R -- 31 B
One Hundred Years In Leather
32 V OOA
M(aa9MA a9 m a^gim
Produced by: Image Australia Pty. Ltd.
Illustrations by Anthony Irving
O HISTORIAN has ever put pen to paper without knowing that some
of the details he would like have eluded him. Often he finds that
Y while he can establish the facts of all the main events, those intimate
S human details which suggest that he has transplanted himself across
time to become an observer of history in the making are missing. In
the case of Michaelis, Hallenstein & Co., we are fortunate in having
the recorded recollections of one of the founders, Moritz Michaelis,
and this has given us clues that are seldom available in compiling the
record of a company's growth and fortune.
We know that on a hot day in 1864 a young man named Isaac Hallenstein set out from
Melbourne for the goldfields with a bullock dray. The four beasts toiled along the dirt road
with a heavy load of foodstuffs and miners' requisites in the direction of Daylesford, where
Hallenstein, a young German migrant, operated a store in partnership with Hermann Buttner.
Isaac was tall-more than six feet-heavily built, with a flowing black beard. He was an.
experienced goldfields trader, having spent some time in California in that role before coming
to Victoria, where further rich deposits had been found.
Isaac was doing well in the store he operated with Herman Buttner, but for all that his
mind was often on other things. He regarded goldfields trading and storekeeping as a prelim-
inary to the accumulation of enough capital to go into the industry he loved-tanning.
In Germany and U.S.A. he had learned the tanner's craft and in Victoria he saw a magnifi-
cent future in front of the infant leather industry which had sprung up. Often on his journeys
between Melbourne and Daylesford he had paused to cast his expert eye over a tannery in
Footscray operated by Arthur Cleghorn. On this day in 1864 he did the same. The buildings
were of weatherboard with shingle roofs and from the road he could see the lime pits and the
workmen going about their jobs. The buildings, like so many in colonial Victoria, were crude
compared with those of the Old World, but they were adequate.
In Cleghom's tannery he saw opportunity and fortune.
At this juncture he was interrupted from his visions by a breakdown in his wagon. It was
natural for him to seek the help of Cleghorn, with whom he had often talked. This time,
however, their conversation had far-reaching consequences and the pity of it is that we were
not there to hear what they had to say to each other.
We do, however, know the outcome of their talk-a handwritten memorandum of an
agreement which gave Isaac Hallenstein and his partner, Hermann Buttner, an option to buy
the tannery from Cleghorn. When Isaac resumed his journey to Daylesford after Cleghorn
had helped him repair his dray, what he prized most was not the heavy load of supplies, but
this piece of paper, folded in his pocket.
Again, we were not present when Isaac reached Daylesford and outlined his plans to
Buttner. We do not know a great deal about Buttner and in any event he is destined soon to
disappear from our story. However, his reaction and motives can, to some extent, be deduced
from what we know to be the outcome of the partners' discussions in Daylesford.
Buttner agreed to join with Hallenstein in taking over the tannery, but laid down one
condition which had not been envisaged when the memorandum had been signed in Footscray:
he would come in on the deal only if Cleghorn was prepared to stay on as manager.
All credit to Buttner! He knew nothing of tanning and had no way of estimating how
his partner, who had learned the trade o0,000 miles away, would cope with its problems in
this new country. The tanning and leather trade, like most other activities in Victoria, was in
a pioneering stage. Rules which worked in England or Europe did not always apply here.
He had seen many craftsmen and businessmen fail through inability to adapt themselves to
new conditions and new challenges.
Perhaps Buttner thought that the condition would not be acceptable to Cleghorn and in
this way he could divert his partner away, at least temporarily, from his vision of being a
tanner. If so, he was wrong. Cleghorn accepted the managership and stayed with the tannery
much longer than Buttner. In fact, he spent the rest of his life working for the firm, and so
did his son and grandson.
[In this connection, the Benjamin family is worthy of mention. Louis Benjamin, who
,joined the company as a weighbridge clerk in the early 188o's, rose to be the general manager
of the tannery. His son, Arthur, who trained under him, also rose to this position and later
becarhe a director of M. H. & Co. and of Associated Leathers Ltd., the holding company for
M. H. & Co. The family connection spanned more than 70 years.]
So it was that on July 21, 1864, Buttner and Hallenstein were in partnership as tanners
with a capital of about 1,5oo and trading as Isaac Hallenstein & Co. We do not know how
many hides Cleghorn had processed when he owned the tannery, but the records suggest that
it was fewer than the I o a week which the tannery was handling two years later.
