House of Representatives
28 November 1911

4th Parliament · 2nd Session



Mr. Speaker took the chair at 3 p.m., and read prayers.

page 3242

PAPERS

MINISTERS laid upon the table the following papers : -

Naval College - Reports by Captain B. M. Chambers dealing with Sites for.

Papua - Ordinances of1911 -

No. 13. - Currency.

No. 16. - Survey Marks.

No. 21. - Customs Duties Amending.

Defence Act - Regulations Amended (Provisional) -

Universal Training - No. 58a - Statutory Rules 191 1, No. 188.

Military Forces-

Nos. 513-555 - Statutory Rules 1911, No. 186.

No. 1 - Statutory Rules 1911, No. 187.

Nos. 558 (i)-56o- Statutory Rules 1911. No.189.

No. 60 - Statutory Rules 1911, No. 190. Financial and Allowance -

No. 46 - Statutory Rules 1911, No. 191.

page 3242

QUESTION

COMMONWEALTH BANKING BUSINESS

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

asked the Treasurer, upon notice -

  1. What was the total amount paid to the banks by the Commonwealth for conducting its banking business, including exchange on remittances, during the last financial year?
  2. What was the total amount received from the banks by the Treasury as interest on deposits held by the banks during the last financial year, excluding any moneys deposited from the Australian Notes Funds?
Mr FISHER:
Prime Minister · WIDE BAY, QUEENSLAND · ALP

– The answers to the honorable member’s questions are -

  1. £2,850. An amount of £6,562 was received from the banks as discount on drafts purchased.
  2. £1,025.

page 3242

QUESTION

PEAK HILL TO NULLAGINE TELEGRAPH

Sir JOHN FORREST:
SWAN, WESTERN AUSTRALIA

asked the Postmaster General,upon notice -

  1. Have not funds been voted for the past two years for the construction of the telegraph line from Peak Hill to Nullagine, in Western Australia ?
  2. When was the work begun, and when will it be completed?
Mr TUDOR:
Minister for Trade and Customs · for Mr. Frazer · ALP

– The answers to the honorable member’s questions are -

  1. An amount of £7,709 was appropriated in 1909-10, and a further amount of £13,700was included in1910-11 appropriation, for the construction of the Peak Hill-Nullagine telegraph line.
  2. The survey of this line was commenced on 28th November, 1910. The erection of the additional wire, Perth to Geraldton, to be used in conjunction with the new line, was completed 1 8th October, 191 1.

Contracts were let for distribution of material along the Peak Hill-Nullagine line about 12th July for completion in ten months.

The work of construction is now proceeding, and will be completed as early as practicable. Information as to the approximate date will be furnished as soon as received from the Deputy Postmaster-General, Perth.

page 3243

QUESTION

COPPER-WIRE DRAWING PLANT

Mr BAMFORD:
HERBERT, QUEENSLAND

asked the Minister representing the Minister of Defence, upon notice -

Whether steps have been taken, or are about to be taken, with a view to establishing a copperwiredrawing plant in connexion with the Small Arms Factory at Lithgow?

Mr ROBERTS:
Minister (without portfolio) · ADELAIDE, SOUTH AUSTRALIA · ALP

– After the Small Arms Factory is completed, the question of establishing a copper-wire drawing plant will be considered.

page 3243

KALGOORIE TO PORT AUGUSTA RAILWAY BILL

Sir JOHN FORREST:

asked the Prime Minister, upon notice -

  1. Whether he has received any reply from the Governments of South Australia and Western Australia as to their intention of passing the necessary legislation required by the Kalgoorlie to Port Augusta Railway Bill 1911 before their respective Parliaments prorogue?
  2. Will he inform the House of the nature of the replies?
Mr FISHER:
ALP

– The answers to the honorable member’s questions are -

  1. A reply has been received from the Government of Western Australia, but a reply has not been received from the South Australian Government.
  2. Reply from Premier Western Australia as follows : - “ Suggested Bill will be drafted as early as possible and submitted to State Parliament now in session.” 22/11/11.

page 3243

DAYS OF MEETING. - BUSINESS OF SESSION

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I move -

That the House, for the remainder of the session, unless otherwise ordered, meet on each Monday at 3 o’clock p.m., and that the time of meeting on each Tuesday, Wednesday, and Thursday be 10.30 o’clock a.m.

On behalf of the Government I wish to say - by no means as a threat - that we must, before the session closes, deal with the business which it is imperative to consider. It is only possible to have twenty sittings before Christmas, but by strenuous effort we hope to get through, and, at the same time, to provide a reasonable opportunity for the full discussion of all the measures undertaken. In addition to the business already on the notice-paper, we intend to introduce a Bill giving the public servants the right to appeal to the Arbitration Court, a general Bill providing for the issue of Commonwealth stock, and a measure of minor importance amendingthe Australian Notes Act.

Mr Deakin:

– To what effect?

Mr FISHER:

– In respect to the £7,000,000 limit for the 25 per cent. reserve. A Naval Defence Bill must also be passed.

Sir John Forrest:

– And the Navigation Bill?

Mr FISHER:

– The second reading will be moved by the Minister in charge, but the further consideration of the measure must be left to next session. We do not require of honorable members that they shall pass all the measures on the noticepaper. Those which it is considered necessary to pass are the Commonwealth Bank Bill, the Public Service Arbitration Bill, the Commonwealth Electoral Bill, the Seamen’s Compensation Bill, the Kalgoorlie to Port Augusta Railway Bill, the Purchase Telephone Lines Acquisition Bill, and the Post and Telegraph Rates Bill. In addition, there are one or two items of policy to engage attention, which I am not at liberty to speak upon now.

Mr DEAKIN:
Ballarat

.- The Prime Minister was never more sanguine than in the just delivered statement of the possibilities of the session. The Opposition is of the opinion that the general principles, of the Commonwealth Bank Bill having been discussed fully during the second-reading debate, the measure may now be dealt with clause by clause, in practical and business-like fashion. In regard to neither it nor any other will debate be prolonged beyond the point at which it can be useful. Within the limits of their responsibility, we on this side are anxious to facilitate the transaction of business. Some exception will be taken to the proposal that we shall meet on Mondays at 3 p.m. For Victorian representatives it means only an additional sitting day. The representatives of New South Wales, however, having arrived home on Saturday morning, would have to leave again on Sunday evening, whilst the representatives of South Australia would reach home on Saturday morning, and have to leave again for Melbourne on Saturday evening, since there is no Sunday train from Adelaide. The proposal is equally inconvenient to representatives of Tasmania. I suggest to the Prime Minister that, since we shall be sitting extremely long hours if the remaining proposals axe adopted, he might forego, until about the last week, his proposition that the House should meet on Monday, and substitute for it a proposal that we meet every Tuesday morning at 10.30.’ The representatives of South Australia, leaving home on Monday night, would be here by that time, and the representatives of New South Wales, also leaving home on Monday, instead’ of Sunday, night, could be here two or three hours after the House met. From the opportunity I have had of ascertaining the general feeling of honorable members on this side of the House, I believe they are prepared to make practically the sacrifice that the Government asks, except that in the particular direction to which I have referred the sacrifice is considerable, while the gain cannot be material. It will seriously inconvenience every honorable member who lives outside this State or whose business calls him beyond it. Since we are disposed to meet the Government, so far as our responsibilities will allow, by confining ourselves to such criticism as is essential in order that the Ministry and the public may be properly informed, the Prime Minister would probably find himself in a better position to make a further demand on the House should it become necessary at a later stage, by refraining from making ‘this demand for meeting on Mondays until it is peremptory.

Mr KELLY:
Wentworth

– I sincerely hope that the Prime Minister does not intend to carry out the whole purpose of the proposals he has just submitted. I have on previous occasions complained of this practice, so that it cannot be said that I am objecting to it because it is made by the present Government. The duty of the Parliament should be, not to carry as much legislation as it can through a session, but to pass as much as it can pass in a satisfactory manner.

Mr West:

– Do as little work as possible !

Mr KELLY:

– I cordially agree with the honorable member in the belief tha: a man can do better work in eight hours than he can if you make him work all day ! 1 cannot understand why the honorable member should claim a privilege for persons outside, when he is prepared to deny, without the slightest consideration, the same privilege to the Opposition, who are charged with the duty of public criticism of public proposals.

Mr Fenton:

– This is a sweating proposal.

Mr KELLY:

– It is. It is absurd enough that of all trades in this country the trade of the politician is the one that requires no apprenticeship. It is bad enough that we should be sent here without any proof that we are fit to be here to examine public measures. But the position becomes absolutely absurd if we are not given a reasonable opportunity to examine public measures before we are expected to deal with them in ‘this Chamber. I do not know how we can be expected to carry out our duty if we are to have measure after measure slung at us, and have no time in which to closely examine those measures before we proceed to debate them. I do not think this proposal is in the interests of the country, although it may be in the interests of the Ministerial reputation in the country. I wish to speak quite frankly to honorable members opposite. The proposal now before us is not new. It has been made by every Government since I have been a member of this House, and I have been equally warm in denouncing it regardless of the Government from which it emanated. I cannot help realizing that the reputation of the Government may not necessarily mean the welfare of the country in this connexion. The reputation of the Government depends on , getting through as much business as they can possibly place on an electoral placard. They want a certain number of measures passed. At the end of a session we find thirty or forty measures on the list, many of them, Supply Bills or others, requiring very little consideration. The object of this practice is to secure numbers, not quality. Our object should be, T think, to deal with every measure submitted to us with due discretion and absolute prudence, so that we can say that no measure is passed that is not carefully considered. Is it not notorious that much of our time year after year has been spent in amending Acts that have been hurriedly passed? ls that not conclusive proof of my statement that this House does not devote itself so much to the duty of passing its measures wisely as it does to the desire of passing as many as the Government choose to submit?

Mr Hall:

– Those passed at the beginning of a session require to be amended just as often as do those passed at the end of a session.

Mr KELLY:

– If there is anything at all in my argument, and I submit that there is, it must apply infinitely more strongly when Bills are submitted ‘ which the House cannot have a reasonable opportunity of criticising. What sort of chance do the Government expect the Opposition to have of criticising any measure that is submitted during the period to elapse before this Parliament is prorogued ? We shall be here every day from 10.30 a.m. until 11 p.m. We have to sleepalthough my honorable friends opposite may feel that it would be better, perhaps, if we were bull-dozed into a state of mental exhaustion - and what time is left to examine measures? Is it fair to put upon a House of this character such a strain? Is it not prostituting the National assembly to so work it out, and give it no chance to consider the measures submitted to it? I ask my honorable friends to be reasonable, and to see this matter apart altogether from narrow party interests and advantages. The honorable member for Eden-Monaro suggests a number of ingenious methods by which business might be expedited. I did not hear the Prime Minister say how far the Government are. committed to deal this session with the somewhat difficult question of the Tariff..

Mr SPEAKER:

– The honorable member must not discuss that question.

Mr KELLY:

– The Prime Minister gave as the reason for this proposal the measures that he intended to introduce during the remainder of the session. I submit that I should be in order in discussing as a reason why this proposal should not be granted-

Mr SPEAKER:

– The honorable member would not be in order in discussing the merits of any one of those particular questions.

Mr KELLY:

– I do not propose to discuss the merits of the Tariff, but the honorable member for Eden-Monaro has just suggested to me that if we did not consider the Tariff this session, we might deal with it on Boxing Day. I urge upon the Prime Minister the necessity of considering the welfare of the country, and to give the Opposition a reasonable opportunity to criticise the measures submitted to the House. If the Prime Minister will not go to the length of enabling the House to meet during reasonable hours, sit a reasonable time, and do its business in a reasonable way, we might, at any rate, have our Monday free. This is not a matter of personal importance to myself, because I long since found that constant travelling at the week end interfered with my work here. I regard the adjournment from Friday to Tuesday as affording a most valuable, and practically the only, opportunity for inquiry into the Government measures to be submitted. When an honorable member has dealt with his correspondence, he finds the best time for considering measures in advance to be during -the week-ends.

Mr PARKER MOLONEY:
INDI, VICTORIA · ALP

– There are only three weeks of the session left, at the outside !

Mr KELLY:

– But I understand that the measures to be submitted are considered by the Government to be of importance. The Prime Minister will do great disservice to the country if he persists in forcing a number of proposals through Parliament without affording *a proper opportunity for examination. I do not urge that a proposal of this kind is peculiar to the present Prime Minister, because the practice has been resorted to by previous Governments, though, so far as I am aware, we have never hitherto been asked to sit on Mondays.

Mr Roberts:

– I think not ; the previous Government took the other course of gagging the Opposition on Tuesdays, Wednesdays, Thursdays, and Fridays !

Mr KELLY:

– If the Prime Minister has the courage of his convictions, and he thinks the Opposition are abusing their privileges, he ought to bring the “ gag “ into operation. I am glad that the Honorary Minister has, by his interjection, shown what is at the back of his mind; he does not think it well to apply the “ gag,” but rather to resort to a process of exhaustion. It is the absolute duty of the Government to apply the “ gag,” if it is thought that the Opposition, instead of criticising, are deliberately setting themselves to talk measures out, or howl, as

Government supporters did when they were on this side of the House. The Standing

Orders have deliberately placed-

Mr SPEAKER:

– Will the honorable member discuss the question before the Chair?

Mr KELLY:

– The question is tha.t it is necessary to give extended time to business, because, as it is now suggested, honorable members on this side have unduly protracted discussion.

Mr SPEAKER:

– That is not the question before the Chair.

Mr KELLY:

– 1 submit, with all deference, that the interjection just made by the Honorary Minister-

Mr SPEAKER:

– As the honorable member knows, interjections are disorderly.

Mr KELLY:

– Then I deeply regret that this interjection should have come from the Ministerial bench. If honorable members on this side had abused their rights of criticism, arid Ministers had no power to deal with them, it would have been reasonable to ask for extra sittings ; but the House has deliberately given any Ministry power to apply the closure, and it is the duty of the Government to act on that power. Why should the guilty and the innocent suffer alike? Why should honorable members, who devote themselves to proper criticism, suffer for those who indulge in “ stone- walling,” though, of this, I have seen nothing during the session? The proposal of the Government is dangerous, and not in the public interest, and it will tend to militate against .the usefulness of a deliberative and legislative Chamber like this. I regret that the Government should have gone a step further than any previous Government ‘ in making this House a mere registering automaton of their decrees, instead of a place where their views and intentions should receive the most earnest criticism for the welfare of the people of Australia.

Mr BAMFORD:
Herbert

.- When the Leader of the Opposition was speaking, I was reminded of the old saying which bids us beware of the Greeks when they bring gifts. Nothing, in my opinion, could suit the Opposition better than the adoption of this motion, because, either business must be done in a slip-shod way, or some of the measures must be jettisoned. 1 am sorry that for once I find myself in agreement with the honorable member for Wentworth. I thought the Leader of -the Opposition was favouring the motion with a sinister motive, but it seems to me, in view of the utterances of the honorable member for Wentworth, that mere is no concerted action 011 the part of the Opposition. 1 am totally opposed to the motion. There is no reason whatever for hurrying legislation on. There is nothing sacrosanct about Christmas, and we can sit just as well after that festivity as before, and finish the business in a reasonable and proper way. You, Mr. Speaker, the Prime Minister, the honorable member for Maranoa, and others are particularly interested in this matter, for, if we rise at Christmas, the natural assumption is a session beginning in April, or not later than May ; and that means that we should have to visit our constituencies during the monsoonal period. During the referendum campaign, I was in my constituency, but was unable to get about on account of the heavy rains, and we may anticipate similar weather in the early months of every year. The Prime Minister is very optimistic if he expects to get through twelve of thirteen measures between now and, say, the 22nd December. In my opinion, the business cannot be completed before Christmas ; and if we try to finish in that time, the result must be disastrous to the Labour party, though, of course, it may very well suit the Opposition. I wish to study, not the convenience of the Opposition, but the interests of my own party, and to some extent my own interests, because I desire to get to my constituent.* during some ‘portion of next year. I shall vote against the motion.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

.- This little flash of personal independence coming from the Ministerial benches is as refreshing as the sight of a piece of blue sky would be to one who had been confined in a cellar for two or three months. It gives one hope that some day honorable members on the other side will begin to think for themselves and exercise a little judgment. When the honorable member for Wentworth was addressing the House I noticed a very self-satisfied smile upon the faces of a number of honorable members on the Ministerial side, because the honorable member spoke of the necessity of considering measures on Saturdays, Sundays, and Mondays. Those who smiled seemed to forget that, whereas they have had these measures before them over and over again in their Caucus, and considered them in every detail, we have them sprung upon us suddenly, and are asked to consider questions like the Commonwealth Bank Bill, involving great economic principles, without any notice whatever. Honorable members opposite, on the other hand, have settled them in detail, and they are brought down here, as if this were a mere registry office, to which far-reaching measures were sent merely to be put through. During last session, when advocating the Referenda Bills, the Attorney-General said that unless they were passed there would be nothing more for the Federal Parliament to do, because we had practically exhausted our legislative functions. Yet the Government have found a political menu as long as one’s arm, and so full of material that when we reach the end of the year it becomes necessary to keep everybody here for every day in the week except Saturday, beginning at half-past 10 o’clock in the morning and sitting until 10 or n at night. This shows the hollow hypocrisy of the constant talk of the Labour party about eight hours being enough work for any man, whether he uses his brains or his muscles. Quite apart from these considerations, there is no reason why all this legislation should be put through in this year. I understand that the Prime Minister has already intimated the possibility of our having a summer sitting after the end of the year. I should like to know whether the public or the Savings Bank depositors are crying out for the Commonwealth Bank Bill.

Mr SPEAKER:

– Order ! The honorable member must not discuss that question.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The same argument applies to all these measures. I challenge the Prime Minister to point to any one of those on the notice-paper for which the public have ever asked in such a way as to necessitate Parliament sitting for abnormal hours to put it through. The Government merely wish to put up a placard in order that they may win some popularity in the country. Speaking, like the honorable member for Wentworth, as a member coming from another State, I may say that if we leave here on the Friday. Saturday is practically a dies nott. There is very little opportunity for one to a.fend to his private affairs on that day, and all that is available is the first part of Monday, even under normal circumstances. But, according to the new proposal, we are to leave here on the Friday, reach Sydney on Saturday, and leave again on the Sunday in order to be here to do business on Monday.

