It's not just one man, it's always a group. It depends on the group, and it depends on the leadership.
Now there are different styles of leadership and there are different ways of organising a group. You remained a family company, not going public, for very many years, through many, many different projects. How did it work?
It worked very simply. The policy was that everything that's made stays in the business. If you were somebody who needs to buy a house, he was allowed to take the money out of the business and buy a house. Or if I want to buy my daughter a house and it cost whatever, I go to my partners and say I need so much money for my daughter's house, so I'm allowed to take it out from the accounts that are kept in relation to your percentage of ownership. But the rest of it stays in the business. With that money you keep on building up. And the other way is of course, is the banks always come to help you. You couldn't exist without the banks, because you need much more than you have. And they trust you, that takes years to create that trust. And because when you promise something you deliver. And you pay it back on time. If you can't pay it back on time you go and see them and you tell them what the position is, and they'll allow you ... they'll give you another few months and you struggle through and pay your debts. But basically the whole wealth was kept together in the family. That's how we built up business after business after business. And all owned together, 100 percent family owned. And seven families, but each one has different percentages. As it happened, my brother and I have majority interest in it. But we gave our word that nothing's on the paper, nothing is written, nothing is ... just by trust, we gave our word that we will not ... to our uncles when they became minority shareholders, that we will look after their children. We will never use the strength of shareholding as a means of doing ... overruling them. The policy became from that day on as equal, regardless of your age or shareholdings, you have equal say. In other words, you had veto rights. And anybody, regardless of age - you're seventeen, you had veto rights, if you're seventy you had veto rights. And the veto rights ... in other words it becomes a consensus. So if I have an idea and you're part of the family and you're working and you say, ' don't like that idea', I have to convince you that it's a good idea, which I've done many times. Or he has to convince me. Others have to convince me that it won't work, it can't work, we better not do it. So then I have to compromise and go through a series of compromises. But eventually it has to be 100 percent agreement, otherwise it's not done. We don't go on with it.
And that's what kept the family together, because each one felt important, because he had equal say. It wasn't a situation like the normal situation in a public company, where the chairman or the chief executive has the right and he tells - he's only responsible to the board and not to anybody else. And the board ... the board usually are not necessarily shareholders, so the board only knows what the chief executive tells them anyway. But in the family business, everybody knows everything, because you all ... we have a huge round table, always have a round table, because there's no head at a round table. Everybody's the head at a round table. And that satisfies everybody, not necessarily everybody, but somewhere, it wasn't always 100 percent happiness, quite a few of them objected and they weren't strong enough to express themselves and have their way. That's where personalities come into it as well. But basically it was run by about five or six people and two of them were outside people, not family people. And it worked.
The history of family companies in Australia is not good. I mean the Fairfax's broke up. There's been a whole history. The Myers broke up. There's been very few families that have stayed together as well as you have.
Yeah, but up to a certain point. We broke up too.
And why and how did that happen?
Well, that was very simple. The ... some of the younger people said we've got to modernise, we've got to bring in ... we became too big. And we couldn't handle anything. The same five or six people ... everything rather, not anything. But ... and the younger people were being neglected. Where before that you'd hold their hand and tell them, 'Why don't you do it this way', and teach them and take care of them. Push them up to a certain point of their ability and help them continuously. And that stopped because we just simply didn't have time to do that.
Too many of us, too many and too big. So somebody suggested to have a ... bring in consultants. And a famous man in London told me when I told him who we had - and I don't want to mention names - he said to me - and he was the chief executive of Rio Tinto - and he says, 'That's the kiss of death'. He said, 'Sack them'. I said, 'Well I can't sack them because I only have one vote'. So he knew all about us, about the family, because he controlled forty-eight countries. I said to him, 'How many companies do you control?' He said, 'Forty-eight countries'. Each country has about thirty or forty companies. And they had them, and a number of other people ...
These were management consultants to tell you how to reorganise.
Yeah, to my mind, a consultant takes your watch and tells you your time. Because they learn from you what you're doing and then they're trying to ... They never created anything themselves. They only advise people from what they read in a book. They are not practical. And particularly in our case. Certainly we were a very unusual company, working the way we did. And that was destroyed by creating four levels of management where there's only one level of management in the first place. And younger people wanted to ... said to us, to the older generation, 'You should resign and we'll run the company'. So we agreed to that. You know, you reach a certain age and you say, and a lot of the young people say they want to have a chance to be there, you have to get in and let them do it. But unfortunately they took the ... They changed the system from the system that worked to a system that didn't work. So then the family got together and decided, again by consensus, decided to sell out. To split up. Very nicely, very friendly. There was no arguments, there was no hurt, there was no ... we're still friends and help each other. And each on has gone a different way within their own families, and each one is doing very well on their own. Because they're free of that ... They create their own organisation. In my case I only have a grandson that was willing to come with me. The one that I told you, as I keep on saying, my eldest grandson wants to be a film producer. And he ... that's all he wants. And the other one wants to be in advertising. The third one wants to work with me, not his father. I said, 'Why don't ...'. His father wants him. He said, 'I don't want to work with him, I want to work with you because I can get on with you and I can understand you', and when he started he was about twenty-five. He's now twenty-seven, and we work beautifully together, because my relationship with him became, in reverse, the same relationship as I had with my father. I now have with my grandson. And so ... although we argue from time to time, and don't agree from time to time, but we compromise with each other. But he's gradually pushing me out, and he's taking over. And I love that because I know that. I'm a realist. I know at my age, however much longer will I live, who's going to look after all that. So he's very clever, he's very good, and he's the head of the family today, at twenty-seven. The same as I became head of the family at about thirty-two.
But despite your age that you refer to, with the break-up of the family only just a few years ago ...
About four years ago.
Four years ago. That means that at the age of eighty-one you formed a new family company, with a whole new idea and process.
Yes, yes, completely new.
Now would you like to tell me about that, and what your ambitions are for that.
Well my ambition was to keep my family together. And my daughters ... their grandfather left them a certain amount of shares of his. Not mine, his. And they're theirs. So they're full fledged shareholders. Not that their father gave it to them, it's their grandfather. I gave them other things, but the shares were given to them by their grandfather. So it belongs to them partly. So I had a responsibility of keeping it together. And my ambition was to create another family company, different to what it was because there's just not enough. The girls, my daughters, weren't particularly interested in business, although the only one who could be a businesswoman is the girl that you met, Bindy. And she could have been but she's not interested. She's doing her own things that she wants to do. And so I then had an idea to create a new family organisation, by the family itself [having] funds, to finance anything that any of the grandchildren want to go into. And the family holds fifty percent interest in equity. We'll lend the other half, either arrange a loan or lend them from the funds that we have, and buy them businesses. The example is General Pants. My granddaughter's husband wanted to be [?] and get some business. And this was an offer to us, or to him. He came along to start to talk about it and he has no money. And this was the first venture that we did that way. And so we said to him and the granddaughter, 'We will buy it for you. Half belongs to the family. Not any individual but the whole family group. And ... from the funds of the family all together. And the other half you have to borrow, which we will help you to borrow. Either we'll lend you or arrange a bank loan for you but you're responsible to pay it back. And you have to pay it back, and then once you pay it back it's yours'. So we become partners, equal partners in the venture. And that, as it happens, became very successful. This young man's very energetic and he's done a very good job. And he's about ... within two years he'll pay off his debt and he and his wife will own half of the business, which is becoming more and more important. And he's made a wonderful job of it. And another one is ... the same granddaughter's brother, who wants to be in advertising. We just ... I think the deal is being completed today, and we're going to be partners with him in advertising. And my grandson wants ... apart from being partners with me in some things, he's partners with me in the pallets. I offered him, I said do you want to buy half of me.
What's pallets? Is this a new scheme you've got?
Well, the pallets is an idea that I had very soon after we broke up, and if you want to see it on the film, we can show it here. [HE SHOWS A BROCHURE] And this is the product that we make for the food industry mostly. Which is hygienic. There's no way that there's any bugs can grow on this ...
... that they put boxes on and a forklift comes in, in here and it lifts it up and puts it ... stacks it up. Before, in storage they hang like this on edge, so that it takes less space. It's got to be strong enough to hold it straight. The way we designed our pallet it's strong enough, it's very strong. And as well, as good as wood is. And it's the only one that's been ever done that way. And we invented that ourselves, together with the Russian engineer. He's the main brain, but without me he couldn't have done it, and without him I couldn't have done it. That's our main job and that's going to be a very, very big business. And Peter, my grandson, I'm talking about, I offered him. I said to him, 'Why don't you buy half of me, because that belongs to me personally'. So he said, 'Okay', so now he's a partner to that. And he's working at it anyway. And he also has his own business. He invited me to be a partner in his business. And he's ... he has a friend, and he and his friend are concentrating on advertising on the screen. You can imagine Bourke Street Mall or in Sydney you'd have Pitt Street Mall or Martin Place, I'm not sure, and in Melbourne he has already arranged the home site. And the site is about a huge screen with constant advertising on it like video. Like on the television. It is television actually. So one of them's going to his partner, and he is partner with his friend and we're half partners to both of them. So we're creating a family with other families.
