House of Representatives
20 March 1947

18th Parliament · 1st Session

Mr. Speaker (Hon. J. S.Rosevear) took the chair at 10.30 a.m., and read prayers.

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– Will the Prime Minister state whether it is correct, as reported in the press, that a formula for the settlement of the Sydney waterfront dispute has been evolved? Will he confirm or deny reports that one of the terms of settlement is the acceptance of the union’s proposal, rejected last week, for the admittance of 500 additional men to the ranks of the union, and their registration by the Stevedoring Commission? Will the Prime Minister make a full statement on this important subject?


– The Minister for Supply and Shipping and I have discussed with all the parties concerned the possibility of bringing the dispute to an end. I have been informed by Senator Ashley and representatives of the federation that they are now prepared to agree to admit 500 additional men into the industry. This proposal was discussed two months ago, when the suggestion was made that 500 men, or thereabouts, be admitted to dispose of theaccumulation of cargo waiting to be handled. At that time, however, the proposal was rejected by the federation. I understand that, quite recently, the federation has agreed to accept the proposal then made, a proposal that, if it had been accepted at the beginning, would have prevented the present difficulties from arising. It is recognized that 500 additional men cannot be brought into the industry immediately and, I understand that the chairman of the Stevedoring Industry Commission, Mr. Morrison, has insisted that overtime be worked for a time until the position improves. A suggestion has been made and is now, I understand, being considered that the members of the federation should work overtime until sufficient new members - said to be 500 - are available to carry out the work of the port without being worked overtime.

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– I address a question to you, Mr. Speaker, in relation to Standing Order 262b-a (a), which reads -

  1. After any question hag been proposed, either in the House or in any committee of the whole, a motion may he made by any member, rising in his place, and without notice, and whether any other member is addressing the Chair or not, “ That the question be now put”, and the motion shall be put forthwith and decided without amendment or debate.

I raise this question now in the interests of the parliamentary institution. My observations since I have been in this chamber show that the Prime Minister (Mr. Chifley) having addressed the House has developed the habit of moving “That the question be now put” before resuming his seat. My reading of the Standing Order is that the member who makes that motion mustrise in his place, and that regardless of whether another member is speaking, the question shall he put forthwith. Obviously, a Minister or a member who is already on his feet addressing the House cannot rise in his place to submit such a motion. If this practicebe continued, it could easily happen that when there is a small attendance of honorable members in this chamber a member could make a vicious and violent attack on another honorable member and then, while still addressing the chamber, move “ That the question be now put “ in which event members would enter the chamber and vote on party lines. The Standing Order gives protection to honorable members in that no honorable member present in the chamber would rise in his place and submit such a motion if he were attacked. He would allow the debate to proceed and later, would reply to the attack. I submit that any honorable member who wishes to move the closure must rise in his place to do so, and that therefore, he may not move the closure if he is already on his feet addressing the House.

Mr Edmonds:

– I rise to order.

Mr McEwen:

– The honorable member cannot take a point of order on a point r>f order.


– The Chair will decide that matter.

Mr Edmonds:

– The honorable member for Reid (Mr. Lang) has not taken a point of order, nor did he ask leave of the House to make a statement. He merely said that he was addressing a question to you, Mr. Speaker. He has not asked a question. Instead he has made a rather -lengthy speech.


– If the point of order were pressed, I should have to uphold it. Instead of raising this matter in the form of a question, it would have been better bad the honorable member for Reid raised it in another way; but as it is an important subject, ‘and as the honorable member has proceeded so far, it is best that it should be settled forthwith.. The honorable member for Reid has certainly introduced debate into his question, and to that degree his remarks have been out of order. However, in the interests of honorable members generally, I shall allow him to proceed.


– I am sorry if my interest in this matter led me to go further than T ought to have gone. I ask for guidance from you, Mr. Speaker, as to the meaning of the Standing Order which I have quoted, and I submit that no member, having made a speech or having expressed any words .at all while on his feet, can while still standing, move “ That the question be now put “. I appreciate that had a point of order been raised I could not have proceeded, but I did not wish to raise this matter suddenly. Without imposing further on the time of the House, I ask if you will consider this matter and decide whether a honorable member making a speech can move the closure before he resumes his seat.


– The matter raised by the honorable member for Reid is of considerable importance and has exercised my mind at various times. I have ascertained that it has been .the practice throughout the history of the Commonwealth Parliament to permit a member who is addressing the House to move the closure. Standing Order 262b was taken from the Standing Orders of the House of Commons, where a member who is speaking is permitted to move the closure. In his Parliamentary Practice, Tenth Edition, at page 212. May says -

Closure may be moved, as the conclusion of a speech, or whilst a member “is addressing the House, and intercepts any motion which it was his intention to move. The intervention of the Chair regarding closure is restricted to occasions when the motion is made in abuse of the rules of the House, or infringes the rights of the minority.

If the Prime Minister had given reasons for moving the closure he would have abused the rules of the House. Standing Order 262b-a (a), concludes by providing that the motion shall be put forthwith and decided without amendment or debate. The Prime Minister did not debate the closure. He had concluded his speech on a matter that was before the House, and then simply moved “ That the question be now put which, as I have pointed out, is in accordance with the practice followed throughout the history of the Commonwealth Parliament and follows the procedure adopted in the House of Commons.

Mr Beale:

– Is it identical in terms with the English procedure?


– Yes. In any case, it is laid down that whore our Standing Orders are silent we must follow the precedent of the House of Commons.

Mr Lang:

– This Standing Order is not silent.


– I am not questioning that. As I said previously, Standing Order 262b-a (o) was taken from the Standing Orders of the House of Commons and, as is stated in May’s

Parliamentary Practice, a speaker addressing the House may finally move “ That the question be now put “ ; but he must not debate the merits as to whether the question should or should not be put. That is guarded against by the Standing Order. I believe that the whole of our Standing Orders need revising, I shall look into the point raised by the honorable member for Reid, and if I conclude that the procedure which has been followed throughout the history of .the Commonwealth Parliament should be departed from, I shall have no hesitation in doing so.

Mr Harrison:

– I rise to order. In your observations with regard to the reasons why you permitted -the Prime Minister to move the closure yesterday, Mr. Speaker, you said that if the right honorable gentleman had debated the question he would have abused the rules of the House.


– I said that if the right honorable gentleman had debated why the question should be put, he would have abused the rules of the House.

Mr Harrison:

– That is the point I am making. If you, sir, had listened closely yesterday to the Prime Minister, you would have heard him say that as similar views have been expressed in this House on many occasions, I move - “ That the question be now put Thus, he debated the matter prior to submitting his motion. That is why the honorable member for Reid has raised a point of order.


– If the House considers that ite established procedure in this matter should be changed, it is at liberty to do so.

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– I ask the Minister representing the Minister for Trade and Customs whether the Government has recently given consideration to the need for the continuance of sugar rationing? Can the Minister say whether the need for the rationing of sugar still exists, and whether the rationing of many commodities other than sugar will soon be lifted?

Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– I shall bring the honorable member’s question to the notice of the Minister for Trade and Customs.

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Shortage of Foodstuffs in Darwin.


– In the absence of the honorable member for the Northern Territory, I ask the Minister for the Interior whether he is aware that the Administrator of the Northern Territory has announced that Darwin is on the verge of a grave food crisis, and that supplies of tea, sugar, flour and general groceries are nearly exhausted? If that be so, what action does the Minister intend to take to ensure that emergency supplies shall reach Darwin before the point of actual starvation is reached?

Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– I am not aware that the Administrator of the Northern Territory has expressed concern regarding food supplies at Darwin. I was in contact with him yesterday, and when I asked him if it were necessary to provide aircraft to carry emergency food supplies to Darwin he said that sufficient food was on hand, and that he was watching the position closely. He explained that with the settlement of the Commonwealth Railways dispute he hoped to be able to maintain supplies. The only matter causing him concern at the moment was supplies of flour, because bakers had on hand supplies for only seven days. He undertook to watch the position closely, and to keep in touch with me on the subject.

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– I ask the Treasurer what financial assistance has- been provided towards the conversion of the Western Australian electricity system from 40 kilocycles to 50 kilocycles which it is proposed to commence with the erection of a new power house at Fremantle? What proportion of the total cost of this work will the Commonwealth bear? When is it expected that the erection of the new power house at Fremantle will be completed?


– The Commonwealth Government arranged for Sir Harry Brown, who is an expert on work of this type, to examine the proposal with a view to ascertaining whether the conversion was essential to industrial development in Western Australia, because the view was held that the existing 40 kilocycle system placed industries in that State at a great disadvantage. Sir Harry reported that the conversion should be made in the interests of industrial development in Western Australia. The Government of that State requested the Commonwealth to assist financially in the project. My recollection is that the work was estimated to cost £660,000, but I do not know whether that estimate embraces the cost of work directly affecting private enterprise. In view of the financial position of Western Australia, the Commonwealth agreed to make available assistance up to an amount of £300,000 for this work. Up to date no payment has been made, but the Western Australian Government is aware that that sum will be made available by the Commonwealth when the work is proceeded with. I am unable to say when the erection of the new power house at Fremantle will be completed, although when I was in Western Australia I inquired into this matter and was informed that that work would take some years. I shall endeavour to ascertain full detaile of the proposals of the Western Australian Government.

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– I have received from the Hay-growers Association of South Australia a communication stating that owing to the shortage of chaff bags many merchants in that State cannot take interstate orders. Will the Minister representing the Minister for Supply and Shipping ascertain the exact position and, if chaff bags are in short supply, take the action necessary to ensure adequate supplies in South Australia?

Minister for Defence · CORIO, VICTORIA · ALP

– The jute position is very difficult, but I shall ask the Minister for Supply and Shipping to ascertain if anything can be done to ensure adequate supplies of chaff bags for South Australia.

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– In view of the queries and doubts of wool-growers about the levy of 5 per cent, on wool, can the Minister for Commerce and Agriculture indicate why the levy was imposed ‘and whether the Government intends to reduce it?


– The advice of the Australasian Wool Realization Commission to the Government was that 5 per cent, levy was justified. On the estimates that the commission then had at its disposal, it was considered that that amount was essential to cover administrative and other charges. It was not anticipated that the price of wool would rise to the present level. I recently discussed the” levy with the chairman of the Australasian Wool Realization Commission. The commission’s operations for this financial year have not yet closed, hut it was indicated to me that it would he possible next financial year to substantially reduce the levy. It is not possible, to state the exact amount.

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– Has the Minister for Civil Aviation yet had time to consider a letter that he received from the Kempsey Aero Club, dated the 15th March, asking that training aircraft that became redundant at the cessation of hostilities be made available to it. If he has not yet done so, will he consider not only the Kempsey Aero Club but ‘also other aero clubs on the north coast? They have been dependent on the Newcastle Aero Clu’b for training aircraft and instructors, hut, because of the large amount of “ dead “ flying from and to Newcastle, the cost is prohibitive. Many former Royal Australian Air Force pilots on the north coast could if training aircraft were available, instruct members of the aero clubs and help to make the clubs prosperous.


– The letter is receiving departmental consideration. The department is anxious to help aero clubs. Assistance is provided on a system that applies throughout Australia. The wishes expressed in the letter and the views of the right honorable gentleman will be given early consideration.

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– Can the Minister for Labour and National Service say how long the present shortage of bottles for medicine, beer and other necessary commodities is likely to continue ? What are the causes of the cessation of the manufacture of bottles, and what are the results of the shortage likely to be?

Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– I am unable to say how long the present shortage of bottles will last. We hope that it will not bc very long. One cause of the shortage is the industrial disputes that have taken place in industry generally, and I understand there is also a shortage of raw materials which have to be imported.

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– According to the mayor of Reading, the recent floods in the Thames Valley in England have been the worst for 300 years, and reports indicate that flood damage throughout England has been serious. Will the Prime Minister show Australia’s practical sympathy with the people of England by making a further financial gift to that country to compensate the people for the heavy losses they have suffered, just as we gave assistance to Japan in 1923 when that country was devastated by an earthquake, and to Turkey when that country suffered a similar misfortune in 193S?


– As will be indicated in a measure to be brought before the House next week, the Government has given consideration to the financial plight of the United Kingdom. The honorable member for Balaclava asks whether further financial aid will be granted in view of recent floods in that country. I cannot promise that his request will be agreed to, but I undertake to give it consideration.

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– I ask the Minister for Labour and National Service whether war risk bonus payments are still being made to seamen on vessels around the Australian coast? Do these payments continue while the ships are in port, or are they made only while the ships are at sea ? Will he make a statement to the House indicating the rate of the war risk bonus, and inform me how long the Government expects that these payments will continue?


– I shall ask the Minister for Supply and Shipping, whose department administers the war risk bonus, to reply to the honorable member’s questions.

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Shotgun Cartridges - .310 Rifles


– Will the Minister representing the Minister for Supply and Shipping ask his colleague to examine the scandalous shortage of shotgun cartridges, in view of the tremendous increase of pests throughout Australia? Does not the ‘honorable gentleman consider that the price which is charged, Ss. 9d. for a box of 25 cartridges, is excessive? Will he explain why this ammunition is almost unprocurable? The poor quality of the cartridges is a disgrace to the manufacturers.


– I shall have pleasure in doing what the honorable member suggests.


– I understand that a number of .310 rifles are being or are about to be made available by the army authorities to the Commonwealth Disposals Commission for sale to the trade for conversion into sporting rifles. Will the Minister representing the Minister for Supply and Shipping request his colleague to have a number of these rifles set aside for purchase by primary producers, so that they may use them in their battle against such pests as emus, kangaroos and dingoes?


– I shall refer the matter to my colleague for consideration.

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International Conference


– Will the Minister for Commerce and Agriculture inform mp whether the Commonwealth Government is represented at the International Wheat Conference? If so, who is the representative, and what are his instructions?


– The Commonwealth’s representative at the International Wheat Conference in London is Mr. McCarthy, the Secretary of the Department of Commerce and Agriculture. The Government has given him instructions regarding the line of policy that he shall pursue at the Conference. lt is not politic nor is it the practice of the Government to disclose the exact instructions prior to the conclusion of the negotiations.

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Radio Australia - SHORT “Wave Service.


– Will the Minister for Information make available to honorable members the text of broadcasts from the Government’s short wave radio station, Radio Australia, which broadcasts to the world ?

Minister for Immigration · MELBOURNE, VICTORIA · ALP

– The scripts used in broadcasts by Radio Australia, which, by the way, is a very well conducted station and any opinion contrary to mine in this matter would naturally be wrong, have been available in the Parliamentary Library for some time. There is no reason why an honorable member should not see any of the scripts that he desires to read. If the honorable member for Parramatta will name any particular script that he would like to peruse, I shall ensure that he obtains it.

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Registration of Private Hospitals


– In view of the fad that many people needing hospital attention have to accept accommodation in private hospitals that have not been registered under the Hospital Benefits Act, will the Minister representing the Minister for Social Services endeavour to bring those private hospitals under the provisions of the Act or take other action to ensure that such people may secure the benefits provided by the Act?


– Yes, I will discuss this matter with the Minister for Social Services. We have already had one discussion regarding the payment of benefits to patients who, through no fault of their own, must undergo treatment at unregistered hospitals. The Minister is now considering this matter, but I shall again discuss with him whether something can be done to induce such hospitals to register under the Act.

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Adjournment Motions and Questions


– The Standing Orders provide that this House may debate a definite matter of urgent public importance for a continuous period of two hours. That provision can be abrogated only by a vote of the House. Also, it has been customary for members to have the privilege of asking questions for a period of one hour at the beginning of each day’s sitting. That privilege, of course, can be reduced or withheld by the Prime Minister. In view of the fact that the Standing Orders have beeen framed in order to give honorable members an opportunity to bring before the House for full discussion definite matters of urgent public importance, such as that which was raised yesterday by the Leader of the Opposition, is it the intention of the Prime Minister in future to use the “gag” as he did yesterday, again in the debate on a motion submitted by the right honorable member for Cowper regarding food for Britain, and in the debate on a motion submitted by the honorable member for Reid, by virtue of the fact that he has the support of 43 members as against 29 members of the Opposition ?


– All matters relating to the interpretation of the Standing: Orders should be referred to Mr. Speaker. The honorable member was completely inaccurate in his statements on the* points which he raised. He implied that there had been some arrangement to pro- vide an hour each day for questions.- There never has been such an arrange- - ment. The practice, which I havefollowed, has been to provide an hour for” questions on the first day of sitting Ineach week, diminishing to half an hour on the last sitting day of the week. It is not true to say that the debate on the motion by the honorable member for Reid was “ gagged “. f was not in the House at the time, but I understand that the honorable member for Martin secured the adjournment of the debate. The honorable member also asked whether I intended to disclose whether the “gag” would be used in future. I do not propose to disclose my intentions except by saying that there are times when matters of an obviously trivial nature, or matters which have been previously discussed at length, obstruct the passage of legislation in this

House, and at such times it is proper that debate should be curtailed. In such circumstances in future, I shall do so.

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Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– I ask for leave to make a statement on the case of Charles Cousens.

Opposition Members. - No.

Leave not granted.


Minister for the Army · Adelaide · ALP

by leave - On the 18th March, the honorable member for Lang (Mr. Mulcahy) referred to the case of Charles Cousens, and I stated that with the permission of the House, I would make a statement on the case to-day. The matter had also been raised previously by the honorable member for Warringah ((Mr. Spender).

In consequence of his broadcasting activities while a prisoner of war in Japanese hands, Major Cousens was brought back to Australia under arrest in November, 1945. After consultations between legal and military authorities, it was decided that it would be more appropriate to proceed against Major Cousens in a civil court. Accordingly, on the 20th August, 1946, Major Cousens appeared at the Central Police Court, Sydney, to answer the information which had been laid against him for treason committed on land beyond the seas. At the conclusion of the hearing, the magistrate ruled that a prima facie case of treason had been established, and Major Cousens was committed for trial. The Attorney-General in New SouthWales, within whose jurisdiction the matter then lay, decided not to file an indictment. He did not disclose the reasons for this decision, which, whilst leaving open the question of the guilt or innocence of Major Cousens, precluded any further action being taken against him in a civil court.

In view of the impassé which had been brought about by the decision of the Attorney-General in New South Wales, a conference assembled at Canberra in December, 1946, under the chairmanship of the Acting Solicitor-General for the Commonwealth, to reconsider the whole matter. The conference was attended by the Acting Crown Solicitor, the counsel who hadbeen briefed by the Commonwealth for the civil proceedings, and senior officers, both military and civil, of my department. The conference had before it the evidence of exhibits and documents connected with the magisterial inquiry, including some 50 scripts of Japanese propaganda, being news commentaries prepared by Major Cousens and broadcast by Japanese announcers to both America and Australia. These commentaries are themselves enemy propaganda of the most insidious type, resembling closely that employed by the late William Joyce from stations in Germany. The commentaries have been read and re-read by those responsible for the prosecution on behalf of the Commonwealth, and all have failed to find any message or other information of value to the Allies. It is my opinion that any reasonable man, no matter how vivid his imagination, upon reading the commentaries would agree with that conclusion. The authenticity of these documents and exhibits was not disputed. Major Cousens himself gave evidence before the magistrate, and admitted their authenticity.

The evidence showed that an intelligence officer at Head-quarters, Eastern Command, had stated that in August, 1942, he heard Major Cousens say in a broadcast from Tokio that Australia should sever its connexion with the British Empire, sue Japan for a separate peace, and take its position as one of the component powers in the Greater East Asia Co-prosperity Sphere. This officer also stated that approximately seven days later he heard Major Cousens say in another broadcast that Mr. Churchill had always been a war-monger, and that his war leadership would be disastrous to the British Empire; and that President Roosevelt was a Jew-financed and masonically inspired leader who would bring about the downfall of the United States of America. Among the exhibits are the two commentaries personally broadcast by Major Cousens. Next we have a statement by Major Cousens made under interrogation and in the presence of two officers of the American Intelligence Service at Yokohama on the 25th

October, 1945. In this statement Major Cousens admits to the tutoring of Japanese radio announcers, who, he says, were selected by him and coached because of their ability and because he wanted his commentaries taken seriously. This statement is proved by an exhibit containing the interrogation of Major Cousens in Japan.

The next exhibit contains an account of th© system used at Radio Tokio for the preparation and checking of commentaries, in which Major Cousens took an active part. And finally, there is a photograph amongst the exhibits of the English-speaking section of Radio Tokio taken on the occasion of the departure for the front of certain Japanese members of the staff. In this photograph Major Cousens appears in civilian clothes as a member of Radio Tokio staff, and apparently in the best of health.

After full consideration, the conference recommended that, in view of the time that had elapsed, trial by court-martial should not be proceeded with, but found that the documents showed clearly that Major Cousens was unfit to hold a commission. It was recommended to me, and I approved, that Major Cousens be called upon in the following terms to show cause why his commission should not be cancelled by the Governor-General in accordance with the provisions of section 16 of the Defence Act: -

In view of the evidence, exhibits, and documents marked for identification in the magisterial inquiry upon which you were committed for trial on a charge of treason, you are hereby called upon to show cause why your commission should not be cancelled.

In due course a reply was received from Major Cousens which traversed at great length various aspects of the case, but which did not, in my opinion or in that of the Military Board, disclose anything which would justify a conclusion contrary to that reached at the magisterial inquiry and at the Canberra conference. The Military Board considered that Major Cousens was not fitted to retain a commission and that it should therefore be cancelled. This recommendation was approved by me for submission to the Governor-General in Council, who ratified the cancellation of this officer’s commission.

It was open to Major Cousens or his legal advisers to have sought trial by court-martial to clear him of the very serious allegation which had been made against him, but neither did so.

Major Cousens claimed that he was acting under duress when he committed the various treasonable acts which have been described. But in this regard, it should be remembered that -

  1. From August, 1942, to March, 1943, he was housed at the Dai Ichi Hotel, one of the best in Tokio and conducted on European lines, and thereafter at the Sanno Hotel, another first-class establishment.
  2. He was provided with civilian clothing made to measure.
  3. He visited various shops in Tokyo and made purchases of books on economics and other subjects.
  4. He admits to having been entertained on at least one occasion in a private Japanese home where he agrees he had a “ jolly good party.”
  5. Evidence was given by the witness Henshaw relating to contacts available to Cousens at .Radio Tokio and elsewhere through whom he could obtain food and cigarettes in considerable quantities. (6.) He was allowed to dine at the Imperial Hotel, the best and most exclusive hotel in the city, without a guard, and on occasions apparently had meals at various cafes with Margaret Kato, for whose fiance he purchased an engagement ring, Japanese being -forbidden to buy jewellery in war-time.
  6. At various times, he returned to the radio station when he was not on duty in order to enjoy the company of the Japanese employees. These people thought sufficiently well of him to ask him to be included in the group photograph to which I have already referred. ,in conclusion, I have to advise honorable members that Cousens was notified in writing of the cancellation of his commission on the 22nd January, 1947, and his demobilization was completed on the 23rd January, 1947.

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Second Reading

Debate resumed from the 13th March (vide page 593), on motion by Mr. Chifley -

That the bill be now read a second time.

Leader of the Opposition and Leader of the Liberal party of Australia · Kooyong

– I do not propose to speak for more than a few minutes on this measure, partly because it would not seem to be, in any event, useful to engage in a long and detailed examination of the provisions of the agreement, and partly by reason of the fact that my throat will hardly sustain a long speech this morning. However, it is, perhaps, desirable to state one or two broad principles. This is not a party matter. It is a. matter of international significance, and there may be many different views about it in many minds. My own mind runs substantially along the same channel as did that of the Prime Minister when he was delivering his second-reading speech. The experience of the world between the two wars showed very clearly and, indeed, very bitterly, that violent fluctuations of exchange rates can be extraordinarily damaging to world trade, and that close controls over exchange, such as those practised by Germany between the two wars, can themselves do immeasurable harm to international trade. If there is one thing about which we all ought to agree it is that one of the tasks of the world, particularly during the next few years, is to restore the volume of international business, and to maintain its continuity and steadiness, because this will render policies of full employment in each country more practicable than would be otherwise possible. Our experience between the two wars demonstrated the desirability of some genuine international experiment in the stabilization of exchanges, and in the maintenance of some constancy and reason in the control of currencies used in international trade.