Mr West:

– The honorable member does it for races ; he ought to be ready to do it for parliamentary work.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We have racing perhaps only once in a year, and in any case I do not see that that has any bearing upon this question. In the whole of the ten years for which I have been a member of this Parliament, I have not had to leave Sydney on a Sunday more than once. I see no unusual circumstances making it necessary now, and I urge the Prime Minister to consider whether there is on the part of the public any crying desire for any of these measures which cannot be satisfied by sitting at normal times.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

.- It is very difficult to answer the arguments of the honorable member for Parkes, because he speaks from such a high altitude that if his feet were in Purgatory his head would still be above the clouds. A famous Oxford collegian once said, “ For complete ignorance, commend me to a schoolmaster.” I can assure the honorable member for Parkes that when he dogmatizes upon a subject about which he knows nothing, he reminds me of that saying. A witness who was asked by a lawyer, “ Will you swear that I have any money in my pocket?” replied, “I believe you have money in your pocket, but I should not care to swear it”; but I take it that the honorable member for Parkes would swear anything in connexion with the Caucus, whether it was true or otherwise. I resent these early-morning sittings. I am nearly dead, and, I suppose, other honorable members are half dead, but I do not want to be completely dead.. I resent strongly that we have nothing ‘definite about the anomalies of the Tariff. People who have come out as immigrants to this country are unable to get employment. I know one man who has been out here for six weeks, and, although it was said that there was plenty of employment in his trade, he would have been in great trouble but for the help of a dear, kind lady. I am waited upon daily by people who want employment, and as we have had no distinct promise in reference to the anomalies of the Tariff- -

Mr Fisher:

– I think you have.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Is it to come on this year ?

Mr Fisher:

– We shall not break a promise.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I do not think the Prime Minister would ever break a promise. If he has given a promise in this case, I am certain that it will be kept, if any human being can keep it. I see no reason why we should not carry the session over Christmas. We should do our work all the better, and be all the stronger, if we sat for the ordinary half-day. No one on this side of the House wishes to burke discussion or to use the powers which this Parliament has already agreed to ; but, at the same time, if it is necessary to hurry on these measures, let us have the usual hours, and put our powers into practice if need be, because I am certain that no argument from >this side will convert a member on that side, and certainly no argument on that side will convert a member on this. The honorable member for Parkes took exception to travelling on a Sunday. I would object to it also, and I hope to see this Parliament removed from Melbourne within a few years. In my opinion, it is too much to add a Monday sitting to the four strenuous sittings we have every week, and the number of those who were members of the first Parliament, but are now dead, is evidence that the travelling of a thousand miles a week to attend the meetings of Parliament is not fair to the man who does it, nor to his wife and family. In the interests of the health of members I protest against the proposal for sitting on Monday. Personally, . I would be willing for the session to go over into next year. There are measures which I hope to see passed into law, which must be discussed. Of course, if it should be necessary to move the closure it must be moved, so that a determination may be arrived at.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– In my opinion, the electors are not in a hurry for much of the legislation proposed by the Government, and measures ill-debated might as well not be debated at all. Honorable members opposite are numerically strong enough to force through their programme. Why do they not take the straight and manly course of applying the “gag” in the first instance? But the results of the Boothby election, and the Victorian State elections, are a warning to the Government to take a pull. The handwriting is on the wall. Ministers must see that the people are opposed to hasty legislation. Much of our legislation may ultimately prove to be unconstitutional. We, on this side, are opposed to many of the Government proposals, because we think them antagonistic to the public interest, and no legislation at all is better .than unjust or harmful legislation. It has been said very fairly by an honorable member on this side that the proposals of the Government are considered and debated before being brought before the Chamber. I agree with that. The same opinion has been expressed in the press. The Opposition members, however, have not had an opportunity to express, in Caucus, our opinion regarding them. It is not in the interest of the country that legislation should be forced through ; but, of course, the Government is strong enough to take the bull by the horns, and gag discussion by the Opposition.

Mr THOMAS BROWN:
Calare

– While willing to support the Government programme, I am opposed to Monday sittings. For more .than ten years I have been constantly travelling between Sydney and Melbourne for the purpose of attending the meetings of this Parliament. I know what it means to leave Sydney on a Sunday night to be present at a meeting on Monday, and to attend here from early in the morning until late at night for the greater part of the week. That is an experience which I do not wish repeated more often than is necessary. The black record of this Parliament is largely attributable to the strain imposed on members. I have never voted to gag discussion, and never shall do so. When members abuse their privileges it is their own concern. Those who do not do so should not be punished for those who do. No doubt, the Opposition; wish to prevent the Government from carrying legislation, and are therefore in favour of shortening the session. In my opinion, it is not necessary to end the session by Christmas time. Rather than rush measures through without fair opportunity for discussion, we should continue our sittings into the new year. Some of the proposals of the Government are out of the ordinaryline, and must be discussed very fully. To give time for this discussion, we should be ready, if necessary, to prolong the session beyond Christmas.

Mr MCWILLIAMS:
Franklin

– -The almost annual debate on motions of this kind should awaken attention to the need for adopting a suggestion which I have made from time to time, and to which, on- two occasions, I have tried to give effect - that is, that there should be a time limit to the speeches of honorable members. Had an opportunity presented itself this session of getting the matter discussed, I should have brought it forward, but our procedure makes it almost impossible to deal with private members’ business. When we have a debate on a railway question, certain honorable members read a few engineering works, get hold of a few catch phrases, and then, posing as engineers, talk about gauges and other engineering questions for hours. When a banking proposal is before us, standard works are again stewed up, we all become experts on banking, and Hansard is filled with pages of matter which any one of us could read for himself in the text-books. In my opinion, Ministers and Leaders of the Opposition should be given an hour in which to state their opinions on any subject, and other members not more than half-an-hour. Under such an arrangement, speeches would be shorter and better, and there would be ample time for discussing the business of the House.

Mr Fenton:

– What would the honorable member do with five-hour men?

Mr MCWILLIAMS:

– My proposal would gag them. It is amusing to hear the members of the Labour party speak against gagging, in view of the fact that the longest sitting on record in Australia - a three days’ sitting of this House - was made necessary by their support to the resolutions which provide for gagging. _ I hope that next session one of the earliest measures introduced will be one to compel honorable members to deal with the business of Parliament, in a practical way. I am in favour of Monday sittings. Throughout the session Tasmanian representatives cannot return to their homes more often than once every three or four weeks, and representatives from Western Australia and Queensland have to remain in Melbourne all the time. It is not too much, then, to ask the representatives from South Australia and New South Wales to spend the concluding two or three week-ends of the session in Melbourne, to enable the House to sit on Monday afternoons and evenings. As to long sittings, it is generally admitted that they are not a success, and I hope that we shall not repeat the practice - of meeting in the morning and sitting until late at night.

Mr RYRIE:
North Sydney

– I agree with the honorable member for Franklin that it would be a good thing to have a time limit for speeches, but honorable members opposite cannot accuse the Opposition of “ stone- wal ling “ this session, or of having endeavoured in any way to unduly prolong discussion.

Mr Fenton:

– This is a non-party question.

Mr RYRIE:

– That is evident from the fact that two of the supporters of the Government have said that they are “ prepared to give every reasonable support to the Ministry.” If this were a party question, they would be absolutely bound by the decision of the Caucus. I do not approve of “ stone- walling.” An Opposition may delay the passing of a measure by resorting to that practice, but in the end the Government, with a majority behind them, is sure to pass it, so that the only result is a waste of the time of the country. I should be glad, however, if some time limit could be placed on the speeches of honorable members. I hope that the Prime Minister will reconsider his determination to ask the House to sit on Mondays. I, for one, should find it very inconvenient to attend here every Monday. As it is, I cannot return home at the week ends and be back in Melbourne every Tuesday, and if this proposition be agreed to I shall have to remain in Melbourne for the rest of the session-: By agreeing to meet every other morning at 10.30, we shall be doing a fair thing, and I do not think any good purpose will be served by over-working honorable members. I wish to emphasize the remark made by the honorable member for Wentworth, that whilst the Government and their supporters are in favour of eight hours a day for the workers outside, they are prepared to make us work twelve hours a day. That is sweating. If eight hours a day is a fair thing for the working man outside, it should be a reasonable working day for parliamentarians. Is it any wonder, having regard to our long sittings, that a great many men who have entered politics have either gone to the wall, or have died comparatively early in life? We should not be overworked. I already feel the strain of politics, and am practically falling away to a shadow. I do not think it is possible to get through the programme which the Prime Minister has submitted ; but I think we shall be able to do a great deal of work without sitting on Mondays. I promise the Government every reasonable assistance, for I do not desire that we shall meet again shortly after Christmas. After the arduous duties of the session, we are entitled to a reasonable spell. I certainly hope that we shall have Mondays free.

Mr FOWLER:
Perth

.- While there is a good deal in the suggestion regarding the curtailment of speeches, I wish to point out that the evil of which complaint is made begins every session by the putting forward of a shop-window programme that is impossible of execution. That is the fault, not of this Government in particular, but of all Administrations, and it is responsible for a good deal of the demoralization that overtakes Parliament towards the end of every session, when important measures are rushed through without the necessary consideration. I am quite prepared to strain a point in order that we may carry out some of the work which the Government are anxious to achieve, but I protest against the proposal to pass this session all the measures that are before both Houses of Parliament. It is utterly impossible. It has been suggested that we might continue ‘the session over Christmas, or have a summer session. 1 would, however, ask honorable members resident in Victoria and New South Wales whether they think it fair that those of us who come from distant States like Western Australia should be compelled to remain here for the greater part of the year. It is not a Federal proposal, and I hope the Government will at once realize the impossible nature of the task they are setting this House in proposing to carry this session all the proposals now before Parliament. I hope they will realize that it is time for them to take a sane view of the position - to say honestly that they are proposing to carry into effect more than is reasonable, and that we should get into recess as soon as possible. The strain on members since the inception of Federation has been something of an abnormal character, and it is time that it should be eased off. When I look round the House, and see friends of mine who entered this Parliament with me ten years ago - honorable members like the Prime Minister, who was then a sprightly young man - and see how they have aged in these years, I feel that there is sufficient justification for my plea that the sessions should be shortened, that the work should be carried out in a businesslike fashion, and that impossible tasks should not be set us.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I take no exception to the criticism of this motion, which is one that is usually submitted every year towards the end of the session. The honorable member for Herbert, in urging that we ought to have a summer session if the work is not done is repeating only what I said myself. While he and other honorable members speak of the great volume of business that has yet to be transacted, he and they forget that nearly all the measures constituting that business have been discussed in this Parliament. They are all in preparation for passing. The position so far as they are concerned is something like that known to the miner when the whole of the ore has been raised to the surface, and put through the mill, and -the cleaning up alone has to take place. It would be just as unreasonable to say that the whole process had to be gone through in connexion with mining when the cleaning up alone remained to be clone as it would be to say that the whole process has to take place of inquiring into and examining these measures. Honorable members are familiar with the terms of our proposals, and, in my opinion, we are adopting the right course. T admit that it is somewhat difficult for honorable members from other States to attend Monday sittings, but I ask the House to pass the motion as it stands, on the understanding that we shall make the experiment next Monday, and give honorable members a holiday on the second Monday. That would break the monotony, and enable honorable members to return home at the end of next week. At all events, we shall see how we get on.

Mr Poynton:

– Why not let the proposal for Monday sittings stand over until the second week?

Mr FISHER:

– I think our proposition the more convenient.

Mr Poynton:

– A lot of honorable members have already made their arrangements.

Mr FISHER:

– We shall see by the second week how we get on. I ask honorable members to pass the motion as it stands.

Question resolved in the affirmative.

page 3250

ARBITRATION (PUBLIC SERVICE) BILL

Motion (by Mr. Hughes) agreed to -

That leave be given to bring in a Bill for an Act relating to the Commonwealth Court of Conciliation and Arbitration and the Public Service of the Commonwealth.

page 3251

COMMONWEALTH BANK BILL

In Committee (Consideration resumed from 24th November, vide page 3192) :

Clause 1 (Short title).

Mr KELLY:
Wentworth

.- I have a suggestion to make, which seems to me to offer the best opportunity of arriving at an opinion on a very important side of this measure. It has struck me that the subject-matter of this measure ought to have been distributed over two Bills - that there ought to be one corporation to deal with banking of an ordinary character, and another corporation to deal with the Savings Bank. Under the measure as it stands we are to have one corporation covering Savings Bank and ordinary banking business. That means that if the ordinary bank happens to make a loss, the assets of the bank, as a whole, including those of the Savings Bank branch, can be drawn upon by creditors of the ordinary bank to meet the liabilities of the bank as a whole. That is bad. We ought to divide the two proposals. We should have the Savings Bank within one corporation and the ordinary bank within another. I suggest to the Prime Minister that, by merely altering the short title to “ Commonwealth Banks Act,” instead of “ Commonwealth Bank Act,” and making the necessary consequential amendments, we could arrive at the result which I believe is desired by the majority of honorable members.

Mr Thomas Brown:

– Does the honorable member wish to separate the two?

Mr KELLY:

– As corporations, otherwise there will be a possibility of the Savings Bank deposits being levied upon to meet the debts of the ordinary bank.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– That is what is going to happen.

Mr KELLY:

– That is what can happen. I am not urging any opposition from a party point of view.

Mr Fisher:

– Does the honorable member propose that we should have two separate banks?

Mr KELLY:

– Yes.

Mr Fisher:

– I cannot agree to that, although I would make the Savings Bank a separate branch of the bank.

Mr KELLY:

– My point is that, whilst the two are within one corporation if the ordinary bank makes a loss, the deposits of the Savings Bank can be recovered by the creditors of the ordinary bank. The bank being one corporation must be sued and dealt with as one corporation.

Mr Fisher:

– I agree at once to the Savings Bank money being kept separate.

Mr KELLY:

– That is what I am trying to arrive at. I do not care what amendment the honorable member makes as long as he gives effect to that proposal ; but I do not think he can adopt any other legal method than that of providing for two corporations. I am satisfied from what the Prime Minister has said that he proposes to keep inviolate from the debts of the ordinary bank the deposits in the Savings Bank Branch. That is all I desire. We ought to safeguard the large deposits of the Savings Bank as much as possible. I shall not submit an amendment, but trust to the Prime Minister to have an alteration made later on.

Clause agreed to.

Clauses 2 and 3 agreed to.

Clause 4 -

In this Act, unless the contrary intention appears - “ the Bank “ means the Commonwealth Bank of Australia established by this Act, “the Governor” means the Governor of the Bank.

Mr DEAKIN:
Ballarat

.- The right honorable member for Swan, who is not at present in the chamber, suggested that it might, perhaps, not be advisable to name the chief officer of the bank “the Governor,” because current allusions to him under that title might lead to certain confusion, inasmuch as it is one employed to describe the Governor of a State. For the purpose of lucidity and distinction it might be desirable to have the title varied in some way.

Mr Fisher:

– He could be called “ the Bank Governor.’’

Mr DEAKIN:

– The Prime Minister might think the matter over with a view to fixing on some appropriate title.

Mr Fisher:

– I like the title “ Governor,” because this official will be something more than a bank manager.

Mr DEAKIN:

– Of course; and, therefore, I think an appropriate title ought to be applied.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– As I have said, I think that the title “ Governor “ isthe most appropriate in the case of a bank of this description. I admit that some confusion might arise; but when the title is associated with the bank, I do not think there will be any doubt on the part of financial people. I frankly say that I prefer the word “ Governor,” unless the Committee feel very strongly on the point.

Mr Deakin:

– “ Bank Governor “ would discriminate.

Mr FISHER:

– If the honorable member thinks that sufficient, we may make that the title. If it is not out of order, I should like to say that I was looking forward to the time when there could be no trouble in this matter - when there could be no confusion with Governors of States.

The CHAIRMAN:

– The right honorable member is out of order.

Mr RILEY:
South Sydney

.- If this is the proper time to refer to the question of director, I should like to point out that we may yet have three “ Governors,” and not one.

Mr Fisher:

– That matter comes up under another clause.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– - I think the honorable member for South Sydney is quite correct. If the Prime Minister intends to suggest a Board of three directors, or trustees, he will be following the precedent of the Bank of England; and it is important to know whether such is the intention. If it be so, I do not see any objection to the use of the word “ Governor “ ; but, on the other hand, if the Governor of the bank is to act alone, his title may be much less appropriate.

Amendment (by Mr. Fisher) proposed -

That after the word “ the,” first occurring in line 6, the word “ Bank “ be inserted.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– - As the clause stands now, it reads “the Governor means the Governor of the bank,” and the official, therefore, is distinguished from any Governor, or from the Governor-General. I do not think that the title “Bank Governor” is nearly as good as “ Governor of the bank.”

Mr Fisher:

– Apparently, the insertion of the word is to prevent people thinking that the word “ Governor” applies to the Governor of Timbuctoo’

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– If the amendment be carried, the clause will read, “ The Bank Governor means the Governor of the bank,” and that, of course, is non. sense. The amendment seems to me wholly unnecessary.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– The honorable member has discussed the matter . in a humorous and somewhat dictatorial manner. The honorable member for Ballarat pointed out that the right honorable mem ber for Swan had some apprehension that the title proposed in the Bill might give rise to some confusion in the minds of people in connexion with the Governor of a State. On that being pointed out, I consented to insert the word “ Bank “ ; and the worst that can be said of the amendment is that it is a redundancy. If, however, the additional word removes any misapprehension or confusion, no harm is done.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

. - I cannot see how the word “ Governor “ used in this connexion could be taken to mean the Governor of a State. The definition clause sets out that wherever the word is used in this Act it means the Governor of the bank ; and what more do we require? The Prime Minister ought to object to any amendment that is redundant.

Mr FENTON:
Maribyrnong

.- I quite agree with the honorable member for Parkes that the amendment is utterly unnecessary. There can be no possible confusion between the Governor of the bank and the Governor-General in Council, because the latter is always spoken of as the Governor-General.

Mr DEAKIN:
Ballarat

.- The right honorable member for Swan pointed out that references to the Governor of the bank, verbally or in the press, would be briefly to “ the Governor,” and that this would be likely to give rise to a certain amount of confusion with the Governor of a State. No one has yet mentioned the Governor-General in this connexion, t called attention to the matter in the absence of the right honorable member for Swan ; and then came the suggestion that the title should be “the Bank Governor.” I hesitated to adopt this suggestion, because that is not a taking title. It does, however, describe the official ; and for want of a better, it was proposed by the Prime Minister. My own suggestion was to leave the matter with the Prime Minister, so that he might consider some modification, with a view to giving the Governor of the bank a distinctive appellation.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– I think the amendment ought to be withdrawn, as absolutely unnecessary. I may say that personally I do not believe in the Bill at all ; but the clause as it stands is clearer than, in my opinion, it would be if the amendment were carried.

