6th Parliament · 1st Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
Mr. STUMM presented petitions from the Gympie RechabitesFriendly Society and the Gympie Temperance Alliance, praying that the decision of the Minister of Defence, that ‘’ dry “ canteens only be allowed in connexion with the Expeditionary Forces, be adhered to.
Motion (by Mr. Fisher), by leave, agreed to -
That to-morrow and on the following Thursday Government business have precedence of general business.
– Is the Prime Minister aware that the Japanese flag has been absent from several recent public functions at which the flagsof the Allies were exhibited?Was this the result of instructions given by, or did it happen with the knowledge of, the Commonwealth Government? We are deeply indebted to the Japanese ships of war for assisting to convoy our troops.
– The honorable member is now going beyond the question.
– I have merely stated a publicly known fact.
– If the honorable member knows what he states to be a fact, there is no need to ask a question aboutit.
– I wish to know whether the neglect to display the Japanese flag with the flags of our other Allies was in accordance with the instructions of the Government?
– If what the honorable member for Parkes speaks of has occurred, it has not been due to any instruction given by the Government, which recognises equally and alike all who are associated with us, and would never wilfully insult any nation.
– I ask the Minister of Trade and Customs if he has seen the statement in both to-day’s newspapers that the Victorian Government has called on its Railways Commissioners to prevent Victorian wheat from going into South Australia, although that wheat has been bought for South Australia in the ordinary course of business?
– I have observed the statement referred to, and have had a minute sent to the Crown Law authorities, asking for an opinion on this action, as well as on the action of the Government of South Australia in prohibiting the export of wheat to Tasmania.
– When does the Minister of Home Affairs propose to lay on the table the amended design for the lay-out of the Federal Capital? Will he do so before the Christmas adjournment, if possible ?
– As soon as I receive the amended plan from Mr. Griffin I shall lay it on the table.
– Has the attention of the Minister of Trade and Customs been drawn to a cablegram published in the nress, which states that the fruit agents in London are approaching the Federal Government in regard to a number of German vessels possessing refrigerating space which are interned in the Old Country! In view of the congestion of produce, will he consider the advisability of communicating with the Imperial authorities to see whether it is possible to send some of these vessels out here?
– I have not seen the cablegram, but as the honorable member has drawn my attention to the matter, I shall look into it, and see if we can do anything. We communicated with the Imperial Government six weeks ago with that very end in view.
– Is the Minister of Trade and Customs aware that the Government of Victoria has abolished the Food Prices Board, and has allowed dealers to charge any price they like for wheat, which is compelling bakers to increase the price of bread?
– I have read that the Victorian Government has taken from the Food Prices Board the power to deal with wheat, flour, bran, and pollard.
– What about sugar ?
– I do not think sugar has been dealt with.
– Has the Minister noticed that the Victorian Government did this after election day?
– Yes. The Victorian Government has the right to do as it pleases in this matter, the Commonwealth being powerless to interfere.
-Has the complaint been made to the Department of Home Affairs by a Canadian Trade Commissioner that an order for timber was given to California without Canada being allowed an opportunity to compete? Has such an order been given, or is it in contemplation ?
– No such order has been given, nor, so far as I can ascertain, has such an order been contemplated. Apparently a rumour of something of the kind is in circulation in America, because some weeks ago an inquiry was made by representatives of the Canadian Government as to whether the Commonwealth had entered into an arrangement for securing American timber, and it was urged that the claims of the timber mills of British Columbia might be considered.
– In answer to a ques tion put by me last week, in reference to negotiations between this Government and that of New Zealand regarding the importation of fodder, the Minister of Trade and Customs stated that correspondence had been passing on the subject between this Government and the Governments of the States. Will the honorable gentleman inform the House what has been the result of that correspondence?
– Over four weeks ago this Government communicated with the Government of each of the States, and I met all of the State Premiers when they assembled in Conference in Melbourne about a month ago. I told them that I understood there was a shortage of fodder, and said that the Government were willing to act for them in getting the New Zealand Government to purchase fodder in New Zealand, so that the middlemen might not take advantage of the position in order to have the New Zealand Government operating in several places at one time. With the exception of Western Australia, the Government of which did not desire to purchase any New Zealand produce at all,not one of the Governments has signified its desire to have any fodder brought in, although it was stated in Victoria that there was a shortage. None of the other Governments has said a word on the subject.
– Will the Minister of Trade and Customs, in view of the congested state of the Australian wool market, take into consideration the advisability of removing the prohibition to the extent of 115,000 bales for America, which quantity represents the requirements of the United States of America in the year before war was declared ?
– No, Mr. Speaker.
– In view of the distress already apparent in this country, I desire to know whether it is a fact, as freely stated, that German prisoners of war, held under the control of the Government, are kept in a state of “ full and plenty,” amounting almost to luxury?
– As the honorable member’s question has a certain amount of satire in it, I ask him to place it on the notice-paper.
– Is the Assistant Minister of Defence aware that the Farmers and Settlers’ Association in the Riverina district has decided to employ Germans in preference to British rural workers ?
– No, I am not aware of it.
– Can the Prime Minister say whether there is any probability of invalid and old-age pensioners obtaining the proposed extra 2s. 6d. a week before Christmas?
– If the honorable memberwill wait until to-morrow night he will ascertain the financial position of the Commonwealth, and will be able to see what can be done.
– Is there any legiti mate reason why the growers of wheat should be placed in a position different from that of the producers of any other commodity, as a result of the fixing of prices ?
– The Commonwealth Parliament has not fixed the price of any commodity.
– Has the Minister of Trade and Customs received from the New South Wales Government the informationhe promised last week as to the supplies of wheat?
– I have not yet received the information, but as soon as I do so, I shall present it to the House.
– Is the Assistant Minister of Home Affairs aware of any special reason for the delay in the departure of the Australian Hospital Ship Kyarra, now in Melbourne,and, if so, does he feel at liberty to disclose it?
– It would not be wise to divulge anything appertaining to such a question.
– The Prime Minister some time ago announced that the banks had offered to exchange with the Commonwealth . £10,000,000 in sovereigns for notes, and I should like to know whether the Commonwealth Bank was one of those banks, and, if so, to what extent it is involved?
-If the honorable member will wait until to-morrow night, he will get a full explanation of the matter.
– Has the Prime Minister yet been able to arrive at an agreement with the State Premiers as to a uniform method of land taxation ? If the Prime Minister has not been able to reach finality, is he hopeful of doing so, seeing that many appeals are withheld awaiting decision ?
– I think that full answers have been given to questions of similar import in another place, and I shall obtain those answers, and lay them on the table. We are anxious to cooperate, but have not yet reached that stage.
– I desire to make a personal explanation arising out of the fierce assault which the honorable member for Richmond made on me in the course of a debate the other day. On page 1121 of Hansard, the honorable member, in the debate on the motion to disagree with your ruling, Mr. Speaker, is reported to have thus quoted me in my absence -
He (Mr. Brenann) said that the honorable member for Flinders might have used all the arguments whichhe intended to use last night, that he might have used the very words which were used in the argument before the Arbitration Court, that he might have quoted word for word the rules of the Australian Workers
– I am concerned only with the sentence in which the honorable member misrepresented me. It was on this that the honorable member for Flinders, who was not in the chamber when I was speaking, interjected that what I had said tended to make a farce of Parliament. Reference to page 1115 of Hansard will show that what I did say was -
There is, however, a very real danger in the course taken by the honorable member for Flinders. He proceeded to dissect the constitution of a certain union, and in doing that he employed almost word for word the arguments used by counsel in the Court.
It appears from that passage that what the honorable member has so vehemently charged me with advocating was the very thing which I said constituted a real danger. It was upon the statement of the honorable member for Richmond that the honorable member for Flinders, who did not hear my speech, interjected that what I suggested would mean making a farce of Parliament.
– On a personal explanation. I desire to say that if the intention of the honorable member for Batman was what he has just stated, it was not the impression he conveyed to me. If he had completed the sentence which he quoted from my speech he would have shown exactly what I did mean to say on that occasion.
– Will the Min ister of Home Affairs lay on the table a return showing the cost of the last general election ?
– I have no objection.
– Will the Minister of Home Affairs state when we may expect to receive the statistical information, usually printed in pamphletform for the information of honorablemembers, regarding the recent Federal, elections ?
– I have already said that I would lay the report on the table.
– Is the PrimeMinister aware that the Premier of New South Wales has announced his intention) of introducing a Bill to cancel the contracts for wheat, and that a deputation) has waited upon him, and pointed out that if the New South Wales Government attempt to cancel the Inter-State contracts they will be exceeding their constitutional powers? Will the PrimeMinister look into the matter and refer it to the Attorney-General?
Mr.FENTON.- Will the Assistant Minister of Defence state whether the Federal Woollen Mills at Geelong are completed ? If not, will he use his best endeavours to have the mills completed as soon as possible so that our surplus wool may be used for manufacture?
– I should like to ask the Prime Minister if he has any knowledge of the visit of certain German prisoners from Rabaul to the JenolanCaves, during which they made themselves objectionable by removing portions of the stalactites, and, upon being remonstrated with by the guides, adopted an attitude which threatened a breach of the peace? Will the Prime Minister cause inquiry to be made, and, if the report is true, will he have those men treated as prisoners of war, and not as gentlemen of leisure?
– I would suggest that until the facts are discovered no reflection should be cast upon any one, enemy subjects or others, because the capitulation was made under certain conditions. However, I will make inquiry into the circumstances stated by the honorable member.
– Has the attention of the Assistant Minister of Defence been called to a letter which appeared in the Herald last week signed by “ Victorian Native,” who was the son of a naturalised German, complaining that he had been dismissed from his occupation as a carrier in the Defence Department? Will the Minister make inquiries,” and inform the House of the reason why that individual was dismissed ?
– I am in possession of the full facts of the case, and if the honorable member will see me privately I shall give him the information he seeks. It would not be wise to make a public statement.
– Will the Prime Minister cause inquiries to be made to ascertain the number of Germans and Austrians who were induced to immigrate into the Commonwealth by the actions of the State Governments during the last few years?
– I shall be glad to get the information.
– Can the Assistant
Minister of Defence state when the cruiser Brisbane is likely to be in commission ?
– Work is to be put in hand at once which will enable that vessel to be launched. The Brisbane will not be in commission for a month or two yet.
Land Policy - Leases, Resumptions : Designs : Expenditure : Administration
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Block 1, upset rental, 2s. 5½d.; rental tendered, 2s. 6d.
