9th Parliament · 2nd Session
Mr. Speaker (Rt. Hon. W. A. Watt) took the chair at 3 p.m., and read prayers’.
– I ask the Prime Minister whether he has any comments to make on statements published by an Australian delegate to the International Labour Conference at Geneva, to the effect that the importance of the conference to the industrial and social life of Australia evidently was not appreciated by the Commonwealth Government, that Sir Joseph Cook had not been present at any stage of the proceedings, that no action was taken by Australia in respect of the recommendations, and that that must create a bad impression. I ask also whether the Prime Minister proposes, when the recommendations of the conference are received, to put them before Parliament for ratification or rejection.
– I saw in the press the statements by Mr. Curtin to which the honorable gentleman refers. I cannot understand on what grounds they have been made. Australia has sent its representation to every conference of the International Labour Bureau, and has done everything in its power to show its sympathy with its work. With regard to the latter part of the honorable gentleman’s question, the matters that are the subject of the conventions and recommendations of the conference are, in practically every case, matters which cannot be dealt with by the Commonwealth. They are matters which are controlled by the states, and it is the practice of the Commonwealth Government to refer them to what is described as “ the competent authority,” namely, the state governments.
” HOLD-UP “ OF S.S. KYOGLE.
– I ask the Prime Minister whether he has any official information with regard to the “ hold-up,” at Fremantle, of the steam-shipKyogle,. a vessel commissioned to carry supplies to the various lighthouses on the north-west coast. Will the right honorable gentleman cause’ the fullest information on the subject to be obtained as soon as possible, and will he tell us what action the Government proposes to take to prevent a repetition of this kind of thing in the future !
– The question is one which should have been addressed to the Minister for Trade and Customs, but I shall have the information for which the honorable member has asked obtained, and shall let him have it.
– The Treasurer, some weeks ago, announced to the House the appointment of a royal commission to make an examination as to the basis for calculating taxation to be paid by the Crown lease-holders of Australia. I should like to know when the honorable gentleman expects to receive the commission’s report to enable him to proceed with the collection of outstanding taxation.
-The royal commission referred to will report as soon as it has finished its duties.
– I should like to ask whether the commission has yet commenced its duties.
– I shall tell the honorable member to-morrow when the commission began its work, and how it is progressing.
Mr. BAYLEY, as Chairman, presented the report of the Public Accounts Committee on expenditure on munitions supply
Ordered to be printed.
BRITISH OVERSEAS SETTLEMENT COMMITTEE.
– Has the Prime Minister yet received a copy of the report of the British Overseas Settlement Committee which visited Australia last year ? If so, will he arrange to have it laid on the table of the Library for the perusal of honorable members?
Mr.- BRUCE.- I shall take steps to mako it available to honorable members.
UNEMPLOYMENT OF MINERS IN WESTERN AUSTRALIA.
– I ask the Minister fo’r Works and Railways whether he has noticed a statement in the Argus newspaper of yesterday which, inter alia, says -
There is still gold in tho Ivanhoe mine of Boulder, Western Australia, but owing to the high rates of wages demanded by the employees, the company was unable to carry on, and the mine has been closed. Now the member for Kalgoorlie wants the Minister for Works and Railways to expedito the ballasting of the Great Western railway line so that 600 unemployed miners might be given work. . . The net results of the unceasing agitation for high wages is that, 500 men are receiving no wages at all.
Is the Minister aware that the miners on the eastern gold-fields of Western Australia have .suffered a reduction of 2s. a day in tho last two years, and that they are, living conditions considered, among the worst paid wage workers in the Commonwealth ? Is the Minister further aware that the Ivanhoe mine has produced over £10,925,000 worth of gold, and paid £3,952,000 in dividends, an average of over £146,000 a year since it was started in 1S97 ? In the circumstances, will the Minister let the newspaper article quoted prejudice the case of these deserving workers who wish to secure work’ by his help, and so provide their families and themselves with food ?
-I cannot discuss or express any opinion upon views enunciated in a newspaper, but the honorable member may rest assured that no statements of such a character as those he has read will stand in the way of the Commonwealth Works and Railways Department doing all it can in the circumstances to assist those requiring employment.
UNIFORM AND CLOTHING MATERIALS FOR NAVY.
asked the Minister for Defence, upon notice -
Whether he will give details of the orders given by the Navy since 1st January, 1023, for “Uniform and Clothing Materials,” and tho cost of each item?
– The as follows : - information is
Classification of Sydney Mail Branch
asked the Minister representing the Postmaster-General, upon notice -
– The Public Service Board of Commissioners has furnished the following information : -
Issue of Clasps on Baks to Medals.
asked the Minister for Defence, upon notice -
Has any decision been reached with regard to issuing clasps or bars to medals given for active service in the recent war, similar to those issued to men who took part in the South African campaign of 1900-02; if not, can he indicate when a decision will be arrived at?
– The Imperial Army Council has decided for financial reasons not to proceed with the issue of battle clasps for the Great War. Battle honours for which clasps would have been issued, however, may be awarded to cavalry regiments and infantry battalions. A regimental committee of Australian Imperial Force officers has been appointed for each Australian Imperial Force unit to submit recommendations with regard to the award of these honours. It is anticipated that their reports will be available at an early date.
asked the Prime Minister -
– The answers to the honorable members questions are as follow: -
Installation in Australia.
asked the Minister for
Works and Railways, upon notice -
– The answers to the honorable member’s questions, which should have been addressed to the Minister representing the PostmasterGeneral, are as follow: -
asked the Minister for Works and Railways, upon notice -
In view of the negotiations between the Commonwealth and South Australian Governments with reference to the proposed Hay-Port Augusta railway, will he cause a flying survey of the proposed route from Broken Hill to Port Augusta to be made, in order to ascertain the cheapest and quickest route to link up Sydney and Brisbane with Western Australia ?
– The New South Wales Government made certain representations as to the merits of the route via Broken Hill, which received careful consideration. An inspection and report of that route were also obtained, but, after taking into account all the factors, the route via Hay was deemed the more advantageous for the Commonwealth.
asked the Minister representing the PostmasterGeneral, upon notice -
– The matter has. been investigated. It was necessary to land the mails without delay, in order to send them on by the first train. Owing to the height of the mail deck of the Mooltan above the wharf, the usual method of discharging the mails by a chute direct into the mailyans could not be followed, and some of the bags had to be landed on to the wharf by means of slings. While those bags were on the wharf, rain commenced,but for part of that time they were covered with tarpaulins, and, as soon as possible, the mails were placed in the van. It is believed that nodamage was caused by the rain to the contents of the bags. While on the wharf, those for Adelaide were kept on top, and, when opened, no injury to the mails was apparent.
Imposition of Fines
– On the 4th July, the honorable member for Cook (Mr.C. Riley) asked the following questions : -
I am now supplied by the Chairman, Central Wool Committee, with the following replies : -
The penalties represent, in round figures, about 25 per cent, of the amounts in connexion with which the breaches were committed. The reason why the whole of such amounts were not forfeited as penalties was that the wool dealers had assigned their interests to others, who were not in any way party, so far as the Central Wool Committee was aware, to the breaches. The control of the wool scheme is vested in the Central Wool Committee under the War Precautions (Wool) Regulations and the War Precautions (Sheepskins) Regulations and Commercial Activities Act;
Hike of Launches
– On the 26th June, the honorable member for Capricornia (Mr. Forde) asked a series of questions concerning the use of steamers in the Mandated Territories. Some have already been replied to, but the answers to others were delayed to enable further information to be obtained. They were -
Advice has now been received from the Administrator that the answers to the questions are as follow: -
The following papers were pre sented : -
Australian Imperial Force CanteensFunds Act - Fourth Annual Report by the Trustees, 1st July, 1923, to 30th June, 1924 (including the Sir Samuel McCaughey Bequest for the Technical Education of Soldiers’ Children).
Ordered to be printed.
Arbitration (Public Service) Act - Determinations by the Arbitrator, &o. -
No. 24 of 1924- Postal Sorters’ Union of Australia.
No. 25 of 1924 - Arms, Explosives, and
Munition Workers’ Federation of Australia.
No. 26 of 1924- Australian Postal Assistants’ Union.
Customs Act - Regulations Amended - Statutory Rules 1924, No. 87.
New Guinea Act - Ordinances of 1924-
No. 23- District Courts (No. 3).
No. 24- Appropriation, 1923-24.
No. 25 - Licences.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinances of 1924 -
No. 1 - Leases (No. 2).
No. 7 - Rates.
Debate resumed from 4th July (vide page 1931), on motion by Dr. Earle Page:
That the’ bill be now read a second time.
-Since the adjournment of the House on Friday last, the Treasurer (Dr. Earle Page) has visited Mildura. In that Arcadian retreat, far from the battle line, surrounded by friends, he made a gallant attack upon the distant foe. He became violent in his speech and in his actions. The conduct of the Labour party he described as an exhibition of arrant hypocrisy. I do not desire to argue with him, nor do I question his authority; but when I pick up this bill and, glancing at its contents, find that everything which the honorable gentleman promised the farmers should be included in it has been omitted from it, I cannot help feeling that the term “ arrant hypocrisy” can be given a far wider application than to the members of the Labour party. According to the Treasurer, the bill provides for five amendments of the existing law controlling the operations of the Commonwealth Bank. Briefly, they are as follow : - The first relates to statistics. For 50 years the statistics concerning the financial institutions of Australia have been collected. All that is proposed in the bill is that the collection of these statistics shall be handed over to a federal authority, and one might ask - “ when they are handed over who will see that the statistics are correct, and what will be done with them? “ One private banking company now sets forth in its returns that its landed property in South Australia - and it has property in nearly every town and suburb of that state - is worth £14; that its total landed property in Victoria is worth £5,000; that its total landed property in the Commonwealth is worth £10,000; and that its total landed property throughout the world is worth only £18,000 ! Yet it is safe to say that £18,000 would not purchase more than a few feet of the property it possesses in Melbourne alone. Knowing the extent to which all the banking corporations have grown, how their branches have increased and their property has augmented in value,” and contrasting that knowledge with the fact that the valuations of property shown in their returns are no greater to-day than they were 25 years ago, we can understand the valuelessness of these statistics. But even if the returns are valuable, what is to be their application and what use is to be made of them ? Another provision of the bill is that the board shall fix and publish its discount rate, and, according to the Treasurer’s speech, it will publish it when it is able to do so. There is nothing in the existing law to prevent the Commonwealth Bank fixing and publishing its discount rate; therefore, that amendment is of no account. The bill is also to provide the Commonwealth Bank with further capital; but as that can be done under the law as it stands, that amendment, too, is of no account. The private banks are to settle their exchanges through the Commonwealth Bank, but as all of them have credits with the Commonwealth Bank and the Commonwealth Bank has credits with them, and as the balances requisite for this settlement do not amount to more than half per cent, in cheques or notes, the private banks should have sufficient to their credit at the Commonwealth Bank to settle their accounts without this amendment. There remains only one amendment of consequence, and that is the proposal to appoint a board of eight directors. What they are to do is set forth, not in the bill, but in the statement of the Treasurer. That statement is contained in » printed document comprising 32 pages, of which 16 pages are devoted to banking in other countries, 6 pages to things in general and nothing in particular, 7 pages to a statement in connexion with notes and loans, 2 pages to an alleged history of the Commonwealth Bank, and 3 only to the provisions of the bill. I am reminded that in 1910, the National party, under its then name of the Fusion, sent out circulars attacking the proposals of the Labour party, and it disseminated them one by one in the hope that the discussion of them would divert the public mind from a consideration of the Fusion’s policy. Apparently, the object of the Treasurer’s speech is to divert the minds of honorable members from the consideration of the bill itself. The six pages devoted to things in general deal with inflation, oversea exchanges, imports and exports, visible aud invisible trade, buying and selling rates of exchange, Government borrowings, tightness of money, cessation of oversea borrowing, resolutions of the Imperial Economic Conference, an English Treasury memorandum, currency and exchange, and seasonal trade. Those six pages can be swept aside. Two other pages are devoted to what is called a history of the Commonwealth Bank, and I notice that on the first page the Treasurer states that the bill is designed to carry out the original intention of the founders of the bank. In other words, the present Government has left out of the bill its own proposals; it has omitted everything it promised to the agricultural population, but it proposes to take up and complete the unfinished task commenced by the Labour party. One’s mind goes back to 1910, when a Labour Conference resolved that the Commonwealth should create a bank of issue and exchange, deposit and reserve. No sooner was that resolution circulated through Australia than the then party of vested interests which paraded before the people under another name, or alias, was alarmed, and its then leader of their representatives in this House stumped the country, and from the public platform endeavoured to stampede the population into antagonism to proposals which, he predicted, would push Australia over the edge of a precipice. The people were told that the suggested innovations would undoubtedly entail industrial chaos and disaster. One of their leaders said that the proposals embodied in the platform of the Labour party were sufficient in themselves to condemn that party in the minds of all reasonable persons. Yet it .’= one of those proposals which the Nationalist Government of to-day proposes to carry on to completion. The Fusion party failed to stampede the country; on the contrary, thb Labour party was returned to this Parliament with a majority, and it enacted its banking proposals, not completely, but in a modified form. But did the party representing vested interests diminish its hostility because of that modification? No; even in its altered form the proposal was bitterly assailed. Yet the Treasurer told us in his second-reading speech that the Government is welcoming the Commonwealth Bank with open arms. Those who are conversant with the history of the bank understand full well the manner in which the party opposite welcomes it; the attitude of those honorable members is reminiscent of the old hags who waited at the mouth of the womb to strangle the infant immediately it was born. Let us turn to the seven pages of the Treasurer’s speech, which are devoted to the note issue, and to the flotations of loans during the earlier period of the war. The note issue was initiated by a Labour Government. That also was to force Australia over the edge of a precipice. It was to create a financial crisis. Who does not remember the allegations made regarding “ Fisher’s flimsies,” and the classical language of Sir Joseph Cook on the platform and in this chamber when he said that these notes would not even buy the poor disillusioned workman a pot of beer. Despite that denunciation, the note issue was initiated, and it operated for four years before the outbreak of war. Then it was proved that the Labour party in the four years prior to the beat of the war drum had been pursuing a policy of financial preparedness. Australia alone of all the countries in the British Empire was financially ready. Even at the seat of Empire, the British Government was found unprepared to meet the financial problems . arising out of the war, and was forced to adopt the system which the Labour party had introduced in Australia during years of peace. The Treasurer said nothing of that. His references to the note issue do not date back further than the outbreak of war. He states how the men of business and the financiers, animated by a .spirit of patriotism, came forward to place their silver, gold, and jewels upon the altar of their country. Nobody can read that statement without conjuring up a mental picture of the temple, and the altar of the Treasury. Behind the Treasurer stands James B. Collins, the UnderTreasurer, who, whatever Treasurers may come and go, strutting their .insect lives upon the political stage, remains, the silent and immutable ruler, the high priest behind the altar. We see these financiers, these .patriots, climbing the steps and laying all .their worldly possessions on the altar of their country. We almost hear the bands playing, see the wagging of the flags, and catch the applause of the multitude. As I read these pages, for the moment I almost regretted that’ at one period in my public life I had harboured cruel thoughts concerning these men. I was assailed by a feeling of remorse that for a single hour I had harboured an evil thought against them. After the lapse of years I all but came to the conclusion that in our time of need they were as patriotic as I was myself. But, as Will Whitburn used to say, “ Next page.” Accordingly, I turn to the next page of the document. What a drab, gloomy, mid sordid picture do I find ! These financiers, who marched up to the Treasury and laid their worldly possessions on the altar of their country, can no longer pose as patriots. They have become confidence tricksters, plying their trade with the thimble and the pea, three card Monte men, with their three to one and four to one. We realize that these patriots were not what they seemed, for when they presented the Treasury with £633,000, they came away with £2,000,000 ; and when they laid upon the altar of their country £10,000,000, they came .away with £2S,000,000. More, far more, stuck to their fingers than was laid upon the .altar of the Treasury. “ This transaction,” says the Under-Treasurer, or whoever wrote this document, “ was more doubtful in character than any other, act of war finance.” Notice that it was not the only doubtful thing. It is good to have this admission after the lapse of years, that there were many doubtful things done. But do honorable members imagine for one moment that the gentleman who wrote this document blames these bankers and financiers for what he himself described as the most discreditable transaction of the war period ? Not at all . On .the contrary, we find that this high priest of finance offers his testimony that it is to the credit of these bankers that they took so little. We must be satisfied with that, just as the man who, after having been stripped of all his clothing by a footpad, is left to walk home in his socks, must be satisfied. So far as this transaction in war finance is concerned, we might say no more about it, but for the fact that the Treasurer, by the wording of his statement, leads the people to believe -that it is the Labour party who are responsible for this- measure, which made possible what has been described -as the most doubtful transaction of the war period. ‘These financiers, we are told on the authority of the gentleman who wrote ‘this document, are not blameworthy. They are the little Oliver Twists, tutored by Pagan, and thrust through the window into crime by ‘a modern and ruthless Bill Sykes, who is plundering the Treasury. I chance to know probably more of this question than any other honorable member in this chamber. I have good -reason to ‘know more. In the early days of the war, I -charged Andrew Fisher, who was : than Prime Minister -and Treasurer, with responsibility for thi? discreditable act, this doubtful thing, this swindle upon the public. He denied responsibility, and assured me that, before it assumed office, the Labour party had been committed to ‘the policy which he was then advocating. I told him thai he should repudiate it at nil costs, but he said that the party could not do that and create a crisis in a time of war. In order to prove that his Ministry was not responsible for the course then being taken, Mr. -Fisher gave me permission to go to the Treasury and to inspect the official documents dealing with the matter. I did so. ‘ I interviewed the Under- Treasurer, and gained the lasting impression that he was ‘the endorser of that policy, which made possible what he, or -whoever wrote this document, described as tho most doubtful transaction in war finance. If I had found anything in those files which would have justified my charges against my then leader, I should have used it to support my own attitude, but I found nothing. I know, of course, that it is very easy indeed for important documents to appear or disappear from the official files. There was another matter used against me. In the Economist of the 10th October, 1914, there appeared an article written by its Sydney correspondent, under date August 24. That article set forth the details of this three to one and four to one swindle, which he justified. He went on to say that the scheme had not been adopted. That was written prior to the elections, from which the Labour party emerged triumphant. So much for that. There were other doubtful things, but I do not propose to be side-tracked in the discussion upon this measure by any references to war gratuity and that system of finance. Within a few weeks of their appointment, the Notes Issue Board issued ‘millions of currency without security. I now merely draw attention to the statement made in the Treasurer’s speech, “ These things have never been explained fully.” They have not. But [ make the prediction that the . time is coming when they will be, and that this country will then know to what extent these so-called patriots engineered the financial arrangements of this country Cor their own ends, and the people will then realize that, whilst so many thousands of their fellow-men were bleeding on the battlefields of Europe, these financiers were bleeding their fellowcitizens at home. I come now to what I regard as the most important portion of the Treasurer’s speech, the sixteen pages devoted to the consideration of the banking systems in other countries. We are told that the Bank of Canada is not a central bank. Therefore, we need not waste a moment’s consideration upon that institution. Like the honorable member for Fawkner (Mr. Maxwell), I do not approach the discussion of this bill as fin expert. Like him, I am modest, and approach the bill as a plain man. I rem ember that Sir Denison Miller once said that banking has a language of its own, which is not understood and is not meant to be understood by the common people.- I remember also that Spalding, a famous English financial writer, has said that bankers veiled their operations with mysterious words drawn from out of the dust of antiquity, and that Frank Hirst wrote that bankers by their obsolete terms not only confused the public, but eventually confused themselves also. I do not propose to deal with this measure from the stand-point of an expert, but from that of a plain man trying to understand a difficult problem. I intend to place before the House what I regard as the underlying principles of banking. First of all, a bank must have a stock in trade, and that consists either of gold, or some other commodity, or of state-guaranteed notes. Upon the basis of so much gold or guaranteed notes, a bank can build up what the Treasurer’s speech has designated a chequemanufactured currency. Issued in the form of credit upon the security that the state supplies, this currency can be watered or diluted to the extent of five to one, so that a bank with ?20,000,000 worth of notes can raise a superstructure of credit amounting to ?1,000,000. That is the first outstanding fact. The second is that, for every ?10,000,000 of chequemanufactured currency issued in the shape of advances to the public, the bank draws off 1,000,000 notes out of its vaults, just as a stream washes a certain quantity of sediment from its banks. Therefore, a private bank that starts with ?20,000,000 worth of notes in its vaults, and makes advances to the public amounting to ?70,000,000, reduces its notes from ?20,000,000 to ?13,000,000. Thus the vast superstructure which the bank erects is gradually undermined ; the base on which it rests is slowly consumed. This is a fundamental problem that affects all countries. It confronts Australia, to-day. The banks throughout Australia, with ?28,000,000 worth of notes, in their vaults, are crying out for more, and the average man in the street wants to know the reason why, with such a multiplicity of currency in their vaults, they are asking for more. It is because the banks are struggling to re-establish their bases that have been eaten into by the chequemanufactured currency that has now reached the total of ?270,000,000. The banks have now only about 18 per cent. of the money with which 11:ey began operations, and they find themselves on the horns of a dilemma. They can call in money that has been advanced, and restrict overdrafts - recalling their notes, gold being out of the question. But if they do this trade will be crippled, and industry will be rendered stagnant. And if they continue to make advances their base will begin to crumble. Thus- there arises a new question; thus there is born an idea. How and by what means .may the private banks use the state as an agency to buttress the crumbling foundations of financial capitalism? To enable the state to step in and uphold the private banking institutions, what is known throughout the world as the central banking system is developed.
