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McKay, Hugh Victor (1865–1926)

by John Lack

This article was published in Australian Dictionary of Biography, Volume 10, (MUP), 1986

Hugh Victor McKay (1865-1926), manufacturer, was born on 21 August 1865 at Raywood, Victoria, fifth of twelve children of Nathaniel McKay (pronounced to rhyme with day) and his wife Mary, née Wilson, from Monaghan, Ireland, and adherents of the Free Church of Scotland who arrived in Victoria in 1852. After mining at Ballarat, Stawell and north of Bendigo, the McKays settled at Raywood, moving to a selection at Drummartin in the early 1870s.

The older children had little formal schooling, but Nathaniel and Mary read them the Bible, sermons, the works of John Bunyan and other improving literature. All eight sons became successful businessmen, tradesmen or farmers, and four of them were closely associated with Hugh Victor's enterprise. Nathaniel Breakey (1859-1924) became a schoolteacher, journalist and founded the Mildura Cultivator ; John (1861-1936) built an extensive provisioning business in northern Victoria; George (1867-1927) was a coachbuilder; Samuel (1871-1932) became a storekeeper with John. Hugh Victor was educated briefly at the Drummartin school and under his brother Nathaniel in north-eastern Victoria, until recalled at 13 to help on the farm.

On the edge of the northern plains harvesting depended on the horse-drawn South Australian stripper and the manual winnower. Government prizes stimulated attempts to produce a harvester combining stripping, threshing, winnowing and bagging. At Drummartin in October 1883 Hugh Victor's attention was caught by J. L. Dow's article in the Melbourne Leader describing the mechanization of Californian wheat-farming by giant 'combination harvesters'. With his brother John and his father, McKay assembled a stripper-harvester from existing implements and machines, work which they always claimed was done in total ignorance of other experiments. Their prototype was completed in January 1885, tried in the field and patented for 'Improvements in and connected with harvesting machines' on 24 March. Hugh Victor persuaded the ploughmakers McCalman, Garde & Co. of North Melbourne to manufacture this machine, which was exhibited at the National Agricultural Society Show in August. Several were sold and gave good service. McKay's boast that they were the first successful stripper-harvesters on the market was later inflated by company propaganda into the claim that he had invented the first machine. In fact James Morrow had perfected, patented and exhibited a stripper-harvester more than a year earlier, had won a prize at the government trial in December 1884, and had narrowly taken the honours from McKay in the 1885-86 field trials.

McKay's first harvesters were made under contract in Melbourne, Sandhurst (Bendigo) and from 1888 at Ballarat, where he opened an office. The McKay Harvesting Machinery Co., established in 1890, purchased McKay's patents and the rights to manufacture, and traded profitably until it fell victim to the economic crisis of 1892-93. The family held more than a quarter of the shares. McKay, recently married on 11 March 1891 to Sarah Irene Graves, was left with only £25 to his name. Assisted by a small syndicate, he snapped up the company assets, traded as The Harvester Co., in 1893 built an improved harvester, tested it in two successive harvests, and marketed it as the 'Sunshine'. Though he purchased the business and established formal independence, his erstwhile partners were rural businessmen who gave essential financial backing over the next decade.

The business expanded phenomenally during the long drought at the end of the century. The 'Sunshine' cut costs, encouraging wheat-farmers to sow more extensively. 12 were built in 1895, 50 in 1896, and production almost doubled annually to 500 in 1901. McKay established agencies in the capital cities and employed demonstrators throughout the inland grain belt. In 1901-02, urged by his brother Sam who had become sales manager since his return from the South African War, he followed his chief competitor Nicholson & Morrow overseas. 'Sunshine' harvesters were dispatched to South Africa, and in 1901 Sam and three Ballarat experts went to the Argentine where they demonstrated 'La Australiana' on a variety of crops so effectively that they soon threatened the trade in North American reaper-binders and headers. Sam superintended South American operations, and established the business throughout north Africa. By mid-1904 McKay's overseas trade had earnings of £70,000, making him the largest manufacturing exporter in the Commonwealth.

