6th Parliament · 1st Session
Mr. Speaker took thechair at 10.30 a.m., and read prayers.
Bill returned from the Senate without request.
Bill returned from the Senate without amendment.
– Remembering how strongly and frequently the Prime Minister denounced the proposal to call Parliament together to deal with general legislation, I wish to know if he has read these concluding words of the speech addressed by the King to the Imperial Parliament?
The only measures which will be submitted to you at this stage of the session are such as seem necessary for the attainment of the great purpose upon which the efforts of the Empire are set.
– I have not read those words, though I take it that they correctly represent what the King said. Never, during the last election campaign, did I made such a statement as has been attributed to me.
– No; but the present Attorney-General said that he spoke for the right honorable gentleman.
– The Prime Minister condemned the idea of considering general legislation at the present juncture.
– Immediately prior to war breaking out I communicated with the right honorable member for Parramatta, who was then Prime Minister, stating that he would have the full support of the then Opposition in any measures that he might take relating to the war, whether I agreed with them or not.
– Is the Prime Minister aware that the AttorneyGeneral, speaking for his party, said, on the 6th August last? -
The Parliament, whether the old one recreated or a new one, would last only during the currency of the war, and thereafter as long as decided by mutual agreement, and would only deal with the war and the consequences arising out of it.
And, on 11th August-
For the time being party has ceased to exist.
– I have already informed the House that I gave an undertaking which I kept, and would have kept under any circumstances, to back up the then Government in their war policy, whether agreeing with particular proposals or not. The ex-Prime Minister said at the time that what we proposed could not be done, and I stood by him in his proposal, as I should have stood by him then in any other.
– I ask the Assistant Minister representing the Minister of Defence if his Department will get into touch with the authorities in Great Britain, with a view to securing for Australians some of the business in the goods supplied to the War Office which is now being done by Canada ?
– I do not know that the question should not be addressed to the Minister of Trade and Customs. The request is a reasonable one. If Australia can supply the goods that are needed for war purposes, the Department will have no objection to communicating on the subject with the military authorities in Great Britain.
– I ask the Prime Minister if his attention has been drawn to the statement by Mr. Justice Ferguson, in a land appeal case, that he does not think that he can satisfactorily discharge the duties thrown upon him by the Act. Will the right honorable gentleman, in view of that fact, endeavour to ascertain whether it would not be well to give effect to the Judge’s recommendations by appointing assessors in connexion with appeal cases. I ask him in particular to consider the matter in regard to appeals in connexion with small assessments. Under the Act, as it stands, the cost of appealing is so large that, although taxpayers may be charged a great deal more than is just, they refrain from appealing.
– The honorable member is now making a speech .
– I ask the Prime Minister if he will look into the whole matter.
– I have read the statement of Mr. Justice Ferguson, and, as I have said on other occasions, I pay great respect to anything said by a Judge. The matter will be taken into consideration.
– Has the Assist ant Minister representing the Minister of Defence read a resume of the Bill which has been introduced into the British Parliament to provide pensions and allowances for the widows and orphans of the men who may be killed in the war, and does the honorable gentleman propose to introduce a similar measure into this House at an early date ? Does he not consider it a matter of urgency that the dependents of the men who are going away should know exactly what their position will be?
– I have not seen the Imperial Bill, but it is the intention of this Government to introduce, at as early a date as possible, a Bill providing for pensions for the dependents of the members of the expeditionary forces that have left for the seat of war.
– I ask the Assistant Minister representing the Minister of Defence if he has read the explanation given this morning in the Argus of the manner in which that journal was prevented from receiving information regarding the sinking of the German cruiserEmden. The Department is accused of favouring the Age. As the Age is no more a Labour organ than is the Argus, will the Minister see that the Argus receives the same square deal as the Age in the supplying of news of general public interest?
-The Department makes no distinction whatever between the newspapers to which it supplies information.
– It has done so.
– It has not.
– Has the Treasurer read the statement of the Premier of New South Wales that he must make provision during the year for war expenditure amounting to £9,000,000? Can the right honorable gentleman give us any particulars of the war expenditure to which Mr. Holman Bays that his State is committed? Does not the Commonwealth Government control the war expenditure of Australia?
– I am glad that the question has been asked. This is the second or third time that I have seen a statement of the kind referred to. It is not true that the States have to provide war .expenditure. If there is a deliberate attempt to mislead the public on the subject, or even an innocent mistake, as I hope there is, I hope that the statement will not be repeated. ‘ The Commonwealth Parliament alone controls the war expenditure of Australia, and will be responsible for it under every circumstance.
– Does not the Prime Minister think that expenditure which is largely due to conditions brought about by the Avar may be correctly designated “ war expenditure V
– lt is misleading to the community to speak of any authority other than the Commonwealth being responsible for war expenditure.
– If a soldier is dismissed from the force for refusing to be inoculated with typhoid serum, will he be punished for wearing his uniform should he have no other clothes to put on?
– The Department will be reasonable in such cases.
– In each of the States of Australia Patriotic Funds have been created for the purpose of assisting the dependents of those who are going to the war. Between £500..000 and £600,000 has been thus collected. Is the Prime Minister aware that, as the result of the war, a great deal of unemployment, with consequent distress to thousands of workers, exists in Australia at the present time ? Will he communicate to the Lord Mayors, who are in charge of these funds, the intention of this Parliament to make provision for those who have gone to the war, as well as for their dependents, and request them-
– Order ! The honorable member is not entitled under cover of a question to make a speech. He is now going beyond the mere asking of a question.
– On a point of order, sir, is not an honorable member entitled, under the Standing Orders, to state any facts that may be necessary to explain his question ?
– That is so, but it is not in order for an honorable member to make a long rambling speech in putting a question. In my opinion, the honorable member could put his question more concisely.
– My only desire was to make clear my object in asking thisquestion. Will the Prime Minister, ask the Lord Mayors and Mayors of the different State capitals whether, in view of the provision which the Government intend to make for soldiers and their dependents, they will consent to the utilization of these funds, or some portion of them) for the relief of those in our midst who are suffering as the result of the war ?
– While I think that the object which the honorable member has in view is admirable, I do not consider it would be desirable for the Commonwealth Government to interrogate those in charge of funds raised for a particular purpose - either the funds raised by the Lord Mayors or the smaller funds collected for the same purpose - in the way proposed. I am, however, entirely in sympathy with the honorable member, because both parties in this Parliament are agreeable to provide by legislation for the dependents of those of our soldiers who may fall, as well as for any of our people who may suffer in consequence of any citizen of the Commonwealth going to the war.
– But what about the dependents who may want food ?
– They, I hope, will be the recipients of relief from funds which have been raised for that particular purpose.
– Is the Attorney-General yet in a position to exonerate all or any of the firms or persons whose offices were raided last Saturday ? If not, when does the honorable gentleman expect to be able to make the full statement to which he referred yesterday ?
– I am not now, nor can I say when I shall be, in a position to state just how far the information at our disposal will exonerate any person or furnish ground for further action in any particular case. I have asked the officers who are engaged in examining the papers to use every diligence and expedition. I realize thoroughly how very unfair it is that any citizen should rest for a moment under an unjust charge. I assure the honorable member that no citizen shall do so for an hour longer than is absolutely necessary.
Reported Loan by New South Wales.
– I desire to ask the Prime Minister whether the statement is authentic that the New South Wales Government have sought to raise money in another State; and, if so, whether that is a contravention of the agreement between the State Premiers and himself with regard to loans?
– I do not know whether the report is authentic or not. I gave a clear and distinct answer to the question yesterday. If anything done by the New South Wales Government affects the agreement entered into, then that agreement will disappear. I understand that the whole matter involved is
– I desire to ask the Treasurer whether it is not a fact that the Commonwealth note issue during the last few months has increased from £10,000,000 to £15, . 000,000, and will he be good enough to let the House know how this difference of £5,000,000, less the £1,250,000 which must be added to the gold reserve, has been invested?
– If the honorable member looks at the returns he will see that there has been no change in the position, save an increase in the note issue. Full details will be given in the Budget Statement.
asked the Minister of Home Affairs, uponnotice -
– I shall furnish the information, in the form of a return, at an early date.
The following papers were presented: -
Norfolk Island - Memorandum relating to - By the Secretary, Department of External Affairs.
Northern Territory - Report of the Administrator for the year 1913.
Ordered to be printed.
Cordite Factory - Extracts from the Annual Report of the Manager for year ended 30th June, 1913.
Harness, Saddlery, and Leather Accoutrements Factory - Report for year ended 30th June, 1913.
.-I move -
That this Bill be now read a second time.
This is a measure to amend the Commonwealth Conciliation and Arbitration Act 1904-11, and the Commonwealth Conciliation and Arbitration Act 1914. The circumstances that have induced the Government to introduce this legislation at the present stage are in themselves so extraordinary as to merit a general review. I hope I shall not unduly trespass upon the attention of honorable members in calling to their minds some parts of the history of this Act. No legislation has had a more chequered history; in none is there such a melancholy contrast between the conditions that were to exist under it and those which do. Many honorable members can recall without difficulty that most eloquent oration with which Mr. Deakin introduced the Commonwealth Conciliation and Arbitration Bill in 1903. It has been said that three parties have, at various times, given their approval to this legislation ; and I think it may be said, without exaggeration, that three parties have at different times condemned it. The idea underlying the Statute was in itself redolent of the best spirit of progress. Mr. Deakin, in introducing the original Bill, spoke of it in glowing terms as the excursion of law into the last sphere of human activity. He kindled in our plastic minds a most delightful vision of industrial contentment, a vision of a land from which strife would be absent, in which all difficulties would be smoothed away, and in which all warring factions would find a haven of perfect peace in the most expeditious and pleasing way. In the honorable gentleman’s panegyric nothing’ was wanting to create an industrial Eden ; but since then, however, many serpents have entered it, and it is now a wilderness. This measure has been amended, I think, five times. These amendments have been necessitated by decisions of the High Court. The power on which the Statute is based is derived from sub-section xxxv. of section 51 of the Constitution, as follows: -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: -……
The honorable member for Flinders has well observed in this House that there is hardly one word in that sub-section that ha3 not been the subject of the most fierce and pro-longed discussion - that the whole sub-section has been a veritable battleground. The purview of the Court has been so restricted, and the approach to it so hedged about, that to-day this tribunal, which was to be shorn of all technicalities, in which evidence was to be obtained, not according to the rules governing ordinary Courts of law, but where equity and good conscience alone were to guide the President in ascertaining the truth, is hampered by technicalities to an extent not seen in any Court of law. Of this we have lately had an exhibition in the Tramway Prohibition case, the culminating effort of a long series of attacks, that has been well termed a public scandal. This brings me to the immediate reason for the introduction of this measure. For while the High Court has, in very many cases, shorn the Arbitration Court of its powers, it has never struck a blow so deadly in its effects, so calculated to cripple the Court and its powers to preserve industrial peace. Of the other decisions of the High Court, it might be said that they left the Court with some powers of usefulness. There was some prospect of doing the work it was established to do; though this became less hopeful with each hostile judgment; by this one it is completely paralyzed. The Arbitration
Court has been likened to a ship which, leaking heavily, comes into port continuously for repairs, and, being repaired, goes out to sea again only to find herself buffeted by fresh” gales, and becoming more unseaworthy than ever. This has gone so far that the ship is now past hopes of repair. I do not wish to disguise from honorable members that this measure is not introduced in the vain hope of makingthe ship seaworthy, but of merely patching it up until it can get into port. I ani: profoundly convinced that nothing short of an amendment of the Constitution will! do what is necessary.
The Government introduce the measure with a certain amount of misgiving. In times past, we have - surcharged with almost incurable optimism - introduced various amendments of this Act, only to see them all hopelessly wrecked and discredited, mere objects of contempt and derision. I introduce this measure, therefore, in a very chastened spirit. I do not venture to say for a moment that the High Court will not attempt to clip its wings. There is about the High Court, in some of its aspects, an air almost sublime. It will not tolerate the suggestion that there can be within the domain of the law, under the Constitution, anything it may not only inquire into or review, but that it may not quash or veto. An attempt was made by this Legislature to prevent the High Court issuing orders of prohibition to the Arbitration Court. The idea in our minds at that time was that we were clothing the Arbitration Court with power to make an award which could not be the subject of an order of prohibition. But the High Court regarded this attempt of the National Legislature merely as a stimulus to further efforts. Its latest achievement has been truly magnificent. But this magnificent achievement is likely to be followed by most disastrous consequences. I do not hesitate, indeed, to say that no citizen who desires industrial peace can view the latest decision without alarm. It is a decision absolutely incompatible with industrial peace - nay, more, it is nothing short of a direct provocation to industrial war. The Arbitration Court was established for the prevention and settlement of industrial disputes. But if we can gather, from the hideous entanglement of technicalities and long-drawn-out litigation in the tramways case, any substantial principle - no man knoweth what a “ dispute” is! Could anything be at once more grotesque and more incompatible with the maintenance of industrial peace than such a position ? It is perfectly clear, as I shall show from the remarks of the Judges themselves, and from the unfortunate experience of organizations, that the mere attempt to peacefully formulate a demand according to the spirit, and even the letter, of the law, will not suffice to create a “ dispute.” Nor can this method hope to succeed even if pushed to the very brink of industrial war. Even a strike itself, though it extends beyond the limits of any one State, will not necessarily create such a dispute as will give the Arbitration Court jurisdiction. That is the position, as I shall show from Mr. Justice Powers’ own judgment. To strike is an offence under the Act, yet to create a dispute without a strike is almost hopeless. These are the Scylla and Charybdis between which the industrial organizations have to steer their hopeless way. If they do not push their formal demand for better conditions beyond the point of demand and refusal, no matter how widespread is that demand, how just the claim, or how contemptuous the refusal, they cannot be certain that an industrial dispute within the meaning of the Act and the Constitution has been created. If they strike they commit an offence ! It is perfectly true that the High Court has said a strike is not necessary to prove a dispute. On the other hand, they have said over and over again, and in this case particularly, that a demand followed by a refusal or no reply, followed again by a further demand and refusal or no reply, does not constitute a dispute within the meaning of the Act and the Constitution. But between peaceful demand and refusal and the strike there is no standing place which an organization can hold. I do not deny that in that rarer atmosphere in which the High Court exists there may be such a point, but there is no place where an organization can stand. As an abstract proposition, doubtless, it may be successfully maintained that while demand and refusal are not enough to create a dispute, yet it is not necessary to strike, but for practical purposes there is no alternative.
