9th Parliament · 2nd Session
Mr. Speaker (Et. Hon. W. A. Watt) took the chair at 11 a.m., and read prayers.
GREETINGS to the United States of AMERICA.
– As to-day is the 4th July, has the Prime Minister despatched fraternal greetings to the people of the great English-speaking nation, the United States of America ?
– I agree with the sentiment that has prompted the question. Up to the moment, no such greetings have been sent, but I shall take action to see that they are.
asked the Prime Minister, upon notice -
– I am taking steps to ascertain the position regarding the points raised by the honorable member, and shall advise him further in the matter as early as possible.
asked the Minister for Trade and Customs upon, notice -
– The. answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
As the Commonwealth Bank Bill (1924) is of vital importance to the credit of the community and to the welfare of the bank itself, will he take immediate action to ascertain the opinion of the principal executive officers of the bank as to the practical effect of the Bill, and inform the House?
– While preparing the bill, I had frequent conferences with the Acting Governor of the bank. It is not considered desirable .to make public the views of individual officers on this important subject.
asked the Prime Minister, upon notice -
Is it the desire of the Government, having due regard to the relative purchasing power of money, that the Public Service Board, in the classification now proceeding,, should lower the standard of the Public Service below that prescribed by Parliament in a schedule to the Public Service Act of 1902, and relatively confirmed by Parliament in the Public Service Act of 1911?
– It is not clear what is meant by the honorable member’s question ; but he can rest assured that the Government have no desire to lower the standard of the Public Service.
PARCEL Post Regulation.
asked the Minister representing the PostmasterGeneral, upon notice -
With reference to the answer given to the honorable member for the Northern Territory in regard to the 11-lb. parcel post for Central Australia, will the Minister condition the next mail contract from Oodnadatta to Alice Springs so as to include the carriage of 11-lb. parcels?
– The general question is under consideration, but I am not in a position to commit myself at the present juncture as to what it may be found possible to do in any particular case.
Imposition of Fines. Mr. C. RILEY asked the Prime Minister, upon notice -
Is it a fact that Sir J. M. Higgins (Chairman of the Central Wool Committee) imposed fines upon certain shorn wool dealers who were found guilty of a breach of the War Precautions Act - Wool Regulations, in buying quantities of wool far exceeding the £10 limit?
If so, will he ascertain the names of the wool dealers who were fined by Sir J. M. Higgins, and the amount of such fines?
What has become of the fines?
Did the action of Sir J. M. Higgins in imposing the lines, together with the disposal of same, have the approval of the SolicitorGeneral ?
– I am having inquiries made, and shall advise the honorable member as early as possible.
asked the Minister for Trade and Customs, upon notice -
Whether, in view of the statement, made in this House by the honorable member for Perth, that the Premier of ‘Western Australia had received advice from the Western Australian Agent-General that .British manufacturers of wire netting export 70 per cent, and sell locally 30 per cent, of their output, which figures are the reverse of those supplied by Sir Austin Chapman, formerly Minister for Trade and Customs, he will take immediate steps to ascertain which contention is correct, and in the event of its being proved that Great Britain exports the major portion of her output of wire netting, will he regard that as conclusive evidence that no dumping is taking place, and remove the dumping duty?
– No doubt, the proportions of British wire netting exported and used for home consumption vary from time’ to time. In May of this year the British Wire Netting Manufacturers Association themselves stated to the
Department of Trade and Customs that the proportion of their output which is exported varies considerably from year to year, and that in 1923 it was 52.83 per cent. The exact proportion of wire netting exported is not an essential factor under the section being operated (section 4). Under that section, goods may be liable to dump ing duty whenever they are sold to an importer in Australia at an export price which is less than the fair market value of the goods at the time of shipment, and detriment may result thereby to an Australian industry.
asked the Prime
Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
Dispute with Seamen’s Union.
asked the Minister for Trade and Customs, upon notice -
Is it a fact that he has been successful in arranging a termination of the dispute recently existing between the owners or charterers of the Port Lyttleton and the Seamen’s Union, and whether any assistance of a valuable nature was afforded him by the honorable member for Dalley?
– When last in Sydney, I interested myself unofficially, as did the honorable member for Dalley, in an endeavour to bring closer together the conflicting interests in the dispute existing between the owners or charterers of the Port Lyttleton and the unions concerned. I had two unofficial interviews in connexion with the matter, and both the honorable member for Dalley and myself are hopeful that the position has been materially improved, and that the way has now been opened up for further negotiations by the parties interested.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
Employment of Hungarians. Mr. COLEMAN asked the Prime Minister, upon notice -
Is it a fact that two Hungarians were recently imported by the Anglo-Persian Oil Company under contract to work in connexion with the oil exploration operations of that company ?
If so, have the provisions of the Immigration Act in relation to contract workers been complied with; and
Will the Government bring pressure to bear upon the company concerned to give preference to Australians in making appointments in connexion with their operations?
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
With regard to a memorandum laid on the tabic of the Library on Wednesday last, being a reply by the Commissioner of Repatriation to certain charges recently made against the commission and its officers, does he consider that such reply copmpletely exoperates the commission and the officers concerned?
– A regrettable inaccuracy occurred in one portion of the information supplied by the commission; but, on the whole, it is considered that the reply furnished in regard to the charges is satisfactory.
– On the 2Sth May, th«» honorable member for Echuca (Mr. Hill) asked the following questions: -
I am now able to furnish the honorable member with the following information : - 1. (a) P.o.l). price at port of shipment -
November delivery, 9s. Id. per dozes. January-February, 1st class, 9s. 3d. per dozen.
January-February j 2nd class, 6s. 3d. per dozen.
Landed price c.i.f.e. at various Aus tralian ports - Melbourne -
To-day’s price - 1st class, 9 s. lOd. per dozen; 2nd class, 6s. lOd. per dozen.
November delivery, i)s. lid. per dozen.
Other states - No information available.
Immediate delivery, 10s. 6d. per dozen.
January-February delivery - 1st class,” 10.-=. to 10s. 4d. per dozen; 2nd class, 7s. per dozen. ‘ Hobart-
Immediate delivery, 1st class, 12s. per dozen. Other states - No information available.
I. (a) F.o.b. price at port of shipment -
Immediate shipment, 9s. 2d. to Ss. lOd. per dozen.
August-September shipment, 8s. 9Sd. to 9s. per dozen.
November delivery, Ss. 9d. per dozen. October-January delivery, 9s. per dozen. “ ‘
August-September shipment, 9s6 3d. per dozen.
Cable quotes. 2nd June, 1024. to 6th June, 1024,9s.61/2d. to9s. 101/2d. per dozen; 7th June, 1024. 9s. Sid. per dozen. May shipment, 9s.10d. per dozen. April shipment, 9s. 73/4d. and 9s. 51/2d. per dozen.
March shipment, 9s. 9d. per dozen. Melbourne -
Immediate shipment, 10s- per’ dozen. August-September shipment, 9s. 71/2d. per dozen.
November delivery, and OctoberJanuary, 9s. 7d. per dozen. Brisbane - (All quotations on basis of c.i.f.e., Sydney.)
Present landed price, Brisbane, l1s.6d. to 12s. per dozen.
New season’s delivery,8s.107/8d. to 10s. 2d. per dozen. Port Adelaide - August-September shipment, 9s. 91/2d. to 9s.101/2d. per dozenFremantle -
August-September shipment, 9s. 7d. to 9s. 9d. per dozen, c.i.f. only. Hobart -
No direct importations,
August-September delivery, 9s.61/2d., 9s.81/3d. to 9s. 9d., and 10s.per dozen. Melbourne -
Spot or prompt delivery, l1s. 6d. per dozen.
November delivery, 9s. 9d, for dozen, October-January delivery, 9s. 9d., and 10s. per dozen. Brisbane - Spot or prompt delivery, 12s. 6d. per dozen.
August-September delivery, 9s. 5d. to 10s. 8d. per dozen (estimated). Port Adelaide -
Spot or prompt delivery, 10s. (id. to 10s. 9d. per dozen. Fremantle - Spot or prompt delivery, l1s. 6d. per dozen.
August-September shipment, 10s. 6d. per dozen. Note. - The high prices for spot delivery are said to be duo to a present shortage.
– On the 22nd May, the honorable member for Swan (Mr. Gregory) asked the following question: - .
What is the average percentage of Customs and natural protection, inclusive of Customs duties, freight, insurance, exchange, and all charges added to invoice cost by the Customs Department in assessing values for duty from consignor in Canada to consignee in Melbourne, per £100 value at place of manufacture in C anada, on the following articles: - Reaper and binder, 6 feet and 7 feet; side-delivery reaper mower, 41/2 feet and 5 feet; hay rake, 8 feet and 9 feet; grain and fertilizer drill, 15 hoes and 17 hoes, 15 disc and 17 disc; disc plow, 4 furrow ?
I amnow able to furnish the honorable member with the following reply: -
The information desired is not obtainable from official sources, and in view of the reference by the Prime Minister to the Tariff Board of the question of the bearing of the duty on agricultural implements upon primary production, it is not desired to anticipate the report of the Board or to duplicate this work.
Motion (by Mr. Bruce), by leave, agreed to -
That leave of absence for one month be granted to the honorable member for Kooyong (Mr. Latham) on the ground of ill-health.
– With the permission of the House, I should like to make a statement on the financial position. I am happy to say that, owing to the efficient work of the treasury staff, I am able to present to the House an approximate statement of the accounts disclosing the financial operations of the Commonwealth during the past year. These figures are approximate only, and have been built up largely by telegraphic advices from the other states and from London, and obviously can be compiled at this early date under general heads only. The figures may be slightly varied when the accounts of the year are complete, but they are now made available as being substantially correct.
The expenditure of the past year was £63,357,150, which may be compared with the expenditure of the previous year of £63,700,485, and the estimated expenditure of £61,896,098.
The revenue was £66,014,243, which may be compared with the receipts of the year 1922-23 of £64,720,635, and the estimated receipts of £61,943,250.
The transactions of the year 1923-24- show a surplus of receipts over expenditure of £2,657,093.
I present a tabulated statement of the whole of the transactions, under general heads, which has been compiled, and which I should like, with the consent of the Hou3e, to incorporate in Hansard The statement i3 as follows: -
EARLE PAGE, Treasurer. 4th July, 1924.
The principal increasesin the revenue over the estimate were: -
With the large increase in the import trade which has developed during the year, the increase in Customs and excise revenue was anticipated. The decrease in the income tax revenue may be largely attributed to the delay in assessing the tax, following on the amalgamation of the Commonwealth and State Taxation Offices. The decrease under interest on loans to states for soldier land settlement is caused by some of the payments being withheld pending a further discussion on the terms of the loans.