Isaac had brought his brother, Michaelis Hallenstein, into the business as it grew during
those two years, but he yearned for faster expansion. Surrounding the tannery was virgin
land; there was a growing market for its leather, not only in Victoria, but in the other colonies
and farther afield in New Zealand and Britain.
In 1866 Isaac had sent Michaelis Hallenstein to London.to make arrangements there for
the tannery's exports. While Michaelis was away, Isaac discussed his ambitions for the tannery
with Buttner. The latter had never been as happy with leathermaking as had Isaac Hallenstein,
but he appreciated his partner's zeal over the industry. We do not know what passed between
the two, but out of their talk came another important result: if Hallenstein was able to find a
partner with sufficient funds and suitable in other regards, Buttner was prepared to sell his
share in the business.
It is at this stage that Moritz Michaelis enters this story. Moritz Michaelis was Isaac's
uncle although he was only ten years older than Isaac. He had come to Melbourne in I853,
soon after marrying his childhood sweetheart. Like Isaac, he had spent his childhood and
early years in Germany. From there he had gone to Manchester, then the world's greatest
textile manufacturing centre. Here Moritz worked with a big merchant company and had
rapidly risen to a position of responsibility. He was handsome, well educated, and had such a
grasp of mercantile commerce that all who knew him felt he had a brilliant future in Victorian
England. Alas, there was an insuperable barrier to the fulfilment of this expectation.
In Germany, Moritz had been a healthy youth, but the damp of Manchester and the fogs
of London he could not endure. Outside these two great commercial centres there was little
to attract him in England. During his sufferings from catarrh, he had often thought of moving
to a healthier climate and had sometimes considered Melbourne. This was before the discovery
of gold, and as he later related to his children and grandchildren, when gold was found he
made his decision. He and his wife settled first at Richmond, and Moritz and his partner,
Adolphus Boyd, with whom he had worked in Manchester, set about establishing themselves
By the time Isaac Hallenstein went to discuss the tannery with his uncle, Moritz had had
more than a decade of commercial experience in Melbourne. Initially, the Michaelis-Boyd
partnership had done well and had grown to the stage where warehouse premises were being
used at two sites-one on the site of the present Hosie's Hotel and the other off Flinders Lane.
Moritz had come well equipped with agencies which he had arranged in Manchester and
London. He dealt considerably in cotton and other cloth and if he had any complaints it was
that goods sent to him on consignment often came in inadequate quantities. In 1864 he found it
necessary to return to Manchester to make arrangements for larger consignments, and returned
to Melbourne in November.
In his absence there had been a typically 19th Century business crisis and many of the
partnership's debtors had defaulted. In turn, the partners were being pressed by their creditors
and soon lost all their accumulated profits and some of their capital as well. Goods were piling
up in the warehouses with the arrival of each ship from England, but there was little oppor-
tunity to sell them. The partners decided to hold on to their goods and not to sell either at the
bedrock cash prices obtaining, or to make credit sales.
Moritz's acumen and shrewd timing enabled the business to ride out this crisis. By
carefully judging the market, he arranged auction sales of goods direct from the warehouse,
instead of clearing them through retail outlets. The results surprised him; on one occasion
f 5,000 worth of cloth, spirits, groceries and stores were sold in a single day under the ham-
mer. Better times came and Moritz made several visits to Sydney where he was able to purchase
merchandise on advantageous terms. Soon he started shipping wool to England, some of this
business being conducted in association with Mr. Clarke, father of Sir William Clarke,
Australia's first Baronet.
A clerk who had been engaged by Boyd caused a major setback to the business. During
a period of eight months he embezzled almost o10,000. He was a married man with several
children and Moritz Michaelis yielded to the wife's plea for leniency, but on condition that
the man confessed his guilt. It was largely due to Moritz Michaelis that the clerk got off with
the light sentence of one year's gaol.
The end of the American Civil War came soon after this loss. Its effect was to depress
prices of cotton goods and firms such as Boyd and Michaelis, who were holding heavy stocks,
were hard hit. This, and a large consignment of faulty boots, brought the business to insolvency.