You're very excited about this pallet idea, aren't you? And you think that you're really onto a winner with it. Do you think you are going to make ...
I am certain that I'm going to win with it. It's there. It's just a question of just altering the machine. We've made part of it. And it's very, very strong, and it's very, very light. And you can imagine that that pallet weighs about nineteen to twenty kilos and the wooden pallet weighs about thirty-seven kilos. That's roughly half the weight, and double the strength. And our pallet that we're currently ... we're making now, we've been successful with and selling it to lots of people in Australia. And they love it. It works beautifully, except it's too expensive.
Now do you think that this clever new idea you've got is going to make your fortune?
I think so. I more than think so, I'm certain of it. In fact my ambition is to repeat the performance. Build up another company, if I live long enough. And ... which should take me five years. And ... but it won't be in Australia because Australia hasn't got the population, hasn't got the raw material, and we make all this from waste: from milk bottles that you buy, plastic milk bottles, detergent bottles and the wrapping that goes around the cases for all your ... Housewives usually use it for wrapping small things - the cling stretch, that stuff.
It's 100 percent recycled. There's no virgin material in that whatsoever.
And environmentally friendly, because in the process when it goes through the heat of about 200-odd degrees, anything that is there that shouldn't be there gets burnt off. So it becomes completely clean. It's sterilised.
Do you ever, in business, have to do things that you wonder about ethically? Do you ever find yourself in business having to do things that disturb you a little bit on ethical grounds?
Ah, yes. But if it disturbs me I drop it because I'm not greedy enough to carry on, because it's wrong. So I just drop the idea and move along.
Could you give me an example from your own experience.
Well, there's very few things. Well, in the meat game for instance, if meat is bad, like you have occasionally, because it hasn't been taken out long enough, or because there's a strike on, or whatever - for whatever reason it gets spoiled, you just boil it down into tallow. You don't use it for food. We've done that many times like that. Obviously you can't do that in steel. But in the food products you can. And in steel there's nothing that can do any harm to anybody. But in food you have to be very careful. That's why I designed that pallet. It was my ideas of the pallet of how to do it from a hygienic point of view. From structural point of view, I put my bits in, but the hygienic point of view is all my ideas, to make certain that it's hygienic, because that's what the world wants today. That's what ... people are becoming more and more conscious about hygiene so you have to supply them with something that they can use to make it more hygienic. And this is one of the products that we're concentrating on. And it will be in big numbers, in millions of numbers.
Throughout its life, your company, your family company, was often called secretive. You didn't give yourself much publicity. Why was that? Why did you keep things close to the chest?
Because we didn't want to brag about what we were doing. We're not people that show off. We're not people that want to be well known. To me it's a surprise that I'm supposed to be important. I don't feel that way. And I don't think it's anybody's business what we have or what we don't have. We are doing, we're creating things, we're helping people, we're helping other people with our creativity in business. We create work for people. And all that is important to us. We think about it, and we are conscious of that. It's not just sort of money. It really has nothing to do ... after a certain amount, I'm not talking about at the beginning, but when you get to a certain amount of money, whatever that might be, after that the money itself is not important, it's creativity, what you do with the money that's important, both in charity and in creating new industries, like this one here.
What was your ... Can you remember an example of a time that was a bad moment for you in your business life?
You mean from financial point of view?
I mean overall. Something that you remember from your business life as being something that distressed or upset you.
Very seldom, I can't recall anything like that.
One of the reasons I'm asking that is that I've read at times when you had to close down whole factories, which presumably meant sacking lots of workers. Could you describe that?
Yes. They were economical reasons. We closed up the fruit factory. We were the fourth largest canned fruit factory. South Africa has very, very cheap labour. Australian labour kept on going up and up and up. South African labour went down, down, down. And we were both supplying English market. And all you do every time you put something in the can, and every time you buy a can, it's a definite loss. And so we decided to close up. And it was cheaper to close up than keep on working. It became a purely economical factor, and we pulled out of it. And there was nobody to sell it to. But very often we sell the business if we don't think there's any future in it. So you're sitting there, and again, it sort of becomes automatic. You sit round the table and you talk about it, and somebody says, 'What the hell are we in that for, we're losing money on that'. And we have a system where we know our profit every day on whatever we produce, because you can correct your mistakes on a daily basis. I'm trying to teach all my friends and all my relations to do the same thing. Very few take any notice. They still go on monthly. And I say the month's just passed but you don't get it every month, you don't get it until the second month. And that's our system today, the Smorgon's work under. Two months after, they know what happened today, because they're not using my system any more. It was actually my father's idea in the first place. He introduced that idea into to my life and I picked it up, and it's very, very important because you know daily what has gone wrong. Why it's gone wrong. And when you know, ask that question, 'Why has it gone wrong?' you get an answer. You work out the answer, and you correct it. You correct it and then it's straightened out again, and then you go on doing it, and that's part of the success of our life, our business life, our business activities, because we knew what we were doing. Particularly in meat. I mean very, very few meat companies knew what they were doing. They just kept on buying cattle, didn't matter what it cost, and didn't matter what they sold for. They just kept working all the year round. We kept the main staff, but the ordinary workers ... It's a seasonal business anyway, meat. Meat lasts for about - in Victoria - for about four or five months then you have to shut down. There's no cattle, there's no sheep, because it's out of season. Same thing in Queensland, where we have a meat works there. We could only work about four months of the year. And everybody accepted it, and if we didn't have enough labour, we picked up new labour and taught them how to do it. As I think I told you before, when we were very, very busy, and there was not enough labour in Australia, we used to pick them up - immigrants straight off the ship and bring them in, and give them a job and teach them. And we invented chain special sections to teach the people how to bone a carcass or how to undress a carcass. It's called dressed, but it's really undress. And within two weeks they become reasonably efficient. And so it costs you money, but you know that you're ... but you're saving a hell of a lot more by not working when it's uneconomical to work.
What's been the Smorgon family's history in industrial relations?
Well, there's ... We were in so many different industries it's very hard to answer that question. The one that we were mainly in most of our life was meat, and that was horrible. Not that that was ... We had a very good relationship - personally had a very good relationship with the union head, the union representative. You've probably heard of him, Wally Curran. He is a sincere Communist, and he wants to destroy the present system and he says so, and he's sincere about it. It's not something he tries to do for the workers, it's his idea to change the system, go to the Russian system. I say to him, 'The Russian system destroyed itself'. 'No, that's only because they had the wrong people. The idea's right'. I said, 'Yes, there's nothing wrong with the idea. The Christian idea is the same, the Jewish idea is the same, almost every religion is the same, and Communism is helping people. But the Russians never practiced it. Russia and Communism became a dictatorship not a democracy as we know it'. But he wouldn't have it. And his habit was very simple. If he was in a bad mood, he'd come in, and we had about three or four thousand people employed, all working in one place, and he'd call a strike. Because he wants to do harm, he wants to stop. And he's punishing the workers much more than he's punishing us. Because the workers miss their pay. And he doesn't give a damn, because he wants his idea to change the system. The only way you can change it is to destroy capitalism. So in that field we always fought him, and publicly he would have a meeting in the yard. We could hear it all, and abuse us to hell, what horrible people we are, what harm we're doing as capitalists. We're exploiting all the workers, we don't pay enough. We don't give the right conditions and all that. 'You should demand more money and all that'. And then he would finish up passing a resolution, after about half an hour of talk or an hour of talk. And he says, 'All those in favour of this resolution this side, and you bludgers that don't like it you're on this side'. Now who would go on the other side when somebody called them a bludger? So he just controlled it that way. He placed his own people into our ... not only into our place, in all meat works. And he was destroying it. He set out to destroy the industry, and he did, he destroyed it. In Victoria the industry was destroyed, as a meat industry, because you just couldn't afford to pay the prices to farmers to grow the cattle that needed to produce the meat. And he was ... I blame him. He probably blames me that there should be another system. But in that field our relationship was not good. It was a relationship, a relationship from point of view of communication was okay, but because he was such a dedicated idealist, that he wanted to destroy, not to create, and we had many discussions, friendly discussions.
But in the steel industry, or the paper industry, we had no problems whatsoever. We had wonderful relationship with paper industry. Also union, but a different union. That union was not a Communist union, it was just a working man's union. And there was only a national strike once or twice in the times we were in paper. National one, not just at our place. We'd talk. If anything happens, somebody's unhappy, they call the union. The union starts talking to us. We sit down around the table with the union. We straighten out whatever it is that person or persons are complaining about and do whatever, settle, compromise both ways and go on working. But they don't stop, they keep on working. But this man pulled everybody out of work first, and then, 'Go home'. That's when I talk about the bad meat when you ask me that question about whether I had any problems about, psychological problems, if you like, or hygienic problems. Yes we did at that time. Every meat works still has it today. Nothing changes in the meat industry. He is slowly destroying it. He's not an official any more, but he still has the power.
If you were a worker, would you like to be employed by a Smorgon company?