Mr ANSTEY:
Bourke

.- It is! really delightful to find that, in the opinion of the honorable member for Parkes all the foolish members of the Committee are not on this side. The honorable member for Parkes regards the amendment as a foolish one, though it did originate with his leader. How are we to read this Bill if the amendment is carried? Clause n, for instance, would read something like this: - “The bank shall be managed by the Bank Governor of the bank.”

Mr Fisher:

– Quite so - it is a redundancy.

Mr ANSTEY:

– I do not see that we require this definition at all.

Mr SAMPSON:
Wimmera

.- It is not necessary to insert the proposed word. I understand that in some of the States we find what is called “ the Governor of the gaol “ ; and we are not told of any confusion that arises between that official and the Governor of the State. Every time the chief officer of the bank is described, it will be as “ the Governor of the bank.”

Amendment negatived.

Clause agreed to.

Clause 5 (Establishment of bank).

Mr ATKINSON:
Wilmot

.- Owing to the arrangement made to close the second-reading debate at a certain time, I had no opportunity to address myself to the general principles of this measure ; and, therefore, I should now like to offer a remark or two on this clause. In the first place, I have no objection to the Commonwealth establishing a bank. It is quite possible for the Commonwealth to establish a bank that will be a really strong institution, to which other financial, institutions can look for support. The question is, “ What sort of bank are we going to establish, and under what sort of management 7” I admit the truth as a general proposition of the statement that banking is merely a matter of dealing in credits, but the credit must have a fairly sound foundation. It is quite open for the Commonwealth Parliament, if -the people desire it, to found a sound and proper bank, so long as we go the right way about it. My trouble is, “Are we going to found a bank that will be worthy of this Commonwealth ? “ If we desired to be so foolish, we could start a large generous affair, open-hearted and open-handed, to which everybody could come in time of need, and where no one would be denied; but I do not think it would carry on for very long. I am afraid that if we do not do something in that line, some people in Australia will suffer a great disappoint ment, because the people were told that the present banks were bleeding the public, and making immense profits, and that the Commonwealth could establish an institution to which the poor and needy could apply with a certainty that their wants would be supplied. We are a Federation, and it would be a good idea if our bank were given a really Federal basis, by the States being allowed to co-operate with the Commonwealth in it. This would tend to make the institution all the sounder, and also help to simplify the very difficult and pressing problem of dealing satisfactorily with the Slate debts. That was one of the great questions for which Federation was brought about, but after eleven years of Federation we are as far off any practical solution of it as we were at the beginning. I am sorry no scheme was outlined in that direction in the recent Budget, but this bank must, sooner or later, take a hand in dealing with the State debts. lt will have to be the financial institution through which we do the business. 1 wish’ to put it on record that, if we give the bank a more Federal basis than the Government propose, it will simplify our procedure, and materially help the settlement of the question, which will have to be dealt with, not only in a way that suits this Parliament, but in a way that is satisfactory to the States which have incurred the debts, and to the people of Australia generally: If we go about the business in the right way, we can establish a National bank which will be in the proper sense a banker’s bank, strong enough to help in time of need any other bank that is worth propping up. Of course, there have been in Australia banks that have gone smash, and that sooner or later would have collapsed under normal circumstances, but other banks have gone down that need not have gone insolvent had there been some institution to tide them over their period of stress.

Mr PARKER MOLONEY:
INDI, VICTORIA · ALP

– I’f the State had come to their assistance, for instance.

Mr ATKINSON:

– Not necessarily the State, so long as there was some strong central institution. If we go about it properly, it is possible for us to establish a bank that, in time, would not only be able to render such succour to other institutions in need of help, but that would be a sound business in itself, and earn substantial profits that could be applied to Commonwealth purposes. Apart from that, it could save the Commonwealth a lot of money by doing the Government business, and by negotiating for the flotation, transfer, and renewal of loans. I take it that that is one of the best arguments for the foundation of a bank of this sort.

Mr Higgs:

– If the honorable member is an individualist, why does he want the private banks to be helped by a State institution ?

Mr ATKINSON:

– The help should be given in the case of a financial institution which is not really insolvent, but which, if pressed too hard at a certain time, would have to suffer a great decrease in the value of its securities, and so cause great loss to many people, and the State generally. Institutions of that sort should be saved from collapse, in the public interest. As an illustration, I can refer the honorable member to what happened in his own State in 1893. A tremendous loss would have been caused to the whole of Queensland if the great securities held by the Queensland Bank had had to be realized at that time, but the Government came forward with their note issue and other forms of assistance, and kept the bank from collapse.

Mr Higgs:

– Our objection is that you believe in Socialism for the big fellow, but not for the little one.

Mr ATKINSON:

– I am not saying that the Commonwealth Bank is an absolute necessity. I do not think it is. I merely say that such an institution as I have outlined could be established, and if it is run on sound lines I see no great harm in it. Ido not say that the Commonwealth Bank should overshadow the private banks, but, if established, it should be a bank that we can all look up to. When established it should also have a branch to deal with the Commonwealth note issue. This would be a. great improvement on the system of handling notes that we have had so far.

Mr Fisher:

– The note issue might be taken over by the bank sooner than you expect.

Mr ATKINSON:

– That would be a great improvement.

Mr King O’Malley:

– We had to give it a trial run before starting with the note issue.

Mr ATKINSON:

– It would not be difficult for the bank, when established, to take the note issue over. It could manipulate the business in a better way for the Commonwealth than could the Treasury. With its central office in Melbourne, and its branches throughout the country, the bank would, as it were, have its finger on the pulse of the community to a greater extent than the Treasury has, and so could tell better how trade was going, and the amount of note issue required. By setting up a central institution we could deal with Savings Bank business also, but we should be takingon unnecessary trouble. We shall have quite enough to do in the first instance to establish our own general bank. It would be wiser to leave the Savings Bank business as it is now, or at any rate before we take a share in it we should consult the States, which already have Savings Banks of their own, in which the people of Australia- have placed over £50,000,000. A great deal of that money is lent out on short-dated loans, and a great deal of it also on long-dated loans, through the Credit Foncier system.

The CHAIRMAN:

– It would suit the honorable member’s purpose as well to discuss the question of the Savings Bank branch when Part V. of the Bill is reached.

Mr ATKINSON:

– I was trying to picture the sort ofCommonwealth Bank that I should like to see established under this clause, but I bow to your ruling. Those in charge of the Savings Banks of the States have done all that they can to make their systems uniform, with the result that depositors now enjoy practically all the conveniences which they could have from a Commonwealth Savings Bank, and the duplication of this machinery is unnecessary. The capital of the proposed bank should be adequate. We need , £2,000,000 or more to establish the bank.

The CHAIRMAN:

– Clause 9 deals with the capital of the bank.

Mr ATKINSON:

– Still, I think that my remark is in order. A more important point is this : It would be better if the bank were not purely a Commonwealth Bank, and had private capital as its basis. It would then be more useful in times of trouble. The Bank of France is not purely a State Bank. Like the Bank of England, it is based on private capital, as is partly the case with the Bank of New Zealand. A purely State Bank might not be able, when its help was most needed, to give the assistance that was required. Panics come when they are least expected, and no method of preventing them is known. If at a time of panic a purely State Bank could not meet the demands made on it, the position would be very awkward, because the public credit would have been destroyed, and there would be nothing to fall back on. But with an institution like the Bank of England or the Bank of France, you would have something to come to the aid of the credit of the Commonwealth, and the Commonwealth could come to the aid of the bank. President Thiers, after the war between France and Germany, said that the Bank of France saved France, “ because it was not a State Bank.” Had that bank been wholly a national concern, it could not have given the assistance which it did, because the national credit had been destroyed by the war. The situation was saved by the credit of the bank coming to the aid of the national credit.

Mr King O’Malley:

– The national credit enabled the bank to expand its currency.

Mr ATKINSON:

– The expanded currency was supported with private credit created by a long course of good management on the part of those conducting the affairs of the bank. Monsieur Pierre D’Essars, who wrote a History of the Banking of all Nations, said that -

When the Bank of France issued notes secured by Treasury obligations, it added its own guarantee to thatof the State, and the paper circulated consequently at par. If the bank and the Government had been one and the same, the bank’s signature would have been no reinforcement of the State’s, and the paper intended to be taken on trust would have been valued at just what the State’s credit was worth.

That touches a vital point that has not been fairly dealt with by Ministers or their supporters. If this bank becomes, as no doubt it will, an ordinary trading concern, it must, like any other institution, occasionally suffer losses, and, should the credit of the Commonwealth be injured, there would be nothing to back it up. A bank based on private capital, doing the Government business on easy terms, and enjoying certain privileges, so that it would be somewhat in the position of the Bank of England, would be a much stronger institution, and of greater value to the community, than a purely National or State Bank.

Mr THOMAS BROWN:
Calare

– Like the honorable member for Wilmot, I had intended to speak during the second-reading debate, but waived my right to do so to enable the Bill to get into Committee on Friday afternoon. Therefore, there are many matters on which I should like to speak which I cannot discuss now. But I am glad to witness the general approval - in some cases a modified one - of the Government proposal for the establishment of a National bank. The honorable member for Wilmot favours the establishment of a bank which will be a sort of agent for other banks, and would come to their assistance in times of financial crisis by placing the credit of the Commonwealth at their disposal. But I think that the time has come when the people should control directly their great monetary interests. At the same time, I would leave the financial field as open to private institutions as it is now. The establishment of a purely National bank has been strongly opposed, when efforts to that end have been made by the States. Savings Banks have been established by the Governments of the States, but until recent times that of New South Wales did not lend money to the general community, and I believe that a similar policy prevailed in the other States.

The CHAIRMAN:

– I would point out to the honorable member that he will have an opportunity to fully discuss the question of Savings Banks on clause 35.

Mr THOMAS BROWN:

– I wish only to explain my support of this proposal by pointing to the policy obtaining in connexion with the State Savings Banks, and showing that this scheme will be more generally in touch with the desire of the people. It will be conducted with due regard to the carrying out of the general principles recognised in the banking world, as compared with the more restricted system adopted by the earlier Savings Banks. The bank to which I was referring when the Chairman intervened would not lend to small holders, and its principal customers as borrowers were the privately-instituted banks. It was only when the crisis of 1892-3 came along that this institution, in common with others, got into financial difficulties. The result was that the State, being the larger and the more substantial institution, had to guarantee their assets, and so prevent the general bankruptcy which threatened.

Mr Chanter:

– The State also guaranteed the notes of the other banks.

Mr THOMAS BROWN:

– As well as the assets of this particular bank.

Mr Atkinson:

– In a time of panic the notes of our bank might not be too good.

Mr THOMAS BROWN:

– There was a time of panic when the notes of some of the large banks which had previously been considered to be very substantial were not worth the paper they were printed on. One could not get them changed, and the

State had to come to the assistance of these private institutions. The lesson of the crisis was that the State was more substantial, and more to be trusted, than was this semi-State Bank or the private banking institutions. It was only when the guarantee of the State as a whole was placed behind them that confidence was restored and business proceeded along normal lines. That proves that the bank, as proposed to be established under this Bill, has a larger asset on which to operate, and that, notwithstanding the fear expressed by the honorable member who preceded me, that there may come a time when the operations of this bank may be seriously affected by a crisis, experience demonstrates that before a State institution can be seriously menaced by any general loss of confidence on the part of the depositors and those who do business with it, the other banks, including the State Bank which does not possess the full guarantee of the several States, will be in a very much worse position than it is possible for this bank to be in. As the honorable member for Denison clearly demonstrated the other day, there is a vast difference between the popular idea of the functions of a bank and the real basic principles on which it works. The banks, after all, are simply dealers in credit, and, that being so, it is desirable that their credit shall be substantial, and that there shall be general confidence in their ability to meet their engagements. My argument is that the Commonwealth, being the larger and wider institution, representing the people as a whole, is not liable to the withdrawal of public confidence that falls to the lot of private institutions. It was objected that the Commonwealth Bank should be completely removed from political control. That is only right, and I support the Government in their desire to establish this bank, and to establish it under conditions that will insure that it will be conducted on proper commercial lines, free from any interference on the part of politicians or those interested in politics. T.hat is not the position of a private banking institution.’ Private banking companies are very anxious to have leading politicians on their directorates, and well-known politicians largely preponderate on their Boards. In the practical work of banking, as the people have reason to know, politics are not altogether unknown. First of all, the small holders of overdrafts from a bank are squeezed when a drought or some other trouble takes place, and that process has been as largely responsible as any other factor I know of for the wiping out of the small settlers and the aggregation of large private estates. In other ways also politics have been introduced into banking business. Small men with ‘ overdrafts have been told that they must exercise due caution in expressing themselves in the political arena, otherwise they may be called upon at a moment’s notice to make good their overdrafts. Such an experience is well known to the poor farmer. It would be a great thing in the interests of pure politics if we could have an institution that would be so free from political bias and control that such an experience would be impossible in connexion with it. It does not obtain in connexion with the State Savings Bank, and a great National bank that can remove such a blot from the free exercise of our political rights will confer a great service upon a large and substantial section of the community. In these circumstances, I heartily support this measure; and I am glad to find that the opposition that used to be offered in the State Parliaments to every proposal to establish a bank under State control is not so pronounced in this case. I trust that this will be a National bank in every sense of the term ; that it will do all the business that it is possible for a bank to do; and that it will do it in the interests of the whole people. I hope, further, that politics will not be obtruded in the discharge of its functions, and that the people who do their business with it will not have the sad experience, which has fallen to the lot of many doing business with private banks, of being hauled up to the bull-ring when their politics do not coincide with those of persons who have the control of the institution.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

;- I have no desire to make a second-reading speech, but I intend to avail myself of the opportunity which this clause affords to offer some general explanation of my own views on this Bill. The honorable member for Riverina remarked, when the honorable member for Wilmot was speaking, that he ought not, upon this clause, to deal with the general question, since it was merely one giving a name to the bank. On reading it carefully, the honorable member will see that it goes further, since it provides -

A Commonwealth Bank, to be called the Commonwealth Bank of Australia, is hereby established.

While I agree with you, Mr. Chairman, that it would be out of place now to deal in detail with any of those questions that we shall, have an opportunity to discuss byandby, such as the details of the Savings Bank proposals, I think we have an opportunity on this clause to deal generally with the advisableness of establishing a Commonwealth Bank. In the first place, I should like to remark that when first I saw this Bill I was rather disappointed with the character of the proposal, and surprised that the pride of the honorable member for Darwin should have been so severely touched by completely ignoring the scheme that was put forward, with the consent of the Government, some eighteen months ago, as the emanation of his own intellect, and indorsed by the Brisbane Conference. My recollection of that scheme was that there was to be a bank in which all the States were to be compelled to take a part.

Mr Deakin:

– Invited.

Mr King O’Malley:

– Not compelled.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I understood that they were to be compelled. The capital of the bank then proposed was, I believe, about ^120,000.

Mr King O’Malley:

– ,£1,200,000.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The scheme was very vaguely described in the press. I do not think it was outlined by the honorable member himself, and I was a little surprised, in view of the reputation for financial ability which the honorable member had amongst his colleagues, that the Government should have so completely departed from that proposal in introducing this Bill.

Mr Groom:

– Judging by the Sydney speech of the Minister of Home Affairs, reported in yesterday’s Argus, it would seem that they are going back to that scheme.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I think it will be impossible to so transform this Bill as to make it in any way like the Bill which the honorable member for Darwin proposed. I am not vain enough to imagine that I can influence the opinions of honorable members opposite by anything I can say on this question. I regard this discussion, so far as putting the Bill into shape is concerned, as quite futile. I have long given up the hope that any honorable members on this side can affect the measures, or the form of the measures, put forward by the Government. It has become a truism that all Bills are discussed in general and in detail before they come here.

Mr Howe:

– The honorable member has no proof of that !

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have had pretty good proof of it in the case of other Bills - for instance, the Land Tax measure and the Commonwealth Notes measure.

Mr Howe:

– The honorable member is wrong !

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That may be; but this Bill, I know, has been submitted to the Caucus.

Mr Page:

– Will the honorable member believe me when I say that I never saw this Bill until it was laid on the table?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is quite compatible with the fact that the Bill was before the Caucus, and the general principle and details approved, and that it has come here now to be registered. I am not sufficiently biased to believe that honorable members opposite are opposed to joining with honorable members on this side in making some necessary amendments ; and when we come to the clause dealing with the management of the bank, I shall submit what I think is, in one respect, a much wiser scheme. Instead of throwing on the Governor the complete responsiblity for managing an institution which may have the handling of £25,000,000 or ,£50,000,000, honorable members will be willing, I think, to appoint directors, as in the case of the Bank of England, or trustees, as in the case of the Savings Banks. I fear, however, that, on the general principles, it is very unlikely that any suggestions from this side will be adopted. I do not take the pessimistic view of this Bill that many honorable members do. It is quite open to the Government, especially of a young community like this, to take part in the banking business of the country. The Bank of England has been, not only a successful, but an extremely useful institution. The Commonwealth has, or will have, enormous financial prospects. We are going, by-and-by, to take over the debts of the States ; and this Commonwealth Bank will have an office in London, in which a great deal of very useful work can be done in this connexion. But a great deal will depend on the way in which such an institution is managed. It would be very undesirable that this bank should be so constituted as to be under the influence, directly or indirectly, of any Government or any Minister. My experience of banking extends over thirty years. I have been director of a bank, and I know something about the business ; and I say that if we are not careful to make this bank completely and obviously free from political influence, the public will never have in it that confidence which is so necessary to make it a highly successful institution.

The CHAIRMAN:

– The whole question of the management may be discussed under clause11.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am not speaking from the point of view of the management. Under the clause before us, I submit, I am at perfect liberty to discuss the whole question of the desirableness of establishing a Commonwealth Bank, and to say under what conditions, quite apart from other proposals in the Bill, I consider such an institution is likely to be successful. I am not trying, sir, in any way to manoeuvre or get round any of your rulings. I submit that we have a perfect right now to discuss the abstract question of the desirability of establishing a Commonwealth Bank, and, to that end, to deal with those conditions which ought, or ought not, to surround such an institution. If the public see or suspect that this bank, instead of being put into the hands of a Governor or genera] manager and three competent men as trustees, is left in the hands of one man-

The CHAIRMAN:

– The honorable member must see that he is discussing matters dealt with in clauses11 and 12.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Those clauses may deal with the same question, but I am speaking on the general principle of political management. We shall have to make it quite clear to the public - and this is the view, I know, of all bankers and mercantde people-

Mr Page:

– Did the bankers make it clear to the honorable member ?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member is very suspicious of anybody on this side. I have not a share in any bank.