Creditors received 14/- in the I, but later when Moritz's fortunes recovered, they were paid
It was a trying time for Moritz, but he was cheered by the number of overseas suppliers
who volunteered to send him goods on credit should he wish to continue trading. Physically
and mentally exhausted, he took three weeks' holiday in Tasmania, returning to find a tempting
offer of a partnership in Manchester, but remembering the climate he declined.
Moritz Michaelis was ready to resume his business career, but was in the process of
deciding in which direction he would go, when his nephew, Isaac Hallenstein, approached
him about the tannery.
Moritz later described how he examined every detail of the business, right down to the
net profit on each hide. He told Isaac he would come into the tannery only if he could get
enough bank credit to buy out Buttner for cash.
The bankers for Buttner and Hallenstein would not advance the necessary money, but
Moritz Michaelis' bank provided the credit with "no security to offer except my word of
honour", as Moritz later recalled. Michaelis, Hallenstein and Co. came into being and the
tannery was soon enlarged to process 480 hides a week instead of the 120zo-1o of former years.
Moritz Michaelis devoted himself to sales and exports from the Melbourne warehouse,
initially doing all the town travelling and returning to the office every evening to attend to the
books and correspondence. Isaac, who loved leather so well, divided his time between the
tannery and the warehouse. When he was away from Footscray, Cleghorn took control of
I I1 '/. 1l
SOOKING back we can see that the strength of the company was in
Sthe philosophy of the two partners. Men of their times, they were
Victorian in their outlook with all that that implies-paternal, dis-
ciplinarian, prudent and moral. But also generous, human and
They made the building of their business not only the chief
interest of their own lives, but they also were determined that it
should be an enduring organisation that would provide careers for
their children as they reached maturity.
A strong sense of family was coupled with a determination that the children who
inherited the assets should be worthy of this inheritance and be prepared to work to preserve
and develop it.
This outlook was not something that arose as a result of intellectual debate between the
two partners. It was something each accepted as though it was part of a natural law. This was
the proper attitude for a businessman to take.
The period in which this concept of the company and its future evolved was between
1867 and 1892. In this 25 years' span the firm undertook a series of moves which laid down a
framework that still remains, although much has been added to it.
The first major move in expansion after the partnership was formed was in 1873 when it
was decided to dispense with the company's London agents and replace them with a branch
office which Isaac established during a trip to England in that year. Michaelis Hallenstein,
Isaac's brother, went to London shortly afterwards to take charge of the office and remained
in that position until his death, when he was followed by his sons Edward and Ernest, and
later by his grandson, Victor. The London operation continued as a branch of M. H. & Co.
until the formation of Associated Leathers Ltd. in 1949, when it became a subsidiary of that
Not long after the London office was opened, the Footscray premises were enlarged.
Sydney was the next centre where the firm set out to find new markets and form a new
partnership. From 1867 a young German, Cosmann Nettheim, had worked with M. H. & Co.
in Melbourne and had proved a competent salesman. In 1876 when prospects in Sydney looked
attractive, the partners sent young Nettheim and their Melbourne town traveller, John
Farleigh, to Sydney. With financial backing from M. H. & Co., the firm of Farleigh, Nettheim
and Co. was established as leather and grindery merchants. A few years later it acquired a
tannery at Concord.
In New Zealand, M. H. & Co. had for some years had an agent, Mr. Grant P. Farquhar,
a leather and grindery merchant in Dunedin. In 1880, Moritz's son-in-law, David Theomin,
went to New Zealand and in conjunction with the Melboutne firm formed a partnership with
Farquhar, originally called Michaelis, Hallenstein and Farquhar, and now Glendermid Ltd.,
another subsidiary of Associated Leathers Ltd. The partnership built a tannery at Sawyer's
Bay, near Dunedin.
In 1888, Farleigh, Nettheim & Co. formed a branch in Brisbane.
Finally, in 1894, came the Perth venture. Earlier, Benjamin Rosenstamm, who had been
employed by the partners in Melbourne, had left them to go to Perth where he set up as a
leather and grindery merchant and provided a distribution outlet in Western Australia for the
products of the Footscray tannery. But by 1894, M. H. & Co. felt the need of stronger links
with Perth and a partnership was formed with Rosenstamm. This partnership then acquired
a tannery at West Perth. On Mr. Rosenstamm's retirement in 1940, the W.A. partnership
was re-organised and renamed Rosenstamm Pty. Ltd.