Because Smorgon's been always fair to their workers. If a worker needs ... The other day somebody ... one of the workers came up to me and he said, 'My wife's family lives in Yugoslavia and she's got a sick mother. I don't have enough money to pay for her fare. Will you lend me $2,000?' 'Of course, come into the office. I'll fix it up'. We always did that, to everybody, to anyone that needed something. A certain respect, a certain communication. And they know that we do these thing so they come to us, so they have no bad feelings about it. That doesn't mean that the union ... the union starts bargaining about the conditions and all that, and they want more money all the time. And we say, 'Okay', same as we did in the meat business. We say, 'You want more money, no problem. Get everybody to pay the same wages as we do and there'll be no problem. But how are you going to sell the meat? You won't be able to sell the meat, so we won't be able to employ you'. But in these cases ... In the paper mill there was never any problems. It was always peaceful. And in the plastic industry it was peaceful. We work with the union today. We don't have many people, but still we're very friendly with the person that's in charge of that particular union. He comes to visit about once a month and my grandson usually handles it. And in the steel mill, when he worked in Tasmania, he used to make deals with [the] union to work the steel mill operation. Not the steel mill itself, not the steel mill, but the IRC, which produces the product from our steel. And he made peace, and then other people came to him and he was very young, he was twenty-two, twenty-three, and other people came to him and asked him to help them to do the union, because he was able to communicate. Does that answer your questions?
Is there any aspect of working for the Smorgon companies that you wouldn't have liked as a worker?
Probably. I can't think of any, because I'm a Smorgon, but probably would be, because you can't exactly put yourself in the position. I probably could have when I was about twenty or twenty-one or something, not today. It's hard to put yourself in a position where you're a worker suddenly instead of being an owner. So I can't really answer that question honestly. I can pretend but ...
How important has it been to your life that you were born Jewish?
Very important, because I believe that we all belong to something. It's not necessarily religion. And Jewish is not a religion to me, Jewish is a nationality to me. And Jewish is a religion some people practice, same as any other religion, and religions themselves I have no problem with the concept of religion if it's practised, but very few people practice it anyway. So I just don't believe there is such a thing as an upper, something that governs you. What governs you is what you're born with. That's what governs you. And maybe you can interpret that any way you like, but it's a ... I'm basically I'm agnostic. Yet I'm Jewish, definitely.
Yes, I do, about twice a year, mostly because I want my children to know who they are, what they are. That's because of the children I go. And now the grandchildren, the great grandchildren all go to the same synagogue, but only high holidays. But I feel like a hypocrite because I don't believe in it but I have to do it for the sake of other people. I don't believe but they might believe. Or they might learn to believe. Some of my children believe in God, some people don't. Some of them don't.
Do you wish you believed in god?
No. I'm too much of a realist to believe in him. It's ... I do believe, and I would have been very comfortable to believe in something, because it was ... it takes a lot of pressure off you, because it's not my fault, it's God's fault. I don't believe that. I believe it's my fault if I do something wrong.
The Jewish tradition has a lot of elements to it, and belief in God is one, which you don't accept ...
But I accept that a nation has its own, its own ... not policies, that's the wrong word, but its own customs, it's our culture really. And I believe that culture, and what I was brought up in, what I know about, what my children believe. And of course, the anti-Semitism helps people like me to stay that way. Because fifty years ago, six million people were killed. Their sin was that they happened to be Jewish, not because they did anything wrong. And there's all those babies that was murdered. Murdered today in other countries. Where's God to help them? I mean, why is it done? Why do these things happen? Obviously there's nobody there to help. You've got to help yourself and you help those people that can't help themselves. That's possibly why we're conscious of ... with our philanthropy - what's the word?
Because we feel it is important to help other people.
What effect did news of the Holocaust have on you here in Australia?
Very severe influence. It made life very hard to understand why. How can intelligent people like Germans, who are probably considered most advanced in culture, most advanced in literature, the most advanced in every aspect of life ... And here one man takes over and murders for no reason whatsoever, because he happens ... he doesn't like Jews. He doesn't know the reason why he doesn't like Jews. He just something ... and a lot of it is influences by the religion itself, other religions, particularly the Pope never stood up for the Jews in the Holocaust time. Today, fifty years after, they're apologising a little bit. It's the same ... It reminds me the same as the black people [who are] expecting to get - to give [sic] a blessing. [They] say apologise and I think Howard did a very good job by apologising personally, but he can't apologise on behalf of me, or you or other people. He can only apologise for himself. He wasn't responsible for that. It was governments before that that were responsible. And at that time the people thought ... They didn't do it because they thought it was the right thing to do ... the wrong thing to do, they thought it was the right thing to do. They were trying to help those people. They weren't trying to harm them. But in the end, from a nationalistic point of view, of course they harmed them. They took away the children from them, which is cruel by itself. But they thought that they could educate them better and they'll pass it on to their ...
Can we come back to the Jewish community here in Australia during the Holocaust. During that period, what did the Jewish community in Melbourne, to which you belonged, did they ... what did they do?
Well they couldn't ... they didn't know very much. Nobody knew very much 'til straight after the war. You heard rumours, but you know, nobody knew about it. In Europe they knew about it, but in Australia it wasn't publicised. The Allied Forces weren't, or leaders, they weren't anxious to publicise the fact that the Jews and other people were being killed in numbers that they were being killed at. It wasn't comfortable for them either because there would have been an outcry to go quicker and destroy that cancer that's there and so nobody talked about it. So we knew very little about it. We knew about the war, that was publicised, but not the Holocaust itself. That was a terrible surprise for not only Jewish people, for the whole world: that educated people with culture, with all sorts of sophisticated knowledge of things, are able to destroy a whole nation of ten million people. And if they would have won the war, they would have destroyed probably two or three hundred million people: anybody that was slightly black, or slightly Jewish.
Did you do anything to help the Jewish refugees after the war?
After that, yes, many things.
Well, mostly by helping to bring the immigrants to Israel. I went on a special trip about six, seven years ago, to Russia, to gather my relations. And we, as a family, had arranged for them to ... I know many people in Israel in high places, and we had to get a visa in the first place, so I went to see a friend of mine there that was in charge of bringing people into Israel. And I said to him, 'I'm going to Russia to get my Russian relations to come to Israel. Can you help me?' He said, 'Give me their names, I'll give you a permit now'. I said, 'I don't know their names yet. I don't know whether they want to come or not.. And luckily, I was very happy that I had one of my grandchildren with me, because she saw it personally. She was actually in Mexico and she heard I was going to Israel, and then to Russia and she said, 'Can I come?' She phoned me and said, 'Can I come with you?' I said, 'Come straight away, and it'd be beautiful for you to get the experience of the whole thing happening'. And we went to Russia, and we went to see mostly my father's people. My mother's people were already here. My father's people, the Smorgons: men were Smorgons and women were another name, but the females were also born Smorgons. And I thought I'd get about a dozen people. I finished up with forty-seven people and we said to them, 'We'll pay for the fare across. We'll pay for the twelve months living. We'll get you living quarters, pay rent for the living quarters. We'll buy you second hand furniture, with [a] TV'. You got to have TV today. And we had ... One of my nephews has cousins there who took on the job to settle them down in Israel, to do all this for us. We paid her to do that. And about forty-seven people. But the majority of them were half Russian and some of them were 100 percent Russian, because they'd all intermarried. It's a third generation from the days that we were there. And some of them I remembered, some of them I knew. They're old people by then, but I knew them.
How many times have you been back to Russia since you left?
Oh, I would say every ... roughly about twenty times.
The first time you went back, what year was that?
1960-something, two or three.
It was a very ... it was a hard time. I really can't explain it really. A sad time. When I arrived in [?] where most of my mother's people are, and my uncles were still alive, and I hadn't seen the uncle for about thirty-odd years. And we kissed the Russian way on the lips, which I wasn't used to any more. And the first thing my uncle said to me is, 'When you get to the hotel, don't talk'. I couldn't understand what he was saying. 'When you go to the hotel, don't talk'. But then he told me several times and then next morning he picked us up and brought us to the houses, to the one house, the one [where] there's four families, and entertainment and all the food and all that. And eventually we found out that one of them was a ... worked for the KGB. And he asked for leave from the general ... you know it's all part of the army ... from his boss, because he doesn't want to meet his capitalist relations. He says, 'Don't do that, I'll lend you my car, and you can have as much money as you like, buy anything. Commandeer any food you like, and show them how well the Russians live'. So when we arrived there's lots of food, caviar, and all sorts of goodies. And then next morning that same man picked us up. He now lives in Melbourne here. And he put us in this car, and there's four of us. There's Loti and my nephew, George Kastan, my sister's oldest son and his wife. And he kept on looking in the mirror. I didn't notice. Loti noticed it. He kept on looking in the mirror all the time to see whether he's being followed or not. And later I realised what it was all about. He was worrying that he was being followed, because he knows the system. And then later, on several other occasions when we were there, they'd take us out to a picnic, and there's always cars following us. And they'd say to me, 'See that car there, they're watching us. That car there, they're watching us, that one, watching us'. And we went into certain ... one of them had a bit of, what we call a dacha, a little hut outside the town and he wanted to show it to me. And he was pulled up. 'What are you doing here? We were in a bus with about fifteen people. And at any rate he told me that, 'The KGB, they don't want you to see it'. They're like spies and they're constantly worried about spies.