What solid ground is there on which an organization can rest when a formal demand and refusal fails to prove a dispute except that of a strike? But why should it be necessary to break the law in order to invoke its aid ? The meaning of the word “dispute” is surely clear enough. In ordinary Courts of Law these difficulties do not arise. A breach of the peace under the civil law may take one shape or another; there may be a violent assault or merely a technical one by laying on a hand. The Courts in practice have no difficulty in determining what is or what is not an assault, and the penalty is measured according to the gravity of the offence. But in this Arbitration Court there is no method of determining what an industrial breach of the peace is - no man knows, and no one can tell him. The Arbitration Court is not permitted to tell us, and the High Court will not tell us. Through the ages one of the mysteries that has engaged the attention of man has been the riddle of the Sphinx ; what was it she had to say? What is the meaning behind that inscrutable smile; what is the answer to the riddle? No man knows. But, compared with the riddle presented by the Arbitration Court, the Sphinx is to be read as plainly as the writing on the wall. What is a dispute? Mr. Justice Powers was so overwhelmed with the futility of trying to answer the question that, after listening carefully for days to evidence that would have convinced most Courts, not only that there was a dispute, but that it was one of a damnably interminable character, he referred the question to the High Court, which, however, politely declined to answer it. The High Court said, in effect, “ Do not ask us now,” and so left it to the Court below to grope its way blindfold instead of dealing with the matter as the spirit of the Act intended.
This Arbitration Court was to be one shorn of all circumlocution and technicalities, but it has become a place where circumlocution and technicality have taken up their abode, indeed, it is their very citadel. Conditions have arisen there that would not be tolerated in any Court of law; let me prove this by referring shortly to the facts in the tramways case. I may be pardoned for doing this in order to make perfectly clear the position that the Government have taken up in this regard. The Government would not lightly bring in legislation attempting to amend the Act, since their desire is for an amendment of the Constitution, which would enable us to do away with this miserable battledore and shuttlecock business. We throw the High Court an amending Act, and they hurl back its shattered remains. Then, spurred on by the demon of eternal hope, we pass another; again it is thrown back; the organizations outside ask for bread; they are given a stone - or a bubble. I wish to show what complete justification there is for this statement of the case and for introducing this legislation. Consider the position in the tramways case. If ever there was a dispute between employers and employes there was one between the tramway men and the employers. What do words mean? Have they lost their meaning and become gibberish ? Are we arguing in terms of which we know nothing, or using well known words of our own language? What is a “dispute”? Where there is a disagreement between employer and employe as to the terms and conditions of employment, there is primâ facie a dispute and a case for the Court. A man asks for 9s. a day, shorter hours, and other conditions, and the employer ignores the request or refuses it; there is a dispute. These things create a dispute. That is the plain common-sense view of the man in the street, and that was the intention of this Legislature. For this Court was created to settle industrial disputes, and so maintain industrial peace. If an organization of men engaged in running the tramways demand better conditions, surely this Court ought to be able to hear whether their demand is a just one? As far back as 1904, there was considerable dissatisfaction among the tramway men in some of the States. The dissatisfaction grew, and at length a Federal organization was formed which formulated a plaint. It is contended that the manner in which this was done was not in order, and that the rules of the organization were loosely drawn. These allegations may be perfectly true, but what has that to do with the community for whose benefit the Statute was passed ? What is the principle on which this legislation rests ? It is the maintenance of industrial peace, for the benefit, not merely of industrial organizations, but of the community. A manufactured dispute, or one which has not been put before the Court according to the rules or regulations, is as much a danger as any other dispute; perhaps, it is a greater danger, because it is some evidence of precipitate action, and so indicates that the danger of industrial strife is mere acute. If there is a dispute in the streets, does any one ask whether it is manufactured ? Not at all. It is sufficient that it is a breach of the peace, and the law at once interferes. If this great war which is now devastating the world is not a manufactured war, what is it? Does any one really think that the assassination of the Austrian Arch-Duke was sufficient cause why the nations of the world should plunge themselves into a welter of blood ? The present war is a manufactured war, but it is nevertheless very real. That a dispute is manufactured has nothing to do with the fact that a dispute exists. The one question is not whether it has been deliberately created, but whether it menaces the community. If so, let the Court deal with it on its merits. If any organization brings forward a bogus dispute, let it pay the penalty. But every dispute ought to be the subject of immediate attention by the Court, and technicalities ought not to strangle it either at the threshhold or later. The dispute in the tramways case was a very real one; it threatened the welfare of the community very seriously. Thousands of men were involved, and the hearing occupied the attention of the Arbitration Court for ninety-three days. No other dispute that I can recall engaged the Court for anything like that period. There were ten parties to the dispute. In the case of eight of them agreements were fixed up, and those agreements were incorporated in the awards made by the Court and became operative. In the case of two parties, the Adelaide and Brisbane disputants, no agreements were possible, and awards were made. But the respondents in both CaSeS appealed to the High Court for an order of prohibition. The application engaged the Full Court for no less than twenty-three days, and seventeen of those days, according to Mr. Justice Powers, were occupied in arguing technicalities, the object of which was to hamstring the awards by hook or by crook. Mr. Justice
Powers in his judgment says: “ I do not see how the work of the Arbitration Court can be continued on present lines after the decision in this case until the Act is amended.” And Mr. Justice Isaacs declares the proceedings “ to be a shocking waste of public and private time, money, and energy.” The Arbitration Court, after hearing all the evidence at first hand, and having had all the witnesses before it, decided there was a dispute; but the High Court, on second-hand evidence, decided there was none. To what extent it was influenced by the evidence of Prendergast - one of those rare examples of a totally unmoral nature, a man who apparently did not know right from wrong - we cannot say. But his treachery had nothing to do with the merits of the case. The only question that interested the community was, Is there danger of a dislocation of the tram service ? That was the question. Were the trams to be stopped and the whole business of the community to be thrown out of gear? That was the issue which the Arbitration Court ought to have been able to answer; and, having answered, its decision should have stood. The Court evidently thought the dispute was real, and, on the merits, made an award. In the case of eight of the parties that award was accepted. The High Court now has decided that there was no dispute, and has issued a prohibition order in respect of the claimant organizations in these two cases, bringing the eight agreements to the ground, for which there is now no legal sanction, along with them. It is true that these are still continuing by consent, but they owe nothing to the law in this matter, and either party can break the agreements tomorrow without penalty or fear of consequences. This, then, is the position to which the community has been reduced by the most recent decision of the High Court. The law not only does not protect the Commonwealth from industrial strife, but creates conditions which make industrial peace almost impossible. The High Court has decided that there was no dispute between the tramway men and their employers. But the facts show that if there was no dispute in this case, there cannot be in any. Let me show this by quotations from the judgments of the Justices then1 selves. Speaking as to the very real nature of the dispute, Mr.
Justice Isaacs, in his recorded judgment, said -
Then came Badger’s famous ultimatum demanding the surrender of “ Badge or billet.” At that time the re were 480 unionists in the Brisbane branch; they were forbidden to come to work so long as they wore a little brass symbol called a badge. They had agreed, it is true, to abide by the company’s regulations, and it was within the letter of the law that the company could, without breaking its agreement with them, forbid them from coming to work so long as they wore the badge. And the company did so forbid them. It was, however, an undoubted lock-out, and not a strike. On the 22nd the company advertised that men might resume, but only if they surrendered the badge. In other words, the lock-out continued.
In other words, a lock-out had occurred, yet the Court said that there was no dispute. Looking at the dispute generally, not only as it affected Brisbane, but also as it affected the men in the four States, His Honour went on to say -
Thousands of mcn, as we have seen, from all parts of Australia, and grouped in branches, first framed their tentative sectional schemes of demand, entrusted their representatives to discuss and standardize them in common council as one body, and eventually reconsidered separately the united set of conditions approved by them, adopted them, and resolved to demand them, and authorized the organization to make that demand for them, which was done. The employers, one and all, rejected the demands.
I desire honorable members to follow this, because here we get a clear statement of the position created by the High Court judgment -
What were the men then to do? Unless they arc required to strike in order to convince the Court that they are in earnest, nothing more than they did is possible, as it seems to me.
Dealing with the manner in which the dispute had been formulated, His Honour quoted the Taff Vale case as an analogous one -
The sole difference of substance between the case (Taff Vale case) and the present is: - There a strike, with its attendant horrors, took place. Here it was happily averted, except where stated. But is the Court going to tell the workers of Australia that, notwithstanding all their efforts to maintain the peaceful continuance of industry, they have always to choose between openly striking - for a mere threat to strike could still bc challenged as unreal - and running the risk of being told they are not really in dispute? Disguise it as wc may, that was and is at the root of the argument.
Could any criticism be more severe? Yet it comes, not from a partisan, but from one of the Justices who heard the case. I put :it to honorable members that the position which has been created is one which ought not to be allowed to continue. It invites industrial chaos. And unless something is quickly done to put the Court in a position to say what is an industrial dispute - we do not hope to do more than that - the Court will completely break down. Its powers to grapple with industrial troubles will still be inadequate. Nothing short of power to review and deal with the industrial conditions generally will suffice. That power we cannot now give it. But, at any rate, the community have a right to expect that the Legislature will do whatever is possible to prevent the Court being an object of contempt and derision. And we owe it to the men who have made every attempt to settle their disputes in peaceful and lawful fashion, that they shall not be the sport of those persons who, while pretending to prefer industrial peace to industrial war, and while lauding “ law and order,” defraud men, after the expenditure of thousands of pounds and years of effort, of the fruits of their labours.
The Bill before the Chamber aims at putting the Arbitration Court into the position we thought it occupied before the decision of the High Court in the tramways case. It may put the Court in a better position; on the other hand, it may not improve the position of the Court at all. It may be that the measure is destined to prove but another futile effort, and that the High Court may pour a broadside into the battered hulk. But I feel that the responsibility of refraining from taking any step which will make for industrial peace is one that I cannot shoulder. The position is serious; it is indeed critical. Any one who has a knowledge of industrial affairs knows that the organizations are now waiting to see what is to be done. I have been informed that there are no fewer than three conferences representing very powerful industrial bodies now being held in this city, in order that the organizations may know exactly where they find themselves, and in order that they may decide upon what action should be taken. The whole industrial world of the Commonwealth is astir, because not only has the decision of the High Court in the tramways case upset the award and the agreements which rested on that award, so far as the tramway men are concerned - it has also made the position impossible in regard to other awards for other organizations. The decision, indeed, strikes at the very foundations of industrial organizations and their relation to the Federal Court of Arbitration. I do not hesitate to say that there is not one award which could fairly go through the same ordeal and escape unscathed. And I am of the opinion that in no case heard by the Court was there one dispute more real than that in the tramways case; nor one in which could not be found some technical flaws which, being proved, would upset the awards made. Nor can there be one found where the claim to consideration by the Court was more just. Therefore, in what position are we to-day? Industrial chaos threatens us at any moment. The keystone has been taken out of the arch, and at any moment the whole fabric may collapse. If there had not been a state of war it would have happened already. The war alone has prevented an industrial crisis on a gigantic scale. Every one familiar with industrial organization in this country knows this to be an unexaggerated statement of the position that exist3 to-day.
– Your difficulty is that you are putting in the keystone before the foundation has been laid.
– It is very difficult to know what is the keystone and what the foundation. The whole thing is like a moving picture, assuming a thousand shapes, but baffling all attempts at analysis. An amendment is called for. The Judiciary has recommended an amendment ; in fact, it is upon the recommendation of the judiciary that this Bill has been introduced.
– When you speak of the Judiciary, do you mean all the Justices of the High Court?
– No. I shall quote from the remarks of those Justices who made this recommendation. Let others quote from the remarks of those Justices who do not make the recommendation. Viewing the facts, the position created by this recent judgment, the recommendation of the Justices who dissented from it, the Legislature and Government cannot refrain from taking what steps are possible in this matter, whether these are destined to be successful or prove utterly hopeless.
What shape the amendment should take is indicated by the Justices. Mr. Justice Isaacs, in delivering his judgment, said : -
Claimants, however, anxious to have the fundamental question determined at once, have no moans of doing so, but must run their chance to the end. Respondents, on the other hand, can, if they choose, move at once, or, if they prefer to have a double chance of winning, by evidence or by exhaustion, may wait. It is not only inimical to general welfare, but quite unfair, that one party alone should have the choice of lying by, taking the chance of a favorable judgment, and if not then satisfied, of upsetting the whole proceeding, very possibly on some merely technical point. If the respondent is dissatisfied with the award, and can only manage to ferret out some technicality that happens to be considered part of the strict and unbending machinery of the law, the merits of the question count for nothing, substantial justice counts for nothing, the probability, or even certainty, of general turmoil and public loss and inconvenience are immaterial and irrelevant; so, too, are the supposed settled relations of other parties perfectly contented with the award. Thus the whole structure laboriously and patiently built up by the Arbitration Court as an equitable settlement necessary to secure industrial peace disappears as an unreality in the eye of the law - but one which certainly leaves very real and very lasting evil effects behind. If, however, as previously suggested, jurisdiction were given under the judicature chapter of the constitution of the Arbitration “ Court,” within the meaning of that chapter it is clear (see Ex parte Williamson, 15 C.L.E., at p. 583) that, subject only to whatever appeal or assistance by way of case stated to this Court, a Parliament chose to permit or provide, the basic question could be definitely settled before the huge extent of the main controversy was incurred. T must not, however, be taken as recommending an appeal.