In all these partnerships M. H. & Co. provided most of the capital and held the control-
ling interest, but it was always the case that the local partners had a share in the profits and
were given a high degree of local autonomy to develop their activities. For example, they all
dealt directly with the London branch on export and import matters.
Through this period the group's fortunes were still very much tied to the manufacture
of leather and saddlery, and the import of grindery and saddlers' ironmongery-and, of
course, the export of leather to the United Kingdom.
The final move that set the seal on all these developments came in 1892 when M. H. & Co.
became a limited company.
The four partners in the company (the two founders-Moritz Michaelis and Isaac
Hallenstein-and Michaelis and Bendix Hallenstein who had been admitted into the partner-
ship some years after it was formed in 1866) came together in Melbourne for the occasion.
In typical paternal fashion it was decided that the sons and sons-in-law of the four
partners could be admitted to the partnership, but only at the parents' wish.
The business carried on as before except that the sons of the four partners now took up
the active management, while the original four only attended, as Moritz Michaelis puts it in
his memoirs, "at their pleasure".
Shortly afterwards the company became a proprietary limited company when the Victorian
law relating to companies was changed.
The board in 1892 consisted of: Moritz Michaelis, chairman of directors, Isaac Hallenstein
and his brother Michaelis, vice-chairmen. The other directors were Bendix, Reuben and
Edward Hallenstein, and Frederick and Edward Michaelis and Willi Fels, a son-in-law of
By this time the Footscray tannery was handling 800 hides a week and export sales were
taking more than 66% of production. The firm's warehousing and administrative work was
being handled from premises at 3o Lonsdale Street East, at 23-27 Lonsdale Street West, and
at 382-384 Lonsdale Street, successively.
After World War I new premises were built at 441-445 Lonsdale Street, which served
the expanding business until the latest move-to 150 Buckhurst Street, South Melbourne,
referred to later.
Moritz Michaelis died in 1902, aged 82. His courtesy and tact, business acumen and
uncompromising integrity, had won him many friends among the employees, the suppliers
and the company's customers.
The other founding partner, Isaac Hallenstein, was also 82 when he died, ten years later,
at Hamburg, in Germany, where he had retired some years previously.
His sons, Reuben and Edward Hallenstein, visited Isaac in i909 for the celebration of
his 8oth birthday. There were other relations there, too, from branches of the family in
England and Germany. It was a happy period for Isaac Hallenstein, looking back on the years
in which he had built well, and knowing that his sons and their sons were securely launched
on careers in paths he had helped to blaze.
Isaac was the last of the first generation to die. His two brothers, Michaelis and Bendix,
who had played important roles in the company, both pre-deceased him. However, the succes-
sion of management was accomplished smoothly, with none of those disturbing trials which
often occur when key personalities are removed from a business. The founders had built well.
SI/ il'.l j J
vt 7, -
IONEERING days were over-M. H. & Co. was now a large
organisation with wide ramifications, but there was no slowing down
in the growth of the company under Fred Michaelis, Moritz's son and
successor as chairman.
It was now moving into the agency field-a development that
was to expand and eventually lead to a policy of diversification.
Jones' sewing machines, Sterling patent leather and Surpass Glazed
Kid were among the early agencies held by the company, followed by
Dr. Scholl's foot supports just before World War I. The Dr. Scholl organisation now has its
own Australian company, and Associated Leathers Ltd. still has a large share in that organi-
sation. On the production side, the establishment of a laboratory in charge of a chemist was
an important development which coincided with the introduction of artificial tannins, and
more efficient production processes. Several of the chemists who have headed the laboratory
have since risen to high positions in the organisation, including Mr. H. L. (Les) Longbottom,
C.B.E., B.SC., present head of Glendermid Ltd., and Mr. George Forman, B.SC., F.R.A.C.I.,
General Manager of the Footscray tannery, both of whom are directors of Associated Leathers
In 1901 the Footscray tannery switched from steam to electric power using its own
generating plant and was one of the first enterprises in the Commonwealth to do so. In 1910
another major building was completed at Footscray to handle the production of more upper
leather, then representing 8% of output.