Mr Page:

– I did not say the honorable member had !

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am not a director of a bank, and I have not the slightest interest in any bank, directly or indirectly. But, surely, I may bring to bear on this question my experience as a bank director, and, from my knowledge of commerce, say that the public will be very sceptical of the soundness, and probable future soundness, of an institution which is liable to have the hand of any Government or Minister placed on it at any time in order to influence its policy?

Mr Page:

– The honorable member surely does not argue that a National bank cannot be sound?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We know that National banks have frequently proved unsuccessful owing to political influence.

Mr Page:

– We hope that that will not happen !

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is the very question with which I am dealing. I do not wish the honorable member to sneer at any opinions which may be offered simply because he is suspicious that I come here as the advocate of bankers. The honorable member makes a great mistake if he thinks I am here as the advocate of any capitalists. I know capitalists as well as he does ; and I have no unreasonable partiality for many of them, whether as merchants, bankers, or manufacturers. I can assure honorable members that, if I stand up here and express opinions, those opinions are quite distinct from any influence that can be brought to bear by any parties outside.

The CHAIRMAN:

– Does the honorable member think that this has anything to do with the clause?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No, I confess I do not ; and I should not have gone into the matter had it not been for the rather uncalledfor observation of the honorable member for Maranoa.

The popular idea outside is that a bank is a means of making enormous sums of money - that banks are a sort of octopus constantly bleeding the people, in order to putmoney into the pockets of what are popularly called “fat men.” During the days of the reconstruction of the banks I made it my business to attend a large number of meetings of those institutions which availed themselves of the reconstruction laws, and I was quite astonished at the great variety of people who formed the shareholders. The cartoon in a Labour paper, representative of a banker, usually shows us a man of huge proportions, . with an enormous gold chain, big enough for a dog chain, large diamonds in his sleevelinks and in his rings, and smoking a big cigar. This represents the popular notion ; but the actual fact is that shareholders consist of men and women, many of them of the working class, small shopkeepers, or various kinds of working women, some of them, perhaps, washerwomen. If anybody attends a meeting of bank shareholders, he, too, will be astonished at the large number of poor and middle-class people to he seen there; and when people look for the typical bank shareholder in the ridiculous figure presented by the working-class papers, they are labouring under an extraordinary delusion. The bank shareholders are, many of them, of the same class of people as those who deposit their money in the Savings Bank ; and to get them to take an interest in the Commonwealth Bank, it will have to be made quite clear that it is not liable to political influence.

Mr West:

– I rise to a point of order. You, Mr. Chairman, have allowed wonderful latitude to the honorable member for Parkes in discussing this clause ; but I think he is now exceeding the bounds - that he is exceeding the bounds of ordinary decency towards other honorable members.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The question of decency I shall not deal with ; but I think I can show that I am quite in order. This clause is simply a proposition to establish a Commonwealth Bank ; and we cannot deal with the advisability of taking that step without asking ourselves under what conditions it would be advisable to establish it. Surely it is obviously relevant to say that, if we establish a Commonwealth Bank, it ought to be free from political influence? I am pointing out, in an appropriate way, I think, that we ought to consider what is the class of people likely to use the bank, so as to give it that importance and substantiality we desire.

The CHAIRMAN:

– Undoubtedly this clause covers practically the whole banking question. I have already directed the attention of the honorable member for Parkes to other clauses in the Bill on which he could discuss this matter; but if he and other honorable members insist on having their say, on this particular clause, on banking generally, I, unfortunately, am not in a position to stop them.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I congratulate you, Mr. Chairman, on taking a little wider view than that of some honorable members who do not wish this question to be discussed. Some time ago I read a quotation from the Brisbane Worker on the subject of a State Bank. It is rather appropriate to repeat that quotation now, in order to show what the popular idea of a Commonwealth Bank is. The newspaper extract is as follows : -

The establishment of a Commonwealth bank of issue, deposit, exchange, and reserve, would be . 1 big step towards making the Australian nation master of its own currency, and liberate its citizens from the talons of the Money Power.

That is the popular view - that every bank in the country, notwithstanding that it is in competition with a great many more in every other State, is a sort of vulture. The word “ vulture “ is used in the article, and the allegation is that the banks are really trying to take advantage of the simplicity of the people to bleed them of their means. That is an utterly wrong view, which will not stand the investigation or the test of figures. When the Prime Minister was addressing the House upon the question, he said the average profit of all the banks over a great many years was 17 per cent. on their original capital, but that on their paidup capital to-day the profits were an average of 9 per cent. I have taken the trouble to look up the Y ear-Book for Australia, and I undertake the responsibility of differing entirely from the right honorable gentleman’s conclusions. He has never taken into consideration the banks which have absolutely failed.

The CHAIRMAN:

– The honorable member is not in order in replying to something that took place during the secondreading debate.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I shall not attempt to reply to the Prime Minister’s speech. I have referred to it, and now propose to deal with the question of the profits of the banks. It is misleading to say what the banks pay upon their original capital.

The CHAIRMAN:

– The honorable member is now trying to evade my ruling.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I do not think, sir, you have any right to say so. I wish to deal with the question of the profits of the banks, and to show that they cannot be arrived at by taking what they pay on their original capital. If one wishes to find out what a bank will pay, he must take as a basis, not merely the present capital, but also the market value of the shares. To ascertain what a bank would have paid on its original capital would take one back sometimes sixty or seventy years. In addition to their dividends, we know that banks and other institutions have put money into reserve funds. If you take their present capital you have to take into account as a basis for their profits, not only the original value of the shares, but the value of the reserve funds. We have to remember, too, that the shares are changing hands every day, and that the people who buy them pay so much premium on them, according to the interest they pay, as will give them about the same average which they get on all other public companies - namely, 5 or 6 per cent. To talk of the “ talons .” of a bank, and of it being a “vulture,” when you have seen the character of the people who form the shareholding class of the banks, is wholly unfair. Honorable members would find, if they bought shares in one of the banks, that, at the current price, they would not produce more than 5, or, at the most, more than 6 per cent. ; and if they were original shareholders they would find that they are not producing much more than that on the present capital, adding to the original capital the reserve funds, which have been saved out of profits. In the past, when prices were high, there were times in Australia when you could not borrow money upon a property under 6 nr 8 per cent. In those days men made bigger profits, and the banks paid dividends to a certain amount and put a portion of their profits to reserve funds. Therefore, if you take the profits paid upon the original capital and the reserve funds combined, you find that they do not come to the high rates that many people suppose they do. If, on the other hand, you take the profits of the banks upon the current value at which people have been buying the shares for years, you will find that, being a sound, and what is called a gilt-edged, investment, they do not produce more than sometimes 4 per cent, or 5 per cent., or, at the very most, 6 per cent., so that the idea that this bank is going to make huge profits can be disposed of at once. That vision of ignorance is one which ought to be dispelled at all events from the mind of every member of this House.

Mr Fenton:

– To whom does the honorable member attribute ignorance?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I said the public outside had an ignorant view of the profits of banks.

Mr Fenton:

– You said the members of this House were ignorant.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I said I did not suppose any member of this House took the same view of it, whatever the public outside might think.

Mr Fenton:

– You say that now.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I said it then. The honorable member, because he is at my back, and misunderstands what I say, gives me the lie direct. In taking into consideration what the banks have produced in the past, it would be utterly wrong to leave out of calculation the losses, not only of profits, but of capital, in the institutions that have failed. If you want to take the average of what a particular industry, whether banking or gold-mining, has brought in, it is not sufficient to take the successful ventures and say what they are making. You must take into consideration the whole of the ventures, successful and unsuccessful, calculate what money has been put into them, what money they have produced, and take that as an average over all their capital.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– And consider also the ventures which private banks have touched, and which this bank will not handle.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No doubt that also ought to be taken into consideration. There is a popular notion outside that the Commonwealth Bank is going to lend money to individuals in a very small way. I cannot discuss that matter here, but it has a bearing on the broader issue which I have put to the Committee. We ought to be very careful, when formulating a scheme for the establishment of a bank, to surround it by all the protection possible through the management. If that is done, and it is put upon the basis of other institutions of the kind, I have no fear for the future. As we are going .to convert some hundreds of thousands of State debts into Commonwealth debts, and to deal with their investment, and to have a branch in London, I think it will be a very useful institution, so long as it is entirely free from political influence.

Mr DEAKIN:
Ballarat

.- As we have come face to face with the particular proposals in the Bill, this clause not only affords an opportunity for the general discussion that we have had, but is the proper place” to invite a specific statement from the Prime Minister on one or two of the most important features of the Bill, and some of the most important proposals which deserve a place in it. The clause provides for the establishment of the Commonwealth Bank of Australia. I have already defined my view of the bank. The word “Commonwealth” is, apparently, intended to be used in its more exclusive reading as denoting the bank of the Government of the Commonwealth, and of the Commonwealth alone. In the original shape of this proposition, the obvious intention was that it should be a Commonwealth Bank in the larger sense of the term, embracing the States and their Treasuries, as well as the

Commonwealth and Commonwealth Treasury. Nothing could be more desirable than such a combination. It would be in harmony with the intention of our own Constitution, enormously increase the resources of the institution, and, of necessity, carry with it the banking business of the States, which, taken collectively, is an immense source of revenue, and affords enormous opportunity.

At this stage, the crucial issue appears to be whether we intend to establish a rival and a competitor to the existing private banks, and to any possible State Banks which may be launched by any of the States. As this proposition is put forward, it creates a rival and competing bank entering into a field which at present is wholly occupied by private banks. As I understand the original object of those who, on various sides and from various political angles, have proposed an Australian bank, the crucial question is whether it is to be national in its business and foundation in the wider sense of the term, or whether it is to step into the public arena relying only on its own great future resources as a combatant. It will seriously limit many of the present operations of the private banks, and might so occupy the field of national finance that only a combination of State Banks, if such a thing could be imagined, would be able to make financial headway against the powerful corporation that it promises to be.

I am endeavouring now to direct the attention of the Committee to this parting of the ways. This is the time and place at which we must arrive at an all-important decision. One of the features which commended this project to many, myself among them, was that in the original draft submitted to the Conference by the honorable member for Darwin provision was made, not as extensively as one would have liked, but quite explicitly, for the recognition of a certain probable partnershiponthe part of the States.

Mr Fisher:

– What does the honorable member suggest?

Mr DEAKIN:

– I wish, first, to ascertain the intentions of the Government.

Mr Fisher:

– The honorable member has a copy of the Bill.

Mr DEAKIN:

– On this point the measure is not explicit, and the opportunity for making it so presents itself. If this is to be a Federal undertaking, the bank shouldbe founded with State as well as with Commonwealth capital. That would make it immensely more powerful and popular. Should the States find part of the capital, their financial business would certainly be given to the bank, and the handling of their debts would naturally come under its management. This last is the outstanding financial undertaking to which all financial attention is directed, and its importance can scarcely be overestimated.

Mr West:

– The States will be able to do their business through this bank in any case.

Mr DEAKIN:

– Yes; but we gain nothing by excluding, and a great deal by including, them as partners.

Mr Roberts:

– Does the honorable member suggest that they should have a monetary interest, apart from their business transactions?

Mr DEAKIN:

– Yes; they should find part of the capital, and should be shareholders with the Commonwealth.

Mr Thomas Brown:

– What share of the management would they have?

Mr DEAKIN:

– I do not wish to appear as the author of a carefully thoughtout scheme, nor am I antagonistic to other suggestions ; but the possessor of a direct pecuniary interest in an institution pays more attention to its management, and does more to put business in its way, than one who is not concerned in its success. My suggestion is a merited recognition of the position of the States, and affords an opportunity for the handling of their debts. It is a frank and open arrangement for the financial federation of our great public enterprises and interests. That is the real end of this bank. Of course, no proposition has the faintest chance of success unless submitted by the Government with the support of Ministerialists; but at this juncture a question not to be avoided is, What is our aim? Is it Federal in the inclusive or in the exclusive sense? The formulation of a scheme such as I suggest will in no sense coerce the States, each of which must consider the proposition -from its own stand-point.

Mr Fenton:

– Would the honorable member be content to leave the door open to the States ?

Mr DEAKIN:

– There should be placed before them, at least in a general way, a statement of the intentions of the measure and an invitation-

Mr Fenton:

– That would delay its passing.

Mr DEAKIN:

– Not necessarily. That might depend on the replies returned by the States, and in such a situation I should be prepared to make a suggestion. But if the Government will not seriously consider the proposal, the discussion of it is fruitless. Still it is at least possible, to frame the measure so as to make provision for their coming in, a period, if necessary, being fixed in which the States could make a definite reply.

Mr West:

– Would the honorable member remove the control of the institution from the Commonwealth”?

Mr DEAKIN:

– Its control would be shared with the States.

Mr Archibald:

– Then political influence of all kinds would come in.

Mr DEAKIN:

– The measure is already in one sense saturated with political influence; my suggestion would not increase that. Were the States given a direct interest in the fortunes of the bank, we should have the best guarantee of their support. I ask the Prime Minister what opportunity, if any, is to be given to the States to take part in the establishment of the bank ?

Mr Fisher:

– What does the honorable member propose?

Mr DEAKIN:

– That the bank’s capital should be found partly by the States.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Commonwealth does not find any capital for the bank.

Mr DEAKIN:

– It is to lend 000,000 to the bank, to start it. I ask, is the bank to be founded on a unitary basis or on ti federal basis, the States sharing with the Commonwealth . in the enterprise ?

Mr Roberts:

– - Does the honorable member suggest control by the States in proportion to their interests?

Mr DEAKIN:

– Were the States to find part of the bank’s capital, they would* have a direct incentive to make their investments fruitful. What I propose would obtain and retain the support of the States.

Mr Roberts:

– They would expect to share in -the management of the bank.

Mr DEAKIN:

– They might have representation on a board in the nature of a directorate. We might either keep the present form of control, appointing a central authority, advised by a directorate- 011 which the States were represented, or create a board having the larger powers which directors, of private banking institutions customarily exercise.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– The questionraised by the Leader of the Opposition is not so clear to my mind as it appears tobe to his. One would think, listening to the honorable member, that the Commonwealth alone had the constitutional power to establish a National bank. As a matter of fact, no one knows better than he does; that the States themselves ha.ve far greater powers in regard to national banking than* has the. Commonwealth Parliament.

Mr Deakin:

– Hear ! hear.

Mr FISHER:

– We need not discuss or criticise their failure to exercise -that power, but their opportunities will not be in any way minimized by the establishment of a. Commonwealth Bank.

Mr Deakin:

– Not theoretically.

Mr FISHER:

– Not theoretically, constitutionally, financially, or otherwise.

Mr Deakin:

– Practically, the creation of this great bank will have an immense effect upon their opportunities.

Mr FISHER:

– In a day, if not in am hour, the whole scene is changed. It wasbut yesterday that honorable members of the Opposition said that this banking proposal was most stupid and unworthy, and, indeed, that it was an impossible proposition. To-day we are told by the samehonorable members that it is going to> be a great institution, which will overlap others and prevent the. States from carrying legislation in the same direction. ThisGovernment is not antagonistic to theStates ; on the contrary, it is most friendly to them.

Mr Gordon:

– Why not take them inas partners?

Mr FISHER:

– Already the Government of the honorable member’s own Statehas agreed to bank with this institution, quite apart from any question of partnership. The question of partnership hasnever been raised by it, nor has it beenproposed, or Suggested, by any of the States. It is quite true that the Minister of Home Affairs, at the Brisbane Conference, outlined a scheme, which met withgeneral approval there, in which it- wasproposed that the States should cooperatewith the Commonwealth in the establishment of a National bank. That scheme, however, is not part of our platform. It is equally true that, for twenty years, a State banking proposal was outlined inconnexion with nearly every State Labour platform in Australia. The people knew exactly what was meant. I do not wish to take away any of the credit to which the honorable member for Darwin is entitled for constantly keeping this question before the public. The business of this Parliament, however, is primarily, to establish a Commonwealth Bank to transact Commonwealth banking business, leaving it open at any time for the States to come in and co-operate with us if they so desire, The proposal made by the Leader of the Opposition, as I understand it, is that the passing of this Bill should be delayed until the States, by co-operating with us, become partners in this concern. If that’ is his proposition, then I venture to say, with the greatest respect to the States, that the Bill will not be passed during this, or the next, Parliament. The second point to be considered is whether we could take in one State if the remainder did not elect to come in. In my opinion, such an arrangement would meet with absolute failure. When all the States desired to co-operate with us we could amend this measure in accordance with their wishes, so that there could be co-operation and joint action, on the part of the Commonwealth and the States, in dealing with the great question of the State debts and their own financial business. After all, the question of the management of the State debts will, undoubtedly, come ultimately into this banking scheme, whether the bank be a cooperative concern or not. That, in my opinion, is inevitable. So far from the Commonwealth Bank proposed to be established being. un-Federal, I say that it will be most Federal. The Opposition have been most persistent in the assertion that a citizen of a State is also a citizen of the Commonwealth. How, then, can they say that the establishment of a Commonwealth Bank will injure the citizen of a State if it benefits him as a citizen of the Commonwealth? We have no power to coerce the States in this matter, but when they think fit they may express a desire to become partners in this national banking institution, and it will be found that this Government is just as desirous of cooperating with them as they are to co-operate with us. But to insert in this Bill a provision, making it at condition precedent to the establishment of -a Commonwealth Bank, that the States shall have agreed to co-operate, would be to cause a fatal delay and to disrupt the whole policy of the bank. I wish the Leader of the Opposi- tion to disabuse his mind altogether of the idea- that this Government is antagonistic to the States. I wish him, and those who are acting with him - in short, I desire all who take any interest in this banking proposalto know thai the Government are anxious to pass a Commonwealth Bank Bill for Common wealth banking purposes, and that they wish to leave it open to the States at any time to express a desire to become partners in it. When that desire is expressed it will be time to raise the question brought forward by the Leader of . the Opposition. In my opinion, the best managed bank will be such a bank as we propose, governed by one central authority, rather than by a combination of interests. In that way, alone, shall we secure a bank of the greatest utility. I do not say that we are shutting the door against the Statescoming in. We leave the door perfectlyopen, so far as this proposal is concerned, but I do not think it would be wise to de: lay the passing of the Bill until the States came to an agreement regarding the question. The Leader of the Opposition knows how difficult it is to get them to agree upon anything, and that difficulty would be intensified in this connexion, seeing that the States, notwithstanding that they had the original, constitutional power to establish banks of their own, have, in no case, attempted to pass legislation, providing for the creation of a bank to do general banking business. I congratulate the Leader of the Opposition on having’ hinted to the State Governments that, they should have embraced before now the many opportunities offered them to create banks of their own. They would then have been in a position to say, “ Here we are with our own institutions. We shall be able to come in and co-operate with you.” Even if we have separate management, in my opinion co-operation is better than the merging of one bank into another. I am not of the view that it would be advisable at present to ask the States to become shareholders in this bank. I shall not dogmatize upon this .question, which has been sprung upon me, but I think the . people of the Commonwealth will be best and most expeditiously served if we pass this Bill, providing for Commonwealth control, on the understanding that when the States have arrived at an agreement to come in, and express a desire to do so, they will be able to, come in and be > shareholders with us in a co-operative banking concern.