He went on to say that prohibition would not lie against the Arbitration Court if it were given jurisdiction under the judicature chapter of the Constitution and were clothed with those powers. Then he went on to say what had always been regarded as a dispute in England, and dealt with the earliest application of arbitration in industrial disputes, in England, in what manner the demands were’ formulated, how they had arisen, and the general recognition of the principle of collective bargaining. His Honour pointed out that in drawing up their logs the men necessarily must leave details to their leaders, that their leaders made these demands on behalf of the men, and that these demands, if rejected, constituted a dispute. He said -
If this commanding principle be, for instance, applied to the question whether the Brisbane men really wanted the extra few pence per day they demanded in the combined log, or were mentally content to receive what they put into their sectional log, the answer would be that the danger to the public disregarded such a test; whether they would or not the result in the case of the possible stoppage to the travelling public and to other industries dependent on the prompt arrival of passengers, is the same in either case, and should be averted.
Then, speaking as to the necessity for. clothing the Court with power to determine at the threshold what an industrial dispute is, he said -
It seems to me it ought to be judicially determined at the threshold whether the entry oi the Arbitration Court upon an arbitration inquiry is justified or not. If it is, let it proceed, and the result, whatever it may be, depend on the merits alone. If not justified, then let it be prevented at the outset. Such a shocking waste of public and private time, money, and energy as has occurred in the present instance ought not even to be possible.
Surely no more scathing criticism was ever expressed by a Judge in any case. Nor was there ever a case which so well merited it. The ends of justice have been defeated, the purpose for which the Statute had been created swept aside, the interests of the community gravely imperilled. The respondents have not given a thought for the welfare of the community or for the maintenance of the principles upon which the Conciliation and Arbitration Act rests. Yet what is the alternative to this legislation ? Honorable members who do not believe in the Act, who do not desire to amend it, should be honest, and say they will go back to the old condition of things; that they prefer to revert to barbarism. It will be no new thing. Germany has set us an example. If there be some industrial Germans here who, under the pretence of upholding the law, would precipitate industrial strife, let them take their courage in both hands and say so. This much is certain: There is no half-way house between an amendment of the law and industrial chaos. Legal redress cannot now be granted to any industrial organization under the Federal Act. The Arbitration Court has no jurisdiction to ascertain what is a dispute. No one will tell it, and it has not the power to determine it for itself. Such a position is untenable, and ought not to be allowed to continue. This Bill clothes the High Court with the power to determine at the outset what an industrial dispute is. The jurisdiction is to be exercised by a single Justice upon application. The reasons for giving jurisdiction to the High Court rather than the Arbitration Court, as suggested by their Honours Isaacs, Higgins, and Powers, J.J. - will, I think, suggest themselves to honorable members. We wish to avoid, not to create, further trouble. Admittedly, to clothe the Arbitration Court with the power to judicially determine what is a dispute would be simpler than the proposal in the Bill; whether it would prove more satisfactory is quite another matter. Their Honours are strongly of this opinion. Mr. Justice Higgins, speaking as President of the Arbitration Court, when giving his award in the tramways case, said -
The position of the question - does a dispute exist? - is most unsatisfactory. The Act assumes that the existence of a dispute is the most obvious thing in the world, B.nd, according to the High Court, Parliament has not given mc any jurisdiction to decide the question. I understand that my fmd ing on the question is not even to be treated as prima facie right, and yet, when the question comes before the High Court, the High Court takes no evidence on the subject. As actually happened in the Merchant Service Guild Case, I may spend days and weeks in going into the merits of claims, and, after I have made an award, the whole proceedings become a nullity, because the High Court cannot fmd in the transcript any sufficient evidence of what it understands by the word “ dispute.” My time and energies, which belong to the public, are wasted, and the irritated employes are put under a temptation to strike work. There are two courses which occur to me that Parliament could adopt to put an end to this position. One is to commit the question of the existence of a dispute to the High Court, and to forbid this Court to arbitrate until the High Court certifies that there is a dispute. The other is - if Parliament thinks that this Court, having the opportunity of meeting the employers and employes face to face, and of seeing the conditions of labour, should be able to form a better judgment - to commit to this Court jurisdiction to ascertain whether there is a dispute or not. Something must be done to improve the present anomalous position; but it is for Parliament tn say what ought to be done.
Mr. Justice Powers, commenting on that statement when delivering judgment in the tramways prohibition case, said, “ I entirely concur as to the second suggestion.” I have already quoted His Honour Mr. Justice Isaacs’ remarks. But upon a general review of the position, and while giving every weight to the recommenda tions of their Honours, it has been thought best to give jurisdiction to the High Court in the manner set forth in the Bill. By clause 5 we have endeavoured to meet the situation. Whether we have dons so remains to be seen. It is a veritable quagmire; but I am of the opinion that the proposed amendment is constitutional. “Under section 71 of the Constitution Act the judicial power of the Commonwealth is vested in a Federal Supreme Court, called the High Court of Australia, and any other Federal Court that the Parliament may create, and any such other Court as it may invest with Federal jurisdiction. Section 76 of the Constitution provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter arising under the Constitution, or involving its interpretation, or arising under any laws made by the Parliament. The distribution of the judicial power of the Commonwealth is so far unlimited that the Parliament may create as many Federal Courts as it pleases, and, subject to the sections of the Judiciary chapter of the Constitution, assign to them such functions in regard to the interpretation of the Constitution, or of any law made under it, as it pleases. The question arises whether we can clothe the Arbitration Court with power to determine what is and what is not a dispute in accordance with the meaning of paragraph xxxv. of section 51 of the Constitution. It has been held, and is now settled law, that the Arbitration Court is not a Court within the meaning of section 71 of the Constitution. The High Court has decided that the President of the Arbitration Court is an arbitrator exercising judicial functions. Paragraph xxxv., of section 51, empowers this Parliament to make laws for the settlement of disputes by processes of conciliation and arbitration. Our powers in regard to industrial matters are limited to such purposes. The Arbitration Court has been created by this Legislature to exercise powers under the Constitution. It is to prevent and settle industrial disputes extending beyond the limits of any one State. The question is, can we clothe this Court with power to judicially determine what is a dispute within the meaning of paragraph xxxv. of section 51 ? The recommendation of Isaacs,
Higgins and Powers, J.J., is that the Arbitration Court should be clothed with power to determine what is and what is not a dispute. The question arises, “ Can we, by any means at our disposal, do this?” I do not say that we cannot. There is no constitutional reason why jurisdiction to determine what is and what is not a dispute should not be given a Court other than the High Court or the Arbitration Court. But the wisdom of doing so is doubtful, and the expediency still more so. Such a Court would - if it were to he really useful - have jurisdiction to determine all matters arising under paragraph xxxv. of section 51, or of any laws made thereunder. But these powers would be considerable ; and the High Court might hold that, although the Legislature could create a Court to deal with the interpretation of certain parts of the Constitution, the power of the High Court to interfere where it is alleged that an inferior Court has exceeded its jurisdiction was not in any way impaired. I do not say that the High Court would so hold, but I do not propose to take any risk in the matter. I think that we shall achieve what is necessary by the provision in clause 5 -
When an alleged industrial dispute is submitted to the Court -
in the case ofa dispute submitted to the Court by plaint - the complainant organization or association ; and
in any other case - any party to the proceeding or the Registrar, may apply to the High Court, for a decision on the question whether the dispute, or any part thereof, exists, or is threatened or impending or probable as an industrial dispute extending beyond the limits of any one State. 2.The High Court shall have jurisdiction to hear and determine the question.
The jurisdiction of the High Court under this section may be exercised by any Justice of the High Court sitting in chambers.
The decision of the Justice on the question shall be final and conclusive, and shall not be subject to any appeal to the High Court in its appellate jurisdiction, and shall not be challenged, appealed against, reviewed, quashed, or called in question, orbe subject to prohibition or mandamus in any Court on any account whatever.
If clause 5 is watertight, the High Court once the Justice has decided the matter, will not be able to review the decision either by way of prohibition or in any other way whatever. If the clause is within our powers, the Arbitration Court may apply for a decision as to whether there is a dispute, and, once that point is decided, the matter is finally settled. Had that been possible in the tramways case we should have been spared the ‘ ‘ shocking waste of public and private time, money, and energy ‘ ‘ caused by the tramways prohibition case. Cases will be settled more speedily, because no appeal is allowed, and no order of prohibition can lie against the Justice. I do not know that I can usefully elaborate the argument in favour of this provision further, but I wish to hear the objections that may be raised against it. I do not invite criticism of our determination to make the Act workable, so as to enable the waterlogged and leaky ship to reach port, but I do invite honorable members to help the Government to effect repairs in the best way possible in the circumstances. I shall be very ready to accept any workable suggestions tending to improve the efficacy of the proposal. The position is full of difficulties and dangers, but these have to be fairly faced. An honest attempt must be made to prevent industrial chaos by assuring those organizations that have awards that these will not be interfered with, and that those seeking redress may do so with perfect confidence. Thus time, energy, and money will be saved, and the patience of the community will not be frittered away.
– Why is one Judge to exercise the proposed jurisdiction ?
– Six Justices occupied twenty-three days in hearing the prohibition case, and decided, by four to two, that there was no dispute. Far be it from me to cast any reflection on the Judiciary, but I think that, if there had been sixteen Justices on the Bench, the case would not yet have been finished. The High Court itself has decided that the question of whether or not a dispute exists is one of fact, and its determination can be more expeditiously arrived at by one man than by six. The flaw in this provision, if there be a flaw, is, therefore, not there. The points to be considered are the constitutionality of the proposal, and, subject to that, whether it will work expeditiously and well. I invite the criticism of honorable members to these points.
I propose to deal very briefly with the remaining amendments of the principal
A-ct for which this Bill provides. At the outset, let me say that all have been suggested either by the Court or by the Registrar. All, except that justdealt with, relate to defects in machinery not vital in themselves, but which have caused a great deal of trouble, confusion, and delay. I ask honorable members to believe that in the performance of its functions this new Court, launched with such eclat on the industrial waters some nine years ago, is continually experiencing trouble in its internal mechanism. The cogs grind; the bearings grow hot. An endeavour is here made to deal with these troubles. Clause 2 deals with the position of an employe dismissed by his employer because he belongs to an organization. Under the Act as it stands, in order to secure a conviction it is necessary to prove that an employe has been dismissed merely because he is a unionist. It is a fact, and one of the most cheering evidences of the innate goodness of mankind, that convictions have been secured for this offence under the existing law. But for every one offender caught, ninety-nine go free. It is obvious that if a man wishes to dismiss an employe because he is a unionist, he may easily do so. An employer may discharge a man because he is a unionist, and say that he has dismissed him because he does not like his appearance. We are amending the principal Act so that the onus will rest on the employer, and this is quite compatible with the policy of the Act.
Collective bargaining has become part of the warp and woof of our industrial fabric. We do not recognise individuals; we recognise only organizations. The whole system is based upon the principle of collective bargaining. The object of the Act, the work for which the Arbitration Court was established, is to settle industrial disputes between organizations and employers. These threaten the peace of the community. Disputes between isolated individual employes and their employers are negligible. Those “ dwellers in the caves “ who talk about the rights of the individual are invited to crawl into the daylight, and to see the new world, in which the individual workman, except in cases so rare as to be insignificant, does not really count at all. There are combinations of workmen and combinations of employers. These are the factors with which the Court has to deal. This Bill is to deal with conditions as they are, not as they were, or even as they might be. Therefore, in order that we may secure collective bargaining, and leave an organization perfectly free to embrace within its grasp every person engaged in the industry to which it relates, no man must be penalized because he belongs to an organization. The law :says to a worker - “ Before ye shall receive industrial salvation, it is necessary that ye shall enter the fold of a union.” To penalize a man for doing that very thing the law desires to encourage is obviously wrong. And particularly so in this case, because the Federal Court cannot make a common rule. Under this law there is only one way in which a man can be industrially saved - that is, by becoming a unionist. In these circumstances, if we gave an employer power to penalize a man because he belonged to a union we should strike at the very taproot of the whole system with which the Statute was deliberately designed to deal. We propose to provide, therefore, that the onus of proving that a man has been dismissed for some reason other than being a unionist shall rest upon the employer. If an employer dismisses one of his men he must show that he did not dismiss him for being a unionist. Thereupon the onus of proof, as the lawyers in the House know, will fall upon the other party, and he will have to make out his case.
– It is a very difficult case to make out.
– It certainly is. In my experience of the Court in New South Wales only one conviction was secured. It is proposed that any fine that may be recovered may be paid to the victim. If a man is dismissed because he is a unionist, and the Court orders his employer to pay a fine, it is even-handed justice, I think, that the man so dismissed should receive the fine. It is not, however, to go to him, ipso facto. The Attorney-General may direct that the whole or any part of a fine so imposed shall be paid to the person injured. Clause 3 provides for an amendment, of section 19 of the. principal Act by inserting in paragraph b, after the word “ organization,” the words “ or by an association registered for the time being as an organization.” This will cover the case of an association which has registered, and whose registration is subsequently found to be defective. If this amendment were not made, then, as has already occurred in several cases, any award or benefit that an organization might have received would fail if it were found subsequently that its registration was defective. This clause will enable an organization in such circumstances to retain its rights. I think it a very necessary provision. Clause 4 amends section 21 of the principal Act by omitting the words “ exists and is,” and inserting in their stead the words, “exists, or is threatened, or is pending, or probable as.” This will extend the scope of the measure so that a certificate by the Registrar that a specific industrial dispute exists will now cover a dispute that exists, or is threatened, pending, or probable. Clause 6 deals with the list of members and officers of an organization filed with the Registrar, and provides that such a list filed with the Registrar on behalf of the organization or association shall be evidence that the persons named in it were at the date of filing members and officers, and that such officers were duly appointed. This proposed amendment arises partly out of the Tramways ease. The question as to whether a man is a member or officer of an organization is most difficult to prove. In the case of the organization with which I have the honour to be connected, and which has branches all over Australia, we should be unable to prove membership in one case out of two. Those who know anything about the way in which organizations are controlled must be aware of this. The man who does the bookkeeping of an organization of workers is not an expert accountant; he is a workman. He does his best; but he is not an expert bookkeeper. This Bill deals with industrial organizations as they are, and not with an etherealized perfected race of human beings, every unit in which has received a collegiate education. It deals with workmen, who have little time and no training in office work, and who are liable to fall into technical irregularities when preparing a plaint for hearing in the Court. This clause will make the certificate of the Registrar sufficient evi- dence that the officers and members of an organization are the officers and the members on the list.