– Does the honorable member contend that the private trading banks of Australia are in an unsound financial position 1
– I have said bo. The problem has now to be faced throughout the world. The dilemma in which the private banks find themselves is that they have advanced such an enormous amount of credit to the public that their base has diminished and must be replenished. Their reserves are below 20 per cent, of their advances. If they attempted this replenishment by calling in the money advanced or by reducing overdrafts, they would stifle trade. The position seems to be that either trade must be crippled or the banks ruined. I now turn to the Bank of France. That is a private institution, for it is financed by private capitalists. Over it is the supervision of the state, which requires the private banks to bring to the central bank their supplies of gold, and also any additional notes they possess over and above what are needed to meet their daily requirements. The State invites the private banks to bring to the central banks a large proportion of their assets, and tells them that they can look upon them, whether in gold or in notes, as if they were in their ‘own vaults; but those assets must be removed from the vaults of the private banks, and placed in the vaults of the central bank as a guarantee in return for the support rendered by the state. Thus the Bank of France becomes the custodian of the total gold reserves of the French nation. I remind you, Mr.
Speaker, that that is the fundamental principle of a central bank, but that principle is not embodied in the bill before the House. Let me now deal with the Bank of England, which has been a private institution for 200 years. It has had certain monopolies and privileges, and of recent times it has been transformed into a central bank by reason of many crises that have arisen. These crises were supposed to be necessarily periodic, taking place about every ten years, but that is now an exploded theory. Into the vaults of the Bank of England is now placed the gold of the private banks. They are not the custodians of their own gold.- All the currency, except what is required for their daily use, is placed in the central bank. If that principle were applied to the Commonwealth Bank, every private bank in Australia, would have to disgorge its gold, and place it in the vaults of the Commonwealth Bank. Since the private banks would have to deposit with the Commonwealth Bank all the . notes not needed for their daily requirements, and since they have in their vaults 17,000,000 notes, including notes of the denomination of £1,000, which by no stretch of the imagination can be said to be required for daily use, before one pennyworth of their bills could be discounted, and before the nation would endorse a cent of their liabilities, the private banks would have to place £40,000,000 of securities in the vaults of the Commonwealth Bank. I know that, in reply to an interjection made by the Treasurer (Dr. Earle Page), the Leader of the Opposition (Mr. Charlton) referred to the voluntary principle of oneway clearance. There is the force exercised by militarism, and there is the force of law, but they are not the only forces in the community. There is also the force of combination, either of.capital or labour, whether exercised by individuals or corporations, and that force is exercised in Great Britain. In addition to the fact that it contains all the surplus stock of gold and notes, the Bank of England exercises another power. The Treasurer pointed out that, when monetary stringency came about, there was a tendency to increase cash reserves, and thus the financial trouble was aggravated. Is there anything in the present bill to prevent that result ? Nothing at all. But the Bank of England has a powerful means of overcoming this inconvenience by its one-way clearance. The private banks must pay drafts into the Bank of England. It can call for particulars of what is held by the private banks, which must then pay to the Bank of England their surplus assets, so that if one private bank attempts to accumulate assets at the expense of another, the Bank of England has the machinery to prevent it. But there is nothing in this Bill to give the Commonwealth Bank power similar to that possessed by the Bank of England. I turn now to the banking system of Germany, which was also mentioned by the Treasurer. Under the Imperial Banking Act of 1909, the Reichsbank was made the central bank, and tho custodian of the gold and the balk of the notes of the German Empire. As a matter of fact, in a large part of Germany the Reichsbank is the only one now operating in connexion with rural credits. It has the sole control of foreign credits - with the exception of one or two banks that possess ancient rights and privileges - which it handles from a national view-point, and by this means it upheld the economic system of Germany prior to the war. There is not a single important element in the constitution of the National Bank of France, the Bank of England, or the Reichsbank embodied in the constitution of the Commonwealth Bank by this bill. Going across the Atlantic to the United States of America, we find that the banking system there has been developed by the great capitalists of the nation. They have built up, by their strong monetary resources, a central banking institution which exerts immense power. One of its fundamental features is that the private banks must provide the ^capital for the central bank. They must pay, not only their gold, but a large proportion of their other assets into it. I think that its constitution provides that they must pay in an amount equal to 10 per cent. of their calls and current accounts. If the principles which apply to the central bank of the United States were made to apply to the Commonwealth Bank, our private banking institutions would be obliged to pay into it not only £22,000,000 in gold, out also additional assets to the extent of £31,000,000. That would provide it Mr. A Anstey . with a capital of £53,000,000. and it would then become for us, what the United States Bank is to that country, a safe deposit. The private banks of the United States of America must make their credit good with the central bank before they can obtain a penny piece of accommodation from ifc. Over and above that bank, there exists a National Reserve Board, which has full authority to enter any private banking institution, examine its accounts and even suspend or remove its directors^ No provision of that kind is made in this bill. The Treasurer also mentioned the South African Reserve Bank. That institution has been created since the war, and. is modelled on the system of the United States of America. The private banks are obliged to pay into it 13 per cent, of their assets. If the South African system were applied to the Commonwealth Bank, the private banks would be obliged to pay into it £49,000,000 before they could have their bills discounted by it. No central bank in any other part of the world, whether it was established’ by Labour or Anti-Labour Governments, by revolutionists or capitalists, is based on anything like such a monstrous plan as that which is suggested to us in this bill. Not evert the most prominent capitalists of the world have dared, to make such a proposal elsewhere. Even in. the United States of America, a country notorious for graft, the financiers did not propose a plan of this kind. They made their arrangements to establish a central bank, and then went to the Government’ and said, “We are establishing a central bank and providing capital for it, to which the private banks will have to contribute. We are making it the safe deposit of the nation, and we now ask the state to authorize the use- of the paper currency it will issue.” That is the proposal that the most outrageous capitalist? that the world knows submitted to thenGovernment. They made it unmistakably clear that before, their central bank would rediscount a single bill for the private banks, the latter would have to make their credit good by lodging substantial securities with it. The proposal submitted in .this bill cannot by any stretch of imagination be accepted as a proposal to establish a reserve bank, for not the slightest provision is made to create a reserve fund. I shall now deal with some remarks made by the Treasurer in the course of his speech. He said -
One of the most important functions of the central hank is that of rediscounting, by means of which, under all ordinary circumstances, every other bank is able to convert its bills of exchange into legal tender money.
That means that the banks of this country are to have a distinct privilege over every other commercial or industrial corporation in that they will be able to convert their bills of exchange into legal tender money. In other words, the bill provides that every individual or commercial concern with security on which a loan is desired must go to the private banks, and say, “ Here are my securities; please advance national currency upon them.” The private banks will do so, and then will go to the central bank, and mortgage those securities. If the securities submitted to the private banks by private individuals and ordinary trading concerns are sufficiently good for those banks to advance currency upon, they are sufficiently good for the central bank to advance upon, and I can see no reason whatever why they should have to pay penalty to a middleman for obtaining accommodation on their security, which he gets from the central bank. That is the real meaning of the Treacurer’s statement - that every bank will be able to’ convert its bills of exchange into legal tender money. Let honorable members think for a few moments upon the nature of the transformation which the Treasurer proposes that we shall make. Legal tender is no longer to be issued on the basis of gold, but upon the basis of bills of exchange. I suppose the reply to this remark will be that we shall then have made the Commonwealth Bank the custodian of gold and notes. But the only gold which will go into the bank will be some £24,000,000 sovereigns that are now in the Treasury. I understand that the ratio of our gold; to notes at present is something like 49 per cent. If 24,000,000 more sovereigns go from the Treasury into the Commonwealth Bank, additional notes with a face value of £50,000,000 will be issued, but they will be issued on security which is already the property of the Crown, and which is also the security for the notes now in circulation. No country in the world issues notes upon the value of the property of the community. The universal custom is to issue notes upon gold which the private banking companies present as security. If the 24,000,000 sovereigns now in the custody of the Crown are to go into the Commonwealth Bank, so should the 22,000,000 sovereigns now in the vaults of the private banks. It should certainly be an unalterable condition that the private banks should hand over their gold to the Commonwealth Bank before being given any accommodation. The Treasurer, or whoever prepared his speech for him, said in connexion with the issue of additional notes - It can scarcely be doubted that the banks would issue cheque money manufactured by the banks.
It was also stated that this would be done, on a “ moderate estimate,” up to two and a half times the value of the security presented by the private banks. This would moan that, if a commercial man lodged securities and got an advance of £100 on them from a private bank, the private bank would thereupon go to the central bank and get from it notes upon which it would base £250 worth of cheque-manufactured currency. Having only advanced £100 to the man who lodged the security in the first place, it would thus have £150 to reinvest, which, of course, would be a very good thing for the private bank. The Treasurer said that the directors, would decide the quantity of notes to be issued, and that they would have “ unfettered discretion.” They would be able, he said, to issue notes on such terms, conditions, and securities as they thought fit. These gentlemen are to have no limitation placed upon them. They are not to be debarred from exceeding a fair margin in consideration of the gold basis. The gold basis, as a matter of fact, is to be no concern of theirs. The bill provides no basis upon which notes shall be issued. The directors are to have unlimited powers in that direction,.: and unlimited discount may be furnished, in the private institutions without any reserves in any shape or form. What else’, is the bill to do? It is, first of all,- to get rid of all the general banking business of the Commonwealth Bank. The original scheme under which . the Commonwealth Bank was- ..to” be really a National Bank from which the people of this country, holding good security, would’ be able to obtain advances, i= now to be swept into the dust bin. This is proved -from” three sources. The first proof is the Treasurer’s statement that the bank has done so little - that it has so retarded the expansion of the general banking business to the detriment of the people generally - that it will be easy to transform it to a banker’s bank on the lines suggested. The second proof is that, under the bill, there is to be no rediscount system. Every private bank can get its bills re-discounted, but there is no agency by which the Commonwealth Bank can do this. The third proof is that, although the Treasurer had promised the rural population of this country that the functions of the bank would be enlarged to permit of advances to provide for grain and fodder reserves, for land, stock, implements, and a variety of other things, the Government has carefully omitted from the bill provision to this effect. Taking these three facts into consideration, the Labour party’s ideal of the Commonwealth Bank as a bank for general trading purposes may be regarded as non est. It is said that eight directors are necessary to manage this central bank. A great public institution such as this is ought to be administered by financial experts, having no outside interests that may come into conflict with those of the institution. But it is proposed to hand over the administration of the bank .to men who will have private interests distinct from those of the institution. No director whose outside interests conflict with his duties to the bank should be appointed to the board. It is said that the bank has grown to such proportions that it should be managed by a board of directors. We have had experience of commissions and committees, consisting of seven or eight members, which have been dominated by one or two of them. The Bank of Australasia is an immense institution, with 200 branches throughout the Southern Hemisphere - 50 in New Zealand and 150 in the various states. Its banking business is all done within Australia. Yet not’ one single director on the board of that bank lives in Australia.’ The bank is an English institution trading in this country, and the whole of its vast machinery is directed and controlled by its general manager. The English, Scottish, and Australian Bank is in a similar position. Its directors are in London - they are mostly “ guinea pigs “ - and its operations throughout the Commonwealth are controlled by a general manager. The
Union Bank is in a similar position. Mr. Fairbairn is the only local director. He lives in Melbourne, and represents local interests. A3 far as the English banks in this country are concerned, their directors are thousands of miles away, and the majority of them have never seen Australia. These great institutions are, and have been for many years, managed efficiently by general managers. In regard to the Commonwealth Bank, the Labour party can do nothing now but state its case; but, after all, we need not worry. We stand, not for the enlargement of the private banking system, but clearly and definitely for a Commonwealth Bank to serve the interests of commercial and industrial firms and private individuals, thus promoting national security. The Commonwealth Bank, with its ramifications throughout this country, should work for the development of our national resources, the advancement of Australia, and the security of its people. The consensus of opinion throughout the world, supported by men who have no sympathy with the aspirations or the ideals of the Labour party, is that the banking system of any country should be viewed purely from a national standpoint. A prominent financier of Belgium, when before ‘ the American Monetary Commission, said that he could not conceive of the establishment of a central institution, in which the wealth of the nation would be laid up, if its management were left to private banks. The J Japanese Minister for Finance, Marquis Katsura, said that only by a bank of the nation holding the gold reserves, omitting currency, and controlling foreign exchange, could national finance and the economic system be consistently developed. Similar views were expressed by M. R. Comtesse, Swiss Minister of Finance. There is a wealth of opinion upon this subject. But the Government is in no way enlarging the scope of the original constitution of the Commonwealth Bank. All it is doing is to hand over the management of the institution to a number of private individuals, who will act, not according to their own judgment, but according to the behests of the Government. It is laid down clearly and definitely what these men are expected to do. The bank, instead of dealing with general banking, is to be a bankers’ bank only. It is to be transformed to something entirely different from the central banks in the existing systems of the world. In all other countries the great body of capitalists provide the capital of the central bank, which the nation supervises, but here it is proposed by the Government that the nation shall provide the capital and that private individuals shall supervise and utilize it. The Commonwealth Bank and its numerous branches throughout the country are to be supervised and controlled by private individuals. The Government proposes to fasten for an unlimited time a board of directors upon this institution, but these men, immediately this Government goes out of existence, will have no power to control or miscontrol the operations of the bank. The Government has eighteen months of existence left to it, and when tho Labour party conies into power it will immediately put the operations of the bank into their original channel. When establishing the Commonwealth Bank, the Labour party, to ensure it serving a useful purpose, determined to advance slowly, making sure that it had one foot firm upon the ground before taking the next step. The Government of that day modified the original purpose of the bank merely to placate its enemies. But you can do nothing to placate opponents whose ideals ;ire distinct from your own. The only thing is to make sure that one’s principles are sound and that one’s methods are firmly based upon the rock of sound policy. When one has the faith that his opinions are right, the only thing for him to do is to put his fortunes to the test, and entrust them to the wind and tide. The present Government can do very little, and when our hour comes, we shall undo what it is doing to-day; and I venture to say that we shall do’ so with rapidity, expedition, and determination. I move the following amendment: -
That the following words be added to the motion : - “ And that the Government should consider the advisability of extending the functions of the Commonwealth Bank to provide rural credits for the following purposes : - (1) To advance upon broad acres: (2) to assist co-operative finance in primary and secondary production; (3) to assist in land settlement and development; and (4) to establish a grain and fodder reserve against periods of drought.”
– I second the amendment.
– The amendment, as the honorable member for Bourke will admit, raises a question of order of some importance in connexion with procedure in a case of this kind. Although we have no standing order that deals with it explicitly, a rule has been laid down as the result of the established practice of the British Parliament. I quote from the 10th edition of May for the information of the honorable member and the guidance of the House in this matter. May is dealing with modes of proposing amendments, and amongst other things says -
When the House has agreed that certain words shall stand part of a- question, it is irregular to propose any amendment to those words, as the decision of the house has already been pronounced in their favour : but this rule docs not exclude an addition to the words, if proposed at the proper time. In the case of a second reading or other stage of a bill, however, it is not allowable to add words to the question, after the house has decided that words proposed to be left out should stand part of that question.
Further on, May reinforces that opinion in the following way: -
Nor can an amendment be made by the addition of words to tho question for reading a bill a second time.
I regret, therefore, that I am obliged to rule that the honorable gentleman’s amendment is out of order and inadmissible.
– I desire to intimate that, after the bill has been read a second time, I shall move that it be referred to a select committee to consider the advisability of extending the functions of the Commonwealth Bank to provide rural credits for the following purposes: - (1) To advance upon broad acres; (2) to assist co-operative finance in primary and secondary production; (3) to assist in land settlement and development; and (4) to establish a grain and fodder reserve against’ periods of drought. I shall propose, too, that Dr. Earle Page, Mr. Stewart, and Mr. Atkinson shall constitute the committee.
– That course would be quite in order.