Block 2, upset rental,1s. 6d. ; rental tendered,1s. 8d.
Block 3, upset rental,1s. 2d.; rental tendered,1s. 4d.
Total area, 3,101 acres. No other tenders.
In both cases acceptance of S. Miller’s tenders recommended by Director of Commonwealth Lands and Surveys, and approved.
No officer of Lands and Surveys Branch holds any lease of land, although some are renting houses erected by the Commonwealth, and the Director of Commonwealth Lands and Surveys rents a paddock of 60 acres.
Figures relating toareas offered for lease are substantially correct. There are three typographical errors of no importance. The area of acquired lands within Federal Territory is 112,507 acres. Of this area, 43,942 acres have been let on five and ten year terms, with conditions requiring erection of rabbit-netting fences and the extermination of rabbits. Special care was given in designing leases so that small holders might secure suitable areas, but very few lodged a tender.
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister of Home Affairs, upon notice -
What is the total amount of money expended to date on the Federal Capital -
– The answers to the honorable member’s questions are as follow : -
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow: - 1 and 2. No alteration is being made at present.
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
At Port Augusta : - Lewis and Reid, 70,000 yet to be delivered (jarrah) ; Huon Timber Company Limited, 100,000 yet to be delivered (Tasmanian hardwood).
Paintings in Queen’s Hall.
Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
– Are the frames thrown in ?
– Yes; with some exceptions, the frames have been made, and the pictures have been painted, in Australia. Let me add that the best work has been done by Australian artists.
asked the Assistant Minister, representing the Minister of Defence, upon notice -
– The answers to the honorable member’s questions are as follow : -
Treatment of Interned Germans
asked the Prime Minister, upon notice -
Whether he will give a full statement in respect to the treatment of interned Germans and prisoners of war in Australia, especially the Germans who were taken prisoners after the capture of the Emden; and the prisoners, officers, and men taken in New Guinea?
– The answer to the honorable member’s question is -
Allprisoners of war in Australia are treated in accordance with the “ Instructions relative to the Internment and Treatment of Alien Enemies,” of which a copy is laid on the table of the House.
None of the German prisoners from the Emden has come to Australia.
The administrative officials from German New Guinea, who are not prisoners of war, receive sufficient money to meet the living expenses of themselves and their wives and families pending their departure from Australia.
About 150 prisoners in all have arrived in Sydney from New Britain. Some of these are ordinary prisoners of war, and are in the concentration camp at Liverpool. The others are higher civil officials, who were included in the terms of capitulation.
Under the terms of capitulation, it was agreed that the higher officials were to receive three months’ salary, and the paymaster has been making a percentage allowance of this three months’ salary, which is being paid to the officials weekly. Dr. Haber, the ex-Governor, lives in a boarding-house at Potts Point. One prisoner (Dr. Steubel) stopped one night at the Australia Hotel. Six ladies (wives of officials) also stayed there one night.
If a prisoner is an ordinary citizen, he is released on takng the oath of neutrality, and must report to the police daily for the first week, and weekly afterwards. He is not permitted to go to public places of entertainment.
– They have a pretty good thing on.
– It is a fair thing. We must treat them like human beings.
asked the Minister of
Home Affairs, upon notice -
– In view of the competent and experienced officer in charge of Commonwealth railways, it is not considered necessary.
Bill received from the Senate, and (on motion by Mr. Jensen) read a first time.
Bill returned from the Senate without amendment.
Debate resumed from 13th November (vide page 681), on motion by Mr. Fisher -
That this Bill be now read a second time.
.- The Commonwealth Bank has not yet achieved the success’ which its founders hoped for it, and this Bill, I take it, is designed to remedy that state of affairs. It seems to me, however, that the Bill proceeds in an entirely wrong direction, and that, if it becomes law, instead of helping the Bank and improving the financial affairs of Australia, it will tend only to damage them. I propose to put before the House my reasons for this view. During this debate, many comparisons have been made between the Commonwealth Bank and the Bank of England. In my opinion, there is no analogy between the two. They are built on entirely different lines. When the Bank of England was established, in 1694, it was given an absolute monopoly, and that monopoly was maintained for more than a century and a half. Our Bank, on the other hand, was established in competition with all the Associated Banks, and it is not, in the ordinary sense of the term, a true State Bank. It is my desire this afternoon to point out how, in my opinion, the Commonwealth Bank may be developed in such a way as to make it strong and virile and of real assistance to the Commonwealth. At the present time I regard it as being merely an instrument of torture to the commercial community, whereas it could be made a tower of strength to not only the financial institutions and the business world of Australia, but to the Commonwealth as a whole. When the Bank of England was founded it was restricted absolutely in its note issue to the amount of its capital. This bank is in a different position. The Bank of England was not brought into close touch with the Government until about 1781-3. It was not until a good many years later that it became an instrument of the Government, and it is only since 1903 that it has been the centre of all the financial transactions of the Home Government. It will be seen, therefore, that the two institutions are on a wholly different footing. The Bank of England, founded carefully, as it was, and with an Act that was meant to buttress it up in every way, has more than once been landed in difficulties because of State interference. In 1797 it suspended payment, and in 1847, 1857, and again in 1866 it was saved only by the Government suspending the limitation of the Bank Act passed in 1844. Thus the Bank of England has not been that buttress to the affairs of the Old Country that we are generally led to believe it has been. As recently as 1S90 the Bank of France had to come to its rescue with 75,000,000 francs in gold. Again, in 1907, in respouse to a mere telegram, the Bank of France came once more to the help of the Bank of England with 80,000,000 francs in gold. There seems to be a strong inclination on the part of honorable members that this Bank - the Commonwealth Bank - should develop along the very lines which the experience of the Bank of England has shown to be dangerous. It seems to me that we should endeavor to extend it along the lines followed by the Bank of France. It must be remembered that, when a crisis arises, we shall have no Bank of France, as the Bank of England has had, to fall back upon. The only way in which we can make the Commonwealth Bank a safe asset and a real support to the financial transactions of the Commonwealth is to follow the lines on which the Bank of France is moulded. To do that we must have a solid gold reserve. One of the most interesting problems of the financial world to-day is how the Bank of France retains its tremendous gold reserve, and at the same time maintains such a low rate of discount. That is a subject into which the Commonwealth Government would he well advised to make full inquiry. If we could find out the secret whereby the Bank of France can give such low rates of discounts, and at the same time maintain such a solid gold reserve as it does, we should have discovered the innermost secret of banking. The secret is. one that we need to discover in order that we may take this institution of ours away from lines that seem to me to be a menace to the stability of the States. If fostered in ignorance, it may become a menace to the financial integrity of the Commonwealth itself. With your permission, Mr. Speaker, I propose to read one or two statements by good authorities regarding the Bank of France. That institution was established in 1800, on lines somewhat like those of the Commonwealth Bank. Although given a monopoly by the revolutionary Government then in power, the Bank of France was also made a Savings Bank, paying at first 5 per cent, on the savings deposited with it, and afterwards 4 per cent. In 1805 its notes had depreciated from 10 per cent, to 15 per cent., and, in 1808, it abolished its Savings Bank department, and went straight ahead from that time. To my mind, that fact teaches us the first lesson to be learned in connexion with the control of the Commonwealth Bank. Let me now read some excerpts from findings of the National Monetary Commission of the United States of America when dealing with the Bank of France: -
The Bank of France continued its role as a bank of issue in a prudent enough manner; it fortunately continued to be much more a bankers’ bank than a State bank, although it had frequent- relations with the State, and rendered it real service…….
But in this function, which it ought not to fulfil, which it does not fulfil, of entering as a silent partner into industries or of favouring their creation, other institutions are going to take its place.
The Commonwealth “Bank has entered into business of the kind which the Bank of France set itself sedulously to avoid. In another volume dealing with the Bank of France it is stated -
Thus the banks of deposit have contributed to progress by gathering and giving life to sums until then lying scattered and idle. They are valuable auxiliaries in the distribution of credit. For this reason they deserve help and protection. The bank, the mission of which is of wider and loftier scope, has shown on many occasions that its helpfulness is not a pretence; daily, in fact, it asserts them by rediscounting their bills. We have also seen that the prosperity of the financial institutions has continually increased. It is associated with the confidences and growing security of our times. But should a war or other calamity occur, quiet and security would disappear, and deposits would correspondingly decrease. At such a time these banks might give way. Or, again, should a lively competition develop, should the direction of opinion of affairs be changed, that alone might suffice, to cause fear of dejection among the auxiliaries of credit. Such a possibility is enough to impose upon the Bank of France the duty of foreseeing and providing for it. The bank must be ready to meet even improbable contingencies, in order to be in a position to recapture the market with a sure hand as soon, as danger threatens it. , v
As in 1907, the Bank of France saved the financial situation of Great Britain, it seems evident that we, at a distance from the Old Country, with nothing but our own resources and strength to rely on, should follow conservative lines ia banking. Probably our most republican and democratic friends opposite do not object to conservatism in banking. A bank is a factory of credit. It is also a distributer of credit The Commonwealth Bank should be, not a hawker carrying its goods about, but a merchant of credit, to whom the big financial institutions and ventures of the country could go for support, knowing that they could “ get the goods “ at any time. The Bill seems likely to prevent this. It makes provision for the taking over of certain Savings Banks by the Commonwealth Bank. To my mind, the business of the Commonwealth Bank and that of a Savings Bank are incompatible. Savings Banks deal with small accounts, and in that res* are very useful, but a Commonwealth Savings Bank can only do’ work which the State Savings Banks already in existence are doing well. The Commonwealth Bank, supported with the credit of the Commonwealth, and a proper gold reserve, should stand behind the financial institutions of the country, so that, in time of war, there may be a solid credit on which to work. Credit is the bridge over which business travels, and if allowed to become too slender must break down and bring destruction. We can make our credit solid, and the Commonwealth Bank will be of real value in a time of trouble and crisis only if it is so managed that it will have the support and confidence of the financial institutions and of the community, its operations being backed up by a solid gold reserve. I object to the .autocratic position occupied by the Governor of the Bank. In no other part of the world does the Governor of a bank occupy such a position. The present Governor may be one of the best bankers in the world, but his position is too autocratic for a democratic community. The privileges and monopolies given to the Bank of France were given by a revolutionary Government. The world over, it is from the ultra-democratic movements that you get the most autocratic results. This Government has made the Governor of the Commonwealth Bank the most autocratic individual in the world. But while we should limit the powers of the Governor in one direction, we should extend them iu another. The Bank would be much improved if a Board were created, of which the Commonwealth Treasurer and the State Treasurers would be c.r, officio members, an equal number of other members being leading financial authorities selected in each State. To that Board I would give extensive powers. The Commonwealth
Bank should have the sole control of the note issue, and, in Committee, I intend to move the insertion of a new clause providing for that. With the control of the note issue, the bank authorities would be aware of the exact financial position, and would know what note issue the gold reserve would maintain.