Mr FENTON:
Maribyrnong

.- I regret that the honorable member for Parkes is not in the chamber, since I wish to refer to an incident which arose when he was addressing the Committee. You will remember, Mr. Chairman, calling me to order when I insisted that the honorable member had made a certain statement inferring that honorable members were ignorant of banking. I rather resented such an assertion, but since the honorable member has assured me that he did not make it I wish to withdraw my statement that he did.

I was rather pleased to hear the Prime Minister say that the Government intend to pursue the open-door policy, so far as the States are concerned, in regard to this proposal ; but if we were to adjourn the further consideration of the Bill until the State Treasurers had had an opportunity to discuss it, I am afraid that we should have to postpone it indefinitely. I should like the Treasurer to insert in the Bil] a provision indicating to the State Governments that the door will be open to them to comp in later on.

Mr Deakin:

– Open now ; not necessarily later on.

Mr FENTON:

– Perhaps the Bill as it stands leaves the door ajar. I certainly think it ought to be open to the States to come in. Some honorable members have been exceedingly afraid of politics entering into the management of this institution, and I think that honorable members on both sides are averse to anything of the kind. It is difficult, however, to determine where what may be called political influence ceases and practical management begins. I read to-day a speech made by the late Mr. G. D. Carter, when Treasurer of Victoria in 1894, in moving the second reading of a Bill providing for the introduction of the Credit Foncier system in connexion with the State Savings Bank. The honorable gentleman was surprisingly frank in pointing out what part, in his opinion, the Government should play in connexion with that institution. In the course of his speech he said -

The Bill makes the whole of the property and cash that may come into the hands of the Savings Bank Commissioners, Government property. We guarantee the depositors; and we have the right to control the finances of the institution. We should have a preferential lien upon the money deposited. The right to veto a loan.

The honorable member for Ballarat will probably tell us whether the Bill as passed gave effect to those views. It appears to me that the Treasurer of Victoria at that time had no fear of enunciating his views in that direction.

Mr Deakin:

– That is a very particular institution for advances of a particular kind.

Mr FENTON:

– That is all very well, but the fact remains that it is a bank. In reading the debate on that measure, I felt that I was reading the debate on the Bill now before us. The same old objections that were trotted out against that measure have been raised against that with which we are now dealing. There seemed to be no fear, however, in the mind of the late Mr. G. D. Carter, who was generally regarded as a Free Trade Conservative member of the Legislative Assembly of Victoria. It was in 1894, immediately after the banking crisis, that the Bill was introduced, because he believed there would be a great demand for cheaper money. Up to that time producers and others had had to pay 9 and 10 per cent; but as scon as that measure was announced the rate came down.

Sir Robert Best:

– The whole thing has been recast in the meantime ; and the Credit Foncier has practically nothing to do with the Savings Bank.

Mr FENTON:

– It may have been recast, but that was what was done at the time. I am simply giving the expressions of opinion as they occurred in debate, and as reported in the State Hansard. I protest against any delay in order to await the decision of the State Premiers. I do not believe that any decision would be come to until the Premiers meet in Conference in the early part of next year ; and there will always be the open door for them to come in if they choose.

Mr ARCHIBALD:
Hindmarsh

– We are indebted to the Prime Minister for the clear explanation he has given of this phase of the question. The States are free to come in if they exhibit any desire to do so; and to await any action on their part would, for obvious reasons, be a great mistake. If the measure be passed on the lines- laid down, it will be a clear indication that the management must be in the hands of bankers without any political control ; and the States, if they do come in. must do so under those conditions. In the past the States have been free to institute banks of their own, butthey have not done so. The attempt made in South Australia years ago by the late Mr. Kingston, failed.

I venture to say, because of that distinguished and august body, the Legislative Council. The Legislative Councils of Australia will see that no State Bank is ever started, and that none of the States take a part in the proposed Commonwealth Bank. But it is just as well that the States should know the real position, and that they should not be able to say in the future that they had never had any invitation. If the States do take an interest in the bank, they will naturally want a nominee on the board; and how, then, could it be said that there was no political control. Of course, I am now speaking solely for myself, and 1 may say that I feel very strongly on the matter. 1 see no likelihood of the States taking an interest in the concern ; but, if they do, it must be on the principles laid down in the Bill. If they do not choose to join in this enterprise, let them start their own State Banks as soon or as late as they like.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- It is strange to hear the Prime Minister saving that the door is to be left open to the States to subscribe capital to an institution to which the Commonwealth itself does not propose to subscribe a single sixpence, and, yet, that the States shall have no voice in the management. How is it possible to put such a provision in the Bill without affording them an opportunity later on to share in the government of the bank? Would any honorable member be prepared to subscribe to the share capital of a company and be deprived of any voice in its management? If the Prime Minister is genuine in his desire to give the States an opportunity later on to come in as shareholders, he ought also to indicate in what way they may be able to share in the management. It is of no use our simply putting a placard of this description in the Bill, unless we also indicate the conditions.

Mr Fenton:

– We cannot do that.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I know we cannot, simply because the whole scheme has not been properly thought out - no general idea has been given of what eventually is to be done. There has been no proper inquiry ; and, as a result, honorable members are acting without sufficient information. As I say, the Commonwealth does not propose to subscribe a single sixpence.

Mr Fisher:

– No one believes that about the capital.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Commonwealth is not subscribing any capital to the institution ; it is simply making a loan for the time being. It is not even stated that this- £1,000,000 in debentures will be subscribed by the Commonwealth, and it may be subscribed by the public. Even if -it is subscribed by the Commonwealth it will be merely in the form of a loan ; it will not be capital put into the institution by the Commonwealth. If we are genuine in our desire to see the States shareholders, we should indicate to them the general conditions in which they may become partners.

It has been stated that the Government, business will be a* matter of considerable moment to an institution of this sort, and that considerable revenue will be thereby derived. The Prime Minister was good enough to answer some questions of mine this afternoon, and we learn that the banks of Australia paid to the Commonwealth no less than ,£4,737 more than the Commonwealth, paid to the banks. The Commonwealth paid the banks £2,850 for conducting their banking business in exchange, and the banks, in competition with one another for the Commonwealth drafts on London, owing to having certain charges to .adjust at the other end of the world, paid to the Commonwealth no less than £6,562 for the privilege of negotiating those drafts. This may come as news to the honorable member, but it is well known in banking circles. The banks, in competition for money at distant places, where there are settlements to adjust, and so forth, are often very willing to purchase a draft, and give a. considerable premium on it.

Mr Fenton:

– Flinders-lane firms do that.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Precisely. The banks also paid to the Commonwealth £1,025 as interest on fixed deposit. Honorable members will see that the Commonwealth Bank, so far as Government business is concerned, will not make profits, but will probably have to make a loss.

Mr SPENCE:
Darling

.- The honorable member for Richmond does not seem able to get out of his head the idea of an ordinary bank, into which a number of gentlemen put a certain amount of capital, with a view to dividends. And he compares such an institution with a National bank, established for the benefit and advantage of the whole people, who are really the shareholders, and who are not seeking profit in the same way. The suggestion that the States should come in as shareholders seems to suggest that some advantages would thereby accrue to the State Governments j and, if that be so, it must mean advantages in the way of political influence and political control. As a matter of fact, the people as a whole will reap any advantage there may be from the establishment of this bank ; and to admit the State Governments would mean an alteration of the whole scheme. When the States express any desire to come in as shareholders, it will be quite time enough to talk about making provision of the kind. I believe the State Governments will very quickly find it to their advantage in handing some of their business to give patronage to the Commonwealth Bank in the ordinary business way. I do not see how they could do any more than that, even if we declared them to be shareholders, and gave them a say in the management. I trust the measure will be left on its present lines, leaving it open to any improvement which the States may suggest, but always keeping in view the advantage of the people as a whole. This Parliament; represents the people as a whole, and the State Parliaments represent only sections of the people. I do not see any advantage to be derived for the whole people by the States, as representing sections of them, coming into the management. On .the other hand, there might be a considerable element of danger through too much political and Governmental influence, which, ought specially to be avoided. It is not correct to say that the bank will be managed by one man only. The Governor of the bank will have great responsibilities, but I think we shall get better results than we should if we had divided control. I do not think that Austral ian experience has shown that government by three Commissioners has been an improvement on government by one man. There has rather been a difficulty in locating responsibility where more than one man is concerned.

Mr Deakin:

– Are not three heads better than one?

Mr SPENCE:

– There is no doubt that the able man who will be secured as the Governor of the bank will consult the experts and authorities regarding any important step that he has to take. There is a provision in the measure for a Deputy Governor, which seems to have been overlooked, and when branches are established there will have to be managers appointed for. them. There will, therefore, be plenty of brainy men available for the Governor of the bank to consult. Let any honorable member picture himself as manager of the bank. What would he do as a sensible man, but get all the advice available, and then, after analyzing it, use his best judgment in deciding his course of action, he having the power and responsibility of deciding in any case? It is best to give responsibility to an able man, who will do his best, and be careful. Nobody rushes bull-headed into a job of that kind, and in any ticklish proposition the Governor would take tlie advice of those concerned.-

Mr SAMPSON:

-He would consult experts who have no responsibility.

Mr SPENCE:

– He would get the opinions of those whose opinions he considered of value, and then use his own judgment. It is a mistake to say that only one man’s brains will be running the show, when there will be quite a host of managers as the business is extended, and all their opinions will be considered by the man in charge. I think the bank is being started on the safest lines. Probably the Governor will start carefully and slowly, and he will need to do so, as he will not have a great amount of working capital to begin with. I do not see any of the dangers that have been depicted. They are possibilities, but they are certainly not probabilities, if we have a man of experience and tested judgment in charge. It is not at all likely that a total stranger to banking will be appointed. We must get the best man available, and pay him a handsome salary to conduct what we believe will become the great National Bank of Australia, and be of great service to the country, corresponding in position with the Bank of England in the Old World.

Sitting suspended from 6-jo to 7 45 p.m.

Mr PALMER:
Echuca

.- I do not know that I should have spoken but for the Prime Minister’s remark that the Federal Government were animated by no feelings of antagonism towards the State Governments in regard to this measure. There is an old truism that actions speak louder than words, and we know that one division of the Bill relates to the establishment of a Commonwealth Savings Bank. . All the States have at present Savings Banks in existence. We may disclaim as loudly as possible any desire to injure the States in that regard, but the fact remains that we are starting a bank which will run in opposition to the Savings Banks of the States. I question whether the Federal Parliament is entitled to establish a Commonwealth Bank in opposition to banks already being run by the States. The Prime Minister was also good enough to say that the States could come in and work with the Federal Government in connexion with this bank. We are entitled, to ask in what way they can come in. I have pondered the matter over since the statement was made, and the only possible way that I can see for them to come in is as customers of the bank. There is no provision implied or expressedin the Bill by which they could come in as partners. In fact, the determination appears to be to make it a Federal bank pure and simple. The Prime Minister has not placed before us those details which are necessary to enable us to form a proper opinion as to whether we should establish this bank. It was probably an unfortunate slip of the tongue on bis part when he said that it was not the duty of the Government to afford such information to the Opposition; but whether it was a slip or not, it is undoubtedly being carried out in practice. Are we to set up large banking establishments in all the chief centres? Are we to evict the State Savings Banks from the post-offices in order to establish our own? There are also a number of other particulars which ought to be supplied to us before we carry the clause. Of course, it will be carried in spite of us; but I am entitled to raise my protest against the deliberate determination by a majority of this House, to establish this bank, in view of the fact that it is going to have very serious consequences to the State Savings Banks, and also in its general banking business, because we are to put ourselves in opposition to existing banks possessing large capital and resources. Unless we put the money of the taxpayers into the venture, to give it stability and strength, it will be a pigmy in comparison with the existing banks from the point of view of the capital at command.

Mr Riley:

-Are you against any form of Commonwealth banking?

Mr PALMER:

– I am not. I think in certain circumstances it might be judiciously entered upon. I should not raise a word of opposition to it if it were a bank purely to deal with Commonwealth securities, and transact Commonwealth banking business; but when it ventures into the realm of general banking business, and of Savings Banks which are al ready existing in every one of the States, itbecomes an altogether different and much more complex question, which ought to receive more serious consideration than it has so far had. We should consider whether we are justified in entering the realms of private enterprise, for the establishment of this bank means that, and means also a large increase in the number of Commonwealth employes. The number will be small at first, but it will be gradually increased until it becomes a very considerable contingent. I dread the time when we shall have so multiplied our enterprises that the Commonwealth employes will be sufficiently numerous to become perhaps a dominating factor in the government of the country.

Mr Riley:

– They are all individuals.

Mr PALMER:

– Of course, it is a step in the socialistic direction, and appeals tomen with socialistic tendencies; but I am opposed to that sort of thing, and to the establishment of this bank; for that reason, coupled with others. If it becomes a marked success, it will mean a large augmentation of the number of Commonwealth employes, and to that extent it constitutes a somewhat menacing feature.

Mr Howe:

– Does that apply if it is going to be a success?

Mr PALMER:

– The more successful it is, the more employes you have, and the more you multiply the number of Government employes, the more you make the Commonwealth socialistic in its nature. I maintain that a socialistic condition is a danger which right-thinking people ought to set their faces against in every possible way.

Mr Riley:

– Are you against the Government running the railways ?

Mr PALMER:

– No; there are certain things which perhaps can be done judiciously by the Government. At any rate, that is no argument for multiplying indefinitely the number of concerns to be brought under Government control. The more we depart from the proper functions of government, the further we shall get away from the ideal conditions which ought to surround every Government!

Mr HIGGS:
Capricornia

– I was very pleased to hear that the Prime Minister had every desire to allow the States to come into the Commonwealth Bank, because I realize that, unless it has the assistance of the State Governments, it is going to have a very stormy passage for some years. Those of us who have taken notice of the opposition with which every State enterprise has met, must see that the Commonwealth Bank is sure to meet with the same. When, wifE the cooperation of the British, Canadian, and New Zealand Governments, the Pacific Cable Board was created, the Eastern Extension Telegraph Company set up the most unfair competition, and to-day the Stateowned Socialistic concern makes a deficit of many thousands per annum.

Mr Chanter:

– But its creation forced the Eastern Extension Telegraph Company to reduce its rates by more than one-half.

Mr HIGGS:

– Yes, and similarly the establishment of the Commonwealth Bank will bring about the reduction of interest by i or 2 per cent.. But it is necessary to have the co-operation of the States to prevent a deficit in its working.

Mr Bamford:

– Within a little time there will not be States.

Mr HIGGS:

– I cannot argue that question now, but such remarks create antagonism between the Governments of the States and that of the Commonwealth, which hinders Commonwealth enterprises, to the detriment of both. Again, when the New Zealand Insurance Department was started, the private insurance companies lowered their rates, doing all they could to maintain their business, and to attract fresh customers. There are twenty-two banks in business in Australia, and the Queensland National Bank alone has fifty-four or fifty-five branches in Queensland. The whole of our commercial business, with the exception of the little done by the Savings Banks, is in their hands. When the Commonwealth Bank is established, and the managers of the private concerns find that customers are likely to remove their accounts, they will ascertain the reason, and if it is that lower rates can be obtained from the Commonwealth, the rates charged by the private banks will be reduced. If the Commonwealth lends out money at 5 per cent., the private banks will probably lend at 4J per cent. There are other ways in which they will try to prevent the Commonwealth Bank from doing business: It will be impossible for the Commonwealth to establish as many branches of its bank as there are branches of the private banks. It will not be possible to have a branch of the Commonwealth Bank in every country town.

Mr Howe:

– That will take time.

Mr HIGGS:

– Yes, and that very fact makes it all the more necessary to obtain the co-operation of the Governments of the States. The Queensland Government has an agreement with the Queensland National’ Bank for the transaction of all Government business by that bank until 1921. That points to a way out of our difficulty. We should insert in the Bill a clause which will allow any State transacting business with the Commonwealth Bank to obtain a proportional share of the bank’s profits. I do not think that the profits will be great, because of the competition of the private banks, but the public will gain by the establishment of the Common wealth Bank by getting cheaper money. But if the action of the Commonwealth in establishing a National Bank is regarded by the Governments of the States as a highhanded procedure, and they are further irritated by competition with their Sayings Banks, the Commonwealth institution will suffer.

Mr Chanter:

– Would the honorable member permit the States to share in the control of the Commonwealth Bank?

Mr HIGGS:

– I am not clear how the States should share in the management of the bank. They might be allowed representation on an Advisory Board, though I hold the view that the management of the bank must, as far as possible, be beyond political control. The States might be given a power like that of the Senate in regard to financial Bills, namely a suggesting power. Undoubtedly one-man control is necessary for the success of the institution. There could not be two captains navigating one ship, and to have the bank controlled by a Board might neutralize the efforts of the man possessing the best brains for its management. If the States come in, it will not be long before some settlement is arrived at regarding the transference and redemption of their debts by the Commonwealth.

Mr THOMAS BROWN:
Calare

– I recognise the advisableness of permitting the States to obtain an interest in the Commonwealth Bank. While this Parliament and Government represent the whole Commonwealth, each of the State Parliaments and Governments represents a portion of the Commonwealth, and the latter have undertaken big financial obligations which could be best managed through » central institution of the kind proposed. No doubt it is the intention of the Government to meet the States in this matter.

Under the Constitution, the Commonwealth is empowered to take over the debts of the States for the purpose of consolidating and redeeming them, but nothing will be done without their consent and cooperation. According to the Commonwealth Statistician, the State loans will mature at a rapid rate in the near future. Between 19 n and 19 15 loans amounting to £38,000,000 mature, in the next lustrum £39,000,000, in the next ,£49,000,000, and in the next ,£19,000,000, or £^77,000,000 within ten years, and about ,£146,000,000 within twenty years. Some of the States are more favorably situated than are others, and I regret to find that New South Wales in this respect is not too well placed. For instance, in 1912 it will have to meet a maturing debt of nearly £10,000,000 ; in 1918 it will have to meet a maturing debt of nearly ,£13,000,000; and in 1924 -a debt of about £16,500,000.