The experience gained during the recent war has taught us another thing - that there are at least some nations which havebeen brought almost to the verge of ruin and which have problems of diffi cult reconstruction that they can hardly undertake to solve out of their own resources. If those nations are to he assisted, we must endeavour to set up an international bank of some kind which, backed by the nations of the world, can provide assistance for those nations faced with this tremendous problem of reconstruction.

Those few observations contain in themselves the primary justification for the creation of an international monetary fund, and for the creation of an international bank. It is quite true that, so much having been stated - so much having been agreed upon even -an immense argument arises over details. I am not at all convinced that argument about those details can be particularly useful at present. Forty nations have gone into this proposal. Australia is among the few which are still suspending judgment. We may criticize individual proposals in the agreement, but we will not change those proposals. We may engage in an academic argument about articles V. or X., or about clause 17, but it will not get us anywhere. Broadly speaking, we must be either in favour of this experiment, or we must reject an experiment of this kind altogether. I am not prepared to reject an experiment of this kind. I think, on the contrary, that it must be made, and we all hope that it will succeed.

A few particular points have been made upon which I propose to offer comment. It has been repeatedly said that, by associating ourselves with the Bretton Woods Agreement, we shall lose some of our national sovereignty. I beg of all honorable members to beware of cliches of that kind. Such an objection, if upheld, would mean that we would never, in the exercise of our sovereignty, make any agreement with any other country. Everytime a country enters into an international agreement it does two things: first, it exercises its own sovereignty in order to make an agreement; and secondly, it abandons, to the extent that the agreement requires its abandonment, some portion of its own sovereignty. You cannot make a contract which obliges you to do certain things and, at thetime, assert your freedom to do or not to do those things as you think proper. Therefore, this argument about sovereignty is only the old argument of isolation put in another way. If we are to live in an international world, and see great international organisms come to fruition, we must make agreements. Whether in this century or in, some future century, the time will come when the world will talk a good deal less about sovereignty, because it will have been discovered that only when every nation agrees to abate its sovereignty will it be possible to develop a real community of nations, or any international law at all.

The second argument is that the Bretton Woods Agreement involves a return to the gold standard. This, again, may be described as a cliche. Does any body who studies the proposals seriously believe that they involve a return to the gold standard? In. the course of argument, the gold standard is sometimes referred to as a fearful bogy, some terrible monster. If there is any man who, in the period between the two wars, was ‘outstanding ,as an opponent of the rigidity of the idea of the gold standard, that man was the late Lord Keynes. If any man served a great purpose in drawing people away from the notion of the gold standard towards an immensely more flexible notion of currency, it was Lord Keynes; yet that was the man who, perhaps more than any one else, can be described as the author of the Bretton Woods scheme. It would be strange, indeed, if such a man were to abandon the doctrine of a lifetime and now advocate .the restoration, of the gold standard.

Of course, the agreement refers to gold, and because there is a reference to gold, somebody lightheartedly assumes that the agreement involves a return, to the gold standard. I point out that it was of the essence of the gold standard that currency fluctuated with a country’s gold holdings, so .til at there was an expansion of currency when gold flowed into a country, and a contraction of currency when gold flowed out. That meant that the volume of gold, and not the judgment of qualified persons, was the controlling factor. Under the Bretton Woods scheme there is to be control, flexibility, and provision for reasonable fluctuation. There is provision for a close examination by the International Monetary Fund of various proposals for the changing of the exchange rate. In those circumstances, it seems to me that while the agreement recognizes, as it must, the existence of gold, just as it recognizes the existence of dollars, it does, at the same time, provide for that flexibility which the gold standard originally excluded.

The third thing that is said - and this is the last matter that I shall mention - is that if we become associated with this scheme, we shall hand over the control of our own domestic policies to the management of this fund. As the Prime Minister pointed out in his second-reading speech, the agreement itself protects us against any such result. Paragraph a of section 5 of Article IV., which is the article dealing with the par value of currency, provides -

A member shall not propose a change in the par value of its currency except to correct a fundamental disequilibrium.

Bight through the agreement, what is aimed at is some equilibrium in the trade position of the nation. Paragraph / of section 5 of Article IV. provides -

The fund shall concur in a proposed change which is within the terms of (c) (ii) or (c) (iii) above if it is satisfied that the change is necessary to correct a fundamental disequilibrium. In particular, provided it is so satisfied, it shall not object to a proposed change because of the domestic, social or political policies of the member proposing the change.

It would be useless to enter into an agreement of this kind on the assumption that there will be a dishonest misuse of these authorities. This organization represents the civilized governments of the world, and it is not to be assumed that the representatives of those governments will approach dishonestly the task of considering whether a certain change ought to be concurred in. It is a very simple question of fact to discover whether there is disequilibrium of the kind referred to. If disequilibrium exists, the agreement makes it clear that that disequilibrium may be corrected by an alteration of the rate, and that the domestic policy - the internal forces, the political schemes - of the member proposing the change are not to be used as any ground of objection to the proposal. That leaves to us a high degree of control over our own affairs. But if to some extent, we shall not be so free to act as we would be if we were the only country in the world, the best reason for that is that we are not the only country in the world. Australia is one of a community of nations. Any nation living in a world of nations cannot expect to be able to go of its own untrammelled course, seeking some kind of security from the rest of the world and contributing nothing to it. In broad outlines, it is sensible that we- should join this scheme. Whether it will work we do not know; whether it will require drastic amendment only experience can tell: but that we should make ourselves associated with other nations in this experiment I have not the slightest doubt.


.- This bill is a betrayal of Australia and also of the Labour party’s platform. That platform provides that the credit of the nation shall be controlled by the Commonwealth Bank, but this bill hands that control over to an international organization - an international financial cartel, a financial oligarchy. Under the platform of the Labour party, Australia must maintain, at all costs, its financial sovereignty, but under this bill that sovereignty will ‘be abandoned. And, if we abandon our financial sovereignty we shall become a vassal state. Of the two instruments, the more important is the International Monetary Fund because that body not only determines exchange rates, but it also polices the economy of every country that joins the fund. One of its auxiliaries is the International Conference on Trade and Employment, and by working together those two organizations can bring any nation to bankruptcy at their own sweet will. They can force any country to carry out the instructions of this financial oligarchy, even to the degree of forcing a lower standard of living. It can interfere with the domestic policy of any country. I listened with interest to the soft words of the Leader of the Opposition (Mr. Menzies) in which he supported the Prime Minister (Mr. Chifley) but I remind both right honorable gentlemen that the managing director of the International Monetary Fund is Mr. Camille Gutt, who, on the 28th December last, when addressing a press conference at

Washington announced that this fund would begin business on the 1st March, 1947. He told the reporters that the major consequences of the new step was not that a new international fund had been established, but that a new regime had been established. By that he meant that a new government for the whole world had been set up. Mr. Gutt said that under section 5 of Article IV., member nations had accepted certain obligations and that they could no longer change the par value of their currency without the consent of the fund. Mr. Gutt made this important statement; he said, “If you see a director of the fund going to one country or another, do not jump to the conclusion that that country’s currency is shaky. It is our job to establish contact with all 39 countries in the fund, and -to ensure that all members live up to their responsibilities.” So, when we see a director of the fund coming to Australia we will know that he is coming here to ensure that this country carries out the orders and instructions of this international money cartel. This is a cartel - soft words will not alter it; it is just as much a cartel as the Dye Trust which included Germany as well as Great Britain and the United States of America in its membership before the war. Under a cartel the world is carved up for exploitation by an international group. That is why the directors of the fund will go from country to country. The important thing for Australia to consider is, what would be the reaction of a government to the demands made by a director of the International Monetary Fund when he arrived in Australia and gave his instructions? This Government is so overpowered by internationalism that it would submit without a struggle. Sir Otto Niemeyer came to Australia on such a mission seventeen years ago. He addressed a Premiers Conference in August, 1930. This is what he said to the assembled Prime Minister and Premiers of the States of Australia -

I assume that every one in this room is in agreement that costs mus.t come down. There seems to be little escape from the conclusion that in recent years Australian standards have been pushed too high.

If this bill passes, in 1950 we can look forward to a visit from Mr. Gutt or another director of the fund. He will repeat Sir Otto Niemeyer’s orders. Let soft words go by the board now, and what will happen? Will there be another Premiers plan? Will there be another capitulation? Many Labour men fought back hard in 1930; they can still fight back to-day. They can vote against this bill. If they do not vote against it to-day it may be too late in 1950. If they fail, Australia’s financial independence is lost, and the Commonwealth Bank will become the satellite of the International Monetary Fund. We shall revert to the gold standard; we shall lose control over our own exchange ; we shall not be able to defend our industries against dumping from abroad. This bill is a repudiation of the Prime Minister’s undertaking, when, as Treasurer, in 1945, he introduced the Commonwealth Bank Bill to give effect to what? To Labour’s policy! In a memorandum circulated with that bill the right honorable gentleman explained why the Government must have the right not only to define monetary policy but also, if necessary, to instruct the Commonwealth Bank to carry it Out. He relied on the recommendation of the Royal Commission on Monetary and Banking Systems, on which he was supposed to represent Labour. That recommendation read -

The Federal Parliament is ultimately responsible for monetary policy, and the Government of the day is .the executive of the Parliament.

Once we enter this International Monetary Fund this Parliament can no longer decide financial policy; it will be decided for us by the fund. If this Parliament desires to alter our exchange rate and instructs the Cabinet, so to do, we must go cap in hand to the directors of the fund. That is to be the extent of our authority; that is our control ; that is Australia ; that is the people. We are told that we have a director to ‘represent us. There will be 39 other directors, but the Australian director will have a 2.5 per cent. vote. That will be the influence of Australia! The director from the United States of America will have a 28 per cent, vote, and the director from Great Britain will have a 13.4 per cent. vote. Should Russia join, the fund, its director will have a 12.4 per cent. vote. So, if we rolled up all the smaller nations, about which we have heard so much, the representatives of the big powers would be able to make Australia toe the line. They will be able to tell us that we must do what we are told. Those are the facts; Australia’s vote will be worthless. The fund, and not this Parliament, will control Australia.

If we stay out of the fund, we shall at least retain our independence of action. If we go into it, we must bow to the majority with the dice already loaded against us. We shall have no veto when it comes to safeguarding our own interests. The representatives on the fund from all the countries of the world will not be statesmen - I am now putting it on .the highest possible plane from our point of view - they will be financiers. They will represent the same group as that which constitutes the Bank of International Settlements. The directors of the fund, who, I repeat, will not be statesmen, but financiers, will be the successors of the directors of the Bank of International Settlements. Let me put this to the Parliament and the people of Australia; the Bank of International Settlements met in Switzerland right throughout World War I. That is the body to which, under this measure, Australia’s interests will be handed over. Right throughout the recent bloody struggle when we were fighting for Democracy, our freedom and our lives, and our best men were sacrificing everything for those purposes, the Bank of International Settlements met in Switzerland. Banker members from London and Wall-street sat around the same table as bankers from Germany, Italy and Japan. While the bloody struggle went on their motto was “ business as usual “. They had no conscience, no body to be kicked, and no soul to be damned. They were safeguarding their assets, whether their assets were in Australia, Germany, Great Britain, United States of America, Haly, Japan, or any other country. They foregathered to protect their assets. That is the kind of organization that this body will be.

The fund will also effect a return to the gold standard. The gold standard favours the creditor nations. In the soft spoken words of the Leader of the

Opposition (Mr. Menzies) the new gold standard will be different from the old gold standard. So it will; but not as he softly tried .to state the position. Under the new gold standard, the people will not be crucified, or treated so harshly, as they were under the old gold standard; the new gold standard will be softer. But the new gold standard will be more rigid than the gold standard that was discarded in 1931. These are the facts. The people are entitled to hear them ; and I hope that all honorable members will examine them before they vote on this measure. We shall not only have to pay into the fund at least 10 per cent, of our gold, to back up our note issue, but, sooner or later, we shall have to meet, all our commitments on the basis of gold. Everybody should know what that means. Once a country enters the new organization it will not be allowed to abandon the gold standard. When Great Britain, went off the gold standard in order to save its currency, that was the action of a sovereign government. Under Bretton, Woods, that is, under the arrangement embodied in this measure, a country must first obtain the sanction of the fund before it can take any such action. In times of economic stress such a procedure would be impracticable. So member countries are stripped of their only means of defence in a time of financial and economic crisis.

Britain was forced into this gold standard to get the American loan through the American Congress. Australia is not in that position. Britain expected the Dominions to keep out of the Bretton Woods Agreement. South Africa had everything to gain from a return to the gold standard, as it is the world’s greatest producer of gold. Canada yielded to pressure from the United States of America, and, if the press reported correctly yesterday afternoon, it is in trouble over repudiation, because it. cannot meet its commitments; but even Canada took the precaution of reverting to parity with the dollar, that is gold, before the fund commenced operations. Australia has nothing to gain and everything to lose by membership in the fund. Our quota for the International Monetary Fund is an initial payment of £62,500,000. In addition, we should be required to take up a similar quota of shares of the world hank if ever the world bank functioned. In the event of our overseas imports and interest payments exceeding the value of our exports, we should have to go to the fund for accommodation. We shall be permitted to buy £15,600,000 of foreign currency in the course of a single year, but that is the limit, and understand that “foreign currency “ means sterling. So, if our adverse trade balance exceeds £15,600,000 in any one year, we shall be at the mercy of the fund. If, at the same time, we joined the international trade organization and put into operation the tariff cuts cooked up for us as they will be al Geneva, we should find our imports growing to such an extent that we should be a mendicant nation. The fund could then send out a mission to Australia to inquire into our economic and financial resources. The mission would then tell us that we must live within our means, and, when it says that to us, it means that it tells us that we shall have to reduce wages, pensions, social services - our standard of living- and the whole lot will come down because these outside authorities say, “You are living beyond your means “. Professor Melville, who represented this Government at Bretton Woods, admitted in his first memorandum that this fund provides an opportunity for the criticism of our domestic policy. That is Professor Melville, the representative of this Government, and that is his report. That was precisely the purpose of the Niemeyer mission. Professor Melville admits, in paragraph 17 of his report, that Australia’s quota of £15,600,000 will not be sufficient to meet our post-war needs. So, even according to Professor Melville, we should have to go cap in hand, exactly as we did in 1930. We should have to get a majority decision. Our vote would be a miserable 2.3 per cent., not so strong as a South American republic’s.

Who would be Australia’s representative when the vote was taken? I wonder. Would it be Dr. Coombs? I do not know and perhaps the Government does not know. Would it be Professor Copland? He might be brought back to do the job as he did it in 1930. The principle on which the money cartel is operating is one of control through restrictions and quotas. That is the monopolistic practice to which this Government subscribes. By staying outside Bretton Woods we shall remain a sovereign nation. We shall retain the Commonwealth Bank a* I lie custodian of the nation’s credit. We shall keep off the gold standard. We shall be free to defend our currency by controlling our own exchange rate. We shall be free to sell our goods where we like and to whomever we like. We shall be free to enter into financial arrangements with any country we wish. We shall not have to put up with interference from the Niemeyers and the Gutts. The world needs our goods. If we keep out of the clutches of the cartel we shall soon be a creditor nation. Gold is not the basis of trade, no matter what may be said. I stated that years ago .and I repeat it. now. Gold is not the basis of trade. Our goods and services are the only real form of exchange. Why should we sign ourselves into bondage? Let us remain a nation of free men. Had this measure been introduced as a non-party bill it, would be rejected, and that would be the end of Bretton Woods so far as Australia- is concerned. The measure has been introduced only as the result of the regimentation of Government supporters who, if they placed their country above all else, and voted in accordance with Labour principles, would refuse to be associated with the bill. Let us remain a free nation. Let us remain free men and women. Let members of Parliament do their duty by the platform upon which they have been elected, and reject the bill.


.- The diatribe of the honorable member for Reid (Mr. Lang) indicates a complete lack of knowledge of the Labour platform and policy, and a monumental ignorance of the subject under discussion. This Labour renegade used the same old cliche that we have heard from him right down the years - “If Labour men are to do their duty to their country, their King, and the Empire, they will vote against the Government”. This indicates just how little reliance can be placed upon the emotional outburst of the honorable member for Reid. I repeat that obviously lie knows nothing of the subject that he has sought to discuss. He has not touched the crux of the problem, nor has he dealt in detail or in principle with the experimental endeavour that the Bretton Woods proposals represent to prevent the recurrence of many of the financial and economic ills to which the honorable member himself referred. The agreement does not embody any new principle. It is the logical development of changing thought throughout the years that have elapsed since the first world war ended. The Leader of the Opposition (Mr. Menzies) referred to the late Lord Keynes, and the large part that that gentleman played in the abandonment of the gold standard. The right honorable member said that Lord Keynes, as an economist, and one of the most liberal we have ever known, exercised a great influence upon economic thought throughout the world. That is undeniable. Keynes it was, who at an early age, when there were many devotees in this country and throughout the world of the gold standard, referred to it as a “ barbaric relic of a by-gone age “. It was he too, who, when commenting upon the Wallace Bruce report which was presented to the Lyons Government of this country, said that what Australia required was not further deflation but a measure of inflation. In the book The Australian Price Structure 1932, Lord Keynes is quoted as saying -

Above all, expand internal bank credit and stimulate capital expenditure as much as courage and prudence allow.

As I have said, Lord Keynes made a notable contribution to the development of a new economic thought - much more liberal than that to which the honorable member for Reid subscribes. In proof of that, I quote from one of the works of Lord Keynes, A Tract on MonetaryReform. He said that nowhere did con,servative principles more generally prevail than in. the realm of finance; yet, nowhere was the need for bold experiment more urgent. Later he pointed out that, there were many monetary heretics at that time, but he believed that .the urgent, haste of the heretics was infinitely preferable to the smug complacency of the bankers. Lord Keynes was one of those who developed a plan to meet the situation that confronted governments and peoples: throughout the years from the ?nd of the first .World War to the beginning of the second. .Outstanding characteristics of that period were fierce competition and exchange depreciation. There was. a constant outflow of capital ,t rom one country to another, designated variously as “ refugee “ or “.hot” money. These things disturbed exchange rates, interfered with the ordinary trade and commerce of the world, and, combined with settlements made after World War I., brought about the depression era to which the honorable member for Reid has referred. The honorable member spoke of certain visitors to this country at that time, including Sir Otto Niemeyer, and referred also to what was known as the Premiers Plan. For many years we have heard the honorable member proclaiming throughout the country that he did not sign the Premiers Plan, and was not a party to it; that by agreeing to the plan and reducing expenditure, his contemporaries had sold their country. It is necessary therefore to place on record the actions and words of that honorable gentleman when he was Premier and Treasurer of New South Wales, which show quite clearly that he was forced by the financial demands of the times to accept the principle of reduced expenditure. I do not say that the honorable member willingly subscribed to that financial plan any more than my friend, the right honorable member for Yarra (Mr. Scullin), or any of the Premiers did ; but after having been forced to .accept the plan by the financial exigencies of the time, the honorable member for Reid has devoted his energies from that day to this to an endeavour to escape the consequences of his action. For the information of the House I shall quote from a record of a meeting of the. State Premiers and the Prime Minister of the Commonwealth held in the Legislative Council Chamber, Melbourne, in May, 1931. After a lengthy discussion ,of the situation that faced the country at that time, the .conference reached the following conclusions : -

  1. The plan agreed upon is an indivisible whole, and the carrying out of any part is dependent upon the carrying out of all parts.
  2. It involves sacrifices by every member of the community, and the conference appeals to all sections of the people to recognize the position, and to accept these sacrifices as a national duty.

To the bond-holder the plan involves a reduction of interest by 22£ per cent., but it safeguards the capital of the investor.

  1. To the Government employee the plan involves a reduction which with reductions a: ready effected, represent an average of 20 per cent., but it makes his position, and future emoluments, much more secure.
  2. To the war pensioner, the plan involves a reduction of 20 per cent, (in some cases less), but it removes the danger of any sudden stoppage, and provides security for future payments. ti. To the invalid and old-age pensioner the plan involves a reduction in most cases of 12* per cent., but it removes the danger of any sudden stoppage and provides security for future payments.
  3. .To all of these a large part of -the reduction is counterbalanced by the fall in prices, and in the cost of living.

The report goes on to state how the plan would help the unemployed, and then records the following resolution, moved by Mr. :Hill and agreed to unanimously : -

The representatives of each Government present at this Conference bind themselves to give effect promptly to the whole of the resolutions agreed to at this Conference.

Then follows a statement by the then Premier of New South Wales, Mr. J. T. Lang. He said - .

I think that I am speaking for the Premiers and Ministers seated round this table when I say that we arc deeply appreciative of the splendid manner in which the Prime Minister has carried out his very onerous duties as chairman of this’ Conference. Every member of it has had to exercise a good deal of patience and I feel that the chairman has set a good example by the exercise of infinite patience and forbearance. I desire, on behalf of the members of this Conference, to move a vote of thanks, and appreciation to the Prime Minister for the ability, patience and forbearance that he has exercised as chairman of this Conference.

The fact is that the agreement was reached between the Prime Minister of the day, Mr. Scullin, and the State Premiers, and no signatures were attached to the document. . Mr. George Lawson. - But the honorable member for Reid, when Premier of New South Wales, was a party to the agreement.


– Yes; he moved a vote of congratulation and thanks to the Prime Minister of the day. Later, he asked the Parliament of New South Wales to implement the agreement. On the 28th August, 1931, according to the New South Wales Hansard, he said -

At the recent conference of Premiers held in Melbourne, which terminated on the 14th August, it was decided to adjourn the conference until the 1st September, on the understanding that in the meantime the various States would compile their budgets for the current financial year to conform with the decisions of the conference of Premiers which met in Melbourne during May and June of this year.

In the same speech, he pointed out that the reduction which he proposed in his budget, with reductions that had previously been made, would effect a net reduction of 20.05 per cent, in the adjustable expenditure of the Government of New South Wales. I have spent some time in dealing with this matter, and perhaps I should not have bothered to do so, but my purpose was to point out that the honorable member for Reid has deceived a large number of people in Australia by his subsequent repudiation of that agreement and by endeavouring to convey the impression that he had not been a party to the Premiers Plan.

I now come to the speech which he delivered to-day. He has declared that the adoption of the Bretton Woods Agreement is a betrayal of the Labour party and of Australia. The honorable gentleman, I suggest, is eminently qualified to speak of betrayal. The simple truth is that the policy of the Labour movement throughout the years is co-operation between the peoples and the governments of various countries. The very soul of the Labour movement lives in its demand for co-operation as -against the competitive element under the present system. The fundamental difference between the Labour party and the parties which form the Opposition in this House is that we seek co-operation as a means to a better way of life, and they pin their faith largely to the competitive system in the economic sphere. “The contention that the adoption of the Bretton Woods agreement will be a betrayal of the Labour movement and Australia is an empty-sounding-cry which means no more than the ‘” splurge “ that the honorable member delivered to-day.

The honorable member for Reid declared also that the credit and currency of Australia are governed by the Commonwealth Bank. That statement indicates just how little he knows of the situation, despite his experience as Treasurer of the State of New South Wales. It is true that within Australia the Commonwealth Bank may expand or contract the currency as the needs of the country dictate, but will the honorable member for Reid, or any one else, suggest that if funds are short in London or New York, the Commonwealth Bank can print notes and hand them to sellers in those cities to meet Australia’s needs for goods or services, or Australia’s indebtedness? Such a proposition would be absurd. Within the limits of Australia, the Commonwealth Bank can adopt the policy that the Government and the people desire. Beyond the confines of Australia, the Commonwealth Bank is powerless to prevent such a financial and economic depression as we experienced in the early 1930’s, or provide overseas funds that the Government may at any time require.