Soaring production (1023 machines in 1903-04, 1916 in 1905-06) encouraged McKay to install mechanized plant and streamlined assembly. Innovations included a revolutionary new steel foundry, moulding by machine, a bolt-manufacturing department, and a sawmill and woodworking department using McKay timber. George McKay was works manager. In declining Ballarat the Sunshine Harvester Works was the great success-story. Year-round production guaranteed employment to some 500 loyal workers by 1905. The works fielded cricket teams, the 'Sunshine' choir sang in the South Street competition, and the employees marched as a body on Eight Hours' Day. McKay's meteoric rise made his success seem fortuitous, but few observers could have been aware of the nervous energy required to sustain what was really a risky and fragile business. McKay's profits were substantial and rising, from around £3000 in 1898, to £39,000 in 1905. But competition, local and overseas, was cut-throat, the weather exposed the business to sudden slumps, and the short harvest demanded absolute reliability of his harvester and of replacement and repair services. Generous warranties and extended credit terms for machines, together with the rapid expansion of the works, meant that McKay operated on substantial bank overdrafts and loans. His triumph was almost as much financial as one of manufacturing and supply.

Sea and rail supply-lines for fuel, raw materials, subcontracted parts and finished machines made a seaboard location imperative. In 1904, alerted by his brother William, manager of the Commercial Bank at Footscray, McKay acquired the well-equipped works of the Braybrook Implement Co. at Braybrook Junction. At the northern and western rail-junction this site had an additional advantage. Being within a shire and requiring an Order in Council to bring it under a wages board determination, it offered shelter from a system to which McKay was implacably opposed. He had stated before the royal commission on factories and shops laws that market forces should determine wage levels, through individual bargaining. In 1901-02 he had helped to form the Ballarat Chamber of Manufactures which campaigned against wages boards, and when a board was mooted in his industry he threatened variously to replace workers by machines, to move his business interstate, and to send his patterns to America and assemble his machines from imported parts. When the Ironmoulders' Wages Board's determination restricted the number of juveniles and improvers in 1904, McKay appealed to the government, obtained a secret undertaking from premier Bent that the determination would not be extended to Braybrook, and moved his works there. McKay's evasion of the wages board did not endear him as a high tariff protectionist to his Victorian competitors or to the union movement. Business rivals accused him of hypocrisy; Laborites, including Tom Mann, branded him a free trader in humans.

McKay argued that the low Federal tariff left him vulnerable to unfair competition from overseas manufacturers supplying larger markets and enjoying cheaper labour, raw materials and freight. Further, he asserted that the stripper-harvester, pirated by Americans, was being dumped below cost in Australia in an attempt to destroy the local industry. In 1904-05 he launched a highly emotive campaign against the 'American Octopus Trust', the International Harvester Co. of Chicago. Workers and protectionists formed the Harvester Defence League to demand a higher tariff, but critics suspected that McKay was taking refuge in patriotism to disguise his fear of competition from fellow-Britishers Massey Harris of Canada, who appear to have been exporting machines copied from Morrow's Union Harvester, not only to Australia but to South America. McKay put the case for higher duties in April 1905 to the Tariff Commission appointed by the Reid-McLean government.

The commission's reports of August 1906 recommended increased duties, and a doubling of those on stripper-harvesters, subject to the outlawing of combines, and the suspension of duties where manufacturers made unwarranted price increases or failed to pay 'a fair and reasonable rate of wages'. The Deakin government responded with its New Protection legislation, designed to spread the benefits of tariff protection to workers and consumers. Despite legal advice that the Excise Tariff (Agricultural Machinery) Act was unconstitutional, McKay applied for exemption from excise duties, and Justice Higgins selected his as the test case. In his celebrated Harvester judgment of November 1907, Higgins, while praising the Sunshine Harvester Works as 'a marvel of enterprise, energy and pluck', decided that 'the normal needs of the average employee, regarded as a human being in a civilized community', dictated that an unskilled labourer should be paid a minimum of seven shillings a day of eight hours, and that as some wage rates at Sunshine were below this McKay could not be exempted. The government looked for a compromise, but McKay determined on confrontation, forcing the government into the role of debt-collector. He challenged the constitutionality of the Excise Act, which was declared ultra vires by the High Court of Australia in 1908.