– One must pay a tribute to the eloquence, the power of invective, and the sarcasm of the honorable member for Bourke (Mr. Anstey), but I do not pretend to agree generally with the views he has expressed. But like the honorable member and like the honorable member for Fawkner (Mr. Maxwell), I do not pretend to be an expert on finance, and therefore cannot approach its consideration as an expert. There are now, therefore, three members in this House who have declared that they are not financial experts. In this connection 1 am reminded of a story which was told of a journalist who approached a great American financier at a time when foreign exchanges were causing the newspapers great difficulties. The journalist asked to have the subject of foreign exchange explained to him, and for half an hour the financier endeavoured to explain it. After a time the journalist said, “ I understand all about it now,” to which the financier replied, “ Then you, in half an hour, have understood more than I have learned in 50 years.” Approaching this matter, not as a financial expert, but as a man in the street, I congratulate the Treasurer (Dr. Earle Page) on the excellent speech with which he introduced the bill. It is generally agreed, at least among -members on this side of the House and people outside, that the Treasurer gave a remarkably interesting statement wheal he surveyed the history of banking in Australia up to the present time, and also dealt with banking in many of the British Dominions. It is difficult to understand the Opposition’s objection to this bill. The bill does not do away with the trading activities of the bank, but .rather strengthens the bank’s position. The honorable member for Bourke ‘Suggested that the .general business of the bank would come to an end if the bill were passed. His actual words were that the bank’s general business would be “ swept into the dust-bin.” I should be glad for the honorable member to point out any clause in the bill which would have that effect. The bill proposes about six amendments to the original act, in addition to the proposal for the amalgamation of the bank and the Notes Issue Board. That amalgamation can hardly be said to deprive the bank of authority, as it must be admitted that, the power to issue notes will increase the bank’s functions. I shall deal shortly with each of the proposed amendments to the existing legislation. First, an increase of capital is contemplated. Surely that in no way reduces the powers
Mr. Duncan-Hughes. of the bank. Second, the administration of the bank is to be greatly strengthened by the appointment of directors and local boards of control. I shall have something more to say, later, regarding that, but in the meantime I suggest that that is not a reduction of the bank’s powers. The third amendment provides that money may be lent to officers of the bank for the purchase and erection of residential homes. I have heard no voice raised in opposition to that proposal, yet it certainly increases the powers of the bank. The fourth amendment is to give the board the power to fix the rates at which the bank will discount and re-discount bills of exchange. The honorable member for Bourke says that that power already exists. He evidently does not think that it is a matter of great importance. But it is a power, and it is safeguarded by the fact that the board is always at liberty to make the rate prohibitive. That was mentioned in the Treasurer’s speech, and it must be obvious to any one reading the bill. Then there is the provision for the settlement of balances as between the private banks which, under this measure, is to be made through the Commonwealth Bank. Surely that does not involve any reduction of the power of the bank. There is provision for the supply of financial statistics to the Treasurer by the banks. The honorable member for Bourke suggests that that provision will be valueless; but, at least, it will not prevent the Commonwealth Bank from doing anything that it can now do. I take these six points, and I suggest that they prove that, so far from the bill proposing any reduction in the powers of the Commonwealth Bank, it will clearly increase its powers. One may ask then what is the reason for the opposition to the bill. There is, perhaps, first of all the urge to oppose, which is inherent in every Opposition. Then there is, I daresay, the desire on the other side to take credit for the original establishment of the bank, and the introduction of the existing act. I do not wish to suggest, that there may not be credit due to those who were members of the Labour party when the Commonwealth Bank Act was first introduced, and who are still members of the party, but I think it is reasonable and fair to point out that the only two honorable gentlemen who were Ministers of the Crown at the time of the introduction of the original act who are in politics to-day arc the right honorable member for North Sydney (Mr. Hughes) and the right honorable Senator Pearce. I have received to-day a pamphlet by Mr. King O’Malley, which I have not had the time to read through, but in which I understand that he claims that he played a greater part than ia generally conceded to him at present in the formation of the Commonwealth Bank. That may well be, and I have no wish to take credit from any one entitled to it: the matter, perhaps, is one which it is worth the while having cleared up, because later on it may be of some historical interest. Seeing that the only gentlemen at present in politics who were members of the Labour Ministry responsible for the introduction of the Commonwealth. Bank Bill are now on this side of the House, it docs seem strange that the Labour party as at present constituted should desire to take sole credit for the passing of the original act. The third reason for the attitude of the Opposition I suppose is that honorable members opposite do not desire to do anything which might appear to endorse private banking. On the other hand, this would not appear to be an opportune time to emphasize the Labour party’s objective in the matter of socialization. Such an attitude might not, in the circumstances, be regarded as a good tactical move, and, therefore, honorable members opposite may have thought it better to oppose the bill straight out. A fourth reason for opposition to the measure is the desire which is apparent to make prejudice by emphasizing the connexion of the pastoralists with it. I should like to know in what way the pastoralists are to be personally benefited by the bill. It is laid down that the directors shall not borrow money from the bank. Honorable members opposite, no doubt, would expect the directors, if they were pastoralists, to go to the bank and borrow as much money as they could get from it. If they would be prepared to do so the power is taken away from them by the provision that the directors shall not borrow money from the bank. Are they then going to help their friends ? I suppose that suggestion will be made, but I should think that their friends would get little from the Commonwealth Bank which they could not get from a private bank, whether they had representatives on the directorate of the Commonwealth Bank or not. I point out, however, that the pastoral industry is to supply only two representatives out of a directorate of eight members. I am not speaking quite accurately when 1 say that the pastoral industry is to supply two representatives, a3 the directors appointed need not necessarily be pastoralists, because the provision of the bill is that they shall be persons who “ are or have been associated with agricultural, pastoral or other primary industries.” There are also to be two representatives of the secondary industries on the directorate^ - “ manufacturing industries or commerce “ is the phrase used in the bill. Will honorable members opposite suggest that they should be preferred as directors of this institution to representatives of the primary industries? There was a great outcry in this House when the Leader of the Opposition was speaking about members of the pastoral industry being appointed to the directorate of the bank, but that seems to me to be an exceedingly wise proposal, because upon the success of some, at any rate, of our primary industries depends now, and must depend for years to come, the success of our secondary industries. T am in favour of the directorate provided for in the bill. The appointment of a mixed board has already been tried in other parts of the world. The idea is that there should be on the directorate eight able financial men, two knowing at first hand the special conditions of Australian primary and two those of the secondary industries. That seems to me to be a sound and prudent proposal, which, I think, will work out in practice better than if we were to taka eight of the leading financial experts of Australia, and appoint them as the board of directors. The attacks which have recently been made on the late governor of the Commonwealth Bank, and which I personally deplore, show clearly not only the desirability, but also the necessity of putting the management of the bank in such a position that accusations of nepotism cannot be made against some one man who may happen to control the institution. These charges, which are very unfair when levelled against any civil servant, will probably be avoided by the appointment of eight directors as proposed in the bill. Incidentally, it is rather strange and amusing that we should find the Opposition in its attitude to this bill in favour of an autocratic control by the governor alone, whilst honorable members on . this side are in favour of the appointment of eight directors instead of one man control.
– The honorable member knows that that was not the proposal in the amendment moved from this side.
– I am not speaking about the amendment.
– The honorable member is speaking of the proposal put forward by this side for the management of the bank.
– I say that, so far as I can gather, the attitude of honorable members of the Labour party is opposition to any alteration of the existing act proposed by the bill.* The appointment of eight directors has been attacked throughout the debate. The attitude which the Opposition has assumed is that we should continue the bank in the position which it occupies at present, and allow it - to remain under the control of the governor.
– We desire the appointment of a board of three expert men.
– If the honorable member for Angas (Mr. Gabb) believes my statement of the facts to be incorrect he will have an opportunity of demonstrating that to the House, and if he can prove that I have been guilty of any inaccuracy I shall be only too pleased to apologize to him for it. I do not think that the country will be misled by the talk about the “ big pastoralists “ which we always hear from the Opposition. The public will realize that the opposition to the appointment of two representatives of the pastoralists to the directorate is not so much an attack upon big pastoralists as an indication of, the disinclination of honorable members opposite to consider the interests of the whole country community. I have stated reasons for which I think the Opposition disapproves of the bill, and there is one further reason which, perhaps, it would be as well to mention. It is that the bill, as drawn, provides for a banking institution very far removed from the bank of which the Opposition dreams. That bank, which I fear will never be established in this world, would be a bank in which the good unionist would be a pampered and welcome guest, and from which the good or bad nonunionist would bo thrown into outer darkness where, no doubt, he could foregather with the “big pastoralist.” It would be a bank into which profits would come pouring from the oil fields in Papua, which we hope the honorable member for Darling (Mr. Blakeley), armed with his native wit and a divining rod, is going to discover during the next Parliamentary recess. From the Geelong Woollen Mills, watched over paternally by the honorable member for Yarra (Mr. Scullin), profits would also no doubt flow into that bank. Then the honorable member for Adelaide (Mr. Yates) would be able to construct the great buildings with which he hopes the whole of the cities of Australia will be adorned. If they were to be constructed of marble, the honorable member would, no doubt, select Queensland marble, because then no one would work for profit, and no one would work for gain, transport would cost nothing, and there would be no more interstate prejudice. The alchemist seeking to transmute baser metals into gold has been with us for centuries, but the result is over the same. I pass from these vain dreams, and I come to two or three details of the bill on which I should like to say a few words. One notices that no other banks have so far been taken over by the Commonwealth Bank since its inception. If one looks at the Commonwealth Y ear-Book he will find that many amalgamations have been effected under which banks have taken over smaller banks, and so strengthened their position. I quote the following from page 427 of the Year-Book for 1923:-
It is worthy of note that amalgamations, which have been such a feature in British banking of late years, have also been effected in Australia, the number of competitive joint stock banks being thereby reduced considerably. During the calendar years 1917 and. 1918 the following were recorded: - (a) The Royal Bank of Queensland Limited with the Bank of North Queensland Limited; (b) City Bank of Sydney with Australian Bank of Commerce Limited; (c) National Bank of Tasmania Limited with Commercial Bank of Australia Limited; and (d) National Bank of Australasia Limited with Colonial Bank of Australasia Limited.
A further amalgamation was announced in August, 1920, viz., the London Bank of Australia Ltd. and the English, Scottish and Australian Bank. The amalgamated banks further strengthened their position by absorbing the Commercial Bank of Tasmania, which from May, 1921, ceased to exist independently. Finally, the National Bank of Australasia has absorbed the Bank of Queensland.
It strikes one as strange that up to the present the Commonwealth Bank has never taken over any smaller bank. I should like to know the reason for that. During the time the Opposition was in possession of the Treasury benches one might have expected that the Commonwealth Bank would have been strengthened by the absorption of other banks, unless the idea of honorable members opposite was that they should be absorbed whether they liked it or not, and without compensation. If the members of the Opposition are so much in favour of an increase in the strength of the Commonwealth Bank, how is it that they did not, like other great banks in Australia, take over minor banks to strengthen its position as opportunity offered ? The honorable member for Bourke (Mr. Anstey), perhaps unintentionally, did not quite fairly state the position relating to the control of certain private banks by their directors. He stated that there are no directors in Australia to manage the Bank of Australasia, but that the whole of its business is conducted by the general manager. But, as a matter of fact, the policy of that bank is dictated by ten directors, who sit in London. To me it does not seem to matter very greatly whether the directors oi a bank are resident in Sydney, Melbourne, Adelaide, or London. The Bank of New South Wales has seven directors in Sydney and three in London. The Union Bank is controlled by twelve directors sitting in London. The National Bank has six directors, in Melbourne; and the Commercial Banking Company of Sydney has five directors, in Sydney. A comparison of the paid-up capital of those banks with the capital at the disposal of the Commonwealth Bank should convince honorable members that eight directors are not too many to place in charge of the Commonwealth Bank. In the Argus of the 20th June, 1924, the following report appeared : -
Reports published in London concerning the re-organization of the Commonwealth Bank are conflicting. Sir William McBeath, Australian representative on the British Board of Trade, says that a complete synopsis will be welcome, and expresses the hope that provision will be made for the constitution of a small board in London of three members, including a London manager, whose duties will be to’ give advice on financial questions, which at present are most acute between London and Australia, and vice versa.
– That gentleman is seeking his own advancement.
– I do not agree with the suggestion of the honorable member for Hindmarsh (Mr. Makin) that a gentleman who makes a proposal for the benefit of Australia is necessarily actuated by personal interests.
– We know what he has done for the state savings bank of Victoria.
– I have quoted the words of a gentleman who is the Australian representative on the British Board of Trade. To me, that fact constitutes as strong a reason for regarding him as a man of integrity as the statement of the honorable member suggests the reverse.
– Sir William McBeath has given abundant evidence of his public-spiritedness.
-HUGHES. - I am also personally acquainted with the gentleman. This report continues -
The views of a London board would be most useful in advising the Australian .hoard, for instance, on loans about to be floated and falling due, also the necessities of the Commonwealth and the states some distance ahead. Such advice from a board would at all times be more satisfactory than the opinion of one man.
I think the bill ought to be amended to provide for the appointment of a local board of advice in London as well as in the capital cities in Australia. That step is rendered desirable because of the fact that the bulk of Australia’s difficulties are traceable to the operations of foreign exchanges. The provision relating to the appointment of the directors contains the following conditions: -
In the making of the appointments of the directors specified in paragraphs (b) and (c) of sub-section (2) of the last preceding section duo consideration shall as far as possible be given to the fair representation of the geographical divisions of the Commonwealth.
As a representative of a state that, comparatively, has not a large population, I question the advisability of agreeing to that provision. The very best men available in Australia should be appointed, otherwise the qualification will be narrowed down to one of residence. I do not suggest that eligible gentlemen are not to be found in every state of Australia. I consider, however, that the number of those who will be available for appointment as directors of such a board will be small, particularly in the states with the smaller populations. Many of the men whom it will be desirable to appoint will already be identified with some other board, or the salary which is proposed will not be sufficient to induce them to throw aside their present business. Honorable members of the Opposition appear to think that the purpose of the bill is to cripple the bank as much as possible. I hold exactly the opposite view. The proper functioning of the bank must be determined very largely by the directors who are appointed to the board. It has been pointed out that in the United States of America the practice of observing geographical divisions has been adopted. I contend, however, that the conditions in that country differ entirely from those that are met with in Australia. America has a population 20 times as great as the population of Australia. There, the various states are more closely linked up by a net-work of railway lines. The whole of America is averagely populated, and there are not vast empty spaces corresponding with those that exist in Australia. The analogy, therefore, is not a, good one. I hope that the Treasurer will agree to an amendment to enable the best men available in Australia to be appointed, regardless of the particular states from which they come. I urge upon, the Treasurer the necessity of getting back to a gold currency as quickly as possible. On that point, a speech that was made by Sir John Grice on the 28th May last, at the annual meeting of the National Bank, is interesting. He said -
The counsel of perfection of getting back to gold can only be followed gradually and slowly, and is of no” practical use in the present emergency. Whilst speaking of gold, a commencement should, and may, easily be made to replenish the gold holdings of the Commonwealth. Our chief manager has for the past two or three years recommended in several quarters the allocation by the Government of the whole or portion of the profits of the Notes Fund towards purchases of mine gold in the local market, thus either strengthening the basis of the fund or alternatively the retirement and cancellation of corresponding amounts of notes now held at part of the Australian banking reserves. The Melbourne Chamber of Commerce a week or two ago passed a resolution on the same lines, and a similar proposal has received the endorsement of the Associated Chambers of Commerce recently in session in Adelaide. By such means the gold position of the Commonwealth, which has declined owing to the war, could be gradually strengthened and prepared for a return to the use of the gold currency.
I have been unable to find in the bill any provision for the purchase of mine gold, as suggested by this able financier.
– The Government possesses the power to buy gold.
-HUGHES. - Perhaps the Treasurer will state in his reply whether it is the intention of the Government to make use of that power. It would, of course, be a truism to say that many honorable members of this House, as well as a large body of the people, were opposed to the establishment of a Commonwealth Bank. The progress of the bank at first was alow That was inevitable ; it was due partly to the fact that the people were customers of private institutions, and to a certain extent to the difficulties experienced in securing the necessary staff at short notice. I do not, of course, mean to criticize the past or the present staff of the bank. It is now being built up, and I have no doubt compares favorably with the stairs of the private banks of Australia. It would, perhaps, be correct to say that the gentlemen who established the bank builded better than the public, or we, knew. I believe that the war was largely responsible for the bank’s success, but that does not constitute a reason for taking away the credit that is due to the gentlemen who established it. The bank has already played ,an important part in the life of Australia, and I believe that it is likely to play a greater part in the future. The war, with its aftermath, and the exchange difficulties between England and Australia - working, as honorable members will remember, in different ways at different times - showed the desirability of ‘ having a strong central bank, linked up with the Treasury; under more authoritative guidance than so far has been the case, controlling currency and dealing with credits, and having official relations with the private competitive banks. The bill in many ways strengthens, and it in no way weakens, the position of the Commonwealth Bank. I notice that the London Times spoke favorably of the proposed amendments, and it cannot be suggested that that journal has any axe to grind in this respect. The Government has good reason to be proud of the bill, which, in its broad outline, I cordially support.
– I call attent ion to the state of the House. [Quorum formed.]
.- I am glad to have the opportunity to add my quota to the debate upon this very important bill. It is only natural that honorable members on this side of the House, representing, as they do, the- vast majority of the producers of the Commonwealth, are disappointed with the measure, because we expected that it would contain provisions to help that section of the community. For instance, no proposal has been submitted by the Government to provide for the establishment of a Land Bank or rural credits, such as were definitely promised on the hustings by the Leader of the Country party, who is the present Treasurer (Dr. Earle Page). The honorable member for Boothby (Mr. Duncan Hughes) stated that the Labour party advocates one-man control of the Commonwealth Bank. No statement to that effect has been made by any honorable member on this side of the House. The amendment moved by the Leader of the Opposition stated that - 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.
The Leader of tho Opposition had in mind the fact that the Commonwealth Bank was established in the face of great opposition; from the private banking institutions and big commercial interests, and he was of opinion that, in order to perform the work intended by its founders, the Commonwealth Bank must be controlled by impartial experts, either men employed in the bank, or men to be appointed because of their ability, on the understanding that they will give the whole of their time to the management of that great enterprise. Under the control of the late Sir Denison Miller, who was recognised to be a big figure in the banking world, the bank made great progress, and we maintain that the appointment of a board of eight directors is quite unnecessary. At the most, three full-time directors would be ample. Seven of the proposed eight directors, we are told, are to be paid £600 per annum. The appointment of eight directors, including a chairman at £1,000 per annum, aud seven directors at £600 per annum, meeting once a month and receiving £50 per sitting, and also advisory boards in each capital, the three members of which will each receive £200 per annum, would involve an annual cost of £8,800. A competent board of three experts, whose only work would be the management of the bank and the broadening of its functions to include assistance to the man on the land by a system of rural credits, would expand that great institution to what the Labour party originally intended it to be. It is rightly contended by the Leader of the Opposition and the honorable member for Bourke (Mr. Anstey) that the gentlemen representing the commercial and pastoral interests will probably have an axe to grind; they will be interested in other banking institutions, and have private interests which will conflict with their duties as directors of the Commonwealth Bank. The proposal to make these appointments for seven, six, five, four, three, and two years is not wise; if the Labour party were returned to power, and desired to amend the law governing the bank, and also the method of control, it would be hampered by those appointments. The establishment of a national bank to function in the interests of the people, and to have gradually increasing powers and uses, is one of the statesmanlike acts that stand to the credit of the Australian Labour party, although some honorable members opposite try to rob us of that kudos. The vested interests that severely condemned the Labour party for its proposal to establish the bank are behind those who today are endeavouring to ham-string the institution in the interests of the commercial banks. Therefore, we cannot believe that the present Government have any intention of broadening the functions of the bank in the interests of the people generally. Speaking on the hustings, the Treasurer, in his capacity of Leader of the Country party, said that he would endeavour to broaden the functions of the bank in order to help the man upon the land. “We well remember the bitter fight put up by some honorable members who to-day sit on the ministerial benches when the Labour party introduced the original Commonwealth Bank Bill in 1911. They were dancing to the tune played by vested interests outside, and had to do the bidding of those who supplied their fighting funds at election time. The same people are behind the Government in the endeavour to make the Commonwealth Bank a bankers’ bank, and a convenience to the private banking institutions, instead of a keener competitor with them, with a view to absorbing them later, and giving greater credit to persons engaged in the primary and secondary industries. The Labour party’s platform in regard to banking is quite clear -
Commonwealth bank of issue, deposit, exchange, and reserve, with non-political management.