– Should not the Government have control?
– In my opinion, it would be better to leave the matter to a Board constituted as I have suggested. The proposal to buy out an existing banking corporation needs careful scrutiny. We do not know whether the Government lias some particular corporation in mind. The Bank of England managed for nearly two centuries with a capital of £1,200,000, and we are rather rushing things in increasing the credit of our bank to £10,000,000 when it has been in existence only about three years. It is almost certain that any private corporation would object to having its affairs threshed out in Parliament before concluding any bargain with the Commonwealth. But I protest against the Governor of the Commonwealth Bank. or any one else, entering into a big contract of this kind before the representatives of the people ‘have an opportunity of deciding whether it would be acceptable. Before any bargain is made, its terms should be threshed out by Parliament. There is good precedent for such a course. Only recently two of the great financial institutions in Australia amalgamated, after an open public inquiry into their affairs. If it is proposed by the Government to buy up some particular organization, and that organization has nothing to fear, and is prepared to give the people a good bargain, why should not the terms of any proposed arrangement be laid before Parliament? We shall take a most dangerous course if we allow anything to be done behind our backs. I believe in the Commonwealth Bank, which, I think, can be made a most worthy institution. Had the ideas of the honorable member for Darwin been followed almost in their entirety the Commonwealth Bank would already have become an institution of great importance and value to the Commonwealth, whereas there is still a certain amount of prejudice against it. The proper way for the Bank to develop is for it to relinquish all savings bank business, not to seek after ordinary banking business, but to transact all Government business. The Commonwealth Bank should stand behind the private financial institutions of the country, and thus extend credit’ throughout the community. Surely this Government has no fault to fmd with the private banks. When the Commonwealth Bank was started, the last Labour Government took a forced loan from the private banks amounting to £6,500,000, by compelling them to accept Commonwealth notes. Those who supported what was done then are perhaps unaware that the method was first adopted by Charles I., the tyrant of England, and at the present time it is being slightly extended by the Germans in the raising of what is termed their war loan. Furthermore, according to reports, the private banks have lent the Government £10,000,000, for a ) >ar, free of interest. It would be well te know whether this generosity, which is so remarkable in view of the treatment that the banks have received from the Government, was due to their own initiative or the result of some alight pressure. At any rate, the Labour party has little cause to jeer at the private banks. The only way in which the Commonwealth Bank can be made a real bulwark to the community, a real refuge in time of trouble, is to take from it pettifogging business, and the rivalry of the Savings Banks of the States. The Commonwealth Bank should be the bankers’ bank, and the Government Bank in the true sense of the term, doing the big business of the Commonwealth and of the States. It would then make for a better spirit and influence with the financial institutions, which, after all, are the basis of true credit, and would cease to be a menace to the stability and the solvency of the States; and, with a solid gold reserve for building up the credit of the financial community, it would do much to sustain and invigorate the fabric of our whole commerce. This Bank, if it were developed on the broad lines which have made the Bank of France such a wonderful success, would be of enormous value ; but, if it is reduced to small pettifogging business, it will become an absolute menace to the solvency and stability of the States, and a direct danger to the financial integrity of the Commonwealth.
.- I had expected to see all kinds of alterations made in the Commonwealth Bank Act, such as
I think the country has been looking forward to for some time. For instance, I think there should have been an alteration in the management, in consonance with the wishes of the majority of the people, and also, I believe, in consonance with the will and wish of the members of the Government, if we could really learn the state of their mind on the subject. The Commonwealth Bank is unique, ‘in the fact that, of all the financial institutions in the world, it is the only one of its magnitude controlled and managed by one individual.
– Is the Governor of the Bank not doing very well?
– I think the Governor would do a great deal better if outside experience were introduced to assist him. After all, a banker is only a banker; he understands the technicalities of banking, but he has not rubbed shoulders outside, and does not understand the roughandtumble of business life; and the more assistance he can get from the outside the better for the success of the institution. At all events, the fact remains that this is the only institution of such gigantic proportions that is practically controlled by one person; and I certainly thought we should have some amendment to remove this anomaly. I have looked rather closely into the question, and I find that there is a great similarity between the Bank of England at its foundation and the Commonwealth Bank when it was instituted. In the first place, the population of Great- Britain, when the Bank of England was inaugurated by the Scotchman, Patterson, was rather more than 5,000,000, or just about the population of Australia when the Commonwealth Bank Act was passed. The Bank of England, for one reason, was established in the year 1694, in order to replenish a depleted war chest. England at that time had the responsibility of fighting three or four combined nations, and the Bank was used as a means of finding the necessary funds. It will be observed that both banks were instituted by Scotchmen, the only difference being that Andrew Fisher thinks the whole control should be in the hands of one man, whereas Patterson, who laid down the scheme afterwards adopted by the British Minister, Mr. Montague, arranged for the representation of the debentureholders on a directorate. Debentures were issued to the extent of £1,200,000, and, in consideration of this, the Bank was permitted to issue notes to a like amount, and the money thus obtained was used for the resuscitation of our Navy. According to the charter of the Bank, the debenture-holders were permitted to elect their own directors and their general manager; and the result was that they appointed twenty-four directors. My contention is that if the Commonwealth. Bank is to be made a success, it is only right and fair that the holders of the £10,000,000 worth of debentures, together with the depositors and the States, who are also interested, should be represented on a directorate. My suggestion is that the Bank Act should be amended so as to permit of these reforms being carried out, the debenture-holders electing, say, three directors, the depositors three directors, and each of the States one, making twelve altogether. Mr. Denison Miller, the Governor, might make the thirteenth director. As I said before, the general manager of a bank has a mere academic knowledge of business beyond that of banking; and it would be of great advantage if the benefit of outside business experience could be obtained. For instance, there are nine or ten directors to advise Mr. French, the general manager of the Bank of New South “Wales, and those directors are all business nien.
– All the same, the general manager “runs the show.”
– At any rate, the Bank of New South Wales is a most successful institution, due to the fact that the management has the benefit of the matured business experience and advice of outside men. I may mention that some six years ago a public trustee was appointed by the Imperial Government to control and invest moneys of intestate estates. That official broke down with the responsibility that was thus forced upon him; and he, of his own volition, applied for the assistance of five directors. It will be seen at once that the responsibility of such an official is quite small and inconsiderable when compared with that cast on the general manager of the Commonwealth Bank, and it is much more necessary in the case of the Bank that outside assistance and advice should’ be made available. The Commonwealth
Bank is at present only in its infancy. It. controls something like £9,000,000, and. this represents too much responsibility tobe placed on one individual. A clause in the Bill authorizes the Governor of theBank and the Treasurer to purchase any other bank when they think fit. I find,, according to the figures given in thefinancial news of the Sydney Morning Herald, that the Bank of Australasia, the Commercial Bank of Sydney, the Bank of New South Wales, the Queensland National Bank, the Union Bank, the West Australian Bank, and the Australian) Bank of Commerce represent a total capital of £16,945,000, which, multiplied by 2-J per cent., shows a present value of £36,714,166. This amount, divided amongst the eight banks I have mentioned, gives an average value of £4,600,000; and I contend that it is not wise to permit the expenditure of such an amount to be at the discretion of any one or two men. With all due deference, I say that the Prime Minister’s experience in financial matters is very limited; he cannot claim to be a financier in- the sense in which we should like him to be one; and yet it is proposed to allow him and the Governor of the Bank to have discretionary power to expend £4,600,000 in the purchase of any bank. Under the recent Public Works Act there can be no expenditure above £25,000 without an inquiry - in New South Wales the limit is £20,000 - and yet it is proposed to permit this discretion to the extent of £4,600,000 on the part of two men. All expenditure of the kind should be sanctioned by this Parliament. There is another serious objection that I have to the Bill. I had been hoping that some amendment of the Act would have been introduced in order to carry out the proposals agreed to at the last Conference of Premiers.
– The Premiers were satisfied with the Bill as it is.
– Mr. Holman was not satisfied.
– I shall show that he was.
– He was dissatisfied. If the honorable member would read the reports, as I have done, he would find that one of the greatest objectors to the Savings Bank clauses in the Commonwealth Banking Act was Mr. Holman. All the State Treasurers, including Mr.
Scaddan, the Labour Premier of Western Australia, voiced the same objection, and I cannot see how members of another place, who are supposed to represent State rights, can support this Bill, instead of protesting in conformity with public opinion in the various States, and insisting that a clause shall be inserted enacting that all Savings Bank business shall be left to the States. At considerable trouble, I have obtained some interesting statistics in regard to what the New South Wales Savings Bank has been doing. I find that that institution has 717,737 depositors, and total deposits amounting to £33,167,523, representing £46 4s. 2d. per depositor, or £17 17s.1d. per head of population. One of the most useful features of the bank’s operations in New South Wales is the enormous amount advanced by way of loan to the primary producers. I find that in sums not exceeding £2,000, repayment of which extends over a period of thirty-one years, the bank has advanced to farmers the colossal amount of £3,070,754, and in sums of more than £2,000, £1,766,631. An interesting portion of the bank’s work is that which comes under the heading of the Closer Settlement Promotion Act. Under the Statute, any two or three or more settlers may approach the owner of a large estate and ask him to put a price on his land. The price having been fixed by the owner, perhaps ten or fifteen would-be settlers ask the Government to advance sufficient money to enable them to purchase the estate. Valuations are made, the estate is purchased, and those settlers are allowed to take up the land in areas not exceeding in value £2,000. The bank advances the requisite money to the settlers to the extent of 95 per cent, of the capital value.
– Do you reckon that that is good business?
– It is, because it leads to the bursting up of big estates. An estate of 100,000 acres, owned by one man, may employ perhaps two or three shepherds and a couple of boundary riders, but under this Closer Settlement Promotion Act two or three hundred human beings are settled on the land.
– Do you mean to say that the bank has never been “ let in “ ?
-So carefully has the bank been administered that during the five years this Closer Settlement Promotion Act has been in operation, only the small sum of £247 has been lost by the bank.