The honorable member for Reid stated that Great Britain had been forced to accept the Bretton Woods agreement as a condition of the American loan. It is certainly true that to the granting of this loan was attached a condition that Great Britain should become a party to the Bretton Woods Agreement. The essential element in that is that it provides for the convertibility of British currency on a multilateral basis; that is to say, English currency is convertible in any area in which those holding sterling balances may desire to purchase. Speaking in the House of Commons, the Chancellor of the Exchequer, Mr. Dalton, who introduced the bill to ratify the Bretton Woods agreement, stated that the Government of the United Kingdom was perfectly willing to become a party to the agreement, because it considered that Great Britain had vast benefits to gain from it. He pointed out that Great Britain required long-term loans for reconstruction purposes, and, what was of transcending importance, for the need to expand trade so that Great Britain might regain its former position in the world. Great Britain needs to increase the volume of its pre-war trade by from 50 per cent, to 100 per cent, if the nation is to regain its former standard of living. Only by a. vast expansion of international trade can Great Britain regain its pre-war volume of exports, before it even begins to increase that figure by from 50 per cent, to 100 per cent. Honorable members will be interested to learn that a former Chancellor of the Exchequer, Sir John Anderson, who is now a member of the Opposition in the House of Commons, warmly supported the Government’s decision that Great Britain should become a party to the Bretton Woods agreement. He pointed out that this decision was a development of the theories that had been evolved, and the bitter lessons which the peoples of the world learnt after World War I. Sir John Anderson supported the measure also because he believed that British trade was vitally dependent upon an international decision like the Bretton Woods agreement. In the Canadian House of Commons, when the Dominion’s loan to Great Britain was under consideration, the Chancellor of the Exchequer stated that the United Kingdom could be assisted in two ways, first, by the proposed loan, and, secondly, by the infinitely more preferable means of an arrangement such as the Bretton Woods agreement.

Mr Archie Cameron:

– That statement is not borne out on page 35 of the report on Bretton Woods.


– If necessary, I can produce the statement. The simple fact is that British economists had a leading role in devising this plan. Lord Keynes introduced a. scheme which he called “ Bancor “. He provided for an international unit of currency. Under his scheme, the degree of currency depreciation allowed, was less than that under the present scheme. I desire to refer to a portion of the speech of Lord Keynes in the House of Lords when the Bretton Woods agreement and the American loan were being debated. He said that he would have been better pleased with a grant in aid, but he admitted that that would have given to Britain “the best of both worlds “. He stated that never before had one government made such a big loan to another in peace time, or one on more generous terms. Lord Keynes would have preferred the loan to be free of interest, but he agreed that the interest rate and the period of redemption made it a better proposition for Great Britain than if the loan had been free of interest, and repayable by regular annual instalments. The reason is that interest shall not be paid for the first six years if Great Britain is not in a position to pay; and Great Britain will be the sole judge of its ability to pay. Lord Keynes also said -

And in the final act of Bretton Woods I believe that your representatives have been successful in maintaining the principles and objects that arc best suitable to the predicaments of this country. The plans do not wander from the international terrain, and they are consistent with widely different conceptions of domestic policy. . . They are framed to preserve equilibrium by expressly permitting various protective devices when they are required to maintain equilibrium, and by forbidding them when they arc nut so required . . . They represent the first comprehensive attempt to combine the advantages of freedom of commerce with safeguards against the disastrous consequences of a Iaissez faire system which pays no direct regard to the preservation of equilibrium and merely relies on the eventual working out of blind’ forces.

Here is an attempt to use what we have learnt from modern experience and modern analysis, not to defeat but to implement the wisdom of Adam Smith.

At a later stage Lord Keynes said -

It is not easy to have patience with those who pretend that some of us, who were very early in the field to attack and denounce the false premises and false conclusions of unrestricted laissez faire and its particular manifestations in the former gold standard and other currency and commercial doctrines which mistake private licence for public liberty, are now spending their later years in the service of the State to walk backwards and resurrect and re-erect the idols which they had played some part in throwing out of the market place.

Similarly, Lord Pethick-Lawrence, UnderSecretary for India, when introducing the bill, said -

In the middle ‘twenties, when the gold standard was being restored by the then Chancellor of the Exchequer, Mr. Winston Churchill, I was one of a very small band of members of the other House who opposed that return. I have never changed my point of view; and if in fact this was a return to the gold standard as we understood it in days gone by, I for my part would not be standing here to defend it. What is true of myself is, of course, equally true of that great economist who has been one of the negotiators, Lord Keynes. … I venture to suggest that under the Bretton Woods Agreement there is -considerable flexibility. … I cannot, myself, see how, short of throwing over the whole basis of exchange stability, you could have much greater flexibility than that.

Experience over the years Las shown that the whole world suffers and nobody gains as the result of competitive exchange depreciation. Depreciation of currency, which the honorable member described as a protective device, means that we obtain less for our goods in terms of the currency of other countries and that we must pay more for the services of our overseas debts. Consequently, whilst we subsidize our export industries we do so at the expense of the whole community, first, because of the higher costs of imported goods, and secondly, because of higher taxes which must be levied to pay for the currency which we must purchase overseas. If that be the honorable member’s idea of protecting Australia’s currency, he is lacking in knowledge of the situation and is, in fact, reactionary in his approach of the problem.

If the depression conditions of the period from 1929 to 1931 should again return to this country, this new experiment that we have commenced will have failed. The experiment is designed to prevent the intense nationalism which gives rise to the keen, but stupid, desire to protect the. nation against the effects of events in other countries. As soon as any nation erects a barrier against another country, a corresponding barrier is erected. Suppose that we could gain some benefit from an exchange depreciation. As soon as we had created a situation in which our goods sold very cheaply in terms of other currency, we should have the beginning of a competitive currency race. Previously, when Australia was forced by competition to depreciate its currency, Australian goods sold more cheaply overseas, but other nations which had similar products to sell had to depreciate their currencies to meet Australia’s competition. For instance, after a lapse of time, the New Zealand .Government was forced to depreciate its currency because its products entered into competition with Australian goods overseas. Another reaction then occurred in Denmark, because Danish butter was competing with New Zealand butter in the markets of the British Isles. The Danish

Government immediately depreciated its currency correspondingly, with the net result that nobody benefited and the people of all countries had to pay higher taxes in order to service their overseas indebtedness and had to bear higher cost.= because of this exchange depreciation.-

There is one measure which could protect Australia’s position should such a situation again arise, namely, currency control. Under the Bretton Woods Agreement, we shall undertake not to employ this measure because, in time of peace, exchange control involves retaliation. There can be little doubt how Australia would fare in a race with other nations if it indulged in the practice of currency depreciation ot exchange control. Only one country in the world to-day can benefit to any great degree in the event of another depression arising from currency depreciation or exchange control. That country is the United States of America. Its surplus .good.* could be sold overseas at one-half of their cost price, if needs be, by the simple expedient of depreciating exchange. Consider events that preceded World War II. The purpose of the 1933 World Economic Conference was virtually defeated by the refusal of the United States of America to participate. In 1936, a conference between Great Britain, France and the United States of America agreed that none of those countries would depreciate its currency or alter its values except by mutual agreement. However, that agreement failed because there was no provision to enable any of the countries to refrain from depreciation if the world situation forced depreciation upon them. We have a different situation to-day. We are putting money, principally our own notes, into our own bank in Australia to enable the nation to refrain from currency depreciation when a. shortage of foreign exchange would normally force a depreciation. The international fund will be able to make a temporary loan to any nation suffering from a shortage of foreign exchange in order to save it from direct financial loss and to prevent it from causing world chaos by competitive exchange depreciation. In fact, the controllers of the fund will not say to a nation, “ You cannot depreciate your currency”, but, “You need not depreciate”. The fund will provide, as the late Lord Keynes said, that when the circumstances demand, a currency depreciation shall be adjusted and shall be brought about.

Mr Fadden:

– “With the consent of the fund.


– Yes ; but I point out to the right honorable member that, for two reasons, all nations have an interest in an exchange that is near a proper range. On the one hand, if the exchange is too low, that makes the products of the country cheaper in the markets of other countries in competition with local products. On the other hand, if the exchange is too high, that makes the country’s products too dear in the markets of other countries. Thus, all nations have a vital interest in the maintenance of what is termed “parity of exchange rates “. The fund provides, first, that when conditions demand, exchange depreciation can and will be brought about, and, secondly, that when a country desires to depreciate its exchange without consent of the fund, it may do so but may not use the resources of the fund.

Australia to-day must export its products in order to pay for its overseas indebtedness in respect of the servicing of loans and the repayment of loans as they fall due. It must also export in order to enable it to import essential goods from other countries. If, temporarily, we were not able to meet the costs of those two services to-day, we should be forced to go to the financial houses or, as a last resort, to the governments of overseas countries to ask for accommodation. The financial houses overseas could accommodate us, if they wished to do so, subject to onerous conditions, as they have done previously, or they could refuse to help us. If Australia has a temporary adverse balance it goes immediately, if it so desires, to those interests overseas, whether business or financial, and asks for temporary accommodation to tide it over that period. If the accommodation is not granted, the limit of our present hope is to make an adjustment or do without the goods from overseas. Under this scheme we can make that approach as usual; but if accommodation is denied we still have an approach to the world fund and the world bank. So, instead of having Australia’s overseas sovereignty curtailed or limited, this agreement will open mp a temporary means of access to the fund and a long-term financial arrangement with the bank. There will be new areas in which the governments of the world will he able to assist one another through periods of difficulty. I agree that this organization will not exist or continue unless the conditions are favorable to it; that is, if any one government or country desires to export to the world but not to import from it. That situation prevails to-day, and it will continue whether this fund is introduced or not. This provides, first, that until quotas are exhausted no government need seek to curtail imports from overseas or immediately make adjustments in its internal economy, if that method is proposed. More important, I believe, it means that thegovernments, through their nominees,, will meet once a year, discuss matters affecting the various nations, and come to an agreement among themselves. I suggest that, had that situation existed in the years prior to 1929, we should not have had the defeatist and dismal policy which was then pursued, a policy which, instead of saving any nation, brought the whole world to ruin and chaos. I believe that that measure of co-operation is one of the most vital things which this fund has introduced. In addition,, however, it ends the Bank for International Settlements.

The honorable member for Reid said that this fund is just a bank for international settlements. He does not know what it is. He does not know its position, or the function that it will discharge. The simple fact is that the Bank for International Settlements set up under the reparations plans after World War I. was a bank composed solely of private bankers. Governments could not participate in or even deposit their moneys with the fund. It was composed of the Bank of England, which was a private institution at the time, the Reichsbank in Germany, the Yokahama Specie Bank in Japan,. and a group of American commercial banks and some otters. Governments could not be shareholders in it or participate in any way in the control or the deliberations of the fund. If we want to end the Bank for International Settlements as a means of effecting the transfer of government moneys in the way of reparations or other commitments, by this means there is developed a purely government institution which seeks to provide in the first place temporary credits so as to prevent a disturbance, an exchange depreciation, or an exchange fluctuation on a wholesale scale in the markets and the countries of the world. Vast fortunes can be be made by exchange speculation. One writer has pointed cut that the exchange speculation after World War I. was disastrous to all countries and all governments, which strove desperately but vainly to put an end to it. This seeks to prevent exchange depreciation and speculation. Thirdly, it seeks to prevent the “ hot “ or refugee money problem, which has been one of the most disturbing features in the markets of the world. That brings me to the situation in relation to the United States of America. We have been told that America has been importing less than it has exported over a period of years. That is stated by a series of articles in the London Economist showing that, in the ten years prior to the war, the United States of America imported on an average $100,000,000 worth of produce more than it exported; but the situation was complicated by the influx into America of $113,000,000 a year of refugee or “ hot “ money, which shot round the world seeking security or profit.

Sitting suspended from 18.J/.5 to 2.15 p.m.


– The Bretton Woods Agreement was the outcome of the problems confronting the world in the disturbed situation following the war. It gives to Australia an opportunity to prevent recurrent economic crises, and provides us with an opportunity to substitute for the rigidity of the former gold standard a more flexible system, under which the exchanges may be stabilized by the balance of exports, and by long-term loans. This will enable Australia to secure its rightful place in the world, and will promote the welfare of the Australian people. In support of that statement, I quote the latest statement written on this subject -

The plan was the outcome of the monetary troubles of the twenty years between the two wars. It would be a mistake to regard the monetary troubles as no more than symptoms of more deep-seated economic disorders. The monetary system is to economic life what the nervous system is to physical life. And, though a perfectly ordered monetary system can do no more than provide a clear field for economic activity, and contributes nothing positive of itself, yet the harm done by a disordered monetary system may be far-reaching and disastrous. Other economic ills cannot be effectively treated unless the smooth working of the monetary system is assured.

This plan, arising from the problems of the post-war period, is intended to achieve that result. The London Economist, in a series of six articles, furnished a penetrating analysis of the scheme, and set out the problems which it is designed to solve. These articles stated that if any international monetary co-operation was possible at all, this agreement would be the means to give effect to it. Professor Melville, a representative of the Commonwealth Government, said -

The agreement reached on these large and complex matters is without precedent in the history of international economic relations.

. Since foreign trade affects the standard of life of every people, all countries have a vital interest in the exchange of international merchandise and the regulations and conditions which govern its work.

Later, he said -

When they do not agree single nations and small groups of nations attempt by special, and different, regulations of the foreign exchanges to gain particular advantages. The result is instability, reduced volume of trade and damage to national economies. This course of action is likely to lead to economic warfare and to endanger the world’s peace. Some form of international monetary cooperation after the war will be needed, whether or not this is to take the form of the monetary fund as at present proposed.

I come now to Professor Melville’s view as to whether this proposal is “ a return to the gold standard “. Earlier, I read the opinions of the most eminent economist that the world has known in recent years, the late Lord Keynes. Professor Melville says -

The position of gold in the fund might be misunderstood. If the alternative to a return u> the gold standard is an amended currency then the fund must be regarded as at least a half-way house towards a managed international currency.

  1. believe that in my analysis of this plan, the view of Professor Melville is confirmed. There is a warning implicit in the findings of these experts to gold producing countries.

Much has been said about the evils of the gold standard. The position which gold occupies in the world’s economy today is the final phase of its influence as a monetary measure. If the agreement proves to be workable, gold will regain its value as a commodity and will not be a monetary measure. This supplies evidence of the rapid move that gold has made in recent years, and indicates that a large concentration of gold may have repercussions if, at a later stage, gold is removed from the world as a monetary measure.

How will Great Britain be affected under the Bretton Woods Agreement? The Chancellor of the Exchequer, Mr. Hugh Dalton, said when the ratifying bill was before the House of Commons on the 12th December, 1945- l will turn now to the Bretton Woods Agreements, our acceptance of which is a condition of the Loan Agreement. And 1 submit to the House that the acceptance of the Bretton Woods Agreements, subject to one proviso which I will make in a moment, is definitely to t’he advantage of this country. Subject to one proviso, His Majesty’s Government will be prepared to defend our acceptance of the Bretton Woods Agreement quite independently of this Loan Agreement with the United States. But the proviso is that we have the financial strength to undertake the obligations of the Bretton Woods Agreements, and thus to acquire the benefits which Bretton Woods offers. In this sense, the Loan Agreement is, for us, a condition of Bretton Woods. I would venture to suggest that there can be no effective international economic plan, that will work in practice, unless there is some reasonable element of stability - such as Bretton Woods seeks to provide - in the field of foreign exchange. British industry, and British export trades in particular, suffered grievous damage in the pre-war years from unregulated, anarchial competitive depreciation of foreign currencies. One day we woke up and found the franc had been marked down.

Nobody had been given notice. Another day, sonic other currency was depressed, and no reason was given for it. I will not multiply examples. It is well known, particularly to those who specialize in knowledge of the export trades, and represent constituencies where those trades play an important part in the life of the community, that we were constantly’ being knocked right and left, without warning and without good reason, by foreigners depreciating their currencies. It would be of great value to the British export trade if we could be reasonably sure that that kind of treatment would not be repeated.

Sir John Anderson strongly supported the agreement. He said -

With regard to the Monetary Fund, the House knows, I am sure, that I have always been a supporter of that scheme. I think it a good scheme in itself. I think that itv main purposes are entirely advantageous - to provide money for the avoidance of short-term fluctuations in exchanges; to legislate, as the scheme does, against the competitive manipulation of exchanges from which, as the right honorable gentleman reminded us, we have suffered more than once in the past and at the hands of more than one country; and finally - and to this I attach particular importance - to provide machinery for the continuous discussion and exchange of views on economic and monetary trends. I think that all these purposes are entirety beneficent.

Later, Mr. Belcher, a Socialist, said-

I would like, however, in passing, to make mie or two remarks about the accusation which has been made that it represents a return to the gold standard. To my mind the essence - the bad essence - of the gold standard, from which we departed in the inter-war years, was as my honorable friend the member for Chesterfield, Mr. Benson, said, that it was rigid, that there was hardly any possibility of manoeuvring inside that standard, that it was unmanaged, that it was arbitrary and automatic. It appears to me that the essence of the Bretton Woods agreement, whether it ties us to gold, whether it expresses our currency in terms of gold or not, is that it is an internationally managed system. That, to me, makes all the difference in the world. We are not dealing with something completely arbitrary, but with an international organization that has a measure of control, and we have a quite formidable part in that international organization … To suggest that the setting-up of some kind of international organization, which is going to attempt sensibly to regulate international financial transactions, is a return to the 19th century laisser-faire world is, to my mind, almost too ridiculous to be repeated.

His remarks were also supported by Mr. Gallacher, the Communist member for Fife. He described Mr. Belcher’s speech as an object lesson in loyalty to honorable members on his side of the House.

The final misconception, with which I propose to deal, is the suggestion that this agreement will be of outstanding advantage to the United States of America.

The fact is that country will deposit in the fund a large sum of money, which will make an immense practical contribution to the solution of the world’s economic difficulties. The agreement will not, as has been suggested, give to the United States of America control of the markets of the world. Had the United States of America desired to exploit other countries, it could have extracted great concessions from them. But this agreement confers on America no advantage over any other membernation. It cannot be the means of forcing one cent’s worth of goods on to any country, but if the demand for those goods exists, means will now be found to enable a country to buy.

I come now to the speech of the honorable member for Reid (Mr. Lang). Once more, the honorable member showed himself to be a pathetic and isolated figure, trying to build a wall to protect himself from the ghosts of a not very creditable past.


– The tenor of the debate can be best preserved by refraining from making personal attacks.


– The suggestion that the Bretton “Woods Agreement was an attack on national sovereignty was disposed of in advance by the Leader of the Opposition, who showed that, in the making of every agreement there was some loss of sovereignty, but that, in the case of an international agreement the parties took on a wider sovereignty in the wider sphere of their activities.


– Order ! The honorable member’s time has expired.

Darling DownsLeader of the Australian Country party

.- The bill before the House is one of great importance, because it embodies an international agreement which the Parliament is asked to consider rand accept or reject. Its importance is demonstrated by the fact that it has been carefully considered by the Government and the Labour party for nearly two years. This agreement is a compromise, as, indeed, every agreement must be. International agreements are no exception, because they imply the making of promises and the assumption of obligations. The Bretton Woods plan has, so far as we are concerned, debits as well as credits. It has disadvantages as well as advantages. The debits arise out of the fact that a country assumes certain obligations upon joining the International Bank. The credits or advantages arise out of the benefits accruing to members as a result of other nations assuming the obligations of membership. Therefore, every obligation we assume must be looked at in the light of the restriction which is placed upon our own freedom of action, and the restraint imposed upon other nations to act in a way prejudicial to our trade interest.

Many real objections to the scheme can be raised. The agreement is fundamentally an obscure document, possessing many defects. These can be removed only in the course of time. Indeed, they can be discovered only by a system of trial and error. Many of its provisions can be interpreted to justify interference with the domestic policy of a country, especially in regard to matters relating to exchange fluctuations, and the denial of resources to countries assumed to be acting prejudicially. The capacity to vary the exchange rate will be drastically curtailed under the agreement, a fact which might cause serious suffering in the event of another financial and economic depression. It is stipulated that, after five years, we may not use exchange restrictions in regard to current transactions. Many matters vital to Australia will be decided by the voting strength of interested parties, and Australia will have little influence in the decisions reached. The obligations which shall be required to assume will be regarded by many as a heavy price to pay for stability of exchange in terms of gold, and for temporary overdraft accommodation. However, 1 believe that if a careful, unbiased survey discloses that the advantages outweigh the disadvantages, Australia should become a party to the agreement. The International Monetary Fund and International Bank for reconstruction and development are institutions which are to function as integral parts of the United Nations. I emphasize that point. These instruments are the natural outcome of the United Nations. We agreed to the general principles of international co-operation as outlined at San Francisco. Therefore, it would be inconsistent for us to oppose the two specialized financial functions which inescapably arise from that organization.

The two main purposes of the international financial plan now proposed are, first, to aid in maintaining the stability of international exchange rates; and, secondly, to assist in the free conversion of one currency into another. It is hoped by a multilateral system of payment, to avoid competitive exchange, thus eliminating foreign exchange restrictions which now hamper the growth of world trade, and upset international balances. The mere fact that that machinery is available will tend to promote international co-operation on monetary matters, and will thus, indirectly, assist in maintaining world peace. Every participating country must supply to the fund full information as to trade, national income, price movements, gold holdings, exchange rates and controls, and clearing arrangements. Most of this information is already published by. Australia and the disclosure of similar information by ‘ other countries should be beneficial to all.

The major world trading countries, except the Union of Soviet Socialist Republics, Japan and Germany have already joined in the plan. All the members of the British Commonwealth of Nations have joined except, for the moment, Australia and New Zealand. The latest advice is that New Zealand is expected to accept the proposal, and I am sure that it will if Australia will do so. South Africa joined after considering the report of a select committee of its House of Assembly. One of the findings of this committee was that, if a system of safeguards ensuring world peace was to be set up, there should necessarily be established a system of financial control to facilitate exchange dealings, and to make financial resources available to the nations. The committee found that the Bretton Woods draft agreements were reasonable and workable instruments, imperfect it was true, but worthy of an effort to make them workable. The committee believed that, in the interests of post-war rehabilitation and international prosperity, the Bretton Woods scheme should be accepted and tried out, despite the admitted risk that it might break down. While bearing in mind that its proposed power might, at the outset, be too limited, the committee said that it was capable of growth and expansion, in. order to meet the demands that would be made upon it as its potentialities became appreciated. The report was accepted, and South Africa supported the agreement.