The increases in the expenditure over the estimate are made up as follows : -
The departmental increase shown in this table may be divided into two parts - unforeseen special payments which are not in any way associated with the ordinary administrative expenses of the department, which total, roughly, £466,200, and increases in the ordinary departmental expenditure in the department of the Customs, which was necessitated by the increased revenue collected; in the Post Office, due mainly to expansion of business, and Arbitration Court awards in the Defence Department, in accordance with a special resolution of the Council of Defence ; and in the Taxation Office, clue to delay in completing the amalgamation of the federal and state offices. “Unforeseen items referred to in the expenditure under ordinary votes of departments include the following : -
Deducting this amount from the total increase in expenditure, £1,017,000, under the ordinary votes of departments, there remains an increase of £550,800. This increase is made up as follows : -
This leaves only £15,700 to be accounted for by other increases.
The increase in the actual over the estimated expenditure of the Prime Minister’s Department is £269,000.
From the foregoing details it will be seen that compensation to South Australia transferred officers, payment to the Central Wool Committee, entertainment of the British fleet, and the Ellis Rowan pictures, account for £236,200 of the total increase. The balance- £32,800- was required for royal commissions, the Australian delegation to the Imperial Conference, and other unforeseen miscellaneous expenditure.
The increase in the Treasury over the estimate is £412,000. The details already furnished, which show contributions to the Japanese Relief Fund, advances and other recoverable expenditure, interest on moneys advanced by the Commonwealth Bank, and Taxation Office, total £419,600, so that there is a small saving on other votes of the department.
The increase of £96,000 in the Defence Department has already been explained.
The expenditure of the Department of Trade and Customs shows an increase of £61,000 over the estimate.It must be remembered that during the year the Customs Department has handled a huge volume of business, which is considerably in excess of that of any previous year. For this reason it became necessary to provide an additional £8,000 for the administration of the Commerce Act and £30,000 for salaries and contingencies generally. A temporary credit to the British Empire Exhibition Trust Account and other recoverable expenditure, total £23,000, making, in all, the increase of £61,000.
The increase of £14,500 in the Department of Works and Railways is more than accounted for by the additional amount of £20,000 already referred to, which was provided for the working expenses of the East- West Railway.
The increase in the PostmasterGeneral’s Department of £171,000 has already been explained.
The Department of Health shows an increase of £13,000. I have already referred to the amount of £20,000 required in respect of the rinderpest outbreak, so that there were savings on other votes of the department.
The increase in the expenditure over the estimate under Special Appropriations other than War, viz., £145,777, is made up of : -
The other small increases, totalling £16,540, are made up of losses on the 1920-21 Fruit Pool, of £14,940, where nothing was included in the estimates, and £1,600 for interest on loans raised for the states.
The details of the expenditure I have furnished are all that are available at the moment, but at a. later date complete details will be furnished of both receipts and expenditure.
This figure may be slightly varied when the accounts of the year are complete, but it is now made available as being substantially correct. When the accounts for the year are closed this balance of £10,085,667 will be adjusted, and the budget, which will be presented towards the end of the month, will indicate clearly how the surplus has been dealt with.
In concluding this statement T should again like to express my appreciation of the very efficient work by the accountant and staff, which has enabled this return to be furnished so completely at such an early stage of the year.
.- I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, the following work be referred to the Parliamentary Standing Committee on Public Works for its investigation and report thereon, viz. : - Establishment of an Automatic Telephone Exchange at Elsternwick, Victoria.
It is proposed to erect a telephone exchange building on a site which has been acquired at the corner of Selwyn-street and Davis-street, Elsternwick, and to install therein an automatic telephone switching system, having an initial capacity of 5,700 subscribers’ lines, with provision for extension to 9,500. That will afford accommodation for prospective development. In addition it is intended to install a heating, ventilating, vacuum cleaning, and air conditioning plant. Elsternwick, which is one of the most populous suburbs of Melbourne, is served telephonically from the Windsor, Malvern, and Brighton exchanges. The cost of line plant required to connect subscribers in the district to those exchanges is unduly great, and economy in this respect can be secured only by opening an exchange in the telephonic centre of the area. The net value of the line plant required to serve the Elsternwick area if the exchange be opened in 1926, will be approximately £85,000, but if the establishment of the exchange be deferred, and the practice of connecting Elsternwick subscribers to adjacent exchanges is continued the value of line plant required to serve subscribers in this area will be about £123,000. It is stated that in a multi-exchange network, such as that of the Melbourne metropolitan area, the exchanges should be automatic. So far as the sub-station equipment is concerned, there will be no change in the apparatus of subscribers now connected with the Malvern and Brighton exchanges. The anticipated annual revenue of the new exchange, based upon the estimated number of line connexions on the dates mentioned, is - 30th June, 1926, the proposed opening date, £44,216; 30th June, 1931, £63,000. The proposed building will be a single story brick structure of simple design. The details of the estimated costs are: - Site, £1,000; buildings, £7,000; heating, ventilating, vacuum cleaning, and air conditioning plant, and electric light and power, £4,700; automatic telephone equipment and external plant, £155,175: total, £167,875. In accordance with the requirements of the act, I lay upon the table plans and other particulars of the proposed building.
Question resolved in the affirmative.
.- I move : -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, the following work be referred ta the Parliamentary Standing Committee on Public Works, for its investigation and report thereon, viz. : - Establishment of an Automatic Telephone Exchange at Northcote, Victoria.
It is proposed to erect a telephone exchange building on a site which was acquired by the Commonwealth at the corner of Bay View-street and Highstreet, Northcote, Victoria, and to install therein an automatic telephone switching system, having an initial capacity of approximately 3,800 subscribers’ lines, with provision for extension to an ultimate capacity of 9,300 lines. This will afford sufficient accommodation to meet the anticipated development in the Northcote exchange area. The proposal also includes the installation of heating, ventilating vacuum cleaning, air conditioning, &c, plant, electric light and power. The subscribers in the Northcote area are at present served by a manual (magneto) switchboard, but the ultimate limit to which this can be extended in the existing building will only suffice for service to intending subscribers until about June, 1925. It is also stated that in a multi-exchange net-work, such as that of the Mebourne metropolitan area, the interests of economy and efficiency are best served by the installation of automatic telephone exchanges. The annual revenue based on the estimated or actual number of line connexions at the undermentioned dates is as follows, viz. : - Actual, 1922-23, £15,016 ; estimated, June, 1926, £25,631; estimated, June, 1931, £42,347. The proposed building is to be a brick structure of simple design. The estimated cost of the scheme is: - Site, £S94; building, £9,000; installation of heating, ventilating, vacuum cleaning, air conditioning,” &c, plant, electric light and power, £5,100; automatic telephone equipment and external plant, £S6,729; total, £101.723.
– Is the exchange to be on the site of the new post office !
– Consideration is being given to the erection of a post office on the same site, and that proposal will be introduced when evidence is being given before the Public Works Committee. I produce plans and other information required in accordance with the Public Works Committee Act.
.- I am very glad that the Minister has introduced this proposal. Few districts in the metropolitan area, and certainly none amongst the northern suburbs, are progressing so rapidly as are Northcote and
Preston. In the past they have been very ill-supplied in regard to both postal and telephonic facilities. The site mentioned by the Minister is a fine one, being elevated and healthy, and commanding a splendid view of the whole of the metropolitan area. I had hoped that the construction of a post office would have been commenced ere this. On several occasions I have approached the Minister regarding the matter, and have been told that plans are in course of preparation. I hope that the* telephone exchange, at all events, will be proceeded with speedily, because it is urgently needed.
– I understand that the automatic telephone equipment involves certain patent rights, and I should like the Minister to inform the House at a later date what, amount the Commonwealth has to pay in royalties for the us© of such patents.
– I suggest that the honorable member should place a question upon the notice-paper.
Question resolved in the affirmative.
Bill returned from the Senate with amendments.
Debate resumed from 2nd July (vide page 1794), on motion by Dr. Earle Page -
That the bill be now read a second time. Upon which Mr. Charlton had moved, by way of amendment -
That all the words after the word “ That “ be omitted, with a view to the insertion of the following words in place thereof : - “ in order to preserve the Commonwealth Bank as a national institution, and to extend its operations for the purpose of controlling credit and exchange, it is desirable that financial experts, to be fully employed in the service of the bank, should be appointed to its management, the proposal of the Government to appoint persons representing squatting and commercial interests, who are diametrically opposed to national banking, being designed more in the interests of private financial institutions than of the people’s bank.”
.- While I congratulate the Treasurer upon the introduction of this bill, I find it necessary to criticize certain of its provisions. There is a good deal of irony in the fact that, notwithstanding Australia’s enormous production of wealth, including over £600,000,000 worth of gold, the public debt to-day is £900,000,000, and all the banks in the Common-wealth are not in a position to finance the coming wool clip. A good deal has been said in the course of this debate regarding the wonderful advances made by the Commonwealth Bank, but I propose to lift the lid off the pot, and show that there is nothing in it but political gas. The Treasurer has stated that the bank has received from the Commonwealth during the last nine years an average of £12,000,000 per annum free of interest. At 5 per cent, that money should have earned £5,400,000, but the profits of the bank during the whole period have been only £4,500,000, notwithstanding the great volume of business which was given to the bank in connexion with the war. If the Commonwealth Government had handed to me £12,000,000 per annum for nine years, I should have undertaken to return a bigger profit than the bank has yielded. The water has boiled out of the pot now! I wish to discuss the note issue.” The Labour party was responsible for taking control of it away from the associated banks.
– Hear, hear! Mr. WHITSITT.- The honorable member for Angas will be sorry for that “ Hear, hear,” in a moment. In acting as it did in that respect the Labour party deprived the people of Australia of the right to demand gold. The associated banks held £200,000,000 in deposits, and the Labour party by making the notes legal tender deprived the people of Australia of the right to demand gold for them. The Notes Issue Board, however, has issued so many notes that the £1 note has new a gold backing of only 9s. 6d. When the associated banks were in control, £1 notes had behind them £8 in gold, but since then the Notes Issue Board has turned out notes like sausages from a sausage machine. “What about the “Hear, hear” now? I do not hear it. The people of Australia were denied the right to demand gold for notes. Shame on the party that deprived them of it. It has been said that the Commonwealth Government advanced money to the states, and so assisted them. That is so. It has even borrowed £3,000,000 itself. But there is no gold to back up the notes that were issued in connexion with those loans. The notes have only a mythical value, and the sooner those for which there is no gold backing are withdrawn the better it will be. Gold is the citadel of power; it is the backbone power of a nation ; without it wealth becomes the plaything of the savage and the sword of a demoniacal socialism.
– The honorable member should take an aspro. ‘
Other honorable members interceding, Mr. SPEAKER (Rt. Hon. W. A. Watt). - Honorable members must restrain themselves from interjecting.
– I have heard honorable members, both inside and outside of this House, say that wheat should be made legal tender. It would be very pleasant for us to be running round the streets with a bag of wheat on our back trying to buy a “ smoke.”
– What about making hops legal tender ?