Mr Chanter:

– And the States keep on piling up the public debt.

Mr THOMAS BROWN:

– Yes ; when we federated the indebtedness of the States amounted to about ,£200,000,000, whereas to-day it exceeds ,£250,000,000. In addition to these maturing debts, new debts are being created, and I hold that the handling of these maturing debts can be successfully dealt with only through an institution of this character. We should therefore endeavour as far as possible to secure the co-operation of the States, and we should have that co-operation in connexion with the Savings Bank side of this proposition. The States at present not being in common agreement, the Commonwealth must give them the lead, and it can give them a lead only by passing a measure of the character of that now before us. The Commonwealth can deal with the matter only from its own standpoint, but it should be ready to welcome the co-operation of the States, and to make every provision to meet them in a reasonable manner. I was pleased to hear the declaration of the Prime Minister this afternoon that he was prepared to make this scheme fit in, as far as possible, with that requirement. That being so, I do not think there is any reasonable ground for strong exception being taken to it. I can understand the opposition of those who, like the honorable member for Echuca, are against the principle of the Bill ; but those who believe in the principle of it can find nothing in this proposal to prevent their hearty co-operation in building up an in stitution which will be worthy of the whole Commonweal th .

Mr DEAKIN:
Ballarat

.- It is very gratifying to discover that the general feeling of the Committee is at least not antagonistic to, and in some respects is governed by, a desire to see a closer relation between the Commonwealth and the States in the management of this bank.. The remarks of the honorable member for Capricornia show that he, at all events, is able to take a broader outlook, and to realize our responsibilities. I am disappointed, however, that no more positive step is to be taken. I brought the matter under the attention of the Committee, without any idea of causing delay. Still the probable advantages to be gained by an immediate junction of the forces of the Commonwealth and the States in finance is so important that, personally, I would have faced any necessary delay in order to bring it about. That, however, did not appear to me then, and does not appear to me now, to be essential.

I would urge the Prime Minister between now and the time when the Bill leaves the Committee to consider whether something more than the open-door policy cannot be proposed to the States - whether we should not have the open hand as well as the open door. Let him consider whether we ought not to make in this measure at least some preparation such as would anticipate and if possible avoid the delay of waiting for further legislation in the event of the- States making to the Commonwealth overtures that it could reciprocate. It would be better still if the Commonwealth would make the overtures to the Governments of all the States, placing upon them the direct responsibility either of availing themselves of the opportunity or of pursuing their own individual courses. The general attitude of honorable members on both sides, especially considering the disadvantages by which we are faced in dealing with this matter at practically the close of the session, and in circumstances of great pressure, is encouraging. It should indicate to our critics outside that a broad national spirit is a Federal spirit. This proposition, important as I think it must be, is not undertaken with the object of the aggrandisement either of this Government or this Parliament. Our position is too well established to need anything of the kind. We can lose nothing in this regard. Nothing can be taken from us by any step in this direction.

In these circumstances, and commending this matter to the further consideration of the Prime Minister, I shall allude only to the suggestion made from several quarters that the obstacles to this rapprochement between the States and the Commonwealth are to be found in the secondChambers of the States. If there is an obstacle, and that obstacle is effective, it is immaterial to us where it lies. I shall, however, be much surprised if the members of those Chambers of review, who, in the case of most of the States, are men of considerable business and financial experience, do not realize the golden opportunity now afforded them. At all events, if after the proposition has been submitted to them by their respective Governments, they still persist in turning a deaf ear, the responsibility will rest, not upon the Commonwealth, but upon those who will hereafter be called to account for their obstruction. Our aim,therefore, should be not simply to allow them to “ come in,” as it has been phrased several times this evening, but to induce them to come in. We can undertake that task for reasons which the honorable member for Calare put very happily. We are one and the same people. Each of us is a citizen of a State, as well as a citizen of the Commonwealth, and we are severally interested in the welfare of our several States, just as we are all interested in the welfare of the whole.

Mr West:

– Then why want dual control?

Mr DEAKIN:

– I do not wish to pursue the honorable member with special propositions to meet his case. I am prepared to accept others far less acceptable to me if only this one great end can be achieved.

Mr Howe:

– Cannot the honorable member make some definite proposition?

Mr DEAKIN:

– We are nearing the close of the session, and the Government are at present disinclined to do more than intimate their willingness to receive approaches in this direction.

Mr Fisher:

– I go further, and say that I am quite willing to approach the States in anyway that will lead to mutual benefit.

Mr DEAKIN:

– That is better still. But we are near the end of the session, and until we receive some response from the States, I do not think the Prime Minister or his party will excuse us if we set to work to discuss all the precise terms on which this co-operation can be accomplished. Until we have received some further indication from them, we are not in a position to ask the Prime Minister to set aside thebusiness we are at present engaged upon in order that we may deal with the matter. In these circumstances, I have endeavoured to be as brief as possible, and, indeed, have done much injustice to this great subject by the rapid and cursory way with which I have felt bound to treat it pending some direct overture to and from the States.

But if such an overture comes before this House rises,we shall have no excuse for not prolonging the session sufficiently long to put this instrument in shape, and so permit the States to come in : and take advantage of it. I trust that, throughout Australia, it will be recognised that the Commonwealth Parliament realizes the importance of this instrument which is being shaped, especially for governmental purposes, and particularly in relation to the States. I have now found a passage in the report of the speech of the right honorable member for Swan, in which he defined in a few words his idea of a Commonwealth Bank. He said - .

I think that a central bank to manage the financial transactions of the Government, including the taking over of the State debts, and the control of the note issue, is necessary, so long as the position of that bank in relation to the Government is clearly defined and understood.

I have made this quotation to indicate that, although there are differences of opinion as to the character of the particular bank now being established, and the functions that it should fulfil, we are, at all events - most of us on both sides are - agreed that those functions call for just that Federal unity in financial matters between the Commonwealth and the States that I have been urging this afternoon.

Clause agreed to.

Clause 6 agreed to.

Clause 7 -

The Bank shall, in addition to any other powers conferred by this Act, have power -

to carry on the general business of banking;

to acquire and hold land on any tenure;

to receive money on deposit, either for a fixed term or on current account ;

to make advances by way of loan, over draft, or otherwise:

to discount bills and drafts;

to issue bills and drafts, and grant letters of credit;

to deal in exchanges, specie, bullion, gold-dust, assayed gold, and precious metals ;

to borrow money ; and

to do anything incidental to any of it powers.

Mr DEAKIN:
Ballarat

.- Referring back to the quotation just read as to the functions that a Commonwealth Bank is called upon to fulfil, we find that, in the first paragraph of this clause, which deals with the whole of the powers proposed to be conferred upon the institution, there is a broad line of demarcation. I refer to the paragraph authorizing the bank to carry on the general business of banking. It is thoroughly understood, therefore, that so far. as this bank is concerned, all busi- ness, even speculative - using the word in the proper business sense - all transactions involving a certain amount of risk, or dealing with private interests, is brought within the scope of this institution. Whatever an existing bank may do in its private relations, the Commonwealth Bank may also do. This appears to be venturing into a very dangerous field, at all events at this stage of the bank’s existence. I do not propose to debate the question, because it is one of those matters on which I understand Ministers have made up their minds.

Mr Fisher:

– Does the honorable member differ from the proposal?

Mr DEAKIN:

– I do; I doubt whether it is wise to undertake such business. Of course, the Governor of the bank will invite this class of business, but he can expect but little for some time to come, especially with the resources at his disposal.

The only other sub-clause to which I propose to call attention is sub-clause 4, which gives the bank power to borrow money. It appears, therefore, that the no-borrowing policy of the Government party is abandoned. Borrowing is now an open part of the programme of honorable members opposite.

Mr Higgs:

– Does the honorable member not see that when the bank accepts deposits it borrows money?

Mr DEAKIN:

– Such transactions also come under the head of borrowing, but the draftsman evidently considers there is sufficient difference to place the two kinds of borrowing in two sub-clauses.

Mr Fisher:

– The sub-clause means what it says - that the bank may borrow from another bank for its immediate convenience.

Mr DEAKIN:

– It is not limited to borrowing from another bank - the borrowing may be from any and every source.

Mr Fisher:

– But I think that is the practical limit.

Mr DEAKIN:

– The bank may also borrow from any Government, if the Government of the day are susceptible; there is no limit to the borrowing. Consequently, I take it that the policy of borrowing, which was formally sanctioned by this House, is now part and parcel of the Labour policy of the country.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– Borrow every time one can make money.

Mr DEAKIN:

– The honorable member who interjects is delighted at this measure, because it nationalizes banking.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– It does not, though I say it ought to.

Mr DEAKIN:

– It is a step towards that end.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– A good step, too.

Mr DEAKIN:

– It is the nationalization of one bank for a particular purpose; and if the other banks could be suppressed by another Bill, the honorable member’s satisfaction would be complete.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– Not suppressed - I did not use the word.

Mr DEAKIN:

– The honorable member did not, but his policy must lead him! to rejoice if all other banks were suppressed,” and the whole banking of Australia nationalized by this means.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– Hear, hear. I would act in all fairness, and not take anything from the other banks.

Mr DEAKIN:

– I do not mean that the honorable member would what is commonly called rob the banks, but he is prepared to rob them of any opportunity of future advantage which he can acquire for his national institution ?

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– I would treat them as I would the trusts - absorb them.

Mr DEAKIN:

– What the honorable member condemns in a trust he applauds in the nation?

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– The nation is the trust in this case.

Mr DEAKIN:

– What kind of trust? However that may be, this is a very important clause, and I call attention to these two points.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– I, of course, expected opposition from the honorable member for Ballarat to the proposal that this bank shall do all the work of a private bank. The history of all our attempts at State banking discloses opposition of the kind. In

New South Wales there are two very excellent Savings Banks which are considered National banks; in fact, they have undertaken land mortgage business, of which they do a great deal.

Mr Thomas Brown:

– The right to do that was secured only after a big struggle.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– I do not intend to go into that matter. We all know the benefit it is to a bank, when lending money, to have the account of the borrower within the bank, and thus give opportunity to operate in credit instead of in actual cash. The idea of those who always oppose State banks is to force the Government to borrow money at a certain rate, and then lend it out again. In New South Wales the borrower was in the glorious position that he went to the State bank and got his loan and immediately placed the proceeds in a private bank, which was able to operate on the money as a free deposit. I congratulate the Government on having embodied the principle of private business in this Bill. Many people who support our movement have asked, “ Whyshould the Federal Government go so far as to create a National bank when there are State Banks in a number of the States?” But we really have no State Banks, only land mortgage Departments carried on in the most re.stricted way possible, without any of the ordinary powers of a bank. The Commonwealth Bank will be able to deal directly with its customers, with all the power to control credit and unfixed deposits ; and this makes it paramount above every other effort at State banking hitherto. The Upper Houses of the States have always opposed State banking, and all the State Governments are absolutely powerless to pass a measure like that now before us. For many years to come it will be utterly impossible for any State Government, no matter how strong in the Lower House, to establish a full and complete State Bank without first conquering the Upper House. This shows the absolute necessity for our going straight ahead with the Commonwealth Bank. As to asking the States to come in and assist with the management of the Commonwealth Bank, I could not tolerate such a proposal for a moment - to my mind it is absurd. As we go along with our policy of nationalization, and the nationalization, for instance, of monopolies, I trust the Federal power will be able to manage its own business. So far as the absorption of banking business is concerned, I have not heard one complaint through the press or otherwise; there has been something said about the Savings Banks, but that is all. I should like to ask the Prime Minister, in regard to the Credit Foncier, or land mortgage business, whether it is proposed to set forth the rate of interest to be charged on the loans. This, of course, is not real banking business, but rather a mortgage Department.

Mr Fisher:

– I think that this is the principal measure, and what the honorable member suggests ought to be dealt with in a separate Bill.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– The Prime Minister feels inclined to accept the suggestion ?

Mr Fisher:

– Yes, that is the line on which I should like to go.

Mr.FRANKFOSTER.- And the right honorable gentleman would be willing to do that?

Mr Fisher:

– Certainly.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– For years I have pointed out the great advantage of being able to borrow at a medium rate, and to repay a small portion of the principal at a time.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Does the honorable member believe in borrowing?

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– Rather ; I regard that as a ridiculous question. A man in business who has good assets with a chance of making money, and who is afraid to borrow, has no right to be in business. I should further like to ask the Prime Minister whether he thinks it would be permissible under this Bill to act upon the co-operative banking system, whereby there is pledged to the Government the combined credits of those who form the co-operative bank. The Government lends in a lump sum the required amount, and the co-operative bank conducts its own affairs in the small outlying districts, giving a good solid guarantee for the amount advanced. Ishould very much like to see that idea incorporated in the Bill,as well as the. Credit Foncier system.

Mr Fisher:

– I am quite sure the Government could deal with the matter in that way.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– It would be unfortunate to allow the Bill to pass without some provision of that kind, because the co-operative banking system reaches the smallest borrower within the State or the Commonwealth. It would be able to deal with kinds of loans with which a big bank manager could not cope. We could not ask him to look after the accounts, or go into details, but if co-operative societies of farmers and settlers, artisans, or others, wanted the money even to build houses, or anything of that kind, and we advanced them the money under their combined security, we should be going to the furthest limit of possibility in extending credit to the humblest borrower in the Commonwealth.

Sir ROBERT BEST:
Kooyong

– It was somewhat difficult to follow the dialogue between the honorable member for New England and the Prime Minister. Am I to understand that the Prime Minister suggests that it will be quite competent under this measure for him to carry on the Credit Foncier system as at present operated by some of the State Savings Banks?

Mr Fisher:

– No; I did not say so. I said that the Governor could lend to any person or body of persons to whom he thinks he ought to lend.

Sir ROBERT BEST:

– There is no question about that; but the honorable member for New England appeared to argue upon the basis that this Bill was intended to include the Credit Foncier system, providing for small advances to farmers, artisans, and others with a proper system of repayment.

Mr Riley:

– That is a matter for the management of the bank.

Sir ROBERT BEST:

– That is exactly what it is not ; but it is the idea with which the honorable member for New England resumed his seat.

Mr Fisher:

– My reply was quite the opposite. I prefer that matter to be dealt with separately.

Sir ROBERT BEST:

– That should be thoroughly understood, because the Credit Foncier system is quite opposed to the general principles of the Bill. It involves a system of borrowing by a process of mortgage bonds, and then retailing the proceeds out to farmers, artisans, and others who choose to borrow.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– It needs a separate Department.

Sir ROBERT BEST:

– It would have to be dealt with in a separate measure altogether.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It cannot be done under this Bill.

Sir ROBERT BEST:

– That is the point I am making. Honorable members must not be under the impression that this Bill is so wide in its scope as to include an effective mode of carrying out the Credit Foncier according to recognised principles. It is essentially a commercial bank that is contemplated, and, consequently, widely opposed to the general principles of lending out in small sums such as have been suggested. The honorable member for Maribyrnong was under a wrong impression regarding the history of theCredit Foncier system in Victoria. It is quite true that a Bill having for its object the establishment of the system was introduced by Mr. Carter, who was Treasurer in the Patterson Administration, and the secondreading speech quoted by the honorable member was in connexion with that Bill ; but the Bill was never carried. Consequently, the comments on it would hardly be apropos to a measure of this kind.

Mr Fenton:

– I quoted it as the statement of a responsible Minister of the Crown.

Sir ROBERT BEST:

– But the Bill to which the speech applied was never carried. As I interjected at the time, it was abandoned, and, subsequently, a Bill which embodied the true Credit Foncier system was introduced. I understood the honorable member to say that the amounts borrowed are a charge upon the Savings Bank of the State. As a matter of fact, while it is the same institution that carries on the ordinary Savings Bank business and the Credit Foncier system, the two sets of funds are kept completely apart. Separate investments are made of the Savings Bank deposits. It is provided that, I think, 25¼ per cent, may be devoted to advances upon land, and that the rest must be invested in Government or the like security ; whereas money for the Credit Foncier system is procured by the sellingof mortgage bonds, and, in setting it out, elaborate provisions are necessary to show the borrowers the system of repayment by instalments.

Mr Fenton:

– I did not say anything about that.

Sir ROBERT BEST:

– The honorable member unwittingly led the Committee to think that the Credit Foncier operations affected the Savings Bank operations, which they do not. Honorable members are mistaken if they think that a Credit Foncier system could be carried on under this Bill, because it would involve elaborate provisions and means of showing borrowers the exact terms upon whichthey may borrow and repay.

Mr Cann:

– That is the only way it can be clone.

Mr CARR:
Macquarie

.- I should like clearly to understand the Prime Minister’s intentions with regard to the States.. We are anxious to have not only their moral but their practical support in this banking scheme. At the same time we are not prepared to share the control of the bank. A divided control of that sort would be fatal to its success. On the other hand, of course, the control might be altogether too concentrated, but that is another question.. I would prefer one-man control to control divided among the separate States. In order to obtain the support of the States we must make some special provision for them in the Bill, if only by giving them a share of the profits proportionate to the extent of their transactions with the bank. That would be the most businesslike method of treating with them. I do not know whether the Prime Minister has yet made a definite pronouncement on the point, but we should do a little more than merely express an opinion on it. If the honorable gentleman agrees, I should like to see embodied in clause 7 some provision setting out that if the States will transact their business, which is enormous, through .the Commonwealth Bank, they will be permitted to share in its profits in proportion to the extent of their business.

Mr Chanter:

– It would be better to have a separate clause.

Mr CARR:

– It does not matter how it is put in.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– The only part . which the States question is the Savings Bank part.

Mr CARR:

– Even if they are not questioning the other part of the Bill, it will pay us to treat with them on the lines I have indicated. I happen to know that various members of the State Governments think they ought to be identified with the institution, which, I am sure, would be fortified by the practical as well as the moral support of the States.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I made two statements regarding this matter earlier in the consideration of the measure. The Government are quite prepared, not only to accept overtures from the States, but to approach the States as regards their financial interests, bringing them into this bank, and letting them work with it. One State has already indicated that it is prepared to come in without any consideration.

Mr Groom:

– In what way ? Simply to bank wilh the bank?

Mr FISHER:

– Certainly.

Mr Groom:

– Burt not otherwise to participate in its management?