I now come to a matter of great importance to Australia, namely the attitude of Great Britain to the Bretton Woods agreement. The United Kingdom is one of the main, members of the International Fund, even though its signature to the agreement was one of the conditions of the loan from the United States of America. Although America’s financial position forced the hand of the United Kingdom Government, we must bear in mind that Britain’s membership is now an accomplished fact, and, must be accepted as the basis of Australia’s attitude. If Australia did not join the fund this country would run. the risk of being the only British dominion which did not do so. That would be an extreme isolationist attitude to adopt. The effect would be that the United Kingdom would be a member of the fund and that all the other members of the British Commonwealth of Nations except Australia and, as at present, New Zealand would not be. All other important members of the United Nations except Russia are supporting it. Few Australians, with the exception of the Communist minority and their supporters, desire that Australia shall “ scab “ on the British family of nation’s and come under the political wing of Soviet Russia by boycotting a world attempt to achieve peace through financial co-operation. The reason why the Soviet will have no part in the plan is obvious ; Russia will not do anything to assist the nations of the Western Hemisphere in their tremendous task of perfecting a workable and progressive international economy. Russia would be only too happy to see these international agreements break down, because the resulting disruption and chaos would provide a fruitful’ field for the spread’ of Soviet communism; and be another step towards world revolution. Britain’s overseas financial1 position is serious-. Australia, India, South Africa, New Zealand1 and - other nations- have accumulated large sterling’ balances in London, mainly as the result of1 war conditions^ and the acceptance by the United Kingdom Government of obligations to finance a disastrous war on behalf of mankind in all countries. Britain cannot liquidate these debts. That country is in fact struggling ‘ to reach the volume of exports required’ to maintain even its present’ low standard of living. In pre-war years Britain’s foreign assets were estimated to be worth £4;000,0’00,000, but by the end of 1946 approximately half of those assets had b’een sold in order to finance the war. The net deterioration of Britain’s external capital assets at’ the time hostilities ended has been estimated” at over’ £5,000,000,000 sterling. The only way in which Britain’s accounts can be. balanced is by an expansion of exports to about one and- a half times the-pre-war level. Thattask will take several years ; in the meantime deficits must be faced.. Seasonal, conditions- in Great Britain have further retarded that country’s industrial recovery. The “ great freeze “ has.thrown 2,000;000 workers out of employment; and the loss of’ production is estimated’ at between £30,000,000 and.’ £40,000,000 sterling: each week. That losswill diminish slowly as the effects of the dislocation gradually decrease. A recent White Paper issued by the United Kingdom Government, which contains, an economic survey for 1947, has been described as the most disturbing document ever issued by a British government. -It reveals that the minimum deficit in respect of’ overseas payments^ is estimated at’ £350,000,000 for 1947.’ That deficit is large when compared with the £955,000,000 of American credit remaining at the end of .the year’. The United Kingdom is now obtaining, about 42 per cent, of its imports from the Western hemisphere, and is selling, in that sphere only 14 per cent, of its exports. The countries in the Eastern hemisphere with which the’ United Kingdom has export surpluses’ either cannot’ pay in gold or dollars, or they pay the

United Kingdom out1 of’ their accumulated sterling balances. The drain ondollars is therefore likely to exceed thetotal deficit in the balance of payments. This problem will- be aggravated by the obligation on the United Kingdom tomake sterling earned in the current transactions freely, convertible into dollars after next July. This special dollar problem, within the balance of payments, can. be wholly solved only by the economic recovery of Europe and the Far East, and the establishment of equilibrium in respect of the balance of payments for all the major trading countries. Britain faces a serious position in connexion, with its -dwindling, dollar reserve,, because at the present rate of- consumption, dollar credits, will expire, during 194S. In the absence of special arrangements, the United Kingdom will thenlack funds to” buy many essential items of materials and industrial equipment, as well as necessary foods. Is Australia to desert Britain which during the war entered’ into obligations which have had such a serious economic aftermath? Are we going to leave the Old Country to fight out its financial’ destiny alone?’ Have we not an obligation, as a part of the British Empire, to stand shoulder to* shoulder with Britain in its “economicDunkirk “’, especially when we remember how Britain stood by us- in the dark days of war? Australia is a- large and important exporting nation, as well’ as- an integral part of the British Empire. One-fifth of our national income is derived from external trade, a large portion of which consists of primary products. Australia is not’ only looking for new markets, but is also vitally interested in the maintenance and expansion of Empire preference.- Surely,, we. cannot: expect to retain the advantages’ which Britain, has given to us through the years, and at the same. time, desert that country, now by standing out. as an isolationist nation against the Bretton Woods Agreement to which it has subscribed?’ The importance of Empirepreference to Australia will be realized when we reflect that 99 per cent, of Australian meat exports are sold in Britain where preferential conditions exist, and that 95 per cent, of Australian butter is; sold in Britain at a preferential rate of 15s. per cwt. Each year practically the whole of our export surplus of sugar, amounting to about 400,000 tons, is sold on the British market, where it has a preference of £3 15s. a ton over foreign sugar. Australian cheese, eggs, milk, rice, apples, pears, grapes and other fruits have the benefit of British preference, and, in addition, bulk purchases and quota arrangements offer substantial advantages to Australian export industries. Most other nations block the entry of Australian goods by imposing prohibitive tariffs. For instance, the highly discriminatory Hawley-Smoot tariff of the United States of America imposes a duty of 2s. 1½d. per lb. on wool, 10-Jd. per lb. on butter, 5£d. per lb. on lamb and 4½d. per lb. in respect of beef from Australia. This, in effect, means that we cannot compete with American products. In the near future some middle course is bound to be found between these two extremes, and we must be represented, and be ready to support Great Britain, when negotiations are pending and our support is needed. It might be too late to save our primary industries if we merely hear about decisions after they have been made and confirmed. That would be the position if we were not a signatory to the Bretton “Woods Agreement side by side with Great Britain and the other members of the British Commonwealth of Nations. The countries which have already accepted responsibility under the agreement share between them more than 70 per cent, of the world’s international trade. In the years 1934-39 more than 80 per cent, of Australia’s exports went to countries which are already signatories of the agreement. “With the consent of the House I shall incorporate in Hansard the following table which gives particulars of those exports : -

It will be seen from that table that, in 1938, 39 nations which are already signatories of the agreement absorbed 86 per cent, of the goods we had to sell on the open markets of the world, and for the period 1934-39 inclusive, they absorbed 81.72 per cent, of the exportable Australian surplus. In 1938-39 nations outside of the agreement absorbed Australian exports in the following percentages : -

Thus, in 1938-39 non-Bretton Woods members took a total of only 14 per cent, of our exports. In international trade, stability of exchange rates and free convertability are two very important factors to Australia. They ensure avoidance, of serious losses through sudden alteration of exchange rates. They keep price fluctuations within narrow limits, and prevent abrupt shrinkage of the volume of trade. These factors benefit both buyer and seller. Australia is an important seller and will become an increasingly important buyer on the international market. Because of the highly restricted terms of the international monetary agreements with regard to nations outside them, there is much more chance of stability if we join the ring of nations subscribing to them than if we remained aloof. Another advantage of participation in the fund will be provided by the additional overseas exchange reserves on which we will be able to draw. These amount to £62,500,000 and, consequently, are nearly equal to our average reserves in the pre-war years. They would form a valuable second line reserve for a serious emergency.

Another important point is that if the fund succeeds, it will prevent countries from developing an elaborate system of bloc exchange accounts such as those employed by ‘Germany with disastrous effect during the ‘thirties. If Australia is to seek wider markets for its exports in countries beyond the Empire, protection against blocking of currencies will bo particularly valuable. In other words, Australia, as a great importer and exporter, has a vital stake in the maintenance of the free convertibility of major foreign currencies.

Members have subscribed to very stringent undertakings regarding relations with non-member countries, with special reference to non-co-operation in trade practices and transactions generally, which would be contrary to the purposes of the fund. In other words, even if Australia did not join the fund, the bulk of our international trade relations would necessarily be regulated by the Bretton Woods Agreement, as the member nations have so pledged themselves. Consequently, our customers would force us to abide by the terms of the agreement in our dealings with them, and if we remained outside we would not even have a voice in the decisions made by those controlling the fund. Could there be a more stupid disenfranchisement ? Nothing can happen to Australia when a member of the fund that could not happen in a worse degree when not a member. Would it not be better to be on the inside looking out, in company with Great Britain and our other great customer nations, than on the outside looking in, with Russia, Germany and Japan as practically our sole companions in the course we adopt? Withdrawal from the fund is easy. If the worst happens, and experience teaches us that the fund is a failure, we can readily withdraw at any time by notice in writing. Accounts shall thereupon be settled in the equitable manner provided. Although it has been freely stated that interference with domestic policy is prohibited, there are several loopholes, indicating that such policy could, in fact, be subject to the fund’s control. For instance, the interpretation of the term “fundamental disequilibrium” might cause a clash between domestic and international policies. In the event of an economic and financial depression, the weight of sacrifice can be shifted materially to other nations by manipulation of exchange rates. In the last depression, Australian exporters obtained £130 for every £100 worth of goods they sold overseas, and although the internal living standard deteriorated, conditions were not as bad as they might have been had our exchange been kept on a par with sterling. That position might arise again, but we would be subject to the fund’s control, except as to the first 10 per cent. If we desired a second variation of 10 per cent., the fund would have to give its decision in 72 hours. Variation beyond 20 per cent, would be more difficult. In that case, a fundamental disequilibrium would have to be shown to exist. That term has already been interpreted to include a pressure on balance of payments which tends to create unemployment.

Again, under article V, the fund may limit the use of its resources to a member if it considers that such resources are being used in a manner contrary to the state in which they are to be utilized. Here, we may also have a conflict between domestic and international policies. Australia might wish to create an artificially high living standard by the undue importation of luxury goods and use more of its resources than the fund deems to be wise. The fund can then affect its internal policy, indirectly, but no less effectively. Whenever the fund can exercise its opinion against a member, and apply the sanction of withdrawing or withholding its resources, there is danger of interference with internal policy. The difficulty cannot readily be overcome. If we are to receive benefits, we must be prepared to concede something in exchange. The best that can be said is that the success of the fund will depend upon the goodwill of its members, and its terms will no doubt be interpreted wisely and broadly. Any other course would be one of selfdestruction and therein -may .lie the safeguard against unwarranted interference with members’ internal policy.

I have analysed all the information available to me in order to define the advantages and disadvantages of the agreement. The disadvantages that occur to me are as follows : -

  1. As to the link with gold : (a) This is to be fixed at a time when it is impossible to judge as to its correctness, (o) The alleged flexibility of that link is non-existent because, in the case of individual members, no change can be made without the consent of the fund; in the case of the combined members, no all-round alteration may be made without the consent of the United States of America or Britain.
  2. As to the present set-up of the fund, although :it is still in the experimental stage, no alteration can, without the consent of the United States, be made (a) in the agreement itself; (fc>) in the quotas, on which all the voting powers depend; (c) in the number of executive directors, on whom, the day-to-day management depends; and (d) in the charges, in some cases penal charges, to be paid by members.
  3. As to the temporary accommodation provided: (a) In times when imports would be paid for by exports, it would not be required or used; (6) in the case of slight temporary departures from normal, such as have often been corrected without much trouble in the past, it would be of some use; (c) in difficult times, such as war or depression, the accommodation would be quite inadequate; and the link with gold, the prohibition of alterations of exchange rates, and of the use of exchange controls, might have serious results.
  4. The United States, by its power of veto, by the administrative provisions, and by its virtual monopoly of monetary gold, has all the powers necessary to dominate the fund.
  5. The right to withdraw from the fund, and the “scarce currency” provisions, are ineffective to protect debtor nations; creditor nations are favoured unduly; and the fund does nothing to promote a balance of trade.

We must approach our decision on this important matter on the following salient bases : -

  1. The International Monetary Fund and International Bank form one of the institutions of the United Nations. If we support the United Nations, we are inconsistent in opposing the Bretton Woods Agreement, as one is an implementation pf the other.
  2. The United Kingdom Government’s acceptance was a .condition of the United States loan, and as its financial position and outlook are so grave, are we to desert Britain at its “ economic Dunkirk “ ?
  3. All members of the British Empire, .except Australia, and perhaps New Zealand, are members. (et) All our other worthwhile international customers are members.
  4. If -we do -not become a signatory of the Bretton Woods Agreement, >we shall still be -affected by its policies without having any say in their making. We would have no greater practical freedom to vary the exchange rate or to use exchange controls because signatories of the Bretton Woods Agreement would be free to retaliate against us.
  5. Benefits of membership promise to be substantial, more particularly those indirect benefits to our overseas trade arising from the restraints on other countries in the matter of exchange control, and blocking of currencies.
  6. Australian prosperity is greatly dependent upon a smooth flow of international trade. If adoption of the Bretton Woods Agreement avoids financial impediments to the smooth flow of such trade, we must gain.
  7. The direct advantage to our reserves of international exchange would also be significant. Fear of insufficiency of exchange reserves has been a constant bugbear to Australia.
  8. We would be able to wage a far more effective fight for our export industries, with special relation to Empire preference, if we were members.
  9. We can withdraw at any time on equitable terms.
  10. If we oppose the Bretton Woods Agreement, our financial bedfellows are SovietRussia, Japan and Germany, and we are drawing apart from the United Kingdom and the British family of nations.

    1. The Soviet’s declared policy of standing out is one reason why there is so much organized opposition from Communist sympathizers, who are totally unconcerned with the fate of our rural export industries.

Generally speaking, it would seem that the debits or obligations when analysed objectively, are not more than we can comfortably shoulder, while the benefits, direct and indirect, could be substantial. In any case, the fund and the bank have been established and are now commencing operations. In the circumstances, the wise course is to join the organizations and make whatever contribution we can to their success.


.- I support the Government’s decision that Australia shall be a party to the Bretton Woods Agreement, but I do not think any honorable members, regardless of the party to which he belongs, could support the process by which the decision was eventually reached. We have heard from previous speakers, particularly the Leader of the Australian, Country party (Mr. Fadden), a good deal about the financial aspect of the agreement. I do not propose to touch that aspect. I support the bill because I believe that in becoming a signatory, Australia will make the greatest possible contribution it could make to ensuring peace. The object of all international agreements is surely the maintenance of peace. That is why we joined the League of Nations and the United Nations. I believe that the League of Nations failed for no other reason than that it had no machinery to control economic relations between the various countries. The economic factors over which the League of Nations had no control led to the recent war. In the period between the two wars international trade was characterized by intense rivalry and currency restrictions and devaluations that led to watertight national economies, which inevitably brought about war. The causes of the conflagration were purely economic. If we are to be a member of the United Nations, of which I have heard criticism from no honorable member, surely we must also sign the Bretton Woods Agreement, which is an integral part of the United Nations and is essential to the fulfilment of its aim. It is obvious from what previous speakers have said, and the statements which the Prime Minister (Mr. Chifley) made available to the political parties represented in this House, that there are many serious drawbacks to this agreement. Perhaps the most serious of them is the doubt which has been raised that the machinery in itself is quite unworkable and impracticable. Whether or not that be so, I am certain that there is no satisfactory alternative to the system and the order which the Bretton Woods Agreement will guarantee us. The alternative, of course, will be a return to the conditions of anarchy, violent fluctuations of trade, prices and employment, and widespread distress which were the result of lack of co-operation some time bef ore the commencement of “World “War II. This agreement is merely an attempt to establish order where before there was only disaster and lack of organization.

This morning, the honorable member for Reid (Mr. Lang) spoke at considerable length, and I gathered from his remarks that he is opposed to Australia becoming a party to the Bretton Woods Agreement. In the course of his speech, he used such words as “ exploitation “ and “international financiers”, and the implication was very plain, namely, that if we join this agreement, Australia will be like a turkey on a plate - to be carved up at the behest of the financiers of Wallstreet, who, the honorable member believes, are very evil men indeed. I do not agree with his judgment, and I believe that he was moved to oppose this agreement principally because he feels, and probably rightly, that the object of agreements of this kind is to prevent that irresponsible manipulation of finance of which he was such a disastrous exponent when he was Premier of New South Wales. He implied that the men associated are not to be trusted. Wo might just as well call the principal figures in the United Nations rogues, crooks and exploiters. When I consider the merits of this case, I find it impossible to forget that the principal sponsors of this agreement were the late President Roosevelt and the late Lord Keynes. Whatever may be said of those two men, no man can state, with justifition. that they were the tools of international financiers, or exploiters. At least one of them was possibly the greatest humanitarian, and had the greatest desire to see a workable international trade organization of any living man. This agreement should be accepted in the spirit that it is an honest attempt to produce a workable system, just as the United Nations is, and just as the League of Nations was a similar attempt.

I come now to the processes which led to the Government’s decision to support Australia’s becoming a party to the Bretton Woods Agreement. Who did decide that we should? Was it Cabinet? Was it the Parliamentary Labour party?

This issue, which is possibly the most important that Australia has ever had to decide in the international sphere, waseventually resolved at the second “ go “, not by the representatives of the people in this Parliament or by the Parliamentary Labour party, but by trade union officials. The Minister for Post-war Reconstruction (Mr. Dedman) said recently, when some soldiers had had the impertinence to comment on the advisability of introducing compulsory military training, that ex-servicemen’s organizations had no right to criticize the Government’s defence policy. If that attitude be right, then most certainly a lot of trade union representatives have noright to lay down the law on international agreements. Another rather curious fact about this bill is the extraordinary set-up which it has produced in the House. Sitting on the treasury bench and supporting the bill is the Minister for Transport (Mr. Ward) who, only a few months ago, was stumping the country, blackguarding everything to do with theBretton Woods Agreement. What are we to believe ? What has caused this remarkable metamorphosis? Has the Minister experienced a change of heart? Will henow support the bill, or will he, as soon as it is conveniently disposed of, again revile it, and do a great deal to detract from its workability? If he does not support the bill, what is his reason? Another remarkable feature of this most important debate is that, apart from the Prime Minister, who introduced the bill, only one Government supporter has taken part in the debate. Why? It is a most important matter! Why do not Government supporters give their frank and honest views on the bill?

Mr James:

– We do not desire to delay the passage of the .bill.


– We know the reason. The Government knows perfectly well that it cannot trust its own supporters to speak on this bill, lest they reveal a split or division of opinion which,- everybody knows, exists in their ranks on this matter. The Government cannot count on the wholehearted support of Ministers in this respect. This unusual position led the Prime Minister to make a curious statement. He said, in effect, “ We shall support the Bretton Woods Agreement, but we reserve the right to withdraw from it whenever we desire to do so “. Observations of that kind are unnecessary, because, as everybody knows, Australia can withdraw from the agreement whenever it desires to do so. The reason why the Prime Minister made that statement is obvious. The purpose was to provide the Minister for Transport with some ice on which he could skate, so that he could return to his electorate and abuse the agreement and everything associated with it. I shall be most interested to watch the gyrations of the honorable gentleman on this subject, and if he falls and breaks his political neck, few honorable members on this side of the House will regret it. I support the Government in putting forward this proposal, and I hope that it will stick to it with more resolution, unanimity and loyalty than it has shown in the past.

Mr. ARCHIE CAMERON (Barker) 1 3.13 1 . - The time has arrived when some honorable member should open the case against the bill embodying the Bretton Woods Agreement which the Government, after considerable difficulty, has asked the Parliament to ratify.


– After great labour.


– Yes. Ministers appealed to caucus, and then to the executive of the Labour party, and attempted to get the federal conference of the party to relieve their troubled minds. Ultimately, they were told to go back to caucus, and settle the problem themselves. We have seen the published list of how honorable members opposite voted in their party room for and against the proposal, and I could not wish for better entertainment to-day than to hear the Minister for Transport (Mr. Ward), or our rather silent friend, the Minister for Information (Mr. Calwell) stating the case against the Bretton Woods Agreement, because, in their hearts, they are opposed to it. Members of the Opposition will be very interested to see whether those two Ministers speak on this bill, and particularly whether the Minister for Transport will discover sudden and urgent business in his office, as he did a few days ago, and depart when the division bells ring. I recognize that a measure of this sort cannot be perfect, and I am fortified in that opinion by the exhibition which we had in the Opposition party room yesterday, when the Government’s own representative, who signed the report that we have had ‘before us for some time, gave his views to members of the Opposition.

I have heard some interesting speeches to-day. I have listened to all that have been made. I heard that of the honorable member for Perth (Mr. Burke), who is usually a fairly logical gentleman. The first part of his speech was devoted to a castigation of the honorable member for Reid (Mr. Lang). That is a private quarrel, into which I do not wish to intrude; I should feel quite out of place. But having devoted fifteen or twenty minutes to the Premiers plan, the doings of Sir Otto Niemeyer, certain Loan Council meetings, and so forth, the honorable member went on to say that he would not like to discuss the Anglo-American loan, because that would be outside the terms of the agreement that we have before us. The honorable gentleman would have to be here for a long time before he would be able to cap that effort in logic. Then there was the speech of the Leader of the Australian Country party (Mr. Fadden). I listened to it with a great deal of interest, and was forced to observe that, according to the statement of the right honorable gentleman, if anybody does not agree with this proposal, which he himself roundly condemned in several of his passages, then that person automatically links himself with Russia, Italy and Japan. That is an effort in logic which I hope that he will not repeat; because if, by opposing this proposal, I link myself with those nations, I am afraid that I shall have to do so.

Mr Fadden:

– The honorable member has imported Italy into my speech.


– I did not bring in the Italians. My friend has overlooked that I have here, and he has seen, the first report of the International Monetary Fund. According to that report, which I believe he has read, the Italians are in the fund and not out of it. So that on that score, at any rate, he has his Queensland friends with him. I put this to the Parliament : There cannot be any arrangement for international exchange until there is international trade. What we are blind to is the future of international trade. We- are equally blind to the policy of the Chifley Government on international trade. That Government has in process of despatch, to Geneva a delegation which is to take some part in an International Conference on Trade and Employment. I believe that some members of the delegation have arrived at Geneva. Some of them were here last night, and I understand that they are returning next week. If ever there was an occasion on which a Government was attempting to “ put the cart before the horse “, it is this. The Government says to this Parliament: Give us all the exchange arrangements. We cannot, in fact we will not, tell you what are our ideas on international trade.


– Perhaps it has none.


– The honorable member for Corangamite (Mr. McDonald) says that perhaps it has none. I believe that to be correct. I make bold to say that if honorable members on the other side of the House spoke their minds on this important question, we should find them about as equally and vigorously divided as they were on the subject of the Bretton Woods Agreement and the International Bank. So I cannot get very much comfort out of the fact that the Government at least has resolved its difficulties in regard to the International Bank and the International Monetary Fund. Before being asked to consider those subjects we ought to know where the Government is going to reduce international trade, because in that respect we have several big things at stake. We have the whole question of Imperial preference and of the right of the Australian Commonwealth to determine its internal economy. If any honorable member opposite will read the report signed by Professor Melville and circulated to honorable members, he will find in it several passages to which I may not have time to refer, wherein the right of this country to determine its internal affairs once it has entered into the Bretton Woods Agreement is a matter which will be determined not by this Parliament but by the governors of the fund. One of the most important statements of Professor Melville, and one on which he was questioned yesterday, is in paragraph 42, in which he says-

Technically, members may withdraw from the fund at any time. In practice, their withdrawal would be difficult, and perhaps impracticable.

What he meant was, that once you go in you are in for “ keeps “.

Mr Burke:

– The honorable member should read the portion of the agreement which deals with that matter.


– If we try to amend that agreement - and we have to amend it before we can affect our right to withdraw upon any terms other than those that are in it now - then there must be 60 per cent, of the membership, represented by their votes, and SO per cent, of those who provide the cash, in agreement with the amendment. That means that if those who subscribe 21 per cent, of the money in the bank say that there shall be no alteration of this agreement, then there shall be no alteration of it. I point out, for the benefit of the honorable member for Perth, that there is only one country in the whole list of countries which represents 21 per cent, of the fund contributed, and that is the United States of America. So what we have here is another form of veto, the very form of veto to which the Minister for External Affairs (Dr. Evatt) so rightly and so vigorously objected in respect of Russia. But in regard” to finance, the right honorable gentleman, and the Ministry of which he is a member, say “ We accept the veto of the United States of America “. So, according to article XVII., no alteration of this fund, bank, or employment arrangement can ever be made without the consent of the United States of America. It does not matter what this Parliament thinks, or what the people of Australia think, once this agreement has been signed, then the United States of America alone will be able to say whether it will be altered. Let us look at this document which the Prime Minister has circulated. I understand that it went to his party before it reached us. I am quite sure, reading page 2, that originally it was not intended to be circulated to the Opposition, because it contains this rather interesting and illuminating statement: -

There, experts from the various countries framed agreements for the fund and bank which were to come into being when the war ended. Australia took a part in all those discussions and influenced their outcome in material ways. Private financiers had no part in them at any stage. Many of them tried to sabotage the work because they saw its threat to their interests and power.

As a beautiful piece of party political propaganda, that will take some beating. It would be a credit to one or two other honorable members. Having perused this document, it strikes me as being very much like a political catechism. It contains these questions -

What is Bretton Woods?

What are the expected benefits?

Who created Bretton Woods?

Who controls Bretton Woods?

What is the membership of Bretton Woods?

What is the relative influence of various countries?

All the answers were supplied by the Prime Minister, doubtless to his entire satisfaction; and to the satisfaction, I may add, of the majority of the members of his party. I shall quote from the report of the first annual meeting of the board of governors of the International Monetary Fund. If one looks at the list of governors on pages 114 and 115, one will find it devoted entirely to the changes in the board of governors that have taken place up to date. It is almost as bad as the House of Representatives when there is an uninteresting debate - .members walking in and out all the time. .Some countries have already changed their representatives twice. How is there to be anything like consistency in a fund if the real people - and I question whether these are the real people - who are managing the show, who are at the head of it, are to be changed as rapidly and as frequently as were those that we have set out in this document. It is a most interesting list of names. One that struck me forcibly, and which I have seen in other international documents, is that of the member for Iraq, Ali Jawdat

The scheme for an international monetary exchange cannot function unless international trade is fairly free and unfettered in its flow, and if that be the situation the scheme is of not so much account. Let us look at the financial circumstances of the different countries which, under the agreement, will make contributions to the bank and the fund.