– Gold is the only thing that can be used. It is the symbol of power. It keeps England afloat. The Mother Country will not allow it to leave her shores at present. She requires it to back her currency. Australia cannot get a single “yellow boy” from England. Every 1,000,000 sovereigns represent £21,000,000 of trade per annum. Some honorable members sa.y that it is all right so long as we get goods in exchange for gold, but I do not agree with them. England will allow as much of her merchandise as we like to come here, but she will not allow her gold to be taken away. If we could get gold we should not be suffering from the stringent financial difficulties that we are now facing. The British Government should be requested to remove its embargo on the export of gold. If we could get more gold we could paddle our own canoe. We have lost £600,000,000 worth of gold through our silly legislation, arid it is time that we put our house in order. The argument that £1,000,000 worth of imported goods is just as good as 1,000,000 sovereigns is foolish. Let us suppose that we obtain £1,000,000 worth of wearing apparel from abroad. Twelve months later the clothing is worn out, and more is necessary. By that time we have lost both our money and our goods. I want sound finance. Issuing notes without gold backing is folly, and the power to so issue them should be taken away from the Government. What does the Secretary to the Treasury know about world finance relative to the business and settlement of exchanges of the various banks trading, say, in Australia with South Africa, the United States of America”, France Japan, or anywhere else? He knows as much about them as a child knows about trigonometry. A little learning is a dangerous thing, and some honorable members opposite have very little learning about finance.
Honorable members interjecting, Mr. SPEAKER. - On account of the number of interjections and the noise of conversation in the chamber it is almost impossible for me to hear the honorable member. I ask honorable members to restrain themselves and exhibit traditional parliamentary reticence during the debate.
– I am dealing at present with the note issue.
– You are presenting a good vaudeville show.
– I shall name the next honorable member who interjects.
– I am pleased with the proposal that the power to issue notes shall be taken from the Notes Issue Board and given to a board of directors of the Commonwealth Bank. The members of the proposed board should be gentlemen who are well acquainted with financial affairs, and who know the facts about our Australian trade and industry. They should not be subject to political control, and should only issue notes for gold. It is ridiculous that the Notes Issue Board should have refused to issue notes on the security of sovereigns. A sovereign will always buy a note and a little more, but a note will not buy a sovereign. New notes should be issued whenever new gold is offered in exchange for them. Our people should be able to demand gold for notes at any time, but they cannot do so at present. Why should the associated banks be compelled to lodge reserves with the Commonwealth Bank? They should be allowed to retain their money and invest it as they desire, provided that their notes are backed by sovereigns. Gold to back all the notes should be in safe custody. The Commonwealth Bank at present has its clearing house at the Bank of New South Wales. That bank is much stronger than the Commonwealth Bank. The associated banks as a matter of fact have built up Australia, and their system of exchange has been altogether to the bene fit of the people. What honorable member who had £100 to collect in Tasmania would think of going across the Strait to get it when he could do so by paying an exchange rate of £ per cent, to the bank ? The system is an excellent one. I go across to Tasmania every week and pay £2 8s. for the trip, but I assure honorable members I would not suffer seasickness for the sake of collecting money that I could obtain on the mainland by paying per cent, in exchange. Honorable members should not decry the associated banks, for they have done a great deal for Australia. They have made possible the investment of money in outside districts and so have promoted development. I have borrowed money from them at 7 per cent, and have made 50 per cent, on it. Will honorable members say that that is not good business? I do not deny that the Commonwealth Bank has done some good, but I think it could have done much more. Money must be made available for the development of Australia, but only under proper conditions. The sane way to conduct financial affairs is to permit the banks to do their own business. The Notes Issue Board should not have been permitted to act a3 it has done. Some honorable members say that it has made Australia blossom like a rose. I would say, like a rose in a bottle of mixed pickles. Men who control financial affairs have to be properly trained to look at things from the bankers’ stand-point. When an ordinary man goes to- a banker, and ask3 for a loan, the banker says : “What is your security? We do notadvance money on enthusiasm, but on security.” That is a proper attitude. It is time we got back to sound finance. The sooner we call a halt in our present practices the better it will bb. I do not agree with the suggestion that it will not be necessary for the board of directors of the Commonwealth Bank to sit more frequently than once a month. If it is to do its work properly it will need to sit two and even three times a week at some periods, for it must keep in close touch with the exchange conditions of the world and the trade and commerce requirements of Australia. The members of the board must give their whole attention to their work. It is impossible to make a banker in a week or two. Ten or even fifteen year3 are not too long for a man to acquaint himself with the intricacies of high finance. Bankers must be trained like other professional men. If we are ill we want a doctor to treat us, and go to a doctor. If we require surveying done we go to a trained surveyor. If we expect expert banking service we must go to expert bankers. They understand currency affairs and general business practice. Shrewd and capable gentlemen ought to be appointed to this board, and they cannot be picked up in the streets. The board should bend all its efforts to restore the gold standard.
– Does the honorable member think that it should control the note issue?
– It should be compelled to issue notes for all the gold that is offered as security, and it should require gold before it issues notes. That is the only way to overcome our difficulties. Bankers should control the currency, for they understand it. It is almost laughable that they have been unable to obtain notes on the security of sovereigns. Notes should be issued whenever gold is forthcoming. The associated banks should be permitted to control their own business. The directors of the Bank of Australasia, the English, Scottish and Australian Bank, the National Bank, and so on, know their own business better than the officers of the Commonwealth Bank can know it, and they should have power to demand notes for gold at any time. They may be trusted not to call for more notes than are required to provide a proper currency. At present our notes are issued on an absolutely wrong basis.
– Would the honorable member give the board of directors of the Commonwealth Bank unlimited power to issue notes?
– I would oblige them to issue all the notes that were asked for in exchange for gold. Gold is far more valuable than notes.
– But does not the honorable member think that the Commonwealth Bank should have control of the note issue?
– It should be compelled to issue notes on the security of gold.
– The honorable member for Darwin must address the Chair.
– When our notes have a gold backing we shall be safe. Gold is the only satisfactory basis for trade between the nations.
– It was necessary to issue notes during the war.
– We are not at war now. The money that was advanced to the states through the Commonwealth Bank is purely and simply a mortgage on Australia. Let us put it to the test. Notes to the value of £57,000,000 have been issued, but there is gold for only £24,000,000 of that amount. What becomes of the balance ?
– Put the banks to the same test with respect to their current 3iCC0U.Il accounts.
– That is a. silly interjection. Current accounts are not. legal tender. Notes are the first claim on the assets of a bank. Before the establishment of the Notes Issue Board, there was not a man in Australia who, if the banks went smash, could not get a sovereign for every note in his possession. Today, of the £57,000,000 issued as notes, at least £27,000,000 is not represented by gold. What is to become of that £27,000,000 which is missing? It is not here, but is invested in the various states; and -if gold were demanded the Commonwealth Bank would have to put its shutters up.
Mr. Scullin The current accounts could not be touched.
– I am not talking about current accounts, but about notes. We cannot make something out of nothing, as that is contrary to the law of nature. Every penny possible should be applied to the redemption of the notes which are not backed by gold, and the British Goverment should be asked to permit a free currency of gold. If that were done, the people of Australia would not find, as at present, the rate of exchange against them.
– There has never been enough gold in the world to meet requirements.
– During the war period Australia’s commercial interests were sacrificed : and it appears that we are to pay even more during peace. It is time that we realized the position, and began to look after ourselves. There is no sentiment in business. England knows her job, and to keep people in England employed, our interests are being sacrificed.
It is proposed to build two cruisers in England, in order that work may be provided for the unemployed there. The people of England prefer to do that rather than allow the vessels to be constructed here. The more we import, the worse will be our position. In time the mortgage will strangle us. The sooner Australia ceases borrowing, the better it will be for her people.
Dir. PARKER MOLONEY (Hume) [12.4]. - The honorable member for Darwin (Mr. Whitsitt) who has just resumed his seat, is entitled to his own opinions, but I shall endeavour to show how absolutely misleading some of his statements are. People who have no time to study the intricacies of finance, can be forgiven for not understanding the position, but for an honorable member in this House to make use of the statements contained in the speech of the honorable member who has just sat down, is unforgiveable. The honorable gentleman led off by saying that this country owed nothing to the Commonwealth Bank. . Such a statement can be brushed aside without comment. It impresses itself on no one’s mind, and certainly not on the mind of the Treasurer (Dr. Earle Page). Throughout his speech the Treasurer paid a tribute to the work of the Commonwealth Bank. The honorable member for Darwin, by way of showing the private banks in a more favorable light than the Commonwealth Bank, said that the private banks used to hold eight sovereigns for every note they issued. The absurdity of that statement is apparent on the face of it.
– It is true.
– I am sorry that the honorable member persists in the statement.
– It was true in 1910.
– Let mo show the honorable member how utterly ridiculous his statement is. Those sovereigns included all the gold held by the banks against all their liabilities. The liabilities of the banks in respect to notes represent about onefifteenth or one-twentieth only of. their total liabilities. If we accept the view of the honorable member, that the gold held by the banks was a backing for the notes they issued, they would have no backing at all for their other liabilities. In view of that, does the honorable member still persist in the views he has ex pressed? He should take the trouble to look into these matters carefully before making such loose and wild statements. The honorable gentleman asked what would happen if the people with current accounts were to draw cheques and demand payment. He said that, so far as the private banks were concerned, everything would be all right. Let me refer to the Treasurer’s speech, and we shall see what would happen if those people presented cheques to the full value of their current accounts. The Treasurer said -
– That represents liabilities at call.
– That is so; and if all the people with current accounts presented their cheques and demanded payment at once, they would get 38.7 per cent. of the amount they were entitled to ask for. It is surprising that any honorable member in this chamber is unaware of a simple fact like that. No private bank in this country would be foolish enough to say that it could immediately meet all cheques so presented to it, and nobody with any knowledge of the position seriously thinks it could be done. I am surprised that the honorable memberfor Darwin should be so innocent.
– Speeches like that of the honorable member for Darwin injure this country.
– They should not be made in regard to the Commonwealth Bank as they tend to damage an institution which has served this country well. No one will deny that, even with the unsympathetic administration which has prevailed at times, the Commonwealth Bank has served Australia well. Throughout the war period it was the great bulwark of the people’s safety: it had a steadying influence, and assisted in the marketing of our primary products in a way that would otherwise have been impossible.
– It saved the other banks as well.
– That is true. During that period of stress the greatest steadying influence in this country was that of the Commonwealth Bank.
– The Commonwealth Bank kept interest low.
– I have carefully considered the speech of the Treasurer (Dr. Earle Page), and the first thing in it which struck me was the statement -
When the question of a Commonwealth Bank was first mooted, it was generally expected that a truly national bank would be established - a bank of deposit, issue, discount, exchange, and reserve. When the Bill was introduced, however, expectations were not realized, and when the bank began to function, it became perfectly clear that a national bank had not been established, but merely a Governmental institution in competition with the private banks. The Bill the Government now brings forward is designed to carry out the original expectation.