Nationalization of banking and insurance.
The latter part of that objective cannot be achieved immediately ; probably the reform will have to bo brought about step by step, but the Labour party, if returned . to power, would certainly set about widening the functions of the bank, and creating as an adjunct a land bank with a system of rural credits, assisting especially co-operative finance in primary and secondary production.
– What power would the honorable member give to the bank other than it has to-day?
– The bank has ample power to-day, but, unfortunately, it has not the sympathy of the Government to back it. The Constitution confers upon the Commonwealth Parliament ample powers for the nationalization of banking and insurance. Section 51, paragraphs xii. to xiv., which define the powers conferred upon the Federal Parliament, include the right to legislate in regard to-
Currency, coinage, and legal tender;
Banking, other than state banking; also state banking extending beyond the limits of the state concerned, the incorporation of banks, and the issue of paper money;
Insurance, other than “state insurance; also state insurance extending beyond the limits of the state concerned.
Therefore, we have ample power to establish a truly national banking system, and to nationalize all banking and insurance. Honorable members opposite have said a good deal about the ability of the private banks to buy out the Commonwealth Bank; generally those honorable members have endeavoured to discredit the national institution. I do not desire to detract from the services rendered by private banking institutions. The first settlement of Australia was in 1788 - eighteen years after Captain Cook first set foot on our soil. In the very early days, of course, there were no banking facilities, and currency problems were acute. As an example of the monetary difficulties in the infancy of Australian settlement, it is related that in 1796 a Is. seat in the gallery of Sydney’s first theatre, could be paid for in coin or in the equivalent value of spirits, flour, or meat delivered at the theatre door. The lack of adequate coinage was still felt in 1815, and this led to the granting of a charter to the Bank of Now South Wales in 1817. Many of the prosperous private banks of to-day had their origin in the first gold rashes in 1851, and they then made profits ranging from 19 to 40 per cent. Branches of banks were established on the gold-fields, where bullion was purchased, and the necessary local currency supplied. But the most important event in the banking . history of Australia was the establishment of the Commonwealth Bank by the Labour Government in 1911. Some honorable members opposite believe that the Commonwealth Bank already competes too much with the private banking institutions of Australia. Others hold that it should not compete at all with private trading banks. We on this side of the House say that it has not been given that support by the Government which it was intended should be given to it. The honorable member for Boothby (Mr. Duncan-Hughes) declared that the Labour party had an opportunity of nationalizing all banking, and of giving greater powers to the Commonwealth Bank, but had failed to use it. I remind the honorable member that the Labour
Government was in power for only two years after the passing of the act. The bank was then on trial. It has since proved itself. For the past eight years the reins of government have been in tho hand of conservative ministries which have been unsympathetic towards the bank. The honorable member for Perth (Mr. Mann) said -
In the opinion of a great many people, including myself, tho Commonwealth Bank had already competed too much in some spheres of nuance.
No doubt, that is his opinion, because he represents the wealthy commercial interests and the interests of banking institutions in Perth. In my opinion, the Commonwealth Bank does not compete sufficiently with private banking institutions. The Treasurer (Dr. Earle Page) declared -
On the whole it will be recognized that the Commonwealth Bank has not been a serious competitor of the other banks. Indeed, it is understood that the policy of the management up to the present has been not to enter into active rivalry with the trading banks, and in pursuance of this policy the interest payable on Commonwealth Savings Bank deposits is, and has always been, lower than the interest paid by the state institutions.
This shows clearly that the Government does not intend that the Commonwealth Bank should be a keen competitor of private banking institutions. I say definitely that, if the Labour party had been in power since the inception of the Commonwealth Bank in 1912, it would certainly have broadened the functions of . the bank by providing for the gradual absorption of private banking institutions, until the Commonwealth Bank had become, in fact as well as in name, a people’s bank, with adequate funds to lend out to farmers and others at reasonable rates of interest. Our primary producers received a definite promise from tho Treasurer during the last Federal election campaign that the Commonwealth Bank Act would be so amended as to provide for their needs. Admittedly, the private banking institutions have done good work. I have no desire to detract from the useful services which, in tho absence of a truly national bank, they have rendered to Australia, but the time has arrived when the people should bo served by one national bank with a rural credits department. whose chief aim would be to assist in the development of the country irrespective of banking profits. All profits made by the Commonwealth Bank would be utilized in the interests of the people and not handed over to private shareholders, as is the case with profits made by private banks to-day. It is only to be expected that these banking institutions should be Up against the Commonwealth Bank, which, by floating war loans at 5s. 9d. per cent., saved the Commonwealth Government £6,000,000 on £250,000,000 raised in Australia during the war period. The rate usually charged by private banks on loan flotation is £2 7s. per cent. The Treasurer, as the Leader of the Country party, during the last election campaign, addressed the electors of Queensland. He emphasized plank No. 13 of the Country party’s platform. He told the farmers in my division that if they voted for the Country party’s candidates they would get a land bank and a rural credits department in connexion with the Commonwealth Bank, and that private banking institutions would no longer have a strangle hold on their industry. He drew a very vivid picture of the paradise into which our primary producers would enter if only a Country party candidate were elected as the member for Capricornia. No mention is made in this bill of a land bank or a rural credits department. I say unhesitatingly that during the last election campaign, votes were obtained for Country party candidates under false pretences. The Treasurer knew as well as any other honorable member knows how often a man struggling to make a living on the land has to abandon his enterprise because of his inability to get advances from tho private trading banks. He knew all this, and, therefore, his promise was so much propaganda in the interests of his party’s candidates, because no other party came along with such a bold promise, although the Labour party does stand for the creation of a land bank with rural credits. The Treasurer put this promise in tho forefront of his platform. He stressed it everywhere. This is actually what he promised -
The establishment of a Commonwealth Land Bank with 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 laud settlement and de velopment.
to establish a grain and fodder re serve against periods of drought.
He elaborated each of these points, speaking for half an hour hi explanation of the details. He told his hearers that the Common wealth Bank was to be expanded to provide for a system of rural credits for the development of rural industry. Secondary industries were to be established in country districts to treat the raw material instead of bringing the primary products to centralized secondary industries in the city. What do we find now? Honorable members of the Country party sitting on the cross benches in this House are so ashamed of the present position, owing to the omission of any provision for rural credits from this bill, that they absent themselves from the chamber during the debate on the measure. They will, however, have an opportunity of voting on the motion to bo submitted by the honorable member for Bourke (Mr. Anstey). It is in these terms -
That the bill be referred to a select committee with a view to bringing in the necessary amendments to provide - For an extension of the functions of the Commonwealth Bank to provide rural credits for .the following purposes: -
To advance upon broad acres.
To assist co-operative finance in primary and secondary production.
To assist in land settlement and de velopment.
To establish a grain and fodder reserve against periods of drought.
He will suggest that the Treasurer (Dr. Page), Mr. Stewart, and Mr. Atkinson, all Country party members, be on that committee to enable them even now to give effect to their election pledges. The honorable member for Bourke very wisely gave notice of his intention to submit the motion as soon as the second reading is disposed of, because it will test the sincerity of members of the Country party, who tails so glibly about what they intend, to do for the welfare of the” primary producers, but stand idly by and omit to criticize a measure that does not contain a single provision helpful to the interests of the people they are supposed to represent. We should have a land bank with rural .credits to enable farmers to overcome their many difficulties in finance, to improve their properties, and to make their homes more attractive, so that their growing boys and girls may be encouraged to remain on the land and continue the important work of developing this country. We all know that the majority of settlers live from hand to mouth. Honorable members of the Country party know this, but they do nothing. Probably the Treasurer, when he joined this Flinders-street Government, honestly intended to endeavour togive effect to his promise to establish a rural credits department -in connexion with the Commonwealth Bank, but when he became a member of the Composite Ministry the influences against his policy were so strong that he had to abandon it or remain out of the Government. He held on to his job and sacrificed his principles. The primary producers of Australia are not getting a fair deal from the banking institutions in Australia. Up to the present, the Government has done absolutely nothing to improve the position. It should he the aim of this National Parliament to do everything in its power to assist the small producers, who are providing the wealth of Australia, and who, by the export of their surplus products, furnish us with .the wherewithal for the payment of interest on government loans and for our imports. At present, every primary producer who exports is mulct in very heavy discounts on the value of his produce shipped. Although the Treasurer mentioned the unfavorable position with regard to exchange, he has done nothing in this bill to provide a remedy; nor has he shown definitely in what way the difficulty may be minimized. All we know is that the whole business is to be handed over to some board to be dealt with. The discount on sight drafts from London at the present time is 57s. 6d. per cent. This means that £100 of Australian produce in London is worth £97 2s. 6d. if drawn for at sight. The rate for :a 60-days’ draft is 72s. 6d. per cent, discount. In other words, £100 of Australian produce is worth only £96 7s. 6d. if drawn for at 60 days. If we peruse the Commonwealth Statistician’s figures we shall see that for the year 1922-23, and for nine months of 1923-24, the transactions that placed money in the Australian banks in London amounted to £243.3 millions, while the transactions that drew money from the Australian banks in London amounted to £285.4 millions, having a difference of about £42,000,000 drawn for despatch by draft to Australia. And yet, during those 21 months, the bank rate for buying the exporters’ drafts in Australia have steadily increased from 20s. and 35s. per cent, discount on sight and at 60 days, to 57s. 6d. and 72s. 6d. per cent, respectively. There is nothing in the trade position of Australia to justify these impositions on the export of Australian produce. They are taxes imposed, not by legislative authority, but by the fiat of the associated Australian banks, for which the great Australian banking combine is responsible. The most remarkable feature in the history of Australian banking during recent years has been the steady diminution in the number of banks operating in Australia. Thirty years ago there were about 30 banks of issue in this country. To-day there are only fifteen large banks. This reduction in the number of banks has not been brought about for the purpose of providing the people with a, better service, but to enable the wealthy Australian banking combine to fix the rate of interest on loans and discounts in the interests of the combine.
– What about the Labour combine ?
– The Labour combine was formed for the good of Australia, and it will help to put the present Composite Government out of office. Although there are only fifteen banks in Australia, including the Commonwealth Bank, there are 30,500 banks in the United States of America, and I am told that the banks in America give a better service to the public generally than do those in Australia. It is apparent that the fifteen banks in Australia are, from the point of view of a combine, much more manageable than are those of the United States of America. The concentration of the banking power into a combine is a grave fact for the Australian public to consider. It is acting detrimentally to the exporters of the farmers’ produce. The banks are the vendors of credit, which is indispensable in modern production and exchange, and the vendors of banking credit in tho Commonwealth are reduced to fifteen, excepting the Commonwealth Bank. The whole fifteen are members of the combine, and it is stated that even the Commonwealth Bank has been greatly influenced by the combine since a government that has no sympathy with a national banking system has come into power and has discouraged the Commonwealth Bank from competing with private banks. The banking combine, known as the Associated Banks of Australia, is extremely wealthy, having deposits at call amounting to £124,000,000, on which no interest is paid, and fixed deposits amounting to £165,000,000, making a total of £289,000,000. The object of the combine, as of all such alliances, is to secure fixed profitable charges for the services rendered. No under-cutting is permitted,, and uniform rates are quoted on all occasions. The private banks agree, through their executives, at what rates they will sell advances, buy deposits, sell exchange, and buy the drafts of exporters for shipments of produce overseas. Thus the banks all quote the same prices or rates to prevent one bank from under-cutting another. It can clearly be seen that the absorption of the smaller banks by the banking combine and the fixing of the rates charged are not in the best interest of the people generally. Now, if we examine the liabilities of the Australian banks to depositors, and their holdings of money - mostly , notes - wherewith to meet possible demands on them, we find that the proportion of cash to liabilities has very seriously diminished of recent years. The following are the advances (which create the deposits), the deposit liabilities, and the cash holdings of the Australian banks, as taken from the sworn averages of the banks for the past three years: -
Advances - 31/12/21: £232,122,342; 31/12/22 : £242,100,338; 31/12/23 :
Deposit Liabilities- 31/12/21 : £235,005,827; 31/12/22 : £249,332,476; 31/12/23. £264,172,590
Cash Holdings - 31/12/21: £53,G07,257; 31/12/22: £50,225,170; 31/12/23: £49,950,380
Proportion of Cash to Liabilities - 31/12/21: 23.1 per cent.; 31/12/22: 20.7 per cent.; 31/12/23: 1S.7 per cent.
For the March quarter of 1924, the proportion had still further fallen to 17.65 per cent. It is in these figures that wo see the cause of the urgent cry of the banks to the Government for more notes to sweeten up the averages of their holdings of cash to liabilities - which should be, according to good banking authorities. 25 per cent. The banks have been overtrading, have been advancing too freely, particularly to wealthy city corporations, but very niggardly to the primary producers. By the big advances to wealthy corporations in the city, the banks have created fresh deposit liabilities until they are brought up with a sharp pull through the decreasing proportion of cash to liabilities. It is almost certain, then, that the cause of the high rates of exchange being charged against the export of the producers’ goods is due to the large advances made by the banks in Australia to wealthy city enterprises, and not to any advances made to the men on the land. Now, to whom have these large advances been made? Not to the primary producers of Australian wealth, but to the powerful companies and firms in the great cities. Followingare n few of tho advances to such clients of the banks, taken from balance-sheets published in the Australian Investment Digest of tho past few months : -
It is no use saying a tiling unless one proves it. There are the published figures of advances by the banks to nine large concerns totalling £1.328,553. No doubt, with £28,000,000 of notes from the Treasury for £10,000,000 in sovereigns deposited, the banks have been making great profits. The bulk of the advances made by the banks have been made to wealthy city corporations. The whole of the advances made at the average country branch of one of the private banks to men on the land would not amount to more than £70,000, and even when advances are granted, the producers are harassed monthly by requests for a reduction of their overdrafts. That is why the Labour party favours the establishment of a land bank with rural credits. The producers do not get from the private banks the assistance they deserve, not only because the banks have made huge advances to city companies and firms, and withheld them from the primary producers, but also because, by reason of these advances, the producers are mulct in quite unjustifiable rates of exchange on their produce. It would materially assist the men on the land if power to grant the facilities that a system of rural credits would afford were embodied in the present bill. Promises to do something in this direction were definitely made by the Treasurer (Dr. Earle Page), but nothing has so far been done. Rural credits were introduced in the United States of America under the Agricultural Credits Act of 1923. The object is to provide intermediate credit for the farmer, and to enable him to borrow for the period required for the production and marketing of his produce. This period varies from six months to three years, depending upon the purpose for which the credit is used. The act established what are known as intermediate credit banks. Intermediate credit means credit granted to farmers for terms longer than those covered by ordinary bank loans, but shorter than those for which farm mortgage loans are usually made. This credit is based on personal and collateral security; that is to say, on the character and standing of the borrower, and on commodities or other personal property pledged to guarantee a repayment of the money loaned. The banking system of the United States of America prior to the introduction of the Agricultural Credits Act of 1923 had been developed to serve trade and commerce, and it is not well adapted to the needs of agriculture. I think that may also be said of the Australian banking system, and it accounts for the fact that bodies of men, grouped as producers’ organizations, are clamouring in tho different states for the establishment of a land bank and a rural credits department as an adjunct to the Commonwealth Bank. A farmer needs immediate credit more than other producers, because his turnover is slow compared with that of a business man. Loans of short duration often suit business people, but crop growers have usually only one turnover in the year, and loans made, say, in the spring, cannot be repaid until the crop is marketed. Loans- to grain-growers need to be granted for more than six months, and loans to growers of live-stock are required for longer periods than that. Seeing that there are country representatives in the present Ministry, one would naturally expect that any bill for the amendment of the Commonwealth Bank Act would provide for a system of credits for the purpose of speeding development in the rural districts of Australia. The Commonwealth Bank is well and favorably known in Queensland, where it is the official bank of the State Government, and it has acted most successfully for that Government for some years. It was recognized in Queensland that it would be inadvisable to have Commonwealth and state savings banks competing against one another, and therefore, to avoid duplication, an arrangement was made for the Commonwealth Bank to take over the state savings bank. Under this agreement the bank hands to the State Government on loan up to 70 per cent, of the increases in depositors’ balances. These are utilized in loans by the Queensland Government to men on the land. In 1920 the Queensland Labour Government endeavoured to float a loan in London, but was prevented from so doing by the tactics adopted by certain wealthy interests. In consequence of its failure, the people of Queensland were placed in a precarious position. The Government then went to Sir Denison Miller, who, as Governor of the Commonwealth Bank, was its financial adviser, and he was able to raise loans for it in New York which aggregated 22,000,000 dollars. The bank, therefore, has been an important factor in the financial affairs of Queensland. I think it is unfortunate that other states patronize private banking institutions in preference to it. Victoria, for instance, has £10,500,000 deposited in eight private banks at interest ranging from 1 per cent, to 5 per cent. That money should all be deposited in the Commonwealth Bank. It is wonderful that the bank has been able to make such great progress in face of the determined opposition of all the interests in Australia which are opposed to the nationalization of anything.