Did you go back to the township that you grew up in?
My daughter asked me to do that, Ginny, in Sydney. And she said she'd like to see where we came from. So I said, 'Well no problem, we'll organise, get as many people as can come, and we'll go back to the village'. And the first time I tried, I couldn't get - they wouldn't let me in. Because I had to go to Donetsk, which is about sixty kilometres away from the town that we lived in. Not the village. Well I went to the village, [but] that village was destroyed. It was called Heidelberg. But there was hundreds, thousands of those type of villages. But we saw ... I had a relation there who remembered me as a child. She remembered me as a young boy, and she's related to my auntie, so she's my auntie's niece. So she was showing us around and she said, 'Your village is destroyed. I'll show you another one right here exactly the same'. She knew them both. And she ... and we went to different homes in that village and everybody loved us. Because the main thing at that time when we went to find the town that we lived in, which is called Mariupol - it's a bigger town - I wanted to find the house where we lived in. And I knew that there was certain area, I remembered the street, but I couldn't find it. And I kept on asking people, 'Where is that street?' because I'm looking for family, where my father used to, and grandfather used to live. Eventually ... and we obviously had to look for somebody older and not anybody young. So somebody said, 'There's an old man in that cottage over there, he might know, because he's about eighty'. And that's about seven, eight years ago. And so we knocked on the door and he came out. I've got some pictures of him in one of the books. And he ... I told him who we are, that we came from Australia and my grandfather used to live around here, and my father and my family and I was part of it. And he says, 'What's the name?' I said, 'Smorgon'. That's how it's pronounced in Russian and I talked in Russian. And he said, 'They are just around the corner'. So he took us round the corner. He said, 'That house is destroyed', but the house next to it was not destroyed but the house we lived in was destroyed. And he started describing the house, just as I remember it. Exactly as I remember it. And he then told us ... and that was very important from my point of view, as far as my family was concerned, because there's a mixture of nieces and daughters and granddaughters. And he said that the day that the Germans walked in here, they came into this yard, gathered 157 Jews and they killed them right on the spot. And when you hear that there on the spot that it happened it has an entirely different meaning than when you read about it in a book because it becomes so much more real and so much more horrible to know that happened. And then he took us into his hut and he was growing his own vegetables, and he was doing all sorts of things. He told us that his first wife was Jewish and when the Nazis came in, he sent her away to her family in the village, another village, where the Germans weren't in, and she pretended to be non-Jewish. It's easier for a woman to be not Jewish, to pretend to be non-Jewish. You know why. So she survived until she died for other reasons, and he remarried. And his wife, and Russians are very hospitable people, and they offered us tea and all that. And then he took us to his neighbours and introduced us to the neighbours. And I remember that we used to have a tree with mulberries I think they're called ...
Mulberies. And I said, 'There's a tree somewhere here'. He said, 'That's it there, the tree's around here. Here it is'. There's the tree that I used to climb to pick the berries from. And it brings your childhood right back. It's a wonderful experience. And that experience passes on to the children with ... my children and grandchildren. And then we always carried some gifts, and the gifts we carried were these small calculators. You know, ten dollars each or something, and we had dozens of them, and we gave them out like confetti. And to them it was something wonderful. But the Russians will not accept anything unless they give you something, even if it's a little lolly or something like that. And they gave us one of the cassettes of one of the famous Russian singers because I gave her son, who was about fifteen or sixteen, one of those little calculators, which none of them had ever seen in their lives. And I showed them how to work it, and I told him, 'You can translate it from English into Russian and work out exactly, you know, arithmetic. You know how to do it'.
The idea of family has meant so much to you, and a Smorgon, the Smorgon name is so important. Was it a disappointment to you that all of your four children were girls?
No, not really, because ... In fact I'm saying that in that Smorgon book, that I was fortunate that all my other brothers and cousins had boys. And they're all about the same age as my daughters. So I had boys during the day who I worked with. They used to come in from school, every school holidays they'd come to work, and I'd pay them. There was a refrigerator full of ice-cream, of chocolate covered ice-cream. I forget the name of them. And they could have as many as they liked, and they get two shillings a day pay. Very early, at the age of seven they start. And so they loved coming there. That's the bribe that you bring them into the family. They eat with us around our table. They're free to ... and they grow up become ... if they want to go to 'school' there ... if you want to go 'school' ... Most of them started at fifteen, sixteen or seventeen. Two of them got formal educations, others didn't. And they wanted to work, because they got used to working there. And the first job they had was a dirty job. I made sure they had a dirty job. I used to say maybe they won't like it, particularly the part where there's manure around. And they still loved it. And we used to make them have a bath before they go home, otherwise their mothers won't let them come back the next day. And they loved it, and then most of them went through that sort of school. And as they started working they were given jobs, and they were treated completely equally. They don't all appreciate it. Some of them think this one was too dependent and that one and so on, depending what job was available at the time. There's no perfection in this world. You can't do everything right.
So you've sort of answered my question, because you have nephews that you ...
The nephews were replacement sons.
Yes, but was it never a possibility that the girls might have been part of the business?
Well, the always accuse me ... yes, it could have been a possibility, but I never pushed them to come into the business. If they would have expressed a wish to be in it there'd be no problem whatsoever. But they liked to play there. They used to come with me on Sundays when they were young kids and would climb the piles of paper, or run amongst the sheep and all that. They loved it but they didn't want to go into that industry. They had their own ideas of what they wanted to do. And I didn't ... I certainly didn't push them like I did the boys. With the boys I did. I pushed them. I kept ... every time I'd see them, 'When are you coming to work?' And you know that was my style of getting them into the business.
What was the difference, Victor?
I must tell you, one of my granddaughters did come to work. In fact, Peter's daughter. And she ... I made a deal with her. I said to her, 'Work here for three years. If you like it, you have a job forever. If you don't like it, leave, otherwise you're only going to embarrass me, because you're taking advantage of being here when it suits you'. When three years was up she said, 'Papa, it's not for me. I don't want to work in this atmosphere'. She wanted to do something else. And so I said, 'Okay, no problem'. But she went through all the departments, the same as the boys did. With her contemporaries, did the same thing.
But none of the girls got the work in the holidays and the two bob a day and the ice-cream.
They could have. Some of them did in the holidays, but they worked in the office, not in the dirty part of the place. They all came at some stage, about twelve, thirteen. And then their interests were moved away from that to other things. But I've been accused all my life by my daughters that I didn't encourage them to come to work, which is true. I didn't encourage them, but if they wanted to, there'd be no problem whatsoever because our policy was always that women were welcome. It's not a decision just by me, it's a decision by the whole group of us. I mean we talked about it, we discussed it. We decided, when the question came up what about girls: we've got all those boys, what about the girls? We said, 'Okay, if the girls want to join it, let them join it'. One of them insisted that his wife should be working. That we objected to. We said, 'Wives have nothing to do with our business. Don't mix wives with business. That creates problems, it creates jealousies'. So we never had any wives working for us, or with us.
Why is it do you suppose, that Australia has so many of its best entrepreneurs, [who] have been immigrants? What is it about being an immigrant that makes you into an energetic entrepreneur?
First of all you've got to be born to be an entrepreneur. And if you happen to be an immigrant as well, all immigrants have left wherever they come from, their country, because they had hardships of one form or another. And they suffered, and they [have] that need to succeed much more than a person that's born here in comfort, even though they have the same sort of entrepreneurial abilities. Therefore they stand out by trying harder, by getting there to the top quicker. It's a certain need that is there because you've been at the bottom and you want to get to the top. But most of ... take my children, or anybody's children, your children. They've not suffered, they've always had something to eat, they always had the comfort so to them it's not important that thing. They'll do it later. But I believe that entrepreneurs, not only the immigrants - immigrants might be a bigger majority because there's a bigger need for it. But it takes some people until their thirties and forties to become very ambitious. Well, take Peter, he's like that. He's very entrepreneurial, and he's twenty-seven. And he's wealthy. Privately he has an income from his grandfather automatic anyway. He doesn't have to work at all. Same thing with Jonathan. Each one of my grandchildren have a certain amount weekly or monthly or whichever you like to express it, but you've met Jonathan, you know how ambitious he is, and Peter. They're not all like that. Some of them just ... The one we're just buying a business for - he wants to be ambitious, but he's not. He wants to be entrepreneurial, but time will tell whether he will be or not. And he's about thirty-one. But his wife is very smart, and she's going into the advertising business, so she'll be pushing. That happens very often. But I don't believe there's a bigger percentage of immigrants. It is because they ... If they were naturally born Australians or [from] whatever country, they would have done the same thing later. If you're born with it, you have it. And then the opportunities come, you see them, because that's part of your nature, part of the thing that you want.
You often use the phrase 'I saw an opportunity'. It's very common in your speech. What do you mean by the phrase 'I saw an opportunity'?
Well, I'll give you an example. I went to America. And I always look at whatever happens around me. And I saw the ... I started talking to some people in the meat industry. Started talking about the hygiene, started talking about how wood was going to go out of fashion and it's going to be forbidden. There's an opportunity, an opportunity to do the pallets.