I cannot help thinking that that statement was a cunning attempt by the Treasurer to conceal the real purpose of this bill. The answer is provided by even a surface examination of the bill. The passing of this measure will not effect, anything which could not be done under the original act, excepting the appointment of a board of directors; yet the Treasurer would have the people believe that that for which they are longing is now at hand, namely, a truly national bank. Another answer which appears on the surface, and which is probably the most effective < answer which could be given, is that if this bill were to effect what is claimed for it by the Treasurer, a howl would go up from the private banking institutions of this country. Instead of that, the private banks have, with one accord, given the bill their benediction. When the Commonwealth Bank was established by a Labour Government in 1911, there was an outcry against it on the part of the private bankers, and by the Opposition of that time. If the Labour party were in power to-day, and made the statements which have been made by the Treasurer, the banking institutions of Australia would heap curses, and not blessings, upon it, for well they know that a Labour Government would extend the bank for the people’s good. The fact is that since the establishment of the bank determined opposition- to it has been displayed by the party opposite. I will not say that the Government proposes to wipe out the bank altogether, but there is only one reason why it does not do so, and that is because the bank has been such a huge success, and has done so much useful work for the people of this country, that honorable members opposite dare not wipe it out. They know that the people would not tolerate any such thing. But the Government does the next best thing it can do from its point of view, and tries to ham-string the Commonwealth Bank on every possible occasion. The principal feature of this bill is submitted with the intention of so hampering the bank as to make it one that will never function as a really national bank should do. It can safely be said that the Commonwealth Bank has prospered, not because of sympathetic administration by the governments that have been in power since the Labour party lost office, and not because of sympathetic administration of those at the head of the bank, but in spite of their unsympathetic administration. One can imagine what its success might have been if it had been given a fair deal. If, for instance, it had been allowed to handle all the moneys that pass through the state departments, municipalities, and other local authorities, which, in the State of Victoria alone, I venture to say, amount to several millions, it is not too much to say that the Commonwealth Bank would be one of the greatest institutions in the Empire. Surely the people’s bank should handle the public funds. But instead of the state departments feeding the Commonwealth Bank with public funds, as they had a perfect right to do-
– As it is their duty to do.
– Exactly . Instead of that, what do we find? Not a penny of the money that courses through the state departments finds its way into the Commonwealth Bank. On the contrary, they put all their money through the private banking institutions. As the honorable member for Hindmarsh (Mr. Makin) has already mentioned, the State Savings Bank of Victoria has £10,500,000 deposited with private banks at rates of interest ranging from 1 per cent, to 5 per cent. I can only say that this is a shameful use of public funds in order to bolster up t he profits of wealthy shareholders in private banking institutions. Quite contrary to what has been said by the honorable member who has just resumed his seat, the Commonwealth Rank may be said to have triumphed in spite of the dead weight of its opponents. Up to the present time it has made nearly £5,000,000 in profits for the people. It exerted a steadying influence which, during the war period, saved this country from anything in the nature of a financial panic. The honorable member for Darwin (Mr.’ Whitsitt) represents a primary producer’s constituency, and a knowledge of what the Commonwealth Bank did during the war period, when the primary producers were largely cut off from their overseas markets, should have prevented him from making the slanderous statements he has made against that great institution.
– No one takes any notice of the honorable member.
– That may be so, but such statements are repeated outside, and it is just as well that a reply to them should be placed on record. Wheat was the first great staple product of this country dealt with during the war period, and the first compulsory wheat pool was handled by the Commonwealth Government arranging with the Commonwealth Bank, and to a lesser extent with the joint stock banks, for advances to be made on wheat certificates. Every one knows what was the result of that arrangement. It extricated the primary producers of this country from the dilemma they would otherwise have been in through being cut off from their pre-war markets?
– It took them out of the hands of the food speculators.
– That is so, and at the same time it eased to a great extent the local financial situation. The same system was followed in subsequent harvests during the war period, but after the first wheat pool the Commonwealth Bank, as a Government institution, was placed in the paramount position. It acted as the distributing bank at every capital centre. Although honorable members are aware of the facts, it is just as well that a few figures should be given, to indicate the colossal nature of the work in the performance of which the Commonwealth Bank was the chief instrument. From 1915 to 1921 the wheat yield amounted to 640,000,000 bushels, and realized £185,000,000. So that when I say that the work in this connexion performed largely by the Commonwealth Bank, was colossal, I am not using the language of exaggeration. Throughout the war period it was the great steadying influence of this bank that relieved the primary producers of this country from the very difficult position in which, but for the assistance it rendered, they would have been placed.
– The honorable member will surely recognize the very important part which the private banks played in the matter.
– I have already mentioned the part taken by the joint stock banks, but I say that except m the case of the first compulsory wheat pool the services they rendered took a very secondary place when compared with those rendered by the Commonwealth Bank.
– That is not so.
– Had it not been for the Commonwealth Bank the primary producers would never have received the same consideration from the private banks.
– It was only the Commonwealth Bank that held the private banking institutions in check during the war. If the steadying influence of the Commonwealth Bank had not been exerted we can imagine what would have happened during the war period from our experience of the private banking institutions in pre-war days, aud when the Commonwealth Bank was not in existence. Speaking of many with whom I have come into contact I can say that the experience of the man on the land of private banks has, in many cases, been a very sorry and sad one. Before the Commonwealth Bank existed they turned many of them out on the roads of this country. If the private banks did anything for the relief of primary producers during the war period it was because of the existence and influence of the Commonwealth Bank. As one who represents one of the biggest wheat producing electorates in the Commonwealth. I say that there is to-day amongst primary producers, and especially wheat farmers, a lasting sense of gratitude to the Commonwealth Bank for what it did for them during the war period. What I have said about wheat can be said also about the handling of wool, meat, butter, fruit, and most of our primary products. This work was done by the Common wealth Bank as the recognized central authority and pivot for the financing of our primary products during the war period. Apart from what the Commonwealth Bank did in the interests of primary producers we know what it has done in connexion with the floating of war loans. The statement has been made, but itwill stand repeating, that it saved the people of this country £6,000,000 on the commission charged on the floating of loans. The rate charged by the Common wealth Bank was 5s. 9d. per £100 as against a, rate of £2 7s. Id. per £100 charged by private banking institutions. This represented on Australia’s internal war loans a saving to this country of £6,000,000. Yet there are people who to-day will stand up in this chamber and decry the Commonwealth Bank as an institution which the country would have been better without. I did not think that there was a member in this House who would not appreciate the work of the bank, and would not have a kind word to say for it. The Treasurer (Dr. Earle Page), throughout his speech, indicated that the country owes much to the Commonwealth Bank. But what is to become of it now ? I have already said that one does not need to read the bill to know what is intended by it; one has only to remember the acclaim with which the measure was received by the. private banking institutions of the country. It is proposed to hand the Commonwealth Bank over to a board that will certainly not be in sympathy with the expansion of its functions in the interests of the people. It is safe to say that the intention of the bill is that the Commonwealth Bank should in future function not so much in the interests of the people as in the interests of the private banks. The bill is intended as a prop for private banking institutions. As the Treasurer, who introduced the bill, and many members of his party, do not believe in the extension of public utilities we can hardly expect the bill to be designed to develop a national bank in the interests of the people.
– They would sell all public utilities.
– The Treasurer said that he would sell the railways if he had his way. He, at least, could not be expected to bring down a bill to develop a truly national bank, and I am not satisfied that his attitude towards the bank is more favorable than it is towards the railways. There is a great difference between the treatment of the primary producers by the Commonwealth Bank and their treatment by the private banks. In view of that, one wonders how any one claiming to represent the interests of the primary producer can laud the private banks and decry the Commonwealth Bank. I remind honorable members of the Country party that when a proposal was made from this side of the House during the 1921-22 harvest to provide a cash payment of os. a bushel for wheat, an amendment wa3 moved by a Country party member that half the amount should be paid in certificates. The amendment was agreed to against the wishes of the Labour party, and there are many men on the laud to-day who can inform the honorable member for Darwin (Mr. Whitsitt) that when they took their certificates to the private banks they were charged an interest rate of 7-i per cent, for discounting them. Again, what were men like the honorable member for Echuca (Mr. Hill) told a few weeks ago when the question of financing the next wheat pool was under consideration? They were told that the private banks had “finished with them.” I do not know whether the honorable member for Echuca would endorse what the honorable member for Darwin has said, but when he placed the private banks on a pedestal he mud have had in his mind the fact that a few weeks ago they would not take part in financing the wheat pool. In so far as the private banks have displayed any willingness during late years to help the primary producers, it has been because of the existonce of the Commonwealth Bank. What hope of assistance could be held out for the primary or secondary producers if the Commonwealth Bank did not exist? And yet it is interesting to know the extent to which the private banks hold the people’s money. The amount at call on which the banks pay no interest is £123,819,000. Not only do they pay no interest on this large sum, but they charge for keeping the accounts of it. .The amount on fixed deposit, on which the banks pay only a very small rate of interest, is £164,725,000, making a total in current accounts and on fixed deposit of £288,544,000. On about half of that large sum of money the banks pay no interest. Yet, what happens when the banks are asked for an overdraft? “When the request is granted the person requiring the accommodation is charged 7 per cent, and even higher. Surely, considering that the people, as a whole, provide the banks with £2SS,544,000, half of which is free of interest, they deserve better treatment than to be charged 7 per cent, for overdrafts. Even when an overdraft is arranged it merely means that the customer is given the privilege of writing a cheque to the extent of the credit arranged in his favour, and no money passes over the counter.
– And even then the customer may have to hand in important title deeds.
– That is so, and the banks will probably advance at the most, only half the value- of the property, and it is the general opinion that they extend their own credit on the balance. I have in mind scores of people, notably in the electorate of Indi, which I once represented, who have been forced off their holdings by the depredations of private banks. I have in my mind at present the case of a man who, in a period of drought in New South Wales, lost about half his stock. Evil days came to him, as they come to many others in this country. He went to a private bank, which allowed him an overdraft. The drought did mot break as soon as was expected, and after being threatened by the bank, he was given a certain time in which to meet the overdraft. There was only one thing that saved him - a Labour Government was in power, and it threatened to introduce moratorium regulations to protect him and others similarly placed. The threat proved effective, and it was the sole reason why he was allowed to remain on his land. His subsequent career shows that he was a thrifty, deserving man, and an asset to this country. The short extension of time allowed to him enabled him to recover, and he is now prosperous. I quote that incident to show that the struggling settler owes very small thanks to the private banking institutions of this country.
– Had the bank foreclosed on the case mentioned by the honorable member, they would probably have sold the land to one of their friends.
– That is very probably true. At the last election the Country party, to which the Treasurer belongs, went to the country knowing all these things. It knew also that there was a strong feeling in the country districts against the policy of private banks. It was expected to do something, and it framed a platform of fourteen points. I shall refer only to the thirteenth - the unlucky point for the primary producers. The Treasurer said during the election campaign that if the Country party had any influence in the government of this country decentralization would be the order of the day; secondary industries would be established in the country, raw materials would be worked up near the place of production, and a system of rural credits would be established. The primary producer said, “ That is what I want,” bub while he asked for bread, the party that claims to represent him gave him a stone. This is what was promised in the thirteenth point of the Country party’s election platform -
The establishment of a Commonwealth land bank and a system of co-operative and rural credits as an integral part of its savings bank department.
To arrange advances upon broad acres.
To assist co-operative finance in primary and secondary production.
To assist in land settlement and development.
To establish a grain and fodder reserve against periods of drought.
There was not much left for the primary producer to desire.
– Surely those things are provided in the bill !