– That is so. The necessity arose during the war for financing the nation’s producers because of the delay they experienced in getting their produce to the customary markets. The Commonwealth Bank did meritorious service in that respect. It financed the wheat-growers in a most satisfactory way. In conjunction with the Commonwealth and State Governments and the joint stock banks, it made advances on the wheat certificates issued by the first wheat pool. and so relieved the farmers of a great deal of anxiety, and tided them over the period when it was impossible to get their wheat to the world’s markets. The system that was followed in respect to the first war-time harvest was also adopted with subsequent harvests, but after the first wheat pool the Commonwealth Bank, as a government institution, acted as the distributing bank in every capital city. It divided the business on a proportional basis among the joint stock banks that desired to share in it. The value of the wheat harvests for the years 1915 to 1920-21, for which the Commonwealth Bank acted as the central financial authority, was £185,000,000. Honorable members who have studied the wool question know that the bank also successfully financed the woolgrowers. Transportation difficulties in the early years of the war caused large quantities of wool to accumulate in Australia. In December, 1916, the Commonwealth Government negotiated a sale to tho British Government of 964,000 bales of unsold wool, which ultimately realized £175,677,000, and the Commonwealth Bank was the central authority for ali the financial arrangements in connexion with the deal. It acted in a somewhat similar manner in respect to the sale ut. meat to the British Government. I represent the State in which half the cattle of Australia are raised, and I claim to know something of the details of the industry. Early in the war period the British Government purchased for the Imperial troops all the Australian meat not required for local consumption, and the Commonwealth Bank was the financial medium in the scheme. The Queensland and New South Wales parliaments passed legislation which provided that all stock and meat available for export should be placed at the disposal of the Imperial Government. They paid the exporting companies for the meat as it was delivered, and the British Government reimbursed them in London. The amount involved in thd deal totalled £10,309,000. It was no small thing for the Commonwealth Bank to play the major part in all the financial arrangements. I am mentioning these facts because some honorable members opposite have attempted to discredit the bank and to detract from its great work. They should give it all the credit due to it for the splendid service it has rendered to Australia. We, on this side of the chamber, do not say that it did all that could have been done. We do nOt think it was allowed to do all that it might have done. The Commonwealth and State Governments should have assisted it to become a still more formidable competitor with the private banking institutions. But I have not yet recited the full story of its achievements. In addition to handling the necessary financial transactions in connexion with the sale of our wheat, wool, and meat, it played an important part in a profitable disposal of rabbits. Honorable members know that during the war rabbits were used to supplement the beef and mutton supply for the troops. The Imperial Government purchased the whole of our exportable surplus of rabbits in 1917, and the consequent transactions, in which, the Commonwealth Bank participated, involved a sum of £1,757,000. The butter producers were also assisted by the bank. In the war years a butter pool was formed, and between September, 1917, and June, 1918, the British Government purchased from it 30,000 tons of Australian butter for £4,350,000. The pool continued its operations after the termination of the war. Prom 1917 to 1921 it handled butter valued at £19,500,000. The Commonwealth Bank was its central financial authority. The bank also acted for the Australian Metals Board in connexion with the sale of Australia’s metal production. During the period of government control of the
Queensland sugar production the bank was the central financial authority. In the last two years of Commonwealth control it advanced a large amount, of money to finance government control of the sugar crops, and it is now assisting the Queensland Sugar Board to the extent of, approximately, £2,000,000 a year. It will be remembered that in 1916 the then Labour Prime Minister (Mr. Hughes), while in England purchased fifteen steamers at a cost of £2,052,654 to assist in carrying Australia’s produce to the markets of the world. The Commonwealth Bank was employed to finance the deal. This list of the bank’s achievements is neither small’, nor inconsiderable. In times of stress and strain such as were experienced in the early years of the war, one might have expected a certain amount of panic in the banking world, but the Commonwealth Bank proved itself to be a veritable sheet anchor for Australia, and it performed a most useful public service. I believe that the satisfactory financial condition of Australia in those years was widely attributed to the existence of the bank. The present Treasurer promised to enlarge the scope of the bank’s activity by establishing, as an adjunct to it, a Commonwealth Land Bank to give rural credits, and to assist co-operative primary and secondary production. So far from doing so he, and other honorable members opposite, have done a good deal to prevent the bank from functioning along the lines intended by its promoters. Honorable members on this side of the chamber would like to see the bill submitted to a select committee in order that provisions might be embodied in it to establish a land bank to give rural credits, and advances on broad acres; to assist co-operative finance in primary and secondary production ; to promote more rapid land settlement and development ; and to establish a grain and fodder reserve against periods of drought. The proposal to submit it to a select committee should commend itself to all honorable members who earnestly desire a measure which will receive the unanimous support of Parliament. If the Government persists in its determination to appoint a board of eight directors, and Parliament agrees to it, I hope that men will be selected who have an intimate knowledge of the whole of Australia, and not men who have been buried in the big cities all their lives and know nothing about country life. We need men on the board who have a wide general knowledge of Australian affairs, and also good banking experience, so that they may exert, in their managerial position, sympathetic consideration for the primary producers. Personally, I would prefer to see the bank controlled by a board of three experts. I hope that the board to be appointed will give sympathetic consideration to the great primary industries as well as the secondary industries of Australia, in order that this country may be developed along lines which will make it, what we believe it ought to be, and what it will be some day, one of the greatest countries in the world.
.- My only reason for participating in the debate at this stage is that I desire to place on record some remarks made by the late Sir Denison Miller, on the occasion of the laying of the foundation stone of the’ Commonwealth Bank building in Collins-street, Melbourne. The bill has been so riddled by criticism that it seems hardly necessary to damage it still further. The Labour party established the Commonwealth Bank, and some honorable members of this Parliament were members of the Parliament which passed the original bill. The -Labour members among them will well remember the fights we had over it in our partyroom, and also those which occurred later in both Houses. Very strong opposition was offered to it by Sir Joseph Cook, and others. I am sorry that the Treasurer, in his second-reading speech, was so restrained in his praise of the management of the bank. In view of the great service it has rendered to Australia, one might have expected much more generous words from him. I, and no doubt other honorable members, had the pleasure of attending the ceremony of laying the foundation stone of the Victorian head-quarters of the bank in Collins-street on the 25th July, 1922. The ex-Prime Minister (Mr. Hughes) laid the stone, and Sir Denison Miller, in a speech in which he thanked Mr. Hughes for so doing, related, in much more effective language than I can hope to use, the story of the bank’s achievements. It is hard to believe that, in the face of the speeches that were made that clay, this Government desires practically to cripple the bank, for that will be the effect of passing this bill in its present form. Sir Denison Miller did not trust to his memory, nor even to extended notes in making the remarks which I shall quote. He had a typewritten statement, compiled from records in possession of the bank, which read as follows : -
It is just ten years since the Commonwealth Bank was established. As you know, it has no capital, as the Commonwealth Government is responsible for all moneys due by the Bank, and it has the whole of Australia at its back. Any profit earned really goes back to the people, as of the net proceeds, one-half is credited to the Bank’s Reserve Fund, and the other half to a Redemption Fund, which may be used in paying off Commonwealth debts, or State debts taken over by the Commonwealth.
By a commission signed by Lord Denman under the Seal of the Commonwealth Government of Australia, of which Mr. Andrew Fisher P.C., was Prime Minister, I was appointed firs* Governor of the Bank, and business was started in a small room, upstairs in a building in Collins-street, with a messenger lent by the Commonwealth Treasury, and an advance from the Treasury of £5,000. To-day we have a staff in Australia, New Guinea, and London, of 1,306 males and 615 females, in all 1,981. Practically every eligible man on the Bank’s staff volunteered for service for the war, many gained high distinction, and we regret the loss of those who paid tho supreme sacrifice and will never return. A suitable memorial will be erected in this building. We have 02 branches throughout the Commonwealth, New Guinea, and London, and nearly 10,000 agencies and correspondents throughout the world, and in addition, 3,189 Savings Bank agencies, mostly at Post Offices in Australia, Territories of Papua and Now Guinea, Solomon Islands Protectorate, and other parts of the Pacific.
The Savings Bank business was started in Victoria in July, 1912, and six months later the Savings Bank operations had extended to all the other States. The States of Tasmania and Queensland have since amalgamated their Savings Bank business with the Commonwealth Bank, with satisfactory results, the number of depositors now being 876,834, with balances of over £3S,000,000. The General Banking business was opened throughout Australia and in London on the 20th January, 1913, and the Bunk has since been able to provide facilities for both General and Savings Bank business for the people.
The Bank’s operations rapidly expanded during the war, and particular attention was given to the accounts of soldiers and sailors, no matter in what part of the world they were fighting.
War Loans, Peace Loans, and a Diggers’ Loan were floated in Australia, totalling £250,172,440, and in addition War Savings Certificates amounting to £7,454,718 were issued. In rais- ing these Loans in Australia, if the pre-war methods of underwriting and cost of flotation as is paid in London for such work - which averages about £2 7s. Id. per cent. - had been adopted, tho cost of flotation would have been £6,889,475, whereas the actual cost was 5s. 9d. per cent., or £719.245, showing a saving of £5,170,230; in addition to which the charges by the Commonwealth Bank for management of Loans and commissions for paying interest coupons, as compared with the charges made in England for similar work, disclose a further saving of £410,711, or a total of £5,580,941.
Tho Bank also manages Loans raised in London on behalf of the Commonwealth Government, State Governments of South Australia and Tasmania, and various other bodies, totalling £78,000,000, of which £52,000,000 has been actually floated by the Bank itself. In addition, the Bank has raised Loans totalling $22,000,000 in America on behalf of the State Government of Queensland.
The Bank, at tho request of the Commonwealth Government, has taken an active part in the management of the various Pools for the sales of wool, wheat, butter, and other produce of the Commonwealth, and has assisted in finance of sugar purchases and Commonwealth Line of Steamers.
Tho Bank also, at the request of the Commonwealth Government, built 1,S74 War Service Homes, at a cost of £1,184,062, or an average of £652 each, and we believe that the soldiers are all well and comfortably housed, and practically all quite satisfied with tho homes built for them by the Bank. The Bank also purchased n, !,”)3 erected homes for £3,000,317, and released 1,025 mortgages totalling £350,980.
The Bank’s latest balance-sheet of the 30th June, 1922, will give total figures of approximately £80,000,000, in addition to which a Note Issue Department, which has been transferred to the Bank under the control of a Board specially appointed, totals £53,546,000, making a grand total of over £139,000,000. The profits earned to date total over £4.000,000.
I Jo not think that any member of this House will question such statements made by tho late Sir Denison Miller, in the presence of the financial authorities and a number of leading commercial and mercantile people of Victoria and the other states. Were it possible to controvert them in any way, an attempt would have been made to do so, but, so far as I have ascertained, not one word has been uttered or written in refutation of them. So interested was I in the subject, that I obtained from the late Sir Denison Miller a copy of his speech, which was afterwards printed in a very interesting periodical which is issued once a month to the bank’s employees and customers, and from which I have read it to the House. I have quoted it because the Treasurer (Dr. Earle Page), in delivering his second-reading speech, did not pay to the late governor of the bank, and the institution itself, that meed of praise to which they were entitled for the admirable work carried out by them during the war. On one item alone the bank saved the taxpayers of this country £6,000,000.
– I referred in my speech to the excellent work both of the Commonwealth Bank and of the late Sir. Denison Miller.
– It was all very well to give a certain meed of praise to them, but the Treasurer went farther, and said that the bank had attained its present position principally because of the large sums of Government money that it had handled. On tho one hand he gave credit to the late governor of the bank for his excellent work, and on the other hand he took it away by saying that without Government assistance the institution would not have been a success. That opinion is held by certain bankers. One prominent banker who was opposed to the Commonwealth Bank engaging in the savings bank business, admitted its success when that branch of the institution commenced making profits. To a certain extent, I agree with him that the Government did provide means by which the bank became firmly established in a lesser number of years than would have been the case in the ordinary course of events.
– It created new business for all the banks.
– That is so. From the stand-point of all true Australians, the bank was, during war-time, a splendid bulwark to finance. However opposed the Treasurer is to the institution in its present form, I ask him not to detract from its usefulness.
– The Government are trying to make it more useful.
– I do not know whether this idea emanates from the Treasurer himself or from some one else. I do not wish to impute ulterior motives, but some influence is being used to cause the Government to bring in banking legislation of this kind. The effect of the bill, if passed, will be to prevent the Commonwealth Bank from competing with other Australian banks, and 1 cannot understand a Minister who profeses to represent the primary producers taking such an action. The primary producers should fight to obtain two objectives, one of which is the satisfactory operation of the Commonwealth Government Line of Steamers to convey their produce overseas and to keep them from the claws of the Shipping Combine.
– The Government have placed the Commonwealth Government. Line of Steamers on a proper basis.
– On what is termed a commercial basis. But the usefulness of an institution is not always proved by a credit balance, rather it is to be judged by the benefit derived from it by the people. A set of circumstances has arisen, however, in which the Treasurer has greased the planks to permit of an easy slide down from the so-called Country party to the National party. He does not- care two’ pence for the primary producers. He has issued his ultimatum, with the threat that if the Bruce-Page compact is not accepted he will join the National party.
– That is the honorable member’s version.
– It is the outcome of the present situation. I cannot conceive of a representative of the primary producers being opposed to a truly national bank.
– I am not opposed to such an institution.
– Instead of being the chief instrument in tho hands of private bankers to throttle the Commonwealth Bank, the Leader of the so-called Country party should resign from the Government before accepting such a position. I wish to make one or two quotations from his own speech to show that he has been consulted on this matter by the private banks. By way of interjection to the honorable member for Bourke (Mr. Anstey), he instanced several banks - the Bank of England, the Bank of France, the Bank of Germany, and the Central Bank of the United States of America. In every case the honorable member for Bourke was able to point out that private capital had been supplied to those central banks, and that every other bank, before gaining the assistance of the central institution, had to deposit with it, assets, in gold or other securities. Yet this is what the Treasurer said - “ There is no compulsion as to the amount to be kept at credit by any bank with the Commonwealth Bank.” In other parts of the world where central banks are established,’ the private banks are compelled to deposit assets with the central institution, otherwise it will have no dealings with them. The Treasurer also said - “ In conferences which Ministers have had with the general managers of private banks.” We can well imagine the general managers of the private banks drafting this bill. I should like to know whether they were invited to a series of Cabinet meetings at which the bill was framed, and how many times they consulted with members of the Cabinet?
– The honorable member is putting words into ray speech which do not appear there.
– The Treasurer has admitted by his own words that consultations were held with the general managers of private banks.
– My speech does not say that they were held to discuss this bill.
– The words are, “in conferences which Ministers have had with the general managers of the private banks.” What more evidence does one want? While the Ministry was formulating this amendment to the Commonwealth Bank Act, they were in consultation with the general managers of the private banks. The only inference which can be drawn from that is, that the provisions of this bill have been approved by the general managers of the private banks.
– That is an entirely inaccurate inference.
– The Treasurer of the Commonwealth, who is supposed to be the guardian of the people’s money, and who is here allegedly in the interests of the primary producers, has consulted with the very men who, in days gone by, have been the chief enemies of the primary producers. I rejoiced in the establishment of the Commonwealth Bank because . I believed it would release a number of people from the talons of these financiers. Let me give one illustration of the treatment sometimes meted out by private bankers to primary producers. A number of men combined to form a company to export rabbits. Their object was to cut out the middleman. They approached a private bank for the necessary finance, and acquainted the manager with the amount of the capital they had subscribed, the composition of the company, and the nature of the trade in which they proposed to engage. The manager promised to do everything possible to facilitate their operations. Notwithstanding that, however, the company was allowed to make only one shipment of rabbits - the largest which had up to that time left Australia. By the Macedonia they shipped 5,000 crates of rabbits. When application was made to the bank for assistance in connexion with a second shipment, the company was informed that the bank did not intend to give it any further help. There were ample guarantees, cool storage certificates, all risks were covered by policies, arrangements were made with a well-known firm in Tooley-street, London, the general manager of the bank was perfectly satisfied as to the financial position of the company, yet no assistance was given by the bank towards financing the second shipment. The influence of other exporters had been brought to bear with the bank against those primary producers. That kind of thing has been done time after time, yet the Treasurer would hand over the primary producers of this country to private banking institutions, for them to do the same thing again. The general managers of the private banks have dictated to the Treasurer the action he has taken.
– That is an absolutely false statement.
– I have read from the honorable member’s own speech.
– The honorable member has put words into my speech.
– I have quoted from Hansard, the Treasurer’s own words when introducing the second reading of the bill. During my long parliamentary experience, I have never previously heard an honorable member admit on the floor of the Blouse that the enemies, and not the friends, of a public institution, such as the Commonwealth Bank, had been consulted in the framing of amending legislation affecting that institution.
– The Treasurer did not mean what the honorable member says.
– The Treasurer said that conferences were held with the managers of the private banks.
– They were conferences regarding the currency question.
– The protests of the honorable member are of no avail. This bill has been conceived in the interests of the private bankers, who have had a large share in the framing of the measure.
– That is an absolutely false statement.
– The Treasurer has admitted that they were consulted. I shall now deal with another phase of the bill. It is proposed that the board shall take over the note issue. People who remember the splendid work accomplished by the Commonwealth Bank during the stress and storm of the war period must admit, if they are honest, that the Labour party was far-sighted when, in the teeth of opposition, it established the Commonwealth Bank and decided to issue notes. Let us consider for a moment the interest paid on overdrafts in Australia. The Commonwealth Year-Book shows that from £170,000,000 to £200,000,000 is advanced practically every year by the various banks of Australia. From the beginning of the war to the end of 1923 the Commonwealth Bank stood out for interest at 6 per cent only, whereas the private banks charged 7 per cent. Had it not been for the Commonwealth Bank, the people of Australia would have been called upon to pay at least 7 per cent., and possibly 8 per cent., on that large sum of money. Assuming that the banks would have charged 8 per cent., or 2 per cent, more than the rate charged by the Commonwealth Bank, it will be seen that the Commonwealth Bank during those ten years saved to the people of Australia not less than £34,000,000 in interest on overdrafts. Even if the interest rate would have been only 1 per cent, greater than that charged by the Commonwealth Bank, the amount saved in interest on overdrafts totals £17,000.000, in addition to a saving of £6,000,000 on the flotation of Commonwealth loans. Moreover, during that period the bank acquired property worth several millions of pounds. Such a record I do not think can be equalled by any other bank in the world. I challenge the
Treasurer to successfully refute my arguments. I am not referring now to the statement of Sir Denison Miller, but to the official figures from the Commonwealth Y ear-Book. When the Labour party proposed a note issue, there was strong opposition to the measure. Members then in opposition said that it was bad enough to establish a bank, but that to establish a note issue would mean that printing presses would be set up to print notes to fill every one’.s pockets. We heard then of the assignats of France and the greenbacks of America, and were assured that calamity would follow our action. But what has been the result? Not long after the taking over of the note issue, with its consequent backing - the credit of the Commonwealth - it was possible to lend to the various state treasurers sums totalling ?30,000,000. Every state participated in these advances, with the result that the people now have railways, roads, and other facilities which otherwise would have been impossible. Those advances have earned interest. At first 3? per cent., or possibly 4 per cent., was the highest rate charged; the average did not exceed 3^ per cent. It seemed like fate that Sir Joseph Cook should have been Treasurer when a loan for ?7,750,000 fell due. When he was casting about to find a means to redeem it, the Treasury officials pointed out that instead of floating a new loan, at probably 6 per cent., there was sufficient money in the Notes Issue Trust Fund to meet .both the principal and the interest on the loan. Where is the man who will say that -the policy of the Labour party at that time was not a wise one? But more can be done. Owing to recent legislation, about ?1,250,000 flows into the Public Treasury each year from the note issue. How is that money to be utilized? The Treasurer has boasted of having established a reduction fund in connexion with public indebtedness, but the Commonwealth note issue, established by the Labour party, has been the biggest contributor to that result. If the Commonwealth Bank is allowed to continue as in the past, it will supply practically all that will be necessary to meet the reduction fund which has been established. We can reasonably anticipate that the note issue will provide a further ?1,250,000 during the ensuing year, and that, if not hindered in its work, the Commonwealth Bank will be another big contributor to our national debt sinking fund. The Government will, no doubt, insist .on passing this bill as framed by the private bankers, even to the dotting of an “ i “ and the crossing of a “ t.” By making the bank responsible for discounting and rediscounting bills, and by preventing it from earning profits, the whole of its capital will in time be absorbed.
– The discounting and re-discounting of bills is a bank’s most profitable business.
– Sometimes it is; but when dealing with other banks it is not so.
– That is where the banks of France and of England make their money.
– The honorable member should refrain from making comparisons between the banks of England, France, and the United States of America and the Commonwealth Bank. Those countries have a much bigger population than ours, and their banks are established on an entirely different basis. They are private concerns and they must make certain deposits with the central banks.
– Because a bank deals with Government money it cannot make profits : is that the distinction the honorable member makes ?
– I do not say that. I say that the Government is trying to cripple the Commonwealth Bank.
– We are going U> extend it.
– I differ from the hon.orable gentleman. I will say that, so far as honorable members on this side are concerned, if the Treasurer wishes to give them a. big lift when we next meet the electors, he will pass this bill as it stands.
– Well, let us do so.
– I do not think that we have much more to say upon it. We may submit some amendments in committee, as, though we may be unable to obtain the whole loaf, we shall try to get some of it. I say that by this bill the Government will prevent the Commonwealth Bank from earning profits which it might otherwise earn, and which would go towards the reduction of the national debt. In doing that it will be committing a, crime against the people of Australia. The Government is obeying the dictates of the private banks.