Each will be required to provide 10 per cent, of its gold or dollar holdings, or 25 per cent, of its total gold, whichever is the lower figure. It is most interesting to observe how Australia’s commitments have risen since Professor Melville prepared the document we have before us. At first our commitment under this heading was £1,000,000 in dollars or gold, and we were also required to provide £61,500,000 in notes. The gold figures have risen to £2,500,000 or £3,000,000. When I raised this question yesterday with Professor Melville I received the reply that I expected. It was to the effect that Australia’s gold reserves had risen so greatly since the agreement was signed that Australia was now committed to provide this very much higher amount in gold.

Another interesting fact which emerges from the report of the first meeting of the governing directors relates to our contribution of notes. I have been most curious about this point. I wished to ascertain whether we were to provide £61,500,000 from our present note issue, or whether we were to add another £61,500,000 to our already high total. The bill, as it turns out, answers my question. We shall not follow either of the procedures I have mentioned. We shall be required to add to our already enormous unfunded floating debt of promissorynotes, or treasury-bills the largo sum of £61,500,000. These notes will be held by the Commonwealth Bank in Sydney. One would have expected that if the Commonwealth Bank in Sydney was to hold our contribution in bills it would also hold our gold contribution, but that will not be the position at all because, according to a statement on page 95 of the report of the board of governors, the following conditions will apply :-

Gold depositories of the fund shall be established in New York, London, Shanghai, Paris and Bombay. The gold of the fund shall be held with the depositories designated by the members in whose territories they are located. A member may pay in gold its subscription to the fund at one or more of the specified gold depositories within the terms of Article XIII., section 2.

The report also states that we must pay the cost of sending our gold to Bombay, New York, or wherever else it must go.

If ever there was a “ Heads I win, tails you lose “ arrangement in international finance it is described for us in the first report of the board of governors.

I have been interested also in the value of the Australian treasury-bill or the Australian £1 note, for that matter, compared with those of other member countries. Yesterday I inquired from the Prime Minister what contribution the fifth biggest contributor to the fund, or, if Russia be excluded, the fourth biggest contributor, namely, China, would be required to make. That country is committed to pay to the International Bank and to the International Monetary Fund £171,900,000 on each account, ‘i also made an inquiry on this subject two or three days ago and have just received advice from the Treasury that the Chinese dollar to-day is worth only .008 per cent, of its value in 1914. It will be apparent therefore that one of the biggest shareholders in this scheme will be able to pay only valueless currency into the fund. What can we expect from that procedure? I have taken the worst example, but I have a number of others of equal interest. The French franc, tor example, was rated at 19.03 to the £1 in 1914, whereas it was rated at only .5 to the £1 in 1946, the drop being 97 per cent. The drop in the value of the currency of Spain in the same period has been 82 per cent. ; in that of Holland 44 per cent.; in that of Italy, 98 per cent.; and in that of Belgium 93 per cent., to mention only a few. The value of the Chinese currency, as I have just indicated, has practically vanished. Italy is the latest participant in the scheme, and its currency is valued at only 2 per cent, of its value in 1914. We have no information whatever about Russia. It is not possible to get the value of anything from Russia - truth, honesty, or anything else, including human rights. It must be apparent, however, that this international financial pyramid is to rest upon a valueless currency, in respect of many countries at least. Yet we are expected to believe that profits from the fund will bc returned to the Commonwealth Treasury. That is provided for in clause 9 of the bill. Such a clause could only have been drafted by a society of confirmed optimists.

In considering this measure, we are also brought face to face with the question of the return to the gold standard. Does this measure mean a return to the gold standard? I have never hidden my views on this subject. I have always said that the only international monetary standard with any stability or meaning was gold. The Prime Minister and other protagonists of this scheme say that it does not mean a return to the gold standard. I hold in my hand a copy of the Western Australia Mining and Commercial Review, of August, 1944. I have kept it because I thought it might be handy some day. This is the organ of the chief representatives of the big gold industry of Western Australia, and from it I quote the following paragraph: -

In addition, the par value of the currencies of member countries would be expressed in gold and could only be changed at the request of member countries. In other words, a gold standard would be restored.

Those are the views of the gold producers of Australia, and I place their statement beside the views of those who say that gold has no bearing on the matter. I also direct the attention of honorable members to the statement in the Prime Minister’s second-reading speech regarding the fund and the gold standard in which the right honorable gentleman said that the scheme doe3 not envisage a return to the gold standard. In this connexion, I ask honorable members to consider once again the ratio of gold to our currency to-day. In my opinion, we can have no common standard that is worth anything in our financial structure in the Commonwealth, or in the world for that matter, seeing thar we have interfered with what was formerly a world-wide standard. Let us take the report of Professor Melville. In paragraph 7 he says

The payment of our subscription as to this part of the quota should represent no difficulty to the Government.

He is there referring to that part of the subscription which is to be paid in gold. It is interesting to note that the gold quota has risen in the last three years from £1,000,000 to £2,500,000. In paragraph 8, the professor says -

The normal method of buying and selling foreign exchange will continue.

So long as our trade is normal, it stands to reason that normal methods will be satisfactory. The Bretton Woods arrangement seems to me like a description which I once heard a Douglas credit advocate give of the banking system. It was a good umbrella so long as the weather was fine, but when it rained the bankers wanted the umbrella themselves. The Bretton Woods scheme seems to me to be much the same. In paragraph 16, Professor Melville says that our withdrawal rights under the scheme would be £15,735,000. In other words, we can get back what we put in. Contributions to the fund will be in notes of various kinds. The nations will .put paper into the fund and they will get paper out. The way in which paper money is depreciating makes it very questionable whether, in six or twelve months time, the contributions of the nations will be worth anything like their face value. The matter of liquid reserves is touched upon in paragraph 17. For liquid reserves to be of any use, they must be convertible at sight into any other kind of currency, and that is just what the International Monetary Fund, except insofar as it deals in gold, does not profess to provide. If the trend of international trade is in the direction which I think it will follow, there will be a great demand for one particular kind of currency. For that reason, all the amounts in these documents were originally expressed in American dollars. The demand will not be for Australian notes or treasury-bills, or for Chinese dollars, but for American dollars, and they will be extremely scarce. If the trade policy of the United States of America is to remain the same, its exports will be greater than its imports, and the greater the discrepancy between them, the greater will be the demand for American dollars, and the less able will the fund be to provide dollars for those who want them. In paragraph 32 of his report Professor Melville says -

Any member buying foreign currency from the fund in exchange for its own currency will have to pay a service charge of three-fourths of 1 per cent. This is a high charge for a service of this kind and is intended to prevent the fund being used except as a reserve of last resort.

We may here apply the umbrella comparison again. In paragraph 28, he touches upon the voting powers of the members in these terms -

When voting is required under the waiver provision or to decide whether a member is to be denied use of the fund’s resources, the votes of creditor members are to be increased by one for each $400,000 of their credit balances and votes of debtor members decreased by one for each $400,000 of their debit balances. lt is the old story of giving to him who hath, and taking from him who hath not. Never was that so well exemplified as in the arrangement for voting among members of the organization. It is evident that in the future the dominant financial and economic power in the world will be the United States of America. I doubt very much whether the International Bank will ever function. Indeed, in the interests of stability and common sense, I hope it never will. However, it is provided that every nation which joins the International Bank automatically becomes a guarantor of every loan made by the bank to any country on earth. If the International Bank makes foolish loans - and these are visualized in the documents before us, the taxpayers of Australia will be called upon to accept responsibility for the mistakes of the bank. When what honorable members opposite describe as British capitalism was flourishing, it went in very heavily for international lending, but I have never heard it suggested that the British Government or British capitalists asked the small nations of the world to get together to underwrite any losses that might be incurred. The British carried their own losses. They carried a loss of £1,200,000,000 which had been lent to Rusia before the revolution. The United States of America is infinitely stronger economically and financially to-day than ever Britain was. Therefore, I was surprised to note that this financial colossus is requiring a guarantee from every small, downtrodden half-bankrupt nation on the earth for the dollars that might be lent for reconstruction purposes. That is a proposal which might be regarded with profound envy by Shylock, Micawber and certain other well-known gentlemen of financial fame. As I have said, I do not think that this International Bank will ever function successfully. Let us look at the list of contributions which the various member nations are required to make to the fund. Australia is to provide 200,000,000 American dollars. It is true that we are not asked to provide this amount all at once but we are to provide about £1,000,000 in gold to start with, and that will be held, not in the Commonwealth Bank of Australia, but in Bombay, New York, or somewhere else. Belgium is to provide 225,000,000 dollars. I maintain that, as the result of the war, practically no European country will be able to honour its obligations under this agreement. Canada, no doubt, will be able to pay its way, and Brazil and Chili might also be able to do so. However, it is provided that China shall contribute 600,000,000 dollars. 1 cannot understand how such a proposal could ever be placed before us for our acceptance. Cuba is assessed at 35,000,000 dollars, Costa Rica at 6,000,000 dollars and Czechoslovakia at 125,000,000 dollars. Egypt is to contribute 45,000,000 dollars. Evidently, there is corn in Egypt still. France is to be asked to put up 450,000,000 dollars. Does any one suggest that France, in the state in which it is to-day, can provide anything like that amount for such a purpose? Greece is to subscribe 25,000,000 dollars, yet we have learned just recently that, for political reasons, the United States of America is to lend Greece many times the amount of this subscription. If Greece could not carry on without the assistance of the United States of America, how in the name of financial sense can it be expected to contribute 25,000,000 dollars to the International Monetary Fund, and a further amount for reconstruction and development.

Mr Anthony:

– The honorable member might as well apply that argument to the American loan to Great Britain.


– The honorable member for Richmond (Mr. Anthony) has done me a service. The honorable member for Perth (Mr. Burke) told us that everything was fairly right so far as Great Britain and the American loan were concerned. However, let me quote the following from a state ment by Mr. Dalton, Chancellor of the Exchequer, made in the House of Commons on the 12th December, 1945 : -

I will turn now to the Bretton Woods agreements, our acceptance of which is a condition of the loan agreement. And I submit to the House that the acceptance of the Bretton Woods agreements, subject to one proviso which I will make in a moment, is definitely to the advantage of this country … In this sense, the loan agreement is, for us, a condition of Bretton Woods.

To those gentlemen who are so anxious to bring the United Kingdom into this’ matter I say that if it were not for the financial position which faces the United Kingdom to-day there would be no chance even of a Labour government in that country entering into this agreement. As the result of price trends in the United States of America since the agreement was made, the value of the loan from the United States of America to Great Britain has sunk day by day, and it is still sinking. Let us consider the contributions that have been set down for other countries such as Iraq, Iran, Liberia, Luxembourg and the Netherlands. The subscription of the last mentioned is fixed at 275,000,000 American dollars, notwithstanding the fact that much of Holland was devastated by the opening of the dykes and its overseas position is such that nobody could expect it to stand up to such an obligation. It is utterly preposterous. Near the bottom of the list in the second schedule we find the Union of Soviet Socialist Republics, the subscription of which is fixed at 1,200,000 dollars. As honorable members are aware, I hate everything Soviet Russia stands for; but I believe that in the Kremlin there is a tendency to be realistic. I have grave doubts whether that can be said of a great many of the Parliaments which govern the democratic countries of the world. Stalin because of his realism, no doubt, has decided that Russia will not join the fund. Yugoslavia is to provide 40,000,000 dollars, and the United States of America is to make the biggest contribution of all. If this is to be the capital on which the International Bank is to be founded, if these are to be the guarantors who are to provide money in case anything goes wrong, then let the people of Australia apologize to Major

Douglas for their criticism of the financial policy which he propounded in years gone by. This agreement is not worth a “ cracker “ to Australia, and the Commonwealth will not be affected one way or another if it does not join the fund and the bank. “We will still have our meat, fruit, wine, butter and other primary products to sell on the world’s markets, and those wanting them will continue to get them irrespective of whether or not we sign these agreements. There is no question about the starvation in the world to-day, and the crying need for our commodities. If the world does eventually reach the state visualized in this document the only money available to cure its ills will be money paid into the fund in the form of notes, if we are to indulge in heavy trade transactions, say, with the Republic of China, and accept Chinese notes in return for Commonwealth treasury-bills lodged with the Commonwealth Bank in Martinplace, Sydney, how is the Australian exporter to be paid for his products? Frankly I do not know, and this document is silent on the point. I have never yet heard that it was a profitable transaction either in private or international trade to exchange commodities for paper which in turn could not be converted into other commodities. That is exactly what we are asked to do in this agreement. If relief were necessary for the people of some country, it would be far better for the Parliament of the democratic countries to provide it outright than to delude themselves into believing that, by joining an institution of this kind, the means can be provided whereby other countries will pay for the necessary commodities purchased in the course of international trade, and that devastated countries desiring assistance for rehabilitation and .reconstruction will be given, large sums of money out of the International Bank which can function only if it obtains dollars from public subscribers in the United States of America. Why should we delude the people into the belief that this agreement will solve anything? Why raise their hopes that it will be a panacea to cure the ills of the world, as we did 25 years ago when the League of Nations was formed? The United Nations will not settle anything nor will these agreements Within five years these agreements will either be vitally amended or no longer in existence. I hope to be here at that time to remind some of my friends opposite of this rather futile debate and this distinctly futile measure.


.- The subject of the Bretton Woods Agreement is a most important one. Its two most outstanding aspects are its effect on full employment in the world and its contribution to the world trade organization. The acceptance of these international monetary agreements will do much to assure the future prosperity, security and contentment of the present generation of Australians as well as of generations to come. During the last few years we have had world conferences on many important subjects which have beer*, attended by notabilities from all over the world. We are able to say with pride that the Australian representatives have obtained for themselves a very high reputation in the councils of the world. I have very bitter memories of the last financial and economic depression which brought worldwide unemployment and misery in its wake. If these agreements will obviate the recurrence of such a tragic happening they should receive the unqualified support of every person. I do not agree with the honorable member for Barker (Mr. Archie Cameron) that Australia is not vitally interested in them. Those of us who suffered most from the depression fear that unless appropriate action is taken now there may be a recurrence of such a tragedy. The honorable member has said that the world needs our wheat, meat, fruit and butter, and will continue to get them. During the depths of the depression ample stocks of primary products piled up in Australia could not be sold. The purchasing power of the peoples of the world depends on full employment. It is to save the world from the catastrophic effects of another depression that these agreements have been made. They should contribute in no small measure to the maintenance of world peace. The Prime Minister has told us that if Australia becomes a signatory to these agreements, the Commonwealth Bank, which is the corner stone upon which the financial structure of the

Commonwealth is built, will in no way be affected. We are all equally resolved in our efforts to prevent another world conflict and I believe that these agreements will do much to prevent future wars. We know that in the past many wars have been caused by discontent among the nations over matters of trade and finance. The International Monetary Fund and the International Bank have been formed for the express purpose of ensuring that all nations are given a fair deal in world trade. The mere fact that 44 nations have already become signatories to these agreements is surely sufficient to prove their advantages. What would happen to Australia if we refused to join? Would it not be better, as _the Leader of the Australian Country party (Mr. Fadden) has said, to be on the inside looking out, than on the outside looking in? If we find that membership of the fund and bank is of no value we have the option to withdraw. The advantages of membership far outweigh the disadvantages. I compliment the honorable member for Perth (Mr. Burke) on his very excellent contribution to this debate, particularly his informative discourse on monetary policy and the gold standard. In Australia, which emerged from the war practically unscathed, these things may be viewed somewhat differently from those countries which bore the full brunt of total war. Let us become a signatory to these agreements so that we may assist the other nations of the world in the rehabilitation and reconstruction of devastated countries. The agreements represent a step in the right direction and as their purpose is to bring about greater amity between the nations of the world and to provide full employment, I give the bill my unqualified support.


.- I support this most important measure. It ia important for several reasons. First, it is an integral part of the organization that has been set up in the hope of ensuring peace, the world peace that concerns the minds of men to-day. The aftermath of all wars since the Napoleonic wars has been a hitter experience. Economic depressions follow soon after each war. Economic war and physical war have alternated. After World War I. men, of whom I was one, thought that we would never have another war. Our enemies had been beaten in battle. Men met in conference and shaped the peace treaty and they were supposed to have eliminated the cause of war. But I am doubtful whether the men that were sent to the peace conference in 1919 were the right men to send. I do not think they were imbued with a sincere determination to do the job they were detailed to do. Now, not long after the end of World War II., people are low in spirit. They regard it as inevitable that we shall sooner or later have if not war, economic depression. I hope their fears are groundless. It seems to me that this time the nations of the world are approaching the task of ensuring world peace in a much more complete and determined manner than they did after World War I. The United Nations is in full swing and trade conferences are being held in the hope of preventing economic warfare, which eventually ends in physical warfare. The Bretton Woods Agreement I regard as an integer of the United Nations whose purpose is world security. We have decided to enter into the agreement in order to make our contribution towards the prevention of trade friction and clashes. This is the first real attempt to control international finance and credit. Some men are opposed to it. Of what are they afraid? Why are they suspicious ? They are afraid of the great powers. But war brings down the great powers, too. War is not for their benefit. Australia should enter the international conferences with a mind free from suspicion. If the nations are not to meet each other in conference confident of the others’ integrity their efforts to come together for their common good are foredoomed. We hear men say that the great powers cannot be trusted. Why not? From what the honorable member for Reid (Mr. Lang) said, one would think that over 40 nations are combining to make Australia toe the line. No one in his right senses could agree with that. The larger nations wish to trade with Australia. If we had had an organization similar to this a few years after World War I., there would have been no need for the dreadful economic depression that in the midst of plenty, brought misery and suffering, not only to Australians but also to all the peoples of the world.

There may be no immediate benefit from this agreement, because, owing to the world shortage of commodities, all nations can sell their goods. But a few years hence, when the shortages will have undoubtedly been overcome there will certainly be need for international co-operation in the control of exchange, and this is a practical step towards that end. I ask the opponents of this measure what their alternative is. Is it to return to the old order of private international finance under which the international financiers wielded far more power than did the governments of the world? The board on which Australia will be represented will be presided over by the British Chancellor of the Exchequer, Mr. Hugh Dalton, as governor. The opponents of this measure see something tobe afraid of, but are they prepared to leave things alone and allow to operate the old system that brought about World War II.? They must stand up to that or offer an acceptable alternative. Anyone who opposes this agreement has no sincere regard for the future of the world. Everything is satisfactory while good prices last, but for how long can we be sure they will last? It is unthinkable that Australia should stand isolated in this matter from almost the whole of the world. To suggest a small nation like Australia could stand alone is ridiculous. It would be like Mickey Mouse trying to stop the Spirit of Progress. If there be evil in the Bretton Woods Agreement we should feel the effects far worse if we adopted a policy of isolation. If we think we can stand up to the other nations and impose our will upon them, we shall revert to what we had in the past. The honorable member forReid said that we had freedom to sell our goods under that system. Of course we did! But who could buy them? No one! We sold overseas at a loss and imposed taxes on our own people in order to make up the deficit to the producers. We do not want a repetition of that. This agreement provides a new system. Many people are afraid of anything new. But here we have all the nations coming together trying to profit from experience and trying to prevent the economic clashes that cause war. In lend-lease we had an illustration of the goodwill of the larger nations that originated that plan. It was said that lend-lease would not work, but it did. In World War I., money was borrowed at high rates of interest and it could not be repaid ; but lend-lease was new, and it worked to the advantage of all that shared in it. Another instance of the sincerity of the larger nations was the institution of Unrra, at the suggestion of the great leader of a great nation, the late PresidentRoosevelt. We contributed to Unrra, as we shall contribute to this fund, and thereby helped to feed the hungry and starving peoples of the world. They could not buy food and we gave it to them. This procedure is to be on the same lines - mutual assistance, without competition, because, obviously, with competition, the larger nations would win. We have had experience of the goodwill that pervades the larger nations. Yet there are men that say that we cannot tr ust them because they will have greater voting power, and that it would be to their benefit to hurt or take unfair advantage of Australia. I am more confident than they, and I shall be until I learn otherwise. Nations must trust each other to get together to develop a better system. This proposal is a part of the whole idea of the United Nations to avoid war. It is designed to prevent economic war, the war that always ends on the battlefields. Unless we approach our problems in an altogether different spirit from that which moves those opposed to this bill, we shall have war, and another war with the terrible weapons that exist to-day, will end civilization as we know it. Men of goodwill have devised this agreement as a sincere expression of the nations’ desire to avoid not only war itself but also all the things that threaten or actually cause war. I do not decry the nations that are suspicious of the Bretton Woods Agreement. We must try to convert them to our way of thinking. If that is not done soon there may not be 25 years between World War II. and World War III., as there was between World Wars I. and II., but war within ten years. We must take quick measures to ensure a steady flow of food to the countries of Europe and Asia that are in desperate need. Hunger breeds war. The hunger of the German people after World War I. was the horse on which Hitler rode to power. Hungry men will listen avidly to any one who feeds them with promises of better things to come, and Hitler’s promises found ready listeners. We cannot keep in conditions akin to starvation the people of Europe. Other nations are able Ac- produce. The United States of America has vast resources. It is the -strongest of nations. It has 150,000,090 people. Its economy is unbroken. Its factories are undamaged. I believe that it will play a great part in restoring international commerce. What it has done in the last few years convinces me of its good intentions in the international sphere. If ~we, as a small nation, say that we do not tiust the large nations, they will say, All right ; go your own way “, and that will not be to our benefit. I, therefore, have every confidence that when this bill is passed it will tend to bring about greater happiness in the world and increased confidence between the nations.


.- I rise to take part in this solemn farce. Honorable members know perfectly well that we are engaging in a farce. We are pretending to debate the merits of an issue, the result of which has already been decided. In the circumstances, the people of Australia, who may be listening to this debate, should know what is happening. They are led to believe that this Parliament is a deliberative assembly, which makes its own decisions. To-day, however, we are debating an issue of major consequence to Australia,, but the result of the discussion is already known. Not one word which has been uttered during this debate will effect the result. The issue has been decided by a tortuous process of discussion, negotiation, recrimination and internecine strife in the ranks of the Labour party.


– Why does not the honorable member get on with the job ?


– I know that my remarks are painful to the honorable member for Hume (Mr. Fuller). Earlier, he heckled his former leader, now the honor able member for Reid (Mr. Lang), who opposed Australia’s becoming a party to the Bretton Woods Agreement. All honorable members are aware that the Parliament is now being asked to place the rubber stamp of its approval on this agreement, because the decision whether Australia should be a party to it was made by caucus after considerable fighting and recrimination. In this debate, we are not examining critically the Bretton Woods Agreement. We are mere puppets. That is how the Labour party’s policy of having issues decided, not by the Parliament, but by caucus, has affected this democratic institution.

Mr. Burke

– Order! I hope that the honorable member will relate his remarks to the Bretton Woods Agreement.


– I propose to do so, but, meanwhile, I consider that the people of Australia should be informed of the futility of anything that any honorable member may say on this bill, because his remarks cannot possibly influence the result. The adoption by this Parliament of the Bretton Woods Agreement has been a controversial issue in the ranks of the Labour party and has led to some curious speeches on this bill.


– Order! I have allowed the honorable member considerable latitude to come to the subject-matter of the bill, and I ask him to do so now.


– The issue which 1 am about to discuss is highly controversial in the ranks of the Labour party. Some honorable members opposite believe that the ratification by Australia of the Bretton Woods Agreement will make this country subordinate to international financiers. I ask: Who is responsible for the introduction of this bill which will ratify the Bretton Woods Agreement? Looking around me, I see that the principal supporters of the Premiers plan - the last financial and economic issue in Australia that aroused great controversy in the Labour party on the ground that it was the creation of international financiers - are now to be found in very diminished numbers on the back benches. Those who occupy the front benches and who support the adoption by

Australia of the Bretton Woods Agreement, gained their prominence in the Labour party by successfully denouncing the Premiers plan. Fifteen years ago, they could be heard declaring that the Premiers plan was calculated, if not designed, to place Australia in the thraldom of international financiers. Those who gained their seniority in the Labour movement by describing the Premiers plan as a device to enable international financiers to obtain financial and economic control of this country now ask the Parliament to approve the Bretton Woods Agreement. For those reasons, I describe this debate as a solemn farce.