– No; the thirteenth point represents the bread that was promised - the bill represents the stone the producers will receive. I have searched in vain for this thirteenth point in the bill. Members of the Country party said that centralization was the curse of the country, but they are now supporting a bill to centralize credit. This is the opportune moment for the Minister to redeem the promise he made at the last election to the men on the land. Birt clearly the man on the laud is to be sacrificed so that the wealthy shareholders in the private banks may be coddled. Great disappointment will also be felt throughout Australia when it is realized that the Government has not seriously dealt with the exchange problem. The bill offers no relief whatever in that respect, although the exchange rate i3 a great handicap to primary and secondary industries. The Treasurer, in his speech, suggested three remedies. The first was that there should be an adjustment of credits due to Australia in Loudon by the liquidation of the Government securities there in lieu of importing goods. Secondly, he suggested a return to the gold standard, but finally he rejected the two foregoing suggestions and submitted a third remedy, which he said he favoured. fie remarked -
The Government recognizes that both internal and external borrowing should be arranged as judiciously as possible. . . The establishment of a central bank on the lines proposed would place independent expert advice at the disposal of the various Governments, and assist in harmonizing, and, if necessary, in curtailing their loan operations.
The only remedy to which the Treasurer pins his faith is the curtailment of public borrowing. In the last twelve months, however, two loans have been floated abroad, one of £8,000,000, and one more recently of £4,000,000. I submit that the Government should set an example to show that it is sincere in its contention that public borrowing should be curtailed. Honorable members expected the Government to bring down some concrete proposal on the exchange question, but the speech of the Treasurer was indefinite and hesitating to a degree. The Minister evaded the issue by saying that he would leave the matter in the hands of the experts to be appointed to the board. In the event of these experts having no solution to offer the position will be as unfavorable as ever. The Government has merely expressed the pious hope that there may be a curtailment of borrowing. If that is the key to the situation, arrangements should have been made long ago* to have only one borrowing authority in Australia. Should the states take no notice whatever of the Treasurer’s advice the position will not be altered in the least. I propose to discuss- another phase of the operations of the Commonwealth Bank. I have taken gilt-edged propositions to the bank and they have been rejected. Three or four weeks ago a wealthy municipality required a. loan for the installation of an electric light system. The whole of the assets of the municipality would have been offered as security, but I was told by the Acting Governor of the bank that there was no money available. The honorable member for Hindmarsh (Mr. Makin) informed lis a few days ago that, he knew of cases in which the bank had declined to advance money, not on the ground that funds were not available, but because it did not wish to compete with the private banking institutions. Several cases in which a similar answer was given have come under my notice. This class of mismanagement is a violation of the very principles on which the bank was established.
Mr. Scullin The bank is carrying out the Government’s policy.
– That may be so, but it is not “ playing the game.” If those in charge of the bank study the interests of the private banks instead of permitting their sympathies to run along the lines of the bank’s progress, they are not fit for the positions they hold. The Commonwealth Bank has made fair progress, saddled though it has been with unsympathetic administration, and one can imagine what progress would have been made under sympathetic control. In my own electorate are many flourishing centres, and yet only two branches of the bank are established there. I believe that most other country electorates are even less favoured. I could name twenty flourishing towns in my electorate where a branch of the bank would thrive, but no steps have been taken, to extend the operations of the institution there.
– There are only three branches in the whole of Western Australia.
– I have not one in my electorate
– This demonstrates that the bank is hamstrung by the very people who ought to be extending its ramifications. When t.he authorities explain that they have no money, they demonstrate their own incapacity and prove that they are not launching out to obtain the new business which would provide them with the funds which they say they lack. The managers of some of the branches in the cities and elsewhere are in sympathy with the ideals of the founders of the bank, but those in supreme command are not acting fairly.
– They are acting under instructions from the Government.
– If that is so, a very serious charge can be laid at. the door of the Government.
– The statement is absolutely contrary to the fact.
– If then the Acting Governor is adopting his present attitude of his own free will, his sympathies must lie with the private banks, in whose service he ought to be. When gilt-edged propositions are submitted to those in command they display about as much activity as a petrified elephant. They say either that there is no money available, or that they are not looking for the kind of business submitted. It is deplorable that the bank has been kept stationary in country districts where the people are most anxious to have the facilities that new branches afford. Any development that has taken place, has been brought about despite the unsympathetic administration. If the leading officials have moved slowly in the past, the bill now before us is calculated to make them proceed more slowly still. One can only read into the measure the intention to maintain the Commonwealth Bank as a prop to the private banking institutions. It is not the desire of the people that that course should be followed. Those who originated the bank hope to see a truly national bank established, and developed on national lines. In my opinion, the time is ripe for the whole of the banking in this country to be done through the medium of a national banking system, acting on behalf of the community.
Sitting suspended from 1 to 2.15 p.m.
– The people of Australia would like to see a real national bank established without further delay. I want to see a nationalized banking system brought about with a mobilization of credits not only in times of war, stress, or trouble, but also in normal times. Prior to the war, people would have ridiculed the idea that Australia could raise the amount of money which was spent on sending troops over seas and on the various activities in which the Government engaged during the war. It was the mobilization of credits that enabled Australia to discharge its obligations ; and nowadays no one wonders how it came about. It is not, therefore, too much to expect that the same thing should be done to develop the Commonwealth in peace time to the greatest possible advantage. The mobilization of credits is not surrounded with that mystery that some people seem to attach to it. After all, credit is the very basis of banking. Banks may have whatever backing they like in the shape of bullion, but it is of little or no use to them without the further backing of public confidence. Credit is simply public confidence. It is depressing to think that in a country in which so many persons are dependent for their very existence upon the sweet will of private banking institutions, instance after instance can be quoted of people being forced out of their holdings because of their inability to get from banking institutions the accommodation to which they were entitled. The absurdity of the position is easily seen when a comparison is made between ordinary traders and ordinary banks. The difference between them is that in the case of the trader the public supplies the business and the trader supplies the goods, whereas in the case of the bank the public supplies not only the business but also the goods in the form of public confidence, without which the bank would have to close its doors. In these circumstances I can see nothing wrong in having a mobilization of credits in a country like this so that what the people create may be used for and on behalf of the people. This can only be done by bringing about a comprehensive nationalized system, of banking. I cannot conceive why so many persons should be at the mercy of private banking institutions. These institutions could not prosper but for the fact that the public supplies that confidence or credit which is their very life-blood. The time is over-ripe for giving the people the control of the banking system of the Commonwealth. The bill offers no measure of relief in this direction. It simply places the people more firmly in the grip of private banks.
– Did the original Commonwealth Bank Bill, as framed by the Labour party, provide such relief?
– I am sure the honorable member will agree with me, if he has gone carefully through the bill, that nothing can be done under it, except to appoint a board, that could not be done under the original act brought into existence by a Labour Government.
– Under the original act the other banks could not be compelled to effect their daily exchanges through the Commonwealth Bank.
– That could very easily be provided for. Mr. Andrew Fisher, who moved the second reading of the original bill, definitely said that the object of establishing a Commonwealth Bank was to set up an institution which would function on the lines I am now advocating. If a Labour Government had continued in office such an institution would have been created long before this, and until a Labour Government comes into power we shall not have a real national bank. This bill offers no hope to any one but the private banking institutions. This is but another proof that the Government are simply out to help only the very wealthy sections of the community.
– The honorable member’s time has expired.
– This debate is so important that I think we should have a quorum. [Quorum formed.’]
.- I engage in this discussion with fear and trembling, because I make no pretensions whatever to be an expert in finance or banking. At the same time one has to take as intelligent an interest as one can in important matters of this kind, and I have read the bill very carefully and listened attentively to some of the speeches that have been delivered upon it. I was particularly curious to learn exactly what is the gravamen of the charge which the Opposition has to bring against the bill, and I find, upon a careful perusal of the speech’ made by the Leader of- -the Opposition (Mr. Charlton) that his main complaint is that the measure represents a dastardly attempt on the part of the Government to kill the Commonwealth Bank. He says that the effects of the amendments proposed will be to enable  the directors of the Commonwealth Bank to assist private banks in- which they are interested to such an extent that it will be discounting their bills and leaving itself without any security.
– I do not think he said exactly that.
– To the best of my recollection, the Leader of the Opposition said that the bills of the private banks will be discounted by the Commonwealth Bank, and that that will lead to an accumulation in the private banks of a mass of notes for which the Commonwealth, will have no security. It is difficult to understand what the Leader of the Opposition means by that charge. Therefore, I have carefully considered each amendment contained in the bill, asking myself, “ How can this proposal possibly have the effect which the Leader of the Opposition predicts? How will this amendment tend to kill the Commonwealth Bank? . How will it tend, as the honorable member for Hindmarsh (Mr. Makin) so weirdly said, ‘ to scientifically strangle ‘ the Commonwealth Bank?” Whilst the Leader of the Opposition says that the object of the bill is to kill the Commonwealth Bank, the Treasurer (Dr. Earle Page) says, “ On the contrary, the Commonwealth Bank is not fulfilling the functions for which it was originally Resigned, and my amendments are intended to enable it to do so.” In order to judge between these conflicting contentions I have referred to the speech of the then Prime Minister and Treasurer (Mr. Andrew Fisher) when moving the second reading of the original bill in 1911. The gist of the right honorable gentleman’s remarks was this, “We see from the prosperous returns of the private banks that there is room for another bank, and we think this a favorable opportunity to establish a Commonwealth Bank that will transact the Government’s business, and also engage in ordinary banking.” Then Mr. Fisher proceeded to express the hope that the bank would develop into an institution dealing in ordinary bills of exchange and other such liquid securities, and eventually become a bank of banks, and not a mere money-lending institution. Certainly it was in the interests of the people that the bank was to be established, and if there was a tendency on the part of the private banks to charge excessive rates of interest the Commonwealth Bank, whose main object would not be to make profits, would be a wholesome check. At the same time there is on record the expressed hope of Mr. Fisher that in time the Commonwealth Bank would become a bank of banks. There is not the slightest doubt that the framers of the original bill, in setting before them that ideal, had in mind the Bank of England; they evidently looked forward to the time when the Commonwealth Bank would become practically what the Bank of England is to-day, an institution which by its very constitution gives stability to the whole banking system of the country. That is what I found when perusing Mr. Fisher’s speech. The Treasurer (Dr. Earle Page) said that the object of the Government in submitting these amendments is to carry out the intentions of the framers of the original bill, and to bring the bank one step nearer the ideal of the original founders - to make it a bank of banks. In discussing this question, Mr. Fisher did not anticipate the time when the ordinary private banks would be dispensed with and a national bank substituted. He certainly did not use the term “ national bank “ or “ people’s bank “ in any such sense; but looked to the time when the Commonwealth Bank would really be a central bank - as the Bank of . England is - giving stability and unity to the whole banking system of the Commonwealth. I now wish to deal with the amendments proposed by the Treasurer, and to ask this question in regard to each one of them: “How can this particular amendment in any sense upset or strike at the foundation of the Commonwealth Bank, or tend in any way to strangle the bank’s operations?” It is exceedingly difficult to discuss a somewhat intricate and important problem of this nature without the aid of notes, and I have to depend upon my memory to keep the amending proposals in their consecutive order as far as possible. If members of the Opposition say that their charge is that the Government are introducing amendments the object of which is to strangle the bank, the only fair way in which to meet such arguments is by taking the amending proposals separately in order to see in what way any single one tends in that direction. The first proposal is the substitution of the board of directors for a governor to control the Commonwealth Bank. How can that amendment, if carried into effect, tend to strangle or in any way curtail! the operations of the bank? I return to Mr. Fisher’s speech again, and I find that when discussing the question of the management of the bank, he said, in effect, that the future of the bank would depend upon the Governor and the way in which he shaped. He said, in effect, “ We make the constitution of the bank, we place the Governor there as director, and upon the manner in which he acts depends the future success or otherwise of the bank.” I quite agree that the success of such an institution depends entirely upon the governor in charge. The same processof reasoning must be applied to the proposed substitution of a board of directors, which is to include the acting governor If we are to assume that the Government are fatuously going to place upon the board either idiots or criminals, there is no hope for the bank. If, on the other hand, we admit that in the interests of the country and of the bank the Government will make the wisest possible selection, and secure the services of men representing various interests, there can bo no objection to the proposed alteration. I assume that the Government will make a wise selection. What has been said by the Leader of the Opposition (Mr. Charlton), and those who think with him? As I understand their utterances, they believe that the men representing the pastoral and agricultural interests will in some way get at the bank. I believe the charge in this connexion is that these men will dishonestly use their positions as directors to obtain from the bank financial assistance for institutions and undertakings in which they are interested, and for which they will offer no sound security.