Clause 8 extends the power of the Court under section 29 by declaring that the award of the Court, shall be binding on all parties it summoned to appear as parties to a disputeor required to answer the claim. The law as it stands applies only to those whoappear, or who are’ represented in the Court. It does not apply to those whoare summoned, but do not appear. Asthere is no power to make a common rule it follows that to exclude those upon whom notice to attend has been served, but who do not appear, is to curtail very dangerously the scope of the Court. It is proposed, therefore, to extend the scope of an award to all those who have been served but do not appear.
Clause 9 amends section 38 of the Act, and deals with a difficulty that has arisen in its working. It is proposed to insert, after paragraph (d), the following: - (da) to order compliance with any term of an order or award proved to the satisfaction of the Court to have been broken or not observed.
Section 55, which determines what a registered organization may be, is amended by inserting at the end of paragraph b of sub-section 1 the words - together with such other persons, whether employes in the industry or not, as have been appointed officers of the association and admitted as members thereof.
This amendment was introduced to deal with circumstances that have arisen in several cases. If honorable members look at sub-section 6, they will see that no person can be a member of an organization unless he is a member of an association of not less than 100 employes. It is essential, therefore, that every member of an organization should be an employe in the industry. An employe is a person who has existing contractual relations of employment with an employer. It follows, therefore, that every secretary of every large organization is excluded from membership of an organization. This rule construed strictly excludes officers of long standing, such as the honorable member for the Darling and myself. On the face of it, such a rule is opposed to the spirit of the Act, and operates most unfairly. So soon as an organization grows to any size, it is impossible for a man to attend to its affairs and at the same time to carry on the Ordinary duties of his employment. It is customary, therefore, to appoint a secretary, who devotes himself exclusively to the work of the association; and the moment he takes the appointment he ceases under this section to become a member of the registered association. Clause 11 amends section 58a of the Act by providing that where, for any reason, an organization changes its name, its registration shall not be affected. The amendment of section 60, which is effected in clause 12, arises out of tho experience of the Court in, I think, the amalgamated miners’ case. Here the Court found itself compelled to cancel the registration, although it certainly did not desire to do so. It is proposed to clothe the Court with discretionary power. Clause 13 provides that every association which, at the coming into operation of the Bill, is registered as an organization, shall be deemed to have been duly registered. This is to cure any defects that may have occurred in the registration of any organization now registered.
I have taken up much more time than I intended, but my excuse must be that this measure is one of supreme importance to the industrial welfare of the country. The circumstances that have induced - indeed compelled - -the Government to introduce the Bill are such as to call, in the most emphatic way, for publicity. The responsibility for the continuance of these conditions rests now on this Legislature. The necessity of an amendment of the law to create some authority to judicially determine what is a dispute is obvious. I do not pretend for a moment that this measure does anything more than patch up the badly-leaking vessel for the very short time, let us hope, that remains before it gets into port. But although an amendment of the Constitution is needed before we can hope to clothe this Court with powers commensurate for the great work it is called upon to do, yet as the present need is so urgent we must do what is possible in the circumstances. The attempt is amply justified, even though it should fail in its object. There is imposed on every honorable member a duty to the public. He has to use his every effort, not to serve his own or his party’s in terest, but to conserve, above all things, the welfare of the whole people, which rests absolutely on the maintenance of industrial peace. It is clear that a Court which has no authority to settle industrial disputes, which cannot even determine what a dispute is, and which, at the end of three years, finds the patient work of its hands mauled and disfigured out of all recognition, cannot hope to maintain industrial peace. But such a position must not be allowed to endure. The decision in the tramways case has created a condition of things incompatible with the maintenance of industrial peace, inconsistent with the principles on which the Act rests, gravely imperilling the welfare of the community. For these reasons I ask the Chamber to approve this measure, and so prevent a state of industrial chaos and disaster.
Debate (on motion by Mr. Glynn) adjourned.’
Debate resumed from 12th November (vide page 603), on motion by Mr. Fisher -
That this Bill bo now road a second time.
– This measure for the amendment of the Commonwealth Bank Act does not seem to me to be urgent or to be required at the present time. The only proposal which is thought by the Government to be of advantage is that giving power to open Savings Banks in the United Kingdom, and elsewhere in the British Dominions; but, in my opinion, that proposal is open to grave objection. Certainly, nothing that the Treasurer said showed any urgency ; and it is difficult to understand why we have this Bill before us now, unless it is intended merely as a sort of placard, or make-believe - a sort of window show - - to impress on the public the greatness of the Bank. Under the orignal Act, the capital of the Bank may be provided by the issue of debentures up to £1,000,000; but, so far as I am aware - and it certainly was so when I was in office - not one single farthing has been raised under that power.
– That is a compliment to the Bank !
– It is also an evidence that such money is not required ; and, unless the Treasurer can show that the £1,000,000 has proved insufficient, the necessity of the Bill disappears
– I have already shown :that.
– I have not heard from the right honorable gentleman anything in this connexion, except that he desires to give the Commonwealth “Bank power to purchase other banks; but if the institution is now a going concern, and doing good work, what is the reason for desiring this further power to enter into commercial operations ? We have been told that there is no proposal in the air for buying any other bank” or banks, so that the scheme would appear to be very hypothetical. First of all, it will be necessary to find a bank which desires to sell, and then the price would have to be ascertained ; and, so far as I know, there have not been any negotiations of the kind. At present, the Commonwealth Bank is doing a large business without any capital in the way of cash. It lives altogether on the deposits in the Savings Bank - including the considerable amount taken over with the Tasmanian Bank - and on the interest and non-interest bearing deposits of its customers. The basis of the Bank’s capital is the credit of the Commonwealth.
– There is nothing better !
– If the credit of the Commonwealth is all that is necessary, why give power to borrow £10,000,000? The credit of the Commonwealth is the sole capital that the Bank has had from the beginning up to the present; and that this has proved sufficient is shown by the fact that no use whatever has been made of the power to issue debentures. That being the case, we ought to be told why the Bill is introduced at the present time. As far as I can see, there is no necessity for it. As for the hypothetical case of buying up some bank, that is a point that ought to be carefully considered by the House. Seeing that we have been doing very good business with the Bank, that we have got this institution going, that it is doing the Commonwealth’s business both here and in London, and doing all exchanges for the Commonwealth, and assisting the Government when necessary, bo far as its powers go, why is it necessary to increase the capital of the institution from £1,000,000 to £10,000,000? That proposal means that this Parliament is to authorize the borrowing and expenditure of £10,000,000 by the Bank. The indebtedness of the Bank is the indebtedness of the Commonwealth, because the Commonwealth is responsible for every action taken by the Governor of the Bank. For what purpose is this £10,000,000 required ? My right honorable friend said that he did not intend to borrow the money just yet, and perhaps he would not borrow it for a long time. Then, what is the urgency of getting this power to borrow? I have shown that no action is contemplated, except that there is a vague idea that the Commonwealth might buy up some other bank. The credit of the Commonwealth is sufficient for all transactions, because the debentures are available as a stand-by if they are required. This proposal of the Government is merely a placard which is intended to make a show in the window, but is not for use. If it is intended for use, we have a right to know what that use is to be. Let us look at two of the biggest banking institutions in the world. The Bank of England, which has done so much in connexion with the financial crisis brought about by the war, has a capital of only £14,500,000. There is certainly a rest reserve of £3,500,000; whilst the fiduciary issue of the Bank of England is only £18,500,000; beyond which limit a sovereigin must be deposited for every note issued. The great Bank of France has a capital of only £7,500,000. How different is the management of the Bank of England from the management proposed by the so-called Democratic party now in power.
– Do you not think we are a Democratic party ?
– So far as this Bank is concerned, the Labour party is very autocratic. They propose to intrust all this money to the control of one man. The Bank of England is controlled by a directorate of twenty-four members, selected from the most eminent commercial and banking men in England, and a Governor and Deputy-Governor as well. There is some security in management of that character; but in Australia we are to leave the whole control to one man. Certainly, the Treasurer has to approve of the Bank raising this money, but fancy the so-called Democratic party allowing the Governor of the Bank and the Treasurer of the day - who may even be a member of this hated Opposition - to raise £10,000,000 of money without the knowledge or approval of this Parliament! Is this responsible government, under which Parliament is supreme? Why is there this second attempt to ignore the Parliament of the country in a matter so very important as the raising of money ? We know that if the Government desire to spend any money at all, they must submit the items for parliamentary approval, and an appropriation must be made before the expenditure can be incurred. In regard to loans, also, wo are obliged to set forth in the clearest way how every item in the Loan Bill is to be expended ; we have to give the specifications of the work very often ; and Parliament is supposed to be cognisant of everything which it is proposed to do before approval is given. Why, then, should we deal differently with the raising of £10,000,000 for the purposes of a banking institution ? Do honorable members opposite approve of giving to the Governor of the Bank and the Treasurer for the time being the right to buy, say, the great Bank of New South Wales, and make it part of the Commonwealth institution, without the cognisance of Parliament? Do they agree that Parliament should be set at nought, and not even consulted ? Once the Governor gets the money, the control of the Treasurer will cease. The power of the Treasurer applies only to the raising of the money. I do not know whether the Treasurer has to approve of a bank being purchased ?
– The Treasurer and the Governor are to raise the money, to buy a bank, and tell us after the transaction is complete, when the Bank with its millions of money will be under the absolute control of one man. I am not saying anything against the present Governor of the Bank. I believe he is an excellent man, and all the time I occupied the position of Treasurer, he and I worked most amicably together. Therefore, there is nothing personal in my criticism. The Governor may be one of the wisest of men, but he ought not to have sole control of this Bank, and un limited expenditure. This institution is not like the Bank of England, with its twenty-six directors, comprising men in the highest positions in the commercial and banking world, and who are always there to aid the institution. There is no other institution of the sort in the world where the absolute control is given to one man. I do appeal to honorable members opposite to have a little regard for constitutional usage. The Government are proposing to intrust to one man in the’ community the whole credit of Australia. We are responsible for everything the Governor does, and must pay the piper if any loss is made. But we are committing ourselves to intrusting the country’s credit to one man, who is a law unto himself.
– He is not that.
– To all intents and purposes, the Governor is a law unto himself. Is that a reasonable thing to do ? Is there any precedent for such a course? Is it a safe procedure? Is it responsible government, which means that Parliament shall be consulted before expenditure is incurred ? Are we going to allow the Governor and the Treasurer for the time being to pledge the credit of the country for the purchase of a commercial enterprise at a cost of £10,000,000, without Parliament being made aware of the transaction until it has been completed ?. Do we realize our responsibility to the people when we vote away the powers intrusted to us under the Constitution ?I desire to say only a word or two inregard to my action as Treasurer in connexion with the branch of the Savings Bank which had been established witha flourish of trumpets in England.On looking into the matter, I came to theconclusion that there was no power in the Act to establish a Savings Bank outside of Australia. I consulted the AttorneyGeneral, and he gave a very deliberate opinion that there was no power to have a Commonwealth Savings Bank anywhere except in Australia. I at once called the attention of the Governor of the bank to the fact, and told him that he must not act illegally. He did not like that instruction, but he said he would achieve his purpose in another way. I replied that, so long as he established his banks within the law, I had no objection. At the same time, I was glad to find that the Governor’s action was not in accordance with the Act. I look upon the Commonwealth as being a portion of the Empire, and under great obligation to the Old Country. It seems to me that, to enter into competition to catch the savings of the people in England, and to offer a higher rate of interest, was not either patriotic or fair on our part. It did not seem to me that such a policy would bring us closer to the people, and the financial institutions of the Old Country. They require the savings of their people as much as we require the savings of our people. They have obligations far greater than we have, and why should we try to grasp the last farthing of the English people? I disapproved of that policy then, and I absolutely disapprove of it now. I was, therefore, glad that the original Act did not permit us to have a branch in London. I think it is a bad policy to attempt to interfere with the savings of the people of Great Britain when they are required in the Mother Country for its protection and for the conduct of public affairs, just as it is bad policy for the Commonwealthto enter into competition with the State Savings Banks, and take away the savings of the people in the States, which are required for the further development of the States.
– Do they not get a lot of our money in Great Britain?
– What about the £300,000,000 odd that we owe the British people? Does the honorable member contend that Australia is a greater country than Great Britain, and that they are under a greater obligation to us than we are to them? Surely the honorable member has some regard for the country in which he was born and nurtured? Does he come here and think that he is a better Australian than those who belong to the country? I do not approve of our entering into competition in Savings Bank business with the Old Country. I do not approve of the Bill before us. It is not required. There is no necessity for it. Above all, it is contrary to constitutional usage and to our system of responsible government to intrust to any one except Parliament the raising and spending of money.
– I had not intended to speak on this Bill to-day, but seeing that it is a matter of so much importance to the people of Australia, I do not think it should be allowed to go by default. The Bill is another of those little non-party questions that have been continuously launched in the House by this Government ever since they have taken office, their action in this respect being a complete violation of all their pledges and protestations on the platform.
– That to which the honorable member refers does not apply to me.