Even honorable members on this side of the chamber are not unanimously of opinion that Australia should become a party to the Bretton Woods Agreement. The honorable member for Barker (Mr. Archie Cameron), who is a conscientious, consistent and skilful opponent of Australian military isolationism, delivered a very fluent speech in support of our economic isolationism. In truth, this chamber to-day seems to be a mad-house. What are the facts? The Bretton Woods financial -proposals do not stand alone. They are a part of a world pattern which earnest, thoughtful and responsible persons have devised in an endeavour to bring some order out of chaos. The Bretton Woods Agreement is not the bright conception of the Australian Labour party, or of a few people in various countries who considered that an international financial and currency arrangement would be advantageous. The Bretton Woods Agreement is merely one part of the whole pattern, which those people are attempting to weave with the single purpose of advancing the interests and safeguarding the security of humanity. Any person who has a knowledge of the proposal, realizes that the Bretton Woods Agreement cannot possibly stand alone. It is a natural result of the establishment of the United Nations, and will begin to operate with the establishment of an international trade organization. These arrangements will be surrounded by a multitude of devices, which the world’s leaders are formulating for the advancement of the interests and welfare of mankind, and to bring about economic stability that will prevent the commencement of a war with its origin in economic causes. The United Nations, the Economic and Security Council, the International Labour Organization, the Bank of International Settlements, the World Court, the International Trade and Employment Organization and the International Currency and Exchange Organization, are all parts of the complete pattern. I do not believe that the plan is perfect. When speaking on the United Nations, I did not state that the organization was perfect, and, in my opinion, it will not function perfectly. Most honorable members will share that view. But all of them supported the proposal that Australia should become a member of the United Nations. The alternative is the reversion to a set of world conditions where the nations will engage in the practice of catch-as-catch-can, and chaotic economic and trade arrangements which contributed so materially, though not exclusively, to the awful cataclysm which overtook the world in 1939.

The real choice confronting us is whether we shall refuse to be a member of any organization or a party to any arrangement until, in our judgment, it is perfect, or whether we shall pursue a progressive plan for the ultimate benefit of mankind. Any person who has a real sense of responsibility and who recognizes the real danger of the world again drifting into war, must approve Australia’s engaging in this experiment. There is no useful alternative. In the formulation of the Bretton Woods Agreement Australia is not a principal. This Government has not devised it. This Parliament will not have an opportunity to amend the agreement. However, we may critcize it. If you, Mr. Acting Deputy Speaker, were to confine honorable members in this debate as closely as I have on occasions been kept to the literal subject, we might not be permitted even to discuss the merits of the bill. We might be compelled to limit our remarks to an expression of opinion as to whether we should debate it- However, that is not your intention, I am sure, and I believe that honorable members can make an interesting examination of the merits of the bill, although that examination will not be a useful one, because they must either accept it or reject the measure. Personally, I shall not attempt to reject the proposal, imperfect as some honorable members believe it to be, simply because it does not represent, in my eyes, perfection. Criticism of the bill is found in its most vocal form among those who used to have the courage to describe themselves as advocates of Douglas Credit. These critics have seen figures where there are only shadows. I do not take any notice of those criticisms. Frankly. I believe that few, if any, honorable members are really capable of correctly understanding and assessing the very intricate technicalities of this agreement. I am not ashamed to admit that I am unable to understand them. In the circumstances, my judgment upon this matter must be limited to the principle. On that issue, I ask myself: Do I advocate Australian isolationism, or Australian co-operation in an attempt to work out an international pattern and plan which will give us an ordered world? Some people will say, “ That is a grand theory, but against that, Australia is a sovereign country, which is invited to surrender its sovereignty for something quite nebulous “. Upon that objection, a very powerful argument could be built, which would appeal to those who have not thought very deeply about the Bretton Woods Agreement. Superficially, the proposal that we should surrender our sovereignty appears to be a very serious one. But there can be no order in modern society unless the individual surrenders his sovereignty to the sovereign State. There can be no ultimate order, good government and peace in this world unless sovereign States are prepared to surrender such a portion of their sovereignty as is necessary to achieve effective international co-operation. My criticism is frankly directed against the Government for its delay in bringing this matter before the Parliament. It is also directed against the Government for bringing the matter before Parliament as a closed issue. It is normal, of course, to find that Government supporters do not need to speak in support of a government measure. Their support is taken for granted, but here we know that, after months of wrangling, something like 50 per cent, of Labour members are enthusiastic opponents of the scheme. This party, which a year or two ago, wanted to safeguard the rights of the Australian people by writing into the Constitution a provision that every Australian should enjoy freedom of speech, is now denying that freedom to nearly 50 per cent, of its own members in this House. Recently, I saw a film entitled the Reluctant Dragon. Where are those two reluctant, dragons, the Minister for Transport (Mr. Ward) and the Minister for Information (Mr. Calwell) ? Never have I heard of any two dragons so reluctant as they appear to be. It is extraordinary that men who claim to hold such strong views on a matter so important as this should be unwilling to come into the House and state those views. A party which adhered for so long to a policy of military isolation, and which was proved to be wrong-


– The honorable member must not broaden the discussion too much.


– I was merely pointing out that there can be a policy of economic isolation as well as one of military isolation, and the question non before us is whether we shall or shall not subscribe to a. policy of economic isolation. Government supporters found themselves in such an intolerable position in regard to their policy of military isolation that, they abandoned it for the good of Australia; yet almost 50 per cent, of the members of the Parliamentary Labour party have still learnt nothing at all. In the Bretton Woods plan we have a device which its originators may or may not believe will operate effectively. I do not know whether they believe in it or not, or whether they put it forward as the best experimental device which they can contrive. Let me take the least advantageous view of the proposal, namely, that it is only an experiment. Even if it be no more than that, it is still our duty to go on with it. However, looking at the matter from a national point of view, what is the high purpose of the Bretton Woods monetary arrangement for international currency control and exchange? It is very simple. It, is a device intended to help certain nations to buy internationally, and it is little more than that. Nations need no aid in order to sell internationally. It is a domestic matter to arrange production, and then the goods are available for sale. The real problem is when nations want to buy, but cannot obtain the credits necessary for the purpose. A majority of the nations in the world are to-day in that position. Prom a humanitarian point of view, and in order to safeguard the peace of the world, it would be well if those nations were placed in a position to buy. Australia is a selling nation. It has industries which produce goods principally for export. Its economic life blood is kept pumping by the sale of goods such as wool, meat, wheat, butter and flour - goods which other nations want to buy. I cannot think of anything that could be of more advantage to Australia than the Bretton “Woods plan which, if effective, would give customer nations power to buy our goods. We have the technical skill, the land and the resources to increase our production. At Shepparton, in my own electorate, there is the greatest cannery in the southern hemisphere, yet one can drive in ten minutes through the area which supplies it. However, one could drive for 300 miles up the Murray Valley through land which is equally productive, land which, if turned to the production of fruit, could supply the needs of half the world. Why do we not develop this laud? Because if we did, under existing world conditions, the world would not be able to buy what we produce. Some honorable members opposite do not understand the relations between what I am saying and the measure before the House. This plan, if effective, will enable the nations to buy our goods, and enable us to proceed with the development of our country.

I am not able to say whether this is a perfect financial proposal or not, and I am not convinced by the arguments of those honorable members who say that it is good or bad. There is not the technical financial skill in this House to pronounce authoritatively upon the subject, but I believe that the plan has been worked out in good faith .by skilled and experienced persons. If it can be made to work, it will be for the great good of Australia and of humanity. I do not propose to be one of those who say, “ The scheme is bad, and if I had a free will I would oppose it, but I have no choice. It exists, and it will go through in any case “. I recognize that this is an experiment necessary for the welfare of humanity. If it does not work perfectly, honest attempts will be made to improve it. If something of this kind cannot eventually be made to work, it will be bad for humanity and for Australia, and the foundations may be laid for another war that will engulf this country.

We must approach this proposal with fair and open minds. The only criticisms which have registered with me have been in the nature of the old threadbare political device of playing upon people’s fears. We have heard about the gold standard. If the Minister for Transport were free to speak he would talk about the gold standard as did the honorable member for Reid (Mr. Lang). We had our bad days when the gold standard was adhered to strictly. We have had our bad days, when floods have damaged the countryside, but it is not suggested that, because we sometimes have floods, water is bad. Because we have had bad days when the gold standard was maintained on a strict note-per-sovereign basis, it does not follow that the relationship of notes to gold on a flexible basis is- necessarily bad. There are those who believe that gold is not a necessary element in banking, either national or international. I do not know whether it is or not. All I know is that no country, either capitalist or socialist, has yet thought itself able to disregard gold. A device has been worked out for retaining gold at an ultimate standard by maintaining a flexible relation between gold and the national currency. That is the system which obtains in Australia, where our currency is 25 per cent, off sterling, which is itself off gold.

The other criticism, to which I have already referred, is that if Australia accepted the plan it would be surrendering some of its national sovereignty. I have referred to the manner in which mankind, in developing an ordered social system, has progressively surrendered individual freedom in the interests of society. The same process was continued in the realm of military affairs when we joined the United Nations, and unless we subscribe to the law of the jungle, where every nation fights for itself, and let the devil take the hindmost, it is inevitable that, in international affairs, there must be some surrender of the complete freedom of individual states. We nave had before us the tragic examples of nations which, in the period between the two wars, pursued isolated economic courses as did Germany, resulting in the economic ruin of other nations. This policy prepared the ground for Hitlerism. It was the policy of Dr. Schaact, with his block currency, which enabled Germany to enthral and eventually subjugate neighbouring states. Are we to return to such a. state of affairs, or are we to endeavour to evolve an orderly economic system among nations which will promote the peace of the world? I am not going to wave the Union Jack, but I point out that the United Kingdom is a signatory to the Bretton Woods Agreement, as are all the other unit states of the British Commonwealth, with the exception of New Zealand and Australia. If ever there was a time when it was necessary for the British people to get together in the face of a pretty bleak economic prospect, that time is now. It is not without significance that Soviet Russia is not a member. Russia i,- completely non-co-operative. I do not want to traverse that matter now, but 1 believe that whether we sign the Bretton Woods Agreement or not is of small importance in comparison with the recent decision of the United States of America to establish a frontier between the United States of America and Soviet Russia in Greece, in the neighbourhood of the Dardanelles. That is the most significant item of world news that has been published since V-J Day. I am not going to canvass it. It is of tremendous consequence, and those who are able correctly to assess the implication of the decisions ought, I consider, to start to “ keep their powder dry “. One of our contributions towards that end should be to engage in all those actions which will weld together, first, the unit States of the British Commonwealth, and secondly, the two great Anglo-American peoples.


.- This bill is for the ratification of the Bretton Woods Agreement, which was negotiated in 1944, in a world very different from that which exists to-day. The agreement rests upon two theories. The conclusion has been drawn from international currency experience between the two wars that competitive depreciation of currencies made a major contribution to trade deadlocks and the impediment of the movement of goods, and hence to economic depression. The theory which underlies the International Bank” is that the immense task of world reconstruction should be carried out not only by means of individual loans from wealthy and unscathed nations, but also by advances by the bank which has been set up. I stress that the world has changed since 1944, when the agreement was negotiated. In 1944, a major aspect of the world economy scene was lendlease. Something like 1,000,000,000 dollars worth of food was presented by the United . States of America each year to Great Britain. Vast quantities of food and war materials were sent by the United States of America to a number of other allied belligerents. When the agreement was negotiated, it was not contemplated that there would be a sudden cessation of lend-lease; and, though this is not a reflection on the agreement, it is an objective fact that if, instead of the unscathed nations reconstructing the damaged nations by means of gifts, such as were represented in lend-lease during the war, there was the alternative that reconstruction should be carried out by means of loans, a situation would be created which would make it more difficult for the Bretton Woods Agreement to function, because that agreement does not deal with trade as a whole, despite the remarks of the last speaker; it is an agreement which deals with the balance of payments in regard to trade as between States, and if the exports of the damaged countries of Europe and Asia in the future are to be exported to pay interest on loans as distinct from exports that will earn corresponding imports, the balance will be upset, the disparity of payments between the two countries will be enlarged, and in the circumstances the operation of the agreement will be made more difficult. The United States of America has made loans to Britain, the terms of which are most generous by all the standards of the pre-war period. But at a later stage, these immense loans will require the payment of interest, and a vast quantity of goods which Great Britain will export to the United States of America will not be earning imports from that country but will simply represent the payment of interest. That is a factor which will make difficult the operation of the Bretton Woods Agreement. The currency which all powers must desire, and will continue to desire for at least the next decade, is the American dollar. It is the currency which can be translated immediately into goods. The demand for the dollar is accentuated not only by the fact that goods can be obtained immediately by means of it - and countries desperate for reconstruction must have the goods - but also by reason of the fact that the dollar is hard to earn, and will still be hard to earn if the United States of America continues to pursue a high tariff policy, involving the rejection of the goods of other countries which would enable them to earn dollars to make purchases in the United States of America. Just how great is the disparity in the balance of payments between the United States of America and other countries, is made perfectly clear by a Federal Reserve Bank bulletin issued in the United States of America on the 27th December last. Reviewing the year 1946, this statement is made -

It estimated that, from September, 1945, to August, 1946, United States exports of goods and services totalled 14,000,000,000 dollars (including 8,800,000,000 dollars through the merchandise trade, 2,000,000,000 dollars through the transfer of goods already abroad, including military surplus and lend-lease supplies, and 3.200,000,000 dollars in services), whilst United States imports amounted to 0,700,000,000 dollars.

Therefore, the disparity was 7,300,000,000 dollars. This unbalance was met generously by the United States of America in the following ways, which will not continue to be permanent financial devices so far as the United States of America is concerned -

To finance this balance, the United States of America gave 3.200,000,000 dollars in outright gifts (1,500,000,0000 dollars through Unrra, 000.000,000 dollars by means of lend- lease, 500,000,000 dollars in the form of supplies to occupied areas, and 600,000,000 dollars through private donations), and 2,700,000,000- dollars in loans . . . (300,000,000 dollars on account of the British loan) . . . The total of 2,700.000,000 dollars financed by credits extended by the United States Government represented nearly one-fifth of the goods and services transferred to foreign countries by the United States of America, during the year.

For some years to come, the demand for American goods must exceed its demand for the goods of other countries, and, in those circumstances, the drain on the dollars in the International Monetary Fund which has been set up by the Bretton Woods Agreement will be intolerable and entirely unworkable unless the United States of America is prepared to make very great advances by way of loans to the other powers, thereby giving to them claims on dollar resources which the Bretton Woods Agreement cannot give to them. I hope that that will be the policy of the United States of America. There remains this imponderable in the United States of America - the Republican party has come into power in the Congress of that nation. The Republican party is traditionally the high tariff party of the United States of America. I do not know whether that high tariff tendency will continue, and I am not making any prophecy. If the Republican party of tie United States of America runs true to form, the present tariffs of that country will continue or will be accentuated, and to that degree the operation of the Bretton Woods Agreement will be made difficult. This only reminds us that the agreement will depend very largely for its effective operation upon the nature of the agreement reached at the International Conference on Trade and Employment.

The theory upon which the Bretton Woods Agreement rests is that competitive depreciation of the currency is a major cause of economic dislocation, and this is well worthy of some examination. The Leader of the Australian Country party (Mr. Fadden) expressed the orthodox but short-sighted view that currency depreciation resulting through our manipulation of exchange rates during the depression cheapened the price of our commodities in foreign countries and made dearer the goods imported into Australia and that during the depression we thus did something to rectify the balance of payments. That is quite true, but to assume that that is a desirable policy for general application is quite a different thing. If there is a competitive devaluation of the’ currency, trouble must begin. It has been assumed in this discussion so far that currency depreciation is the only cause of economic dislocation. The honorable member for Indi (Mr. McEwen) stated that the manipulation of the German mark was the cause of damage to Germany’s neighbours. The fact is that the manipulation of the German mark was not a cause of the dislocation of trade, but the effect which resulted from a decision to impede the physical movement of goods. This was the result of the determined German policy of autarchy under which Germany manipulated its currency. The currency was manipulated by Germany for purposes which in themselves were unsound.

Mr McEwen:

– I said that the manipulation was partly a diplomatic device.


– When Germany enthralled its neighbour states, such as Yugoslavia, it took their goods, which it wanted to build up the German arms stock-pile, and it insisted that those states, including Yugoslavia, should accept payment in goods which they did not need. Notably aspirins were sent to Yugoslavia, as, according to a German minister, Germany was already causing Yugoslavia enough headaches. The German policy of autarchy involved the manipulation of the mark and the purchase of selected goods, but the manipulation of the mark was not a prime objective.

Let us look at conditions in Japan before the war, for the Japanese Government had devalued its currency to a greater degree than any other country in the world. In theory, under such conditions, Japan should not have been able to purchase goods from abroad in any volume because, in terms of its currency, it had made foreign goods too dear. In point of fact, Japan became, after the devaluation, a very much heavier buyer of goods from us. Japan was able to make such purchases from abroad with its devalued currency because, within Japan itself, a policy of full employment was being applied. I am not advocating the Japanese policy of full employment, which was vicious to the core, as it was full employment turned to the mass production of arms, mass preparation of all kinds for war and also, in part, the exploitation of that part of China which J apan had taken into its possession. Here we have a clear illustration of the fact that mere currency devaluation in itself need not be an impediment to trade. Japan did not make a physical tariff decision to impede trade, hence its currency manipulation did not prevent it from purchasing heavily from abroad. I cannot accept the view, therefore, that currency devaluation in itself must necessarily be a big impediment to trade. The United States should have bought less after President Roosevelt had devalued the dollar in 1933. In fact, the rising purchasing power associated with the “ new deal “ enabled the United States to trade heavily in foreign goods even in terms of its devalued currency. Currency devaluation is only one device which may impede trade.

Some remarks have been made during the debate about the alleged gold standard which will exist under the Bretton Woods Agreement, but an analysis of the relevant clause of the bill shows that the arguments are not sound. A true gold standard will not be established under the provisions of the agreements which refer to the purchasing power of the fund. Though I am not capable of making a definite alternative suggestion, it appears to me that an unscientific device is being adopted to determine the relative values of currencies. The United States of America, which is to provide the measuring rod under the Bretton Woods Agreement, has not altered the value of its currency since 1939, and the agreement provides that the gold value of the contributions to the fund must be maintained. In the United States of America there has been a sharp rise in internal price levels during the last eighteen months. If we had sold wool to the value of £4,000,000 to the United States of America recently the quantity of goods that we should be able to obtain in return for it would be very much less than if we had made the sale eighteen months ago, because of the rise in price levels. The real devaluation of the currency of the United States of America is not in terms of its gold content, with the dollar at 117 grains of gold. Our currency has maintained its value in a relatively successful manner, because we have been able to maintain stable price levels within the country. In the United States of America there is a demand for goods and that country can deliver the goods though in lesser volume than formerly, because of price increases. The devaluation of the currency in terms of purchasing power is not dealt with effectively in the agreement. I said that I was not able to suggest a better alternative than that set out in the agreement. It may be that a general price index would be a real way to determine purchasing power parity as between countries, but I do not know how an agreement could be reached about the basket of goods to be included in the index, since all countries produce different classes of goods. This agreement is an attempt to anticipate a situation that may arise, and it must be left to the common sense of the governors of the fund to administer it wisely. The agreement is, in effect, an attempt to remove one of the causes of economic dislocation, which is competitive currency devaluation, and it is the result of our having learned, in part at any rate, the lessons of the inter-war period. But we must recognize that if high tariff policies are to be pursued and if American trade continues to he heavily unbalanced over a long period as the result of reversion to a high tariff policy, i t will be extremely difficult to administer the fund. I have a strong feeling that, in the long run, the huge loans that have been raised from American sources will not be repaid ; and if a strong attempt is made to enforce the payment of interest, ns the result of rigid adherence to orthodox policies, the Bretton Woods scheme will not work. The fact that the United States of America has been remarkably generous in its treatment of needy countries, however, causes one to hope that the economic policy which it will pursue will be unlike its former intensively individualistic policy, but will be a policy appropriate to the world leadership which that country undoubtedly has to-day.


.- This bill is, in itself, simple, and the answer which it provides to the problems envisaged is also, in itself, simple. It is unfortunate, however, that as has so often happened recently when matters of great importance have been submitted to this House for consideration, honorable members have been presented with a document which has already been signed and are expected to fill the role of rubber stamps, in respect of decisions which have been made elsewhere by other bodies. At the same time, I disagree with the honorable member for Reid (Mr. Lang) in regard to this measure. He considers that if the bill could be submitted for an open vote by honorable members on .both sides of the chamber it would be rejected. I, however, have no hesitation in declaring that in an open vote honorable members would accept the measure by a substantial majority. I believe that most honorable gentlemen are of the opinion that the passage of the bill through the Parliament will be in the best interests of the people of Australia and of the world.

The meat of the measure is in the two schedules, the first of which provides for the setting up of the International Monetary Fund, and the second, for the establishment of the International Bank. I have found throughout the country, as well as among honorable members of this House, including the honorable member for Reid, a good deal of misunderstanding and ignorance in regard to the measure. I do not see anything sinister in the proposal that machinery should be established for the purpose of stabilizing foreign exchanges throughout the world. There is nothing to be afraid of in this regard. In fact the proposal should be warmly welcomed. The purpose of the International Bank is to provide funds over a long period for the rehabilitation of war-worn countries and the development of undeveloped countries. We must agree that these objectives are highly commendable. Money must be provided if prosperity and progress are to be assured, and the proposed Internationa] Bank is, in my opinion, an instrument of groat value in that regard.

I wish to refer to some of the arguments advanced by the Leader of tha Australian Country party (Mr. Fadden), and I may repeat some of the figures that he used, but the subject is of such great importance that I feel justified in doing so. The first important point strongly emphasized by the right honorable gentleman was that, owing to the war, Great Britain had dissipated a vast portion of its overseas assets amounting in value to £5,000,000,000. These assets were required to purchase food stocks abroad and, what is perhaps equally important, its requirements of raw materials. I do not know if honorable members have seen the British White Paper relating to the proposals of the British Government to correct its financial position. They are very striking. It is planned that this year Great Britain shall expend £1,450,000,000 on imports and that Government expenditure overseas, including expenditure on occupation troops and other payments resulting from the war, shall be cut down to a total of £175,000,000. Thus, it is proposed that the total overseas expenditure for 1947 will be £1,625,000,000. Exports are estimated this year to be valued at £1,275,000,000, leaving the total deficit for the year of £350,000,000. Even on paper this plan looks bad enough, but when one examines it one finds that herculean efforts will be required to achieve it. It means that in 1947 Great Britain’s exports will have to exceed the volume of exports in 1938 by 140 per cent. If it is to pay for all its imports next year it will have to increase the 1938 figures by 175 per cent., which will probably mean that it will have to double the 1938 volume because some of the items exported in that year are not now being produced in sufficient quantities. I refer to coal and steel then, the principal exports. But that is not the whole story. We have to consider where its exports go, and whence its imports come. As was pointed out by the Leader of the Australian Country party, Great Britain obtains to-day 42 per cent, of its total imports, including all things vital to its economy, from the western hemisphere. Of the balance, 14 per cent, comes from Empire countries like Australia. On the contrary, the bulk of its exports go to the eastern hemisphere, to Asia, .and some of the British countries in the East. Its needs of dollars or currency of any value must he met from the United States of America. While Great Britain is drawing large quantities of goods from the United States of America, it is, at the same time, drawing its monetary requirements from countries in- the eastern hemisphere, which will not be taken in payment for those imports from the United States of America. So the position must inevitably worsen.