World War I brought a prohibition on the export of leather. In one stroke, the export
business which had been so important to the company since its foundation had to cease. But
there was a big local demand for boots and other leather goods from the A.I.F. and other
branches of the services. The company had already had experience in the manufacture of
saddlery and after the 1914-18 War expanded this side of its activities at its factory at the corner
of Lonsdale and Queen streets, and subsequently in other successively larger rented premises.
At the outbreak of the war the Footscray tannery was processing 2,300 hides a week.
Several new buildings had been put up in the years before 1914. These, together with the
laboratory and the extra efficiency from the use of electric machinery, meant it was well
equipped to handle the demands now made on it by the war conditions.
We read of Fred Michaelis farewelling staff members as they embarked for service with
the A.I.F., including many of his own relatives. With the coming of peace, exports of leather
were resumed, but the paths of business had to be re-established and in some cases blazed anew.
Australia's footwear industry expanded rapidly in the 19zo's and almost immediately
overshadowed the opportunities offered by export markets. With the advent of the motor
car, harness sales declined and their place in the M. H. & Co. range was taken by sporting
goods such as footballs, golf bags and cricket pads.
For many years the Footscray tannery had manufactured glue. It had obtained the
Australian rights to a German process for producing pearl glue-an important advance on
the previous process of making glue in cakes.
In 1925 the company entered the gelatine manufacturing field. This was a pioneering
venture culminating in 1930 when, in exchange for shares in Davis Gelatine Ltd., glue and
gelatine manufacture was passed over to the latter company.
Frederick Michaelis was 74 when he died in 1935. His life had been devoted to his family
and to the firm, but like his father he found time for philanthropic activities. In these, his
chief interest had been the same as his father's-the Alfred Hospital. Fred Michaelis was
chairman of the hospital's board of management from 1927 to his death. He had also been
President of the Wesley Old Collegians and had seen.his sons educated there.
After Frederick Michaelis' death, his cousin, Reuben Hallenstein, succeeded him as
chairman of directors.
Exporting and importing were again disrupted by war in 1939, but as before the company
was able to adapt to the new conditions. Canvas 'goods made their entry on a major scale.
The factory which had made the horse collars was used to make goods such as respirator
haversacks, canvas cot bottoms, tents and other items needed by the fighting men of World
War II. When the war ended it was comparatively simple to turn to the production of civilian
canvas goods which soon made a growing contribution to the firm's turnover and product
Today M. H. & Co. manufactures the well-known "Oasis" range of sun blinds and
hollands, and the "Luxaflex" range of Venetians, awnings, insect screens, doors, curtain
rodding, etc., as well as a wide range of canvas goods including tents, tarpaulins, car covers
and wading pools. Products handled by the merchandising section since 1945 also include
such items as a complete range of sporting equipment, including equipment for all types of
fishing, underwater gear, toys of all types, shoe factory and shoe repair supplies, a wide range
of household hardware, supplies for the furniture and upholstery trades, a wide range of
saddlery and travel goods. The merchandising section also handles the distribution of Festival
Many of these products have grown logically out of the firm's main manufacturing
activities in the leather and canvas goods fields. Others, such as fishing gear, for which the
firm acts as distributor and importer, fit naturally into the distribution channels built up for
kindred goods--such as camping gear. They are a harmonious range of goods, both in'terms
of their origin and in terms of distributive machinery, and cater well for the ever-increasing
leisure time enjoyed by the average Australian.
While the expansion of the range of general merchandise is readily apparent, the tannery
operations have continued in full force and cover both sole leather and a wide range of light
leathers for the shoe and other trades, which are sold both locally and in overseas markets.
The major reorganisation of the company in 1949, when Associated Leathers Ltd. was
formed, has made it possible for the group to expand in its chosen fields in a very flexible way,
and to run its affairs with the happy blend of general control from top management but still
without sacrificing local initiative.
Since 1949 a number of acquisitions has taken place. One of the first of these was the
business of Julius Cohn Pty. Ltd., in 1951. The Adelaide firm had for many years been an
important distributor of Michaelis Hallenstein products in South Australia, and when it
merged with the group, it meant that Associated Leathers now had subsidiaries in every State
with the exception of Tasmania, where branches of M. H. & Co. were later formed at Launces-
ton and Hobart.