– The honorable member says that.
– No, that is what was said.
– A piece of specious pleading.
– No, that is one of. the objections raised against the appointment of a board of directors. I understood the Leader of the Opposition to say that on the score of expense the number of directors should not be so great, and that the control of the institution should be in the hands of financial experts.
– Of men in the bank?
– Men in the bank! The Leader of the Opposition admitted that the private banking institutions of Australia arc being conducted on a sound basis, and if those institutions on whose directorates are representatives of important interests are well managed, there can be no objection to representatives of similar interests being included in the directorate of the Commonwealth Bank. I fail to see how, in regard to the first amendment, which relates to the substitution of a board for a governor, it can be shown that such an alteration would strangle the bank. After all, if it means that the directors are going to lend the money of the Commonwealth Bank without security - it seems that is about all it can mean-
– Who said that?
– That was stated by the Leader of the Opposition. I cannot remember the exact words - I wish I could - but they were to the effect that the bank under such a directorate would be induced to discount the bills of private banks, and so cause an accumulation of notes in the private banks, for which the Commonwealth Bank would not hold any security.
– That is not what the Leader of the Opposition said.
-(Mr. Bamford) . - Order ! The honorable member for Hume was allowed to proceed without interruption, and I ask honorable members to extend the same courtesy to the honorable member for Fawkner.
– The honorable member for Hume did not misrepresent the position.
– I do not wish to misrepresent any one.
– The honorable member is making a very good attempt to do so.
– I am doing the best I can. Other honorable members have the opportunity of referring to the actual words used as recorded in Hansard.
– We should all deem it an honour to read out marked passages for the honorable member.
– The part of the speech to which I am referring deals with the proposed substitution of a board of directors for the Governor. The Leader of the Opposition used words to the effect that the board would discount bills for the private banks, and that that would lead to the accumulation in those banks of paper currency, for which the Commonwealth Bank would hold no security.
– I do not wish to interrupt the honorable member, but may I be allowed to point out that the Leader of the Opposition said that, unlike any other central bank, the Commonwealth Bank, under the provisions of this Bill, would not have a safety fund such as a central bank should hold in reserve.
– I was not dealing with that aspect of the question. The second amendment proposed is that the capital of the bank shall be increased. Under the original bill provision was made for a capital of ?1,000,000, but in 1914 an amending bill was passed in which power was given to increase the capital to ?10,000,000. That power has never been exercised. This bill leaves the capital at ?10,000,000. How can it be said that that will tend in any way to strangle the bank or hamper its operations? It seems to me that it will put it in a better position to fulfil the functions which it was intended by its founders to fulfil. That point surely requires no elaboration. The next amendment proposed is that the Commonwealth Bank shall have power to fix and publish its rate of discount. I suppose that that power exists now, although no act of Parliament definitely provides it. I have no doubt that the Treasurer has proposed this amendment as a step towards ultimately making the bank a really central bank in every sense of the word. The practice in the Bank of England is, I understand, for the court of directors to meet weekly on Thursdays to fix the rate of discount for the coming week.’ The Commonwealth Bank will follow that practice if this amendment is agreed to. I do not see how it can be suggested that we shall even hamper the bank, much less kill or strangle it, if we adopt the proposal. The fourth amendment provides that the private trading banks shall be compelled to effect their exchanges through the Commonwealth Bank by drawing cheques and paying into it. That is another step towards making it a central bank. “ The present system of effecting exchanges is a pooling system. A daily balance is made, and adjustments follow by the giving and taking of certificates. The proposal in the bill is that the private trading banks shall furnish the Commonwealth Bank with regular returns. It will then be in a position to know exactly to what degree it can help the private banks by giving them accommodation from time to time. This power will also help it to function more effectively. The last amendment provides that the banks shall furnish statistics to the Commonwealth authorities as they now do to the state authorities. That also will tend to centralization. I have examined these amendments carefully, and I must confess that I cannot see how they can do other than increase the usefulness of the bank. I certainly fail to see how they will diminish its usefulness or curtail its operations in any way. Mr. Andrew Fisher stated, in the speech to which I have already referred, that he hoped the day would come when the Commonwealth Bank business would be largely dealing in ordinary bills of exchange and liquid securities of that kind. If the bank, by having a large fund at its disposal, is able to help the private banks by rediscounting their bills of exchange, it will do a great deal to assist the country. The private banks frequently bold bills which they wish to convert into cash, and” if the Commonwealth Bank can rediscount them and give accommodation it will be altogether to Australia’s advantage. That will render them more efficient, and stimulate their activities. I have listened carefully to the speeches that have been delivered by honorable members in this debate. Those by the honorable member for Macquarie (Mr. Manning), the honorable member for Perth (Mr. Mann), and the honorable member for Swan (Mr. Gregory) were interesting and instructive, and so was the speech of the Treasurer (Dr. Earle Page). But when honorable members are asked to deal with plain, practical suggestions such as are contained in the bill, I cannot understand why they should think it necessary to discuss the general question of exchange, the advisableness of a return to the gold standard, the effect of our fiscal policy on the exchange situation, and like matters. Those are important and interesting subjects, but they do not affect the bill. When I was giving consideration to the plain, simple questions in the bill, I asked myself, “Do I believe that the effect of these amendments will be to increase the usefulness of this fine institution?” I have come, after a careful consideration of all the facts, to the conclusion that it will be, and, therefore, I shall support the second reading of the bill.
.- When I interjected while the honorable member for Fawkner (Mr. Maxwell) was speaking, and said that honorable members on either side of the House would feel it an honour to read any marked passages that he might desire to have read, I am sure I was expressing the mind of honorable members generally. I know that when Mr. McKenzie a former member of the Victorian Parliament, who was afflicted like the honorable member for Fawkner, wished to have such passages read, his colleagues felt it an honour to be able to read them for him. If the honorable member will permit me, I shall be glad at any time to read his extracts for him.
– Thank you.
– That there may be honest differences of opinion on this important measure no one can gainsay. I intend to vote for the amendment of my leader (Mr. Charlton). The Commonwealth Bank started as no other bank in the world started. I refer honorable members to the valuable report of the commission that inquired into banking problems in the United States. I believe that, with the exception of myself, the only other honorable member who has read the evidence and finding of that commission is the honorable member for Bourke (Mr. Anstey). The commission inquired into the banking systems of the world, and dealt exhaustively with the constitutions of the Banks of England, France, Italy, Spain, and Russia, not one of which is constituted in quite the same manner as the Commonwealth Bank. The Bank of England enjoys certain privileges, including the issue of notes, for the management of the national debt. .Ti was called upon to finance the debt created by Charles II., of anything but sacred memory. The history of banking is almost a romance for those who care to study its pages. On a former occasion I pointed out how, at an early period in the history of banking in Victoria, it was possible for any money-spinner who could command a sum of ?125,000 to start a bank in this state.
-(Mr. Bamford). - Does the honorable member intend to use that incident as an illustration ?
– Absolutely. It already appears in Hansard, in the report of my speech on the original banking bill. I pointed out then that any moneyspinner with the sum of ?125,000 could have started a bank in Victoria and obtained authority to issue an unlimited number of notes. Those honorable members who, like myself. are getting on in years will remember the position when all the associated banks in Australia. - there were no fewer than 87 different banks then - had authority to issue notes. Very few people could give, off-hand, the name of the bank whose notes they carried in their pockets. I recollect, on one occasion, walking down Collins-street with a friend, and putting questions on this point to a number of persons whom we met. Not one person in the twelve whom we questioned could say what bank had issued the notes which he was carrying. All they knew was that they held bank notes of a certain denomination. As a result of all this confusion, after the Australian-European Bank failed, the notes issued by that bank were passing as currency throughout the back-blocks of Australia for over 25 years. Honorable members will, I am sure, agree that with so many different banks of issue, it was much more difficult than at the present time to detect forgery in notes. The practice of the Bank of England is never to allow a note returned to the bank to go back into circulation, so that if any forgery is attempted the authorities know at once. When I was in the note issue department of a private bank the practice was for one office.r to call over the numbers of the notes returned to the bank, while another officer checked the call in the ledger. If the same number reappeared, the practice was to examine the note carefully under a microscope and ascertain if it was genuine or a forgery. . If it was genuine, the presumption was that the note of the same number previously returned must have been a forgery.
– I am afraid the honorable member is not confining his remarks to the amendment before the Chair.
– Perhaps not, Mr. Deputy Speaker, but Mr. Speaker ruled that honorable members should be permitted a fairly wide range in the debate on this bill. If you rule that I must confine my remarks strictly to the amendment, I shall have to develop my argument at a later stage.
– I did not hear Mr. Speaker’s ruling on the point raised, so I must ask the honorable member to comply with the directions of the Chair.
– I shall endeavour to do so, Mr. Deputy Speaker, but you and I are too old in parliamentary experience to be prevented from developing our argument in the way we desire. With your permission, I shall direct my attention to the amendment a little later. If honorable members desire the information concerning the position in Victoria during the time of which I speak, I refer them to my remarks in Hansard. I claim credit for having been the first to reveal the danger of one bank being able to issue an unlimited number of notes. Section 12 of the Banks and Currency Act 1890 reads -
Notes payable to bearer at sight or on demand issued in Victoria by any banking company, firm, or individual banker, in the hands of any bona fide holder thereof for value who has received the same in the ordinary course of business without notice that the same has been issued or dealt with contrary to the provisions of this Act and has not subsequently dealt with the same otherwise than in the ordinary course of business shall in the event of such company being wound up or such firm or banker being insolvent or bankrupt be a first charge on the assets in Victoria of such company, firm, or banker, not being the subject of any mortgage, pledge, lien, charge, or other security in favour of any other creditor-
I specially direct attention to the significance of the concluding sentence - not being the subject of any mortgage, pledge, lien, charge, or other security in favour of any other creditor.