The second point is that the bulk of exports from Great Britain must be represented by manufactured articles. The British people have to put forward a very much bigger effort in the manufacture of goods than they did before the war. At that time a great proportion of the exports from Great Britain consisted of coal, steel and semimanufactured goods ; but there is now no demand abroad for semi-manufactured goods and in any case it cannot afford to send abroad those goods which return much less in value than fully manufactured articles. If, before the war, Great Britain enjoyed one-fifth of the world’s trade, it now requires two-fifths of the world’s trade to meet its requirements and, as we know, that is impossible of achievement. The only practical way in which Great Britain will be able to maintain itself in the years to come will be by securing the former share of increased world trade. There is not the slightest chance that other countries will take proportionately twice the quantity of British goods they took before the war. What are the chances of extending world trade? A vast portion of the world to-day, Europe in particular, is still stricken by the after effects of the war. The only possible chance of an increase comes from the Dominions, the Americas and, we hope, from portions of Asia. If there be no increase of world trade, if Great Britain cannot double its pre-war share of the trade of the world, it must go downhill and the standard of living of it3 people must be reduced. If Great Britain is to hold its own an extension of world trade is absolutely essential. I have dealt with the position of Great Britain at some length for two reasons, first because we are bound to Great Britain both politically and economically, and secondly, because what applies to Great Britain applies equally to ourselves. In past years, Great Britain has provided the chief market for Australian goods and we have drawn from it in return a very large proportion of our requirements. If Great Britain is forced to divert its goods from us in order to get currency from the United States, it will mean that we will have to sell our goods to Great Britain and take in exchange such capita] goods or other goods as it can supply. And if Great Britain cannot supply our market our position must become progressively worse. Any permanent lowering of the standard of living of the British people must mean a reduction of the demand in Great Britain for our chief exports. Thus, we.have a dual interest in the maintenance of the economic and financial stability of the Mother Country. The question which we have to decide is by what means can we increase world trade? The answer, which must be clear to everybody who has studied this question, is that one of the chief factors in the extension of world trade is the stabilization of foreign exchanges. I happen to know something about this subject from my own personal experience. The honorable member for Fremantle (Mr. Beazley) referred to conditions in Germany. From 1928 until just before the outbreak of World War II. I was engaged in trade with Germany, and I recall, from my own personal experience, how extraordinarily difficult it was to trade with German firms without facing the gravest risks. From one day to another, with blocked marks, travellers’ cheques, and so on, we did not know where we stood. What applied to Germany applied also to almost every other country in the world. Among the few countries which escaped these conditions, insofar as their internal trade was concerned, were the countries of the British Empire. One of the factors which made for the successful development of trade between Empire countries was our reliance during that period on stability of exchange. I believe I have said suffi cient to demonstrate the imperative necessity for retaining a stabilized exchange by any means.

A number of objections have been raised, not so much in this House as outside it, to the establishment of the International Monetary Fund and to the whole conception of the Bretton Woods Agreement. I propose to refer to some of them, because I believe them to be important. The honorable member for Reid (Mr. Lang), for instance, raised the bogy which has frightened many people in this country in years gone by, and, no doubt, will continue to do so in the future, when he referred to the sinister influence of the international monetary cartel of his friends Niemeyer and Guggenheimer. Apart from those two gentlemen, many others were mentioned in connexion with this so-called Jewish high finance cartel, including the former Secretary of the United States Treasury, Mr. Morgenthau and big Jewish financial firms such as Pierpont Morgan and Company and others located in New York, London and elsewhere, who were accused of being behind everything sinister that has taken place in the financial world, and, in particular, in connexion with the Bretton Woods Agreement. I have had some experience of public affairs in Europe. I had quite a lot to do with these so-called sinister gentlemen in my various activities in governmental positions, but I have never found any evidence to prove that they were engaged in sinister plans directed against the British Empire. The International Monetary Fund found its genesis in the book of the late Lord Keynes, The Economic Consequence of the Peace Treaty, and in other more recent works written by that distinguished gentleman. Lord Keynes was universally looked upon, not by laymen but by important commentators on world ‘ affairs, as one of the greatest experts in economic affairs that the world had known for many years, if not for many centuries. Apart from his work in that field, he was a great Britisher and believer in the British Constitution. He was largely responsible for the Bretten Woods Agreement. The late President Roosevelt, another great humanitarian, also had his share in it. How can anybody knowing the work of those two great men in connexion with this fund conceive that it is a plot by a large or small number of Jewish or other financiers to bring the whole world and particularly Australia, under their thraldom. It is too ridiculous for words.

Another objection is that through the fund America will be able to dominate the world, including Australia. Fund or no fund, America can dominate the world through the dollar. The Bretton “Woods Agreement will neither help nor hinder America if world domination is its policy, but I do think that the representation of the different nations on the board would tend to tone down American imperialism, if there were any, and thereby safeguard our position. It has been said that tho Bretton “Woods Agreement is a plot designed to bring the world under the control of America. I do not know whether honorable members have read the debates on the agreement in tho American Congress. I could quote the statements of numerous congressmen, all more or less along the same lines, claiming that America, instead of benefiting from the agreement, will be done a great deal of harm and left to “ carry the baby”. The statement that I propose to read is typical of many in the debate. It is the statement of the Hon. Jessie Sumner, no doubt an intelligent; woman. The Summary of Congressional Proceedings U.S.A., March-September, 1945, volume II., Nos. 1 and 2, contains the following passage: -

It was a scheme to get American money under false pretences. “ Ratify this bill “, the Congresswoman declared, “… and it will be found that we have surrendered to a trustee-controlled monetary organization good American dollars in return for depreciated currencies probably put up at a high par value, though many of them are of little or no value. . .” This swindling, war-breeding Bretton Woods proposal would, in her judgment, throw away their chance to do the good things they wanted to do in the future.

I could quote dozens of similar statements made in that debate. “Mr. Holloway. - And dozens of others the other way round.


– Yes, but I am arguing against the view that this is an American plot to enslave us financially. The third objection is that the agreement re turns the world to the “ iniquitous “ gold, standard. I do not like the gold standard that we had, and, if this proposal meant a reversion to it, I would vote against, it, but it does not. Some curious things are said about the gold standard, but I doubt whether the people that say them, know what the gold standard is.


– They know what a sovereign is.


– If they have longmemories of conditions under the gold standard. An Australian note is exchangeable anywhere for its legal equivalent in gold. Nothing that I or theGovernment can do can alter that. Under that standard if I sell a note abroad, I receive its equivalent in gold. All that this agreement proposes is that some standard should be set up, some yardstick, to measure the exchange values of the currencies of the nations. Means are laid down whereby the value so determined for any country may, within limits be altered. To deal with that subject I should have to speak at great length. So I shall refrain. If we do not adopt gold as the yardstick, what shall we adopt? “We must have some measure in order to arrive at relative values. If we do not use gold we shall have to use the dollar or something else. I would as soon have gold as any other measure.

Another objection raised, if not in this House, at least by a number of people outside, is that, in some way or other, we shall surrender some of our sovereignty if we enter the agreement. It is clear that every international agreement that we enter whittles down our sovereignty. It is clear that under this agreement we surrender some of our powers, particularly the power to move our currency as we desire, hut what does that matter? I have listened frequently to honorable members opposite talk about international co-operation. They are willing that Australia should assume obligations as a member of the United Nations. In return for the obligations that we shall assume we shall have rights. If honorable members are in favour of that, they ought to be equally in favour of this proposal. As I said yesterday, in the debate on international affairs, if this world is ever to progress we must have collaboration between the nations. We cannot have assured peace until we have a central world power that will control not only political but also economic matters. The small amount of sovereignty that we shall surrender is a small price to pay for the step towards that world organization that we need. Are we to be unprepared to take that small step towards the goal that we waul to reach? Are we to pull ourselves back and say, “ We will have none of this ! “ and retire into the cave of economic isolation, letting the other nations carry on as they may. I am sure that we cannot do that and I am equally sure that we should not try.


, - Normally I should leave the discussion of a bill dealing with a subject so technically involved as this to those who have a specialized knowledge. Obviously I am not fitted to debate the financial points that have been raised by several honorable members, but I consider that this bill is of such tremendous importance, that it has aroused so much interest, even though it has not been interest that has led to complete knowledge, and that it has also aroused so much feeling, even feeling that has run high and hot, that I should, in my own mind at least, believe that I was running away from my responsibility if I failed to record the reasons for the vote that I propose to give. I have been rather disappointed with this debate for various reasons, but the chief of them is that many of those who have spoken have been lukewarm about this measure. I am enthusiastic. I support it. I know that the institution will not be perfect. Is any institution perfect that human minds have conceived and human hands devised? I look about the world to-day, a world torn by war, with nations so crushed that many of them may never rise again, many of them, too, nations that for our sakes suffered. I have never forgotten, if other members have, Jugoslavia. Its rulers had arranged a commitment that would have allowed the German army to cross the frontier unopposed, as other nations had been and were prepared to do; but the people of Jugoslavia, almost to a man, rejected the arrangement made on their behalf and in effect lay down in front of the steamroller. That is one of the countries. There are many others. If they are to have some opportunity to get back to normal relations with the rest of the world, to revive their own economics, they must have home help from other nations, and I believe that only through the instrumentality of a world-wide organization can we hope to achieve that end. Temperamentally, I am one of those who believe in action. When I see a situation such as this I cannot believe that we can sit down and do nothing about it and just hope for the best. When I see some attempt made, as we have here, to deal with at least one problem and when we see an effort made by the United Nations to deal with the problem on a larger scale - of which after all, this is, merely a -part - I feel bound to do what T can to support those who are prepared to work out a plan of salvation for us all.

Knowing that I am bound by my personal feelings to look favorably on this measure I consider it my duty to examine very carefully the arguments that have been advanced against the scheme from many sections of the community. First let me look at those who have opposed the measure in this House. There is a strange coincidence apparent, I think, if one glances casually at the scene. There are three nations which at present have not signed the Bretton Woods Agreement namely, Russia. Australia and New Zealand. In this House, the three voices raised against the agreement - two of the voices have been raised against it in this chamber, and the third has become articulate in other places - were those of the honorable member for Reid (Mr. Lang), the honorable member for Barker (Mr. Archie Cameron), and the Minister for Transport (Mr. Ward).

Mr Anthony:

– The Minister for Transport has not raised his voice in this House against the agreement.


– No; but we all know the ideas that the Minister espouses.

Mr Barnard:

– A queer combination, are they not?


– 1 regard them as a most extraordinary combination in all the circumstances, and I point to them merely as a matter of interest. I shall not make any further comment.

The honorable member for Barker referred to the speech of Professor Melville. He said, quite rightly, that in answer to a question in the Opposition party room yesterday as to how a member could withdraw from the International Monetary Fund, Professor Melville replied that, quite frankly, he thought that the withdrawal would be a very difficult process. This was how he illustrated his point. He said : “ Suppose a man opens a banking account, then gets into financial difficulties, overdraws his account and becomes thoroughly disgusted with the whole banking system “. Any honorable member who has read Professor Stephen Leacock on the subject of banks will know something of the poor fellow’s feelings. The professor continued: “ Having withdrawn his business from the bank, he just cannot extricate himself from the banking system “. That is perfectly true. He is affected by it in every way throughout his life. But what I desire to point out to the honorable member for Barker is that the man is in precisely the same position then as he was before he opened his account. I do not share the fears concerning the withdrawal from the agreement that apparently are held by the honorable member for Barker, because I am convinced that, whatever our position may be, were we forced ‘or were we to seek to withdraw from the fund, we should not be in a different position, or in a worse position than we shall be in when the Bretton Woods Agreement comes into full operation. If Australia does not become a signatory it will be on the outskirts of this scheme. Forty nations will be parties to it. Does any honorable member contend that the influence of 40 nations on the world economy will not affect us in any possible way? When we talk of being hampered by the Bretton Woods Agreement, we cannot overlook the fact that we shall be hampered by it - if it is being hampered, just as much in remaining aloof - as we would if we were a party to the agreement.

Before I go further, I should like to express my warm thanks to the Prime

Minister (Mr. Chifley) and the Minister for Transport for having provided me with the documents which they had prepared relating to the Bretton Woods Agreement. This expression of my thanks is due to them for the courtesy which they showed to me. The arguments which each of those gentlemen prepared were impressive, but as honorable members will observe, those which the Minister for Transport adduced in his broadcast did not impress me so much as did those of the Prime Minister. However, I propose to examine, for a few moments, one of the three principal arguments which have been offered against Australia’s accept;ance of this plan. Other honorable members have referred to them and, obviously, they will be constantly repeated. The first related to the gold standard. I profess to no technical knowledge of the gold standard. I have a fairly good working model of a knowledge of it, and that helps me to some kind of opinion on the matter. The honorable member for Flinders (Mr. Ryan) gave an excellent sketch of the position this afternoon. What surprises me is that the two speakers who dealt most fully with the gold standard were opposed to the Bretton Woods Agreement and one of them loathes the gold standard as he loathes sin; the other likes the gold standard and embraces it. On more than one occasion, the honorable member for Barker has expressed his belief and faith in the gold standard. He did so this afternoon. Yet the Minister for Transport and the honorable member for Barker are opposed to the Bretton Woods Agreement. I shall go no further with that line of argument, other than to say that it is stretching the whole concept of the gold standard to suggest that the Bretton Woods Agreement represents a return to it.

I glance now at the fear of world domination by international financiers. Do we really believe that this plan has any real relationship to the kind of financial organization* that operated before the war? Pre-war finance was controlled by private financiers, but the proposed system will have the sanction of the governments of most of the conditions of the world. Those who speak in terms of world domination by international financiers inevitably refer to the financial and economic depression. The following passage appeared in a booklet issued by the Australian Railways Union : -

The de facto government of the United States of America is the rich men behind the scenes. They started the depression in 1921 and again in 1929. They helped fascism in Europe, and now, through Bretton Woods, seek to establish themselves in a key position to give financial and economic assistance to such countries as best serve the interests of the American monopolists.

The world-wide depression, which began in 1929, came about through a variety of causes; but, probably, the chief among them was that governments did not understand the workings of international finance, and that the lessons which we have learned since could not then be applied because they were not even remotely understood. “When we think of the various measures which extricated us from the economic and financial depression, let us remember that the device which had most to do with it, namely, the depreciation of our currency, did a great deal to worsen the effects of the depression elsewhere. We have now to talk in terms of world-wide organization against a world-wide menace. This agreement, as I see it, is not an instrument to create a world-wide financial and economic depression. Rather is it an attempt to formulate an organization to forge a weapon against the very beginnings of a world-wide depression.

Sitting suspended from 6 to 8 p.m.


– Before the suspension of the sitting, I was dealing with the main objections that had been raised against the Bretton Woods plan. I had referred lightly and shortly to the objection that it revived the gold standard. I had referred also to the objection that it meant world financial domination by certain large financiers, situated, as we all know, mainly in America. I shall now refer to the other principal objection that has been raised, the one which I believe has the most popular appeal and the one which, no doubt, is least thoroughly understood ; that is, the objection that this will mean a loss of sovereignty. What is the basic problem facing all democratic peoples to-day? I should say with Clare Booth Luce, that it is the problem of obtaining social and economic security without the sacrifice of the political liberties that we enjoy. As the world becomes more closely organized, it is absolutely inescapable that some of our sovereignty must go ; and the constant struggle must be to achieve a balance between that political freedom which we, in the British democracies at least, value so very highly, and the necessity to give away some of that sovereignty which is inherent in the political freedom that we enjoy. I remind the House that personal sovereignty has been limited ever since Adam left the Garden of Eden. Adam’s sovereignty in the way of personal raiment was enormously greater than our own. Ever since, as we have moved on into a closer and still closer organization, our personal sovereignty and freedom have been limited. If it be true that, in our domestic and national sphere, we must wage a constant battle and keep a close watch to ensure that that balance between freedom and sovereignty shall be preserved without the sacrifice of the objective at which we aim, then it is equally true that in the international sphere wo must keep the same close watch. But some surrender of sovereignty is inevitable. In this day particularly, our sovereignty is more limited than it has been at any time in the history of the world. The war alone ensured that. The development of weapons of warfare ensured it. In particular, the discovery of the use of atomic energy has made it something which we cannot ignore for a moment. At the moment, one power holds the main secrets in connexion with the manufacture of atomic bombs and, realizing all the might that it holds in its hands, is prepared, once the proper machinery has been chosen, to hand that tremendous power over to the control of an international organization. I believe, and I think that most honorable members believe, that that is the only way in which we can escape the final destruction of civilization - that the control of atomic enery shall be in the hands of an international commission of some kind. But is there a realization of the degree to which that must limit our sovereignty? Is it realized that the government in

America, possibly the least socialistic of all countries in the world to-day, and certainly among the democracies, have taken complete and absolute control of the means for producing atomic energy, and all the raw materials associated with it? If that has to be done in America, it has to be done as well within the international organization. If the international control of atomic energy were once arranged, we should have to submit to the taking over by that body of all the raw materials associated with its manufacture. That would mean the surrender of sovereignty greater than anything envisaged in this bill, and I believe that we have to face it. We could not hope to survive in a war which had to be fought with the weapons of modern warfare, crowned as they are by the atomic bomb. Other speakers have said that this financial agreement must be part and parcel of our agreement to take part in the United Nations. With that, I am in complete agreement. In my youth, I was one of those who believed that all wars sprang from financial sources. Indeed, I once wrote a sonnet on that very subject, and I am almost tempted to read it to the House, because T am quite sure that only by having it published in Hansard could I ever get it into print. I have long since abandoned that view. It has been take from, me by the events of the last 25 years. I realize that war is due to the failure of human motive in a variety of spheres. It is due to an inordinate love of power; for example, to love of personal or national aggrandizement. Or, as I heard an eminent Anglican divine say, it springs from original sin. Nevertheless, it remains true that trade and finance are very closely bound up with the causes of war, and unless we are able to make possible a free flow of trade throughout the world we shall fail in that sphere, at any rate, in our obligation to the generations of the future to prevent war. I believe that this organization, this plan, has been evolved for the very purpose of helping international trade to flow more freely, to convert our currency into the terms of another with the greatest possible facility. I believe that, if we can achieve what this measure is designed to achieve, then we shall have removed at least one of the causes which would make for warin the future. Do not let us be afraid to take this step. I fear far more theeffect of our taking no step at all. I beg all honorable members to remove from their minds the feeling that we can makeourselves secure unaided. That is a physical, financial and economic impossibility. I beg all honorable members to> remove from their minds the feeling that all people other than ourselves are people who have poor motives and a wicked intent. If we are to denounce all those people as wicked and designing schemers, we shall adopt the policy of international anarchy which plagued the world during the depression years,, and which must be expected to bring about again just such another disaster if it continues. .


.- The subject under discussion - the International Monetary Fund and the International Bank of Reconstruction - has been rather fully discussed, and quite a varied number of opinions have been expressed from both sides of the House in connexion with this very important agreement. Some speakers have gone into the very technical details of the agreement, which has created considerable discussion in all parts of the world, and has revealed a wide difference of opinion as to whether or not other nations should become associated with the fund. Tonight, in my few brief comments, I do not intend to go into the technical side, but rather to state my views in respect of this agreement, which to my mind, and in the opinion of the Government, will have a far-reaching effect and can prove very beneficial to this nation.

We listened a few moments ago to a speech by the honorable member for Darwin (Dame Enid Lyons) which, I believe honorable members will agree, gave a very correct analysis of this agreement, and showed that she had given careful consideration to all the important aspects of it. Earlier in the day, the right honorable member for Darling Downs (Mr. Fadden) placed before this House most enlightening figures, which were associated particularly with the export trade, and the trade value that will be conferred on the nations that are taking part in it to-day. From those speeches, and from the speeches of honorable members who sit on this side of the House, it is obvious that there are great benefits to be gained by Australia’s participation in the agreement. An agreement of this nature has such farreaching implications, and makes such a new approach to financial arrangements in the world, that it naturally arouses many fears and misgivings on both sides of the House, as well as doubts as to whether or not it will prove successful. I believe that no honorable member, to whatever view he may subscribe, is without certain misgivings as to whether or not the fund will function as it should, as to whether it will have the results which its sponsors say that it will have, and whether it will not prove to be detrimental, as its opponents would have us believe that it will.

All those reasonable and natural fears must arise in the consideration of an entirely new approach to the financial set-up in this postwar world. Whilst having in mind all those factors, we cannot work on the basis that just because this is a new approach to financial agreements it is doomed to failure. We have seen clearly that the League of Nations failed. The United Nations may fail. Other new endeavours to obtain a better state of affairs in the world have failed, and they may fail in the future. We should remember, however, that the League of Nations failed in one respect because some people condemned it at the outset. They did not give it an opportunity to function as it should, and it did not receive that honest support which is so necessary in international agreements if they are to bear the fruits which it is hoped they will produce. I believe that under this financial agreement we must have a. new and an honest approach by all nations. If America, Great Britain, and other nations enter into this agreement simply for the purpose of getting what they can out of it, with no consideration for the higher ideals that are associated with international politics, and with no intention to do their best for the people of all countries, then we cannot hope that they will succeed in the financial sphere or in the sphere of peace. In my opinion this agreement has been drafted by representatives of the nations with high ideals and honest intentions to do the best they could in the financial world to prevent any return to the prewar experiences of poverty and want. I hope that the agreement will prove to be beneficial to the people of all member nations. If it were worth while to establish the United Nations in order to assist in achieving international harmony in a general way, it should be worth while to implement this international financial agreement. Because the United Nations in its early stages has not achieved complete success in every respect, we should not condemn it out of hand. The people of Australia have shown their approval, in many ways, of our participation in the activities of the United Nations, and 1 am sure that they will approve of our participating in the organizations established under the Bretton Woods Agreement, seeing that the object is to achieve general financial stability. The Government has acted wisely in approaching this subject as it has done, and I believe that the Parliament will ratify the agreement with the confidence that great good will accrue to the country and to trade and development generally by reason of its operation. Undoubtedly the object of the agreement is to bring a greater measure of prosperity to the nations of the world.

Some honorable members have complained that Australia will have a voting capacity of only 2 per cent, under the agreement, and that the smaller nations, including Australia, will be dominated by the representatives of Great Britain, America, and certain other countries. But I ask whether it is not reasonable to assume that if these other nations may exert a dominating influence under the agreement they would also be able to do so if there were no agreement at all. In these circumstances, is it not desirable to take the risk of participating in the agreement, rather than to remain aloof and he subject to complete domination ? I believe that the representatives of the nations which drafted this agreement were actuated by an honest desire to face fairly the great problems of international finance. I cannot see that Australia can lose anything by becoming a member of the International Monetary Fund, but

I can see that we may lose a great deal if we do not link up with it. lt is surely desirable that we should participate in this attempt to formulate a workable international policy. Surely every honorable member would be willing to admit that, although Australia is a country with a small population, it has been able, through the able activities of the Minister for External Affairs (Dr. Evatt), to exert a valuable influence on international affairs generally at recent conferences. There is no reason to assume that the country will not be represented in a similarly satisfactory way at any international financial conferences. Therefore, notwithstanding that Australia will have a voting strength of only 2 per cent., it is desirable that the nation should be associated with the International Monetary Fund as a member nation.

The honorable member for Darwin revealed the shallowness of the argument that has been advanced that, if Australia participates in the activities which are flowing from the Bretton Woods Agreement, it may come under the dominance of international financiers. The honorable member pointed out that activities under the agreement will be on a governmental basis. Governments will be dealing with governments. Under the old method of international finance the people of the various nations were subject to the mechanizations of private financiers whose principal purpose was to serve their own ends. The Prime Minister pointed out in his speech that the operations of the International Monetary Fund and the International Bank would be related to our central banking organization, and that there should thus be no further fear of domination by privatefinanciers. It is significant to me that the financiers on Wall-street are bitterly opposed to this agreement. They fear that its operations may adversely affect their own enterprises. The very fact that these private financiers are opposed to the agreement is a strong point in favour of its ratification.

Despite the arguments of the honorable member for Reid (Mr. Lang), who conveniently omits every fact that does not suit him in respect to his attack - and in this regard, at least, he is not unlike the honorable member for Barker (Mr. Archie Cameron) - I consider that the Government is taking a wise step in seeking parliamentary ratification of the agreement. The honorable member for Reid argued that if we adopted the agreement we would risk domination by financial interests in other parts of the world and that, we might again have to suffer the experiences of the dark days of 1931. The honorable gentleman forgot to point out, however, that if Australia finds that the administration of the International Monetary Fund and the International Bank is proving detrimental to the best interests of this country, we can withdraw our Support and, in fact, get our money back. That being so I am fortified in my opinion that this country should link itself with the other 43 nations which have signified their acceptance of the scheme. The very fact that, on the giving of due notice, Australia can withdraw from the fund is a great safeguard. If the full implementation of the agreement turns out to be detrimental to the best interests of Australia, and detrimental to the welfare of its people, the Government can withdraw its support.