Wood is going unhygienic, and it's going to be - maybe it'll take five years or ten years - but it's going to be ... we've got to get rid of it from hygienic point of view, and people are getting much much more hygienic. And it's not enough yet. Not enough to ... generally people don't take much notice, but as the publicity about it goes on more and more, there's always something in the paper every day, just an ordinary housewife. You have a look next time you start cooking, if you're using a wooden board it's got cracks in it, and those cracks you can't get out the ... there's an opportunity. Make a board out of plastic, which has been done. It's there. We've got two of them in here. There's many things like that. So you see the opportunity and you start developing something like a pallet itself, and you see that you can do other things, not only a pallet, but there are other things. There's an opportunity again, to see that there is opportunity. Sometimes you come across a raw material, and you say, 'Something can be done with it', you say to yourself. And you start thinking about it, and you say, 'Well I know where I can get it, I think I can get this, and I think it could be very successful'. I just heard the other day about a friend of mine who has bought into the rights of producing feed for vegetables, you know, the compost. And the compost is made from worms, and they take the chicken manure or actually piggery [manure], and they buy the ... His business is to grow worms. I didn't do that, I didn't see it, but he did.
Now I want to cut across you, because I want to move on with your story. Because I'm interested in whether or not you think that as well as having to see an opportunity, you have to be the sort of person that gets a little bit obsessed with the idea.
More than that. Obsessed with the idea in a commercial sense. Because if it doesn't earn you, make any money it's not a good idea. What is the purpose of making something which you can't sell. That's a toy, a one-off. But if you want to be an industrialist like I am, I consider myself an industrialist, so I see it from the ... immediately I see how many humans would want it> What would be the market, how big the market would be for that particular thing that I see that something new? So it's just a mixture of commercial sense and ambition and innovation. So it can mesh several things.
Nothing. Success means something. Money is only a means to create something else. That's after you have three meals a day and half a bed. I'm not talking about when you first start life and you want money and you want a nice house and you want nice things around you. But after that, as I told you, I love cars. After that it's just nothing to do with money. Money is a measuring stick of your success. And money, you take that piece of ... you're creating money and you take that money and start something else. You build something else with that. Create another idea with that. It's a means of proving your own ambitions of getting to a certain point. And the general public or public companies or even commercial ... thinks in terms of money. They don't think in terms of the product itself. [They think] How much money am I going to make out of it? And then it's not just money itself that you're after. You're after the success of making it. Now, on the other hand, if you couldn't make any money out of it I wouldn't be interested in doing it. Because there's no money, then so what? I can't move after that because that's all I have. And I have to have that profit. And the bigger the profit, the more pleasure it gives you because you're more successful. Again, nothing to do with money itself, it's just the ... instead of making say a dollar, you make five dollars. It gives you much more thrill than it does making less. And that's another driving force but not the fact of the money itself. Doesn't make any difference whether you have five hundred thousand, two hundred thousand, a hundred thousand, or a hundred million, or a hundred billion. It doesn't slightest make a difference because you can't eat more than a certain amount.
But would it make a difference to you if you lost it all?
Yes, definitely, it would make a big difference. Because then I'd have to start all over again from nothing. And starting from nothing is a lot harder than starting with something. And so, yes it would be a very bad experience.
No, in fact it ties you up.
Because you, for instance, at the moment I'm doing this pallet and I'm waiting for [the] next four weeks to make it happen. You heard my discussion with Peter on that subject. And I don't want to leave it. I don't want to go anywhere, I want to stay to make sure that it's done. And it happens that every piece in place. It's made up of many pieces, and if my engineer forgets one nut, I'm lost. And he does, he forgets about small things and so I have to remind him. So we've put a system in where the draftsmen have to put a whole list of things, at every point. And Peter just told me yesterday that there's one particular point [that] was missed. The day after they looked through the whole thing. Without that one small little thing, it's not a pallet. So therefore I'm worried to go away. I don't want to go away. I went away to Sydney just overnight, and I went straight back to the factory when I arrived home.
But it does give you freedom to be able to pursue a new idea.
Oh yes, that it does. It gives you the means of pursuing and keep on spending the money that's necessary to spend to develop it. I don't have to go and look for money or float it, or beg somebody to put some money into my venture. I can afford to do it myself. So it cuts out a lot of hardship.
When you were a young man, did you dream of being rich?
Just a need, just I always wanted to be rich, I wanted to be rich. I didn't want to be poor. I saw so much suffering, so much poorness. I wanted to get above that. And so I said to myself, 'I'm going to be rich'. Whatever rich meant. At that stage, at that particular point, a hundred pounds was probably being rich. Rich itself ... the word 'rich' itself means many things, from one to billions. It's still rich.
The dream is to get rich. And after you get rich, when you reach that point of whatever you consider rich, then you have ambitions to get higher and higher and higher in achievement, in achieving the things that you're dreaming about. And you have to have a dream. You don't have a dream, it will not happen. Because you have to have a vision there or a point over there somewhere that you have to reach. It's like climbing the stairs. You keep on trying, doesn't matter how much it hurts, but you go for that thing that you want, that you dream about. And really, people that are successful always have a dream. My father had a dream of escaping from Russia. And he did it. He came here, he tried some other things. He changed that dream. He thought he'd be able to produce socks, but that disappeared. And I remember on the boat, when we were travelling, we talked about ... my father had a habit of talking to his children all the time, particularly to his male children, my brother and I. And there was no secrets, there was no ... Everything he talked about. And he wanted to ... He imagined how many factories he was going to have, because we were a large family, and each one would have a machine that will go like that and make a pair of socks. And each pair of socks meant a ... whatever, a shilling to ten cents, or whatever it meant. Then he started multiplying by how many people who could make them in a day.
Are there difficulties about being rich? Are there problems?
What about the fear of having your possessions stolen?
Stolen? Well, I don't personally have that fear. If it's stolen it's stolen, it's gone, goodbye. It's sentimental. And I try not to be sentimental. You can't mix sentiment with business. It doesn't work. Because if you start bringing sentiment into it, you won't do the right thing. You won't sell or buy. Because you think - it's not ambition, it's sentiment. You can be sentimental and you can give it up, but that doesn't make business. And we sell a business ... Take the meat that we sold. It was very hurtful to us, to all of us, particularly to me because I was there from day one. And ... but you know that you have to do it because you'll fail in other things. You have to sell it for the particularly circumstances that happen at the time. In other words you think, well I have to give this up to get that.
Now you say you have to be practical and not sentimental in business. But you both talk about yourself as a practical person and a dreamer.
And also sentimental in certain circumstances.
How does being practical and being a dreamer go together?
Very well. There's no problem about it. There's no clash about practical and dream. The problem is to create your dream, to make it come true. Because the dream itself is just something, it's not an object, it's not something you can touch, it's something in your mind. And being practical is also something in your mind, because again you're born with that ability to think in terms of logic, of practicability, and ... but the main aim is to reach that point.
How much is the family part of your dream?
Up to this day, it's hundred percent family. Even though there's one part of the family life which ... well, there's been two or three breaks up in the family. And they're all peaceful, they haven't been ugly. They haven't been ... There was a certain amount of sentiment, but not if you look at it from practical point of view, it has to be done. And particularly when you create something yourself together with others, the others get hurt as much as you do, because each one thinks that he's done it himself anyway. You know, nobody thinks that they didn't contribute anything. They did, they in fact did. The problem is with a lot of people they don't think of it in the first place, they don't know how to start. They don't have those abilities or those gifts that they're born with that they know how to begin to create something. But then they're very good executors of your dream. You say, 'This is what I'd like you to do, if you like'. In our family they always had the option. If they didn't want to do it, they didn't have to do it, they could do another job. And so you suggest to them, 'Why don't you - would you like to do that with me?' And the person said, 'Yes', and then you start mixing your ideas together with his, and his ambitions and my ambitions. And then the rest of the family comes in with their particular input and it grows into a beautiful statue or whatever, business, or whatever you like to call it. It's art, in a different form.
Can I ask you now just to talk about your whole philosophy and the attitude you have to the general concept of family, what that means to you.
Well, what it means to me is really a togetherness, a friendship. You're part of a certain group of people, and whether you're a leader or you're not a leader it doesn't matter, but it's part of the people that you mix with, part of the people you live with, part of the people that you help to achieve their particular ambitions. And it becomes all one. And now that, as you know, I'm starting new life ... or started that about three years ago, and now I have a different family. The other family's just as important to me, but they have nothing to do with other family anymore, physically. We meet at parties, we meet at home, we visit each other but we don't talk business any more, our old business, except one, except the steel mill. And ... but that's a separate business now, managed by outside people anyway. So there's no direct contact, no physical contact with that particular business. But otherwise now I've got a new business, and a new family. And I'm trying to create the same thing as we had before in a different way, as I think I explained it, by putting the money into my family company, which belongs to my total family: my daughters, my grandchildren and great grandchildren, which they're all going to inherit. It's going to be theirs, it's theirs today if they want it. But the ... I own a very big piece of it and they are part of the same thing. They also have pride in that.