Mr FISHER:

– I am not going to discuss separate management, or the question’ of other parties coming in to help manage’ the bank. All I say is that while the Government are here they will co-operate in every way, bath actively and passively, to assist the States in coming into the business,’ but it must be understood that .this is a Commonwealth banking measure. That isthe beginning of it. This clause is not the place to make the provision suggested by the honorable member for Macquarie, lt deals with the powers of- the bank. The honorable member’s suggestion ought to> be dealt with in a separate clause, indicate ing the position that would be given to a State Government doing its business with the bank, and what would be the quid proquo. In reply to the Leader of the Op-, position, I think the power to borrow money in paragraph // ought to be given to the bank. There are occasions when a bank may ask for accommodation from another bank or from any other party.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It would do that by dis- . counting its bills, and not by direct borrowing.

Mr FISHER:

– I prefer, in a measure of this kind, to put the thing in the most direct language available, so that there may be no mistake about it. If the Governor or; the management of the bank desire to .borrow money for purely banking purposes,, they ought to .have that power clearlystated, if we mean to give it to them. It is not desirable that the management, of a bank belonging to the people of Australia should be any more restricted than is. themanager of a private concern of the same-, kind. We want to start from scratch, and give equal facilities to both parties.

Dr CARTY SALMON:
Laanecoorie

– - The Government have said a little too much with regard to this clause. It has been said that language was given .toman to conceal his thoughts, and possibly, the Government, in their desire to conceal the true objects of the bank, have put thepowers in the clause into specific words. If they wish to incorporate in the Bill thefull powers that the bank is to have, and if, those powers are to be anything like the’ desires expressed by the Prime Minister in. his. recent remarks, their object would behest obtained by deleting the whole of these- paragraphs, and providing that the bank, in addition to any other powers conferred by this Act, shall have power to do anything that the Government of the day please.”

Mr KELLY:
Wentworth

.-I think the clause to which the honorable member for Laanecoorie takes exception has been drafted to give the Government a free hand to deal with any matter connected with the bank, and which, in the wisdom of the Governor of the bank, may appear necessary at any time in the future. The Government do not necessarily anticipate thatthe provisions of the clause are to be put into operation immediately in their entirety. I understand that they are only giving the Governor of the bank powers in all these directions in case he feels, in his wisdom, that it is necessary to exercise them.

Mr Fisher:

– That is what it says.

Mr KELLY:

– Yes; and if it is the wish of the Government that the bank should co-operate with the Savings Banks of the States, I donot know why that is not definitely provided for in the clause.

Mr Chanter:

– The Prime Minister has spoken of a new clause.

Mr KELLY:

– This is the clause which sets out the general powers of the bank, and it is illogical to have a powers clause in which all the powers of the institution are not stated.

The magnanimity of the Prime Minister stops short at taking whatever money the Savings Banks may be inclined to hand over to him. His remark seems to imply that he is willing to take their money if they will hand it over.

The CHAIRMAN:

– The Prime Minister did not make any reference to the Savings Banks.

Mr KELLY:

– Then I am altogether under a wrong impression. Have I been dreaming in thinking I heard my right honorable friend give a most explicit explanation in reply to the honorable member for M!acquarie?

Mr Carr:

– I didnot deal with Savings Banks.

Mr KELLY:

– Does the honorable member seriously tell me that he did not make a speech dealing with the effect of the clause on co-operation with the Savings Banks ?

Mr Carr:

– Not at all. I refer the honorable member to the Hansard report.

Mr KELLY:

– I shall read the Hansard record with considerable interest, to see whether the reporters have been -under the same hallucination as I have been. The general impression conveyed was that honorable members were dealing with Savings Banks. The honorable member for Macquarie addressed the Prime Minister almost in bullying tones, and compelled immediate attention to what he said.

Clause agreed to.

Clause 8 agreed to.

Clause 9 -

The capital of the Bank shall be One million pounds……

Mr THOMAS BROWN:
Calare

– I do not know if the Government have a special reason for limiting the capital of the bank to £1,000,000. It seems to me that a large financial institution, adequately representing the Commonwealth, will need a much larger capital, particularly if it gets the business of the States. A private institution, started with similar aims and purposes, would not be limited to a capital of £1,000,000. In my opinion, the Commonwealth Bank needs a capital of atleast £5,000,000. At any rate, it is not unreasonable to give power for the extension of the capital to £5,000,000. If the money is not needed, it will not be drawn upon.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I think that £1,000,000 is more than enough to meet the requirements of the bank for the first few years. I speak with great diffidence, but the advice given to me, which coincides with my own views, is that the bank willsoon have more money than it can handle. The difficulty will be to make use of the money deposited with it, so as to pay working expenses, and at the same time give a good return to the depositors. I cannot conceive of the bank needing for capital purposes anything like £1,000,000 within the first two or three years. The capital used in building and equipping offices would probably be more like £250,000 than £1,000,000 for a good time to come. As soon as the bank opens its: doors, it will get money. WereI surethat first-class investments for that money could be found at once, I should have no doubt of the immediate success of the institution. Parliament meets every year, and can increase the capital of the bank if more is required.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

.- The sanguine tone of the Prime Minister is in keeping with the Trades Hall scheme for building workingmen’s cottages by issuing £3,000,000 of notes, so effectively ridiculed in an Argus leader this morning.

While the right honorable gentleman may speak with diffidence, he acts with great confidence. It is not proposed that the capital of the bank shall be £I,000.COC but that £1,000,000 shall be lent to the bank. The absurdity of that proposition is shown by the fact that the banks of Australia, possess coin, bullion, and cash balances amounting to £37)198,339, their advances being £159,237,265, their other assets £53,765,400, and their total assets about £250,201,004. Yet the Prime Minister says that this bank can* do with a loan of £250,000.

Mr AGAR WYNNE:
Balaclava

– I have always understood that capital is money put into a business. It is said that Parliament can do everything but prevent a baby from crying, but it is extraordinary to find it declared by legislation that borrowed money shall be regarded as capital. I am surprised that the Government has not put Commonwealth money into the institution. The sum of £1,000,000, or something like it, should have been voted to start the bank, whose profits could go into the Treasury. The bank will have to provide interest amounting to 3! per cent, on the capital lent to it, and at the end of the first year it will be in debt. A profit of 1½ per cent., in addition to the 3 J per cent, interest, would amount to only £15,000. We were told, in answer to a question to-day, that the Government pays something like £2,000 to private banks for the management of its business, and receives about £6,000 for interest on money lent to them. Obviously its business is not of much advantage to the banks. Adding £8,000 to £15,000, you get only £23,000, which probably will not pay expenses for the first year. Premises will have to be bought or rented, and branches cannot be established in the various capitals under £500,000, the interest charge on which, at 4 per cent., would be £20,000.

Mr KELLY:
Wentworth

.– Under clause 10 the Government has power to give the bank a capital of more than £1,000,000. In clause 10 it is provided

The CHAIRMAN:

– We are now dealing with clause 9.

Mr KELLY:

– Certainly; but on this clause the question arises as to whether or not the capital of £1,000,000 for which it provides is adequate.

Mr Carr:

– Clause 9 limits clause 10.

Mr KELLY:

– It does not. Clause 10 is supplementary to clause 9. It is provided that -

The Treasurer may, out of the Consolidated Revenue Fund, which is hereby appropriated accordingly, make advances to the bank for the purpose of enabling it to defray any of the expenses incidental to the establishment of the bank, the opening of offices thereof for business, and the raising of sufficient capital for carrying on business.

The proposal in clause 9 is that the capital of the bank should be £1,000,000, to be raised by the -sale and issue of debentures. Clause 10, however, is supplementary to clause 9, and under it the Government may advance to the bank for the opening of offices for business, and the raising of sufficient capital to carry on business, any sum that the Government may, in its wisdom, or absence of wisdom, see fit. There is no bar at all upon the energies of the Government under the succeeding clause.

Mr Agar Wynne:

– The money is not to be voted on the Estimates, but there is to be a special appropriation.

Mr KELLY:

– We are to present the Government with a blank cheque. We have no guarantee of what the amount is to be. The position seems to be that we are not dealing with our own money, and can therefore afford to be liberal ! It would be infinitely preferable if the whole of the capital of the bank were to be subscribed under this clause. I cordially indorse the statement of the honorable member for Balaclava that we ought to give the bank whatever is necessary to finance it, and to make the bank responsible for its capital.

Dr Carty Salmon:

– That is what clause 10 really provides for.

Mr Hall:

– It provides for lending money which is to be repaid.

Mr KELLY:

– And with singular prudence it does not set forth when that money shall be repaid ! It may be a short or a long-dated loan. We have it on the authority of the Treasurer that if the loan is only a temporary one - that is to say, if we lend the bank up to £5,000,000 for twelve months : the period mentioned, I think, by the right honorable gentleman - no interest will be charged upon the loan. Therefore we who, in fits of abstraction, occasionally think ourselves trustees of the public purse, are now giving the Treasurer the right to fill- in a blank cheque on the account of the Commonwealth of Australia up to any amount that he and the

Governor of the bank think necessary to start it, and to provide it with business premises.

Mr Higgs:

– Does not the honorable member think we ought to deal with that provision when we come to it?

Mr KELLY:

– The whole question of the financing of the bank is open to review. No doubt my honorable friends opposite, if they wished to hamper criticism of the finances of any proposal, would cut up the scheme into a number of clauses, and then claim that we must discuss them one at a time. That would be the best way to blind the eyes of the people as to what is proposed in this case.

The CHAIRMAN:

– I have allowed the honorable member considerable latitude in discussing clause 10.

Mr KELLY:

– I do not propose to discuss it further. The proper way to have drafted this measure would have been to set forth in clause 9 what, after close examination of the bank’s probable requirements, we were prepared to give it to put it on it’s feet, and to expect the bank to be responsible for the repayment of the money so handed over to it.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- It may possibly be owing to the fact that honorable members opposite believe that the credit of the Commonwealth is to be behind this bank that they think they are, entitled in connexion with it to depart from what is known as sound finance. Any private institution starting on these lines would be scouted by the financial world. I am glad that honorable members opposite, judging by their cheers, share that view. I would remind them that financiers will equally scout an institution started by the Government which departs from the principles of sound finance. If there is one thing which this bank should eventually do it is, I believe, the work of dealing with the debts of the States; but unless this bankhasthe good opinion of the financial world, it will be utterly useless to us for that purpose. I stated during the secondreading debate my reasons for believing that the capital of this bank should be subscribed privately.I should be perfectly willing to see the rate of interest fixed.

Mr Higgs:

– What rate?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Anywhere in the vicinity of from 4 to4½ per cent. on the shares.

Mr Higgs:

– Then the honorable member would loadup the bankrightaway?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Government propose to do that in any circumstances. Everything in connexion with the starting of the bank, and the cost of its premises should come out of capital account. That being so, what is the reason for clause 10? If it is proposed to . raise by means of debentures the money necessary for the capitalization of the bank, why is it proposed to give the Treasurer power to make a temporary loan to the bank? All the expenditure in the initial stages of the bank should come out of capital account.

Mr Hall:

– Must there not be some preliminary expenses?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The initial expenditure, whatever it is, in starting the bank should constitute capital expenditure. It should come out of the £1,000,000 to be raised by the sale and issue of debentures.

Mr Hall:

– So it will, when the bank repays the advance made by the Treasurer.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Then what is the reason for clause 10?

Mr Fisher:

– When we reach that clause I shall tell the Committee.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Thetwoclauses should be read together.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– The two experts,according to their own statements, have spoken ; but I differ from their views. I believe that the Bill is drafted in a sensible, straightforward manner. It provides that the capital of the bank shall be £1,000,000, to be raised by the sale and issue of debentures. Meantime, the bank being a Commonwealth institution, the Treasurer of the Commonwealth is to advance it the moneys necessary to enable it to get a start, and to issue its debentures. The money so advanced, however, is to be repaid to the Commonwealth. The position is simplicity itself. The honorable member for Wentworth and the honorable member for Richmond say that these two matters should be provided for in the same clause.

Mr Agar Wynne:

– But should not the bank be started with some capital ?

Mr FISHER:

– Money will be advanced by the Treasurer of the Commonwealth to enable it to begin operations. Immediately the Governor of the bank has commenced operations, he will be able to sell debentures up to £1,000,000, and he can then repay to the Commonwealth the amount advanced to it prior to the issue of those debentures. The. two matters, instead of being embodied in one clause, are, in my opinion, properly dealt with in two clauses. The one clause deals with the capital of the bank and the other with the power of the Treasurer to advance the bank the money necessary to enable it to commence business and raise its capital by means of the sale and issue of debentures.

Mr FAIRBAIRN:
Fawkner

.- It is obvious from the statements of the Government and their supporters that the capital of this bank is to be the credit of the Commonwealth.

Mr Kelly:

– Does that mean that the capital is to fluctuate?

Mr FAIRBAIRN:

– I suppose so. I feel in duty bound once more to remind honorable members opposite that, although we are assured that the credit of the Commonwealth is far superior to that of any private institution or individual, the credit of other countries has suffered reverses. Issues of notes by the United States Government have been sold on the public market at a discount of, I dare say, from 75 to 85 per cent.

Mr King O’Malley:

– They are now the highest bonds in the world.

Mr FAIRBAIRN:

– The point I wish to make is, that we are constantly being assured that the credit of the Commonwealth will always stand. Are we neverto have any reverses? Are we always to have plain sailing? Is our credit always to be at its present high level ?

Mr Hall:

– Are we ever going broke?

Mr FAIRBAIRN:

– I hope not; but this is the sort of irresponsible finance that is going to break us. I do not expect to change the opinions of honorable members opposite, but it behoves me to point om that the credit of other countries has suffered reverses, and that that may be the experience of the Commonwealth.. To establish a bank without capital, and upon nothing more than credit, is little short of a midsummer night’s madness.

Clause agreed to.

Clause 10 - (1.) The Treasurer may, out of the Consoli dated Revenue Fund, which is hereby appropriated accordingly, make advances to the bank for the purpose of enabling it to defray any of the expenses incidental to the establishment of the bank, the opening of offices thereof for business, and the raising of sufficient capital for carrying on business. (2!) Any moneys advanced in pursuance of this section shall be repaid to the Treasurer by the bank.

Mr CHARLTON:
Hunter

.- After hearing the discussion, I have come to the conclusion that there should be some provision for interest to be paid on any money advanced to the bank. The Prime Minister has told us that this advance is to give the bank a start; but I believe that in the case of an advance from the Treasury the bank should be placed in a position similar to that of any other business institution. While the Prime Minister holds that this advance is only for the initiation of the bank, the Governor of the bank may later on be of opinion that it requires a further advance; and there is no limitation to the operation of this clause. The advance of a million may not prove sufficient, possibly through some mismanagement of the Governor himself ; and yet he may hold that, under this clause, he is entitled to a further advance without any interest. I hold that on all such advances, whether long or short, interest should be paid.

Amendment (by Mr. Fisher) proposed -

That after the word “bank,” line 11, the following words be added : - “ together with interest at the rate of3½ per centum per annum.”

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- If what the Prime Minister said in answer to me on clause 9 be correct, I cannot see why the money advanced should be repaid immediately the capital is obtained ; that is to say, I cannot see why the debt should not be immediately capitalized. Clause 30 provides for the repayment of this money out of a redemption fund to be created by placing half the profits of the bank to the credit of that fund. But the bank may not make a profit for two or three years, and it is more than likely that it will not. Under the circumstances the money which the Prime Minister says is only required to enable the bank to float its debentures and to get its so-called capital, ought to be immediately capitalized and liquidated so far as the Treasurer is concerned.

Mr Hall:

– The honorable member means that it should be repaid out of capital instead of out of profits?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Yes. Perhaps the most important point of all is that the clause should cease to be operative, once its particular purpose is secured.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– The honorable member reads the clause in a different way from that in which I read it. It may not have the limitation I think it has, namely, that it is only for the establishment of the bank in the first instance.

The object of the clause is to provide money incidental to the establishment of the bank.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Question is when the bank can be said to have been established.

Mr FISHER:

– That is the question, but I agree generally with the view that this clause is not to give the Treasurer permanent power to advance money to the bank. If the £1,000,000 proves not to be enough, Parliament should be asked to sanction a further advance by another Bill. As a matter of policy, I do not desire a provision to enable the Treasurer to advance further money without the authority of Parliament. I ask honorable members to pass the clause, and I undertake to see the Attorney-General in regard to it; and if the provision does not mean what I think it does, some amendment can be made.

Mr GROOM:
Darling Downs

.- I take it that “the opening of offices” does not mean only’ the head office.

Mr Fisher:

– It might.

Mr GROOM:

– I should say that it means the opening of various offices. When the Prime Minister was moving the second reading of the Bill, he was asked whether interest would be payable on the advances made to start the bank, and he replied that it would if the advances were for a long period, but if they were only temporary it would be hardly worth while to provide for interest. He further said, however, that if the Opposition thought any principle was involved he would have some provision made, but that his opinion was that the advances would not be for more than a year.

Mr Fisher:

– I am of the same opinion now.

Mr GROOM:

– I think the right honorable gentleman will find that the word “offices” will give rise to a supposition that there will be a number of advances extending over a considerable time.

Mr KELLY:
Wentworth

.- It might be advisable for the Prime Minister, when consulting with the Attorney-General, to suggest the propriety of setting out quite clearly that when this money is repaid it ought to be repaid out of the £1 ,000,000 which is supposed to be the capital of the bank.

Mr Chanter:

– That would wreck the bank by taking the capital away !

Mr KELLY:

– Is this blank cheque that we are sanctioning now to be filled in” for a large amount ? I have no desire to wreck the bank.

Mr Chanter:

– That is the honorable member’s object.

Mr KELLY:

– I beg to differ from the honorable member. All I want to know is where I am in presenting this blank cheque. If the bank premises are to be in Collins-street, or in Martin-place, the sum required will be over .£1,000,000; and if the non-provision of this money will wreck the bank,’ the position is worth the serious attention of the Committee. If I understand the Prime Minister, he intends this money for certain incidental expenses.

Mr Fisher:

– That is what it means.

Mr KELLY:

– If that be so, then there can be no objection to repaying it out of the £1,000,000.

Mr Fisher:

– It might be paid out of profits.

Mr KELLY:

– If there are any.

Mr King O’Malley:

– There must be £1,000,000 to start the business.

Mr KELLY:

– Any money for starting a business is usually put down to capital account, and amongst such expenditure is included that on premises. I do not know a single commercial undertaking with which I am connected that has not down in the capital ledger the value of its premises. We are informed by some intelligent members of the Caucus, who have, no doubt, previously discussed this matter, that this money is to provide bank premises, and yet we are told, also, that if we ask the bank to bear that expenditure out of the £”1,000,000 we shall wreck the institution ! I should like an expression of opinion from the honorable member for Riverina.