When we transferred to the Commonwealth Bank the right to issue notes, the note issue of that bank became the safest in the world. No other form of security had a prior claim on the assets of a bank in this state. I would prefer to see the note issue under the control of the Government, but probably this House, in its wisdom, will decide to leave them under the control of the Commonwealth Bank. If the recommendation of the Public Works Committee, which has done splendid work in other directions, had been followed in connexion with the building of the noteprinting office, probably upwards of ?40,000 would have been saved. Section 14 of the act from which I have just quoted reads -
No banking company, firm, or individual banker shall issue notes payable to bearer at sight or on demand unless such company or firm has a subscribed capital of not less than Two hundred and fifty thousand pounds, and a paid-up capital of not less than One hundred and twenty-five thousand pounds, or unless such individual banker has a capital of not less than One hundred and twenty-five thousand pounds, and any company, firm, or banker issuing notes contrary to the provisions of this section shall be liable to a penalty amounting to Twenty-five pounds per centum of the amount of the notes so issued, to be recoverable with full costs of suit by any person who may sue for the same.
That is not possible to-day, because one of the greatest arguments in favour of the Commonwealth Bank is that we have taken away the right of the other banks to issue notes. The result is that the credit of the community is now much higher. I have seen in Collins-street crowds of people waving bank notes, and threatening to go’ to the banks, to demand payment in gold. 1 was able to stop the base desire of one man who wished to ruin the banks. At that time the directors of the banks were trembling for fear of what might happen. But such a state of affairs is impossible now. There is no Australian but has faith in the Commonwealth Bank. I care nothing for the returns of the Bank of England, where the note issue is placed in one column, and the gold issue in another. Back of the notes, there are the huge amounts represented by the current accounts, deposits at call and at interest, We can rightly claim that the Commonwealth Bank has worked splendidly, and that it has avoided the dangers and pitfalls of the past. In this chamber, on a previous occasion, I drew attention to an iniquitous provision in relation. to the savings bank whereby a wife has no claim on the bank if her husband steals her bank-book, forges her signature, and obtains her money.
-(Mr. Bamford). - Will the honorable member connect his statements with the subject under discussion ?
– So far as I am aware, this is the first time in connexion with an important bill when only one amendment has been moved, that latitude has not been allowed to an honorable member speaking on the second reading.
– The amendment is now before the chair.
– If you rule, Mr. Deputy Speaker, that nothing but the amendment may now be discussed, I shall take the opportunity to speak later on, in spite of you.
– The honorable member must not threaten the Chair.
– It is not a threat. But I shall avail myself of the opportunity to speak when another gentleman is in the Chair. In the meantime, I shall have to kill time, and you can pull me up as often as you like. I am sorry to have to speak in this manner to an old friend. The question before us appears on the notice-paper in the following form -
Commonwealth Bank Bill (1924) (Treasurer) - Second reading - Resumption of debate (Mr. Whitsitt) on the following motion of Dr. Earle Page - That the Bill be. now read a second time - and on the amendment moved thereto by Mr. Charlton, viz.: - That all the words after the word “That” be omitted with a view to the insertion of the following words in place thereof: - “in order to preserve the Commonwealth Bank as a National Institution and to extend its operations for the purpose of controlling credit and exchange, it is desirable that financial experts, to be fully employed in the service of the bank, should be appointed to its management, the proposal of the Government to appoint persons representing squatting and commercial interests, who are diametrically opposed to National banking, being designed more in the interests of private financial institutions than of the People’s Bank.”
I draw attention to the absence of a quorum. [Quorum formed.]
Mr. Speaker having resumed the chair ;
– It was, perhaps, a misunderstanding on my part, Mr. Speaker, but I was under the impression that, in view of the importance of this bill, and the fact that only one amendment has been moved, a certain amount of latitude would be allowed to honorable members when speaking. I was referring to the fact that if a husband stole a savings bank pass-book belonging to his wife, forged her signature, and obtained her money, the bank would not be the loser, whereas if a forgery were committed in connexion with a current account with any of the associated banks, the bank would be the loser, even if the forgery were cleverly done. When the bill for the establishment of the bank was before Parliament, this House had to consider an amendment made by the Senate to clause 48 -
Where a person fraudulently represents himself to be a depositor, and presents a depositor’s passbook, and complies with the rules of the bank, and thereby obtains an3’ money belonging to the depositor deposited with the bank by way of savings bank deposit, the bank shall not be responsible for the loss sustained.
The Senate desired to leave out the clause.
– I candidly confess that I cannot see the application of the honorable member’s remarks to the motion and the amendment before the House. The honorable member is dealing with the general question of banking law.
– An amendment on the lines I am suggesting will be moved when the Banking Bill is in committee. I wish, if possible, to discuss it at this stage.
– The honorable member will not be in order in discussing matters outside the motion and the amendment.
– It is to one man and one man only, that credit should be given for having suggested the establishment of a national bank. Credit should also be given to those who established the bank - to Mr. Fisher and those honorable members who supported him at the time the measure was before Parliament.
– It was King O’Malley’s suggestion.
– That is so. His experience of banking, gained in the United States of America, was of great assistance in framing the Bill. If per mitted, I shall quote from his scheme for adjusting the financial relations of the Commonwealth and the states. The extract is not long, and I shall give it to the House as a monument to King 0’Malley’s great work, this being the first opportunity of doing so as the Commonwealth Bank Act has not previously been brought before honorable members for amendment. It indicates, in many ways, the unfortunate position existing in Victoria, New South Wales, and every other state where the state savings bank is in absolute competition with the Commonwealth Savings Bank. Had Mr. 0’Malley’s scheme been carried out as he desired, there would have been no competition whatever between them. In addition, the erection of splendid buildings in Elizabeth, Swanston, and Collins streets, all carrying on the savings bank business, would not have been necessary and the states would have been partners in the profits made by the Commonwealth Bank. The following was Mr. King O’Malley’s proposal for a national postal bank: -
In order to facilitate and economize the carrying out of the financial transactions of the Commonwealth and of the States, and especially those connected with the conversion, redemption, renewal, and issue of loans, it is proposed to establish a national bank of deposit, issue, exchange, and reserve. It is proposed (1) that this bank shall be conducted purely as a Government Department, absolutely free from political control; (2) that it shall be so constituted as to possess all the powers and immunities requisite to its security, to the recovery of its debts, and to the disposal of its property; (3) that its capital shall be represented by 12,000 shares of £100 each, of which at least 6,000 shall be in the hands of the Commonwealth Government, and that of the balance no State Government shall hold more than 1,000 shares.
Six separate states would find half the capital required. They would each have a representative on the board, making the personnel of the board seven. The representative of the Commonwealth would have a casting vote, in addition to his ordinary six votes, so that there would be complete unanimity in transacting business. Further -
That was to prevent any shares from getting into the hands of private companies or individuals. Continuing -
That was to prevent a recurrence of what toot place in the United States of America. After the Civil War the Government of the United States of America were compelled to borrow at great loss money in London to meet the issue of greenbacks. When Grover Cleveland was President of the United States of America he also had the greatest difficulty in obtaining credit to prevent a run upon the Government bank by the associated banks. Such a provision would prevent the notes of the Commonwealth Bank being held in large quantities by the associated banks. The scheme further provides -
Honorable members may in their wisdom deem it advisable later to accept an amendment making provision on the board for representatives of the six states. Further -
The foundation of the financial credit of France was laid in the “ Rentes “ system. The great Napoleon, in those days, allowed the issue at 4 per cent, of small bonds, each equal in our money to £4, and which on one occasion fell in value to 50 francs. By following the splendid example of France, a thrifty nation, and adopting a similar system of bonds here the people would have the opportunity of saving money in small amounts. In connexion with the savings bank branch of the bank’s operations, I should like to make one more quotation from Mr. King O’Malley. He said-
I have for years advocated that there should be a Commonwealth Bank, and drafted the scheme adopted by the Brisbane Conference. Well, we have got a start - wo have a Commonwealth Bank, thanks to the Labour party - but I want more. I want that bank to be an institution which will help the farmer with cheap money, and will not call in the loans when times are bad and he needs the assistance most. This is- no visionary idea. It has been done in other countries. In New York, for instance, they are adopting the rural credits system to give cheap money to farmers on longtime overdrafts.
In order for the bank to become great a Board of Management should be appointed, consisting of the Governor, representing the Commonwealth, and one representative from each of the subscribing States, who should represent the States Savings Banks, the Governor possessing a casting vote. Thus wo preserve banking equality of Commonwealth and States.
In France and Germany the small farmers can borrow all the money they require at 3 per cent, to 5 per cent., payable by small instalments over a term of about 50 years, or sooner if they wish. The greatness of these countries is largely due to the prosperity and independence of the small farmers, and I want to see a similar state of affairs here. The land and the : workers of a nation are its real source of wealth, and are entitled to more sympathetic treatment than they have had in the past. Not only should they be assisted to produce, but to market their produce.
