House of Representatives
9 November 1920

8^th Parliament · 1^st Session

PRIVILEGE
PASSPORTS BILL
PAPERS
ADJOURNMENT
- Direction of Federal Capital Design
QUESTION
- COMMONWEALTH LOANS
QUESTION
- WHEAT POOLS
QUESTION
- SALE OF COPRA AT RABAUL
QUESTION
- SUPPLY OF WHEAT FOR GRISTING
QUESTION
- ASSISTANCE TO RIFLE CLUBS
QUESTION
- YEOMAN WHEAT YIELDS
COMMONWEALTH BANK BILL
- Second Reading
ELECTORAL (WAR-TIME) REPEAL BILL
QUESTION
- ORDNANCE BUILDINGS, BRISBANE

Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 3 p.m., and read prayers.

page 6283

PRIVILEGE

Speech by Mr. Mahon.

Mr HUGHES:
Prime Minister · BENDIGO, VICTORIA · NAT

– I desire to bring under your notice, Mr. Speaker, a matter of very great importance, arising out of a speech delivered by the honorable member for Kalgoorlie (Mr. Mahon) on Sunday last. According to the Argus of 8th November, the honorable member is reported to have said -

The outrage committed upon Archbishop Mannix in England would never be forgotten by the Irish people of Australia. Never in Russia under the worst ruler of the Czars had there been such an infamous murder as that of the late Alderman McSwiney. They were told in the papers that Alderman McSwiney’s poor widow sobbed over his coffin. If there was a just God in heaven that sob would reach round the world, and one day would shake the foundations of this bloody and accursed Empire. The other day he was approached by a vinegar-faced “ wowser “ who said that the police in Ireland were being shot in the back. If they were shot in the back it must be because they were running away. But there were no police in Ireland. They were spies, informers, and bloody cut-throats. (Applause.) He read with delight that some of those murdering thugs had been sent to their account, and he trusted that Ireland would not be profaned by their carcasses. Their souls were probably in hell, and their bodies should be sent to England. He would not have the sweet pastures of Ireland poisoned by their carrion clay.

Other speakers included Messrs. Tudor, Parker Moloney, F. Brennan, Considine, and Cunningham, members of this House; Mr. Prendergast, member of the Victorian Legislative Assembly; and Messrs. J. F. Hannan, J. J. Collins, J. J. Clancy, and Peter Larkin. The following motion was agreed to by the meeting: -

That this meeting expresses and extends its profound sympathy to the relatives of the late Lord Mayor of Cork, who was brutally done to death by the Lloyd George Government, and assures them that his prolonged martyrdom, which has kindled the indignation of the whole civilized world, will assuredly hasten recognition by the nations qf the Irish Republic, to which ‘ Alderman McSwiney devoted his noble life.

That this meeting earnestly invites the attention of free Australia to the complete destruction of civic liberty in Ireland by the action of the English Government; it denies the right of England to impose her will on the Irish people in view of the fact that Ireland, by an overwhelming majority,, approved of the establishment of an Irish Republic; and it condemns thu saturnalia of murder, arson, plunder, and destruction indulged in by the foreign army of occupation, with the clear connivance and approval of the English Government.

That this mass meeting of Australian citizens, in view of the policy of oppression and tyranny pursued by the English Government in Ireland, and which has brought eternal disgrace upon the whole British Empire, of which Australia forms a part, pledges its support to any movement for the establishment of an Australian republic.

In view of the statement alleged to have been made by the honorable nr.ember, and the terms of the motion - both incompatible with the oath of allegiance taken by the members of this Parliament, and entirely opposed to the sentiments of the great majority of the people of Australia - I ask you, Mr. Speaker, whether I may ask the honorable member whether the report that I have just read is substantially correct ?

Mr SPEAKER:

– The question being really “ one of privilege, the honorable member for Kalgoorlie is entitled to make any statement that he may desire in replying to it.

Mr MAHON:
KALGOORLIE, WESTERN AUSTRALIA

– For nearly twenty years, with a slight interregnum, I have been a member of this Parliament. I claim that, during this long period, I have not been wanting in sobriety of speech or conduct. I do not now remember that I have ever been called to order during that time. I am certain that you, Mr. .Speaker, * who have been a member of the House nearly as long as I, have never,, during your occupancy of the Chair, found me acting in disobedience to the rules or in showing disrespect to your office. In anything I may now say, let me assure you that I intend no disrespect to you, and none to the Parliament created by the people of Australia. I have never, during my career here, called attention to anything said outside the House about me, about the principles I espouse, or about men whose reputations I reverence. Now, only last week most vile statements were made by men sitting on the opposite side of the Chamber about the religion which I profess, statements published at length in the newspapers, but none called attention to the outrage so wontonly offered to the feelings of the ‘ Catholics of

Australia . One man who sits opposite said that when a church, meaning the Catholic Church, became a political institution it should be broken up. The Catholic Church’s record needs no championship from me. Bigger men than he have attempted to break up that church, but ito will stand and flourish when he and his like are in the limbo of ignominious oblivion. For anything I say inside the Chamber I am responsible to you, Mr. Speaker, and to the House. There is the law of the country to call me to account for anything that I may say outside this House. Therefore, if any man gets up here to catechise me about language that I have used, or am reported to have used., outside this House, I say to him, politely, but firmly and decisively, that he can go to the devil.

Mr Hughes:

– Then we are to take it that the report is correct?

Mr MAHON:

– You are not to take anything of the kind.

page 6284

PASSPORTS BILL

Message received from the Senate that it had agreed to the amendments made by the House of Representatives in the Bill.

page 6284

PAPERS

The following papers were presented : -

Rubber Agreement Act- -Regulations - Statutory Rules 1920, No. 193.

Deceased Soldiers’ Estates Act - Regulations Amended- Statutory Rules 1920, No. 194.

Defence Act - Regulations Amended - Statutory Rules 1920. Nos. i87, 188, 189, 195, 196, 197, 198, 199, 200, 203, 204, 205, 207.

Northern Territory - Ordinance of 1920 - No. 8- Public Trustee.

War Precautions Act and the Land, Mining, Shares, and Shipping Act - Regulations Amended- Statutory Rules 1920, No. 185.

page 6284

ADJOURNMENT

Direction of Federal Capital Design

Mr SPEAKER:

– I have received from tha honorable member for Cook an intimation that he desires to move the adjournment of the House to discuss a definite matter of urgent public importance, viz., “ The proposal to supersede the present direction of Federal Capital Design and Construction by the appointment of a Committee largely composed of antagonistic and unworkable elements.”

Five honorable members having risen in, their ‘places,

Question proposed.

Mr J H CATTS:
Cook

.- The announcement appeared in the press on the 2nd instant that it is proposed to supersede the present Federal Capital Director of Design and Construction by a Committee of five persons. The names of two Federal officers are mentioned as members of the Committee.

I wish to show (1) that the Committee will be composed of antagonistic and unworkable elements, and (2) that the proposal is a gross breach of faith with the Director of Design and Construction of the Federal Capital.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member will not be able to show that.

Mr J H CATTS:

– In 1913 the right honorable member for Parramatta- (Sir Joseph Cook) invited Mr. Griffin to come to this country for consultation shortly after his plans had won the international competition for the laying-out of the Federal Capital. While Mr. Griffin was here the Government, of which the right honorable member for Parramatta (Sir Joseph Cook) and the present Minister for Works and Railways (Mr. Groom) were members, appointed him upon a definite and binding agreement as Federal Capital Director of Design and Construction - in October, 1913.

Upon that appointment, and upon the terms of that contract, Mr. Griffin went to America and closed up a lucrative . and growing practice in Chicago, and then returned to this country for the purpose of carrying out his agreement, and building . the Capital, directing its design and construction in accordance with the plans with which he had gained the first .prize in the international competition.

The agreement under which Mr. Griffin was appointed gave him full executive authority as Director of Design and Construction, subject only to the Minister.

When the three years’ term of the original agreement expired, there was a Labour Government in office, and in 1916 Mr. King .O’Malley, who was Minister for Home Affairs at the time, renewed Mr. Griffin’s appointment on the self-same terms and conditions.

In October, 1919, the Hughes Government extended this appointment under the same terms and conditions, so that the terms and conditions of the agreement under which Mr. Griffin was originally appointed have been ratified by the two great political parties represented in this House.

Mr. Griffin possesses pre eminent attainments. I have been associated with the agitation for the selection of the Federal Capital site and the ‘building of the Capital for many years, and have taken a very close interest - I was going to say in its progress, but I should, perhaps, say, in its want of progress. Mr. Griffin is a Bachelor of Science of the College of Engineering of the University of Illinois, in the United States of America, and he has taken his degree in architecture’, and also University courses in architectural and sanitary engineering.

Mr. Blacket, who was appointed a Royal Commissioner to inquire into certain charges which had been made against Mr. Griffin in connexion with his office by departmental officials, reported in May, 1917, that from October, 1913, to June, 1916, Mr. Griffin was prevented from carrying out the duties of his office. I shall refer to this again later. The Government then suspended works at the Federal Capital on account of the financial position arising out of the war. Thus for seven years Mr. Griffin has had no chance to carry out the work for which he was appointed.

In November, 1913, it was decided by Mr. Kelly, who was then Minister for Home Affairs, that there should be an international competition for designs for the Parliament House at Canberra; but that competition has, for one excuse or another, been held up until the present day. We were told that the leading architects of the world were at the war. For any old excuse the international competition for designs for the Federal Parliament House at Canberra has been held up. This is our general experience in connexion with all Capital matters.

Some of the officers whom it is proposed to place upon the proposed Com.mittee have shown throughout gross antagonism to the present Director of Design, and Construction of the Federal Capital. As I shall show, it would be impossible to expect progress from a Board or Committee composed of these unwork-able and antagonistic elements.

The departmental officials to whom I refer have been responsible for the most colossal blunders that have been committed in the building of public works in this country. I refer to (1) the water system, (2) sewerage, (3) electric light and power, (4) brick works, (5) the railways, (6) accountancy. All these matters were reported on by the Blacket Royal Commission.

The errors complained of were commenced prior to Mr. Griffin’s arrival on his return from America after his appointment, and have been carried out in spite of his repeated protests.

The water system’. The Federal Capital site at Canberra was offered in 1908 by the New South Wales Government, because of the plentiful supply of water by gravitation, and because of the enormous possibilities of providing cheap water power. Canberra is looked upon as one of the finest sites in Australia for the development of cheap water power. These matters have been reported upon by the leading experts of New South Wales. The Federal officers, instead of adopting a gravitation scheme for supplying water to the Capital, substituted .a pumping scheme which necessitated the pumping of water to a height of 800 feet. Mr. Oliver, Chief Engineer of the Metropolitan Water Supply and Sewerage Board of Victoria, and recognised as a leading man in his profession in Australia, reported that the first cost and the subsequent service of water by gravitation would be cheaper than the pumping scheme that has been adopted by the departmental officers.

Sewerage. The departmental officers proposed to proceed with a main trunk sewer to empty 25 feet below the Molonglo River bottom, and to pump the sewage on to a sewage farm. Mr. Oliver, when called in to report, estimated the cost of this trunk system of sewerage at ?250,000, and after ?40,000 had been spent upon it he reported that the proposal for a sewage farm was absolutely impossible. Mr.. Oliver himself devised a scheme of sewerage for the Federal Capital site to cut out entirely the proposed expenditure of ?250,000 for mall] trunk lines of sewerage.

Electric light and power. The location of this industrial undertaking is in such a position as to necessitate the construction of a special line of railway and destroy one of the main views of the city. It took into consideration the supply of light, but not the supply of power, and Mr. . Blacket shows, in his report, that the building cost twiceas much as it should have cost. The plant is already obsolete. Reciprocal engines have been installed, whereas the authorities to-day state that the building should be fitted with turbine engines.

Brickworks. These were set in. the residential area, the immediate effect being to depreciate the land values in that area, but the departmental officers also partially cut down a hill which afforded protection from the prevailing winds. No proper test was made to discover, whether shale existed in sufficient quantities to warrant the building of brickworks, and subsequently, when a test was made, it was found that there were only 13 feet depth of shale at that spot. The first plant had to be scrapped owing to its unsuitability. and the ultimate cost of the brickworks was £40,000. It was estimated by the manager of the Northcote Brickworks, Melbourne, when he gave evidence before Mr. Blacket, that a modern plant’ of double the capacity of the brickworks at Canberra could be erected in Melbourne at a cost of £10,000. He could not give the figures for Canberra, because he would have been obliged to make an investigation, on the spot. As the brickworks at Canberra were erected 3 miles from the railway line it necessitated 3 miles of haulage of coal from the railway to the works and 3 miles of haulage of bricks from the works to the railway. It has since been discovered that there is an inexhaustible supply of shale near the existing railway in the industrial area.

Housing. The departmental officers constructed temporary buildings which cost as much as permanent buildings. The administrative offices, according to Mr. Blacket’s report, cost £15,000, whereas they should not have cost more than about £2,000.

Railways. When Mr. Griffin came buck from America he found that the officers had a permanent railway nearly completed from Queanbeyan to the city boundary, a distance of 4½ miles, and that it was located in the river bed which in his plan, which had won the international competition, was to be in the centre of a series of ornamental lakes. A flood some time after the completion of the railway washed out half-a-mile of the railway works in the bed of the river, at an estimated damage, according to Mr. Bell, the Commissioner of Commonwealth Railways, of £8,000. This information was supplied to me by the Minister, hence I accept it as accurate. The cost of building this 4½ miles of railway was £50,000, and it has now been shown that it could have been built as proposed in Mr. Griffin’s plan on high ground for the same amount of money.

Accountancy. It was shown by Mr. Blacket’s report that no proper system of accountancy had been followed, and that, although colossal losses had already been incurred, it was impossible to tell the aggregate cost to the Commonwealth of these enormous blunders perpetrated by the departmental officers.

In addition to the matters reported upon by Mr. Blacket a number of bridges have been built within the Capital area, and not one of them hasstood against floods, with the exception of one very heavy concrete structure, and even in that case the railway line which crosses the river upon it was washed off it.

This is the finding of Mr. Blacket, as shown on page 45, paragraph 170, of his, report -

That necessary information and assistance were withheld from Mr. Griffm, and his powers were usurped by certain officials;
That he and his office were ignored his rights and duties under his contract denied, and false charges of default made against him:
That Hon. W. O. Archibald and members of the Departmental Board endeavoured to set aside his design and substitute the Board’s own design.