– Close them up.
– I have given one illustration of what may be expected from private banks, and many more might be given. Honorable members opposite can talk of unionism being responsible for boycotting, and cruelty, but they have only to take a. few steps in the financial world to discover how cruelly people are treated by private banks and other financial institutions. These have at times ruthlessly pursued men engaged in business.
– Might not the people be worse off if there were only one bank 1
– I am not suggesting that there should be. only one bank in the Commonwealth. I consider that there should be banks established in every part of the Commonwealth, but they should be banks of the proper kind. I can tell the honorable member for Swan (Mr. Gregory), who professes to represent the primary producers in this Parliament, chat there are two things for which the primary producer should stand in the teeth of all opposition. The first is the maintenance of the Commonwealth Line of steamers, and the next the maintenance of the Commonwealth Bank as a. vigorous and powerful institution. We should not undermine the bank under the pretence that we are doing something to extend its usefulness. In depriving it of the power to compete with the private banks the Government is committing a fraud upon the people. The honorable member for Boothby (Mr. DuncanHughes) was quite entertaining in the contribution he made to the debate.
– My speech was not wasted, then.
– No, as an entertainment it was not bad, but its logic did not convince me. The honorable member told us that if pastoralists require financial assistance for any of their projects they have the private banks to appeal to. As they can obtain from private banks the assistance they require, he suggested that it did not concern them how the Commonwealth Bank was conducted.
– I was speaking of the appointment of representatives of the pastoral industry to the directorate of the bank.
– I admit that. I suppose that if we went through a list of the wealthy pastoralists of Australia we should find that quite a number of them are directors of private banks, or are very large shareholders in those banks. It is not too much to say that the shareholders of private banks are not anxious for the success of the Commonwealth Bank.
– It does not follow.
– I think it does. I remember reading the report of a meeting of the Bank of Australasia directorate in London, when, I think, Mr. Anderson presided. The meeting was held at the time the Commonwealth Bank was about to be established. Speaking to his co-directors, the chairman said, “ There is not the slightest doubt that the passing of the Commonwealth Bank Bill has introduced a very serious competitor to the banking systems in Australia.” He was honest enough at the same time to say that if the new bank was properly managed there was no reason why it should not become in Australia what the Bank of England is in Great Britain. He was clearly of the opinion that the Commonwealth Bank would be a serious competitor of the private banks, and he spoke with a full knowledge of banking conditions. It will be agreed that the legal and medical professions are strict unions. The honorable member for Boothby, as a member of the legal profession, will admit that if a man possessing equal or superior qualifications to his own were to establish himself in business in the same district, that man would probably make serious inroads upon his income. It is true, as the Treasurer has pointed out, that the Commonwealth Bank made most of its profits from the great war loan transactions and the financing of the wheat, wool, ‘ and other pools during the war period. In that, crucial time the bank played its part, and played it admirably. To make, as it did, £4,500,000 in profits in ten years was no mean achievement. I direct attention to the fact that those particular opportunities for the earning of profits are not now presented to the bank, and if its profitearning capacity is to be maintained it must seek “fresh woods and pastures new” for money-making. In the circumstances it is, in my opinion, significant that the Government should have chosen this particular time for the introduction of a measure which will limit the operations of the bank. It would otherwise at this time have had to seek fresh legislation to enable it to provide rural credits for the assistance of those engaged in rural industries, or some other means of making profits. A sinister influence is responsible for the introduction at this particular time of a bill to limit the operations of the Commonwealth Bank.
Silting suspended from G.SO to S ‘p.m.
– Prior to the adjournment, the Treasurer (Dr. Earle Page) contested a point I made, with regard to Consultations with outside bankers. The quotation which I placed before the House related merely to the composition of the board. I. believe that there is not a more vital part of the bill than that which deals with the appointment and composition of the board. If the Treasurer or the Government saw fit to consult private bankers regarding the composition of the board, or as to who should be chairman, it seems to me only a natural inference that consultations also took place with private bankers on quite a number of other matters. The testimony of the Treasurer, and other evidences that are apparent to anybody who wishes to see them, drive one more and more to the conclusion that this is neither more nor less than a private bankers’ bill. If it is passed by Parliament in the interests of private banking, it cannot be conducive to the welfare of the Commonwealth Bank, which is the people’s bank. The more one examines the honorable gentleman’s speech, the more one is convinced that the members of the Government are merely the puppets of the private banks. Their action in this matter is on all-fours with their past actions. First of all concessions were made to the squatters and big lease- . holders. Secondly, large remissions of taxation were granted to the wealthy persons who carry on business chiefly in Flinders-lane. Now the private banks are coming in for their share of the boodle. The amount handed out to those three big sections runs into millions of pounds; yet the Treasurer sits in his place and smiles.
– I am smiling at the audacity of the honorable member’s assertion, which is quite untrue.
– There can be no audacity in stating the truth. If the legislation passed by this Government is analysed, it will be found that those sections I have mentioned have done very well.
– The honorable member forgets that last year we increased the old-age pension payments to the extent of £1,250,000.
– The Treasurer is a self-confessed offender. He has stated -
During discussions which I recently have had with bankers, they made it clear that the right to get cash in case of need is of the greatest value to banking.
– That is quite true.
– That illustrates the extent to which this type of individual has been called into consultation in the framing of the bill. The Government today occupies a much happier position than that in which the Fisher Government was placed when it established the Commonwealth Bank. It has banking experts which it can consult, and thus obtain all the information it desires to enable it to frame a bill that will conserve the interests of the people. Those officials have had wide experience, and there was no necessity for the Treasurer to approach private bankers for information. The Governor of the Commonwealth Bank, the Deputy Governor, and other members of the staff, are among the most experienced bank managers in Australia, who have had dealings with every phase of finance. Possessing such a splendid advisory board as that, why should the Treasurer or the Government consult those who are enemies of the Commonwealth Bank?
– That is not so. Many of them are clients of the Commonwealth Bank.
– The Treasurer had these expert, men at his elbow, yet ho passed them over in favour of the private bankers, who are enemies of tho Commonwealth Bank. The honorable gentleman has stated that already the Commonwealth Bank has accumulated profits totalling close on £4,500,000. It is intended to allow the amount to be increased to £10,000,000 by borrowing. The Treasurer will do the borrowing, yet he is hand in glove with those persons who have been exacting from the taxpayers a very fair interest bill. “When he goes on the market to borrow money to increase the capital of the Commonwealth Bank to £10,000,000, he will again be charged substantial interest. If the Treasurer will have confidence in the board which is to be appointed, why can he not allow it to look after its own borrowing? It should be allowed to decide for itself whether £4,500,000 is sufficient to enable it to carry on the business. It is claimed that the board will be non-political, yet the Treasurer proposes to reserve to himself the right to interfere with it. It is quite likely that some of his friends will have money to lend at 6 per cent, interest. I have here a quotation that relates to this matter. I am not sure of the name of the paper, but I think it is the Standard, published in Western Australia. I cannot say whether it is a labour paper, but it certainly expresses labour sentiments. It says -
In other words, the Commonwealth will pay the Shylocks C per cent, for the Shylock’s credit, and when tho latter find it necessary to strengthen their cash reserves, the Commonwealth will do the strengthening by putting the credit of the people of Australia, in the shape of Australian notes, at the back of the private institutions. The great game of robbery of tho people would be apparent to an ordinary intelligence; but Earle Page’s is not an ordinary intelligence.
Further on it says -
We have never considered that the Commonwealth Bank functioned as it might do, in the interests of the country; but we are convinced that if Page’s bill passes, as introduced, the country will be an interest subservient to the financial magnates of- Australia.
I am quite in accord with those sentiments. I have already referred to the manner in which the profits of the bank are to be divided. If the Government is intent upon robbing the bank of a splendid field of legitimate business we shall have less money with which to liquidate our public debt, because half the profits of the bank are to be paid into the Treasurer’s much-vaunted sinking fund. The bill, I admit, disqualifies certain persons for appointment as directors or members of a local board. It provides -
A person who is -
a director of any corporation (other than the Commonwealth Bank) the business of which is wholly or mainly that of banking; or
an officer of any corporation (other than the Commonwealth Bank) the business of which is wholly or mainly that of banking, shall not be capable of appointment, or of continuing to act, as a director or a member of a local board.
Some honorable members may be satisfied with a safeguard of that character, but to my mind it leads us not one whit further. Those associated with private banks, if denied the right to sit on one of these boards, will quickly find a representative who will give effect to their ideas and wishes. The inclusion in the bill of that disqualification clause has been done merely for show purposes. The correct result cannot be reached by that means. I do not suppose that the criticism levelled at the bill will alter the opinion of the Government, because its orders are to proceed along certain lines, and if those lines are departed from it will be brought to book. I quite believe that when the board is constituted it will have on it men interested in pastoral pursuits, and other friends of the Government. I view with thankfulness the prospect that the time during which the bill will operate will not be lengthy enough to enable harm to be done to the bank. The board will hardly have got into its stride before a halt will be called, especially if its actions are inimical to the interests of the bank and adversely affect the people. The Labour party, when returned to power, will not take long to put a stop to that kind of thing. As in 1910 we did not hesitate to repeal the Naval Loan Bill, so we shall not hesitate to repeal legislation passed by this Parliament which we consider is detrimental to the interests of the great body of the people. Queensland saw fit to place the whole of the resources of its savings bank system at the disposal of the Commonwealth Bank. Immediately the Commonwealth Bank authorities decided to undertake savings bank business in Tasmania that state also, realizing that it could not compete, agreed to amalgamate. I hope that the time is not distant when Western Australia and South Australia will fall into line, and the two largest states - New South Wales and Victoria - will be forced to follow suit. A friend of the Commonwealth Bank the other day said to me. “ I suppose they will try to cut off our right hand by taking away the savings bank business.” The Victorian savings bank commissioners have done a wonderful amount of good work with the Credit Foncier system. I regard the savings bank branch as one of the essentials of a national bank. When Mr. Allan, the leader of the Country party in the Victorian State Parliament, was Minister for Lands recently, he issued a booklet, some pages of which were devoted to a statement of the great benefits that had accrued to the farmers of Victoria by the application of the Credit Foncier system, conducted, under the auspices of the state savings bank. Who are the depositors in the state savings banks? For the most part they are the workers in town and country. Mr… Allan boasted of the fact that £15,000,000 had been advanced from savings bank deposits to enable the rural industries to be developed. I want to see the state savings banks co-operate more and more with the Commonwealth Bank. By that means a huge fund can be created, which will enable a rural credit system to- be established throughout Australia. Under the act the Commonwealth Bank is so hampered that, although its savings bank deposits total close upon £40,000,000, apart from a certain amount which, is utilized in connexion with the Credit Foncier system in Queensland, the money is merely drawing interest from the general banking branch. Those millions of pounds, augmented by the deposits in the state savings banks, would form a great fund to carry on beneficial works in rural districts. I have no sympathy with any attempt to hamstring this bank, for I believe heartily in the extension of its operations in both general and savings banking. My chief objection to the bill is that a magnificent institution now owned by the people of the Commonwealth will be handed over to those who, instead of promoting its advancement, and thereby conferring greater benefits upon the community, will, through the present Government and its supporters, do their level best to strangle it. My voice will be heard in denunciation of attempts of that kind, and I am comforted by the knowledge that in eighteen months or two years the salvation of the bank and the people of the Commonwealth will be assured by the return of the Labour party to power in this Parliament.
Mi-. BRENNAN (Batman) [8.17].- Some of those who have addressed themselves to this intricate subject have announced that they are not expert in banking. I am an expert. The little I did not know of the subject was supplied by the honorable member for Boothby (Mr. Duncan-Hughes). Having heard him, the sum. of my knowledge is complete. There is a wise old saying that “ a little learning is a dangerous thing,” and I avoid that danger in the obvious and safe way I have just indicated. As a matter of fact, a great deal of mystery is imported into this subject for the reason so well stated by the honorable member for Bourke (Mr. Anstey) this afternoon, when he pointed out that high financiers had been so long and successfully engaged in deceiving other people that they had at length succeeded in deceiving also themselves. From that sum of- wisdom which I have modestly attributed to myself in the interests- of perfect veracity, I know this fundamental fact, that when one goes to negotiate a small loan, just as when one goes to negotiate a large one, whether the loan office be described as “ the Commonwealth Loan Office,” or whether it merely bears the name of “Moses” or “Moriarty, Financier,” the question will be, “What security can *you offer?” The transaction will immediately rest upon a basis of simple, not complex, business. In approaching this subject, I am consoled also by the recollection that away back in 1893 a number of high financiers in Australia gravely miscalculated the financial situation. They were seers and prophets in their day. They had a day; it was a glorious day, but it ended suddenly in disaster. Like “ the great De Barral,” of whom Joseph Conrad writes so eloquently in *Chance, they “ melted away.” To-day they are nothing but a name, but they got something out of the business, even if their victims got very little. Approaching this subject in its simplicity, and denying absolutely that it has any complexity, I have a shrewd idea that the objects of a Commonwealth Bank should be to ensure financial efficiency and economy. Those should be the watchwords of a national bank, and I am perfectly satisfied by a reference to the figures upon the subject that the joint stock banks exact far too great a tribute from the people. That is a simple proposition. For the years 1912 to 1923 they exacted £54,565,724. The annual tribute rose from £3,212,676 in 1913 to £5,109,279 in 1923. During that time, whether the seasons were bad or bountiful, whether times were hard or good, the banks always seemed to prosper, and, indeed, they prospered rather more from the people’s adversity than from their success. The profits of the Commonwealth Bank during the same period were about £4,500,000, and that institution had, at one time, as much as £40,000,000 lying to the credit of the Commonwealth Government’s current account, upon which it was paying no interest. The total thus extracted from industry by the Commonwealth and private banks was £59,065,724, or nearly £5,000,000 per annum. Much of that money went to absentees, who spent their money outside this country. All of it went to a very limited number of privileged persons; it was not dispensed widely amongst the people. The profits of the Commonwealth Bank, it is true, do come back to the people, and this also can be said for that institution, that its existence exercised a very useful restraint upon the private banking institutions during the period of the war. I wish to make a few comments upon the general outline of the Treasurer’s speech. It is a curious fact that the exchange rates in Australia today are no more advantageous to the people than they were in those good old days when gold travelled with an armed escort, when there were no railways, and when all sorts of extraordinary expenses were actually incurred in the transport of bullion. The charges to-day are rather more than they were in those comparatively primitive times. I believe that if the Commonwealth Bank had been continued in the spirit in which it was founded, even perhaps under the same management as when a Labour Government was in power, it would have been a. very severe corrective to that dangerous growth of the exchange rate; but unfortunately, the popular will is fickle, governments change, and a bank which might have been a very useful institution, although still useful, is not so good as it would have been under more sympathetic administration. The Treasurer has spoken feelingly of the increase of the rate of interest on government loans. “Wo know that tho interest rate rose sub- stantially during the war, and that when, you, Mr. Speaker, as Treasurer, were zealously endeavouring to float loans in the interests of the safety of the Commonwealth during wartime, you found a sad lack of those open-hearted patriots who might have been expected to make heroic sacrifices for their country.
– They were too busy telling everybody else to go to the war.
– Not very successfully in the case of the honorable member for Batman.
– In my case, with only a. moderate degree of success. The increase in the rates of interest on ‘Commonwealth loans for war purposes was largely due to tho operations of the private banks. If they supported the war loans, it was because they were furnished with funds out of the treasury, usually at a lower rate of interest than such .investments were commonly yielding, whether from direct subscriptions or from advances to clients who were subscribing to the war loans. I have no quarrel with the banks, which in that way kept a sharp eye open to the interests of their shareholders, firstly, because I always admire a successful business man or firm; and, secondly, because one who conducts his business on an overdraft does not care to quarrel too bitterly with the banks. In regard to legal tender reserves, the Treasurer made what he, no doubt, conceived to be a striking comparison between the reserves of 1888 and i892 and those of 1922-23; but I would remind him, as a result of somewhat detailed research in this matter, and also because of that special technical knowledge which I have already confessed myself to have, thai; no useful comparison can be made, for the simple reason that in the years 188S to 1S92 a fourth of the liabilities were outside, and not inside, Australia. . In 1922-23 the position was reversed. It is interesting to learn that the bank’s liarbilities were in Australia, but the assets, in a large measure, were- in London. The Treasurer made a very serious admission. He pointed out that the granting of excessive credit, or the withholding of due credit, by the banks upsets and demoralizes economic conditions. This is perfectly true; but if we had a Common- wealth Bank administered on the lines of the Argentine national bank, and by a Government animated by the spirit which animated the Government of that country when the Argentine bank was established, the Commonwealth Bank would be an absolute and certain corrective to any threatened demoralization due either to the withholding of credit when credit was due, or to the granting of excessive or prodigal credit, either course being liable to end in financial disaster. Unfortunately the Commonwealth Bank, as it is intended to operate, is merely in the position of a big brother amongst the trading banks of the Commonwealth. It is not going to have the effect which I have just indicated is desirable. On the question of restriction of credit I would point out - and it is important, for the honorable member for Bourke (Mr. Anstey) to remember this in connexion with the motion which he foreshadowed at the close of his able and interesting speech, in which he proved himself to .be a brother expert in finance - that squatters and pastoralists, for whom the Treasurer and his colleagues speak and stand, usually get excessive credit on their broad acres and squattages held out of use. whilst advances in connexion with the farming or manufacturing interests are niggardly and all too small, and in many instances cannot be obtained at all. Unfortunately the effect of extravagant advances on land held out of use is to give to that land a fictitious value, to mako laud hard to obtain, and to make money urgently required for the development of this country difficult to obtain.
– Members of the Ministry are the friends of the squatters.
– There is no doubt about that. In this connexion I quote another banking expert, whose name I am not permitted to give, and although it may be doubted, I am at liberty to say he is a greater, expert even than I am. In t],e course of a statement on this subject he says -
The dislocation of trade and the interference with production are brought about by the locking up of credit in assets not readily convertible. ‘
As to the central banks, of which we hear so much, there is no parallel to the Com monwealth Bank in any part of the world unless, possibly in the Argentine. The functions of central banks, as we understand them, are to give improved facilities to private banks. In the United States of America, where the central banking System is seen at its best, there is an absence of what is known to us as the branch system . In that country there are over 25,000 separate banks. Many of those institutions are in a small way, and operate on very small credits indeed. They depend largely for their existence upon the central banking system, through which they convert their credits, and which pursues the process of re-discounting bills which the smaller banks have negotiated. As a matter of fact, in Australia we can claim to be long past that stage in our system of banking. In transfers of money from one state to another, or from one country to another, banks having surplus funds for transmission, act in co-operation with other banking institutions which have need of the money in question, and vice versa. Having a demand for money with which to make payments abroad, such a bank finds another with surplus funds at its disposal. In this way the o banks operate without the need of the central banking system as it is in operation in the United States of America. The Treasurer had something to say upon the . familiar question of the Trench assignats and the greenbacks of the United States of America. It has to be remembered, when we are speaking of the inflation of the note issue in this country, and when we use those financial adventures as an illustration of a shocking example to be avoided, that no just comparison can be made between our condition and the condition under which those notes were issued. The American greenbacks were issued during war, under stress of war and in conditions of desperation induced by that war. Those conditions, may Providence be ever praised, do not exist at the present time - in Australia. Nevertheless, our Australian notes are issued on the promise that the holder can go to the Treasury and. get gold for them, and it is only fair to say also that the nation’s self-respect is not assured whilst that condition cannot be fulfilled, as we know it cannot be, and will not be except under a system of national banking which sets the nation first, and the profits of the private individual second, if not last. One of the familiar methods by which the private bankers exploit the general public is through what is known as the buying and selling rates of exchange. And it is the way with bankers, as with private individuals, to keep their weather eye upon abnormal conditions whatever they may be. Thus it was that during the war the profiteer was seen at his best. These profiteers were found amongst the bankers as well as in Flinders-lane and in other parts of the Commonwealth, prospering exceedingly well.