– That is marvellous. Is there any more land available on those terms?
– It must be remembered that if a farmer takes up 700 or 800 acres, he puts into the land the whole of his energy, with the result that in two or three years he has probably increased the value of the property by 25 or 30 per cent.
– How much has the bank advanced under that Act?
– A sum of £1,594,458. I obtained those figures from Mr. Warden, the Commissioner of the Savings Bank, only last Tuesday, so they are right up to date. Then, in the Irrigation Department the bank has advanced £5,875, and in the Homes Department, for the building of workmen’s homes and suburban residences, £44,330. Altogether the New South Wales Savings Bank has advanced on loan, under those various headings, £6,482,048. Of the total advances 20 per cent., or about £6,500,000, has been lent in country districts to encourage the primary producers. No country can prosper unless its primary producers are thriving, and the reason why Melbourne, Sydney, and the other capital cities are stagnant to-day is that the primary producers are stricken with drought. Therefore, I say that any Government which introduces a Banking Act by which the beneficial operations of the State Savings Banks will be destroyed, is not worthy of the name of a Government. For that reason I protest against the introduction of this Bill, without the inclusion of the amendments I am suggesting. These are the various headings under which advances are made by the Savings Bank of New South Wales -
Upon mortgage, of -
– Order ! The honorable member is now getting away from the matter before the Chair.
– I respectfully submit that the fact of the Commonwealth Bank entering into competition with the State institutions for Savings Bank business will prevent the owners of land from getting the assistance they have been getting in the past from these institutions.
– The honorable member will see that if I allow him to go into the little details of this matter he will get completely away from the question before the Chair.
– Will I be in order in introducing an amendment?
– When the amendment is proposed I shall be able to decide whether it is in order; but I would remind the honorable member that the proposing of an amendment will not enable him to speak on these matters in detail.
– I am simply dealing with the policy of the Commonwealth Bank, and am drawing a comparison between it and the State banks. I am not antagonistic to the Commonwealth Bank. I wish to enlarge its field of usefulness.
– You wish to strangle it.
– I do not. I wish to make it more useful. I do not wish it to continue the policy, which the honorable member for Maranoa pointed out, of underwriting the sum of £300,000 in one instance, and £600,000 to the Broken Hill Proprietary Company, in another case.
– For the establishment of ironworks in New South Wales.
– The honorable member cannot point out a single instance of a working man having been advanced a penny from the Commonwealth Bank for the erection of a home, or of a farmer being able to obtain an advance for the development of his property. My opponent at the 1913 election, the Honorable Thomas Brown, one of the whitest men in Australia, urged upon the unthinking electors that it was desirable to establish a Commonwealth Bank, because that institution would advance money to allow workmen to build homes, and the farmers to develop their lands. Can the honorable member point to a single instance of a farmer having received an advance from this Bank ? I have travelled far and wide throughout the country, and I have not met one farmer who has benefited from that source.
– I know that the private banks failed me in my need.
– I suppose that onetenth of the applications to private banks failed; but in connexion with this institution every application failed. We were told when the war broke out that the Commonwealth Bank was going to step into the breach, and that it had actually found employment for 25,000 workmen in New South Wales. That clap-trap emanated from the Worker office. Looking at the Bank’s balance-sheet of the 31st August last, I find that of its total assets of over £9,000,000, “British, colonial,, and Government securities (face value, £2,887,944) represent £2,818,981.” At the 31st December, 1913, those assets totalled £1,929,094. Up to the issue of the last balance-sheet, the Bank had increased its advances under that heading by £900,000. Distributing that amount amongst the six States, the average available for each would be £150,000. How much extra employment will that give? In the way of legitimate banking business I find that “bills discounted, loans and advances to customers, and other sums due to the Bank “ amount to £1,392,084.
– Is that all their business?
– Yes; since the Bank has been in operation.
– But look at the short time they have been working.
– Can the honorable member show another bank that has been so successful in the same period?
– I can show the honorable member where the New South Wales Savings Bank increased its advance business by £2,600,000 in one year.
– But compare another bank in its first two years of existence with the Commonwealth Bank.
– I cannot do that, but I can point to the fact that the Commonwealth Bank can only find room for £1,392,000 by way of investment, though it has £9,000,000 of the people’s money. Such a state of affairs is a travesty on banking. It is not banking. The Commonwealth Bank in this regard is an hallucination; it is a sham - worse, a shadow of a sham. We are told by the*
Treasurer that one amendment which he is submitting in the Bill will prove the great usefulness of the Commonwealth Bank. Transactions between the Motherland and Australia will be accomplished free of exchange. The right honorable gentleman told us that our soldiers who are going to the front will be able to pay money into the Commonwealth Bank, andhave it transferred free of exchange from the Mother Country. I quite agree with the Prime Minister that every latitude should be extended by the Commonwealth Bank to those soldiers who are going to the front to battle for us while we remain at home, but to lead honorable members to believe that this proposal is an innovation especially introduced by the Commonwealth Bank is wrong. The idea has been in existence for many years. If a person pays money into a Post-office Savings Bank in London he can have it transferred to any branch of a State Savings Bank in Australia free of exchange. This reciprocal arrangement has been in existence for years. The Savings Bank Commissioners in New South Wales, referring to this matter in their report, say -
The reciprocity arrangements with the PostOffice SavingsBank of the United Kingdom continue to be used by depositors in both institutions for the easy and expeditious transfer of money. During the year the amount of £17,074 was transferred to the State, and £10,822 12s.11d. to the United Kingdom.
So we see that the system has been in vogue for years - long before our Treasurer introduced his amendment. I wish to show how economically the affairs of the New South Wales Savings Bank are conducted. The Commissioners’ report for 1912 says-
The Commissioners are pleased to report that the expenses of management of this department were reduced to 8s. 3d. per cent. on the average funds for the year, as compared with 9s. 5.7d. per cent. for 1910.
Taking the whole of the deposits and of the advances, and the cost of making the advances and receiving the deposits, we find that this useful institution is run at a cost of8s. 3d. per cent. per annum, which all honorable members will agree is a very satisfactory position, though I am informed by the Commissioners that this year they anticipate the expenditure will be something like11s. per cent. The reason for this, they state, lies in the fact that the Commonwealth is en tering into competition with the States to secure the earnings of the people, and State Savings Banks have been compelled to rent offices in various towns and to maintain an extra staff. The result of this competition between the State and the Commonwealth has put up the cost to something like11s. per cent. When we come to realize the position, we must conclude that the honorable member for Denison is in competition with himself, or that the honorable member for Illawarra is competing against himself. Travelling through the various towns of the Commonwealth I have found a branch of the Commonwealth Savings Bank on one side of a street, and a branch of the State Savings Bank on the other side, one bank being in competition with the other.
– That state of affairs does not exist in Tasmania.
– Operations in that State are so infinitesimal that they are not worthy of consideration. To bring the facts home to those honorable members who are rather blind in regard to this matter, let me suppose that a business man in the town of Bairnsdale is running a profitable business, and says to his partner, “ We are doing so well on this side of the street that it would be a good thing if we opened another store on the other side of the street and entered into competition with ourselves.” That is exactly the position in regard to the Commonwealth Bank and its competition with the State Savings Banks. The shareholders in each are the same. The Commonwealth should have left the field of Savings Bank business exclusively to the States, especially in view of the very useful work that the State institutions have been performing. The New South Wales Savings Bank Commissioners, dealing with the margin of profits, say -
The margin of profit to cover contingencies was6s.6.5d. per cent., as compared with 4s. 2.9d. per cent. in 1910, an increase of 2s. 3.6d. per cent., the result being arrived at as follows, all percentages being computed on the mean, or average, amount of funds during the year, viz. -
Gross profits, £39s. 8.3d. per cent.
Interest to depositors, £2 14s. 10.8d.; expenses of management, 8s. 3d., total, £3 3s. 1.8d. per cent.
Margin,6s. 6.5d. per cent.
This, I think, is a very fine profit. In regard to the advances to settlers and the
General Advance Department of the New South Wales Savings Bank, the following figures, covering a period of thirteen years until 1912, are very illuminating : -
In my opinion, the agreement arrived at by the State Premiers at the Conference held about nine months ago was most reasonable. The suggestion was that the Commonwealth Bank should relinquish the Savings Bank business to the States, and that, in return, the States should give to the Commonwealth Bank their entire banking business. The States agreed to leave on deposit with the Commonwealth Bank the amount then on deposit in the Commonwealth Savings Bank, amounting to about £5,000,000. At any rate, they agreed to make it up to £5,000,000. The Commonwealth Bank was to have that sum for ten years, or for twenty years if that had been asked for. This would have given the Commonwealth Bank a splendid capital, while the various States were to carry on their entire banking business with it- that is to say, all the States, municipalities, and the local governing bodies of the various States were to throw in their lot with the Commonwealth Bank, and the States were to negotiate all their loans through it. The Commonwealth Bank, instead of showing a loss which aggregates something like £40,000 in the last three years, could have made a direct profit and wiped out this deficit had the proposal adopted at the Premiers’ Conference been carried out.
– The Commonwealth Bank did not show a loss of £40,000 last year.
– I spoke of the aggregate loss.
– But have they not charged up the cost of bank furniture? Did not the bank make a profit of £8,000 on the actual working last year?
– I can settle that argument at once, because the following are the exact figures: -
To amount from last account, £45,089 3s. 3d.; reserve fund,- ; redemption fund, - ; £45,089 3s. 3d.
By profits for half-year ended 30th June, 1914, £8,093 8s. 5d.; balance carried to next half-year, £36,995 14s. 10d.; £45,089 3s. 3d.
I said that £40,000 was the aggregate loss. I was not far wrong. The aggregate loss was £36,995 14s.10d.
– The net loss.
– That was not the loss on the working of the Bank. Those figures include the cost of establishment, &c.
– That is covered by the PremisesFund.
– Is not the sum of £30,000 for land purchases included?
– I have had sixteen years’ banking experience. I defy the honorable member to show me any bank balance sheet where the premises account and furniture and fittings account are not separate from the profit and loss account. The figures I gave referred to the net loss on the actual running of the Bank.
– If the honorable member has the balance sheet of the Commonwealth Bank, let him read out the furniture account and the buildings account, and settle the question.
– We find among the assets - bank premises, £38,379 3s. 9d., which includes furniture and fittings. If the honorable member wishes me to include this £38,379 into the banking account, the loss would be £74,000. I should advise the honorable member not to ask me to do that, since it would make his Bank look ridiculous.