Mr. Blacket further reported that there was in the Department a combination of certain officers, hostile to Mr. Griffin and his design for the Capital city.

For years the manner in which the departmental officers persisted in carrying out a plan of their own which had never been submitted to competition has caused the greatest amount of friction, prevented the work at Canberra from being proceeded with, and has entailed enormous losses to the Commonwealth. If the works which have been constructed on the initiation of these officers are part of. their plan, it is quite clear that the Federal Capital built on their plan would be one of the greatest hotch-potches in the world.

It has been said that if the building of the Ark had been left to committees the whole living world would have been drowned.

– My honorable friend made an attack upon Mr. Griffin when he first set foot in Australia in 1913, and has been “ up against “ him ever since. It is a blind prejudice.

– Will they? They can only do so if the House and the Minister permit them. I repeat that it was thought the officers would do so, and Mr. Griffin was brought here to see and to report whether they did, interfere with his plan. Therefore, the fundamental idea at the bottom of the agreement was that he was not to construct the Capital, but to take care that those who did the work did not maul his plan about.

My colleague (Mr. Groom) directs my attention to some questions that were asked in the House on the 29th October, 1913. On that date the honorable member for Maribyrnong (Mr. Fenton), “amongst other questions, asked -

Who will prepare the specifications and conditions of competitive plans, and arrange the architectural portion of the city, and will the Government allow an architect, even outside the Department, to draw up conditions and assist in the architectural work of all the buildings ?

The reply was -

The agreement with Mr. Griffin provides that he will advise upon, and if so requested by the Minister, prepare conditions of competition for public buildings and works for the Federal City and preliminary feature plans for the guidance of competitors. It is proposed to use his advice to insure harmonious structural development. The Government will be able to have the erection of buildings supervised by its own officers. Copy of the agreement in question will be made available to honorable members this afternoon.

Mr J H Catts:

– That is all righterected under Mr. Griffin’s supervision.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It does not say so in what I have read.

Mr J H Catts:

– You are not reading the agreement.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr FENTON:

– This constant agitation in regard to building the Federal

Capital, instead of forwarding the movement, is in reality retarding it. But for the war and the financial strain it has involved, I would be in favour of the proposed expenditure on the Federal Capital; but we can at present spend our money to much better advantage in other directions. I would urge the honorable member for Cook not to pay too much attention to these reports. I have no desire to take advantage of my position to do an injustice to any man; but from schemes which have been outlined before the Public Works Committee from time to time in regard to the Federal City, I have been led to certain conclusions. The designer of the Federal Capital has jurisdiction only over the city area, and not over the whole of the Territory, but unfortunately he considers himself to ‘be a master of all the professions. In regard to various works in the Territory, he sets himself up against men who have made a life-long study of special branches of engineering, such as sanitary engineering, and also architecture. He sets himself up as a leader in all the different professions.

Mr J H Catts:

– He has never .done that.

Mr FENTON:

– I assert that he has; and when a man claims to be a Jackofalltrades, I am inclined to think that he is master of none.

Mr J H Catts:

– The honorable member is grossly biased.

Mr FENTON:

– I am not. If the honorable member will look through the evidence given before the Public Works Committee during 1915 and 1916, he will find that my statement is in accordance with facts.

I have no desire to do an injury to the designer of the Federal City. I believe that his design would give us an artistic and magnificent city, but it is altogether too elaborate and too expensive to permit of the Commonwealth giving effect to it for many years to come. In the distant future, we may contemplate a city with ornamental lakes and picturesque settings such as the Federal Capital designer proposes, but I do not intend to vote for such an expenditure at the present time. I would advise the advocates of the expenditure of money on the Federal Capital not to be for ever bringing up the matter. I believe the work will jog along steadily, although perhaps not as merrily as they would have it; and in due time, when money is far more plentiful than it is to-day, we shall build the Capital to the delight and satisfaction of the people. I understand that the agreement made with the designer of the Federal City does not give him jurisdiction over its environments. He has not charge of the whole Territory, which comprises 1,000 square miles.

Mr Groom:

– I think that Mr. O’Malley, when Minister for Home and Territories, gave him authority over works outside the city area; but his original agreement related to the designing of the Federal City.

Mr FENTON:

– Quite so; and my view is that works relating to the Territory outside the city itself should be in charge of more experienced officers.

Mr AUSTIN CHAPMAN:
EdenMonaro

– I regret the form which this discussion has taken, since I believe that it will lead us nowhere. I have some proposals of a practical character which I should like to bring before the House, but it was only when I entered this Chamber this afternoon that I learned from the honorable member for Cook (Mr. Catts) of his intention to take this action. I am, therefore, not prepared at this moment to go into them. We are wrong in pitting officer against officer. There has been too much of that sort of thing, and I am satisfied, from my own experience, that the feud between the officials has cost the Commonwealth practically a quarter of a million sterling.

Mr Gabb:

– I call attention to the state of the House. [Quorum formed.’]

Mr AUSTIN CHAPMAN:

Mr AUSTIN CHAPMAN:

– To-day I received this telegram -

Being in favour of immediate action to honour constitutional pledge re Federal Capital, will you hold up all parliamentary business until definite action is taken to absolutely consummate capital?

Mr GROOM:
NAT

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

- Mr. Corin, in a paper which was published after Mr. Oliver’s report, says -

Comparative estimates of a steam supply at Canberra with electric pumping and the gravitation scheme advocated by the author for the hydro-electric supply, show that the cost of water and electrical energy for the former would be 4.6d. per 1,000 gallons and 0.98d. per unit respectively; and for the latter 3.4d. per 1,000 gallons and 0.57d. per unit, it being understood that the exact division of the charges between water supply and power is necessarily to a large extent empirical.

Mr Groom:

– Experience has shown that outside criticism was mistaken regarding the cost of the pumping scheme.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– The figures I have just given relate to the cost to the users of water and electrical energy. It was urged against the gravitation scheme that it would be impossible to put in at the beginning a plant for the supplying of 100,000 persons, but Mr. Corin pointed out eight years ago that the gravitation scheme could be carried out in three divisions as the population increased, supply being provided in the first instance for a population of from 10,000 to 15,000; secondly, for one of from 20,000 to 50,000; and thirdly, for one of from 50,000 to 100,000.

Mr j H Catts:

– Mr. De Burgh showed in 1908 that that was the proper scheme.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– So-called experts have overridden the advice of men who “ had no axe to grind,” and have disregarded the suggestions that they have made. I should like an assurance from the Minister that in future the best advice will be taken, and that the departmental friction of the past shall not be allowed to continue. While I am anxious for the erection of the Federal

Capital at Canberra, I do not wish to see money wasted there as in the past. The Minister has spoken of Mr. Oliver’s report as having been falsified by experience, but in 1916 Mr. Oliver objected to the departmental pumping scheme for these reasons -

The necessity of having to pump the water to such an elevation and the consequent expense of doing so;
The height at which the service reservoirs are placed above the city, being such that an unusually severe strain would be imposed upon all fittings. These pressures are, I consider, excessive*

I understand that there is a pressure of 250 lbs. to the square inch on all the town fittings, which means continual leakages, destruction of valves, and bursting of pipes.

The use of cast iron in the rising main to the pipehead reservoir at Mount Stromlo instead of steel.

Eight years ago we may have been able to run risks in the expenditure of public money, but now, in view of our war indebtedness, we have no money to waste. Therefore, we should not permit feuds between responsible officers to prejudice the public interest, and should insist that the suggestions of outside experts; when substantially buttressed by good professional opinion, should receive consideration.

Question - That the House do now adjourn - put. The House divided.

AYES: 15

NOES: 21

Majority . . . . 12

AYES

NOES

Question so resolved in the negative.

page 6301

QUESTION

COMMONWEALTH LOANS

Cost of Flotation

Mr FENTON:
for Mr. Marin

asked the Treasurer, upon notice -

What were the costs per cent, in connexion with the flotation of the respective loans raised by the Commonwealth Government ?
What amount was expended on giving publicity to the recent Peace Loan of the Commonwealth ?
What was the amount of brokerage fees paid in connexion with such loan?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The answers tothe honorable member’s questions are : -

1st issue, 5s. 4d. per cent.; 2nd issue, 4s.8d. per cent.; 3rd issue, 4s. 5d. per cent.; 4th issue, 4s. 3d. per cent.; 5th issue, 5s. per cent.; 6th issue, 5s. 8d. per cent.; 7th issue, 6s. 4d. per cent.; 8th issue, 7s.10d. per cent.; 9th issue (second Peace Loan), 7s.10d. per cent. (approximate).
All accounts have not yet been received, but the expenditure on all forms of publicity, including advertising and expenses of committees, is estimated at £47,000.
Brokerage fees and commission to authorized agents, £18,610.

page 6301

QUESTION

WHEAT POOLS

Advances by Banks.

Mr FENTON:
for Mr. Makin

asked the Treasurer, upon notice -

What are the respective amounts advanced by each of the banks to finance the various Wheat Pools, and what rates of interest did they receive!

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The banks have not advanced specific amounts to finance the Wheat Pools, but the overdrafts at each State capital have been adjusted from week to week, so that the total overdraft is apportioned between the banks in relation to their deposit business. According to the latest advices, the wheat accounts are in credit, butthe overdrafts resulting from the further payments to growers of £1,830,000, which commenced on 5th instant, will be adjusted between the banks as set out above. The rate of interest paid to the banks was 5 per cent. per annum.

page 6301

QUESTION

SALE OF COPRA AT RABAUL

Mr CUNNINGHAM:
GWYDIR, NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

Is it a fact that an officer from the Customs Department recently called on certain firms in Sydney and asked for alternative quotations f.o.b. Rabaul and c.i.f. Sydney for 2,000 tons of copra which had been expropriated by the Board at Rabaul?
Is it a fact that only a few hours were given in which to complete the quotation?
Is it a fact that this copra was subsequently sold at Rabaul?
If so, who purchased the 2,000 tons of copra, or any portion of it, and what was the price paid?
Is it a fact that the firm of Burns, Philp, and Company purchased about 1,700 tons, more or less, of this copra?
If so, at what price per ton?
Were tenders invited for this copra? 8. If not, why not?
Is it a fact that Mr. W. G. Lucas, late of Burns, Philp, and Company, who went to New Guinea as the Government representative, is returning by the warship Melbourne?
If so, what is the reason?

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The information is being obtained.

page 6301

QUESTION

SUPPLY OF WHEAT FOR GRISTING

Mr. FENTON (for Mr. Makin) risked the Prime Minister, upon notice -

Whether the Government can announce what arrangements will be made in the immediate future for the re-opening of the flour mills by an adequate supply of wheat being made available for gristing purposes?

Mr WISE:
Postmaster-General · for Mr. Hughes · NAT

– Considerable quantities of flour gristed in anticipation of sale are still held by the States unsold. The gristing of further quantities for export would have involved the diminution of the stocks of wheat available for overseas sale, and the consequent loss of favorable opportunities of realization. At presen!t it cannot be stated when the export business will be resumed.

page 6302

QUESTION

ASSISTANCE TO RIFLE CLUBS

Sir GRANVILLE RYRIE:
Assistant Minister for Defence · NORTH SYDNEY, NEW SOUTH WALES · NAT

– With reference to a question asked by the honorable member for Wakefield (Mr. Richard Foster) on the 29th October on the subject of grants of ammunition for rifle club purposes, I desire ‘to state that a sum of £50,000 is provided on the current year’s Estimates for general expenses of rifle clubs and associations. In addition, the Minister has approved of a free issue of ammunition to the value of £30,000, calculated on the basis of actual cost to the Department, besides a free issue of approximately 9,000,000 rounds of ammunition (valued at £15,000) for use at Association and Union prize meetings. As stated in the recent announcement of defence policy by the Minister, these must be understood as representing the full extent of assistance to bo given by the Government in the way of subsidy to rifle clubs.

page 6302

QUESTION

YEOMAN WHEAT YIELDS

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– On 17th September the honorable member for Melbourne (Dr. Maloney) asked me the following question : -

Will the Minister for Trade and Customs (Mr. Greene) follow up the courtesy which he showed to me some time ago in obtaining ‘ information concerning the wonderful variety of seed wheat known as Yeoman, which gives up to 96 bushels per acre. I ask the Minister if he will endeavour to obtain a supply of .this variety from the Imperial’ Government for the use of the wheat-growing States of Australia?

In reply, I said -

I will have the matter inquired into. I think it probable that the agricultural experimental stations under the control of the various State Governments will have taken up the subject.

I am now in a position to furnish the following information which has been supplied by the Premiers of the various States: -

New South wales:- The Department of Agriculture states that the Yeoman variety of wheat is to be tested this year. The variety is extremely late, however, and not suitable- even for the Glen Innes district. It i3 a typical English, wheat, and a very heavy stooler. A complete report on the trial of this wheat will be available in about January next.

Victoria. - No experiments have been conducted in Victoria as yet with the new variety of wheat called Yeoman, but it is proposed to procure some seed of this variety in time for the next sowing season.

Queensland. - No tests have yet been made in Queensland of Yeoman wheat.

South Australia. - The Director of Agriculture has reported as follows: - “We have no record of local experience with the variety of wheat known as Yeoman. A few ears of this wheat, however, were handed to us last season, and we distributed it over the Government farms. Speaking generally, however, I may state that wheats that are heavy yielding under a climate such as that of England, very rarely, if ever, succeed under South Australian conditions. We have repeatedly tested varieties alleged to have given heavy yields in countries such as England, but have always found them more or less unsuited to local conditions. Personally, I see no reason for believing that Yeoman wheat will prove any more useful than other varieties that have been introduced in the past.”

Western. Australia. - Both Browick and Red Fife varieties (the Yeoman is a hybrid between these), have been planted in the test rows at the Chapman and Merredin Experimental Farms in this State, last planting season. Past experience, however, indicates that they are not likely to prove as suitable for our conditions as they are reported to have proved under British conditions.

Tasmania. - Yeoman wheat appears to be unknown in this State, and no experiments have been made with it.

page 6302

COMMONWEALTH BANK BILL

Second Reading

Debate resumed from 4th November (vide page 6187), on motion by Sir . Joseph Cook -

That this Bill be now read a second time.

Mr TUDOR:
Yarra

– I shall not be long in discussing this measure; but I say at once that I regret that the Treasurer (Sir Joseph Cook) has intimated that it is his intention to strike out one of the most important clauses of it. In considering this Bill, my mind goes back to 1911, when Mr. Fisher introduced the first Commonwealth Bank Bill. If honorable members will turn to page 2644 of Hansard for 15th November, 1911, they -will find the following report: -

Mr FISHER:
Prime Minister and Treasurer · WIDE BAY, QUEENSLAND · ALP

– I move -

That this Bill be now read a second time.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Sovereigns for every one !