– It applies to the right honorable gentleman as well as to any of the rhetoricians who used his name, and pledged his name, to non-party conduct in Parliament. All the followers of the right honorable gentleman know quite well that what I say is true. Time and again the Attorney-General, speaking with the authority of his leader and for his leader, and saying that he did so, said that the last Parliament should have been revived for the purpose of dealing with the war and nothing else.
– The honorable member must confine himself to the question before the Chair.
– My friends opposite are here grinning at the way in which they have dealt with the people of the country. Solemn pledges on the platform are nothing to them.
– Again I ask the honorable member to confine himself to the question before the Chair.
– Here and now I make my protest against these controversial measures being brought forward for the consideration of Parliament at this time. The procedure is a distinct breach of an agreement that honorable members opposite made with the people.
– I am sorry to have to interrupt the honorable member, but I have twice called him to order for discussing something that is foreign to the Bill before the House. On the motion for the second reading of the Bill the honorable member must say whether he approves or disapproves of the principles of the measure.
– I think that it is always in order to discuss whether a Bill should be before the House.
– If I permit discussion on the lines pursued by the hon orable member the House might very soon be discussing everything but the Bill itself,
– I have the right to protest against the Bill being here.
– On the second reading of a Bill, an honorable member may discuss whether he approves or disapproves of the general principles of the measure, but he cannot go into details. These can only be discussed in Committee. The honorable member must know that I cannot allow him to roam all over matters quite outside the question before the Chair.
– That is a new ruling. I have never heard before that one may not, on the second reading of a Bill, discuss whether the measure should be introduced for discussion at the time. I should like to know whether debate on those lines is not pertinent and relative to the Bill; because I am now protesting against being compelled to discuss this Bill at the present time. As I have already said, honorable members opposite gave a definite-
– I have already told the honorable member that he must not follow that line of argument. If he disapproves of my ruling, he must take the proper course to dissent from it.
– As your rulings, Mr. Speaker, are always given without reasons, and we cannot make anything of them, I must leave the point. I should like to know what is the matter with the honorable member for Barrier? I never rise to speak but he begins mumbling and chuckling like a bear with a sore head. The Bill is of sufficient importance to be discussed calmly and at length, and, if need be, at leisure. The interposition of hilarity and jocularity when we are discussing one of the biggest financial propositions ever submitted in the chamber does no credit to honorable members.
I hope I am in order in- asking whether the Bill has been before Caucus; because I should like to know whether honorable ‘ members approve of the underlying principles of the measure and of the Commonwealth Bank, and whether honorable members supporting the Government approve of the autocratic system of government which is introduced and emphasized once more in this Bill. They say that they are Democrats, and that they do not believe in one-man rule. They have always preached the doctrine that one-man rule means tyranny and oppression. Therefore, I would like to know whether Caucus has discussed the advisability of giving to one man the control of twenty millions without let or hindrance, or question of any sort as to anything he may do? The Governor of the Commonwealth Bank already controls ten millions, and this Bill will give him control of another ten millions.
– The honorable member is wrong.
– The Governor of the Bank already controls ten millions/ at least, so I read the Bank’s balancesheet; at any rate, he has liabilities to the extent of ten millions, though we know nothing about them. I suppose that a good proportion of the ten millions is in bricks and mortar, which the Governor of the Bank has purchased on his own account. I am not speaking of ordinary banking business, such as mortgages and that kind of thing. I am speaking of absolute purchases of property by the Governor of the Bank. I challenge contradiction when I say that no other Parliament in the world would permit any man to do what this gentleman is doing every day. What might happen if he were not the upright, straightforward, and honest man I believe him to be, I do not know.
– You called him a Czar at the last elections.
– I still call him a Czar. I doubt if the Czar of Russia has as much power over financial matters as has the Governor of the Commonwealth Bank. Saying this is no reflection upon the man, but is a reflection upon the so-called Democrats opposite, who clothe the Governor of the Bank with absolute autocratic power to do as he pleases behind the back of Parliament, and, indeed, to flout Parliament if any question be asked of him, as we have seen him do on many and many an occasion.
– Is that your only objection to the Bill?
– I should have thought it would be a telling objection with the honorable member who says that he has been fighting the capitalists all his life.
– I have been fighting the enemies of progress.
– The enemy of progress is he who clothes any man in a free community with absolute autocratic power, ana provides the means for doing wrong. The consequences will follow as sure as daylight sooner or later.
– Has not the Governor of the Bank made a success of it?
– I do not know. I hope that he has. He has many privileges that a private banker has not. If he cannot make his Bank a success with all the safeguards and privileges with which he is surrounded, at any rate, he should do so. We should not run away with the idea that the Governor of the Bank is in the position of a manager of a private bank. The Governor of the Commonwealth Bank has the wholeaegis of the Government thrown round him to protect him and give him priority in every way. He has scores of privileges and rights and powers not possessed by the private banker, and if he is not making the Bank a success, he should be doing so.
Sitting suspended from 1 to 2.15 p.m.
– I wish to raise a point of order as to the scope of the debate on the second reading of the Bill. Our Standing Orders have nothing very definite to say on the matter, except that amendments must be relevant. May gives us a little more information. I find it is stated, on page 472 of the 11th edition, that -
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a Bill to move, as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from the principles, policy, or provisions of the Bill, or expressing opinions as to any circumstances connected with its introduction.
It is competent for a member to move an amendment to a question to express opinions concerning circumstances connected with the introduction of a Bill, and, consequently, it must be competent to express such opinions without moving an amendment. I ask you to state, sir. what are the limitations of debate when the motion for the second reading of a Bill is under discussion? In my opinion, it is competent for an honorable member to express opinions as to the circumstances connected with the introduction of the Bill, and I should like a ruling from you on the subject.
– I am not called on to give a ruling on hypothetical cases. Anymember may speak to the motion for the second reading, but his remarks must be relevant to the Bill.
– We must all admire the firmness of your decisions, sir.
It is time that the Commonwealth Bank obtained greater resources and more power. During this period of financial stringency the Bank has not been able to do anything to ameliorate conditions in any large way. That is an outstanding feature of the financial situation. I understand that last night the Treasurer said that the Bank of England and the Commonwealth Bank had saved the international financial situation.
– No ; the Commonwealth Bank and the Bank of England.
– That is not true.
– The Prime Minister is acquiring the habit of saying glibly that statements are not true. Last night he told the House that there was no arrangement between us in regard to a second-reading motion. I was amazed to hear that he had said that.
– In future, I shall make my arrangements with the right honorable member in writing.
– The Prime Minister may do as he pleases in the matter. He made an arrangement with me in the lavatory.
– Will the right honorable member address himself to the question ?
– I ask you, sir, to require the Prime Minister to desist from interjecting insulting observations if I am not to reply to him.
– The right honorable member knows that all interjections are disorderly, and that it is impossible for the presiding officer to anticipate them ; but a member is not in order in replying to interjections.
– I know of no rule of debate that is more honoured than that a reply may be made to an interjection. There could be no debate if that were not permissible. The outstanding feature of the present situation is the absolute inability of the Commonwealth Bank to give any substantial relief. I know that the Governor of the Bank wishes to do his best, but he does not possess the necessary resources. He does not control the note issue, and cannot come to the rescue of any one. As to the general financial situation, he has been able to do but little except in regard to ordinary current transactions. As a buttress to the financial position of the country, the Bank is useless. I shall therefore welcome any reasonable attempt to increase the Bank’s powers and prestige, and to give it the status which it must possess before it can fulfil in the remotest degree the functions of a national bank.
Some things have happened during these trying days that are of almost priceless value. The logic of events has driven the truth of matters home to the Prime Minister, and to leaders of the Labour party in the States. The right honorable member signed and distributed throughout Australia a famous manifesto, containing the astounding statement that the Australian note issue had given enough money to be loaned to the States by the Commonweal th to enable them to maintain their public works policy, and thus to prevent a huge army of unemployed from being thrown on the streets. The manifesto also stated that, without the Commonwealth Bank and the Australian note issue, we should be faced at this juncture with a general collapse of industry, trade, and finance. Do honorable members believe that the Commonwealth Bank has had anything to do with overcoming our difficulties? The Bank has absolutely no capital, and it is mere effrontery to say that it has prevented the collapse of the trade and finance of Australia. It is a good thing that the crisis has brought home to the minds of responsible Labour leaders the fact that it is foolish to think that paper money can maintain the credit of Australia and preserve its industries from collapse. Let me read what Mr. Holman said recently on the subject. He is one of the Labour leaders, and is certainly one of the cleverest of them - lt is suggested that we should finance those works by the simple and easy expedient of borrowing bank notes from the Federal Government and paying our workmen and contractors with them. One has hardly the patience to deal with proposals of that kind with the consideration they really deserve - or, rather, which those who make them deserve - because they are no doubt made as the result of genuine suffering in certain cases. But I ask honorable members to follow what would happen if that were done. If we were to borrow now £2.000.000, 3.000,000, or £5,000.000 of paper money and pay our workmen with them, these notes would, through the medium of the stores, soon find their way into the banks, and the banks would be left with the alternative of holding those notes themselves, which would be equivalent to advancing us a loan, which they cannot alford to make at the present moment, or do what they naturally would do, return them to the Treasury in Melbourne and demand gold.
There is another alternative. If there were an over-issue of paper money, the banks would naturally get rid of their gold and keep the notes for their reserves.
Then the Treasury in Melbourne would be in the position either of refusing payment, which would precipitate the crisis which every responsibleminded man in Australia is endeavouring to avert, or of paying out until it reached the legal maximum, when, 1 take it, refusal would be inevitable. … I am convinced .that the moment has arrived when it is better to speak, and speak plainly, and say to misguided people who are urging this resource that it is no resource whatever, and that while no doubt a note issue can be expanded legitimately, and ought to be expanded legitimately, at a time like this by the united efforts of the Government and the banks throughout the State, to put as large a body of funds into circulation as possible, and while I am prepared as Treasurer to do all in my power to help, that is a different thing to treating paper currency as an inexhaustible supply of capital. That is one of the prize delusions of those who know nothing about the questions involved.
That is rough on honorable members opposite. Mr. Holman says that this is one of the prize delusions of those who know nothing about the questions involved.
– Is the right honorable member going to connect the quotation with the Bill before the House?
– I am. I take it that the question of the Bank and its resources affects the whole financial situation of the country. But I will have done with this quotation, since it seems to be unpalatable to some people. Mr. Holman, in one fell swoop, heaves overboard all the foolish notions of honorable members opposite. He practically says they are simpletons, who know nothing about the question, otherwise they would not hug these delusions to their breasts. That is his characterization of those who believe in any such thing. His is the old Conservative view. Mr. Holman has fallen into line with the old Conservative financiers on this side, who have been expressing the same opinion for many years. It has taken the present war and the existing crisis to bring him round to that old. safe, sound view of national finance and away from that which has been preached from the housetops by those who, in his own language, know nothing about the question.
– I think the right honorable member has described Mr. Holman as the most extravagant Labour man in the Commonwealth, so far as finance is concerned.
– And is it because he is the most extravagant member of the Labour party that honorable members opposite barrack for him at election time? They characterize him now as the most extravagant member of the Labour party-
– No. It was the right honorable member who said that of him.
– It was most touching to see Mr. Holman on the platform with that other great financial authority - the Prime Minister - at the recent elections. Then they were on each other’s necks, but now that the election is over, and honorable members opposite are in power, they speak in this way of the man who helped them so much and so well.
This aspect of the matter is worth placing on record, and I propose to make the following quotation from the Labour manifesto of 1914 -
The Commonwealth Bank and the Australian note issue had created the very instruments by which credit could be supported and the wheels of industry kept moving even in this great crisis.
– Hear, hear!
– If that be so, why is the right honorable gentleman obtaining from other sources money for the assistance of the States?
– Because the right honorable member has failed absolutely-
– Order ! I am sorry to have to interrupt the Leader of the Opposition, but he is now entering upon a general discussion of something altogether outside the scope of this Bill. He read a few moments ago, a long quotation dealing with the note issue. This Bill, so far as I am aware, makes no reference to the note issue. I must ask the right honorable gentleman, therefore, to confine himself to the question.
– I am making aquotation in which the first words are “ The Commonwealth Bank.” If that is not a pertinent quotation, I should like to know what is. I object strongly to be put down in this way when I am talking about the Commonwealth Bank.
– If the right honorable gentleman objects to my ruling, then the proper and honorable course for him to pursue is to move that it be disagreed with. If he does, I promise him that his motion will be dealt with at the earliest possible moment. If he does not, then he must abide by my ruling, otherwise I shall have to take some other course.
– I have no desire to disagree with your ruling, but I wish you to permit me to make a quotation bearing on the subject of the Commonwealth Bank. If responsible statements of Ministers when before the country may not be quoted in this House as bearing upon the legislation which they are proposing, it seems to me that parliamentary discussion is at an end. In this manifesto we had the statement that the Commonwealth Bank would be the buttress of the industries of Australia, and that it would help us over the present crisis.
– The right honorable member will be perfectly in order in following that line of discussion, but the quotation that he read a few moments ago went much further.
– I do not know how we can separate the note issue from the general financial question.
– The general financial situation is not under discussion.
– I desire to argue that the Bank should have the control of the note issue; but it seems to me that I cannot reach the point I want to make. I think, Mr. Speaker, you might allow me to state my point before you interrupt me. My point is that the Commonwealth Bank should be placed in a position of greater power and responsibility with a better directorate and a better control ; that the management having been put right, it should then be clothed with greater responsibilities, including the note issue and everything else relating to the finances of the Commonwealth. I am entitled, I think, to make this quotation, because, as we know to our cost, it did good service all over Australia. In it we have the statement that -
Enough money is to be loaned to the States by the Commonwealth to enable them to maintain their public works policy and thus pre vent a huge army of unemployed being thrown upon the streets. Had it not been for the Commonwealth Bank and -
The reference is to the note issue, to which, under your ruling, Mr. Speaker, I may not refer - the private banks would have been compelled in sheer defence to restrict credit -
That is an absolutely indefensible statement for which there is not a tittle of justification - overdrafts would have had to be reduced so that enterprises affected by the war would have shrunk almost to nothing. Money would have been very dear -
Here we come to the Attorney-General’s rhetoric - unemployment and trade crises would have come upon us like aflood submerging everything. Instead of which, money is very cheap, employment is encouraged, traders should not be called on to reduce overdrafts or harassed by dread of complete ruin. The wheels of industry move, and trade becomes possible.