– Has the honorable member any reference to the cost of the land purchased for the Sydney premises?
– I do not know where that comes in.
– In the Bank Premises account.
– It ought to appear in the balance-sheet.
– I do not think that it has yet been paid for.
– That, perhaps, is the solution of the difficulty. This is a mat- ter which should be taken up by the Treasurer. He should ask the Governor of the Bank to see that the amount is included in the balance-sheet. .
– It had not been paid when I left office.
– That may explain the matter. The point with which I am most concerned, however, is the wiping off, as quickly as possible, of this deficit of £36,995. If the authorities would adopt the suggestion which I have the temerity to throw out, it could be wiped off in one year. My proposal is that the whole of the States, in consideration of the Commonwealth Bank giving up the Savings Bank business, should undertake to negotiate all their loans through the London branch ‘of the Commonwealth Bank. These negotiations, up to the present, have been carried on through the Bank of England, the London and Westminster Bank, and other big financial institutions. If this business were transferred to the Commonwealth Bank, then, instead of showing a loss of £36,995 a year, as it does at present, it would show a profit of something like £140,000 a year. I find on looking through the figures that the average amount of State loans maturing is £13,780,000 per annum. If we say, in round numbers, that it is £14,000,000 per annum, then the Commonwealth Bank, if it conducted the negotiations, and made the very modest charge of 1 per cent, for underwriting and brokerage expenses, would make an annual profit of £140,000.
– It would cost far more than 1 per cent, for underwriting, brokerage, and so forth.
– Yes. I said that if the Bank made the very modest charge of 1 per cent.
– And provided that it could do the work.
– Quite so. The bargain, I think, would be a fair one. If the States held out all these advantages to the Commonwealth Bank, then surely the Government, as far-seeing business men, should be prepared to adopt the advice given to them by the State Premiers that it should drop the Savings Bank branch and take in return all the business which the States could give them. In that way the Commonwealth Bank would be made one of the strongest and soundest institutions, not only in Australia, but throughout the world.
.- It is not my. intention to detain the House at any great length; but, in view of the opinions expressed during this debate by many eminent members of the Opposition, who not only here, but on many platforms throughout Australia, have availed themselves of every opportunity to show their hostility to the principle of the Bank, I think it well that I should make a few observations. The Commonwealth Bank has been of valuable assistance to the people.
– In what way?
– Whilst our honorable friends opposite tell us that the Bank has not been a success not one of them has been prepared to show wherein it has failed. I should like Co be informed in what respect it has failed to render valuable service, because I hold that it has done more to improve the finances of the Commonwealth than has any other institution.
– To what extent has it done so?
– It has prevented the finances of the Commonwealth being cornered by the private banks and other financial institutions.
– In every possible way it has prevented the cornering of our money as was attempted by private banks prior to its establishment. The private banks tried to corner the finances. They imposed increased rates of interest, and in every way were going to make money much dearer in Australia. If the Commonwealth Bank were not in existence, itv would be absolutely impossible to carry on many of the businesses which to-day are being conducted successfully.
– Do not smile.
– There is no occasion to smile. It is only men like the honorable member, who are anxious to retard the progress of Australia, and who lend their assistance to other financial institutions which have so long exploited the people, that talk in that strain.
– I am prepared to transfer my overdraft to-morrow to the Commonwealth Bank.
– The Commonwealth Bank, perhaps, is not in a position to grant overdrafts to the extent that it. would like, and honorable members opposite are not going to improve its position- by the opposition they display towards it-
They are opposing it in every possible way. They are not inclined togive the Bank power to increase its capital.
– It has not called up a penny of its capital.
– Our honorable friends of the Opposition are favorably disposed to the private banks, and are lending them every assistance.
– We have not mentioned them.
– The attitude of honorable members opposite satisfies me that the Commonwealth Bank is the only financial institution in Australia that is likely to be of any service to the people. They may sneer, but we know what assistance it has rendered to the Commonwealth .
– Tell us what it has done.
– The very fact of its existence has had a beneficial effect on the people. My honorable friends are not pleased with it, because they cannot exercise over it the political influence which they used to use in connexion with private banking institutions. When we find a member of the Opposition asking in this House that the names of those who have obtained overdrafts from the Bank shall be made public, we know what to think.
– Who asked that question?
– The honorable member did.
– That statement is absolutely incorrect.
– He did not ask for names.
– On the 20th ultimo, the honorable member for Wimmera in this House asked the Treasurer -
Whether he will obtain from the Governor of the Commonwealth Bank the number of borrowers from the Bank on fixed loan of sums of £2,000 and under, on 20th November, 1914, and the total amount of such advances.
– He asked for the number; the honorable member said that he asked for the names.
– If the Opposition had the power to demand it, they would ask to be supplied with the names.
– That is a mere assertion.
– The honorable member’s question shows that the Opposition are anxious to know who borrow from the Bank.
– The information for which I asked is given in every State Savings Bank balance-sheet.
– And, if the honorable member got an answer to his question, he would probably follow it up with another asking for the names of the borrowers.
– No doubt he would.
– The honorable member should withdraw the statement he made against me.
– The honorable member should have withdrawn his question. We should have been in the throes of a financial crisis to-day but for the presence and assistance of the Commonwealth Bank.
– In what way? Give us some specific case.
– The honorable member knows all about it. The case he has tried to make out for the institutions he is representing convinces me that he is afraid of the Commonwealth Bank. The banks of the Commonwealth, in 1913, made an aggregate profit of over £3,000,000.
– Is the honorable member sure of his figures?
– I am. I have here a statement supplied by Mr. Knibbs, the Commonwealth Statistician, in which he states that the aggregate profit made by the banks of the Commonwealth during 1913 was £3,212,676.
– Have those figures been published ?
– I cannot say. He also states that, during the same period, the banks of the Commonwealth paid dividends amounting to £1,790,921.
– What was the amount of capital invested?
– I have not bothered to obtain that information. The honorable member may collect it for himself. He seems to be very interested in the other banks.
– If the other banks, in 1913, made a profit of over £3,000,000, what profit should the Commonwealth Bank have made?
– We are hopeful that it will be given opportunities to make a very substantial profit. At all events, it will not foreclose on holdings to the extent that private banks have done.
– It is not making advances on holdings.
– We hop© that, before long, it will be making advances to farmers and land-holders, and that it will be able to give better terms than the private banks have done. Many people may think that it should not make advances on land. So far as I am aware, the Bank of England does not do so. Wo are told that it is the only successful bank in the world. If honorable members will only give the Commonwealth Bank the support that it needs, that institution will become what the people of Australia desire it to be.
– We desire to make it a real bank, instead of the shadow of a bank.
– If one goes into any of its branches in any part of the Commonwealth he will be satisfied that it is doing more business than any other bank in Australia.
– The returns do not show that.
– In the Melbourne or Sydney office you will find five times as many persons as in any other banking centre.
– .For every transaction in the Commonwealth Savings Bank in Melbourne there are five in the State Savings Bank.
– The honorable member for Swan, when Treasurer, did not lend assistance to the Commonwealth Bank. He was opposed to it doing Savings Bank business, and showed plainly that, had he had the power, he would have wiped out that connexion. Speaking the other day, he showed beyond the possibility of doubt that he did everything possible to destroy the Savings Bank business of the Commonwealth Bank.
– What did I say?
– The right honorable member said that, under the Act, the Bank had no power to establish a branch of the Savings Bank in London.
– That is so.
– Legal authorities are of opinion that it has the power.
– Who are they?
– It is not necessary to say who they are.
– I do not think that legal authorities have expressed that opinion.
– The AttorneyGeneral is of the opinion that the Bank has the power. But, rather than that there should be any controversy in connexion with the matter, the Government propose to amend the Act to make it clear that the Bank has the power.
– If the Bank has the power, the provision referred to is superfluous.
– I bave not heard the Attorney-General say that the Bank has the power.
– I think the Treasurer has said that he is of the opinion that it has the power.
– Then why does he propose to give it this power in the Bill ?
– At ally rate, we are going to give the Bank this power. Every one must admit that it is necessary to have a Savings Bank Branch in London.
– I think not.
– It is necessary now that so many people are travelling from the United Kingdom to Australia to have a branch of the Commonwealth Savings Bank in London to provide for the transference of their money to Australia.
– It is not necessary to have a branch of the Commonwealth Savings Bank in London for that purpose.
– Persons who have not at their command sums as large as those possessed by honorable members opposite prefer to deal with Savings Banks. The honorable member for Calare spoke of the amount of money held by the Commonwealth Bank in London. It is necessary to keep a big credit balance there, with investments in short-dated loans, to enable the Bank to deal with exchanges.
– It is not necessary to have a branch of the Commonwealth Savings Bank in London.
– The imports and exports between the Commonwealth and the United Kingdom amount to about £100,000,000 a year, and it will develop. When there is a Commonwealth line of steamers trading between Australia and the Old Country, freights will be cheaper, and people will be travelling more frequently and in greater numbers. Honorable members may jeer at that statement, but I am confident that within a year or two freights and fares will be considerably reduced, and that branch offices, not only of the Commonwealth Bank, but also of other Commonwealth institutions, will be established in many parts of the world. Our friends opposite tell us that the Commonwealth Savings Bank has not been a success, and at the Premiers’ Conference, held last March, the honorable member for Parramatta, w-ho was then Prime Minister of Australia, said that the honorable member for Balaclava, who was then Premier of Victoria, had told him that the existence of the Commonwealth Bank has in no way interfered with the results of the Victorian Savings Bank.
– I said that the Commonwealth Savings Bank did not influence the increase of the deposits in the State Savings Bank, but that it had cost us a lot of money to retain, our business. .
– What the honorable member for Parramatta said was this -
Mr. Watt told me a long while ago that he is doing very much better, despite our opposition, with his Savings Bank than he ever did in this State under the old system.
Mr. Holman. ; We have had a similar experience in New South Wales.
– Our deposits have been larger, but it has cost us more to get the business.
– The opposition of our friends to the Commonwealth Savings Bank is hardly justifiable, seeing , that, according to those statements, the Commonwealth Savings Bank has in no way interfered with the Savings Banks of the States.
– It costs Victoria ?30,000 a year extra to keep its business. I made that statement at the Conference which has been referred to.
– It is an unjustifiable expenditure.
– We think so, because it is due to the opposition of the Commonwealth.