Mr Chanter:

– I am not going to play the honorable member’s game !

Mr KELLY:

– The honorable member has told us so much, and I do not see why he should not take the people of Australia, into his confidence. He was not sent here to hold his Parliament upstairs, and to hold his peace downstairs, but rather to say exactly what is in his mind. This clause appears to rae misty and vague, and 1 desire to discover what it means. The Prime Minister would do well to consider the propriety of taking this money from the proceeds of the debentures, so that when we are capitalizing the bank we shall know that it means £1,000,000, and not that amount plus a sum which the Treasurer is authorized to advance, and which the bank is to repay in the dim and distant future, when it starts to make profits.

Amendment agreed to.

Clause, as amended, agreed to.

Clause11 -

The Bank shall be managed by the Governor of the Bank.

Mr DEAKIN:
Ballarat

.- This clause raises the whole question as to whether the government of the bank is to be by one man or by some combination of officials. In any case there are provisions in the measure which go to show that of necessity there must be somewhere in the background a controlling authority. If we add together the various powers with which, in different portions of the Bill, that controlling authority is to be endowed, it will be discovered that there is another authority, which is the Government of the day-

Mr Fisher:

– I should like the honorable member to point that out.

Mr DEAKIN:

– The Government of the day will exercise a very great but undefined control over even the Governor of the bank, who in other portions of the measure appears to be endowed with almost despotic authority. The Governor and the Deputy Governor are to have ‘such powers and to perform such authorities “ as are prescribed by this Act or the regulations.” To this Act I shall shortly draw attention; to the regulations I cannot, because we have not seen them, but they will or can be framed and authorized by the Government quite irrespective of Parliament, and in the absence of Parliament. We have, therefore, the powers and duties partly outlined in this measure, and capable of being indefinitely added to or altered by regulations outside this House. That is in clause 14. In clause 23 the consent of the Treasurer is required before establishing a London branch, or branches in other places beyond the Commonwealth. In clause 24 the approval of the Treasurer is required to appoint any person to act as attorney of the bank. Clause 32 is important. Under clause 53 the Governor arranges with the Minister of any Department in order to obtain the services of any officers for his purposes. But 64 is the important clause, under which the Governor-General, which means Ministers, may make regulations “ not inconsistent with this Act prescribing all matters required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act,” and in particular for certain provisions as to the stock of the bank, and matters incidental thereto.

Mr Fisher:

– I would suggest that the honorable gentleman should ‘read the last provision in full.

Mr DEAKIN:

– The Prime Minister desires that this should also go into Hansard - and in particular formaking provision for -

  1. the issue, inscription, transfer, transmission, and redemption of inscribed stock of the’ bank, and all matters incidental thereto.

Any man who obtains all powers which are necessary or convenient finds pretty well everything within his grasp.

Mr Fisher:

– We have no power to prescribe anything inconsistent with the Act.

Mr DEAKIN:

– Exactly; but if the occasion required one could show what a. skeleton this Bill is in relation to these powers. The limitations, if they can be called such, which are imposed by the Bill relate for the most part to non-essentials that could not be dealt with in any other way, or to matters which are not of immediate importance. As a matter of fact, I am not exaggerating when I say that this last clause practically throws the reins on the horse’s neck. Sofar as we are concerned as a Parliament, we throw the reins on the neck of the Government, and the Government can take the bank and the Governor pretty well anywhere they please. A very large authority is necessary, but while, under the terms of the Bill, the Governor is practically the sole responsible person - the deputy taking his place under certain circumstances - and it is understood that he is free from political influence, at the same time the power of regulation given by the Bill is quite sufficient to show that the Governor ofthe bank after all in many cases will not be the real authority. The neal authority will be found in the Government of the day. The Government have that power; most Governments would exercise it. Putting that view, with some diffidence, as my own opinion, I find myself greatly supported and strengthened by the interpretation of the Prime Minister himself, when he was expounding the Bill on the first occasion to the House. He pointed out very frankly, from the very first paragraph of his speech, that this will be a bank belonging to the people, and directly managed by the people’s own agents - they being obviously the Ministry of the day.

Mr Fisher:

– No, I do not think so. I do not think members of Parliament are agents.

Mr DEAKIN:

– To my mind the phrase is susceptible of only one meaning. It was intended to convey that really the reins were in the hands of Parliament, and that the Government of the day would exercise the driving power, subject, of course, to Parliament. The Prime Minister then went on to say that the Governor would, in some respects, have an autocratic position, but that he was not as autocratic as he appeared, because -

In our case we have what is equal to a Board, but without the information.

The last admission is rather curious. I think it means that Parliament consists of -men who have not the same information as the ordinary board of directors of a -bank, to whom he had alluded in the preceding sentence. To be more explicit, he added -

What I mean is that Parliament meets at least once a year.

Here we become equal to a board, the actual governing body of this bank. It is Parliament, which meets at least once a -year. The honorable member for Darling Downs interjected -

The Treasurer does not suggest that Parliament is to be a board of directors?

And the Prime Minister cheerfully replied -

I say that we have what is better than a board of directors.

Parliament being better than a board of directors, which is the governing body of a bank, is further clothed with all the authority and powers in the Bill which this House can exercise. The Prime Minister added -

If any failure should occur through want of ability, or from some other cause on the part of the Governor of the bank, provision is made to enable Parliament to be informed, and Parliament can by legislation provide a remedy. We know that- All public servants and foodies are subject to Parliament, and Parliament by acts of legislation can provide a remedy wherever a remedy is’ necessary. What I am more concerned with is the fact that if we read these phrases together - “ The people’s own agents,” “ The body which is equal to a board,” “ Parliament which can by legislation provide a remedy” - we have a chain of :statements that we cannot -afford to disregard.

There is one comforting knowledge - that we have, not only the power, but the responsibility. There is an absolute guarantee, said the Prime Minister, on page 2647- to all persons doing business with the bank that the Commonwealth will see that their legal claims are met should any disaster overtake it.

A little lower down he said -

The Treasurer will have something to say in <he management of certain investments, but I do not think that that will amount to any interference in the management of the bank generally.

From these passages it is clear that the Prime Minister points to Parliament as exercising supreme authority - the authority of a board of directors. He refers to the exercise of the legislative power. But it is also evident, from the series of statements quoted, that he regards Ministers as the active agents of Parliament in this relation, and, more especially when Parliament is not sitting, as the persons responsible for the control of this institution, as well as for every other Government Department.

Consequently, in the appointment of a Governor, with the attendant risks of one-man rule, you have that one-man rule modified by the control of the Government of the day while it has a majority while Parliament is sitting, and always during the recess. Is that the form of government from which the best results are to be expected in a financial institution whose responsibilities are as varied and business as fluctuating in its character as those of every bank? Another illustration pf Ministerial control occurred when, in reply to the interrogation -

Will there be an annual charge for keeping accounts in the Savings Bank? the Prime Minister said; -

That is a matter to be dealt with by regulation on the authority of the Treasurer, but were I in office I should veto such a proposal.

The regulations under this Bill are, for all practical purposes, unlimited. They have to be read with the rest of the Bill, where restriction operates only in a few directions as any check upon the regulating power. The power to make regulations, and also rules, whether Parliament is sitting or not, is in itself a very important authority, which will no doubt be often exercised by the Government of the day.

In the circumstances, the question for honorable members is : “Is this the best possible government which we can devise for the institution in which we are going to embark so many of our fortunes?” Without that personal experience which other honorable members are able to claim, I venture to think that the addition of a certain number of qualified impartial and independent directors, either to act as advisers to the Governor, the final voice remaining always with him, or, following the usual model of the private bank, exercising joint authority with him, and capable of restraining him with certain restrictions, would strengthen the institution. The Committee is called upon to decide, before passing away from this clause, whether the bank shall be managed by an independent Governor, or whether the Governor shall be supported by two or three independent advisers, or whether he shall be the head of a board, instead of the whole and sole authority.

Mr Fisher:

– The honorable member might give his views as to whether the management should be by one man or by more.

Mr DEAKIN:

– It is a difficult matter to decide, because now and then a man is discovered who is so admirably qualified for a certain position that one feels inclined to say, “ We possess the right man for the work to be done, and are ready to put our confidence in him.”

Mr West:

– The Bank of New South Wales is run by one man, and so are Messrs. Burns, Philp, and Company, and other institutions.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– They are controlled by boards of directors.

Mr DEAKIN:

– If a board chooses to trust its manager, that is another thing. With a board of directors and a chairman, you have the advantage of both systems. In any case, the Governor should have the support of an advisory board; though I have an open mind as to whether the members of the board should have the status of bank directors, the Governor being their president or chairman, and capable of being outvoted. The clause provides for placing absolute trust in one man; but there is no certainty that we shall be able to find a man so strong in body, so healthy in mind, and so well-informed, that we can put our trust in him. A man clothed with the despotic authority vested in the Governor might be tempted to take the bit in his teeth, and it would be difficult to deal with a capable man when Ministers thought he was exceeding the margin of safety. It seems to me that the provisions of the Bill under which we trust the government of the bank to one man, and, at. the same time, give supreme authority to the Administration in power to make regulations and rules, will bring about a less stable control than the well-wishers of the institution desire.

Mr FISHER:
Prime Min.ister and Treasurer · Wide Bay · ALP

– I do not agree with the Leader of the Opposition that the Bill enables the Government to make’ the bank a political institution.

Mr Deakin:

– I spoke of the powers which may be exercised under the Bill. What the right honorable member intends to do is another thing.

Mr FISHER:

– There is not a word or phrase in the Bill giving the Government power to interfere with, or to direct, the Governor of the bank.

Mr Deakin:

– What is there that the Government is prevented from dealing with in the making of regulations?

Mr FISHER:

– The honorable member relied first on clause 14, which says -

The Governor and the Deputy Governor shall respectively have such powers and perform such duties as are prescribed by this Act or the regulations.

All regulations must be consistent with the Act. The honorable member did not quote any provisions empowering the Government to pass regulations which would interfere with the management and control of the bank.

Mr Deakin:

– The Governor-General may make regulations not inconsistent with the Act.

Mr FISHER:

– If they are not inconsistent with it, they must be consistent with it. The next clause on which the honorable member relied was clause 23, which says -

The Governor may, with the consent of theTreasurer, establish a branch in London, in the United Kingdom, and may with the like consent establish branches in any other places beyond the Commonwealth.

In what sense can an interference with the Governor take place under that clause? It is only right that the Government shall have power to say whether branches of the bank shall be established outside Australia, and where. There is no doubt that there will be a branch in London, and provision is made for branches elsewhere, and for agencies where there are not branches.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Will the Prime Minister limit the regulations in accordance with the recommendations of the Governor?

Mr FISHER:

– That would be unwise. The Governor may be an excellent man, so’ far as the management of the bank is concerned, and were I Treasurer I should pay great heed to his recommendations ; but the establishment of branches beyond the Commonwealth is a matter in which the Government should have a say. Clause 24 provides that -

The Bank may, with the approval of theTreasurer, by instrument under its common seal,, appoint any person (whether in the Commonwealth or in any place beyond the Commonwealth) to be the Attorney of the Bank, and? any person so appointed may, subject to the- instrument, do any act or execute any power or function which he is authorized by the instrument to do or execute.

There is nothing in that clause enabling the Government to coerce or influence the management of the bank in any way.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– What about clause 32 ?

Mr FISHER:

– I am willing to quote any clause that is thought to support the position of the Opposition, because it is of vital importance that the public shall not be led to believe that the Bill allows the Government to interfere with the management of a bank. Clause 32 enacts that -

The Governor may, with the consent of the Treasurer, make rules, not inconsistent with this Act or the regulations made by the GovernorGeneral thereunder, for any of the following purposes : -

the good government of the Bank,

the classification of the officers of the Bank, and

any matter necessary or convenient to be provided for carrying on the business of the Bank.

By the utmost straining of words, that clause cannot be construed as giving to the Government power to coerce or interfere with the Governor of the bank. The next clause on which’ the Leader of the Opposition relied was clause 53. which says -

  1. The Governor may arrange with the Minister administering any Department of the Commonwealth for any officer of the Department to act as agent of the Bank for the transaction of Savings Rank business.
  2. Any officer acting as agent of the Bank in pursuance of this section shall be deemed to be an officer of the Bank.

That clause was drafted to enable the Governor of the bank to arrange with the Postmaster-General, the Minister of Home Affairs, or any other Minister, to permit his officers to act as agents of the bank for the transaction of Savings Bank business. A departmental official would be appointed an agent of the bank for the sake of economy. He would not act solely for the bank, but would do the bank’s business in conjunction with his departmental work. Wherein does that clausegive power to the Government to interfere with the management of the bank ? I come now to clause 64-

Mr Deakin:

– That is the clause.

Mr FISHER:

– If that is the bugbear, let me say at once that we are willing to adopt any means for restricting the powers if the Government in such a way as will prevent political influence in the management of the bank. We desire the bank to be absolutelv independent of political influence, which certainly will not be exercised bythe Labour party. If there is any way in which clause 64, which empowers the Governor-General to make regulations, can be tightened up, we are willing to consider an amendment. The case made by the Leader of the Opposition has broken down. He has abandoned one clause after another.

Mr Deakin:

– There has been no abandonment ; I simply read all the clauses giving to the Government power to interfere in the control of the bank.

Mr FISHER:

– I have quoted those clauses which merely give the Government power to co-operate with a view to facilitating the bank’s operations, and do not affect the management of the bank.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Clause32 goes right to the heart of the matter.

Mr FISHER:

– I am willing to reexamine that clause. It must not go to the public either in the way of private tittle-tattle, or platform utterance, that the Labour party has any wish to introduce political influence in the management of the bank.

Mr Anstey:

– Or any other kind of influence.

Mr FISHER:

– No, though I do not know what kind of influence is referred to. The other point raised by the Leader of the Opposition is one upon which no body of men could dogmatize. I refer to the question of what is the best method to pursue . in regard to the management of this bank. Shall we have a Board consisting of officers of the bank ? Shall we have oneman control, or shall we have a bank controlled by three or ten men?

Mr Anstey:

– Ask the Leader of the Opposition.

Mr FISHER:

– I was exceedingly anxious to obtain his matured judgment on this point, but I fear that he has not quite made up his mind on it.

Mr Webster:

– The honorable member was looking for the impossible.

Mr FISHER:

– If we could present to the House to-night the gentleman whom we propose to appoint as Governor of the bank, he tells me that he would be able to say whether or not he is in favour of one-man control. I am in a better position. I have been impelled by my own reasoning to the conclusion that control by one man is better than control by any number of men. That is the conviction at which the Government have arrived. No body of men could dogmatize on the question of whether the bank should be controlled by one, two, or three men. But, assuming that we decided to have a Board of three, where should we obtain the members of that Board? It has to be remembered that this is to be a Commonwealth Bank, differently situated from any other bank of which we know. It is to be a bank owned solely by the people, and to be conducted in the interests of the people. A Board of directors for such a bank would, however, necessarily consist of men interested in other financial concerns. That is obvious. Men who were worthy of a position on the directorate would have banking experience, and in nine cases out of ten would have interests in other concerns of a like kind.

Mr Archibald:

– In private banks?

Mr Webster:

– Or leanings in that direction.

Mr FISHER:

– Although they gave honest service, they would still be at that obvious disadvantage. That is one side of the question. But supposing we abandoned the idea of bringing in practical men from outside, and constituted a Board consisting of officers of the bank, what would be the position ? If the Board consisted of three men, it would comprise the Governor, the Deputy-Governor, and the officer next in authority. As the result of this, the Governor himself might be outvoted, and the policy of the bank determined by two of his subordinate officers. Whilst a Board of that kind might be able to conduct a bank, it would not be able to carry it on as well as would a single Governor, absolute and responsible. There is yet another line of reasoning that may appeal to honorable members, and it is that we might have a Governor and a Deputy -Governor, and also a number of inspectors, independent of the Governor, with power to report to the Treasurer, or the Minister administering the Act, as to the state of the bank’s affairs. In that case, the Minister would know what the Governor did not, and he would be asked to decide between the reports made privately to him by the inspectors and the policy of the Governor. In that way political influence would become rampant. Immediately we allowed any appeal from an officer who was not the Governor to the Minister administering the Act, the Governor would be absolutely at the mercy of that Minister. What kind of man are we likely to appoint as general manager of the bank? What kind of salary are we likely to offer him ? Both the man and the salary attaching to his office must be first class.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What is the right honorable member’s i’dea as to the salary that should be paid to the Governor?

Mr FISHER:

– I have already refused* to state what I consider would be a proper salary for the Governor of the bank, and I go further, and say that it would be most inadvisable to advertise a position of this, kind. I am able to say to honorable members that I have no man in my mind at all in regard to this position, and that the gentleman who has been mentioned aslikely to be appointed is not an applicant.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr. Ralston hasalready in the press repudiated the suggestion that he is to be appointed Governor.

Mr FISHER:

– It was an impertinence on the part of the press to publish the statement that he was an applicant for the position. Surely a man may come down here to open a branch of his own bank,, and, whilst here, have a conversation with a few old friends, without such a suggestion being made in regard to him. I do not wish any one to believe that Mr. Ralstonis not one of the biggest men in the Australian banking world, but those who know him know that he is not available for this position. That”, however, is by the way. The man to be appointed Governor of tlie Commonwealth Bank should have Australian banking experience. Indeed, it would be useless to select a manwho is not an Australian banker. Then, again, the man who will undertake this work will have a fairly good knowledge of what the position really means. He will know very well that if he fails, his honour as a business man will be affected, and his future position in the banking world will be absolutely worthless. That is the purely personal, selfish side of the matter. If he fails, he will be lost in his profession, and will be almost an outcast. Then, amongst all men of wit, knowledge, and experience, there is always the ambition ‘ to succeed, and, having regard to all these circumstances, I think we are likely to get the best services from one man of ability. I do not intend to enlarge further uponthe point ; and, as I am not anxious that the Committee should come to “a division on the question to-night, if the Leader of the Opposition thinks that it should be further discussed, I shall move that progress, be reported.

Progress reported.

page 3284

ELECTORAL BILL

Bill received from the Senate, and (or* motion by Mr. King O’Malley) read ai first time.

House adjourned at 10.21 p.m.

Cite as: Australia, House of Representatives, Debates, 28 November 1911, viewed 22 October 2017, <http://historichansard.net/hofreps/1911/19111128_reps_4_62/>.