Mi-. Lister. - Aud among the lawyers, too.
– I am afraid not. I always had an uneasy feeling that I was not keeping up with my brothers in that regard, though one may do his best within the limitations prescribed by a just conscience. The margin between buying and selling exchange was actually doubled during the war. The Commonwealth Bank, a Labour institution at its inauguration, was captured by the war ^promoters for the war promoters:’ objects, aud, unfortunately, it became tainted, with the influence of those who were using it and by the means which they employed. I was greatly interested to learn from the honorable member for Boothby (Mr. Duncan-Hughes) this afternoon, that the Labour party could not claim the whole of the credit for the establishment of the Commonwealth Bank. The honorable member ingeniously argued that of those who were in the Labour Government when the bank was established, there are now only two in the Parliament, and that these were Nationalists in the persons of Senator Pearce of another place, and the right honorable member for North Sydney (Mr. Hughes) of, for the present, God knows where.
– My point was that the present Labour party was not responsible for the establishment of the Commonwealth Bank.
– I think, so far as I am permitted to think in the circumstances, that I fully understand the honorable member’s point, but I do not the more agree with him. It is only by a curious process of reasoning that one can hope that the glory of the Commonwealth Bank can infiltrate through the Labour party, which is whole and intact, through that small remnant which still remains of the gallant fourteen which left us, into the receptive bosom of the honorable member for Boothby. Whatever consolation he can draw from that source he is welcome to. He can take all the glory attaching to those honorable members, and he can also have them. We fear he will not have them long. They are all that remain of those fourteen who so ingloriously departed, and, not more gloriously, fell.
– But they were a gallant fourteen.
– I agree with the honorable member a3 to 50 per cent, of what he says, and that, I think, is a percentage rate which he should understand. I agree with him that they were certainly fourteen, but I deny their gallantry. I remarked in regard to the increase in the buying and selling rates of exchange, which practically doubled during the war, that the proof that the increase was unjust is to be found in the loud protests that were then made by the mercantile community. Although I have no quarrel with the mercantile community as such, I cannot help thinking that the profound dissatisfaction expressed by it with the private banks, in consequence of the doubling of the selling rate of exchange, affords an excellent illustration of the conditions under which honest men are said by tradition to get their due. I leave it to honorable members to suggest to themselves when that happy state is reached. Our answer to this increase in the selling and buying rate of exchange is that the national bank should be a competitor; not a gentlemanly, kindly, and benevolent competitor, as a banking friend suggested to me on one occasion, but a genuine competitor on such terms, backed up by the nation as a whole, as to be able to dictate its own policy in ‘the interests of the people, and not to crush its rivals out of existence, but to see that they pursue their operations on lines of justice. The Notes Issue Board has been applauded for not issuing more notes to finance the exports of 1923 and 1924. Of course, if there has been inflation, as there seems to have been under the present management, the Notes Issue Board is to be commended, but it is not necessarily to be commended for that, since, if the security was right, and if the interest was right, there was nothing on which money should have been more freelyjudiciously, of course, but, within that limit, freely - invested than upon the trade of our own Commonwealth in our own primary products. I give that in, and I include the wool kings, with all their friends and special interests. The Treasurer also expressed some solicitude for insurance policy-holders and wage-earners, pointing out that an excessive inflation of the currency would react against them.. I have one comment to make upon that remark, and it is that there is a good example of high finance to be found associated with the Mutual Life and Citizens’ Assurance- Company, operating in Sydney, and possibly elsewhere. I notice that that particular insurance company has recently declared a dividend of 67^ per cent. Honorable members may, perhaps, know the name in high finance that is associated with that insurance company, for the name has been mentioned as that of one of the likely directors of the Commonwealth Bank. Always going to reliable sources for my information, I find, on reference to the Wild-cat Monthly of the 31st May, 1924, the following significant observation in reference to this particular company: -
A nice profit is being won in the difference between the interests on borrowings and the return from the investments.
My expert informant adds -
The borrowings amount to three and a quarter millions, and how much of this has been provided by the Commonwealth Bank would be interesting to know, particularly the rate of interest charged.
The only additional point one would be interested to know is whether the gentleman whose name is so closely associated with this insurance company is really going to be a director of the Commonwealth Bank. The Treasurer spoke of the importation of Bank of England notes. The first question that one asks is, “ What is the Bank of England likely to think about that?” The cost of importing would be worth considering, and the length of time that these notes would necessarily be in circulation would have to be borne in mind. As you, Mr. Speaker, know, and as we experts all know, the Bank of England, notes circulate for only a comparatively short time. ]f exported to Australia, they would have to circulate for a considerably longer time than they ordinarily do. There would be no effective assurance that we could guarantee payment at par, calculated in Australian money. Certainly the bank itself would require to hold gold against those notes, and there are a lot of difficulties in the way of that somewhat extraordinary proposal. I have mentioned the Argentine Bank, and I refer to it again as affording an example of what I think a national bank should be. It is a bank in competition. The Treasurer said, in effect, in his opening speech, “ We do not want a bank merely competing with the other banks, the ordinary joint stock banks of the Commonwealth.” Well, I do wish to see in Australia a national bank competing with all the other banks, and, if necessary in the interests of the Commonwealth, driving them off the pitch. I do not ask that their funds shall be confiscated. I shall not say anything so drastic as that for fear of imperilling my overdraft ; but I suggest that, if necessary, competition, should proceed as far as that. The national bank of the Argentine was bitterly opposed, just as was the Commonwealth Bank, by certain classes of politicians) certain representatives of the press, and certain commercial magnates. They predicted for it rapid decay and disaster. They said;, as though it were the worst thing they could, say; that a national bank it was, and would remain, for the rest of its life, and they predicted that that life would be a very short one. Those of us whose memories go back to the origination of Australia’s Commonwealth Bank will remember that the Labour party had to fight against precisely similar criticism and talk in this chamber and: on the platforms outside. Now, forsooth, these gentlemen opposite would have us believe that their conversion to sympathy with this bank is genuine. I should like to think that the Treasurer and his friends were repentant, but I doubt if they are as penitent as they seem to be. If they are sincere in saying that the establishment of the Commonwealth Bank was a step in the right direction, they should come humbly to the feet of the Labour party, and learn something about this subject. They should act under the guidance of the Labour party, and accept its good advice in the matter: but to dogmatize about it is, at least, a little presumptuous.
– The private banks arc very joyful over the measure.
– Their joy may be snort-lived. Foreign exchanges were influenced by the Argentine Bank, and it controlled the market in the interests of the public.
– How much private capital is there in the Argentine Bank?
– I have not. the exact information before me.
– As a matter of fact, there is none.
– If the honorable gentleman will give notice of the question I shall find out the exact amount. To quote again my expert informant: -
AH banks in the Argentine are faced with the competition of the national bank in all departments of banking. The action of the hank is declared to be felt everywhere. Its dealings in foreign exchanges are so great that it practically controls the market to the advantage of the general public’ All of its liabilities are guaranteed by the Government. The bank is credited with having rendered important services to industry and commerce. It is reported that tho former margin between buying and selling exchange, 0 to 10 centimes, or in other words, (i per cent, to 10 per cent., has, by the competition of the national bank, been reduced, and the margins vary little at all, except to the extent of an insignificant fraction. The financing of the wheat export from the Argentine during the war was conducted by the bank of the nation. The clearing house, which has been in operation since January, 1913, and which superseded the private clearinghouse conducted at One of the private banks, is operated through the bank of the nation. At the time of its establishment one paper stated that it would live (and die) a state hank, showing that its existence was considered likely to be of short duration. One commentator, in 1911, made the following significant retraction : “ The forecast wc predicted in the first edition of this book [Martinets and Lewandowski) will have proved mistaken - a forecast, based upon the authoritative opinion of an eminent Argentine statesman, who affirmed that the official banks (that is, the state banks) bore within them the germs of the moral and financial ruin of the country.” It is now regarded as the most important of all tho banks, in spite of having been established at a time of unprecedented financial confusion.
The Argentine Bank is, in other words, ii bank conceived very much on the lines of our national bank, but it has evidently operated under sympathetic administration exactly on the lines upon which the Labour party wished the Commonwealth Bank to operate, and it has given relief on ‘ those lines, which unfortunately, under recent administration, the Commonwealth Bank is not doing.
– It is designed, and operates, as u central bank.
-I do not pretend that the Commonwealth Bank is, to employ a word I do not like using, functioning as we had hoped, but it is established on right lines. The machinery is there; the foundations have been laid by the Labour party. For that we have to congratulate ourselves and our party, and the honorable member for Boothby (Mr. Duncan-Hughes) and his two friends. On the other hand, the Bank of England - no expert should conclude a speech of this nature without a word or two concerning the Bank of England - flourishes in a land in which, I am grieved to say, there is almost incalculable and unspeakable poverty. It is a private institution, but it is so hoary and venerable that it has won the respect of succeeding governments, and it has become, in a certain sense, a government institution, although securing regular dividends of 12 per cent., or thereabouts, to its shareholders. It is a private bank enjoying certain facilities, with which it has been specially endowed by succeeding British Governments. Unfortunately - and I hope that the shares will not depreciate in value in consequence of the remark that I shall now make - the Bank of England flourishes and pays these dividends largely out of the poverty of the disfranchised masses of Great Britain. Unfortunately, also, this private institution has been supported and buttressed by Government influence. Honorable members on this side of the chamber are exceedingly suspicious about the proposal to appoint a board of directors for the Commonwealth Bank. The part-time financiers who are to constitute the board are to be paid in accordance with the little time that they will be expected to give to their work ; but I feel perfectly certain that, though they may give little time to their work, they will exert a very grave influence upon the bank. Members of the Labour party in this House spoke at one time of ridding the bank of political influence, and they did so; but for my own part I must say that political influence, which is subject to the light of day and to searching criticism from the public and tho press, is not half so dangerous as the private influence of a certain class of vested interests and financiers. For that reason, we should resist the proposal to appoint a board of directors which, we think, will represent interests that are likely to perpetuate the very undesirable features of the bank to which I referred earlier in my address. The object of the Labour party is to enable the bank to give to the Australian people good service at a minimum cost. There is none of the mystery of high finance about this matter. It is an ordinary business transaction. Banking is a necessary adjunct to business, and we want the Commonwealth Bank to be accessible to ordinary men and women, and not a bank from which huge dividends, which the honorable member for Darling (Mr. Blakeley) would call a “ rake-off.-‘ filter through mysterious channels to the controlling interests. In a. word, we desire that the bank shall be a truly national bank, and that its profits shall not go to a few private interests., but be distributed in benefits to the whole community. I do not propose to go into the question of currency. Itis a delicate matter. With my expert knowledge, I could deal trenchantly with it. A few other experts, such as the honorable member for Boothby, understand what I mean. I will leave the matter at that. I have tried to discuss the practical side of the subject. I have no very great hopes for the future of the Commonwealth Bank until the people of the Commonwealth realize the great importance of ridding themselves for all time of reactionary politicians. We must have a progressive Government associated with a progressive bank; and before we can have a progressive bank we must have a Government which is concerned about the popular interests, as distinct from the private and personal interests of its own friends. I expect very little from the Commonwealth Bank until the Labour party is returned with a, majority by the electors, but I thought it wise to express my views ‘ on the subject in order that the gentlemen who may secure control of the bank may live in a state of pious mortification in the shadow of the fear of the coming of that day when their day will be done.
.- I do not pretend to be an expert on the subject of banking, but-
Motion (by Mr. Bruce) put. -
That the question be now put.
The House divided. Ayes … … … 31
Question so resolved in the affirmative.
Question - That the bill be now read a second time - put. The House divided.
Question so resolved in the affirmative.
Bill read a second time.
.- I move -
That the bill be referred to a select committee to consider tho advisability of extending the functions of the Commonwealth Bank, to provide rural credits for the following purposes : -
To advance upon broad acres.
To assist co-operative finance in primary and secondary production.
To assist in land settlement and de velopment, and
To establish a .grain and fodder re serve against periods of drought.
Pew -words of mine are needed to commend to the House a motion, which, if agreed to, will tend to benefit a large number of our primary producers. The ideas contained in the motion originated from a very eminent medical gentleman who, in preference to practising his profession, deemed it necessary to try to discover remedies for the ills of human society. He was very successful in setting forth his ideas before the rural population, and they cheered him on his way. These words are apt - “ Cheer up, despondent farmer,”
The cheerful doctor said - “ I’ll work for you in Parliament
While. you are fast in bed.”
I cannot understand his attitude now that the time has arrived for him to put hia ideas into practice. His original conception of the Commonwealth Bank was that its functions should be enlarged so as to assist the agricultural population in the directions indicated by the motion.
– The honorable member may not discuss the merits of the recommendations contained in his motion, but must refer either to the expediency or otherwise of referring the bill to a select committee.
– That is what I am doing. I know of nothing more expedient than that the bill should be referred to a select committee composed of the gentlemen who originally advocated these ideas. The last persons that I would recommend for their consideration are those who are averse to them. To expedite the work of the select committee, so that a speedy report may be made to this chamber to enable Parliament to consider the advisability of embodying in the bill the recommendations of the committee, no more eminent persons could be appointed to this committee than the gentlemen who originally gave birth to these ideas. The personnel of the committee should include the Treasurer (Dir. Earle1 Page), his colleague, the Minister for Works and Railways (Mr. Stewart), and Mr. Atkinson, Honorary Minister. Certainly no one outside the ‘Country party should be appointed to the committee. I commend the motion to the House, -feeling confident that it will be agreed to. .Mr. CHARLTON (Hunter) [9.21].- I have much pleasure in seconding the motion. If ever there was a time when we should seriously consider such a proposal, it is now. We are dealing with a far-reaching measure, and before its final discussion in committee, the bill should be referred to a select committee to investigate the whole matter, and to see if something cannot be done to assist people in rural occupations. It is net my intention to .debate the bill at this stage, but I remind the House that if passed as it stands, it will for all time tie the hands of the hank in the matter of assisting those connected with the land. Once it becomes a bankers’ bank, and has to discount bills presented by other banks, there will be very little money left to advance to those who are opening up and developing this country. We are facing a serious position, requiring careful consideration. We are not all financial authorities, but it is not difficult for any man who reads the bill, and gives it the least consideration, to ascertain that as it stands it will preclude men on the land from obtaining advances from the Commonwealth Bank. It will, therefore, be impossible to carry out the intention of the bill unless some alteration is made to it. There is not so much urgency for the bill that Ave cannot afford the time for a select committee to take evidence from financial experts and to furnish a report to Parliament. We do not know who had a hand in drafting the bill. It may be all that is claimed for it by the Government, but we on this side are not in a position to know. How many men in this chamber can claim that they are conversant with finance and the ramifications of banking?
– -‘There is the honorable member for Batman (Mr. Brennan). He says he is an expert.
– That honorable member is an exception. There are few financial experts in this House, and that is a genuine reason why the motion of the honorable member for Bourke should be carried, so that we may have the fullest information on this subject. If such a committee were appointed, there would be no apprehension on our part respecting the Commonwealth Bank giving effect to the functions that it was originally intended to carry out, and which we all want to see put into practice. The man on the land is the backbone of the country, and. unless we facilitate rural credits to assist him, he will be considerably handicapped. Where is’ he to look for credit? The states have great difficulties in providing sufficient capital for the assistance of the rural population, and if they are unable to do it, the settlers must, of course, look to the parent government. This Government must provide for the future development of Australia, and this can only be done by encouraging population and making money available to men who are prepared to open up new country. If the bill is passed as it stands, I fear that this aspect may be overlooked. I should not object to the measure if I thought it was in the best interests of the country, but as this is problematical, we should at least obtain the best possible advice on the subject. For that reason I support the motion. The bill will have a farreaching effect, every one in Australia being affected by its provisions, and as it is such an important measure, before definitely deciding upon it we should have the best information on the subject. Not one honorable member can claim to be a financial expert, therefore it is apparent (hat further information is needed. We must do nothing that will place this House in a false position, taking, as it were, a step in the dark. We can be enlightened only by the appointment of .a select committee. What astounds me is the fact that the honorable member for Bourke is so liberal in his views as to the personnel of the committee. He is strongly of the opinion that the .committee, if appointed, will be able to elicit evidence to show that the bill is unsatisfactory. We know that the members of the Country party have the interests of the rural workers at heart.
– Ou their tongues, but not in their hearts.
– We know that they are here to look after the interests of the man on the land. The honorable member for Bourke is so anxious to assist the man on the land that he is prepared to allow the Country party to appoint its own committee. Can any cue for a moment conceive a fairer proposition? It should be accepted readily by this House. Probably not one of us has had any training in a bank, and with our limited knowledge of finance we should not be expected to deal with this matter without a lead. A committee would be able to collect the evidence of experts in every state, and, after giving it mature consideration, to arrive at a decision and make a recommendation to Parliament. Most of us would be prepared to accept the recommendation of the committee. In any case, we should then understand the bill; and if it could be shown that certain clauses were not in the best interests of the country, the necessary amendments could be made. Moreover, if matters of vital importance should be found to be omitted from the bill, the defect could be remedied by the insertion of the necessary new clauses. But, if we allow the bill to go into committee, it will pass through this House and go on to another place, and in due course it will become law. It will be too late then to rectify any mistakes. Honorable members know how difficult it is, once the machinery set up by an act has been put into operation, to effect any change. The honorable member for Bourke has provided the House with an opportunity - it may be the last - to decide whether or not it is favorable to the appointment ofa committee; and, as he is willing that that committee should consist of honorable members from one side of the House only, surely no one can charge him with partisanship in this connexion. If ever there was evidence of an honorable member’s sincerity, the honorable member for Bourke has supplied that evidence tonight. A national bank should be the people’s bank, and should operate in the best interests of the country. “We should deal with this matter in a proper way, and leave nothing to chance. A measure of such importance should be brought before us in a different manner from that adopted on this occasion.
– And without the ‘“‘gag’’ being applied.
– Some honorable members on this side of the House know a great deal more about banking than do some who have spoken on this measure. They have been preparing for some weeks past, and no doubt have some valuable information which should be placed before honorable members, and would have been placed before them but for the application of the “ gag.” Sometimes the rules governing the procedure in Parliament are put into operation contrary to the best interests of” the country. There is no urgent need for this bill. It would not take a committee long to get the necessary expert evidence, and to place a summary before us. “We would then be in a position to arrive at a conclusion in the best interests of Australia.
.- I desire to congratulate the honorable member for Bourke (Mr. Anstey)-
Motion (by Mr. Bruce) put -
That the question he now put.
The House divided.
Majority . . . . 6
Question so resolved in the affirmative.
Question - That the motion (Mr. Anstey’s) be agreed to put. The. House divided.
Question so resolved in the negative.