The Commonwealth Bank, and - something again to which I may not refer, under your ruling, Mr. Speaker - without which, at this juncture, we should be faced with a general collapse of industry, trade, and finance, are due to the Labour party alone.
All that the Commonwealth Bank has ever done throughout this crisis has been to act as an agent. It cannot act as a principal, because it has no capital. It has acted purely as an agent, and whatever the Treasurer is going to do now with regard to certain loans to the States will be effected through the Commonwealth Bank acting only as an agent. The Bank is not finding the £18,000,000 which the States are to receive. Nothing has more strongly emphasized the need of a National bank with large resources and skilled management as the crisis through which we have been passing. I, therefore, am glad in one sense that it is proposed to clothe this Bank with greater powers and privileges than it has.
But what does the Bill provide? In the very forefront of it we have a proposal to take over other banks. Is it not remarkable that the Prime Minister should tell the House, “ We want power to take over other banks, bub we do not know that we are going to take over any?” It seems to me that the right honorable gentleman is playing with the House. Either the Governor has a bank in view or he has not. If he has not, that is the best of all reasons why this provision should be eliminated from the Bill. Why should it be emphasized in the form of a special clause ? If, as the Treasurer says, he has no other bank in his mind, and does not know that the power is going to be exercised, that is a reason why the clause should be rejected rather than passed. And that leads me to another point. I understand that in connexion with the taking over of these banks, and the exercise of this power, Parliament is to be absolutely ignored. The power is to be exercised with the consent of the Treasurer. If the Governor of the Bank wishes to get £6,000,000 or £8,000,000 within his control, he will say to the Treasurer, “ Come in and help me to get it.” But having once obtained it, he will show the Treasurer the door, and will have no more to do with him. There is nothing fair about a provision of this kind.
– But it is good Socialism.
– It is pure, unadulterated, logical Socialism. It is, indeed, the very essence of bureaucracy. I protest against the Parliament being treated in this way. This provision may involve a matter of some £5,000,000, £10,000,000, or £20,000,000, and surely in regard to something which so profoundly affects the finances and resources of the Commonwealth this House should at least be consulted. But, no ! The Treasurer and the Governor of the Bank are to deal with it. This Parliament is not considered to be worthy of the compliment of consultation. If the Labour party were on this side of the House and some other party brought down this proposal how they would scarify and “ stone- wall “ it.
– We should be “ gagged “ if honorable members opposite were in power.
– And honorable members opposite would have to be “ gagged “ if we were trying to pass such a Bill, otherwise we should never get it through. The fact is that the Bill is simply a proposal to nationalize, by administration, and not by legislation ; and, in this, the Government are going even further than under the referenda proposal. Under the latter, when it is proposed to nationalize any industry or corporation it is left to Parliament to decide; but in the present instance, the
Governor of the Bank and the Treasurer may do as they think fit.
– The honorable member himself was once in favour of nationalization.
– That is one of those statements that come very glibly from the honorable member; I never believed in this sort of nationalization. Truly every honorable member opposite regards himself as a financial genius, who can conduct banks or any other class of business. The measure proposes to give power to take over any other bank or banks, to increase the capital of the Bank, to insure the priority of the Bank over other corporations, and to clothe it with privileges which are possessed by no other institution of the kind, and which, in their very essence, put all competitors at a disadvantage.
– It is the same in the case of the Bank of England.
– When the honorable member speaks of the Bank of England he ought to speak of it as a whole - take it as a balanced institution, in its resources and management, and then his interjection might be logical. My objection is to giving these great powers to one man away from the advice and control of any directorate whatever. The Bill further provides for the opening of savings banks oversea, and for clothing the Bank with the power to deal with trust funds. The point is, that we are proposing to give the Bank more capital and further financial resources; and, while I have no quarrel with that proposal, I should like to know what is to be done with regard to the £9,000,000 of extra debentures. Are they to be floated, or is the £10,000,000 still to be a reserve?
– They will not be called up unless they are necessary.
– Has the Prime Minister any idea whether that will be necessary ?
– It may be. The Bill gives the Governor no power of coercion.
– What does the Prime Minister mean? I am asking whether the debentures are to be put on the market and used, for instance, in the purchase of some other bank. Has the Prime Minister any object in Ks mind in asking for the power to issue these debentures? The right honorable gentleman tells us that at present he does not require this money; and, therefore, it is difficult to see why he should desire the capital to be increased. All these are questions which ought to have been answered when the Bill was introduced. It is obvious, so far as the Bill shows, that the Government have no great national purpose in view; and yet it is proposed to give the Bank power to enter into competition with the banks outside.
– Is that worrying you?
– The banks worry a good many honorable members opposite more than they worry me.
– They worry a lot of the struggling settlers, too!
– Has this Bank ever helped any struggling settlers?
– I am glad to know that, but it is strange that we do not get this information from the Government, and have to wring it out cf their followers.
– I must ask honorable members to cease interjecting.
– The Prime Minister tells us that he has in view no bank that it is desired to purchase; and it seems to me that the only end in view is to intensify the competition already set up with the private banking institutions of Australia. That is not necessarily the function of a National bank. There is a clear line of demarcation always to be drawn between a National bank doing national business, and private institutions which are assisting the industrial enterprises of the country. There is plenty of national work for a National bank without competing with private banks.
The late Government, some time ago, arranged with the Premiers of the States to draw that line of demarcation, making it a sharp one, with the idea of the big banking transactions with the States being undertaken by the Bank, and the State authorities being given a voice in the direction and management. If the present Government would take a similar course there would be no necessity to go into competition with the private institutions. On this point,’ I should like to hear the honorable member for Balaclava, who, as an ex-Premier of Victoria, has all the figures at his fingers’ ends. There are, we know, scores of millions of pounds of legitimate national banking business to be done which is now done by private banks. This could be given over to the Commonwealth Bank under a national directorate, which would enable the Commonwealth Government to work in association with the States, leaving the private banks to do their own work.
– The honorable member for Darwin proposed that that should be done, and honorable members opposite refused to agree.
– If the honorable member for Darwin did make such a proposal he was “ booted out,” as every man is who makes a sensible suggestion amongst our friends opposite. This Parliament is being ignored and treated very cavalierly in connexion with the Bank, which every day does things that other corporations are not permitted to do. Bail ways Commissioners, for example, who have infinitely greater functions than has the Manager of the Bank, cannot spend £100,000 without consulting Parliament. If they desire to build a cockspur railway line, to cost £30,000, the project has to bo inquired into by a Public Works Committee.
– How much Government money does the Governor of the Bank spend without coining to Parliament? Not a “bob “ !
– The Parliament is responsible. The Governor of the Bank never has to come to Parliament, and he has to-day nearly £10,000,000 of liabilities.
– How many millions of liabilities have the Railways Commissioners?
– I wish honorable members would stop their interjections, all of which cannot brush away the fact that there is no Government officer in Australia with anything like the power of this Bank Governor - that there is no bonk manager in the world so untrammelled. I am not asking that there should bo any curtailment of the resources of the Bank; indeed, I should like to see those resources increased, and the Bank given control of the note issue, which would then have a chance of better regulation than it has in the hands of the Treasurer. That, 1 may say, is only my own opinion, and some of my colleagues differ from me. There can be no doubt, I think, that the note issue would be safer in the control of a bank properly directed and controlled than it can be as it is at present, under the control of the Treasurer.
Let us have proper management first of all - that is the keynote. There is a way offered to conciliation and co-operation with the States, and so carrying out the fundamental idea of Federation. The Prime Minister, however, always seems to take the line of friction rather than the line of harmony and association. Why should the States not bring their business to the Commonwealth Bank, and have some say in the control of the large operations which affect them so profoundly ? Additional support is given to this idea by the statement of the Prime Minister that the £18,000,000 is to be paid to the States through the Commonwealth Bank. In all large financial institutions there ought to be a properlyconstituted directorate, which would not limit one iota the power of the Governor for usefulness, but rather multiply it many times over. It would, however, preserve some semblance of our democratic institutions in connexion with the most vital function of all Governments, namely, the financing of the country.
.- I should have thought that some honorable member on the Treasury bench would see fit to reply to the very forcible and telling criticism of the Leader of the Opposition. But apparently it is not the desire of honorable gentlemen opposite to support at this stage the measure which their leaders have brought in. I rise to oppose the passage of the Bill, and I have not the slightest hesitation in indorsing unreservedly the argument used by the Leader of the Opposition, namely, that it ought to be the duty of the party for which he speaks to oppose the extension of this institution until its two chief defects, according to our judgment, are removed. Those two defects have been enunciated by him, firstly, the Savings Bank features which brought the authorities of the Commonwealth and States into violent collision, and, secondly, the absence of State partnership in the control and profits of the institution. It does appear to me that the Bill is an admission that the Bank which was founded two and a quarter years ago has failed, or, to be more just, has not succeeded in fulfilling the purposes of its creators. The Leader of the Opposition has drawn attention to the nature of its failure. After two and a quarter years of operation, there ought to be sufficient experience and funds under the control of the Governor to permit him to co-operate with the Government, even without control of the note issue, to help us over any troublous financial crisis. The Governor of the Bank has done nothing. I do not blame him one bit, but surely we are sound and above party when we say that you cannot put your finger on a solitary substantial act that the Governor has done to relieve the tension of the banking and business community at this stage.
– Do you know all he has done ?
– No: but I am judging by the indications in financial circles what the bank has done. It is not the fault of the Governor that he is unable to produce some cure; he possesses neither the power nor the money to do so. The £9,000,000 odd which he controls according to his last balance-sheet issued in September, half in the Savings Bank institutions and half in the ordinary branches of the bank, is all at call. And the Leader of the Government knows full well that, in normal times, you must keep a certain amount of till-money, which must be vastly increased if you would be safe in abnormal times. In addition to the till-money, you must keep your second line of reserve funds, and when you have done that, a vast percentage of your money is locked up. You can only deal with the comparatively small balance at a time of crisis. Hence it is that this Bank must have one or two sources of supply if it is to be useful, as the Bank of England is useful, in times of crisis. It must have either control of the note issue or control of a capital issue. And it is necessary that both these things should be fully considered by the Government, and adequate provision made, if the Bank is to act as we desire it to do in time of emergency. Notwithstanding the manifesto issued by its creators, the Bank has been abortive so far as concerns helping the financial institutions and the business and governmental powers of Australia at the present time. I desire to say plainly that I hope honorable members will not endeavour to class me as an opponent of a National bank.
– I am glad to hear that there is some good feature in you.
– The honorable member’s compliments are distributed all over the chamber, and, consequently, they become valueless. My trouble is not their quality, but their incessancy. I was about to say that before the Commonwealth was established, and many young politicians in Victoria, as in other States, were advocating the foundation of the Union, I dwelt often in my speeches on the advantages which a truly National bank would confer upon the Commonwealth and the States if they were properly linked in union. I need not dwell on them at this stage, because I think members on both sides are agreed that there are many powers that that bank could discharge to the common advantages of all forces - municipal, State, and Federal.
– What do you suggest?
– I desire, before I conclude my remarks, to advocate an alteration which, I hope, will induce some members of the Government party to reconsider the position, and to admit for a moment that the final word to be said about this Bank was not the statement made when the institution was launched by the Act of 1912.
– Nobody said that it was.
– I think that if the honorable member win read the debates that took place whenever the representatives of the Commonwealth and States met to debate this question, he will see that the invariable attitude which the gentleman at present presiding over the destinies of the Government took up was that the constitution of the Bank could not be altered. When we talked about partnership in profit and control to the present Prime Minister, the right honorable gentleman ridiculed the suggestion at more than one Conference of Premiers. I venture to say that, even after the Act was passed, had there been a decent spirit of conciliation shown by the party then in control of the Commonwealth, the States could at that time have been easily induced to come into partnership, with advantage to the directorship, to which I referred, and the risks of profit and loss. I was about to say that the cardinal blunder appears to have been that the Commonwealth set out upon this enterprise without capital, because as this Bill itself admits a capital of £1,000,000 is wholly insufficient for a big national bank to do business with in six capital cities and other subordinate cities in Australia.
– That is not capital, but an obligation.
– It is an obligation to pay, and the debentures are indorsed by the Government. It was foreseen that even if the debentures were issued they would be an insufficient capital for the requirements of even the smallest State in the nation if the business of the Bank was to become general. In consequence, the Governor, with the consent and approval of the then Government, said, “ We must get money, and an easy means of getting it was to endeavour to secure the existing Savings Bank deposits of the States. That at once drove into irreconcilable conflict with the Commonwealth the six Governments of the States, and that conflict occurred irrespective of party, as the right honorable the Prime Minister will well remember. When the Bill was before us originally, a Conference of State Treasurers and Premiers, hurriedly summoned by Mr. McGowan, the then Premier of New South Wales, met in Sydney to consider the effect of Part 5 of the Bill on the existing institutions of the States, and the whole of the six Governments - two Labour and four Liberal - joined in a memorial to the right honorable gentleman who is now, and was then, Prime Minister, asking him to modify his proposals, and to consult with the States before their institutions were attacked in that way. The only courtesy which the Prime Minister paid to that memorial was to read it in the House, and to throw it into the waste-paper basket, and we have never been able to get into effective consultation with the Federal authorities until the present Leader of the Opposition met us in March last.
– Did not the Prime Minister meet the Premiers ?