It will be seen that the right honorable gentleman could not wait until the Prime Minister and Treasurer of that day had advanced a single argument in support of the Bill before he made that sarcastic interjection, “ Sovereigns for every one 1 “ Yet he is to-day standing sponsor for an amendment of the Commonwealth Bank Act. During the discussion on the motion for the adjournment of the House I took advantage of the opportunity to read some of the speeches made by honorable members on the motion submitted by Mr. Fisher for the second reading of the Commonwealth Bank Bill in 1911.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Does the honorable member think he is still sane after reading those speeches)

Mr TUDOR:

– I wish to say that I was very much struck with the remarks of the then honorable member, for Wentworth (Mr. Kelly) and of the present Minister for Trade and Customs (Mr. Greene). I find that in the course of the debate Mr., now Senator, Fairbairn predicted that all the Caucus would be directors of the Bank. The late Lord Forrest said, among other things -

The Government has not proved that the measure is urgently needed, or that there is even a gap which it will fill. It is doubtful whether the Constitution empowers us to create a Bank.

I have copied from the report of the debate the remarks which I have attributed to Senator Fairbairn and the late Lord Forrest as typical of the hostility shown by honorable members opposite to the establishment of the Commonwealth Bank, which they have. since taken every advantage of, and to-day there is not one man who was opposed to the establishment of the Bank .in 1911 who would advocate wiping it out. Its establishment is evidence of the foresight of members of the party that I have the honour to lead, because we had in our programme for some time the creation of a National Bank. I admit that I could wish that the Commonwealth Bank had greater powers than it has.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Then the honorable member is going back on it.

Mr TUDOR:

– I stand by the interjection I made the other day when the . right honorable gentleman was moving the second reading of this Bill.’ When speaking of the investment of the funds of the note issue in the ordinary business of the Bank, ‘the right honorable gentleman said -

I do not think the Bank in that regard should be given privileges which other banks do not possess.

I interjected that I would certainly be prepared to give the Commonwealth Bank advantages over and above those given to private banks. I stand by that statement.

I wish to refer honorable members to some particulars supplied by Mr. Knibbs in his article on “ Banking,” which appeared in No. 11 of the Commonwealth Year-Book for 1918, and which is published in that issue much more fully than it appears in the issue for the following year. He gives the names of various banks, their capital, dividends paid, and the amount of their reserves. Honorable members will find that in dealing with the Commonwealth Bank he gives the following particulars: - Paid-up capital, nil. Rate per cent, per annum of last dividend or bonus, none. Amount of last halfyearly dividend or bonus, nil. Amount of undivided reserve profits, £526,292. I find, according to the Budget-papers, that that amount has now reached £2,363,000.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We have had none of that.

Mr TUDOR:

– No, but the Bank has made profits to that amount, and they stand to its credit to-day.

I shall mention the honorable members of the House who voted against the Commonwealth Bank Bill which brought the Commonwealth Bank into existence Among them were the honorable members for Parramatta (Sir Joseph Cook), Wakefield (Mr. Richard Foster), Richmond (Mr. Greene), and Eden-Monaro (Mr. Austin Chapman), and also the present Speaker (Sir Elliot Johnson). Of course, the division was on party lines. Honorable members voted to kill the Bill.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No. We wanted a different kind of Bank.

Mr TUDOR:

– That is not so, . Honorable members voted to kill the BilL

The following is a table prepared by sources of Australian cheque-paying **Mr. Knibbs** in regard to the capital re- banks in the years 1916-1917: - The other day the Treasurer **(Sir Joseph Cock)** told us that, during the war, the Bank of England was making no greater profit than it was making prior to the war, but that remark is not true as applied to Australian banks; because they took as much advantage of the war conditions as did any .other section of the community. As a matter of fact, their reserved profits are higher than the original capital put into them, as for instance, in the case of the Western Australian Bank, whose paid:up capital is only a little over » third of its reserved profits. Yet the Treasurer says that he will not give the Commonwealth Bank - the Bank owned by the whole of the people of Australia - any advantage over private banks. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- What advantage could the honorable member give it? {: .speaker-KWL} ##### Mr TUDOR: -- I would give it every possible advantage I could give it. The Treasurer tells us that he intends to eliminate the proposed new section 60o, relating to the portion of their reserves which banks are to hold in Australian notes, and says that this matter will be covered by a complete Banking Bill. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I said that it should be. {: .speaker-KWL} ##### Mr TUDOR: -- That makes the position still more remote. Is this a sop to the banks? Is it done in the interests of the people of Australia, or is it proposed to eliminate this paragraph in order to get the banks to help to finance the wheat guarantee? Have the institutions put a pistol at the head of the Treasurer and said, " Unless you eliminate that provision we will have nothing to do with the financing of the wheat crop?" {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No. They did not, or anything like it. {: .speaker-KWL} ##### Mr TUDOR: -- I am glad to hear the Treasurer make that statement, but it is most peculiar that, after a Bill has been submitted, presumably after consultation with the Treasury officials and possibly with banking officials, we should learn, even before the Treasurer had made his second-reading speech upon it, that a vital clause specifying the proportion of its deposits each bank shall hold in Australian notes was likely to be altered: I admit that the Treasurer told us early in his second-reading speech that he proposed to eliminate this provision. I asked the Treasurer by interjection during his speech whether the Commonwealth Bank would be able to issue as many notes as it liked, and he said that it would be entirely within its power to issue more or less just as it liked. Some honorable members have complained that the note issue is inflated. They contend that it is quite possible prices would come down if it were deflated. Of course, as I interjected the other day. when the Treasurer was speaking, prices are high to-day because so many men have been withdrawn from productive industries. If we withdraw 20,000,000 men from production, and place them where their task is nothing but destruction, it necessarily means that less articles are produced and that the cost of them considerably increases. The Treasurer tells us that the note issue ought to be removed from political control; he advanced as another reason for transferring its control to the Commonwealth Bank the fact that the Bank has branches all over Australia, while the Treasury has none. As a matter of fact, the Treasury does not distribute the notes except at the head office, and, perhaps, at a few sub-branches. They are now distributed by the banks. It is their proper function to do so. If the Commonwealth Bank is to do this work now it will be obliged to keep sufficient supplies of notes on hand in every capital, and will thus relieve the private banks of the necessity to send to the Treasury in Melbourne for the notes, and transmit them to their various branches. I would like to hear what remuneration is to be paid to the board of directors which is to control the note issue, and whether the directors will be permitted to interfere with the other work of the Commonwealth Bank. Will they simply control the note issue? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -Exactly. {: .speaker-KWL} ##### Mr TUDOR: -- Will they have anything to do with the other work of the Bank ? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Nothing whatever, {: .speaker-KWL} ##### Mr TUDOR: -- Will they devote the whole of their time to the work of controlling the note issue? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The two directors to be appointed, other than the Governor of the Bank and the Secretary of the Treasury, will be reputable business men chosen from outside to act in the same way as the Trustees of the Melbourne Savings Bank act now. {: .speaker-KWL} ##### Mr TUDOR: -- That is to say, while they will not be employed full time on this work, and while their fees may amount to a fair sum per annum, they will not be receiving anything like the salaries drawn by bank managers? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- They will receive just the fee for each day they sit. {: .speaker-KWL} ##### Mr TUDOR: -- The Treasurer has told us that the gold reserve provided is 25 per cent. of the note issue. When the Commonwealth Bank Bill was under consideration in this House, there was some very severe comments on that particular proposal, and this is what the right honorable gentleman himself said on that occasion - >I always congratulate the Labour party on the possession of a mild-mannered Prime Minister, such as they have, for 1 think he would disarm-- {: .speaker-20000} ##### Mr Page: -- Joseph Cook. {: #subdebate-10-0-s2 .speaker-F4S} ##### Mr JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Well, he does disarm me. I cannot find it in my heart to attack him. There is that in his exterior which would deceive any one of us if we did not know what was underneath it. Beneath it all, however, we know that there is a perfect Machiavellian purpose. I desire to show how far away he is in regard to this Bill from the people on whose support he relies to carry it. It is my duty to show what they expect, and what he proposes to give. So far as the great struggling masses outside are concerned, this is another piece of Dead Sea fruit that the Government are offering them. . . The Prime Minister told members of the Opposition that the fact that the Commonwealth Bank will compete with private banks should not give them concern, because they profess to believe in private enterprise; but be gave no good reason for this revolutionary proposal. My main objection to the Bill is that it provides for a politicallycontrolled bank . This Bill ties the Governor of the Bank to the Treasurer in a way which, I believe, is very sinister, and will work out to the detriment of the Bank, and the country. . . . Whatever the ultimate purpose may be, they are setting up a control which will make it almost impossible to conduct the Bank on ordinary sound business lines. With the experience he has had in the last eightor nine years, does the Treasurer still say that a control was set up which made it almost impossible to conduct the Bank on ordinary sound business lines? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is precisely what I am saying, and now I am endeavouring to remove this matter from Treasury control. {: .speaker-KWL} ##### Mr TUDOR: -- Does the Treasurer still , contend that beneath it all there was a perfect Machiavellian purpose, and that the Bank has done no good to Australia ? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do not believe that the Bank has done any good to the workers of the country in the sense they expected. {: .speaker-KWL} ##### Mr TUDOR: -- I believe it has done an infinite amount of good to the people of Australia. If it had not been for the Commonwealth Bank and the note issue this country would not have got through the war as well as it did. The right "honorable gentleman went on to say further - >I should like to know where the business of the bank is to come from. I should have thought that the Prime Minister would tell the House where he expected to get it from. He should have done what any outside company would do when issuing a prospectus. . These are urgent reasons why the House ought to pause before plunging into this enterprise, which must be fraught with serious consequences to the future of Australia. Every prognostication of the right honorable gentleman on that occasion has been falsified. The Bank has done good work, and not one honorable member who opposed the Bill in 1911 would now oppose passing it into law. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I certainly would on its present lines. I believe to-day that it is not on proper lines. {: .speaker-KWL} ##### Mr TUDOR: -- But in 1911 the honorable member and others sitting with him opposed the whole project, root and branch. The following voted against it: - **Sir Robert** Best, **Sir Joseph** Cook, **Mr. R.** Edwards, **Mr. G.** Fairbairn, **Sir John** Forrest, **Mr. Richard** Foster, **Mr. J.** M. Fowler, **Mr. G.** W. Fuller, **Mr. D.** J. Gordon, **Mr. Massy** Greene, **Mr. L.** E. Groom; -Mjr. R. Harper, **Mr. W.** M. Hedges, **Mr. W.** H. Kelly, **Mr. W.** J. Mcwilliams/ **Mr. A.** C. Palmer, **Sir John** Quick, **Mr. G.** de L. Ryrie, **Mr. Carty** Salmon, **Mr. S.** Sampson, **Mr. H.** Sinclair, **Mr. John** Thomson, and **Mr. Agar** Wynne, the tellers being **Mr. L.** Atkinson and **Mr. W.** Elliot Johnson. The pairs against it comprised the following : - **Mr. J.** Livingston, **Mr. Hans** Irvine, **Mr. Bruce** Smith, **Mr. W.** H. Irvine, **Mr. A.** Deakin, and **Mr. P.** McM. Glynn. That division took place litton an amendment to the motion for the second reading of the Bill, affirming that it should be referred to a Select Committee. Honorable members know that there are two or three ways of killing a measure. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That amendment was not designed to kill the Bill, but to improve it. {: .speaker-KWL} ##### Mr TUDOR: -- One of the methods adopted for killing a measure is to submit an amendment affirming that it should be referred to a Select Committee. I can only recall one occasion upon which such an amendment has been carried. That was in 1901, upon the motion for the second reading of the Iron Bonus Bill. The result of the adoption of that amendment was that the question was not again dealt with until 1908. The measure was thus killed for a period of seven years. The Treasurer has told us that the Bank of England is satisfied to make only pre-war profits. May I quote the *Australasian* *Insurance* *and Banking Record* for February of the present year ? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I did not say that the Bank of England is satisfied to make only pre-war profits. I said that it was satisfied to make only those profits during the war. {: .speaker-KWL} ##### Mr TUDOR: -- But our private banks were not satisfied to make pre-war profits during the war. They made as much as they could. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- How much did the Commonwealth Bank make during the war? {: .speaker-KWL} ##### Mr TUDOR: -- I have not the figures bv me. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is convenient for the honorable member not to know. What is the use of the honorable member talking as he is doing? {: .speaker-KWL} ##### Mr TUDOR: -- Does the Treasurer desire me to sit down- and allow him to have his own way entirely ? When I tell him that the private banks in the Commonwealth were not satisfied to make only pre-war profits during the war period, he asks, ' How much did the Commonwealth Bank make during the "war?" I believe that it did fairly well. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It made larger profits than any other bank in Australia. The honorable member did not mention that. {: .speaker-KWL} ##### Mr TUDOR: -- But for the Commonwealth Bank the private banks would have made very much higher profits than they did. It was only the restraint which was imposed upon them by. the Commonwealth Bank which prevented them from doing just as they chose with the people of Australia. The Commonwealth Bank is giving better terms to its customers to-day than are any of the private banks, notwithstanding that it started without capital, and notwithstanding that we were assured upon its inception that the £1,000,000 which the Labour Government proposed to put into it would be simply frittered away. The *Australasian Insurance and Banking Record* for February last sets out that the total deposits of the ordinary banks and of the Commonwealth Bank compared with those of the December quarter in the six previous years as follows: - From the same journal of 21st October, 1920,. I gather that during the September quarter of 1919, the ordinary banks had £27,031,599 in deposits not bearing interest, and this amount had increased during the September quarter of the present year to £35,205,331, an increase approximately of £8,200,000. But their fixed deposits bearing interest increased only from £27,286,453, during the September quarter of 1919, to £30,288,489 during the September quarter of the present year. It will be seen, therefore, that the private banks can well look after themselves, and, consequently, this Parliament should do its best to help our own Bank. I have never professed to be an authority upon finance, although a great many other honorable members adopted that *role* when the last Bank Bill was before us. But we ought to endeavour, wherever possible, to assist our own Bank and to place every facility in its way. I know that some State Governments do not help the Commonwealth Bank, but prefer to assist private banks in opposition to it. I have here a few figures extracted from a return published in the Victorian Government *Gazette,* which will serve to show how the Victorian Government boycotts the Commonwealth Bank in favour of pri vate banks. That Government, in August, 1917, had the following deposits in the various banks mentioned : - We have reason to ask why the Victorian Government boycotts the Bank which is owned by the whole of the people of the Commonwealth in favour of private banks. However, the Bill which we are now considering is more a machinery measure than anything else. Whether it is wise to transfer the Commonwealth note issue from the Treasury to the Commonwealth is a debatable question, and I shall be interested to hear the opinions of financiers upon the matter. Personally, I am anxious to do everything that I can to assist the Commonwealth Bank in order that it may have a fairer run in the future than it has had in the past. {: #subdebate-10-0-s3 .speaker-KDZ} ##### Mr JOWETT:
Grampians .- It seems to me that the motion for the second reading of this Bill affords honorable members an opportunity - of which I hope the fullest advantage will be taken - of discussing not merely the question of the issue of Australian notes and of the currency generally, but also the effect of the note issue upon the prices of commodities within the Commonwealth. One of the main objects of the measure is to transfer the control of the issue of Commonwealth notes from the Treasury to the Commonwealth Bank under the supervision of a special Board which is to be created for the purpose. Personally, I regard the proposed alteration as an improvement upon the past method of controlling our note issue, although I have not one word of reproach to utter in regard to what has been done under the existing control. We are all agreed that one great object in the control of our note issue should be the stability of the currency and the stability of prices. Honorable members who have studied the history of note issues in the past will recognise that the evil of excessive issues has been due to the necessities - sometimes the political necessities - of various Governments. Notes have been issued in excess of the reasonable requirements of a country, and the issues have been deflated. They have become enormously depreciated, not because those in charge of the Government have deliberately intended that the issue shall be in excess or the currency depreciated, but because the financial necessity of their position seems to indicate the issue of notes as the best course. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is a great temptation. {: .speaker-KDZ} ##### Mr JOWETT: -- It is; but I am delighted to think that there is no fear of the right honorable gentleman, as Treasurer, succumbing to any such temptation. Any step that removes the control of the note issue from the Government, and places it in the hands of what I may call an independent Board, must make for the stability of prices and of the currency. Although I notice that in the Bill the Government reserve the right to interpose in what might be termed extreme cases, there can be no doubt that the establishment of this Board of control will serve as a great check should any such temptation assail a future Treasurer. I should like to say a few words on the immense importance of the stability of prices. Every one will agree that if it were possible it would be highly desirable in every community to have the prices of commodities stable; that is, that those who produce commodities should be able to reasonably calculate ahead what their prices will be in the future. {: .speaker-K0A} ##### Mr Gabb: -- Where would the speculator come in then ? {: .speaker-KDZ} ##### Mr JOWETT: -- I am sure there is no one who desires that any number of people should be attacted from what one might call productive occupations and pursuits, and led to make a living in the vortex of speculation. It is not in any way desirable that people should make a living by any form of speculation. I do not think I need say more than I have to emphasize the desirability of stable prices ; nor do I wish to dwell long on the enormous extent to which prices of commodities are compelled to fluctuate by reason of fluctuating currencies. There are many causes of these fluctuations in prices; there may be a great failure of the crop of corn, oats, or other product, and prices necessarily rise in consequence of the enormous decrease in the supply.. There may also be most bounteous crops followed by a natural fall in prices; but eliminating all the causes which are beyond human power to conto - apart also from any fluctuation in prices due to some special demand- {: .speaker-K0A} ##### Mr Gabb: -- Or a little manipulation. {: .speaker-KDZ} ##### Mr JOWETT: -- I may even emphasize that interjection by saying very considerable manipulation. There is no doubt that these great variations in prices, anticipated as they are bv some people who make special study of them, are responsible for great manipulation. There is also the effect on prices of the great Com- . bines and Trusts, which in recent years have become so much in evidence. {: .speaker-KLL} ##### Mr Makin: -- You are not suggesting that there are such things in existence I {: .speaker-KDZ} ##### Mr JOWETT: -- Not only do I make that suggestion, but I say that, in my opinion, those Trusts and Combines are among the greatest menaces to mankind at the present moment. As I have said here several times before, anything I can do to destroy them, and impose on those responsible for them the utmost penalty of the law, I am prepared to do. {: .speaker-KLL} ##### Mr Makin: -- This is a new version ! {: .speaker-KDZ} ##### Mr JOWETT: -- Not at all. Leaving on one side all the other causes of fluctuation in prices it cannot be denied that fluctuations of the currency have an enormous effect on prices, and are an unmitigated evil.. It is a great evil when, owing to any country or countries being flooded with new currencies, prices rise excessively. This imposes great hardship on a great many people; any benefit there may be is derived by the comparatively few, and is small compared with the enormous loss to the many. Similarly, it is a great evil, if not a greater evil, when owing to the contraction of the currency, or " deflation," as it is sometimes termed, an enormous decrease in prices is brought about. In that case, widespread ruin is brought to vast numbers of people engaged in the most important of all industries, the primary productive industries, and also to those engaged in the secondary industry. {: .speaker-K4F} ##### Mr Considine: -- Do you suggest that the vagaries in the currency are the main cause of the great increase or decrease in prices? {: .speaker-KDZ} ##### Mr JOWETT: -- I have just said there are many other causes. {: .speaker-K4F} ##### Mr Considine: -- Do you consider it the main cause.! {: .speaker-KDZ} ##### Mr JOWETT: -- I think that where there is a large paper currency, especially when that currency is inconvertible, the great and abiding cause - although it is almost a paradox to say so - is the fluctuation in the supplies of currency. I should like to refer briefly to one or two "very remarkable and typical instances of the evil done by such fluctuations. I refer first to the experiment tried in France in the early days of the Revolution, an experiment which lasted from 1789 to 1796. The Revolutionary Government issued what are known as *assignats* - a vast issue of paper money on the credit of the national lands of France. It will be remembered that after the Revolution had been in progress for some time, the Government annexed large areas of land formerly owned by the nobles and by the Church. These were the national lands, and the theory ' then held - curiously enough the same theory crops up even to-day, and I am not sure it will not crop up during this debate - was that the national lands of France were of such colossal value that notes could be issued on the security of them without any fear whatever of the notes being depreciated. Every one of these *assignats* was practically a mortgage on the national lands - the national lands were assigned to the owners of the notes, and hence the name. {: .speaker-K0A} ##### Mr Gabb: -- Britain had a bit of a say in the breaking down of that system. {: .speaker-K4F} ##### Mr Considine: -- The British Government forged French notes. {: .speaker-KDZ} ##### Mr JOWETT: -- Theoretically and imaginatively, the honorable member may be correct,, but historically there is a great deal in what he says to which I take exception. {: .speaker-K4F} ##### Mr Considine: -- It is a historical fact that Britain supplied forged French notes. {: .speaker-KDZ} ##### Mr JOWETT: -- I believe there is not sufficient historical evidence to support that statement; the causes of what followed were very different. It is very interesting to know that when the *assignats* were first issued, the French philosopher, Mirabeau, one of the greatest amongst many great revolutionary philosophers, was a strenuous advocate of the course taken; and I should like to read what he said in the course of the dis.cussion on the question. I think I have heard in this Chamber, during, the last few weeks, expressions of opinion very similar to those of Mirabeau. He said of the *assignats: -* They represent real property, the most secure of all possessions, the soil on which we tread. There cannot be a greater error than the fear, so generally prevalent, as to the over-issue of *assignats. . . .* re-absorbed progressively in the purchase of the national domains^ this paper money can never become redundant. That was the theory of the great French philosophers and patriots of the Revolution. {: .speaker-K4F} ##### Mr Considine: -- Of course they did not allow for forgery ! {: .speaker-KDZ} ##### Mr JOWETT: -- I have thoroughly investigated the charge that the over-issue and depreciation of the *assignats* were due to forgery; and I think the overwhelming evidence is against it. It is quite possible there may have been a few forged *assignats* in circulation, but these were infinitesimal compared with the colossal issue authorized by the French Government. {: .speaker-K4F} ##### Mr Considine: -- I thought my interjection quite pertinent. {: .speaker-KDZ} ##### Mr JOWETT: -- Quite so, but when repeated too frequently, it is apt to become a little less impressive. Launched under such auspices, with such sublime confidence that these *assignats* could never become depreciated in value, the issue took place, and the French Government continued the issue. One authority says, " The necessities of the State compelled enormous issues of these *assignats* until they became greatly depreciated." That is my point'. The necessities of the 'State compelled enormous issues of this paper money until it became greatly depreciated, and that is why I welcome the proposal for a Board in Australia. It is not that I say for a moment that anything wrong has been done by any Australian Government in having issued the notes that they have issued, but there is the fear that at some future date, since wo are issuing Government notes which are not convertible into gold on demand - they are an inconvertible currency - they may he issued in excess and become depreciated. That, I say,, is why I support the Treasurer's proposal for a Board. The history of the French note issue is very instructive. The French issued these *assignats* again and again, when they were in financial difficulties,, and the amounts became colossal. In one decree, it was solemnly stated that the maximum issue was never to exceed 1,200,000,000 francs - a self-denying Ordinance - but further issues brought up the total to 3,750,,000,000 francs, until a note representing 100 francs was worth only 20 francs in coin. The result of this was an enormous rise in the prices of commodities. The Revolutionary Government, no doubt from a most praiseworthy desire to protect the people from the effects of this enormous rise in prices which they had brought about- {: .speaker-K4F} ##### Mr Considine: -- What had they brought about? {: .speaker-KDZ} ##### Mr JOWETT: -- They had brought about the enormous rise in prices by the tremendous increase in. the circulation of paper money, and they issued decrees endeavouring to fix prices to protect the consumers. Such endeavours, however; were hopeless. They passed most extraordinary laws,, because these people of the revolution of 130 years ago had very great faith in the powers of compulsory legislation, but perhaps not much more faith than some of our friends opposite have to-day. Recourse was had to drastic legislation, that decreed six years' imprisonment against any one who should sell specie - that is, gold and silver - for a more considerable quantity of *assignats* than the *assignats* purported to represent, and for the second offence twenty years' imprisonment. That decree was promulgated on the 1st August, 1793. On 10th May, 1794, they decreed the death penalty in an endeavour to enforce their decisions. By June, 1794, according to the authority from whom I have been quoting, there were in circulation no less than 5,500,,000,000 francs in the shape of *assignats.