The operations of Farleigh's in Queensland and New South Wales, Cohn's in Adelaide,
and Rosenstamm's in Perth and the Tasmanian branches are, broadly speaking, the same as
those of the Melbourne company.
The same year saw the formation of A. L. L. Indents Pty. Ltd. to give specialised attention
to the group's importing work.
In 1955 Interstate Rubber Company Pty. Ltd. was taken over. This firm has branches in
Melbourne, Sydney, Brisbane and Adelaide. It is primarily engaged in supplying ready-cut.
soles and other components to the shoe manufacturing and repair trade. The directors of
Associated Leathers had believed for some time that a trend was developing among shoe
manufacturers to buy leather in ready-cut shapes, rather than having the cutting done on
their own premises. This judgment proved correct.
The following year Australian Leathers (Hong Kong) Ltd. was registered to handle the
growing exports both to Hong Kong and the rest of the South East Asian area.
In 1961 Venco Pty. Ltd. and Sunmaster Products Pty. Ltd.-blind manufacturers-were
acquired. They make the whole "Luxaflex" range of blinds and awnings.
The group's acquisition of British Plastics Pty. Ltd., of Melbourne, in the same year
enabled it to add to its product range a number of household goods, including a quality
line of dinnerware, toys and some industrial goods.
In 1958 advantage was taken of vacant space at 441 Lonsdale Street to set up a new civic
amenity. This is the Building Development Display Centre where new building materials and
fittings are on permanent display and an advisory service is provided for architects, builders
and the general public.
In 1962, with the exception of the tannery and the Building Display Centre, all of M. H. &
Co.'s activities in Melbourne-warehousing, manufacturing and administration-were con-
centrated in a large new building at 15o Buckhurst Street, South Melbourne.
In 1963 the business of H. A. Tuck & Co. Ltd. was taken over in New Zealand. Tuck &
Co., with offices in Auckland and other large New Zealand centres, is concerned with the
supply of sewing machines, laundry machinery and dry-cleaning equipment throughout the
In 1864, M. H. & Co. was purely a leather business.
Today--ioo years and 20,ooo products later-Associated Leathers' other products
account for 60% of sales, and it now operates a large and expanding group of companies.
Descendants of the founders down to the fourth generation hold some executive positions,
but they have been joined by many others.
The Board of M. H. & Co. in 1964 comprises the Hon. Sir Archie Michaelis, former
Speaker of the Victorian Legislative Assembly, as Chairman, a position to which he was
appointed in December, 1948; Mr. Orwell Michaelis, B.A., Managing Director; and Messrs.
Roy Barden, Frank Danglow (Warehouse General Manager); George Forman (Tannery
General Manager); Roy Michaelis and Doug Tolliday, M.sc.
With the exception of Mr. Tolliday, the above are also on the Board of Associated
Leathers Ltd., which has two additional members-Mr. Charles Dodds who is Managing
Director of Farleighs Pty. Ltd., and Mr. Les Longbottom, Managing Director of Glendermid
Ltd. Mr. W. L. (Les) Fryer is Secretary.
These men now guide the destiny of the group of companies which owes its origin to
the broken wagon wheel of 1864.
ASSOCIATED LEATHERS LTD.
Michaelis, Hallenstein ~& Company Proprietary Limited
A. L. L. Indents Proprietary Limited
British Plastics Proprietary Limited
Rosenstamm Pty. Limited ..
Farleighs Pty. Limited
Interstate Rubber Company Pty. Ltd.
Farleighs (Qld.) Pty. Ltd. ..
Julius Cohn Pty. Ltd.
Venco Pty. Ltd. .
Sunmaster Products Pty. Ltd.
Australasian Leathers Limited
Australian Leathers (Hong Kong) Ltd.
British Plastics (N.Z.) Limited
Glendermid Limited .. ..
H. A. Tuck & Co. Ltd. ..
Melbourne, Launceston, Hobart, Sydney
Melbourne, Sydney, Brisbane
Sydney, Melbourne, Brisbane, Adelaide
Dunedin, Auckland, Christchurch, Invercargill
Auckland, Wellington, Christchurch