– Yes; but I will show how utterly unsatisfactory the attitude of the Commonwealth to the States was. My point is that the States never had a consultation with the Federal authorities on the vital points of this issue until we were met in March last by the then Prime Minister.
– I attended your Conferences and answered every question put to me.
– The honorable gentleman answered the questions in characteristic fashion, if he will permit me to say so without affront. He will remember the soft answer that turneth away wrath, which he gave to the representatives of the six Governments when he was asked for a partnership in the Bank; and when the Premiers would not consent to take the risks of loss and the possibilities of profit without some share in the government; the right honorable gentleman said “ There can be no partnership in the government of the Bank.” No real partnership was possible, unless it was in the control, as well as in the profits and risks of the institution.
– The real trouble was that the chairman would be a Federal appointee, and, in consequence, there would be Commonwealth control of the Bank.
– I do not think that was the trouble. I am now taking a somewhat critical course, but I desire to state later on what I should suggest. So far I have been associated only with the State end of this business. But I have endeavoured also to study the Federal end, and to arrive at some arrangement, irrespective of party, that will serve the people of Australia and its component States.
– Is the honorable gentleman sure of his facts when he states that I made no suggestion of partnership both in profits and in management?
– I am sure of my facts. When I saw a statement that had been made by the right honorable gentleman during the recent election, that he had at the Conference offered the States a partnership in the control and profits, I looked up the report of the proceedings at the Conference, and found that the right honorable gentleman was in error. I know that it is very easy for an honorable member who has been leading the strenuous life, as the Prime Minister has been doing during the last few years, to forget facts, but I have refreshed my mind by reference to the reports only a month or two ago. I know that I, and, I think, Mr. Holman, Mr. Denham, and Mr. Barnes, of Queensland, adopted the same attitude in standing out for this partnership in control and in profits, but all our efforts merely led up the road to futility, and that portion of the Conference was absolutely fruitless. This Bill comes to us as a measure of second thought. It is clear that the present Government, while they may claim some measure of success for the Bank with its limited powers and possibilities, now desire Parliament to give the institution a wider life and a wider scope. This Bill may be called an “ extension Bill,” and the Leader of the Opposition was surely right in saying that the measure should be something more than that. It should be a reconstruction Bill.
– Is the Bank not like the Bank of England, in that it has had to fight for its life ?
– A comparison of this * bank with the Bank of England is somewhat impertinent. The Bank of England is not a governmental institution.
– But the Bank of England had to make a small beginning, and it had to fight for its life against the same sort of opposition.
– So have I, and other orphans, had to fight for our lives. So has the tame tiger in our Zoo; the tiger is now tame, but, at one time, it had to fight for its existence. However, I am not fighting the Commonwealth Bank, but am endeavouring to draw attention to the fact that, after some years of close attention to the governmental side of the problem, I believe that a giant blunder has been committed. I believe that it is not too late to retrieve the blunder, and this is a stage, created by the very act of the Government, as this is a Bill which seeks to alter the constitution and powers of the Bank, when we can ask “Does the Bill strike at basic principles, and does it insure the future of the Bank?” I say that it does not, but I am one of those who is willing to make it so, if the Government will allow us to do so by seeing the institution in the light in which we are endeavouring to show it. This Bank ought not to be a party institution. The Government ought to be able to lift it completely out of the ruck of party, and, by fair concessions, and a consideration of the views which hitherto ha.ve been neglected, make it something better than a party bank. Let us look at the attitude which the right honorable the Prime Minister took. I ask him to place himself in the position of a State Treasurer, perhaps the Treasurer of a State Labour Government. There were State institutions holding in the aggregate some £70,000,000 of money - all of it the people’s money, and deposited in small amounts. The opera tions of some of these institutions stretched back over three-quarters of a century. The bank in the mother State of New South Wales has a history of something like eighty years; the bank in Victoria, fifty or sixty years. During all that time the Savings Banks have been gathering up the people’s money, being a common medium of transfer to those who needed it most, and with one uninterrupted career of success to both the Governments and the depositors. The money they covered was used, as honorable members well know, to serve great social purposes - in Western Australia, for the extension of land development; in Victoria, for the reduction of interest rates to farmers through a credit foncier system, and in the purchase of homes by workers and shopkeepers on very liberal terms, and we put an equitable condition into the money market which prevented the small borrower being raked at any time by the somewhat rapacious methods of the money lenders. These institutions in general, also lent this money to the Governments of Australia before the Commonwealth came into existence. Out of about £22,000,000 in the Victorian Savings Banks, over £10,000,000 have been lent to the Government by authority of Parliament, for the purpose of building railways, for water propositions, land settlement, and other reproductive schemes. For the past three or four years every Government in Australia had been leaning heavily on the trustees or governors of Savings Banks for help for their local loans, and in support of their loans overseas, and they felt that this step on the part of the Commonwealth Government not only took from them the prestige - which, of course, is not very much to consider - of running these institutions, but that it also rendered extremely difficult and doubtful their future financial position. The States were trying to develop the commercial enterprises of Australia, and to help forward the growth of population, and were doing in detail the same work that the National Government were undertaking; and they felt that the National Government were dragging them to their knees and weakening their chances of a successful coritinuai.ee of those endeavours. When the Act waa passed, and the Commonwealth Government were inconsiderate enough to say that their first business would be to take away from the States their Savings Bank branches the States had either to surrender the business of these branches to the new competitor which the Parliament of Australia had brought into existence or fight for the existence of their own institutions. I ask any honorable member what he would have done in the circumstances.
– The honorable member is full of fight ; his appearance shows it ; his record is full of fight; but less pugnacious gentlemen in both parties in the States said, ‘ ‘ We have a solemn responsibility on us to run these concerns and find money for them, and now that their existence is threatened, we must fight for their maintenance and even for their extension.”
– What were the terms on which the Commonwealth offered to take over the Savings Banks?
– The offer of the Commonwealth to the States was, “ Come in and be swallowed; we are the lion; please be the lamb.”
– Commonwealth control and Commonwealth security are the best.
– I do not deny it; that is not the point at issue. The offer of the Prime Minister was not one which recommended it to any of the Governments of Australia. In many ways the result of the attitude of the States has been happy for the State Savings Banks. If time permits later on, I shall draw attention to some features of the comparative success of these institutions which are fighting against the Commonwealth Bank. I know that the answer may appropriately come from the Prime Minister that the Commonwealth Bankhas not exhausted its resources, and that it has not lifted the interest rate, nor said that it will give 3 per cent. for any £500 deposited.
– Is it fair to say that the Commonwealth Bank has been fighting the State Savings Banks?
– The first step the Commonwealth took was to kick the Victorian Savings Bank branchesout of the postoffices, and the second step was to do the same thing in Queensland. This action, however, did not affect the Victorian Savings Bank, because when the position was analyzed a startling fact was disclosed.
The State Savings Bank had seventy branches of its own, and five times seventy post-office agencies; but before it was kicked out it was only receiving 7½ per cent. of its receipts from the multitude of post-office agencies. Therefore, when it was given notice to leave, it realized that, as a result, it might only lose7½ per cent. of its takings.
– That step did not show that the Commonwealth was fighting the States.
– The Government did their little best to fight the States. They said to the States, “You cannot do business any longer in the places where you have been doing business lor fifty or sixty years, becausethe Commonwealth is now going to put up its own brass plate.” The States realized the inevitability of the position . They acknowledged that it was within the power of the Commonwealth to dismiss them from the tenancy of the post-offices, and they set to work to get other branches.
– But you cannot call th at fighting.
– I do not suppose that the Commonwealth fought their best, because it was theoreticallypossible for the interest rate to be raised to 3¼ or even 4 per cent., while still keeping a margin of profit after providing for the cost of management; but the Commonwealth Savings Bank has £5,000,000, the bulk of which, under other circumstances, if not the whole of it, would have gone to the State Savings Banks cash boxes. That is not the worst of the position. The Government Savings Banks all the world over trade on the narrowest margins of profit. They do not seek to give dividends to shareholders. American, British, and Australian institutions all keep the cost of management as low as possible, and pay as high a rate as possible to their depositors. In Victoria the cost of management is not 10s. per cent., and 3s. or 4s. above that is the total margin for risks of every kind on an institution that has over £20,000,000 in hand. In other words, the Victorian Savings Bank recognises the depositors as shareholders, and, without bleeding the borrowers, it practically transfers as much as possible of the receipts from borrowers into the hands of the lenders by keeping the charges low. These institutions effect a useful and substantial social service, and should not have been attacked. They are the most highly socialistic institutions in Australia, and the most successful of all the institutions with which I arn acquainted. In good and bad times alike, before the discovery of gold and afterwards, and in those alternating periods of prosperity and depression that every part of Australia has known, especially in the south-east corner of the continent, the State Savings Banks have stood right up, and the most that has had to be done for them was when, during the 1893 crisis, the Government of Victoria stepped in and said, “ We guarantee the depositors and debenture holders of this institution.” But for fifty years, in many cases, the depositors and debenture holders did not have that guarantee. There is room in Australia for a great national bank which will do service for the nation, and which may, in a time of crisis, have the opportunity of transferring, either in specie or notes, enough money to stop runs and restore credit and keep currency and trade going normally. If we lay down the foundations of a National bank which will grow with the strength of the nation, we are doing the right thing; but when, as part of that project, we attack an institution that lias been doing most essential service for the people, it is a cardinal blunder that must stand to the eternal condemnation - not honour - of the men responsible for the step. Robbery, daylight robbery, instead of the provision of capital, has been the result of that method of doing business. The States have been driven to financial expedients which have not been creditable to the reputation of Australia. In some cases they have been unable to get the money for a large number of public works without going cap in hand too often to the London lender. Such a state of affairs should be altered. There is an easy way out of the difficulty. If we could consent to look at the matter without any consideration for the dignities of parties or persons, I believe that the position could be altered. I would to God I could strike a light in the mind of the Leader of the Government, and illuminate it on this question, because whenever I have talked it over with him he has always had in his mind the conviction that a National bank, unless it had Savings Bank business, would bo to that extent imperfect. Surely that is nonsense. I say that with all respect to him and of him. Surely when we find other national institutions, although governed by separate parts of the nation, already achieving that business, if it is our desire to serve the nation, and not a party, we can disregard theories of that kind, and say, “ Let us leave this necessarily restricted area for the time being to the forces that are discharging the functions properly, and take on other business where nobody else is doing a national service.” That is what the right honorable gentleman and his colleagues should do. If we are to look at the main facts of this matter, and improve the situation, we must consider two great schemes - one produced on the other side of the House, and one partly produced on this side, which can be blended, if blending is necessary. The honorable member for Darwin is responsible for a scheme ordered by this House to be printed in 1908- It is practically the authorized Labour party’s scheme for the Commonwealth Bank and State debts questions. I believe it represents the Brisbane Conference resolutions in definite shape. It stands to the great credit of the honorable member that he has been able, in a party whose members necessarily do not claim to have expert banking knowledge, to have had adopted by that party, and kept for five or six years as its policy, a proposition with effects so far-reaching and daring, and so thoroughly in accord in its design and operation. Its essential portion is a partnership between the Governments of Australia. It is a shareholding proposition, true to the term and type of its author, without boodle. He proposed a capital at the time - he would probably enlarge it now- of £1,200,000, made up of 12,000 shares of £100 each, 6,000 of which were to be allocated automatically to the Commonwealth, and the other 6,000 to be available for the States, with the one limitation that no State should own more than 1,000. Equality of share-holding was possible so long as there were six States, and therefore still is. There was to be a Board of Management for the bank, consisting of the Comptroller-General, who, changing terms, may be the Governor of the bank to-day, representing the Commonwealth, and one representative from each of Ihe subscribing States. Why did not the right honorable gentleman, when he passed the Bill in 1912, take, as he was in honour bound to take, a, scheme which his party had already authoritatively in- dorsed? This was not done, although I believed at the time that the honorable member for Darwin, with the persuasive unction of which he is the conspicuous possessor, would have succeeded in getting it done.
– The States would not accept it.
– The honorable member is in error, because I can assure him, as one actively identified with all the States in this matter at the time, that, while some timid States - let us call them the smaller States - did not want to embark upon the risk of loss, the States as a whole were iu favour of it, but would not consent to take all the risk of loss or profit without a voice in the control, as the Prime Minister then suggested. That scheme is the same, although expressed in a different way, as the one produced by the Leader of the Opposition in the recent contest, and I make bold to say it would have found almost unanimous support at the Melbourne Conference, where we worked out the basis of the other branches of this matter in March of this year. If honorable members are interested in this subject, they will find from the records of the Conference what a fair proposition we had worked out for the Commonwealth. We made a condition - the only way we could see fair play for the States - that there - should be a surrender by the Commonwealth to the States of savings bank operations; but something far more than a quid PrO quo was to be provided by the States, which were to enter into partnership with the Commonwealth. We said, “ We are prepared to bring to you a vast business which you could never obtain while fighting us, and the turnover of which would make you at once the biggest bank in the Commonwealth. We offer you, in addition, to use all -our force with those great but subordinate bodies throughout Australia, such as Harbor Trusts, Boards of Work, municipal councils, and fire brigades, which have a . turnover in the mass very little less than the States themselves. We shall bring all that business into your bank, although we cannot bring it in immediately, because of existing arrangements here and in London, but we promise you a certain amount down.” With regard to the nearly £5,000,000 of savings bank money that the Commonwealth Bank had collected, we said, “You keep that, and without the issue of any debentures it will be at least the nucleus of a great capital for you. We, as State institutions, without having received a penny of the money, will consent to pay interest upon it, repay it, and manage it for you.” That money being left with the Commonwealth Bank for a definite term of ten or twenty years, and practically not at call, would have constituted to all intents and purposes a substantial capital for the bank. At the same time we would have brought to the Bank all the other business that we could command. Was not that a proposition that might well have been accepted ?