The Harvester judgment made McKay an instant convert to the Victorian wages board system, but his behaviour boosted unionism and strengthened worker interest in Federal conciliation and arbitration. In 1911 the agricultural implement makers' union called a strike, ostensibly to enforce the closed shop but as part of a strategy to bring the industry under a Federal award. Led by McKay the employers responded with a lockout of all unionists, striking or not. McKay refused Prime Minister Fisher's offer to mediate. The Harvester dispute lasted thirteen weeks, affected 2500 workers, left the union defeated, demoralized and bankrupt, and poisoned industrial relations for decades. McKay's detestation of Labor and unionism was expressed in his support for the free (non-union) labour cause and in his own campaign for the Ballarat seat at the election of 1913. Labor won the seat in a tough and close fight.

Initially McKay's promotion of worker residence at Braybrook had been speculative, appreciating that as land values rose 'we can sell it by the foot instead of by the acre'. But the 1911 dispute set him thinking about the possibility of creating at Sunshine, as the Braybrook Junction township was known from 1907, a model community of worker freeholders opposed to militant unionism. He drew inspiration from overseas company towns, notably those of Cadbury and Lever brothers in England. His own estate department built stores, a public hall and library, and a coffee palace, provided land for a technical school, supplied electric light and public gardens, and initiated tree planting. If there were an element of idealism, Sunshine was nevertheless an investment in industrial peace. McKay anticipated that married men, preoccupied with family, mortgage repayments and their gardens, would prove a loyal, diligent, and politically moderate workforce. At Ballarat he had introduced generous holiday leave, a contributory accident fund and a personal loan scheme; these were extended at Braybrook under the management of worker committees. Hugh Victor, Sam, Nathaniel and George McKay and their families lived at Sunshine, and exercised a pervasive influence. Critics saw not so much philanthropy as subtle social and industrial controls.

The Sunshine Harvester Works was for many years the largest factory in Australia, and it grew prodigiously to cover 30 acres (12 ha), employ 2500 workers and in 1926 distribute £600,000 in wages and salaries. McKay had initiated full-line production. Under J. B. Garde, who adapted the stump-jump principle to the American-derived disc plough, the tillage department produced an array of successful implements from 1905-06. McKay experimented with self-propelled harvesters from 1902, and in 1912 Sunshine commenced the manufacture of internal combustion engines for farm use. A severe challenge to his stripper-harvester from the Massey Harris reaper-thresher was met when McKay bought the rights to Headlie Shipard Taylor's header-harvester. Taylor's header was available for the 1916-17 harvest, and it met the Massey Harris challenge and also rapidly outpaced the stripper-harvester, especially after spectacularly successful work on storm-damaged crops in 1920-21. This was a most opportune development, for McKay was never to regain the South American markets lost on the outbreak of war in 1914. Otherwise, war and business had combined naturally for him. War materials were produced on a considerable scale and McKay initiated the production of drawn steel shafting and brass and copper tubing, supplying the latter widely to industry. He and Sam were members of the Federal Munitions Committee, and McKay served on the board of business administration formed in 1918 to advise the contract and supply board of the Department of Defence. While in London during 1919 he chaired the Australian War Materials Disposal Board. For these services he was appointed C.B.E.