Clause 1 agreed to.
Clause 2 -
This Act shall commence on a date to be fixed by proclamation.
.- I move. -
That all the words after the word “ on “ be omitted with a view to insert in lieu thereof the words “ 1st January, 1927.”
My reason for moving that the Act should commence on the 1st January. 1927, is to make perfectly sure that between this and that date the people of Australia will have an opportunity of judging the Government, not only on its past record, but also on this particular piece of legislation. I am perfectly certain that if this bill were placed before the people of Australia for their approval or otherwise, the arguments used against it by my honorable colleagues on this side would carry sufficient weight to ensure its condemnation. The bill is wrongly named, and had I done my duty fully I should have moved an amendment to clause 1. Instead of the bill being cited as “ the Commonwealth Bank Act 1924,” it should be named “ The Associated Banks Bank Act.” After all, it represents only another of those sops to vested interests, a succession of which we have had in this House ever since the coming into being of the Composite Government. This bill is really a sop to the vested interests of the associated banks and insurance companies, which are responsible for the very funds upon which honorable members opposite conduct their elections. Each of these vested interests is given certain promises, and in return places certain moneys at the disposal of those controlling the anti-Labour fighting funds. The squatters of Australia have given many hundreds of thousands of pounds to the fighting fund of the National and Country parties, and they will continue to contribute to that fund whilst the members of those parties remain in the frame of mind to relieve the squatters of £1,300,000 of taxation. Prior to the last election, certain promises were given to the vested interest.
– Will the honorable member kindly say how he connects these remarks with his amendment.
– I am endeavoring to prove the necessity for postponing the bringing of this measure into force until the 1st January, 1927. I want to deal with some of the influences, so powerful in this community, that are able to secure the passage of such legislation as this. I have pointed out that the squatters, for the money they put behind the antiLabour forces, have received their quid pro quo. I was about to refer to another section, the rag merchants, amongst whom the Prime Minister occupies a prominent position. They received their quid, pro quo - the Commonwealth Woollen Mills were sold. The oversea shipping companies also received their quid pro quo. and were freed from taxation to the extent of £100,000 a year through the present Government being in office. Now I come to, probably, the most important of the vested interests, represented so faithfully and so well by the Treasurer and his colleagues. I refer to the associated banks and the insurance companies of Australia. For the money which they put behind the Government, the antiLabour party are redeeming their promises by introducing this bill, which is of no use to the people, but will be of very great benefit and assistance to the associated banks and financiers. In 1926, and probably before that year, there will be a federal election, to which we look forward with great hope. We believe that there will be a change of Government.
– “ Hope springs eternal in the human breast.”
– If one is not altogether blind one must surely draw some inference from the extraordinary defeats of anti-Labour parties in four of the states of the Commonwealth. One cannot but come to the conclusion that there will be a Labour Government in power in the
Commonwealth after the next Federal election. That being so, I am of the opinion that the bringing of this bill into force should be postponed. It is not in the interest of the people. I shall content myself, for the present, with submitting my amendment.
– The amendment moved by the honorable member for Darling (Mr. Blakeley) is very indicative of the flippant way in which the Opposition, as a whole, has faced this very serious problem, and. the measure now before honorable members. This bill is admitted on all sides to be probably one of the most important measures introduced during the whole of this Parliament, but instead of a serious discussion of the merits of the measure, we have had from honorable members opposite a series of farcical episodes, calculated to turn the whole business of Parliament into ridicule.
– I rise to a point of order. I object most profoundly to the remark of the Treasurer that our proceedings are farcical. That is a reflection upon Parliament, upon the Chair, and the dignity of this chamber generally. It is a reflection also upon me, a participant in the deliberations of the Commonwealth Parliament. My attitude towards the bill has been a, most serious one. I ask that the Treasurer be called upon to withdraw and to apologize..
(Mr. Bayley). - If the words used by the
Treasurer are offensive to the honorable member for Batman (Mr. Brennan), I ask the Treasurer to withdraw them.
– If the words are offensive to the honorable member for Batman I have no hesitation whatever in withdrawing them. I have already indicated my opinion of the flippant way-
– I rise to a point of order. I take exception to the word “ flippant,” and I ask for its withdrawal.
The TEMPORARY CHAIRMAN.The honorable member for Darling (Mr. Blakeley) has objected to the word “ flippant “ used by the Treasurer, and I ask the. Treasurer to- withdraw it.
– I am quite at a loss to understand why these words .should be objectionable to honorable members opposite.
– Order ! The Treasurer may not discuss the matter. I ask him to withdraw the word complained of.
– If the honorable member for Darling is offended by the use of the word “ flippant,” I withdraw it. I confess myself surprised to find that his feelings are so easily ruffled. I was referring to the different attitude adopted by honorable members on this side during the whole of the debate on this bill. Honorable members on the Government side have attempted to discuss the measure on the highest possible plane. In my speech I dealt with the matter in the broadest possible way. I congratulate Government supporters on the valuable contributions they have made to the debate.
– I rise to a point of order. On a specific amendment, moved by the honorable member for Darling (Mr. Blakeley), is it competent for the Treasurer to roam over the whole of the provisions of the bill, and compliment his supporters on the contributions they made to the debate on the motion for its second reading ? I am anxious to assist the Treasurer as far as practicable. If he ceases “ stone- walling “ he may get the measure through.
– It was apparent to the Chair that when the honorable member for Darling placed his amendment before the committee he. advanced certain arguments in favour of postponing the coming into operation of the act. The Treasurer is now endeavour- ing to answer those arguments, and to show why the bill should be considered at the present time.
– I was about to connect those valuable contributions which were made by the honorable member for Swan (Mr. Gregory), the honorable member for Boothby (Mr. Duncan-Hughes), the honorable member for Macquarie (Mr. Manning), the honorable member for Perth (Mr. Mann), the honorable member for Fawkner (Mr. Maxwell)–
– I rise to a point of order. Is it competent for the Treasurer, or any other honorable member, in committee, to debate what has taken place in the House? I contend that the Treasurer is traversing the debate which took place in the House, and that he is quite out of order in doing so in committee.
The TEMPORARY CHAIRMAN.The Chair cannot uphold the point of order raised by the honorable member for Dalley.
– Well, the Chair does not know its business !
– Order ! The honorable member for Dalley is out of order in reflecting upon the Chair. I ask him to withdraw the statement that he made.
– Certainly, I withdraw any reflection upon the Chair.
– When interrupted by the’3e numerous points of order I was endeavouring to say that each of the honorable members whose names I mentioned made the point that the most urgent matter that can be discussed in Australia at the. present time is that of overseas exchange, and that one reason why this bill should be proceeded with with the utmost celerity is to ensure that that question shall be faced at the earliest possible moment, and in the most satisfactory way. For that reason the Government will not for a moment consider the amendment of the honorable member for Darling (Mr. Blakeley). The arguments advanced in opposition £o the bill did not deal with the matter of exchange. The present attitude of the Opposition is quite understandable. It has never known where it has stood in regard to the measure.
– I rise to a point of order. I regard as offensive the statement of the Treasurer that we have never known where we stood.
– The Chair cannot consider trivial points of order.
– The Opposition has been impaled upon the two horns of a dilemma. It belongs to a party which was in office when the Commonwealth Bank Bill was introduced, but it is also faced by the fact that that party has removed from its membership practically all those who were most prominently associated with the introduction of the measure. Mr. King O’Malley, who was responsible for the introduction of the Commonwealth Bank Bill, at present is not a member of the Federal Labour party. To-night an attempt was made to side-track the bill, by moving that it be referred to a select committee. That attempt failed. Now the wording of this clause has been seized upon to endeavour to postpone the coming into operation of the act for another two years. If honorable members examine what has taken place in other countries, they will find that rural credit legislation has always followed the creation of central banking systems-
– Order ! The Treasurer will not be in order in discussing that matter on this clause.
– We desire to have a central banking system in Australia at the earliest possible moment. We want to have it so strong that it will be able to stand behind all the financial institutions which, in the past, have financed so many men on the land, and made it possible for their products to be marketed. We recognize that Australia has reached the stage when it is imperative to grant increased facilities in relation to finance. We have come to a time when our primary products, which comprise probably 97 per cent, of our total exports, must be financed in such a way as to permit of the producer receiving, as soon as the product is shipped or put in store, a considerable portion of the proceeds of those products, even though they have not been sold. A central banking system, such as the bill will bring into being, is already too long delayed. The honorable member for Batman (Mr. Brennan) spoke of theArgentine
– I rise to a point of order. Is the Treasurer in order in replying to statements made by the honorable member for Batman during tho second-reading debate? We are in committee, and at this stage we have no- Cognizance of proceedings in the House. Tho Treasurer had ample opportunity during the second-reading debate to reply to the honorable member for Batman, but he failed to do so before his leader applied the “gag.” As the Government deprived us of an opportunity of more fully debating the measure on the second reading, the Treasure f cannot, in committee, reply to arguments advanced at an earlier stage.
The TEMPOS- AllY CHAIRMAN”. - The Chair is satisfied that the Treasurer has advanced only such arguments as he was justified in using as a member of the committee.
– I reluctantly move - That the ruling of the Temporary Chairman of Committees, that the Treasurer is in order in replying to statements made by the honorable member for Batman during the second-reading stage of the Commonwealth Bank Bill be dissented from.
That the ruling of the Temporary Chairman of Committees, that the Treasurer is in order in replying to statements made by the honorable member for Batman during the second-reading stage of the Commonwealth Bank Bill be dissented from.
– The honorable member’s motion cannot be accepted in that form. The Chair gave no ruling such as the motion contains. My ruling was that the Treasurer was in order in advancing such arguments as he thought fit as to why the amendment moved by the honorable member for Darling should not be agreed to.
– It is well to have your ruling made quite clear, sir. If honorable members will ponder for a moment they will realize the far-reaching effect of it. The Treasurer mentioned the name of the honorable member for Batman and an argument used by him during the second-reading debate, and I have taken the point of order that the Treasurer was not in order in replying in committee to arguments advanced by the honorable member for Batman at an earlier stage of the bill. Your ruling, sir, if allowed to stand, will strike at the whole principle of committee discussion.
– I rise to a point of order. You, sir, having ruled that you cannot accept the motion of dissent as phrased by the honorable member for Dalley (Mr. Mahony), there is nothing before the Chair upon which the honorable member can continue his remarks.
The TEMPORARY CHAIRMAN.The honorable member for Dalley had submitted his motion of dissent, and the Chair had informed him that it could not be accepted in that form, whereupon the honorable member for Dalley again rose to order, and when the honorable member for Macquarie rose, the Chair was waiting for the honorable member for Dalley to state his- point of order.
– He had not reached it.
– It is all very well for the honorable member for Fawkner to sit in his place and make supercilious remarks upon this important question.
– Order ! The honorable member for Dalley rose to order, and he must address himself to the point of order.
– Then I hope that the honorable member for Fawkner will pay respect to the Chair. I took the point that the Treasurer, or any other honorable member was not in order in replying, in committee, to arguments which had been advanced by honorable members (.luring the second-reading debate ou the measure in the House. If that is allowed, the committee stages of a bill will become a farce. The House goes into committee for the purpose of dealing with a measure in detail. The second-reading stage is for tho purpose of discussing the general principles and the broad outlines of a bill.
– Order! The honorable member for Dalley is going rather beyond his rights in discussing the point of order in that way. I am waiting for him to state his point, of order, and I expect him to do so as briefly sis possible.
– Very well, Mr. Bayley. 1 take the point that the Treasurer was out of order in quoting in committee remarks made by the honorable member for Batman during the second-reading debate of the bill.
The TEMPORARY CHAIRMAN.I cannot uphold the point of order. Clause 2, which is before the committee, reads -
This act shall commence on a date to bo fixed by proclamation. to which the honorable member for Darling has moved an amendment to leave out the words “a date to be fixed by proclamation,” with a view to insert in lien thereof the words “ 1st January, 1927.” Members of the committee must be aware that the discussion on such a clause must, of necessity, be very general. I permitted the honorable member for Darling to discuss the clause in its widest possible sense, and in fairness, I must extend to every other member the same privilege.
– Two wrongs do not make a right.
The TEMPORARY CHAIRMAN I do not consider that I was wrong in permitting the honorable member for Darling to argue his case in general terms, and I propose to grant the same privilege to the honorable the Treasurer. Therefore I cannot uphold the point of order raised by the honorable member for Dalley.
– Then I shall move dissent from your ruling.
The TEMPORARY CHAIRMAN Will the honorable member put his motion in writing?
– I must ask you, sir, to get one of your clerks to write it out for me, because I am suffering from, rheumatism. You have ruled that the Treasurer was in order in quoting and in replying in committee to certain remarks made by the honorable member for Batman during the second-reading debate of this bill. I submit that it is not competent for any honorable member to do that. If it were permitted, we should simply have, in committee, a repetition of second-reading speeches. This course is never allowed.
The TEMPORARY CHAIRMAN.Order!
– In committee honorable members arc expected to confine their remarks to the particular clause under discussion.
The TEMPORARY CHAIRMAN.Order ! I have already stated that in the opinion of the Chair the Treasurer was within his rights in placing those facts before the committee, and that I cannot uphold the point of order.
– Then I move -
That the ruling of the Temporary Chairman of Committees, “ That the Treasurer is in order in covering in committee any ground which he thinks fit in reply to statements made by the honorable member for Darling,” be dissented from.
Question - That the ruling of the Temporary Chairman (Mr. Bayley) be dissented from - put. The committee divided.
Majority . . . . 9
Question so resolved in the negative.
– I do not feel inclined to allow the statement of the Treasurer, in characterizing the amendment by the honorable member for Darling (Mr. Blakeley) as flippant, to pass without comment.
The TEMPORARY CHAIRMAN.The honorable member may not refer to that statement, since it has been withdrawn.
– The honorable member for Darling submitted the amendment because he thought it was right that the bill should not become law until the people had had an opportunity to express their opinion concerning it. The Treasurer (Dr. Earle Page) and the Minister for Works and Railways (Mr. Stewart), when they “stumped” the country in the interests of the alleged Country party, promised that provision would be made for rural credits in order to help the men on the land. ‘ For that reason I regard the amendment as vital. If it is carried, and the measure is not to be put into operation until 1927, it will never see the light of day. The Treasurer knows that it is a mis-statement of the position to say that the amendment is not a sincere one. He would not dare to face his electors and ask them to endorse a bill such as the one before us, for it constitutes a direct breach, of the election pledges of the Country party. The honorable member for Darling has treated the subject in all seriousness. In common with other honorable members on this side of the chamber he has the interests of the people at heart, and I strongly resent the imputation that has been made.
.- I also support the amendment. The bill is not an urgent one, and the amendment is reasonable. The trend of the debate shows that the Opposition has treated the bill seriously. Apparently no additional power is proposed to be given to the hank by the bill, but the institution is to be placed in the hands of its erstwhile opponents, since the very gentlemen who are to comprise the board of directors were, in all probability, opposed to the establishment of the Commonwealth Bank. The honorable member for Darling (Mr. Blakeley) has made a good suggestion. The Government surely have no fear about permitting the people to express their opinion on th© bill, and the people should be given an opportunity to say whether they think that it will really be in the beet interests of the country to pass it. The second -reading debate did not indicate that it possessed such virtues that it should be passed immediately. On the other hand, it was shown that it had little, if any, merit. One great objection I have to it is that it will interfere with the management of the notes issue. That is a strong reason for giving tho people an opportunity to declare whether they favour or object to it. The Treasurer said that very few members of the Labour party who were in this Parliament when the original bill was introduced are still here, but, although the personnel of the parliamentary Labour party may have changed, its principles are still the same.
– The honorable member must address himself to the amendment.
– My remark was made in reply to one reason advanced by the Treasurer for not accepting the amendment. He said that the only two members of the Government which introduced the original Commonwealth Bank Bill who are still members of the Federal Parliament are the right honorable member for North Sydney (Mr. Hughes) and Senator Pearce. Those .two gentlemen have departed as far from the principles which .they originally advocated as this bill departs from the basic principles of the Commonwealth Bank. In all these .circumstances the people should be consulted. The nature of the debate, and the limited number of Government supporters who spoke, suggests that some secret motive was responsible for their comparative silence. If that is not so, the Government should have agreed to a previous amendment to submit the bill to a committee of financial experts. That it did not do so suggests to me that it is afraid that something may be discovered which will not be to its credit. If this amendment is negatived it will show that the Government is afraid to trust the people. Honorable members of the party to which I belong are sometimes accused of being caucus ridden, but the experience we have had in connexion with this bill proves that honorable members on the ministerial side of th6 House are governed by the caucus. Even the honorable member for Fremantle (Mr. Watson), who was returned as an Independent, supported the Prime Minister in his attempt to bludgeon the bill through.
– He did not vote for the “gag “inthefirst instance.
– I am sorry if I. have done him an injustice. Ho voted for the second reading of the bill, and did not give us any reason for so doing. I do not condemn him for not doing so. I call attention to it simply in proof of my statement that there is a remarkable unanimity among the Government supporters. No justification has been given for rushing the measure through. It was reprehensible for the Prime Minister to move the “gag” when the honorable member for Reid (Mr. Coleman), a young member of the House, rose to speak. That honorable member might have given us some very good reasons for opposing or supporting the Bill, and, in any case, it is likely that he would have given us something original. The Prime Minister had decided, however, that the axe must fall, and fall it did. I hope that I shall not be accused of wasting time by speaking in this manner, for I feel that momentous issues are before us. I did not speak in the secondreading debate, for my ideas on banking are quite different from those of a number of honorable members. When the time comes I shall do my best to -nationalize finance in the interests of the community. I bad no desire to make an academic speech about banking, the incidence of the notes issue, , or the question of the gold standard. I am quite content to accept the facts as I find them.
– The honorable member is not now addressing himself to theamendment.
– I contend, sir, that if the consideration of the bill is postponed, the people will be given an opportunity to consider the methods of finance which i advocate.
Motion (by Mr. Bruce) put -
That the question be now put.
The committee divided.
Majority . . . . 8
Question soresolved in the affirmative.
Question - That the words proposed to be omitted stand part of the clause (Mr. Blakeley’s amendment) - put. The committee divided.
Majority . … . 8
Question so resolved in the affirmative.
Clause agreed to.
Clause 3 agreed to.
Procedure in Committee.
Motion (by Mr. Bruce) proposed - That the House do now adjourn.
– I desire to direct a question to you, Mr. Speaker, for the purpose of eliciting information for the guidance of myself and of honorable members generally. I desire to know whether it is competent for an honorable member during the committee stage of a bill to refer to what took place in the House during the secondreading stage, and whether it is competent for an honorable member, at the committee stage, to quote what an honorable member said during the second-reading debate ?
Mr. SPEAKER (Rt. Hon. W. A. Watt). I think that honorable members - particularly those who are as familiar with parliamentary practice as is the honorable member himseJf- know full well that the House has no cognizance of what takes place in committee, unless it is officially reported. It is not the custom to ask the Speaker to interpret the acts of the Chairman or other presiding officer, in committee ; and it is certainly not the practice to give opinions off-hand on such questions as the’ honorable member has raised.
Question resolved in the affirmative.
Houseadjourned 11.2. p.m.
Cite as: Australia, House of Representatives, Debates, 9 July 1924, viewed 22 October 2017, <http://historichansard.net/hofreps/1924/19240709_reps_9_107/>.