Why does it matter to you to be involved with people that are related to you?
It's not only people that I'm related to. I work with a lot of other people who don't have a share in the business, and I have exactly the same attitude to them as I have to my own family. And I give them exactly the same opportunities, but they're not shareholders, they're still workers. They might get bonuses but they don't get shares in the business because it's private, it's something ... We're not a public company.
Why not? Did you ever consider floating the company? Did you ever consider ...
Many times, and each time we rejected it.
Because you lose complete control, you're responsible to other people. An example I can give you is we started ... that question was asked many times. If I take a piece of steel from the steel mill, and some poor woman who has ten percent of the business, or ten shares in the business, I'm pinching a part of her property and I don't want it on my conscience, that I took something that doesn't belong to me. I don't need it, I don't want it, I hate it. I had a little bit of experience in the public companies. I feel very uncomfortable in those situations. Because from my family, if I take something I don't care, because they can take it too. But that poor old lady that I'm talking about, she can't. So why should I take something from her and feel guilty about it? So I'd rather not do it. It's really as simple as that.
You like the concept of only being responsible to yourself, and those who ...
Not only to myself, but to my own family with whom I share. And if I share with them, they can do exactly the same thing as I do. But when it's a public company, a shareholder can't come in and say, 'I want this'. 'I want to borrow it' or 'I want to steal it, I want to take it'. But I can do anything within the family company, not only I, every member of the family can take whatever they like. We account to each other, so if something that's worth something, money, we say, 'I'll take that, charge it to me'. But we can't do that in a public company, because you'll be accused of stealing.
So how important has mutual trust been to the family operation?
I think that was the most important thing in our success, is that mutual trust. We never, ever had any agreements in writing. It was always by word, by agreement, by saying, 'Yes, okay, let's do it'. Never, ever have we signed any ... even the original partnerships with my uncles, there's just a note about it, but no signatures on the note. It's just a memorandum rather than an agreement.
What would have happened if somebody had abused the trust?
If somebody had abused trust, I'd be very angry with them, and eventually one way or another they'd be out of the business.
No. No never.
And with the various break-ups, and especially this most recent one, where everything changed, has that affected the personal relations in the family?
No, no, it's very similar to what it was, because everybody accepted it. It was by agreement. It wasn't as if the ... Normally, even though my brother and I are the ... have more than fifty percent of the company, we have no rights, because we agreed not to have the rights. So we are exactly the same as a person who has five percent of the company. So there's no problem about that.
When the management consultants came in, you're on record as having disagreed really with their advice. And you felt that it was undoing a very particular and precious way of operating that had been built up. Did you try to persuade the group not to take any notice?
Yes, yes, I did with the young people. The way the veto works is once you agree, which I did because I didn't know what it meant to have outside people advising you, once I agreed I have no right to change my mind. I have the right [but] everybody else has to agree with me, the seven families. [The] heads of seven families have to agree to do whatever they like. So ... but they liked ... the young people like it, they wanted that. The generation after me, they wanted to. You probably saw that in the movies that I showed you. But that didn't destroy our friendship, it didn't destroy our relationship. But then eventually after a few months of that unhappiness with some young people as well as the older people, we got together again and said, 'Well let's break it up'. And it was done.
How did you feel about that? Having spent a lifetime struggling to keep it all together, then to come together to make a decision to break up the sort of Norman Smorgon, your father's family group, how did you feel?
I felt very sad about it, but I'm a realist. In my mind it was a question of doing it, or ruining the whole business. It started going down and down and down because the outside people, the new team that the professionals brought in, they knew nothing about our systems, nothing about how we performed. And they introduced new people who knew nothing about our past or how we do things. They started doing things in a very heavy ... what's the word?
Authoritarian. And the young ... our young people were dictated by people they'd never met before. And they suddenly became senior people. They used to take notice of their uncles and cousins or brothers, and then suddenly somebody comes along and tells them what to do, and they know that it's wrong. And unless they have strong personality. And that happened to Peter. Peter worked in ... he went to work as an apprentice. He worked in the steel mill, through different sections of it. And then he went to ... he was sent to Tasmania for about two years. And he took - there was three plants there - he took, with his personality [he] took over the running of the three plants himself. And then he was sent to Sydney. In Sydney there was a man that was very happy for him to take over and do whatever he wanted to do. So he was very happy about that. Then he came back to Melbourne, and he came back to Melbourne because his girlfriend was here, who you met. And here he struck a man. In Melbourne he struck a man. [Peter] said to him, 'What job am I going to do?' He said, 'You go and do some simple little job sir, and in five years if you make that good enough, we'll see if we can promote you'. So then he took matters in his own hands and went above that man, and went straight back to the chief executive of that section, not the family member, and said to him, 'I want to do that job'. He said to him, 'Well put it down on paper and show me what you want to do'. So he did. And the chief executive said, 'Wonderful, go and do it'. But there's not many people like that.
What kind of a father are you to your own daughters?
Terrible? In what way are you terrible?
They accuse me of not paying enough attention, not bringing them into the business. Not now, but when they were children, and when they were young. I love them and I spend a lot of time with them. But then Loti and I are away each year for about four to five months of the year. So they were spread around the relations or a nurse, and they were quite unhappy. At the same it was a wonderful experience for them, because they saw how other people live as well. So there were times that they thought they were ... I don't think they're angry. They're not now, certainly not now, because now they understand. And they do exactly the same thing, as we did, to their children. But I don't think that my children would consider me being a good father in the sense ... not in the sense that I don't love them or I don't cuddle them. We're a cuddly family anyway, but it's a neglect. I'm not always there when they want me. And that to them was very important obviously. To most people it is important.
Do your daughters think you're too interested in business?
They know that I'm too interested in business. We always joke about it. And I said to them, 'Well what do you like doing, would you give that up?' 'No'. I said, 'Well why should I give up what I like doing?' So then they begin to understand. And then when they get married, their husbands are in business usually. And then they start to learn. They understand what it's all about. So they have a happier marriage because they know that their husband's not going to be there twenty-four hours a day. He's only going to be there eight hours a day or eight hours a night, or whatever.
You said that you didn't encourage the girls to come into the business, that they were free to do it if they wanted to, but they didn't get the same encouragement that the boys got. Why was that?
Mainly because we were in a heavy, smelly industry, which women don't like. And particularly in meat, which was the first business, when the children were growing up. They loved going to the meat works and running amongst the sheep and all that sort of thing but not the slaughtering and the canning, and all that.
You didn't feel it was quite right for them?
No, I wouldn't have minded if they came in, but none of them said I want to come in. One did, one of my grandchildren did. This one, the one you just met today. And she said she wants to join the company. I said, 'Wonderful, come in'. But I said, 'I want to make a deal with you first. Three years, after three years tell me whether you want to stay or not so I'm not embarrassed against my other partners'.
Do you remember when your first child was born?
Yes, very much so.
Could you describe how you felt.
I felt wonderful. It was a tremendous feeling. But I must tell you it all happened too as well, because at the same time I say I love the child. I did, I do, particularly the first one. Loti was ... I was a wholesale butcher, as you know the story, and you have to get up about three o'clock in the morning and go and load the trucks. And she started getting pains at three o'clock in the morning. And I said, 'I had to go and load the truck, hang on. I'll be back at six'. I came back at six just in the right time to take her to the hospital. But of course, it wasn't quite as bad as that because there was an extension front on my father's place. In those days you had extensions fronts. We lived about half a mile away and so she had help in case something happened. But then when the baby came, I'd get up at two-thirty and feed the baby, boil up the bottle, change the nappies, and all that sort of thing, until the child was about eighteen months or two years. I did that for the second one, but not the third or fourth one. By that time we could afford maids. We couldn't afford maids then, because in those days we lived on five pounds a week, but Loti had enough to employ a nurse, because the nurse only got about five shillings a week. So it wasn't hardship really in a way. Everybody lived ... All the working people lived on about three or four pounds a week so she was already better off. She was certainly better off than when she lived at home with her father. She was getting one pound a week. So it was no hardship.
What does it mean to you as a human being to be a father?
It meant to me that the continuation of the family, continuation of a human being that's just been born, that's just ... and it's part of me, part of my own flesh, my own ... it's mine.
And did it make you feel very responsible for the future?
Yes, very much so. Then you really start thinking about money and how am I going to support that child. And how ... it's all part of the ambition to make certain that your children will be well looked after and I had the means to look after them. All that goes through your mind. Not ... it takes time, you know. It's not sort of instant, it's a gradual process, and as more children are born, the more and more you think about extend[ing] the house. Now how am I going to pay for it? And I have to take so much money out of the business. Now I've got to decide whether I'm going to buy extra cows or am I going to buy milk for my children, which of course there's no option but buying milk for children, if you didn't have enough, so you'd borrow a bit more.
When did you reach the stage, or have you ever reached the stage, where you're not working at all for money that you can do things with?