– Had the proposition which was placed before the Premiers in 1912 been agreed to this expenditure would be unnecessary. It was because of the number of State Righters that it was not adopted, and -that the Governments of the States have not to-day the same interest in the Commonwealth Bank that the Commonwealth Government has. Two of the States have since fallen into line with the Commonwealth - Western Australia and Tasmania - and the others will soon do so.
– Western Australia is still running its Savings Bank.
– The States I have named have come fairly into line and are satisfied that they will benefit in every way by adopting the Commonwealth proposal. Within two years the Common wealth Savings Bank has obtained ?5,500,000 of deposits, which shows that the people of Australia are satisfied to do their business with the Commonwealth. Since the war broke out the amount deposited in the Commonwealth Savings Bank has increased by ?1,250,000, the amount deposited on the 16th November being ?5,758,330.
– What was the amount of deposits on 1st August last?
M!r. SHARPE.- I have not got that information.
– The honorable member will find that his statement is wrong, that there has not been so large an increase since the war broke out. The deposits in the Savings Banks of the States are increasing faster -than those in the Commonwealth Savings Bank.
– Honorable members who are opposed to the Commonwealth Bank should submit figures applying to the operations of the State Savings Bank9 if that be so.
– The deposits in the State Savings Banks are growing more than twice as fast as those in the Commonwealth Savings Bank.
– We have no knowledge of that. The existence of the Commonwealth Bank will destroy much of the power that the private banks have hitherto enjoyed. When it makes advances to farmers and others it will not foreclose in the wholesale manner in which the private banks have foreclosed. Much of the success of the private banks has been due to their foreclosure upon property belonging to persons who could not repay advances, but who, if given an opportunity to redeem themselves, could have done so. Many of the biggest and best stations in Queensland are now held by the banks, which had advanced small sums of money on them, and had thought it opportune to foreclose when drought and disaster came. It is because of this practice of the banks that our friends have accumulated the great amount of wealth which they possess. The largeness of the sums which have been gained by the banks shows that it is time that the people of the Commonwealth began to take some of this money for the benefit of the taxpayers. I am confident that the Commonwealth Bank will earn this money for the people, and will make advances at reasonable rates of interest. Had not the Commonwealth Bank been instituted, borrowers would now have to pay not less than 10 or 12 per cent. interest.
– That is a wild and whirling statement.
– No, it is not. It will be remembered that some time ago it was almost impossible to borrow under 7 per cent., although things were better then than they are now. There is no doubt that if the private banks had the power, and were not exposed to the influence of the Commonwealth Bank, they would now be charging an exorbitant rate of interest; and if there were no other reason, this presents one for thoroughly organizing and soundly establishing the Government institution.
– When the Commonwealth Bank was instituted, overdrafts could be obtained from the private banks at 6 per cent., which is the rate of interest charged by the Commonwealth Bank.
– But it would not be now possible to borrow at 6 per cent. were it not for the influence of the Commonwealth Bank.
– The funds of the private banks are eight times that of the Commonwealth Bank, and they lend at the lowest rate at all times.
– My opinion is that the private banks would have taken advantage of the present position, and but for the Commonwealth Bank would have charged much higher rates of interest. I am confident that in a year or two it will not be necessary for any Government in Australia to go outside the Commonwealth for the purposeof borrowing money, because the Commonwealth Bank will be able to finance, not only Australia as a whole, but any or every State. There is only one other truly national bank in the world, namely, that in the Argentine; and since its establishment in 1893, the Argentine Government, by reason of that Bank, has benefited to the extent of £5,000,000. The German Bank returns to the State about £2,000,000 a year, while the Bank ofFrance pays about £800,000 in taxation.
– That is all an argument for a national bank, but not for a national bank of this particular type; that is the difference between us.
– I am confident from all appearances, that the Commonwealth
Bank will achieve great and beneficial results in the future.
– If it is proposed to constitute the Commonwealth Bank as those other great national institutions are, we shall help; but none of those banks are Savings Banks.
– That ought not to affect the appreciation of the. work of the Commonwealth Bank, which, as I say, will doubtless prove of great benefit to the people. In the underwriting of many large amounts the Commonwealth Bank has earned great profits, showing plainly that the Governor is a man of much financial foresight who does not hesitate to take advantage of any favorable opportunity presented. Certain amounts have been underwritten for the Broken Hill Proprietary, and the Melbourne and Metropolitan Board of Works. Further, a large sum of money has been lent to the Hampden-Cloncurry Mining Company in North Queensland. What the exact amount involved in the latter transaction is I do not know, but it must run into big figures, having regard to the size and importance of the company. The following is an extract from the Age: -
Financial arrangements have been completed between the Hampden-Cloncurry, North Queensland, and the Commonwealth Bank, under which the company will resume production forthwith, thus giving further employment to some 900 men.
The company is enabled to do this consequent upon the Bank having agreed tomake an advance against the blister copper, which will be stacked at Townsville, pending opportunity for realization.
The terms are not advertised, and I do not suppose they will be, but as this company employs about 1,000 men, the amount lent must be very considerable.
– Does the honorable member know anything of the security offered?
– I am prepared to trust the Governor of the Bank in that regard; and, in any case, we are told that the copper is the security, and as this is stored in Townsville, I suppose it is all right. Honorable members opposite expect the Bank to be completely organized and in full working order in about a year; but, as a matter of fact, there has been hardly time yet for it to become known as it should be. We all agree that the Bankshould be in a position to lend money to farmers and settlers, not because they will get it at a very much cheaper rate, but because the conditions will be much easier than those offered by the private banks, who are likely to foreclose at a moment’s notice.
– The original object of the Bank was to give cheap money to Farmers.
– If the additional capital be granted to the Bank, it will be able to launch out in that direction.
– What is to be done with the extra capital ? The Treasurer did not tell us.
– I do not suppose that the Treasurer would tell us.
– Why not?
– Surely the honorable member for Oxley does not want us to give an open cheque for £10,000,000?
– I am quite prepared to trust the Government in that regard. What our friends opposite are so much concerned about is the management of the Bank. On reference to the debates when the Bank Bill was before the Chamber, I find that the present Opposition were very much disturbed because of a fear that it would become a political institution, and urged that it should be non-political in every sense of the word. An assurance to that effect was given by the present Prime Minister, and the Opposition were perfectly satisfied. Immediately, however, that the Liberal Government were returned, a desire was shown to alter the conditions in every possible way. Certain offers were made to the States, who were to have practically the same power as the Commonwealth Government in the control and management.
– Does the honorable member say that a partnership in the control was offered to the States?
– The present Prime Minister, who was then at the head of the Government, said that the Commonwealth Government would consult the Treasurers of the States at different periods of the year for the purpose of receiving suggestions.
– No share in the control was ever offered to the States, although the Prime Minister, when introducing this Bill, said that when the States were ready, he was ready.
– According to the report of the Premiers’ Conference of 1912, the present Prime Minister said -
I feel it is only just to you, and fair to the Commonwealth, that I should say that in our legislation the Federal Parliament has, us far as possible, removed from the political arena the management of the Commonwealth Bank. That policy will be continued so long as the present Government have control. Therefore, it is not proposed to divide the management either of the general Bank or of the Savings Bank, with co-partners. I will say this, however, that, as Treasurer of the Commonwealth, I shall be happy indeed, if this scheme is acceptable to you 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 get 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.
– What the Treasurer said, in effect, was that he would talk to the State Treasurers once a year or so about things in general; but that is not offering a share in the control of the Bank.
– It cannot be supposed that any Commonwealth Treasurer would prove unreasonable, in view of the offer to confer with the State Treasurers. Those are the conditions under which the Bank is managed at the present time, and I think the institution is meeting with the approval of the people. They are thoroughly satisfied with its management and its results. It has made progress at a rate which no other bank in the Commonwealth has equalled. Members on this side are quite satisfied with the working of the Bank, but they desire to see the institution have the additional power asked for, and I am satisfied that with additional capital it will be able to carry on other business more satisfactorily and give better results than are being given by the private banks, whilst the public revenue will benefit considerably. I intend to support the Bill, and I hope that honorable members opposite will consider it their duty to adopt the same course.
.- Not very many years ago a person named De Rougemont and several others were wrecked on the north-west coast of Australia. There seemed little hope of their being saved, but the ready wit of De Rougemont contrived a scheme for harnessing turtles to a raft, and by that means the shipwrecked company reached the mainland. That extraordinary story fades into insignificance when compared with the statement of the honorable memfor Oxley regarding the wonderful effect which the Commonwealth Bank has had and the manner in which it has saved the financial reputation of Australia. The honorable member made that statement in face of the fact that after the Commonwealth Bank had taken control of the note issue, robbed the States of a large sum by way of note tax, and prevented the private banks from issuing notes, the private banks are at the present moment coming to the assistance of the Commonwealth Treasurer by lending him £10,000,000 in gold.
– That is not from the banks.
– I must enter an emphatic protest against the statement by the honorable member that most of the members sitting on this side of the House were strongly opposed to the Commonwealth Bank because theywere speaking in the interests of the banking corporations.
– Hear, hear!
– That statement is not just. Personally, I do not believe in the Commonwealth having a banking institution, but, the Bank having been established, it is the duty of every one of us to do what he can to make it a success. There is no call for any suggestion of ulterior motives on the part of members on this side of the House. I have a feeling of. disappointment that after the experience the Government must have had during the present crisis, and the representations which have been made to them, they have introduced a Bill which not only continues the present arbitrary power of the Governor, but indicates not the slightest intention of the Government to place the control of the Bank under a board of directors.
– Do you not think the Governor is doing good work?
– Certainly not.
– Point out one case in which he has not done good work.
– The honorable member has told us of a case. At a time like this, when money is required to build up our primary industries, is it fitting that a bank with a small capital should be advancing money on mining ventures? We have heard from the late Treasurer that the Governor of the Bank has absolute authority.
– It is a very good thing that he has.
– The honorable member’s remarks to-day set me thinking.
Probably political influence is getting behind this Bank. I feel satisfied that when the present Treasurer was making the appointment of a Governor, he had the interest of the Bank so much at heart that he tried to get the best man available for the position, and I believe that the present Governor is a good man.
– Then why criticise him so bitterly? He is insulted by every man who rises on the Opposition side.
– Apparently no person dare criticise any institution established or person appointed by honorable members opposite. The insinuation of the honorable member for Oxley that members on this side were acting in the interests of the private banking institutions did not meet with any protest from the honorable member for Denison. Apparently he thought that that statement was quite right. I have nothing to say against the Governor of the Bank personally.