– If you had thought more of the people than of your State rights, you would have done it without imposing any conditions.
– Judging from the interjections that I have heard from the honorable member since I have been here, I very much doubt whether he knows a great deal of what he is speaking about. I do not care twopence for State rights, and never have. I believe that sensible men in both Parliaments will endeavour to reconcile their differences, and not bump one another at enormous cost and risk to the people whose servants they are. As the Leader of the Opposition will admit, I frequently joined in urging and helping all kinds of Commonwealth enterprises in order to bring about a feeling of concord between the bodies governing tlie affairs of Australia. I am not a State rights man, never have been, and never will be, and the honorable member for Flinders, who sits near me, and held the same State office as I did, never was one either. Time after time he has fought for the legitimate extension of national powers and enterprises when he has found them to be good for the people. There is a feeling in this House that the Governor of the Bank is, as it were, sacrosanct. I have no feeling of that kind. I have met him. and found him very human. I do not think he is qualified for the large powers which the Government that appointed him gave him. He is an ideal technical banker, and came from technical banking into a wider area, the half of which he had never surveyed and never imagined. He knows nothing about the politics of the bank in its relation to the sentiments of the people and the governmental institutions of Australia, as he has repeatedly shown in the fruitless negotiations which he instituted to acquire and swallow the State Savings Banks. I have no hesitation, and never shall have, in criticising the governor or controllergeneral or directorate of a hank when I think they are driven by false considerations to a policy of wrong actions. I believe Mr. Miller has on more than one occasion made gross blunders that have to a large extent prevented the establishment of that feeling of reconciliation which some of us hoped to promote. Let us take illustrations. The Bill empowers the Governor to bank in England. But he is banking there now, and was banking there in 1913. I had occasion to ask, for the Government of Victoria, through its Agent-General, that a circular which the Government had issued in London, describing the bank as the State Bank of Australia, might be cancelled. There was .in that description the affectation or pretence that the bank was the institution of the State whose borrowings were so well known in the Old Country.
– The Commonwealth is referred to as a State.
– All nations and empires are in a sense States; but why was not the bank described as the Commonwealth Bank ?
– The occurrence took place while my predecessor was in office, and the description was withdrawn immediately attention was drawn to it.
– The error was admitted immediately, but only when the Government of Victoria had drawn attention to it. The Governor is banking in London, although he has no statutory authority to do so.
– Yes, he has.
– Then, why is it necessary to give him authority in the Bill ?
– He has no power to do it.
– But he does do it. He is like the man who was told he could not be sick on the bridge, but was sick nevertheless. I have here figures showing the increases of the accounts in the Commonwealth Savings Bank since it opened. While in Victoria the accounts increased in a given quarter by 2,993, in London they increased by only 68. The figures are positively laughable. In the biggest city in the world, where there is a population of 7,000,000 persons, the Commonwealth is prepared to take the savings of the British workman, and to use them for Australian purposes, and yet during the quarter ended June, 1913, there were only 85 new accounts opened; in the next quarter, 97; and in the next quarter, 68. The business would be small for the most remote town in the Mallee.
– And this, notwithstanding the fact that a higher rate of interest is offered.
– Yes. I agree with the right honorable gentleman that it is not ethically right, either in times of peace or in times of war, for the Commonwealth to go to London and say, “ We want the savings of the people of England.” The honorable member who propounded the scheme never proposed that we should search countries across the seas for the convenience and advantage of the people of this State. In Victoria we have gone so far in our sense of localization as to provide that not only is our Savings Bank to confine the raising of money to Victorian depositors, but also that the money must he spent within our borders. Had all the States acted in the same way, we should not have had the New South Wales Treasurer going to the Savings Bank of Adelaide to take up debentures. He could not get money from Victoria, because the Victorian Savings Banks Commissioners are not allowed to lend out of the State.
– Yet the honorable member calls himself an Australian !
– I am more Australian than is the Prime Minister. I was born here, and I am going to die here. Everything I ever got or had is Australian.
– What the honorable member said previously was very smallminded.
– My honorable friend from New South Wales will never understand Victoria. We read in the Scriptures of the wise men coming from the east. The honorable member represents East Sydnev, but apparently things have changed since biblical times; or he is called West to mark an exception.
– I have never run away from a constituency.
– Nor have I. The principle should apply in regard to the Com- monwealth Savings Bank that applies in regard to the Savings Bank of Victoria. The institution should be for the benefit of our own people, and its money should be raised in Australia and spent in Australia for Australian purposes. I should hesitate to go to the people of any other country and ask them to lend us their money in dribs and drabs. The savings banks of the Old World do good business for the people in England. They are the soundest institutions in the world. We do not need to enter into competition with them, and by doing so will put ourselves in a wrong light before our parents and kinsfolk in the Old World. It may be that the Governor of the Bank can claim that he has done what he has done with the full authority of the present Administration; but, nevertheless, it is wrong. I hope that when new powers are given to him we shall correct matters. We are proposing to allow the Governor to acquire State institutions - small savings banks. But that has already been done. Some of the Tasmanian institutions have been acquired, and I think some of the Western Australian institutions, without statutory authority. You beget liability to blundering and the exceeding of power when you put a Kaiser in charge of the Bank. So long as Mr. Miller has his present powers, he can flout Parliament.
– lie told us that he did not agree with the opinion of the Attorney-General.
– He is able to say to a Treasurer or to a group of Ministers, “ Leave me alone. Parliament has seated me on a throne of authority, and I shall not answer the questions of prying members or of the press.”
– It is a good thing that he could not he interfered with during the past twelve months.
– What difference would it have made beyond preventing the Broken Hill people from getting their money? No member of Parliament would wish to interfere with questions of overdraft, advances, discounts, and exchanges. But when the Governor of the Bank makes a departure involving a new principle in the development of our institutions, we have a right to speak. It was pointed out by the honorable member for Eden-
Monaro that this institution was promised to the people for the making of small advances to farmers and others, to enable them to do the settlement and developmental work which means so much to both country and town. Instead of making such advances the Governor of the Bank says, when a big corporation comes along and asks it to underwrite a certain quantity of debentures, taking all the risks and accepting a commission by way of compensation, “ Certainly. Let the big corporations come along and I will do their underwriting.”
– Does the honorable member say that the Bank took up these debentures?
– It underwrote them for a compensating commission.
– Does the honorable member object to that?
– If there be an overflowing cash-box at the Bank, and the small borrowers have what they want, and if there be a wholesome business which he has the means of accomplishing, by all means let him bring the profits to the Treasury of Australia. But if he is not able to meet the demands for money of the. small settlers, I hold that he should turn a deaf ear to the tempting propositions of large mining corporations.
– The question is: “Is he permitted to underwrite and to make a profit for the Bank?
– The Prime Minister surely recognises the responsibilities of underwriting. It is not merely a transaction by a broker, who is the go-between as between the borrower and the lender.
– Mr. Miller underwrote it, and raised the money in Australia, and lie has been hounded for having done so ever since.
– I am not hounding him at all. I am merely saying that that is a function which should be secondary to the primary functions of the Bank. I admit that this is an arguable part of the proposition. There may be some who will say, “ Come one, come all, this Bank will do anything that is profitable.” But I think that a National bank should be treated as the great railway enterprises of the States are treated. In other words, it should be used primarily for the development of the country, and to help our people.
– It should largely advance money on land?
– Not necessarily.
– Then how is it going to help the farmers?
– If the men who launched this Bill had their way, the competition between the Savings Bank institutions would grow apace, and it is plain that before long those institutions would then go out of business. There is only one other argument that I would like to put before sitting down. It relates to the proposal to increase the capital of the bank from £1,000,000 to £10,000,000, the object being, according to the declaration of the clauses, that we should buy up certain banking institutions as the opportunity occurs. There are two weaknesses in that, proposal, apart from those -which have been alluded to. One is that we are invited to buy a “ pig in a poke “ so far as the nation is concerned. Whatever institutions were purchased this Parliament would have no voice in their purchase. It would not know whether their liabilities were correctly stated or whether their assets were correctly valued and verified. There are two ways out of that difficulty, and I think it should be left to the Ministry to take one of them.
– Cannot we inquire into those matters?
– How can we, seeing that the matter will rest with the Governor of the Commonwealth Bank and the Treasurer ?
– Surely we could direct the Treasurer?
– Yes, if the honorable member and his party are prepared to back up their direction by defeating the Ministry. The weakness of the scheme is that the Governor of the Bank and the Treasurer might agree to purchase an institution, say the A. B. Company, with, perhaps, £9,000,000 worth of assets and £9,000,000 worth of liabilities, and this Parliament, which would have to back every debenture, would know nothing whatever about the value of those assets. It would have no voice in the ratification of the conditional agreement. If the nation were to buy a tramway system or a great sugar enterprise, the only way in which it could be successfully done would be by the Government taking upon themselves the responsibility of drawing a conditional agreement with the seller, which should be liable to ratification by the shareholders or proprietors on the one side, and by Parliament and the people on the other. If tho State purchased the tramways, that is the only way in which it could be done. Everybody desires to see that misjudgment does not lead us into a loss of millions sterling. There is still another aspect, and apparently the Prime Minister has not thought of it. It may be said at once that a financial corporation would not consent to have, at risk of rejection, the whole of its affairs laid bare on the table of the House, because that might mean ruin if rejection followed. I admit that that is so, although we saw the same sort of thing done in connexion with two great insurance companies in Australia. The whole of the affairs of those companies were laid upon the table, they were debated in the press before the amalgamation took place, and in one case rejection, and in the other acceptance, resulted. But eventually no injury was done to either of these institutions. At the same time, we must recollect that financial institutions are delicate things, which might easily be killed or injured by such methods. Surely tho Government will not ask this Parliament to give unfettered control in matters of this kind to the Governor of the Commonwealth Bank or to the Treasurer without certification by the nation. Surely it should be necessary that certain valuators should be appointed to privately value and privately certify either to the Government or to Parliament, and it ought also to be necessary for the AuditorGeneral to report upon the securities which are intangible. The proposal of the Government, as the Leader of the Opposition has pointed out, may easily mean on increase of £20,000,000 or £30,000,000 in the purchasing power of the bank. If it be true that this institution, without any capital, has already developed a purchasing power of £9,000,000 or £10,000,000, how strong will its deposits and till money bo when its capital is £10,000,000? Obviously £30,000,000 or £40,000,000 might be the measure of its deposits and its capital, and it might embark on huge purchases of the kind projected. I cannot think that the Governor of the Bank can purchase an organization whose operations cover Australia, unless its purchase runs into double or treble £10,000,000. He might purchase a Bank which does business in one or two States, but that would not satisfy the whole of the States. He would naturally look to an organization which will cover the Commonwealth, and spread the advantages of its operations over all parts of Australia. The cost of that purchase will be a great deal more than is contemplated in this Bill. All things considered - and I am grateful to honorable members for the patient hearing which they have accorded me at a lime when I know they are anxious to catch their trains - I would recommend to the Prime Minister the reconsideration of two important phases in connexion with this Bank.
– Before the honorable member closes, will he refresh his memory by looking at the marked portions of the report of the Premiers’ Conference of 1912 ? He will then see that I am not in error, and that he himself is.
Mr.WATT. - This is the portion of the right honorable gentleman’s speech to which he has directed my attention -
I shall say this, however, that, as Treasurer of the Commonwealth, I shall be happy indeed, if thisscheme is acceptable to yon and to us, and is approved by the Parliaments of the States and the Commonwealth, to meet the Treasurers of the States to discuss matters of financial importance to both of us, so that we could gel a lead as regards any amendment of the Act from time to time, or receive suggestions for the better management of the Bank in the interests of the people generally.
– Will the honorable member be good enough now to read the marked passage on page 73 of that report?
– Before doing so, let me pause, because it is not very easy to say whether or not this portion of the report has been unwittingly torn from its context. I might require to read the whole of the report, in order to show the definite refusals of partnership which are contained in it.
– Then, in view of the hour, I ask the honorable member not to make the quotation now, but to do so at a later stage.
– Very well; at a later stage I undertake to prove my case with regard to the actual partnership offered and refused. It was not the kind of partnership of which I was speaking when the right honorable gentleman inter rupted me. I do not desire to do him an injustice. I know that his mind runs along perfectly, rigid lines with regard to this Bank, and my own has not changed very much with respect to it I have a fairly good memory, and it has been recently refreshed. My proposition for partnership was one for control of the government of this institution, and not for periodic consultations, such as we now undertake, as between the Commonwealth and the States, in regard to theories of the Bank and suggestions for its better conduct. I shall, however, discuss that question at a more opportune time. I was about to say, when interrupted, that I am not qualified, as a private member, to make any offer to the right honorable gentleman. . But, as this debate proceeds - and I trust it will be carried on from both sides without prejudice or. passion - I am quite sure that the desire will grow to see this second birth of the Commonwealth Bank owned by both the Commonwealth and the States. We cannot ask the States into partnership as long as we declare war against them, and there is still a state of war. We had hopes that, if the late Government were returned with a majority at the last general election, the agreement which is proclaimed as the policy of the Liberal party would be. adopted. As a matter of fact, it was not only a Liberal party proposition. It was adopted just as swiftly and energetically by my honorable friend, the Premier of New South Wales, as it was by any of the other State Premiers. The Government of New South Wales feel the pinch of this competition even more than we do in Victoria, and it will be an act of statesmanship which will redound to their lasting credit, if the Prime Minister and his colleagues are able, before the Bill passes, to put upon it the impress of union and companionship and co-operation with the States. If that be done, we shall be able to build up an institution which will be of lasting service to the people of Australia.
Debate (on motion by Sir William Irvine) adjourned.
Bill returned from the Senate without amendment.
House adjourned at 4.0 p.m.
Cite as: Australia, House of Representatives, Debates, 13 November 1914, viewed 22 October 2017, <http://historichansard.net/hofreps/1914/19141113_reps_6_75/>.