Well, I think that's happened a long time ago. So at my age now ... I would say that was when I was about forty-ish, around about that time. When we got on our feet, we started getting bigger and bigger, and we started exporting. By that time we were big exporters. So by that time it was not a question. The question was can we borrow another hundred thousand from the bank. And we always had a good reputation with the bank, and every time we went my father was scared of the banks, because of where he came from. I had no fear of the banks, because they were a bank. They were in the business to lend money. But in my father's mind of course was, being brought up in a different generation, to him it was something. The bank manager was a god and he wasn't - not trembling - but he was uncomfortable, and he used to send me to see the bank manager. And he saw them as well, but he'd push me to go and see them on the more serious things. But to me it was nothing, it was just the same as going into the shop and buying a pair of shoes.
So you dealt with the banks. The other big public institutions that had to be dealt with in a business sense was government and politicians. And in general - we heard the story, you know, about going to Canberra - in general, what was your attitude and policy towards politicians?
It was ... Our policy was always to support both parties, because you don't know who's going to be, which one you need, which one will help, which one won't help, and we developed friendships with both sides of politics. And ourselves, we weren't politically minded. Most of the family voted Labor, because of where we come from. They all vote for the socialists. Most of the Jewish people were Socialists in the sense that they were poor and they were abused, and they thought that communism was the answer to the Jewish question, and to anti-Semitism. It was for a little while, but then it stopped very quickly. And so there's a natural sort of response of fear, which I didn't have. By the time I grew up there was ... anti-Semitism wasn't very strong in Russia, because the communists said a lot of that has to stop. And most of the revolutionaries who created communism were Jewish anyway. But then when Stalin came in, then it became different, because he then didn't give a damn that they were Jews or what they were: kill them. 'If they're against me, kill them', which was different to ... Lenin had a different policy. Lenin wanted to grow the country slowly back into the ... like they're trying to do now. And Stalin said ... he also had a policy of spreading further and further afield, going to other countries, like they did later. And that's when ... you probably know the history about Trotsky. Trotsky's the one that insisted on revolution through the world.
But I wanted to talk about you, and in relation to politicians and politics, was your attitude pragmatic?
What does pragmatic mean? What does pragmatic mean?
Well, you just decided to be practical in the way you approached politics. So I'll ask you that question again and I'd like you to answer with your view of how you approached politics in Australia. And I'll ask you the question again. What was your approach to politics and politicians in Australia?
In the first place we were very impartial and didn't worry very much about politics but we always gave something to both parties. But the Labor Party was always more favourable, got a bit more than the other ones because of the background that we came from. And ... but then my first experience with politicians was with Arthur Calwell. He rang. We had a small little canning factory in North Melbourne and he was in that area of covering Melbourne. And he just ... it was his first attempt at being a parliamentarian and he needed help, and he rang up and he rang everybody in the area, and I happened to answer the phone. And this man says ...
You've told us this story. So that's fine. Moving on to something else, one of the things that interests me about you was most Jewish immigrants, particularly, put a huge value on education. Now you yourself decided that you didn't want to go on to further education as your father wanted you to do. What is your attitude to the value of education?
I think education for specific purposes is wonderful. I think education for the sake of social contact is wonderful, but in business it has no meaning. Education is what is in your head, and what gifts you were born with, that you can exploit from yourself. Education doesn't help a business man. I do feel sorry that I didn't have some education to be able to read more, to understand things more. But that comes after a while by mixing with people, talking to people, particularly in my case where I had opportunities to talk to many great people. And that explained to me what they're about. And they knew that I had no education, and they treated me equally. They didn't say, 'Oh what the hell do you know?' and that sort of thing. Or ignore you. And part of that is part of success, because I was seen to be, or perceived to be successful in business. So therefore they responded, 'You're smart in business, so you're smart enough to understand what I'm talking about'. So in one sense I'm sorry that I didn't have education but would I have done the same things if I would have had that, I don't know.
But you learnt enough out of life for a university to decide to give you an honorary degree, didn't you?
Obviously they think ... obviously they thought that I deserved it, and it was the biggest surprise I probably had, much more than ... getting that honour. But it's a ... it was a complete surprise, and I said, 'Why me? What have I done that I deserve to be called a doctor, if I want to call myself a doctor?' And that was very pleasant and very exciting and satisfying. That's when the ego comes in.
And so you got a very special thrill out of this.
Extremely special. Especially. I got a very strong feeling about that, that I was given that honour. This was given to me indirectly, not for what I've done, from what Loti has done.
This is the Officer of the Order of Australia?
The Order Officer of Australia. AO. AO. That's the second highest order, which I was very pleased about of course. But at the same time, I felt that I didn't get it for what I should have got it for. I should have got it for being an industrialist, because that's what I'm good at. I'm not good at art, Loti's good at art. I was helping financially. I was helping, encouraging her to be involved in it and encouraging to get more and more. She didn't need much encouragement, she did it automatically. But I didn't try to stop her or ... I tried to help her in the things that she wanted to do. So I was number two in that field, not number one. So to me it doesn't mean just as much as the Doctorate, which was a completely different thing to this type of honour.
How did you feel the day that you got the Doctorate?
High. Very happy, very high.
People talk about the fact that manufacturing industry is going to cease very soon to have the place that it's always had, and as has already happened in America, the whole new computer age, the information age, is going to take over as the major area of productivity in society. Now you've always looked ahead, Victor, at things as they developed. What's your feeling about that? And what does Smorgon, your company, feel about it?
My present company?
Peter and I? As modern as possible. All the machineries we're building, we're building with computers and with all the automation that's possible, that's available today. And I believe that the automation has to come, otherwise we're going to be behind the world. Australia's going to be behind the world. And Australia, to a great extent, is quite modern, or has been for some years. People buy the latest equipment. In the paper industry it's the latest possible equipment. In the steel industry it's the latest possible equipment. And that changes continuously and you've got to keep up with that and you've got to understand it. And the machines that we're building are automated. Just as an example. I told you I made a mistake making only one entrance for the flow of molten plastic, recycled plastic, and that didn't spread far enough. So we had to build two more so the whole pallet is covered. And my engineer, who is Russian, born and educated, but he ... because he's been doing all this type of work, and he came up with the idea of making the automation so that if one section is filled, the other one takes over and the third one takes over, so the whole product is filled up, or the holes or space in the mould are fixed up, which is the latest technology in that particular field. There's many other fields. I talked to a lot to people about that. In the other professions it's the same thing.
You've said that you don't think education in a formal sense is valuable to a businessman. What about knowledge?
Knowledge of the subject that you're working in? Yes very important. But then you learn as you go along. You don't ... You can't learn everything, particularly when you are inventing things, when you are discovering new ways of doing things. You make mistakes and you have to think about it, and my main ... my system is ... because I didn't have any engineering education or any other education, my Russian engineer has several diplomas about engineering, and he's got a very narrow mind for what he learned. He says, 'It can't be done', and I say, 'Why can't it be done?' 'It's never been done before'. I said, 'That doesn't matter. I think it can be done. Why don't you do it this way?' He says, 'It won't work that way'. 'Well which way do you think it'll work?' 'It'll work that way'. 'So okay, let's do it that way'. And then I got him and got him and then he starts thinking about it, so I force his mind from here to here, and he comes up with the ideas, not I. And he has the brilliant ideas, but not without me. Without me he wouldn't come anywhere near it, because his mind is trained to one narrow field, and that's a big problem with industry generally. And engineers in particular. They have ... although my brother hasn't got it, because he's just a natural engineer. My cousins that I was telling you about, they don't have it. They never had an education, yet they can make the most complicated machines.
I get the impression that throughout your career, the thing that you've provided, the essential ingredient if you like, is a very, very clear strong will.
You're right. Definitely. I've been accused of that many times. When I decide that something should be done, I fight for it until it's done. And then my record's probably eighty-five to ninety percent successful. It works. And some people get very angry about it, other people I work with, because I believe in pushing your brain up. I believe in forcing people to think. To make them think you've got to say something that they don't like. And they don't like to be talked to [that way], when they're educated, particularly when they're educated: 'Don't do it that way, do it another way'. They say, 'That's the only way to do it', and I say, 'It's not the only way to do it. There's many other ways to do it. My mind and logic tells me that there other ways to do it, let's work on it, let's talk about it. Have discussion. Tell me how would you do it if you couldn't possibly get the type of material. What would you do?' Another fault with the engineers have is they make everything out of small, thin steel. You know, the very weak stuff. And I say to them that, 'You're crazy. The steel is not where the money is, the money is in the working the steel and in the machining it, and it doesn't make it difference if I might be paying three times as much for the steel, because it's thicker. But it's stronger, so therefore it's going to last longer'. So I say, 'I'm looking from practical point of view'. They don't, they just ... they don't think in terms of ... certain things they do, but generally they don't think in terms ... particularly when you invent something, they don't think about how long's it going to last. And many times many things we had to change, because he didn't build it strong enough. And then I forced to him think. I scream at him and said, 'When you're ordering steel, make sure it's three times more [stronger] than you think it is'.
How important was the Second World War to the success of your business?