– Show us where he made a loss on any transaction.
– Even if the Governor has made a loss on any transaction, I am not going to find fault with him on that account. This institution has come to stay. Its capital of £8,000,000 to-day ought in ten years’ time to be £50,000,000 or £60,000,000. I believe that it has a good Governor; but Mr. Miller is liable to the same ills as any other person, and is it a wise proposition that the control of this huge institution should remain under the control of one man only ? Apparently the Government see something disquieting in the position to-day. because the Bill contains the extraordinary proviso that debts due to the Commonwealth Bank from all other banking institutions are to have priority over all other debts of those institutions. That seems to me a most extraordinary proposal.
– Not at all.
– Why should a bank under good control require that protection?
– A debt due to the Bank is a debt due to the people and the people always get preference.
– This is aproposal that the Commonwealth Bank shall take all the profits and none of the risks. It makes me fear that some of the business done by the institution has been such as to demand this extraordinary provision. If this Bank is to be a success, there must be continuity of policy, and in that respect the institution at present lacks the benefit which comes from control by a Board of Directors. Such a Board is absolutely essential if the Bank is to have that continuity which is so necessary. Most of the successful banking institutions of the world have been carried on for centuries, not by individuals, but by controlling bodies determining the principles which shall govern the institution’s policy. Does the present policy of the Comonwealth Bank conduce to the betterment of the country ? How has this Bank assisted the primary producers 1 It has been in operation for two years, and has £8,000,000 of money under its control,” and I desire to know how its policy has benefited the country? The land is our greatest asset; it produces the wheat, the wool, the butter, the fruit, and all our export produce. Australia exported last year £79,000,000 worth of produce, of which £77,000,000 came from the land. Then, what has the Bank done to help the primary producer ?
– Legitimate banking is not lending money on land.
– Is it legitimate banking to lend money to the Metropolitan Board of Works?
– Yes, it is.
– Is it legitimate banking to lend money to the Broken Hill Proprietary Company ? A couple of years ago there was nearly a financial crisis in Germany, owing to the fact that many of the banks had lent immense sums of money to large industrial organizations. Apparently, instead of the Commonwealth Bank trying to assist in building up the country, the proper policy, according to the honorable member for Denison, is to lend money to firms such as the Broken Hill Proprietary Company. Then the honorable member for Oxley told us of a mining show in North Queensland, where the Commonwealth Bank has gone to the assistance of the company, who, in consequence, will be able in future to employ 900 men. I have also heard of money being advanced on city property. Bub I have not heard of a single instance of the Governor having advanced money on broad acres. The land is the best security that the Bank can get, and if legitimate business of that character were being done, there would not be any necessity for a proviso to give debts due to the bank priority over other debts* Only by making this Bank a means of assistance in building up the primary industries can it be of great benefit to the country. Extraordinary power is given in the Bill for the Governor, with theconsent of the Treasurer, to take over any other banking institution. I venture to say that had the party now in Opposition been in power and dared to bring before the Chamber a proposal to give the Governor of the Bank, with the authority of the Treasurer, power to commit the country to an expenditure of eight or ten millions of money without consulting the Audit Department or Parliament, there would have been an outcry throughout the length and breadth of the Commonwealth. What is the necessity for such a provision? Honorablemembers should remember the precedent which this provision is creating, and I say that it is wrong to give to any man,, either the Governor or the Treasurer, power to take over an Institution, even at a cost of only £20,000, without consulting Parliament.. To ask the House to agree to such a proposal is a most extraordinary request. I hope that honorable members oppositewill refuse to give the power, and that, they will agree to an amendment to clause 2 which will provide that the matter shall be subject to the approval of Parliament-
– It could not he done im that way.
– Then where is thematter to end? The present trustful nature of honorable members opposite is wonderful. Honorable members who in the past have had so much to say in regard to other expenditure are now prepared to allow the Governor of the Commonwealth Bank to take over a huge corporation, no matter what it may cost. In the measure the Government also desire power to take over the State Savings Banks. I cannot understand why the Commonwealth should seek to interfere with the State institutions. I think that the proposal is contrary to the spirit, if not the words, of the Constitution. I always thought that it was intended that the words “ Banking, other than State banking/’ should expressly exclude the States’ Savings Banks. At the time this matter was first mooted, the Commonwealth Government could not put forward the excuse that they needed the money.
They had ample funds at the expiration of the Braddon section with which to carry on work ; there was a large surplus, and they gained £9,000,000 by the issue of bank notes. There was no excuse whatever for entering into competition with the States in regard to securing the savings of the people. The only object that I could see the Labour Government had was the destruction of the financial stability of the State Savings Banks. The magnificent assets these were to the States was realized, and the fact that there was £80,000,000 on deposit in the States’ Savings Banks was also realized; they believed that by denying to them the use of the Post-office machinery for their Savings Banks it would be absolutely impossible for the States to carry on, and therefore, by the dislocation of their finances, they would be compelled to agree to Unification. That is the only reason that I can see for the action of the Commonwealth Government in regard to this Savings Bank business. So far as we have been publicly informed, it is not intended to hand over the Savings Bank business of “Western Australia to the Commonwealth. The State Government are still endeavouring to stick to their own bank. They realize its great importance to the State. Certainly the Labour Government were careless at the outset. When they received notice from the Governor of the Commonwealth Bank to quit, they kept on their Savings Bank business in the Post-offices right to the very last day of the month, and thereby made a present to the Commonwealth of the good-will of that portion of their business at the time conducted through the Post-offices.
– A majority of the people in Western Australia support the Labour Government.
– The Liberals will fight very hard to put out any Government that would not bring forward legislation prohibiting the Governor of the Commonwealth Bank interfering for the future with the State work. The Savings Bank in Western Australia has done magnificent work in the development of the State. It has been the means, through the medium of the Agricultural Bank, of building up the agricultural industry of the State. The work done by the Agricultural Bank by means of the funds borrowed from the Savings Bank has been marvellous. The Savings Bank had the moneys of the people, and these were available for lending to the Agricultural Bank.
– What percentage went to the agriculturists, and what to the Government?
– I have not the figures, but a very large proportion went to the agriculturists. The State Government were always borrowing very large sums from the Savings Bank for the purpose of the Agricultural Bank, but the official statements do not show what the amounts are. Through the Agricultural Bank having cheap money to lend to the farmers, and through their conditions being very liberal, the result in Western Australia has been an extraordinary amount of new settlement. The area under wheat in 1899 was 285,000 acres. This area increased by 1914 to 1,097,000 acres. The production of wheat in 1909 was 2,460,000 bushels.
– The honorable member is now going into details which should be left until we reach Committee.
– Clause 5 gives power to the Governor of the Bank to take over the State Savings Banks, and surely I am justified in showing the value of the Savings Banks to the States, and in giving reasons why the State institutions should be protected ?
– The honorable member is now dealing with something else.
– I have only one short quotation. I shall not go further. Whereas in 1909 the wheat production of Western Australia was 2,460,000 bushels, it increased by 1914 to 13,331,000 bushels. All this increase came about through the agency of the Agricultural Bank, and the source of assistance was the State Savings Bank.
– What was the percentage of bad debts incurred by the Agricultural Bank?
– I cannot tell the honorable member. Quite recently, and for the first time, the Government of Western Australia have had to go to the London money market for the purpose of financing their Agricultural Bank, instead of borrowing the money from the Savings Bank. And now the proposal of the Commonwealth Government is that, instead of the money of the people of the State being spent in developing the State, it may be used in building up a huge industrial concern for the Broken Hill Proprietary. The money deposited in these Savings Banks should be spent in the States in order to give employment to the people in the States, as Western Australia is now doing through its Agricultural Bank. The mines of Western Australia have been a godsend to the State as well as to the whole of Australia. We all recognise how the development of mineral resources builds up the country, but when the question of one man purchasing a banking corporation, or lending money to a mining concern, which is also a huge industrial organization, comes up, one fears that it is time to put on the considering cap. In 1909-10 the excess of deposits over withdrawals in the Western Australian Government Savings Bank was £329,000. In 1910-11 the excess was £502,000. Thus the State Treasurer had £502,000 of the people’s money which he could lend for the purpose of developing the State. In 1912-13, Cbe first half-year of the competition with the Commonwealth Bank, the excess of deposits over withdrawals was only £32,000. The Commonwealth had grabbed £115,000 of our money.
– Whose money ?
– The money of the people of Western Australia - the workers’ money, which we needed for expenditure in our own State.
– Does not that show the popularity of the Commonwealth Bank?
– Not to any degree, because I believe that much of this is a political matter. On the gold-fields of Western Australia the people are eminently Australian.
– They are “ big Australians.”
– The honorable member may look upon them as “ big Australians,” but, at the same time, it is not to the interests of Western Australia that their savings should come over here, in order to build up the Broken Hill Proprietary, or any other industrial corporation, or without the approval of the Treasurer, in order to aid the Cloncurry Mine in North Queensland. Proposals such as those are not good enough for the people of Western Australia. They wish the people of the State to have control of their own money. As I was saying, in the .case of the Western Australian Government Savings Bank, the excess of deposits over withdrawals in the first half of the year 1912-13 was only £32,000. That was in the first half-year of the Commonwealth’s opposition.
– And yet the State institution offered higher interest.
– Yes. The worst feature is shown in the following period. The Treasurer of Western Australia is having anything but a happy time. He has lived up to the anticipations of honorable members opposite, and has spent money like a gentleman. He has a deficit of something like £100,000 a month.
– But he has something to show for it.
– Yes, he has. Th honorable member for Oxley spoke about the glorious time that was coming when the Commonwealth Bank would have all the people’s money. We were to have ships sailing to London carrying people at low rates. We were to have the millennium. There is a State retail meat shop in Perth supplying certain customers; there are also State timber mills operating in Western Australia, cutting sleepers, and though they started in November last, the monthly expenditure returns of the Government do not show a sixpence of the expenditure in connexion with thai national undertaking. What do honorable members expect to do when they get control of these State Savings Bank funds? In Western Australia, in the year 1913-14, there was an excess of withdrawals from the Government Savings Bank. The excess was then on the other side. In 1910 the excess of deposits over withdrawals was £502,000. In 1913-14 the excess of withdrawals over deposits was £49,000. “This was not due to bad times or to the drought. During the first seven months - from July, 1913, to January, 1914, inclusive - the excess of withdrawals amounted to £82,000, but this was made up in the next five months to the extent of £30,000; showing that the cause was not the bad times. As I pointed out before, the competition of the Commonwealth Savings Bank brought about this excess of withdrawals. The latest monthly statistical abstract issued by the Western Australian Government shows that, from the 1st July to the 30th September of this year, the excess of withdrawals over deposits has been no less than £92,220- The State Treasurer, who has now a monthly deficit of £100.000 in regard to his ordinary receipts and expenditure, will need to provide £370,000 this year to meet those withdrawals, if they continue at the same rate.