* Trade was paralyzed, and all manufacturing establishments were closed down.- The Government also passed' decrees- compelling' people to- bring in their corn and sell it at a fixed price. 'All these measures were found to- be in vain. {: .speaker-K4F} ##### Mr Considine: -- Was that during the period when the French. Republic was at war with Europe? {: .speaker-KDZ} ##### Mr JOWETT: -- I think the French Republic was at war with Europe during most of its existence, and- certainly it was at war during that period. {: .speaker-K4F} ##### Mr Considine: -- As French commerce had been almost stifled> those conditions may not have been due merely to the overloading of the note issue. {: .speaker-KDZ} ##### Mr JOWETT: -- Doubtless, for all effects there are many causes. Life,, both financially and spiritually, is complex. There axe many tendencies always 'at work in different directions, and I should like to allow the fullest possible scope for the tendencies indicated by my honorable friend. France was at war during that period, practically fighting the whole of Europe. It might be said, and I am not prepared to deny it, that this enormous issue of *assignats,* which some people might term an over-issue; was the only means by which France could raise revenue to carry on a war of existence, and 'that the course she took was justified, because she did maintain her existence as a nation. I am not concerned at present with that aspect of the case. I am merely pointing out the effects of the enormous issue, or' overissue, of *assignats.* I wish to emphasize that here we have the evil effects of an over-issue of paper money bringing about an enormous rise in prices, placing vast numbers of people at a terrible disadvantage.. I do not wish to raise the question of who or what was responsible, for any issues of notes in various countries, including Australia, during the period of the late war. Those issues may have been necessary, or they may not. I emphasize the fact that those issues have taken place, and that there is a depreciation in the note issues of nearly all European countries, and in that of Australia, at the present moment. One of the results of that depreciated note issue is undoubtedly a certain measure of rise in prices. {: .speaker-K4F} ##### Mr Considine: -- What would the honorable member say the extent of the depreciation was in this country? {: .speaker-KDZ} ##### Mr JOWETT: -- If the honorable member will remind me later, I shall give the exact measure of the depreciation. I propose to give the clearest proof of it, because I notice with some amazement, and almost with amusement, that some people in this country claim that there is no depreciation in the note issue. I emphasize now the facts that the issue of paper has taken place, that a depreciation of the paper money has taken place, and that a rise of prices has taken place. The question now arises whether notes should be called in in order to bring the value of our notes to the sovereign, which they originally represented. The effect of that policy would be to bring about a considerable fall in prices, but to carry it into effect would, in its turn, create very grave evils. {: .speaker-KZA} ##### Mr West: -- If your credit is good, why do you want to bother about gold at all? {: .speaker-KDZ} ##### Mr JOWETT: -- That is a theory which has been held by many great financiers and economic authorities, including the honorable member ;but I do not propose somuch to examine that theory at this stage as to examine the facts of the present situation, and the probable effect on prices of putting into force any theories which are held. It is rather curious that on this subject, to-day and at almost all times of which we have record of currency discussions, there have been two schools of thought. One may be called the expansionists- the people who say thai the currency of the country should be expanded for various reasons. That is a very simple form of raising revenue, as was found in the French Revolution, and as was found in European countries, including Great Britain, and also in Australia, during the recent war. The honorable member for Robertson **(Mr. Fleming)** reminds me that it was also found a very simple form of raising revenue in the United States during the Civil War. It brings about a very buoyant condition of the finances, and of trade, for a time. I gather that one or two of my honorable friends opposite are among the expansionists. They do not say, "We cannot have too muchof a good thing; we cannothave too much currency,"but they say, " We can do with a little more of it, and if the Government is short of money and does not want to curtail its expenditure, probably that is the best way of raising extra money."People who hold that theory I call, without disrespect, expansionists. {: .speaker-K4F} ##### Mr Considine: -- Some of us think that whatever you do you are so far on the road to ruin that you cannot pull yourselfup. {: .speaker-KDZ} ##### Mr JOWETT: -- I am afraid that is rather a melancholy view of life. I like to think I am in accord with my honorable friend on many matters, but on that point I cannot put myself in accord with him. I am not so great a pessimist as to think that we are on the road to ruin. There is no necessity to believe that we are on the road to ruin. All the terrible calamities which are preached and: prophesied so frequently from the housetops can be averted if we have good sound common-sense thinking amongst the people of Australia, and in this Chamber of legislature. There are always with us the school of expansionists, who believe in an unlimited currency. I gather from a hint from the honorable member for East Sydney **(Mr. West)** that they regard the holding of vast stores of gold as not at all essential. They believe that all the functions which have in the past been carried out by gold, but which are not now carried out by gold, could just as easily be carried out by the issue of paper money without any gold at all. There is always in existence another school whom I may, without disrespect, term contractionists. They believe in contracting the volume of money in the world. At the present moment they stand on what appears to be fairly good ground in saying that there has been too much paper money issued, and too great a rise in prices. But they do not stand on safe ground when they say that the best thing we can do is to bring about a fall in prices, get back to the old state of things, and call in all the redundant currencies. There might possibly be some measure of justification for that view if they confined themselves to the question of a contraction of redundant paper currencies; but the result of my observations is that long before we had any redundant paper currencies these same people were still contractionists. They did not believe in the expansion even of the metallic currency. {: .speaker-KFC} ##### Mr Fleming: -- They were stabilists. {: .speaker-KDZ} ##### Mr JOWETT: -- I shall deal with that point in a moment. They did not believe in the normal expansion of the currencies of the world to meet the world's requirements, before we had any redundant paper money in existence. They stood openly for what they called a solid standard, which did not permit an expansion of the currency to enable them to face trade depressions and severe panics. The honorable member for Robertson interjects that they believed in stabilizing the currency. I cannot see any evidence of that whatever. In giving one or two instances, let me allude first to the features of the great Peel's Banking Act of 1844. I rather regret that I have been drawn aside to these somewhat recondite matters, but Peel's Banking Act has been mentioned. It was an Act to make it impossible to increase the currency as the requirements of trade and industry demanded. There was a. fixed amount - about £15,000,000 - up to which the Bank of England was allowed to issue notes without holding any gold for them. But beyond this amount their note issues were useless.For one thing, the Bank of England was not allowed to issue £1 notes. The Bank of England was expressly created to lend the Government of William and Mary, without any security whatever, a large sum of money, and against that Government debt the Bank was allowed to issue notes of a denomination of £5 and upwards without any gold reserve. Not a bank in the whole of England was allowed to issue a note of a lower denomination than £5, and every note issued by the Bank of England in excess of the £15,000,000 due by the English Government had to be represented by gold. {: .speaker-KFC} ##### Mr Fleming: -- The bank had to hold in gold £1 for £1. {: .speaker-KDZ} ##### Mr JOWETT: -- That is so. For every £5 note issued there had to be a gold reserve to the same extent. {: .speaker-L07} ##### Mr Lazzarini: -- But how often has that Act been suspended? {: .speaker-KFC} ##### Mr Fleming: -- On only three occasions before the last war. {: .speaker-KDZ} ##### Mr JOWETT: -- Yes; but I would remind the honorable member for Robertson that the Act was suspended only when the contracted system for which it provided had brought the whole of the commercial, financial, and industrial classes of England to the verge of ruin. {: .speaker-KFC} ##### Mr Fleming: -- Not at all. {: .speaker-KDZ} ##### Mr JOWETT: -- I assure my honorable friend that Peel's Banking Act of 1844, which was maintained by the contractionists of that day - the people who did not believe in enlarging or expanding the volume of currency in the country, to meet the requirements of commerce and industry - was from beginning to end a monument of folly. It has hardly been seriously justified by sound economists. On the contrary, it has been denounced by many political economists. It was a curse, and although it was suspended on three occasions before the war, its suspension did not take place until it had brought many people of the commercial, financial, and industrial classes of England to the verge of ruin. In a moment of panic it was suspended, and the stupendous folly of the Act then became apparent. I have given a quotation to impress upon the House the evils brought upon (mankind by the over-expansion of currency. I propose now to make a further quotation with the object of showing the evils, in the shape of severe and sudden falls in prices, brought about by overcontraction or, in other words, an inadequate supply of currency. For we have to guard against those who are in favour of creating a contraction of currency, just as much as we have to guard against the expansionists. I stand for the stability of currency and prices. Honorable members will all have a knowledge of the economic situation which followed the Battle of Waterloo. It will be recalled that during the great Napoleonic Wars there were in England periods of very high prices, due to various causes, and that almost immediately after the Battle of Waterloo there was a tremendous fall in prices. Many people seem to have only one desire nowadays, and that is to bring about a reduction in prices. They complain, very reasonably, of the high cost of living at the present time, and object very strongly to many of the causes responsible for it. But I do not think they quite realize the danger of a sudden, or even a gradual, breaking down of prices and the disaster that would thus fall upon the whole of the producing, manufacturing, and trading interests of the country. During the Napoleonic Wars the farmers of England, encouraged by the high prices then ruling, were producing to the utmost of their capacity. But at the close of 1815 a great fall in prices took place, and **Mr. Walter** Wallas, in an article on " Agriculture after Waterloo," published in the *Cornhill Magazine* for September, 1917, deals with the effect upon the farming interests. After referring to the farmers, who, because of their inability to sell their produce, would be seen despondent and dispirited, walking home from market before noon, where a few years before they had driven in their smart gigs, he goes on to say - >Glad were they to get home early now to escape the tradesmen whose Christmas bills were unpaid, and even to save the small expense of the ordinary-- He was alluding there to the dinner held in the leading hotel in each market town on market day. I dare say that some of my honorable friends have enjoyed an ordinary in a leading country hotel in the Old Country - >Hundreds of farmers were already in gaol under the Debtors Act, even in rich counties like Somerset and Lincolnshire, and these were by no means always spendthrifts either, but often men who had been careful and industrious. How would honorable members like to see that state of affairs, which was due to the collapse in prices, ruling in Australia, at the present moment? - >Many farmers were, with their families, in the workhouse, and in his favourite Suffolk, Arthur Young-- a great writer on agricultural subjects in those days - " would have found farmers whom he had known as substantial tenants glad to get work as day labourers. As he drew near homestead after homestead he would have seen the empty stack-yards - all had been threshed after harvest in 1815, and sold in a glutted market to pay the Michaelmas rent, or to meet more pressing liabilities of taxes, rate, or tithe, the banks having refused to advance the money. I give this as an instance of the evil effects of a great contraction of currency and sudden fall in prices. {: .speaker-K4W} ##### Mr Nicholls: -In the coming harvest they will not be able to sell the wheat in New South Wales. {: .speaker-KDZ} ##### Mr JOWETT: -- I do not agree with the honorable member. This writer goes on to say that - >The plough was nearly at a stand, and the only trade that flourished was that of the bailiff. Land that had been reclaimed went back to the weeds. In Northumberland the Duke of Roxburghe was sowing down several farms with grass seeds. From Berkshire they wrote, " We are endeavouring to get our arable into grass as fast as possible." Eight thousand acres were unoccupied within a few miles of Long Stowe, in Cambridgeshire. No man would touch them. At the prices ruling it did not pay to go producing. {: .speaker-K4F} ##### Mr Considine: -- Does the writer attribute these results to the deflation of the currency ? {: .speaker-KDZ} ##### Mr JOWETT: -- He does not theorize on the subject. He simply deals with the facts as taken from official documents of the times. {: .speaker-KEV} ##### Mr Fenton: -- An undue contraction in currency may bring about a great fall in prices. {: .speaker-KDZ} ##### Mr JOWETT: -- And we may have brought about in that way just as great an evil as existed in England at the close of 1815. {: .speaker-KLG} ##### Mr Mahony: -- It is a great pity that we cannot get a pretty big fall in prices in Australia. {: .speaker-KDZ} ##### Mr JOWETT: -- I do not agree that we should have a sudden and serious fall in prices. Neither I, nor those whom I have the honour to represent, have had anything whatever to do with the increase in the currency of Australia. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Ask the honorable member for Dalley whether, if prices follow wages up, wages will follow prices down. {: .speaker-KDZ} ##### Mr JOWETT: -- I am interested to be reminded by the Treasurer that, while in a rising market prices follow up wages because an increase in wages must result in an increase in prices, it is likewise true that when a great fall in prices takes place wages also fall. The first effect' of any contraction in currency is very widespread. It entails the breaking down in prices of primary products, and the output of manufacturing industries to a point when it becomes unprofitable for the farmer to produce, and the manufacturer to manufacture. In support of this view-point, I again quote **Mr. Wallas's** statement as to the effect of the great fall in prices upon the agricultural industry in England after the Napoleonic wars: - >Bankruptcies, seizures, executions, imprisonments figure in every second letter; tithes and poor rates were unpaid'; improvements of every kind were discontinued; live stock were greatly lessened; tradesmen's Christmas bills could notbe met. > >In Lincolnshire they report "a large portion of land, recently broken up and burnt, not being worth cultivation." And with what feelings would Arthur Young - that optimistic advocate of enclosure, and of turning moors into arable - have heard a wail from Devonshire. The great enclosures taken from moors and commons are quietly resigned to their ancient possessors, the heath and the furze; and vast sums expended improvidently in subjecting land of very indifferent quality to cultivation are lost for ever. This breaking down of prices as the result of the undue contraction in currency has its inevitable effect upon wages and employment. So far as I can ascertain, wages have never been brought down in any country inthe world by any other process than that which makes it unprofitable for the employer to carry on. The almost immediate effect of a contraction in currency is the unemployment of large numbers of workmen, because production has become unprofitable. I have been told that even now some manufacturing industries in this country, being unable to dispose of their output, are about to close down. {: .speaker-K4W} ##### Mr Nicholls: -- Can you name any industry that is unable to get rid of its output ? {: .speaker-KDZ} ##### Mr JOWETT: -- Yes, the boot-making industry. {: .speaker-K4W} ##### Mr Nicholls: -- Why is that? {: .speaker-KLG} ##### Mr Mahony: -- Because people cannot afford to buy boots. {: .speaker-KDZ} ##### Mr JOWETT: -- That is exactly my point. Prices have been forced so high - and, unfortunately, the same applies to woollen goods - that people are unable to buy the goods. {: .speaker-K4W} ##### Mr Nicholls: -- Why should boots be so high in price when hides are so low? {: .speaker-KDZ} ##### Mr JOWETT: -- The honorable member has asked me a question which on another occasion I should be pleased to answer fully. On this occasion the Standing Orders will not permit me to discuss it. In many manufacturing industries the cost of production has reached a point at which employers are no longer able to continue, and for the moment there is a danger of closing down. This movement has taken place in all economic history throughout the world. This widespread unemployment and a breaking down in prices generally are the inevitable results of any serious contraction in currency. Are those who advocate thiscourse of events prepared to face such consequences upon the people of Australia? If we are to revert to those prices ruling for some years before the war we must expect a great deal of unemployment and distress throughout the Commonwealth, until such times as prices and costs are readjusted. I have emphasized the evils resulting from an undue inflation or contraction of currency, because I think the wise and statesmanlike course, namely, the stabilizing of currency, lies, between the two extremes. The Bill, I understand, represents an attempt to insure stability by taking control of the note issue out of the hands of the Government, and placing it under an independent Board of experts. I am glad to think that the measure follows very much on the lines of the Federal Reserve banking system of the United States of America. I have a very vivid recollection of events in that country during my visit thirteen years ago - in September, 1907. There was a financial panic due entirely, in my opinion, to the fact that the people in control of the note issue were contractionists - of the same class as those who believed in Peel's Banking Act of 1884 - making it impossible for currency to expand with the legitimate requirements of trade and industry. The honorable member for Wimmera **(Mr. Stewart)** was visiting the United States at that time, and no doubt will remember what took place. {: .speaker-KZU} ##### Mr Lavelle: -- I call attention to the state of the House. [Quorum *formed.]* {: .speaker-KDZ} ##### Mr JOWETT: -- I was asked by way of interjection a few minutes ago if I could state whether the currency in Australia had depreciated or not. It is just as well that this question should be placed fairly before honorable members. *Sitting suspended from 6.27 to8 p.m.* {: .speaker-KDZ} ##### Mr JOWETT: -- Prior to the suspension an honorable member had asked me if I considered that our Commonwealth notes were over-issued, and if they have depreciated in relation to gold. I do not say that our Commonwealth notes are over-issued. That is a matter of opinion ; but it is a question of undoubted fact that they have depreciated in relation to gold. {: .speaker-KWL} ##### Mr Tudor: -- That is not peculiar to Australia. {: .speaker-KDZ} ##### Mr JOWETT: -- It is not; it is worldwide. {: .speaker-KEV} ##### Mr Fenton: -- Could I get more for a sovereign to-day in Australia than for a £1 note? {: .speaker-KDZ} ##### Mr JOWETT: -- Possibly the honorable member would not get more than 20s. for a golden sovereign. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Even supposing that he could get a sovereign. {: .speaker-KDZ} ##### Mr JOWETT: -- That is so, and only the Treasurer can inform the honorable member where these most attractive golden sovereigns may be obtained. I wish to prove that a Commonwealth fi note is not worth a sovereign to-day, 'but that a sovereign is worth a great deal more than a £1 note, by using as an illustration a recent sale of gold on the part of the Gold Producers Association of Australia. With respect to this matter I congratulate the Government and the Commonwealth Treasury upon having allowed the gold producers to obtain world's parity for their product. *Extension of time granted.* {: .speaker-KDZ} ##### Mr JOWETT: -- The Gold Producers Association, although it was not permitted a free market for its products during the earlier part of the war, has been free; in the past two years, to market its gold where it can get the best price. We have, therefore,, a method now which is, I think, absolutely accurate, and by which we can gauge the value or our gold in paper money, so measuring the depreciation of our currency. ' There is a school of thought in Australia which cannot realize that our highly-valued notes can ever become depreciated in relation to gold. Those who uphold the tenets of this school will not look facts in the face; it is the duty of this House to do so, however; to recognise that our paper money has depreciated in value, and to ascertain the exact degree of depreciation so that we shall not make any move in the dark. It was recently announced that a large sale by the Gold Producers Association had taken place. The precise quantity quoted consisted of 700,000 sovereigns, and the sale was conducted on the basis of £5 16s. 8d. per ounce. This is a very notable sale; and, although negotiations were conducted by medium of British notes, it is a fact that the British and the Australian note currency have remained upon a practically equal basis. A reliable comparison can, therefore, be made. The Gold Producers Association made its sale to the National City Bank of New York. That is probably the greatest banking institution in the United States. As I have just said, that institution paid for fine, gold- at the rate of *£5* 16s. 8d. per ounce. The value of fine gold, if it were paid for in sovereigns, could never be more than £4 5s. per ounce. Our sovereign is equal to nearly one-fourth of an ounce of gold. There are 480 grains troy in an ounce. If a sovereign contained exactly one-fourth of that weight,, namely, 120 grains, gold would be obviously worth £4 per ounce. Dealing now with fine gold, there are not 120 grains in a sovereign, but only 113. The equivalent worth of the gold in a sovereign is £4 5s. per ounce of fine gold, provided that the purchase money is paid' in coined gold. That is, provided one is selling one's raw gold for sovereigns, fine gold would be always worth £4 5s. per ounce. Thus, it is obvious that if a person can get more than £4 5s. per ounce for his gold he must be getting it in some form of currency which has depreciated in relation to gold. The Gold Producers Association got £5 16s. 8d. in British paper money for every ounce of their fine gold. As I have said, our own notes and the British notes are of practically the same value in relation to one another, though they are both depreciated in relation to gold. The exact measure of this depreciation is shown by this sale to be that the British, and presumably the Australian, note of £1 is worth 14s. 4d. in gold. That is tested by the latest sale of Australian fine gold at £5 16s. 8d. per ounce. As _ for the argument that the British note issue has not depreciated, I quote the following remarks of **Mr. Dyason, Chairman** of the Gold Producers Association regarding earlier sales: - >It is, perhaps, rather humorous that there should be any controversy as to the fact of the depreciation of our currency, when in seventeen months we have purchased £6,340,723 of our currency - that is, notes - for £4,975,217 in sovereigns. {: .speaker-K4F} ##### Mr Considine: -- Is the honorable member reading from the account of an interview with **Mr. Dyason?** {: .speaker-KDZ} ##### Mr JOWETT: -- No; from a statement made by him at the annual meeting of the members of the Gold Producers Association, at which he occupied the chair, and was reported in the daily newspapers.My comment on it is that not only does it conclusively prove that there is a depreciation of our currency, but it also enables us to measure that depreciation. The position is this: If 6,340,723 £l-notes will buy only 4,975,217 sovereigns, how many sovereigns will a £100-note buy? A calculation shows the £100 bank note to be worth only £78 9s. 31/2d. in sovereigns, which made the £l-note worth about 15s. 9d. when measured in gold, as tested by the large sales spread over seventeen months. {: .speaker-K4F} ##### Mr Considine: -- Is it not worth much less than that now? {: .speaker-KDZ} ##### Mr JOWETT: -- It is worth less than that now, namely 14s. 4d., as tested by the latest scale. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It seems to me that the case is incorrectly stated. I think that the difference in value is due, not so much to the depreciation of our notes, as to the appreciation of gold in a market that is not free. That is only another way of stating the position, but it conveys a different impression. {: .speaker-KTU} ##### Mr Laird Smith: -- Can you buy more for a sovereign than you can buy for a £l-note? {: .speaker-KDZ} ##### Mr JOWETT: -- So far as I know, in no country in the world are there two retail prices for different kinds of money, because nowhere are there two kinds of money in circulation. Sovereigns are not in circulation now, either in Australia or in England, therefore there is no means of ascertaining whether one could buy more with them than with notes. Where you cannot buy or sell a commodity, it is useless to ask its price. The appreciation of gold and the depreciation of bank notes are two terms denoting the same fact. If geld has appreciated in comparison with paper money, paper money has depreciated in comparison with gold. {: #subdebate-10-0-s4 .speaker-10000} ##### Mr Speaker:
Hon. Sir Elliot Johnson -- The honorable member's time has expired. {: #subdebate-10-0-s5 .speaker-L07} ##### Mr LAZZARINI:
Werriwa .- Two of the statements made by the Treasurer **(Sir Joseph Cook)** in his secondreading speech were rather alarming. The first of these was that this is not the time when the National Parliament of Australia should come into conflict with the banking institutions of the country, and the second that under no circumstances should the National Bank of the Com monwealth be shown any consideration in preference to the private banking institutions. Dealing with these in their order, I ask why is it that we must not to-day trespass on the preserves of the favoured private financial institutions of the Common wealth ? Is it because the Government has to go hat in hand to them, begging to be allowed to use the credit of the nation, which they control? Is it because they hold the nation in the hollow of their hand, dictating terms, and doing just what they please? The Treasurer to-day scouted the idea that the banks might refuse to finance the wheat, and I accept his assurance; but what is the fear underlying his statement?Is it that the banks might close the avenues of credit necessary to the proper functioning of this and the other Governments of Australia. Why must we mention only in fear and trembling the financial institutions, the money-lords of t he country ? I think that this is the time when we should interfere with them, and when the National Parliament should mobilize the credit of this nation in order that we may overcome the difficulties and dangers, both financial and economic, into which the war has thrown us. We shall never do this merely by running the Commonwealth Bank alongside the private banks, and in no circumstances giving it any advantage over them. In my view, the opening of this Parliament was the proper time for the introduction of a Banking Bill, to nationalize banking by the extension of the operations of the Commonwealth Bank, so that it might control the banking of the Commonwealth, and take from the private institutions the power which they have too long wielded, and by the possession of which they can almost terrorize Governments, not only in this country but in every country of the world, compelling them to do their will, and be at their beck and call. Some of the remarks of the last **speaker (Mr. Jowett)** seem to me to conflict with statements made by the Treasurer when moving the second reading. The former almost dogmatized as to the cause of the present excessively high prices being an inconvertible currency of paper money. In Great Britain, in France, and in Australia, we are told that it is because the paper currency is so inflated that prices are high, yet in America it is said that prices are high because that country is. loaded with gold; and I .understand that the second statement is made also in Holland. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Both statements may be correct. {: .speaker-L07} ##### Mr LAZZARINI: -- I shall show that the talk about the need for a gold reserve and a gold basis for currency is so much nonsense. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The argument in America is, I think, that it is the credit which has been built on the gold that is* the cause of the high prices in that country. {: .speaker-L07} ##### Mr LAZZARINI: -- How, in countries like Australia or in the British Empire, where there are so many private chequepaying banks, can it be ascertained that the currency is inflated? It is possible to ascertain the ratio of notes to gold in this country, but, as I have pointed out on other occasions, the notes in circulation are not 5 per cent, of our total paper currency; and that is true of the Empire at large. I have seen the -claim made by financial writers that,, in countries like Australia and Great Britain, 95 per cent, of the actual trading and interchange of goods is effected by means of cheques. The Treasurer's own figures prove that to be so. In delivering: his Budget he told us that the total of the deposits in the private banks of Australia has increased from £247,000,000 to £385,000,000. In round figures, the customers of the private banks of Australia are operating, by means of cheques, on deposits amounting to £400.000,000. Our gold reserve is about £60,000,000. {: .speaker-KDZ} ##### Mr Jowett: -- No; £44,000,000. {: .speaker-L07} ##### Mr LAZZARINI: -- -That makes my argument the stronger. Against the £400,000,000 represented by the cheques in circulation, there is a gold reserve of only £44,000,000, or about 11 per cent, of the value of the cheques. Whatever may be pledged to support the credit of the cheque-drawers - property or anything else- only £44,000,000 in gold stands behind it; therefore, the withdrawal of £10,000,000 worth of notes from circulation, or even the withdrawal of half our notes, would make practically little reduction in the paper currency' of the country. {: .speaker-KDZ} ##### Mr Jowett: -- There is a very important difference between cheques and notes. Cheques are not legal tender, whereas the Commonwealth Bank notes are. {: .speaker-L07} ##### Mr LAZZARINI: -- My honorable friend has had too much experience of commercial life to back out. in that way. I admit that acceptance of a note may be required, and that one cannot demand acceptance of his cheque. There is no compulsion to accept a cheque, but the fact is undeniable that cheques constitute 95 per cent, of our currency, and are paper currency. {: .speaker-KDZ} ##### Mr Jowett: -- Cheques are not currency. {: .speaker-L07} ##### Mr LAZZARINI: -- I wish to demonstrate that the gold reserve is nonsense, taking into consideration the huge credit supported by the circulation of notes and cheques. If the old currency principle of the Bank of England were still adhered to, and gold in the shape of bullion or of sovereigns were kept in reserve for every ' note issue, there would be something in the argument' concerning an inflated currency. I think I have shown that the banking institutions of this country, including the Commonwealth Bank, have not more than 6 per cent, of the currency in gold. If you establish the fact that the commercial affairs of Australia, and of the British Empire as a whole, can be conducted smoothly, and without interruption on a circulation of credit, you establish at the same time that the principle of banking on such security is sound. I contend that there is no reason why private banking institutions should be allowed to grow rich on what is really the united credit of the people. The whole of that credit should be operated through the Commonwealth Bank for the benefit of the nation as a whole. I made a clipping from a paragraph appearing in .the *Age* a short time ago referring to a report by currency experts appointed by the British. Government to make financial reports, in which this statement occurs - >During the war. the conditions necessary for the maintenance of a gold standard have ceased to exist. The principle upon which the Bank * of England was established was that there should be a sovereign kept in reserve for every note issued, and the honorable member for Grampians **(Mr. Jowett)** has admitted that in times of financial, crisis, when any strain was put upon the people, the gold ran away. It was the first thing to desert the country in its hour of need. {: .speaker-KDZ} ##### Mr Jowett: -- That is quite true. {: .speaker-L07} ##### Mr LAZZARINI: -- I wish to make the complaint that it is only in time of war, when nations are tottering to their fall, or their very existence is threatened, that these instruments of credit are used, and no attempt is made to use them in times of peace for the benefit of the nation. They are made full use of when the purpose in using them is to destroy. These little pound notes which our friends opposite are despising so much,- and the issue of which they contend must not be inflated, saved the Empire during the war. Two hundred millions of them sent the British armies to the Front to fight the Germans, kept British ships at sea, and financed the Empire through the war. {: .speaker-JWG} ##### Mr Fowler: -- Was it not the credit behind those notes that did it? {: .speaker-L07} ##### Mr LAZZARINI: -- I do not say that it was not -the credit behind the notes, but I am arguing that it is only in such times of stress that those credits are made use of, and they are not used, as they ought to be, to develop1 the country in peaceful times. That is left to the mercy of financial institutions. I have referred to the huge amount of credit which, apart from gold, represents the security upon which the financial affairs of the nations are conducted to-day. The actual trading between the nations to-day is one of barter. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- And yet the gold dollar of America- is fixing the exchanges for the whole world. {: .speaker-L07} ##### Mr LAZZARINI: -- I have given the opinion of financial experts, but probably the Treasurer would not accept tie views of experts quoted by me. I have shown that during war the nations did not rest on the security of a gold currency. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The honorable member is the only wise man now. {: .speaker-L07} ##### Mr LAZZARINI: -- I am not submitting that as merely my own opinion. I ask honorable members to remember that we were told that the war was going to be a war to end all wars, and we were also told that after the war we were going to have a new world. That was said by **Mr. Lloyd** George in England, by M. Clemenceau in France, and by **Mr. Wilson** in America. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The trouble is that we have the same old Lazzarinis in it. {: .speaker-L07} ##### Mr LAZZARINI: -- I was not here then.- We were told that the huge burdens that were oppressing the people would not be tolerated any longer, and that the working man would demand, a newer and a better life in the world. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- So we are better'. We are getting £1,000 a year now. {: .speaker-L07} ##### Mr LAZZARINI: -- Let me tell the right honorable gentleman that every one of the little Bills he has been bringing in is adding to the burden on the taxpayer. Every attempt he makes to deal with the finances of the Commonwealth imposes an additional obligation upon the taxpayers. As taxation goes up, the standard of living goes down. That has been proved throughout history, and it is an economic truth which cannot be denied. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is to say, that, as rates go up, the community is worse off. {: .speaker-L07} ##### Mr LAZZARINI: -- Oh, no. I see that economic truth is lost on the right honorable gentleman. I shall have to explain the matter to him fully later on. In my view, four of five months of the time of this Parliament has been wasted in endeavours to bring about what has been termed " industrial peace." With these huge financial burdens upon the people, it can never be brought about. In my opinion, every attempt so far made has simply added to the expenses of the people, and has aggravated the position. Something must be done to meet the trouble. If parliamentary institutions and responsible government are to attempt to solve the huge problems that confront us to-day, we must get to the root of the financial position If we solve the financial problem, our other problems will be easy of solution. I ask honorable members to consider the position in which Australia is to-day as the result of the complex banking and financial system we have adopted. There is no attempt made to mobilize the resources of the nation in times of peace to meet our obligations. We have now such a staggering burden of debt to bear that we must try to solve our financial problem. According to the figures given by **Mr. Knibbs** in the *Commonwealth TearBook* for 1919, the Commonwealth public debt was then £350,000,000; the' total debts of the States amounted to £396,000,000, and the debts incurred by local bodies to £64,000,000. These figures give a total of £810,000,000. The annual interest charge on the public debts amounts, roughly, to £35,000,000. That is. to say that to meet the interest on the national debt every man, woman, and child in the Commonwealth must raise £7 per year. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- How much of that is earned by the assets ? {: .speaker-L07} ##### Mr LAZZARINI: -- Very little. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The bulk of the State debts pay for themselves. {: .speaker-L07} ##### Mr LAZZARINI: -- No, they do not; and whether they do or not, the interest' is a charge upon every industry, and must be paid before the workmen can get a farthing for their own benefit. It is the same with the interest bill on private indebtedness, to which I shall refer in a moment. A man, his wife, and three children are required to raise £35 annually to meet the interest on the national debt of Australia. I tried to discover as nearly as possible from the *Commonwealth Y ear-Book* the amount of private interestbearing capital in Australia, and it works out at something over £1,000,000,000. That is, leaving out all the small fry If I put down the interest on that capital at the comparatively low rate, at the pre-' sent time, of 5 per cent, or 6 per cent., it will be seen that the interest bill amounts to £112,000,000 annually. If we add this amount to the £35,000,000, which must be paid in interest on the national debt, it will be seen that the 5,000,000 people of this Commonwealth have to raise £14.7,000,000 every year before they begin to obtain the necessities of life or those things which go to make life bearable to the individual. Allowing for possible errors, and estimating the total interest charge at £145,000.000, I find that every man, woman, and child in the Commonwealth must raise £29 per annum to meet the interest on Commonwealth, State, and private capital. A man, his wife, and three children must raise an annual revenue of £145 to meet the interest charge, and a family of eight must raise £232 annually. Honorable members may say that they do not pay that money, because they do not receive it. I aim aware of that, but it is paid from the goods they produce. It is paid from their labour, and nothing else. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- All from their labour ? {: .speaker-L07} ##### Mr LAZZARINI: -- Yes, out of production. It does not fall from Heaven. Where else does it come from ? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I may be wrong, but I thought that the machinery of production produced a great deal of it. {: .speaker-L07} ##### Mr LAZZARINI: -- Where would the machinery obtain the raw material upon which to work ? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The honorable member said that labour, did it all. {: .speaker-L07} ##### Mr LAZZARINI: -- I do not say that labour does it all in the sense the right honorable gentleman seems to infer, as meaning the man who works with a pick and a shovel. I refer to the. producers in primary and secondary industries, who are the real workers in every nation. The middleman, who sells things over the counter, does not produce very much. Leaving out the manipulations of profiteers, the unfair trading of monopolies and combines, and the profits made "unduly out of the war, the finger at once is placed on the secret of the ever-increasing rise in the price of the necessary commodities of life. All other causes are subsidiary to this deadweight of interest on debt which is hanging over the people of every country. Yet we are told we must not attempt to interfere with the banking institutions. The Treasurer says it would be unwise to do so. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Indeed, I did not say any such thing. We have interfered with them time and again. We will not let them issue their own notes as they used to do. We have about £10,000,000 of gold we got from them at the beginning of the war. {: .speaker-L07} ##### Mr LAZZARINI: -- I understood the Treasurer to say that this was not. the time to come into conflict with the banks. There is very little difference between .that and saying that it would be unwise to interfere with them. In any case, I do not suppose the present' Government would dare to come into conflict' with the banks, seeing that they call them into conference every time they have a financial problem confronting them, and' that every arrangement the banks choose to make they must either accept or reject. But what did the banks do in the time of crisis? If the Commonwealth Bank had not been in existence, if the Commonwealth note had not been legal tender, and if the Commonwealth Bank had not been behind them, the private banks of Australia would not have lasted more than 48 hours. They would hare been in the position of the banks of Great Britain. War had not been declared four days when all the banks in England closed their doors, and they would not have opened them again had it not been that the Chancellor of the Exchequer issued £200,000,000 worth of Treasury bills - which was afterwards, I believe, increased to nearly £300,000,000 worth - bearing no promise of redemption in gold, but simply having behind them the faith of the people in the stability of the British Government and the credit of the British nation. When any nation is threatened by a great crisis its Government always has to come forward and stand behind the banking institutions of the country. Otherwise they would close their doors. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- For the very simple reason that, when war comes, it smashes up all ordinary organizations. {: .speaker-L07} ##### Mr LAZZARINI: -- As a man who stands behind a military policy and believes in having the country physically fit for war, surely the right honorable gentleman will stand behind a policy that seeks to have this country always financially fitted for war. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do. {: .speaker-L07} ##### Mr LAZZARINI: -- If the right honorable gentleman would only close up the private banking institutions, and have only one bank with the whole of the credit of the Commonwealth behind it, he would find that when war broke out, his security would be unquestioned. Surely what is good security when an army is threatening the country is equally good security when there is no such threat. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is this being done anywhere else? {: .speaker-L07} ##### Mr LAZZARINI: -- The right honorable gentleman wants .a precedent for everything. The curse of this parliamentary system is the search for precedent with no attempt to break new ground. ' This policy will eventually bring parliamentary government further and further into disrepute until the people repudiate it. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I am merely suggesting that the experience of the world might be worth a little. {: .speaker-L07} ##### Mr LAZZARINI: -- It might be. But does the right honorable gentleman want to stop where the world was in banking matters 200 years ago? Surely we have advanced in every way commercially and economically? Are we to stop dead financially speaking? Are the private banking institutions a preserve on which no Government dare tread? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- .Who has suggested this nonsense? {: .speaker-L07} ##### Mr LAZZARINI: -- I am glad that the right honorable gentleman admits that it is nonsense. I was under the impression that he was suggesting it. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is all nonsense. {: .speaker-L07} ##### Mr LAZZARINI: -- Before I conclude; I shall quote an authority which the Treasurer will not ridicule, and which will bear out what I am saying, in regard to banking, although it does not advocate national banking. The fact that when war broke out every nation in the world was compelled to discard all the bid ideas in regard to the banking world, and open up new fields by. pledging the whole of the security of the nation, making every individual stand side by side equally responsible in financial matters as in military service on the battle-field, proves beyond doubt that we have no need to worry or agitate ourselves about having sovereigns behind our notes, or about calculations as to how much gold makes a sovereign, or about where we are to get the gold, or whether we should permit its export. {: .speaker-K4F} ##### Mr Considine: -- Before the war, all the authorities thought that a war could not last more than six months. {: .speaker-L07} ##### Mr LAZZARINI: -- Exactly. It was only the despised paper with no gold behind it, which my friends opposite do not seem to like, that was capable of keeping the armies of the world in the field. If we would only close up all private banking institutions, and have one bank with the whole of the- resources of the Commonwealth behind it, we could finance anything. We could exploit the credit of Australia for 'the purpose of developing this young country as we., unfortunately, have had to exploit, it for war. What is credit, about which we all talk so much? In the commercial world, and in an economic sense, it is nothing more than the present value of future profits. We exploit our credit to-day for Government undertakings. We spend £1,000,000 or £2,000,000 on a developmental work, and immediately its construction is completed we have an asset against our expenditure, and the returns steadily derived from it are our future profits. I have a quotation dealing with hanks from *Theory and Credit,* by Henry Dunning McLeod, of Trinity College, Cambridge, and the Inner Temple, BarristeratLaw, Secretary of the Royal Commission on the Digest of Law on Bills of Exchange, &c, honorary member of the Juridical Society of Palermo and of the Sicilian Society of Political Economy, corresponding member of the Society of Political Economy of Paris, and of the Royal Academy of Jurisprudence of Legislation of Madrid. This i' what he says in regard to banking - >The whole of this confusion and mystery is ' .r.red away by simply observing that a bank merely a shop for the sale of credit, and the quantity of credit a bank will create is determined by the ratio of the demand for payment in money compared with the total quantity of credit created. All a bank has to do to create credit is to have enough ready cash to meet immediate requirements in ratio to the credit created. If it has, say, a capital of £5,000, and its average immediate requirements work out at about £1,000 per week, it can multiply the amount of its credit in respect of the other £4,000 indefinitely. The balance is never called upon. It was in this way that the Commonwealth Bank building in Sydney was erected. I understand that it cost £450,000, but not a penny was borrowed for the purpose of building it. It actually cost the people of Australia nothing. As the bank had more money in its tills than its clients called for, it simply paid the workmen out of its till money, and now the Commonwealth has an asset worth at least £800,000. {: .speaker-KDZ} ##### Mr Jowett: -- I think we ought to build Canberra on that system. {: .speaker-L07} ##### Mr LAZZARINI: -- We could build Canberra, or anything we like, on that system. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is right! No more work now! {: .speaker-L07} ##### Mr LAZZARINI: -- The interjection of the right honorable gentleman brings one down from the sublime to the ridiculous. This is where work will give the results to those who do the work, and not to those who loaf on the toiler. McLeod goes on to say - >Bankers depend on the doctrine of chance just as insurance companies do. It is practically possible that all may demand payment at once, as it- is theoretically possible that all persons insured may die at the one time. Some time ago, when we were dealing with the question of war service homes, it was suggested that these homes might be built by the issue of Commonwealth notes. Thereupon the Treasurer interjected, That would mean building the houses for nothing." He made a somewhat similar interjection this evening when he affirmed that if notes were issued in that fashion there would be no more work. I propose to quote one of the greatest authorities upon banking and financial matters in Great Britain - I refer to McLeod - to show that the banks do create these things out of nothing. If the Treasurer laughs at me for making »that statement, he dare not laugh at McLeod when he makes it., That authority says - >The invention of cash credits has advanced the wealth of Scotland by centuries. We have an enormous mass of exchangeable property created out of nothing by the mere will of the bank and its customers, which produces all the effects of solid gold and silver. . And when it has done its work it again vanishes into nothing at the will of the persons who called it into existence. Hence we see the mere will of man has created vast masses of wealth out of nothing, and then, having served their purpose, they are de-created into nothing from' whence they came. They are melted into thin air. But the solid results are by no means faded. On the contrary, the solid results have been vast tracts of barren moor converted into smiling fields of waving corn, the manufacturer of Glasgow, Dundee, and Paisley, the unrivalled steam-ships of Clyde, great public works of all sorts, roads, canals, bridges, harbors, docks, and railways, and many others, and poor young men into princely merchants. {: .speaker-KDZ} ##### Mr Jowett: -- 'But the whole of that paper money was issued by private banks. {: .speaker-L07} ##### Mr LAZZARINI: -- I did not say that it was issued by national banks. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I think that this little Bill deals with the proposed transfer of our notes to the Commonwealth Bank. {: .speaker-L07} ##### Mr LAZZARINI: -- And I am dealing with the tail of it. The honorable member for Grampians **(Mr. Jowett)** has interjected that the paper money of which I have been speaking was issued by private banks. I am perfectly aware of that. My complaint is that our private banks do convert a few of our young men into princely merchants. Were it not for our private banks we should not have the industrial hell to which reference has been made. {: .speaker-KDZ} ##### Mr Jowett: -- 'The honorable member's friend, **Mr. Henry** Dunning McLeod, does not say that. {: .speaker-L07} ##### Mr LAZZARINI: -- I know that. Only, the other day when I advocated the creation of a cash credit for the payment of the wheat guarantee, the Treasurer said that that would mean the game thing as the issue of notes. It would mean nothing of the sort. We may put our paper into circulation, but the actual currency, whether it be gold, silver, or copper, is nothing more nor less than tickets of admission to the economic goods of life. {: .speaker-C7E} ##### Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920 -- When the people had iron as their basis, it made a lot of, difference in Sparta. {: .speaker-L07} ##### Mr LAZZARINI: -- The records of those days are too meagre to enable us to say precisely what happened then. McLeod says - >The essential business of a banker ' is to create and issue credits to circulate as money. I cannot for the life of me see any security behind the banking institutions of this country other than the united credit of its people, backed by the laws which are enacted for their protection in time of crisis. As that credit is created, by the people it does not belong to the financial institutions, and should be manipulated for the benefit of the nation. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- We are going to do that under this Bill by transferring the control of our Commonwealth notes to the Commonwealth Bank. {: .speaker-L07} ##### Mr LAZZARINI: -- What effect will that have upon the credit of Australia? {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Has the honorable member read the Bill? {: .speaker-L07} ##### Mr LAZZARINI: -- Yes. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Then let him come down to earth and consider it a little. He has been upon the higher plane for quite a long time. {: .speaker-L07} ##### Mr LAZZARINI: -- I have nearly finished. I have still another quotation from the same authority, which puts the whole of our credit system into a nut-shell. The writer says - >As an example of the power of credit to create new products, we may cite the following instance'. The States of Guernsey, having determined to create a meat market, voted £4,000 to defray the cost. Instead of borrowing this sum at £ per cent., the Governor issued 4,000 cardboard tickets, on which were inscribed Guernsey meat market notes; they represented £1 each, and were legal currency by universal" consent. With these notes they paid the contractor, and with them he paid his workmen, and all who supplied them, with materials. They were freely taken by the tradesmen for goods, by landlords for rents, by authorities for taxes. In due course the market was completed. The butchers' stalls, with some public rooms over them, let for an annual rent of £400. At the expiration of the first year of this tenancy the State called in the first batch of notes numbered to 400, and with the £400 of real money received for rent, redeemed the £400 of representative money expressed by the meat market notes. At the 'end of ten years all the notes were redeemed through the application of ten years' rental. In this way they built a very good market without paying any interest - on borrowed money, and without injuring anybody. > > **Mr. Predick** Hill testifies that this was no isolated case, but that it was the usual method adopted in effecting public works. I may mention the abundance of paper money in Guernsey as a great cause of prosperity. The paper money is issued by the island Government in the following way: - When any great undertaking has been entered on by the States, such, for instance, as the opening of new roads, there is immediately an issue of fl-notes. These are sent out as the work proceeds, and as money is wanted. When the undertaking is completed and begins to yield an income, the notes are brought in again, and new undertakings are commenced. The notes are not payable on demand - indeed, the Government has not even an office at which they can be presented. The people find by experience that their representatives do not issue the notes in greater abundance than the demand for them justifies, and consequently no depreciation in their value is to be feared. Moreover, the purposes for which the notes are issued are of advantage to every man in the island, so that every one looks upon them as coming from a bank of which he is a partner. Here, then, in the little island of Guernsey we have, perhaps, the only instance in the world of a really national bank - a bank in which the whole property of the State is the security, and the profit of which is shared by the people at large. By means of this healthy currency undertakings of great magnitude have been executed during the past years. Again, banks show in their balance-sheets that they possess so much in the nature of reserves, and so much in the nature of securities against their indebtedness. In speaking upon the system which they use to increase their capital and their credit, McLeod says - >Banks, therefore, which issue the notes may increase their capital by receiving their own notes in payment, by which they turn their own notes into capital. But banks which do not issue notes may increase their capital in exactly the same way. A customer of the bank who has a balance to his credit is in exactly the same position as a note-holder. If he wishes to subscribe to an increase of capital by the bank, he simply gives the bank a cheque on his account. This is equally a release from a debt as a payment in the bank's own notes, and an increase of capital. If the customer has not sufficient in his account to pay for the stock he requires, he may bring the bank bills to discount. The bank discounts the bills by making a credit or deposit in his favour which, of course, is a negative quantity, like a bank-note. The customer then gives the bank a cheque on his account; that is, he releases the bank from the debt it has created, and that debt released becomes the increase in capital. This is the way in which the capital of all joint stock banks increased, and it may go on to any extent without any payment in money, and) consequently, it is impossible for any one who has not had access to the books of the bank to ascertain what proportion of the capital consists of payment lu money, and what portion consists of the bank's own temporary credit turned into capital. There is another reason why banks fail so often. I now desire to say something about the floating of loans abroad. We have heard much about the difficulty of borrowing in London and abroad. I, for one, hope and pray we may never be able to float any more loans in London or anywhere else out of Australia; indeed, my wonder is that we ever floated any. What happens when we float loans abroad ? Our banking institutions being in private hands, and it being our habit to follow the advice of expert bankers, we really refuse, under the system, to use our own credit, or rather, and worse still, we pay other people interest for using our own credit. Does any one say that the money we borrow comes here? We are told that goods come by way of loan. That is an old argument that was in use many years ago, more particularly 'as between European countries. The idea was that when a merchant shipped, say, £1,000.000 worth of goods, instead of payment being made here or in London from the receiver of the goods, the buyer of the goods hero placed the money in the bank to the credit of the Government, and the foreign money-lender liquidated the debt abroad. We were then supposed to have got goods by way of loan. When we turn to the statistics from the colonization of Australia we find that from 1826 to 1918 the imports to Australia were £2,137,141,000, and the exports £2,297,062,000, not including gold. In the year 1917-1918 the excess of exports over imports was £160,000,000, which obviously means that there is that amount owing to Australia. But we have floated loans to the extent of hundreds of millions in England, not from the British Government, or from the people, but from . British money-lenders, very often Jew money-lenders. We sell our bonds on the London market. What are these bonds ? They are pieces of paper, really, bearing a promise to repay at a certain date, and to pay interest- until the principal is liquidated. We sell those bonds through underwriters on the London Stock Exchange, and speculators buy them, and pass cheques to our agents, who, in turn, pass cheques to the bank with which Australia does business. A record is made of the money in the bank, and then, say that £5,000,000 has been borrowed, that amount is cabled to Australia, some bank being notified to lend it to the Government. Whose money and whose credit is involved in this ? It is the credit of the Australian nation, and nothing else. Financial experts may tell us, perhaps, that we have got the credit of Britain; but how can that be when we pledge the credit of Australia to the extent of millions annually? These are some of the things which make an Australian-born sometimes angry. We are too. often told of what we owe to the Empire,, and to people outside, and how thankful we ought to be. I am not here to discuss the matter "from that point of view, but when men, born outside Australia, come here, and have the effrontery to tell us that it is the Mother Country who has been financing us, and. that we owe her hundreds of millions - that we owe everything; we have to somebody else - it is time something was said on behalf of Australia. I see that 'my time has now expired, and I move - >That nil the words after the word " now " be omitted, with a view to insert in lieu thereof the words " withdrawn for the purpose of its recasting and immediate re-introduction with more comprehensive clauses to provide for the nationalization of banking in order - > >to relieve the taxpayer of the heavy burden which will accrue from paying interest on future loans; > >to provide credits to carry on Com monwealth and State undertakings; > >to provide cash credits for rural industries in order to release primary producers from the grip of the financial institutions; > >to consolidate the National Debt and put it on a sound footing; > >to make proper financial provision for the nation to honour its obligations in full to returned soldiers." {: #subdebate-10-0-s6 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh .- Ever since it was first intimated that this measure was to be introduced I have taken a great interest in the subject. I was somewhat amazed to read the views of the contributor, " Scrutator," to the financial columns of the *Argus* in regard to the financial intentions of the Treasurer **(Sir Joseph Cook)** when the right honorable gentleman announced that he proposed to submit a Banking Bill. Ofcourse, the provisions of the Bill then contemplated were somewhat different from those in the measure before us. the highly contentious clauses having been eliminated. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Only on one point. {: .speaker-KLL} ##### Mr MAKIN: -- That contributor to the *Argus* did not then speak in the kindest terms of the Treasurer's proposals, but the Melbourne papers of this morning gave the Bill their blessing; and we read such comments as this - >The Bill will, therefore, meet with no objections, except from those who aim at socializing all institutions and business, and who are not particular what price the public may pay in the way of special privilege for the concerns of Government. It is rather amusing to read comments of that description; but it is a tragedy when we recognise the great impositions in the form of interest which we have had to pay to the great money-lords of this and other countries for financial accommodation during recent years. Before I sit down I shall 'give a *resume* of the conditions and circumstances that govern private banking institutions in their relation to the public concerns of Australia and also point out the great economy that could be exercised if the financing of the country, both in war and peace, were conducted by medium of a national banking institution. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Who are those " great money -lords " ? {: .speaker-KLL} ##### Mr MAKIN: -- One has only to look at the directorates of some of the private banking institutions which operate in Australia. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- And in nearly every case we find that they represent thousands of small shareholders. {: .speaker-KLL} ##### Mr MAKIN: -- I notice that, on those directorates, there are men of title and others who certainly are living on the hard earnings of the nation, and extracting profit through the medium of interest, while giving no *quid pro quo.* In view of the amendment submitted by the honorable member for Werriwa **(Mr. Lazzarini)** I feel that the nation is going to be able to right itself financially. I believe there is a way out of the great difficulties which confront this and almost every other country of the world ; and that is by the people themselves taking control and financing their own operations, thus relieving themselves from the pressure of financial institutions outside. I am satisfied that, by this means, we can do much to place our country in a position of solvency. There may be members on the other side who depreciate the value of a Commonwealth Bank. This afternoon, when my Leader **(Mr. Tudor)** was speaking, the Treasurer asked, " What' advantage has the Commonwealth Bank been to the worker?" My reply would be that it has relieved him of impositions which otherwise would have been placed on his shoulders, because, when all is said and done, it is the producers of wealth who have ultimately to stand the responsibility and meet the obligation of paying. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- How simple I am! I had the notion all the while that the worker to-day is much more discontented than he was when this bank began. {: .speaker-KLL} ##### Mr MAKIN: -- I quite recognise that; but it is because of the false economic system which prevails. The Commonwealth Bank has unfortunately been circumscribed by all kinds of limitations, and has not been able to operate to the full extent which was first desired for it. Consequently, to-day, the circumstances are such that it has not been able to relieve the situation to the full, although it has assisted to do so in some measure. It is the bank that saved this country from financial ruin at the beginning of the war, for it placed the private banking institutions in the position of having the assets of the nation behind them. I believe the time is coming when the people of this country, if they are to be protected from a financial crisis and even bankruptcy, can be saved only through the medium of their national bank. {: .speaker-KFP} ##### Mr Richard Foster: -- In what way? {: .speaker-KLL} ##### Mr MAKIN: -- If the honorable member had been paying attention to the speech of the honorable member for Werriwa, and had listened to the honorable member's amendment, he, as a keen business man, would have seen in what way that could be done. The relief I speak of can be secured to the people by the people themselves having the full advantage of the mediums of credit that can be created through the assets that they build-up as wealth producers. This can be best done through the medium of a bank which shall have a complete monopoly of the financial operations of the nation, and be able to relieve the taxpayers of the heavy burdens which accrue from the paying of interest on loans, by providing credits to carry on the Commonwealth and State undertakings, and cash credits for rural industries, in order to release primary producers from the grip of financial institutions, by consolidating the national debt, and putting it on a sound footing, and by making proper financial provision for the nation to honour its obligations in full. The financial institutions of the world have fattened on the proceeds of war. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- As I understand it, you believe in the complete abolition of interest? {: .speaker-KLL} ##### Mr MAKIN: -- The complete abolition of private banking institutions, and a complete monopoly for the Commonwealth Bank, or a National Bank that may be created. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Therefore, you believe in abolishing interest on money? {: .speaker-KLL} ##### Mr MAKIN: -- Not necessarily, but I do not see why one section of private money-lenders should be able to extract as high as 20 per cent, interest on the capital they place in a banking institution, while other people, who are ordinary depositors in the bank, receive only per cent. I cannot see any justification for the wide margin between those circumstances. The Western Australian Bank has paid as high as 20 per cent, by way of dividend. {: .speaker-KDZ} ##### Mr Jowett: -- They are not charging that in interest to their customers. {: .speaker-KLL} ##### Mr MAKIN: -- That is interest upon the capital that their shareholders have invested in the proposition. The private banking institutions really have no high standard of principle from the national stand-point. They have no particular country. All countries from which they can extract profit and interest are alike to them. They are creatures without *a.* conscience. They are extracting interest from the people, and not providing the people with, an equivalent in return. The Treasurer has stated that the present unenviable position occupied by Australia in London, in the matter of meeting its liabilities, and securing credits there, is not due to any disrepute in which Australia herself stands. but is caused by the banks which have permitted large purchases to be made, while temporarily there has been *a* dearth of credit on the part of the banks in London. It is claimed in London that Australia should export her gold to establish credits there. That is a proposition by means of which the private banking institutions are endeavouring to make a personal convenience of what is a national asset, governing the stability of this country. I am satisfied that Australia does not stand in a position of disrepute, with other countries because of anything for which she herself has been responsible. It is the private banking institutions and other financial mediums that have been responsible for producing these very undesirable circumstances to the detriment of the people of the Commonwealth. It is as well to take into consideration the profits that have been made by the private banks, so that the people may understand just how they are being imposed upon, and appreciate the fact that each year sees them in greater difficulties than before, so that, instead of being able to get out of the morass into which they have unfortunately allowed themselves to slip, they are becoming more deeply involved as time goes on. The following tabulated statement shows the transactions of seven of the Associated Banks of Australasia for the seven years' period from 1912 to 1919:- These are the figures for only seven banks out of the eighteen Associated Banks. The *Insurance and Banking Record* gives a complete summary for eighteen of the Associated Banks of Australia. I propose later to give their balance-sheets for last year, in order to convey to the public some idea of the extent of their operations. These great fortunes aresecured out of the hard earnings and the production of the people. If such fortunes can be amassed as a result of the unwarranted profits that are made by controlling our financial credits and providing a convenient system of bookkeeping, it is about time that the nation took over the control in the interests of the whole of the people. {: .speaker-F4S} ##### Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I suggest that the honorable member ask leave to continue his remarks at a later stage. {: .speaker-KLL} ##### Mr MAKIN: -- I respond to the Treasurer's suggestion, and ask leave to continue my remarks at a later stage. Leave granted; debate adjourned. {: .page-start } page 6326 {:#debate-11} ### ELECTORAL (WAR-TIME) REPEAL BILL {: #debate-11-s0 .speaker-KYD} ##### Mr POYNTON:
Minister for Home and Territories · Grey · NAT -- I move - That this Bill be now read a second time. The Bill repeals the Commonwealth Electoral (War-time) Act, and no further explanation of it is necessary. {: .speaker-KEV} ##### Mr Fenton: -- It is designed to remove certain disabilities? {: .speaker-KYD} ##### Mr POYNTON: -- Yes. Question resolved in the affirmative. Bill read a second time, and reported from Committee without amendment; report adopted. Standing Orders suspended; Bill read a third time. {: .page-start } page 6326 {:#debate-12} ### QUESTION {:#subdebate-12-0} #### ORDNANCE BUILDINGS, BRISBANE {: #subdebate-12-0-s0 .speaker-KFK} ##### Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT -- I move - That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1914, the following works be referred to the Parliamentary Standing Committee on Public Works for their report thereon, viz. : - Ordnance and other Defence buildings at Kelvin Grove, Brisbane, Queensland. On the authority of the House we have already erected Ordnance Stores at Leichhardt, Sydney, and are building similar stores at Seymour, Victoria. The House also authorized recently the erection of Ordnance Stores at Midland Junction, Perth, Western Australia, and we are proposing now to enter upon a similar work 'in Queensland. These stores at Kelvin Grove have been rendered necessary owing to the inadequacy of the present Ordnance Store accommodation in Brisbane, which is equal to only onethird of the requirements. The stores themselves are unsuitable. They were not designed for the purpose, and are not efficiently equipped. Great quantities of goods are at present stored in drill halls and rented premises. The drill halls are now required for training purposes, and the amount paid in rentals is £1,073 per annum, which expense it is considered should be no longer incurred. The fact that these stores are housed in unsuitable premises, which are situated in several localities, entails unwarranted expense in administration, supervision, and caretaking. The erection of new, up-to-date, and commodious stores will obviate such unsatisfactory conditions. The site proposed for these stares comprises a portion of the defence area now devoted to the accommodation of the Engineers' and Artillery Depot at Kelvin Grove, and a small area of land adjoining which it is proposed to acquire. The buildings generally will be elected with brick walls, concrete floors, and iron roofs, and will be similar in type, but of smaller dimensions, to the Ordnance Stores buildings now in course of erection at Leichhardt, New South Wales. The buildings and works comprise the following: - Excavation of site, Ordnance Stores, Small Arms Ammunition Store, Administration Office building, luncheon room block, lavatory block, Unserviceable Goods Store, Inflammable Goods Store, machinery room, fencing and gates, formation of roads, water supply, storm water drains, electrical installation, lifts, and fire-prevention services. The total estimated cost of the works is£53,041, and the details are as follow: - In accordance with the provisions of the Public Works Committee Act, I submit the plans, specifications, and estimates of the proposed work, and I ask the House to agree to the reference to the Public Works Committee. Question resolved in the affirmative. House adjourned at 9.55 p.m.