The war itself was not. We were restricted, we were on a quota. The Government has only a certain amount of meat, and that was the business we were in. And they wouldn't ... that's all you could have. So we had to have that quota and it wasn't a very big quota for us, because we were very small. The big companies had the big quotas. And it's after the war. Before the war and after the war that we started growing. Before the war England wanted anything, because they knew the war was coming and they were putting away canned goods, and we'd supply them anything that they wanted, and in big numbers. So that was our first partner. But then when the war started and the Government, the bureaucracy took over. They had some dividing up: how much you can have and how much you can have, or how big is your plant, how big is your plant, how big is your lot of meat, how big is your abatoirs. And ours certainly was not the smallest or the biggest. There was three others that were huge and they got most of the orders. And then it came to price, and they'd ask us to put in a price. That was the system. We said, 'We'll accept whatever Angliss accepts', because we knew they knew how to do it, and we knew it cost them a lot more than it cost us. So we said, 'We'll take the same price'. And then you also bring in innovation. We were talking about innovation, and talking about new products, and how you substitute one product for another. As you probably know, as we talked before about sausages, and the navy wanted sausages in cans. And sausages are usually put in a pigskin, pig casings, which is the casing of the intestines. They're cleaned, and there was not enough of them. They had to be about that size [GESTURES HALF OFF CAMERA]. So my brother came up with an idea of taking a plastic tube or a rubber tube about the same sort of size as a sausage, put that in hot water, and then if you put any meat in hot water, it creates its own skin. Then with cold water you push out that sausage meat after cooking it, push it out and you then slice it up into a certain size in a box, and you put it in again, without a skin, and put fat in, because they need the fat to fry them. And we got all the orders that were available. Vestey's or Angliss or any of the big companies, they don't think in those terms. So we had the advantage that way, that we introduced [new methods] and nobody else could produce it, because they just didn't figure another method of doing it. So if you can't do it one way there's always another way. I was talking about engineering, this is very similar to engineer[ing]. Engineering is something else.
Victor, as we speak you're eighty-five years old. How's your health?
My health is excellent, except for pain here, pain there, but that's nothing. In the legs, hips and muscles. Otherwise I'm a very healthy person, at any age. I don't feel any more than fifty. I might, I might get in at fifty-five but I doubt it. Because you young people think that are old people are old. We're not. Some of us are. Some young people are old. Again, it depends on your genes, depends on what you're born with.
Do you think ever about death? Do you think ever about death?
Yes, I do.
What do you think it's going to mean?
What's going to happen?
I'm going to die, and they'll bury me and they'll forget all about me after. It's very simple. There's no after death. There's only one fellow that's supposed to have come back, and he was Jewish. But in 2,000 years another one didn't appear. Still waiting. Both the Jewish religion and Christian religion believe there's another one coming. He's not there.
So you feel that it'll be the end.
It's the end. It's the same as whatever: flowers, animals, they have a certain life span, then they die. That's what happens to them. They die, you bury them or whatever happens to them, and that's finished, you're finished with that. And that's it, that's the end. There's a beginning, there's an end. You're born, and it's a natural process of life, of everything in life. There's nothing ever that stays forever except stone, which is not a living thing, it's an object, it's a mineral, which lasts millions of years. But any living thing, including the smallest insect, has a span of life, whatever it might be, and then dies. But it reproduces first.
No, there's no immortality, because somebody else takes over. It's not immortality. Once you're finished, once your dead, you're dead. You don't ... you have no influence whatsoever. You might have influence whatever you've done before during your lifetime, and people might copy that and be influenced by that. That of course happens. But once a person is dead, it's ... that's the end. And my ambition is to die. People talk about when are you going to retire. I said, 'As soon as I die. That's the time to retire'. Otherwise it's a very dull life if you keep on living not knowing what to do. I've got some friends like that. They try to play golf, which they don't even like. They're just killing time and within a short period they die, just from boredom.
You describe yourself as an optimist. What is your hope for the future after you're gone?
My hope is that Peter will take over the running of the family. There's a lot of children, there's a lot of great grandchildren. And he'll take ... it will belong to all of them, whatever we have. And that he will manage it and bring the others in as they grow up, and repeat the same thing as I did during my life in his own way, in much more modern ways, because he's computer wise already, he's very much into that, and understands it much more than I do in that respect. He has many more gifts than I have. And ... but I'm not sure whether he has the ambitions that I have. I think he has, but that's got to be proven yet. He's too young, he's twenty-seven. But I think he's got the ability to do that.
What have been the most exciting moments of your business career?
When I bought the chickens. When I bought the first four, or six or whatever it was. That was the most exciting. It's been exciting ever since, but nothing's more exciting than what you do first. The first time you do it.
And when you talk about the excitement of business, what are you talking about?
I'm talking about innovation, something new, something different, something that nobody's ever done before. Or some ... there's a need for it and you're able to fill in that need. In the chicken was a need to ... for me it was a need to make some money, so that I can live with a little bit of independence, not because I was kind to the women, because I thought it's a good business. And I was obviously born with those needs to be successful. So that was my first success. You asked before about the money, it's nothing to do with the money that I made. It did in a way, but that's a measuring stick. So I suddenly became respected by the rest of my family, because I've already become richer within months. I became richer than they were when I started the wholesale business, and so all that is sort of part of living, part of the respect that you build up over the years.
Do you think that in order to be a successful business man, you have to be able to harden your heart? [Smorgon: Pardon] Be able to harden your heart?
No, I don't think you have to be hard in the heart. You can be a very kind person, you can be a very cruel person, you can be a very objectionable person. You could be anything. And they're two separate things.
What kind of a business man have you been in that respect? Have you been tough?
In many respects I've been tough. I've been tough on the young people. My policy was always to push them, to bring their brain to a higher level, the brain in experience, the brain in performance, not necessarily education. If I was trying to educate somebody, I would use the same method of pushing and encouraging and say, 'Do it'.
Any other way in which you've been tough? Have you been tough on competitors?
You're always tough on competitors. They think we're tough. Yes. It's not tough. We always ... because we fought the big companies not the small companies. We always avoided competing with people of our own size, of the level we do. That's why we got out of the butcher's shop. Originally we had ... there was only another one, another kosher butcher's shop. And then there's some more, another two were built, we got out of it. We didn't want to compete with those people because it's too tough. They might be smarter than we are and they might be harder workers than we are. So we went for the big fellow, the big companies, we fought against them. And you can't hurt them mentally, you can only hurt them very tiny because they've got so much money behind them. And most were not Australian companies, they were English or American companies, and they had unlimited funds to work. And we just picked up what they left behind. We just took advantage of them.
Have you been a tough employer?
I wouldn't think so, no. I think we've been a reasonable employer. I think we've been ... as I said before we're socialistic minded, and we understand the working man's thinking, but that doesn't mean that he gets more wages than whatever the standard is. But we are, from very early days when we couldn't afford it, if one of our workers got sick at work, he would get ... we kept on paying wages. I remember in Bridge Road, Richmond, the first shop we had, other than the kosher shop and one of the men ... our man that worked there became sick. And the family - at that time I wasn't the leader - but my father and his brothers decided to keep on paying him wages, because he's ... In those days there no welfare, there's no things like that. Today there is. So you don't have to do that. But in those days if you thought of yourself as a decent person you helped those people.
Going right back to your beginnings in the Ukraine, and remembering your early childhood there, were there any signs in the young Victor, in Victor the child, of the person you were to become?
I wasn't aware of it. There might have been. My father thought so. My father always pushed me to do something. Always told me what he was doing. And don't forget that it was during the Revolution, and I'm a product of the Revolution. I was born in 1913, and the Revolution started in 1917 and lasted 'til about 1922. And we left in 1926, so most of my time I came to Australia, that's possibly ... well, really two years. At the age of twevle, or from the age of four to the age of twelve, it was wars and slaughter and murder, and you know the story about my mother. And all that sort of thing is right in front of you. So you accept it because it's there. But then later on, when my father started building up business in Russia under the New Economic Policy, he used to tell us everything he was doing, both to me and to my brother. There was no secrets, there was no ... he always encouraged us to listen to what's happening. He was taking tremendous risk, because we could have talked about it to somebody that shouldn't know it. And in those days, bang, you're dead, because of whatever they perceive you to be doing.
And looking back, with hindsight, what effect do you think that had on you, that you carried with you through the rest of your life?
I don't really think that it had any effect. I still believe that it's the genes that you are given, that you're born with. There's the effect on my sister. There's the fact that they were older than I am. There's the effect on my brother, or any other people that I know at that age, at that time. Even the older people. I don't think ... You forget it. Look at the Holocaust people that survived. They come back to life very quickly and become very successful as well.
What are the principles that have guided you life? If you had to leave a legacy and had to sum up the things that you really think make a life a good life, what would you say?
I would say the satisfaction of having a beautiful wife and beautiful children, having a nice home, having respect from your equals and above, having respect by other people that think you're a decent person, and all that type of thing. That's what life means to me.
And it wouldn't be your success?
Well, I don't think of myself as the success that other people think. To me it's normal. I just do it. So I don't think ... When people say to me ... When you rang me and wanted to interview me, I say, 'Why am I so important? What have I done that's so important that people want to know more about us, or about me?' because I am not conscious of that. I'm conscious of doing things I want to do, that I love doing.