– Has the drought anything to do with those withdrawals?
– I have shown that, in the period 1913-14, the excess of withdrawals amounted to £82,000 in the first seven months, but that the year finished up with an excess of £49,000. From these figures it would not appear that the drought had this effect upon the State Savings Bank. The Commonwealth Bank, in the first half-year of their operations in Western Australia, received £115,000. That was in 1913, and, in 1914, they received £181,000, making a total of £296,000 of the people’s savings taken by them in Western Australia in a period of eighteen months. I am sure that the Commonwealth Government cannot seek the destruction of an agency which means so much to the people of Western Australia, and which has done so much for the prosperity of that State. A State Treasurer should only borrow in the London market for the purpose of carrying on ordinary developmental work. Never, in the past, have State Treasurers in Western Australia dreamt of borrowing upon the London market for the purposes of the Agricultural Bank. The money for that bank was always obtained from the State Savings Bank. I cannot understand why honorable members opposite should have desired to injure the States as they have done in connexion with this institution. They have certainly done a gross, grave, and serious injury to the finances of Western Australia and to he future prosperity of that State. 1 ask them now to seriously consider whether they ought to continue the wretched, paltry system of interference with the State Savings Bank business. Why not give the States the full strength of their Savings Banks and try to induce the various parties in this Parliament to come together with the object of making the Commonwealth Bank in every sense of the term a national institution? I wish to draw attention now to the wretched little pinpricks to which the States are subjected. The Bank Notes Bill, introduced by the Labour Government, took away from the States a considerable source of revenue in the shape of their bank notes taxation. A little while ago I received from the Governor of the Commonwealth Bank a circular advising that its customers need no longer use cheques bearing stamp duty.
– That was the decision of the late Attorney-General.
– It is the law, and the issue of such a circular was quite* unnecessary. In my opinion, it was merely an advertisement- an attempt to attract the customers of other banks. There are certain mean-spirited people who would regard as a consideration the use of cheques bearing no stamp duty.
– It is in accordance with the Constitution.
– Quite so; but the point that I wish to impress upon honorable members is that the stamp duty is collected,- not by the banking corporations, but by the States concerned. If we do not think that such a duty is a fair one, let us say so. A stamp duty on cheques is regarded by the States as a” fair means of revenue, and if we favour such a duty why should we not subject the Commonwealth Bank to the same disability as that suffered in this respect by private banking corporations? I hope that honorable members opposite will try to treat the States fairly in connexion with Savings Bank business. The arguments that I have brought forward with regard to the Agricultural Bank and the State Savings Bank of Western Australia may not apply with the same force to other States more closely populated. In Victoria, for instance, where we have a closely concentrated population, it is easier for the State Savings Bank to compete with the Commonwealth Bank than it is in Western Australia, where we have a scattered population. I hope that honorable members will take into consideration the position of the States, and more particularly that of Western Australia, as well as the difficulties in which they are placing the Treasurer of that State. If they do, I am convinced that they will come to the conclusion that it is wise to give the States full control of all Savings Bank business and to confine our attention to an effort to make the Commonwealth Bank a truly national institution.
.- When the Prime Minister was introducing this Bill to the House, Mr. Speaker, he was subjected to many interjections, and you felt it necessary to ask him to confine his attention solely to the question before the Chair. I shall endeavour, as far as possible, to. obey that direction, but if I do digress at all, I am sure that, with your ready discernment, you will quickly observe my falling away from grace, and will summon me back to the right path. Unlike some honorable members who have spoken, I shall not cast any reflection upon the private banking institutions of Australia. To my mind, they have been carried on in a very creditable manner, and they owe very much of their success to the men who have managed them. I am not satisfied with the position that the Commonwealth Bank has so far achieved. It is not yet a national Bank in the sense that I understand the term, but I look forward to the time when, having the credit and resources of Australia behind it, it will transact the whole of the business of the Commonwealth and the States, and be undoubtedly a national institution. Honorable members opposite have complained of a lack of information regarding the Bank. To some extent I am in accord with them. No one is more anxious than I am that the fullest publicity should be given to the transactions of the Government; but we must not forget that much of the business of a bank must be carried on by one or two men, and, for a time, be known only to them. The honorable member for Balaclava, who, no doubt, is the director of an insurance company, knows that.
– There is a doubt about his being a director.
– He has been for many years a member of the Victorian Parliament, and we know that there are in the State Parliaments many men of the “ guinea-pig “ variety - men who consent to be appointed to the directorates of public companies and draw two guineas a sitting. I dare say that the honorable member for Balaclava has had his share of these little emoluments which attach to membership of the State Parliaments. I look forward to the day when we shall have fewer private banks than we have at present. During the discussion of the original Commonwealth Bank Bill it was admitted in this House, by those familiar with banking business, that there was at present a good deal of overlapping, and that the numerous banks that we had in Australia were not necessary to the transaction of our commercial business. I have travelled largely in Australia. I make it my business to visit other States than that of which I am a representative, and if other honorable members would do the same they would have a better knowledge of Australia than they sometimes display. They would certainly discuss matters appertaining to the welfare of the Commonwealth in a broader spirit than was displayed this evening by the honorable member for Dampier. One of the clauses of this Bill provides for the Commonwealth Bank taking over some banking institutions; that, at all events, is my reading of it, and I am pleased that such a provision is to be made. It would be well if the Associated Banks, following the action proposed by the Government in this respect, reduced their number. In some of our provincial towns I have seen three or four palatial bank buildings. I have, in my mind’s eye, a district of not more than 12,000 inhabitants where three very fine banking premises are to be seen within a radius of 100 yards. They are of such dimensions that they would adorn Lombard-street, Cornhill, Cheapside, or any of the other great streets of the world’s capital, London. Such buildings are absolutely unnecessary, and the people who borrow from the banks have to pay for their upkeep. That clause in this Bill which will reduce by one, at all events, the number of these institutions is a step in the right direction. Honorable members of the Opposition, if they are really in earnest in their professed desire that the Commonwealth Bank shall become a national institution, giving assistance to the primary producers and others, should be prepared to support the Government in passing this Bill. I hope, before very long, to see the Commonwealth Bank a truly national institution. A good deal has been said during this debate regarding the Bank of England ; I shall not make more than a passing reference to that institution. The Governor of the Bank has been said to be possessed of autocratic powers. I regret some of the criticism to which he has been subjected. I have every respect for Mr. Miller. He has no opportunity to reply to criticisms levelled at him in this House, and I think that the honorable member for Balaclava, in particular, went rather further than he should have gone in his references to him. The only person to conduct the negotiations* between Lloyd George and the Bank of England in connexion with the recent war loan of £250,000,000 would be the Governor of that institution. The Chancellor of the Exchequer and the Governor of the Bank of England are the only two persons who can conductsuch transactions. At the Conference of State Premiers, held while the original Bill was under consideration, the Prime Minister submitted a certain proposal. It was proposed that 75 per cent. of the existing deposits in the State Savings Banks should remain at the service of the State, leaving 25 per cent. for the services of the Commonwealth. That 25 per cent. would not necessarily be taken out of the particular State in whose bank it had been deposited.
– The Bill had been passed when the Conference took place.
– At any rate, that was a condition proposed by the Prime Minister. It must be remembered that behind the Commonwealth Savings Bank are the whole of the resources of Australia, whereas behind a State Savings Bank there are only the resources of its State. Members should dealwith questions like this, not in the light of to-day only, but also with regard to the interests of the future. They should remember the climatic. conditions of Australia, where one portion of the country may be suffering severely from drought, while other portions are enjoying prosperity. It is intended that the Commonwealth Bank, being a national institution, shall give assistance in the hour of need to any part of Australia that may need help; but honorable gentlemen opposite, with their petty, parochial ideas, fail to rise to such conceptions. They know only the little place in which they live, and have no knowledge of the country at large. The Commonwealth Bank will know no State division, but will give aid wherever aid is needed, and the people who intrust their savings to it will know that the credit of the whole Commonwealth is behind the Bank. Lloyd George, speaking not long since on the present situation, said of the English bank note that the whole resources of the Empire were behind it. For Savings Bank business, the Commonwealth has command of all the postoffices in Australia. Wherever there are ten men and a dog, a post-office is applied for, and wherever there is a post-office there is a branch of the Commonwealth Savings Bank. One other point that I wish to make before asking leave to continue my remarks on another occasion is this: The Bill empowers trustees to put money into the Commonwealth Bank. If it did nothing else, that would he a great thing in its favour. Such a provision goes a long way towards making the Bank a national institution, and to carry out the intention that was in the mind of Parliament when the principal Act was introduced. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
The following papers were presented : -
Australian Institute of Tropical Medicine, Townsville, Queensland - Half-yearly Report from 1st January to 30th June, 1914.
Meat Export Trade - Report (with appendices) of Royal Commission (Mr. Justice Street).
Ordered to be printed.
Audit Act - Transfers of Amounts approved by the Governor-General in Council - Financial year 1913-14- Dated 25th November, 1914.
Lands Acquisition Act -
Land acquired under, at -
Bendigo, Victoria - For Defence purposes.
Congwarra, Federal Territory - For Federal Capital purposes.
Glenorchy, Tasmania- For Defence purposes.
Grafton, New South Wales- For Defence purposes.
Port Augusta, South Australia- ForRailway purposes.
Military Forces- Physical Training - Report by Hon. Lt.-Colonel C. Bjelke-Petersen, Director of Physical Training.
Public Service Act - Promotion of Arthur Wilson, as Supervisor, Third Class, Telegraph Branch, New South Wales.
Rifle Clubs - Report on State Rifle Associations, District Rifle Club Unions, and Rifle Clubs, for year ended. 30th June, 1914.
House adjourned at 6.28 p.m.
Cite as: Australia, House of Representatives, Debates, 2 December 1914, viewed 22 October 2017, <http://historichansard.net/hofreps/1914/19141202_reps_6_75/>.