The war and post-war years saw a widening range of Sunshine machines: engine-functioned harvesters from 1916, combined seed and fertiliser drills and cultivators (after R. A. Squire) from 1917, reapers and binders from 1921, and Taylor's self-propelled auto header from 1925. McKay's own motor tractor of 1917, like his self-propelled harvester of 1908-09, was suspended as not commercially viable. The survival and prosperity of the McKay enterprise depended on the inventiveness of practical farmers and specialist engineers around the country, attracted by McKay's reputation and wealth to sell him their patents and expertise. Surveying the agricultural implement industry, and finding it littered with enterprises which had collapsed on the deaths of their founders, McKay yet refused to relax his personal control. When H. V. McKay Pty Ltd was created in 1921, he became governing director for life with absolute power. Sunshine was plagued by industrial disputation, despite McKay's institution of pensions and retirement allowances in 1921, a sick-pay scheme in 1922 and a mortuary fund in 1924. In 1922 he founded with G. D. Delprat and others the Single Purpose League devoted to the abolition of compulsory arbitration. He told Prime Minister Hughes that he favoured collective bargaining by industrial tribunals composed of equal numbers of employers and employees.

McKay left his Sunshine home in 1922 when he achieved his long-held ambition of owning Rupertswood at Sunbury. Not finding the move or the social life to her taste, Sarah McKay lived apart until McKay's health deteriorated in 1925. Extensive tests in London confirmed terminal cancer. McKay received the verdict with great courage, continuing his business and public duties to within days of his death. In his last weeks he summoned his old friend Hume Cook, to whom he told his life-story of the humble farmer's son who had invented the stripper-harvester, converted a suspicious farming community, defended Australian interests against American industrial pirates and triumphed single handed over immense odds, including interfering socialist unions and governments, to create the greatest manufacturing enterprise Australia had ever seen. The power of this legend was apparent in the response to his death at Rupertswood on 21 May 1926. The press vaunted the most widely known industrialist in Australian history as 'McKay of Sunshine' and the 'Inventor of the Harvester'. The Argus thought him a character of towering strength and tenacity; the Age eulogized him as 'a man with an intense faith in his own vision, and with a determination of character and bigness of heart that enabled him to take all obstacles in his stride'. Hundreds of his employees swelled the congregation at his funeral service and led the procession with the Sunshine pipe band to the Sunbury cemetery for a Presbyterian and Masonic burial. The moderator-general drew this lesson from McKay's life: 'Success came to him through his own splendid strength and manful endeavour … He was an inspiration to Australian youth, and stood for what a man could accomplish by determination'.

McKay was survived by his wife, a daughter and two sons. He left an estate of £1,448,146, and a codicil vested the income from 100,000 shares in the H. V. McKay Charitable Trust, chaired by George Swinburne and designed to encourage rural settlement, improve country life, and assist charitable objects at Sunshine. The Museum of Victoria houses a bust by Wallace Anderson and the farm smithy in which McKay conducted his first experiments. On several putative anniversaries of his 'invention in 1884 of the harvester', memorials to McKay were unveiled in the city of Sunshine.

Sam was managing director until his death on 12 November 1932 in Sydney while returning from the Ottawa Conference, where he had been an adviser to the Australian delegation. He had presided over the merger with the Australian interests of Massey Harris in 1930. H. V. McKay's son Cecil Newton (1899-1968) was managing director of H. V. McKay Massey Harris Pty Ltd from 1937 and chairman from 1947. The McKay name disappeared when Massey Harris purchased the remaining family interests in 1955 and renamed the business Massey Harris Ferguson, subsequently Massey-Ferguson (Australia) Ltd.

Select Bibliography

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  • Royal Commission on the Commonwealth Tariff. Progress reports: no 5, agricultural machinery and implements, no 6, stripper harvesters, Parliamentary Papers (Commonwealth), 1906, 4, Minutes of evidence 1906, 5
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  • Bavin papers (National Library of Australia)
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  • H. V. McKay archives (Museum Victoria)
  • private information.

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Citation details

John Lack, 'McKay, Hugh Victor (1865–1926)', Australian Dictionary of Biography, National Centre of Biography, Australian National University,, published first in hardcopy 1986, accessed online 23 October 2016.

This article was first published in hardcopy in Australian Dictionary of Biography, Volume 10, (MUP), 1986

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