Cite as: Australia, House of Representatives, Debates, 9 November 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19201109_reps_8_94/>.

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House of Representatives 9 November 1920

PRIVILEGE

Mr HUGHES:Prime Minister · BENDIGO, VICTORIA · NAT

Mr SPEAKER:

Mr MAHON:KALGOORLIE, WESTERN AUSTRALIA

Mr Hughes:

Mr MAHON:

PASSPORTS BILL

PAPERS

ADJOURNMENT

Direction of Federal Capital Design

Mr SPEAKER:

Mr J H CATTS:Cook

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Mr Groom:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Mr Groom:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Mr Mahony:

Mr Groom:

Mr J H CATTS:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H CATTS:

Mr Poynton:

Mr J H CATTS:

Mr Fenton:

Mr J H CATTS:

Mr Fenton:

Mr J H CATTS:

Mr Fenton:

Mr J H CATTS:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Austin Chapman:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Fenton:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Austin Chapman:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Austin Chapman:

Sir Robert Best:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Austin Chapman:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr Austin Chapman:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir Robert Best:

Mr Mahony:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr J H Catts:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr JAMES PAGE:MARANOA, QUEENSLAND · FT; ALP from 1903

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr JAMES PAGE:MARANOA, QUEENSLAND · FT; ALP from 1903

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr FENTON:Maribyrnong

Mr J H Catts:

Mr FENTON:

Sir JOSEPH COOK:Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr FENTON:

House of Representatives
9 November 1920

Mr HUGHES:
Prime Minister · BENDIGO, VICTORIA · NAT

Mr MAHON:
KALGOORLIE, WESTERN AUSTRALIA

Mr J H CATTS:
Cook

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr JAMES PAGE:
MARANOA, QUEENSLAND · FT; ALP from 1903

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr JAMES PAGE:
MARANOA, QUEENSLAND · FT; ALP from 1903

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr FENTON:
Maribyrnong

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr AUSTIN CHAPMAN:
EdenMonaro

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Mr SPEAKER (Hon Sir Elliot Johnson:
LANG, NEW SOUTH WALES

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917