I have given my meed of praise to a great man whose financial acumen was exercised for the benefit of Australia. His endeavours to secure the establishment of a national bank for the Commonwealth were unceasing in the party to which he belonged, but to which I am sorry to say he does not now belong. That party adopted his views, and carried them to fruition under the leadership of Mr. Andrew Fisher. There is one flaw in the existing Commonwealth Bank Act, and attempts were made in this House to rectify it. We should have consolidated the savings banks of the states with the savings bank of the Commonwealth. The amendment moved by the Leader of the Opposition (Mr. Charlton) meets with my full approval. As a youngster I served in a bank for about seven years, during a period of eleven years. In the case of an ordinary bank, in selecting its directors the first man looked to is the biggest shareholder of the bank, and then any man of wealth, squatter, or merchant may be called to the board. But, after all, we know that the conduct of a private bank is left to the manager. In nine out of ten private banks it is the practice of the directors to say, “ Yes, Mr. Manager.” I remember that on one occasion Mr. Murray Smith, who was a bank director here for 20 or 30 years, attended a meeting of bank clerks held in the Temperance Hall. He did not know that the clerks in his bank were called back to work at night. I told him so from the platform of the hall, and I said, “ If you will walk down to the bank with me we shall find them working there.” He was astonished to find them at work, and he said, “ I never knew they came back.” We need financial experts on the directorate of the Commonwealth Bank. It differs from any other bank in the world. It is a bank of issue and deposit, and at the same time a savings bank. I can remember that 50 years ago there were penny savings banks in the Old Country, and at one time there was a post office savings bank in Victoria, but never so far as my reading goes, has there been another bank like the Commonwealth Bank, at the same time a savings bank and a bank of issue and deposit. The Leader of the Opposition has given a great deal of thought to this subject, and I am sure he will agree with me that we should have on the directorate of the bank, an expert in savings bank business, who should have control of that department, subject, of course, to the governor. The directors should give the whole of their time to the work of the bank. They should not be half-time men. I hope we will not appoint to the directorate “guinea pigs,” such as are many of the directors of the private banks. I have little doubt that the Commonwealth Bank will ultimately become the greatest banking institution in the world, unless other nations follow our example in the establishment of similar institutions. The Commonwealth Bank is certain to increase in power and influence in the community. The directors should be financial experts, and where in Australia can we better secure such men than from amongst those trained in our banking system? Who could be better fitted to be a director of the bank than one who has successfully passed through the different grades in its service? There could, of course, be no objection to the appointment of a heaven-born, genius of finance, wherever he might be found. Very few merchants dealing in bills of exchange know very much of the intricacies of the law pertaining to such instruments. I remember that. as a youthful officer of a bank I was somewhat of a favorite with the merchants, probably because I was so small, and on many occasions they wrote questions which they asked me to give to the accountant to answer for them. I mention this to show that as a class, merchants cannot be regarded as financial experts, though there are, of course, amongst them men of great financial knowledge. That can be said of every calling. We know that many pawnbrokers become financial experts, but they are not the type of men we want on the directorate of the Commonwealth Bank. Although the Leader of the Opposition has submitted an amendment on the motion for the second reading of the bill, that is not to say that there is no good in it. I think there is much that is good in the bill, but honorable members on this side quite definitely desire that the Commonwealth Bank should be an institution not only for the conduct of higher finance, but for the benefit of every person in Australia. The great Bank of France in the old days used often to have in reserve, two, three and four times the amount of gold deposited in the Bank of England. Yet the Bank of France used to discount half-crown bills, for even two weeks, or sometimes for one week. The officers of the bank would go around and collect the money, deducting a very small rate of commission. The rate of the discount of the Bank of England would go up and down like a see-saw, while the rate of the Bank of Prance was steady. I am speaking, of course, of pre-war days. Paris was the steadiest money market in the world, not even excluding the wealthy New York Exchange, because the Bank of France was based upon the interests of the common people of the country. Members of this House, although possessing good securities, have been refused overdrafts. No one knows how much money has been lent to private firms. Parliament should stipulate that not more than £100,000 should be advanced to any firm or individual. “We know how Lord Rothschild defeated a great opposition house that up to a certain date held sway in England. He was chairman of the Bank of England, and the whole thing was settled as if it was a very small matter, but even the Bank of England had a severe shaking. A proposal to limit the amount of advances to individuals and companies would be endorsed by a board of experts. People who knew something of the inner working of Sir Denison Miller’s mind say that he had good margins of securities. A large sum of money should be advanced to assist the states, the municipalities, and the Commonwealth. The Commonwealth Bank should assist the Commonwealth Government as it did in the war years. Sir Denison Miller said that if called upon by the Commonwealth Government he would be prepared to organize the finance of Australia in peace time as he had done it in war time. It will be remembered that during the war bonds amounting to £350,000,000 were issued. Is it not better to lend £100,000 to 100 families than to lend it to one individual ? Cheap money distributed over a large number of people will do more good than if placed in the hands of only a few. It is the duty of honorable members to improve the bill if possible. I understand that the Treasurer looks upon it as hi3 pet ewe lamb. The greatest stumbling block to the development of the Commonwealth Bank is the competition between its savings bank branch and the state savings banks. Those two banks pay different rates of interest on savings bank deposits, and a further difference is introduced by the Commonwealth Bank giving 3 per cent, on deposits of £1,000. In former days the rate of interest in the state savings bank o? Victoria was kept low to force depositors to use the associated banks. Even the State Government, which in a few hours will be no more, has lodged a sum of £10,000,000 with the associated banks. I would make it compulsory that all municipal, state, and Commonwealth funds should be deposited in the Commonwealth Bank. A directorate such as is suggested would probably agree to all the gold in the country being lodged in that bank. I hope to have the assistance of honorable members in inserting a clause to prevent nepotism. One firm should not be allowed to do all the architectural work for the bank. If the object is to adorn the big cities of Australia with beautiful buildings, we should hold competitions in which all Australian architects can compete. If that is done correctly-designed buildings will in the future decorate the cities of this beloved Australia.
Question - That the words proposed to be omitted (Mr. CHARLTON’S amendment) stand part of the question - put. The House divided.
Question so resolved in the affirmative.
Debate (on motion by Mr. Anstey) adjourned.
The following papers were presented : -
Customs Act - Regulations Amended - Statu tory Rules 1924, No.83.
International Labour Conference of the League of Nations held at Geneva - Fourth Session, October -November, 1922 -
Recommendation (Emigration, Immigration and the Repatriation and Transit of Emigrants).
Motion by Mr. Bruce (by leave) agreed to-
That Mr. Pratten be discharged from attendance on the Library committee, and that, in his place, Mr. Duncan-Hughes be appointed a member of that committee.
Leagueof Nations: Australia’s Representatives - Bounty on Export of Beef and Live Cattle.
– In moving -
That the House do now adjourn,
I desire to inform honorable members that the Government is now in a position to announce the names of Australia’s representatives at the next Conference of the League of Nations, which is to be held in September.Those representatives will be Sir Littleton Groom (Commonwealth Attorney-General), Mr. Charlton (Leader of the Opposition), and Sir Joseph Cook (High Commissioner for Australia in London). I think that the delegation that it is proposed . to send on this occasion will command the very greatest confidence of the whole of the people of Australia. Its composition will demonstrate that the part taken by Australia in the League of Nations is not influenced by political considerations, and is not a matter upon which there is any division among the people. In addition to those three delegates, it is also proposed to send Mrs. E. F. Allan as a substitute delegate.
I also desire to make a statement to the House with regard to an application made recently by the Australian Meat Council to be granted a bounty on the export of beef and live cattle. The honorable member for Macquarie (Mr. Manning) raised this matter two days ago, and I then said that I hoped the Government would be in a position shortly to make an announcement. During the year 1922, bounty to the extent of £123,000 was paid on frozen and canned beef and live cattle exported, and during 1923 the sum of £141,000 was paid as bounty. In regard to the bounty on beef exported, inquiries showed that the prices which the growers were obtaining were higher this year without a bounty than they were last year with the bounty. The difficulty specially brought under notice by the council related to the meat exported from the Wyndham works in “Western Australia, from which place the freight was1/8d. higher than it was from other parts of Australia. Under all the circumstances the Government has decided that it is unable to approve of a bounty on beef exported, or of special treatment being given in regard to any particular port, and it is suggesting to the Australian Meat Council that they endeavour to arrange for a reduction of freight from Wyndham. It has been made plain, however, that there is an opening for the establishment of a satisfactory trade in the export of live cattle, and as the Government is anxious to safeguard and increase this trade, it has approved of the payment of the bounty of 10s. per head to be continued this year on the terms that have operated during the last two years. It is estimated that the export will total 10,000 head of live cattle, on which the bounty to be paid will amount to £5,000.
.- I desire to call the attention of the House, .”anil particularly of the Treasurer (Dr. Earle Page)_, to the serious industrial position that has arisen in the important town of Kalgoorlie. Without any previous intimation a cablegram was recently received from the London directors of the Ivanhoe mine announcing that it was proposed to amalgamate that mine with the Lake View and Star mines and shut down the Ivanhoe mine. It was, of course, beyond the power of anybody in Australia to prevent that being done, and the result is that 500 men have been thrown out of employment. For every miner in Kalgoorlie four other people are kept employed in various avocations there. If no employment can be found for the miners a loss of 2,000 in the population of the town will be sustained. Three hundred of the 500 men are married. The Western Australian Government has done everything it possibly can to alleviate the situation. The Premier visited the gold-fields, and 100 men were given work along the water supply main. Fifty more were absorbed in other mines, leaving a balance of 350 still unemployed. Kalgoorlie, through not having any surrounding wheat-growing country, is in a particularly unfavorable position to provide work for such a large number of unemployed. These men have their homes established in Kalgoorlie, and they naturally require employment in the district. Acting on a teiegra.ni I received from the Premier of Western Australia, I interviewed the Minister for Works and Railways (Mr. Stewart), and suggested that the men should be employed on the ballasting of the transcontinental railway. The Minister pointed out that the £50,000 allocated for that work for this year had already been exhausted. I therefore approached the Treasurer to find out whether a further sum could be made available, and he replied that he could not see his way clear at the present juncture to make a further grant. I wish to emphasize the point that not more than half the ballasting work has been done, and it is essential that the whole of the line should be ballasted. At the present rate of progress it will take nine years to complete the work. Seeing that honorable members on the Opposition side of the House have on various occasions assisted the Government to relieve other indus tries, I hope that a sum will be promptly set aside to enable these men to secure employment near their homes. Only Y0 men are now employed at the Woocalla Quarry in connexion with ballasting operations, and about 30 men are engaged in rail-lifting. They are all employed at the eastern end of the line, while none are employed at the Kalgoorlie end. The State Government is doing all that it possibly can in the matter with its limited resources; and, seeing that the ballasting work must be done, I hope that the Government will make a sufficient sum available for the purpose. The men for whom I speak do not ask for soup kitchens or food; they are industrious people, and they simply want work. The present time of the year is ideal for ballasting operations. It would not be necessary to ballast the whole of the line immediately, but if the work is put in hand forthwith these men will be placed on their feet and the fear of starvation will be averted.
– I have to bring under the notice of the Government a letter that has been received by Mr. T. Walsh, general president of the Federated Seamen’s Union of Australasia, regarding the treatment of native labour on the New Guinea Steamship Company’s vessel Kavu now in Sydney. The letter reads -
I have to bring under your notice the condition of sixteen New Guinea natives at present engaged on the New Guinea Steamship Company’s vessel, the Kavu. It would appear that these men do not receive proper food, housing, &c. It seems that some days they only receive two meals comprising rice (without sugar, &c. ), and bread without butter. Perhaps every third day a 2-lb. tin of meat is given to be divided among the sixteen, Now and then tea is given, less milk, and with very little sugar. There is no proper sleeping accommodation provided for them. Some sleep on deck beneath an iron enclosure (enclosed on three sides), others sleep in the holds. They have about three blankets each, very poor ones at that, and complain bitterly of the cold. They state that the vessel “ makes plenty water,” and appear very much afraid of her. They are emphatic on this, and say they want to go back on the Burns, Philp Mataram. As far as I am able to gather they receive about 7s. per month. The Kavu is anchored alongside Ford’s boat building shop at Berry’s Bay.
I hope that this matter will be investigated. If the natives are being exploited as is suggested, the Government should see that those responsible are brought to book.
– The representations made by the honorable member for Kalgoorlie (Mr. A. Green) will receive the consideration of the Government. I shall discuss the matter with the Treasurer (Mr. Page) and the Minister for Works andRailways (Mr. Stewart). I appreciate the great anxiety that the honorable member feels over the matter. The question raised by the honorable member forCapricornia (Mr. Forde) will be brought under the notice of the Minister for Trade and Customs (Mr. Pratt en).
Question resolved in the affirmative.
House adjourned at 4.2 p.m.
Cite as: Australia, House of Representatives, Debates, 4 July 1924, viewed 22 October 2017, <http://historichansard.net/hofreps/1924/19240704_reps_9_107/>.