The Leader of the Australian Country party (Mr. Fadden) pointed out to-day that 86 per cent, of the trade which Australia did in pre-war days with countries overseas was with the 43 nations which have already accepted this agreement. It would be reasonable to assume that if Australia withheld its support from this great experiment in international finance the nations which formerly traded with us and which are now parties to the agreement might restrict their trade with us, with the result that we should lose valuable markets. Naturally member nations will desire to trade with member nations. It is reasonable, therefore, to assume that if we declined to join with other nations in this attempt to bring stability into international financial operations we might find ourselves on a black list. This might not mean very much so long as the market for our commodities was practically unrestricted, but when supply and demand became more nearly related, we might find ourselves in a very difficult position. I consider therefore that, in the interests of both our primary and secondary industries, we should join in this move for international financial and economic collaboration. The figures which the Leader of .the Australian Country party placed before the House this afternoon were significant and indicated the wisdom of our following a course which will ensure, insofar as it can be assured, that we should not he excluded from markets which formerly were available to us. I believe that the 43 nations which have already agreed to participate in this scheme have been actuated by a genuine and honest desire to stimulate the prosperity and economic security of the peoples of every nation in the post-war years. Our economic existence depends upon our being able to secure markets for our commodities and I believe that we should do a great deal to this end if we become a member nation under the agreements embodied in this bill.

I do not agree with every provision in this bill and the schedules thereto, but that is no reason why the whole scheme should be rejected. We are being given the opportunity to participate in a noble experiment in international stabilization in respect of currency and economic affairs generally, and we ought to be prepared to take a measure of risk in order to make the experiment a success. We have been prepared, in recent years, to send accredited representatives to all kinds of international conferences overseas, and I consider that we should be no less ready to support the effort that is being made to stabilize the financial affairs of the nations by the means set out in the Bretton Woods Agreement. In my opinion, the sponsors of this proposal are making a sincere effort to achieve international financial equilibrium ‘and they deserve our support. I trust that the experiment will be a great success and that the confidence of the numerous governments which are entering into this agreement will be fully justified. There is a very good prospect of fulfilling the purposes which the designers of this scheme had in mind. I hear an honorable member opposite interject that the majority, in caucus, in favour of the Government’s proposal was not great, but I remind him that matters of this kind are determined by our party on a majority vote. That is not always the case with honorable gentlemen opposite. I look forward with confidence to successful collaboration by the representatives of the various governments in the field of international finance under the terms of the Bretton Woods Agreement. I believe that there is every prospect that, under the scheme that has been devised, we may enter upon a period of economic stability and security which will be greatly in the interests of all the nations in the world.


– This is a remarkable measure. For the first time during my membership of this Parliament I have listened to an honorable member of the Australian Labour party praise the leader of the Australian Country party. An agreement which can accomplish that ‘result must be a remarkable document. In fact, this is the first occasion on which I can recall the Australian Country party being given credit for anything by honorable gentlemen opposite. But not only is the Bretton Woods Agreement remarkable in itself ; it is remarkable also for the manner in which it is being placed before the country. I believe that the members of this Parliament, who, on the average, represent about 60,000 electors, should have the opportunity to give free expression to the views of their constituents. A member of this Parliament is sent here to voice the principles in which he believes. One might be pardoned for thinking, after listening to this debate to-day, that it was an eisteddfod in which every one was singing the same song, except for the temporarily discordant notes of the honorable member for Reid (Mr. Lang), and the honorable member for Barker (Air. Archie Cameron). Apart from what they said, no dissentient opinion has been expressed, although we know that this issue has divided theLabour party into two almost equal parts. The supporters of the Labour party areentitled to know just what are these strongly held opinions of the Minister for Transport (Mr. Ward), the Minister for Air (Mr. Drakeford), and another illustrious member whom I shall not name. These honorable gentlemen persevered in their opposition until they almost brought the Prime Minister (Mr..

Chifley) to his knees. It is well known that at the first meeting of caucus the proposals of the Prime Minister were not accepted. Originally, Cabinet reached a majority decision after a hectic debate, but that was not the end of the matter. The Prime Minister had to carry his proposals to the executive of the Labour party, and he had to fight the issue through one State branch after another, receiving endorsement by a bare majority only. The Labour executive then referred the matter back to caucus. I may be mistaken in the exact sequence of events; but- that, briefly, is the story.

Mr Barnard:

– The honorable member is a long way out.


– Then let the Minister for Repatriation (Mr. Barnard) get up and tell us just what did happen. That would make of Parliament a debating institution instead of a debased institution.


– We are not going to discuss our domestic affairs in this Parliament. They are our business.


– The Bretton Woods Agreement is the business of the people whom honorable members opposite allegedly represent. We gathered the impression that there were men in the Labour party who were practically prepared to get out of the movement rather than support the agreement. It was reported in the press that the South Australian Labour executive had announced that any South Australian member of Parliament who voted for the agreement would not be endorsed for the next election. That is what they thought of the agreement. The people of Australia are entitled to be told by the opponents of the agreement why they are opposed to it, why they think that it will have the effect of selling the Australian workers into bondage. However, apart from the honorable member for Reid, none of the opponents of the scheme has spoken. 1 violently disagree with the honorable member for Reid. I stand for practically nothing for which he stands, but I respect the courage with which he state? his opinions in this House.

I support the Bretton Woods Agreement, but that does not imply that I object to those who disagree with me voicing opposition in this Parliament. After all, that is what the British parliamentary system is for - ‘to permit the expression of different opinions. I support the agreement because it has for its objective the achievement of noble ends. Whether they will be achieved remains to he seen. We have seen other international plans crash in ruin. It may be that the same fate is in store for this, but, in the meantime, we ought to back it with all the goodwill possible. The purposes of the agreement are stated briefly in the bill itself as follows : -

  1. To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
  2. To facilitate the expansion and balance growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.
  3. To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
  4. To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
  5. To give confidence to members by making the Fund’s resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
  6. In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.

Are any of those purposes such as could not be subscribed to by the honorable member for Barker, or the honorable member for Reid, who so violently denounced the scheme to-day? As a matter of fact, they are all such as every citizen of this country fervently hopes will be achieved. Because of the long period of wrangling in the Labour caucus, Australia is among the last of the 41 or more nations to adopt the agreement, but it is clear that there is a very strong current of world opinion in favour of it. The nations are essentially selfish. Every nation views international proposals from the point of view of how they are likely to affect its own interests. That is only natural. However, it is in Australia’s interest that we should assist in the rebuilding of the war-torn nations of the world.

I have taken from the Y ear-Book figures which indicate the dependence of Australia on world trade, which show how necessary it is to rebuild those nations which are our customers, and how desirable it is that, by an international arrangement such as that proposed in this bill, they should be enabled once more to buy our surplus products. Unfortunately, we have not as great a surplus as we ought to have, but we trust that the position ‘ will improve. Our principal exports are wool, sheepskins, wheat, flour, dried fruits, mutton, beef, tallow, lead, zinc and sugar. In 1938-39, we exported to Belgium goods to the value of £5,546,000. In the same year, we bought from Belgium £1,000,000 worth of goods, but last year our purchases from that country were so small that they do not figure in the list. Much has been said of the economic dominance of the United States of America, and of how the Bretton “Woods Agreement was designed by the financiers of that country so that they might get a grip upon world trade. Let me say here that I believe that there ought to be in Australia a little more appreciation of the United States of America than there is. I remember how, in March, 1941, this Parliament adjourned so that honorable members might welcome the ships of the American Navy, just before Japan entered the war. When we are tempted to speak of the United States of America as a usurious nation, let us remember the help which wo have received from that country in the past. In 1938-39, we exported to the United States of America goods to the value of £3,600,000, but in 1945-46 we exported to that country goods to the value of £35,000,000, or ten times the value of our exports in 1938-39. Before the war, we imported from the United States of America £14,500,000 worth of goods. Last year, our imports were valued at £42,000,000 - and these were not lend-lease goods either; they were direct trade commodities. Of course, we recognize that our principal customer has always been the good old Mother Country, the United Kingdom, but the United Kingdom may not always be in a position to be the chief buyer of our surplus commodities, however much we may regret this. We have recently heard of the difficulties which Great Britain is facing in the way of storms and floods, but we hear less of the difficulties confronting Britain in meeting its financial commitments; yet that difficulty is a far greater worry to Mr. Attlee and Sir Hugh Dalton than the vagaries of the seasons.

I do not propose to examine the Bretton Woods Agreement clause by clause. The bill is very short; the schedules are very long. I have no doubt that any bush lawyer could pick holes in it, but no one listening to such a person would bc much wiser after he had finished than before he began.t I do not believe that any honorable member in this House is qualified to express a worth-while opinion on the intricacies of international finance and the requirements of the International Monetary Fund. Yesterday, we had the privilege of listening to Professor Melville, the economic adviser to the Commonwealth Bank. He is no partisan. He gave an impartial dissertation on the agreement, and he answered questions fairly. I asked my share of questions, and I came away with the feeling that the worst that could be said of the agreement was that it would do Australia no harm. The best that could be said of it was that it might prime the pump, as it were ; that it might help to set in motion the flow of trade which is so necessary to world rehabilitation. I believe that, with all its limitations, the agreement is deserving of our support. It might fail. No doubt, its enemies hope that it will. There are some, like the honorable member for Reid, who say that it is the work of overseas financiers. Indeed, listening to them, one can almost see a long-nosed Jew in the background - - some one like Sir Basil Zarahoff perhaps - trying to get the workers of the world into his grasp again. When we study this agreement and read what Professor Melville had to say about it we find that the international financier who is to be president of the International Bank is Sir Hugh Dalton, Chancellor of the Exchequer in the Labour Government of the United Kingdom, and that the deputy president is to be no less a person than the Treasurer of the United States of America. Had the Government made up its mind to become a signatory of the Bretton Woods Agreement before the 31st December last, we may have seen our own Prime Minister appointed as a member of the executive committee of the bank. These are the leaders of the international financial gang conjured up by the honorable member for Reid as the likely destroyers of the workers of Australia. It is said that politics make strange bed-fellows. I certainly never imagined that I should see the Prime Minister and the Leader of the Opposition in the same political bed, singing love songs to one another; nor did I expect that at any time the honorable member for Barker would lie alongside the Minister for Transport. It is almost unbelievable that such things should happen. Although there has been some difference of opinion between one honorable member on this side of the House and some of his colleagues in relation to the Bretton Woods Agreement, the honorable member for Barker has at least openly professed his antagonism to it. For all I know other honorable members on this side may oppose it, but at least they will be courageous enough to speak and vote against it. But when the bill is put to a vote in a short time where will the Minister for Transport, and the Minister for Information (Mr. Calwell), be? Will they stand by their advice to the workers of Australia and sacrifice their Cabinet positions, or will they meekly walk across the chamber and vote in favour of a bill which they have told the Australian people will be to their great disadvantage? Time alone will tell. I assure the Prime Minister that there will be no pairs granted by honorable members on this side of the chamber in respect of any divisions that may be taken in connexion with this bill.

We can, I believe, congratulate the Prime Minister upon the tenacity, skill :and diplomacy he has displayed in carrying this proposal through the caucus and the Cabinet. Shortly before his death the former Prime Minister, Mr. Curtin, in speaking of his political accomplishments said that one of his greatest achievements was his persuasion of the Australian Labour party to abandon, in part, its anti-conscription policy by extending the area in the islands in which our militia forces were permitted to operate. The present Prime Minister has emulated that great achievement by beating to the ground the opposition of the Minister for Transport, and carrying the Labour party out of a policy of isolationism and lining it up with the great nations of the world. Australians will not line up with the Colonel MacCormacks and the other isolationists of the United States of America. The United States of America is not without its own problems. It has been said by the honorable member for Barker and other honorable members that we do not know how the United States of America is likely to react to the agreement if there should be a change of government in that country. I remind him that practically every isolationist in the United States of America, both Republican and Democrat, was defeated at the last election campaign. The people of the United States of America are moving towards world leadership. It is no good burking facts. It has been said that under this agreement we will assist the United States of America to encompass the world. Irrespective of whether wo stand in or out of the agreement, the economic strength of the United States of America is so great that it is able to tell the world just what it likes in the matter of world economics. I trust that I have aroused some honorable members opposite sufficiently for them to tell us why we should not support the bill. Even at this late hour perhaps the Minister for Transport may be persuaded to state his reasons for his opposition to the measure.

Mr Barnard:

– It is a Government measure.


– A steamroller has been run over many members of the Government. I trust that this monetary agreement, together with the world trade agreements now being discussed, will have a reasonable chance of success. It is upon the success of such efforts at international co-operation that the future welfare of the world depends.


.- The honorable member for Richmond (Mr. Anthony) was more concerned about washing dirty linen than with the merits of the bill before the House. The Australian Labour party is a democratic institution which abides by majority decisions; but the party to which he belongs is merely one of spare parts. It has no settled policy on any matter of importance. Some mention was made of the possibility that we might antagonize the United States of America if we do not sign the Bretton Woods Agreement. Such fears are groundless. When this country was threatened with invasion, when our troops were being sent back from foreign battlefields to defend our shores and the late Prime Minister, Mr. John Curtin, appealed to the United States of America for assistance, members of the Australian Country party accused him of attempting to cut the painter with Great Britain. Mr. Curtin had no desire to sever our ties with Great Britain; his sole concern was to secure assistance to defend this country. It is to his credit and that of the American people that the United States of America came to our aid. We shall never forget the debt we owe them.

One of the principal purposes of the bill before us is to improve international trade relations. Differences in the matter of international trade have arisen in the past because tariffs have discriminated against certain countries. The United States of America, for instance, has in the past sought a reduction of the tariff on American goods entering this country. When this subject was being debated in 1931 I said quite definitely in this chamber that the whole fabric of our tariff should be reviewed and that the United States of America should enjoy the same preference as was accorded to Great Britain. I am still of that opinion. I said then that if ever we needed a friend in the Pacific the United States of America would come to our assistance. How true that has proved to be. A nation’s financial policy dictates its economic standards. By controlling financial policy internationally economic security and full employment throughout the world would be stabilized and the economic cause of catastrophic wars lessened. Every one of us knows that many wars have occurred over trade differences. We have witnessed in the past the manner in which prohibitive tariffs imposed in a spirit of economic nationalism have brought about international discord. Vast quantities of foodstuffs for which other countries have been clamouring have been destroyed in order to maintain export prices. The late President Roosevelt spoke of a new deal. Where is the new deal to come from unless the world reaches some common understanding in regard to trade? Associated with the establishment of the International Monetary Fund is the making of world trade agreements which are now being discussed at Geneva. Australians cannot advocate full employment and financial isolation. Our delegates at all overseas conferences sponsored by the United Nations have consistently fought for the right df full employment for our people. Modern scientific developments indicate that if rugged nationalistic isolationism does not give way to international co-operation based on goodwill civilization must perish. The closing days of the war saw the development of atomic energy. We know that by the use of atomic energy the whole of humanity could now be destroyed, and every day new experiments in the devastating effect of- this new weapon are being conducted. The honorable member for Denison (Dr. Gaha) said that birth control is sapping the strength of the white races of the world and thus the yellow peril is becoming, an increasing menace. Why is this happening? Do not honorable members think that it is because women will not rear children for cannon fodder? It is tragic to realize that mothers have given the flour of the manhood of this and other countries to fight in wars that mainly originate over trade.

I listened attentively to the honorable member for Reid (Mr. Lang). He spoke about 1931, when a mission from the privately owned international banks led by Sir Otto Niemeyer came to this country and told us that we had to tighten our belts. That was his phrase, I think. Labour was in office. Sir Otto Niemeyer told the Scullin Government that, instead of expending money on reproductive public works that were in its programme, it would have to curtail expenditure, even on social services. I remember the part that was played at that time by the honorable member for Reid. I was an opponent of that plan, too. But I do not share with the honorable member fears that history will repeat itself and that we shall again be dictated to by private financiers, because, at that time, we had no control whatever over the Commonwealth Bank of Australia, whereas to-day we have full control. I further remind the honorable gentleman that the institution that is being set up under the Bretton Woods Agreement is an international bank that will be controlled, not by private financiers like Niemeyer but will be wholly controlled by the governments that are parties to the agreement. Talk of strange bedfellow s! On one side of the chamber we have the honorable member for Barker (Mr. Archie Cameron) and on the other the honorable member for Reid, both of them utterly antagonistic towards the Communist party. The honorable member for Reid was the leader of what was known as the Non-Communist Labour party. I wonder how they can sleep so happily together with “Uncle Joe “ Stalin, who will not sign the agreement.

Mr Archie Cameron:

– That is not so strange as the sight we shall see on the government benches when the division takes place.


– There will be no division in which all (members of the Labour party will riot abide by the majority decision of the party. Yes, it is a funny old show, Archie. Is cooperation for the common good not a sound principle ? If it is, the average “ Aussie “ says, “ Give it a go ! “ Should the world’s statesmen and financial experts not prove equal to the idea of co-operating for the common good, let us pull out. But do not sabotage the development of internationalism because of suspicion, surmise or prophecy. We do not convict a man on suspicion or on what he might do. We must have facts. With Bretton Woods we must have facts. So, in the words of the Prime Minister, let us go into it with the guard up, willing to support a sound ideal but unwilling to be kicked around by the major powers. If the major powers are domineering, any signatory to the agreement will have the right to withdraw and take with it its contribution to the fund. I am willing to try anything once, and I am prepared to “ give this a go “, but, as the honorable member for Richmond, with whom I have never agreed in my life before, supports this, I am wondering whether I am right. Apart from that, however, the Bretton Woods Agreement proposes a union of governments aimed at promoting an orderly flow of international exchange to increase international trade. It is managed by governmental representatives and not by private financial interests. Thus it replaces the influence of private banks in international exchanges. Further it is not a return to the gold standard, because each nation puts in only 10 per cent, of its quota in gold. In these days of atomic warfare it is only the development of international co-operation that will save civilization. As an ideal, the proposal to set up some form of international organization that will promote an orderly -flow of trade is sound, but it is well to examine the practical application of an ideal worthy of support, because often there is a slip between intention and practice. We all know the possibility of error. What carries me away in this agreement is this: we fought World War I. as a war to end war, and we were told when World War TI. broke out that we were fighting for ideals similar to those for which we fought the previous war. Now we find, with the battles hardly over and peace net yet officially restored, what appear to me to be preparations for another war if some nation does not get its way in dictating the politics of another nation. We must prepare. I believe that Russia considers that thi3 agreement forms a financial bloc against the Soviet Union. I do not and will not accept that. If Russia could fight side by side with us against the common enemy recently disposed of, it is hard to understand why it refuses to enter this agreement. The institution that is being set up is forbidden to interfere with the domestic policy of any country. Internal currencies cannot be interfered with, and signatory nations can issue as much credit as they like in their own countries. Where are the members of the Labour party out of whose alleged opposition to the agreement the Australian Country party has tried to make so much political capital? First, we find that the federal executive of the Australian Labour party, which represents every State, carried a resolution in support of the agreement before the Parliamentary Labour party reached a determination. The New South Wales branch of the Labour party has carried a resolution supporting it. So has the Victorian branch. The South Australian branch, of course, has not; but I do believe that it is preparing to fall into line. This Government has withheld a decision on the Bretton Woods Agreement for two years. Why?

Opposition Members. - Yes, why?


– I will tell honorable members. The simple reason is that the Government wanted a clear conception of the set-up of the International Trade Organization. Any reasonable man or woman knows that it is nonsense to imagine that we can live alone financially or economically. The set-up of the International Trade and Employment Organization is not yet complete ; but a decision on the Bretton Woods Agreement was brought on so that we shall gain advantage from becoming an original member, which Ave shall become.

Senator McBRIDE:
WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954

– Who said that?


– I did. Members of the Australian Country party jabber like a mob of schoolboys, but they are listened to in silence. The set-up of the International Trade and Employment Organization is not yet fully completed, so the Prime Minister now asks the Parliament to accept the Bretton Woods Agreement, and I am pleased to see so much unanimity. We have the right to withdraw if the international trade arrangements prove unsatisfactory. We argue that modern scientific development indicates that if rugged nationalist isolationism does not give way to international co-operation, based ou goodwill, civilization must perish. The Prime Minister has pleaded for this measure for some time. Forty-three nations, including the socialist government of Britain - that may hurt the Opposition - and many European socialist : governments, ‘have accepted the agreement - principally because they believe the future of mankind is wrapped up in some form of control over the cut-throat forces of economic nationalism. Economic nationalism can only lead to another war, as it did in 1939.

What are some of the criticisms of and doubts about the agreement? First, it is said that it means interference with internal policy, that it means that the control of our own Commonwealth Bank is surrendered. The articles of the fund state specifically that there is no power to interfere with the domestic policy of a member country. This point is answered by saying that the agreement controls exchange rates and can, therefore, action can be taken which would have repercussions on internal policy. Under the agreement, exchange rates can be depreciated or appreciated by 10 per cent, without the approval of the fund. The .fund is obliged to approve further exchange rate variations, by a further 10 per cent, either way, if satisfied that they are necessary to protect a fundamental disequilibrium; but it is prohibited from taking account of the interna] policies that may have caused that fundamental disequilibrium. That was one point that the honorable member for Reid went to some length to explain. He was forced to take action on the social welfare programme that he introduced in New South Wales - widows’ pensions, for the first time, and child endowment. Certain cuts had to be made.

Mr Lang:

– Not one penny was taken off social services in New South Wales. It was done in the Commonwealth, but not in the State sphere.


– I do not want to argue with the honorable member.

Mr Archie Cameron:

– Does not the honorable member for Hunter remember saying, “Lang is right!”?


– I said that the Labour party was right. I never give individual credit. The lauding of Lang as the man who was right, was a mistake. Under the Premiers plan, governmental expenditure in New South Wales was reduced.

Mr Lang:

– Social services were not reduced.


– When the honorable gentleman was Premier of New South

Wales, he increased the unemployment relief -tax of 3d. in the ;£1, which .the former Premier, Mr. Bavin, had imposed, to ls. in the £1. However, I do not desire to indulge in recriminations which have no useful purpose. I do not believe in washing dirty linen in public for the edification of the Opposition.

Wall-street is supposed to control the whole of American finance. Critics of the Bretton Woods Agreement declare that the fund will be dominated by Wallstreet. That fear is based on a misconception of the plan. Who will operate the plan? Not Wall-street. Wall-street is opposed to the Bretton Woods Agreement, just as the Beaverbroo’k press in England and the Opposition in the House of Commons opposed it. Members of the Opposition in this Parliament are not so shrewd as their counterparts in certain other countries, because, obviously, they failed ‘to secure from overseas sufficiently early the policy that they were expected to advocate. Their counterparts overseas opposed the ‘Bretton Woods Agreement. T was in Great Britain when the House of Commons was debating the Bretton Woods Agreement, and I have some knowledge of the opposition to it.

The management of the fund and the International Bank will be in the hands of government representatives-, answerable to the people and not to “WalL-street financiers. As a matter of fact Wallstreet bankers opposed the plan and conducted propaganda .against it because they foresaw a threat to their power and their profits through international control. At all overseas conferences, including that held at Bretton Woods, Australia has strongly advocated that fu’ll employment should be written into the charter of the United Nations. Full employment can be achieved only if it is a world objective. It is to the aci vantage of all nations which desire economic stability within their own borders, to ensure that unemployment shall not occur in other countries. For example, unemployment in France means reduced purchasing power an that country. Therefore, France reduces its imports from Australia. This action, in turn, either causes unemployment or a reduction of prices in Australia, and attacks on working-class conditions. The primary producers are usually the first to feel the impact. We cannot .be blind to .the -fact that our stability is directly concerned with -the economic conditions prevailing in the .countries -with -which ‘we trade. One .of the objectives of the Bretton Woods Agreement is to make it easier :for one country -to huy the goods of another. This exchange of trade and commerce “helps to promote employment in both countries. For example, if other countries, through the lack of external credits, :are unable to buy our wool, our primary producers will suffer. The .Bretton Woods Agreement will help to prevent this by making it easier foi- one .currency to be exchanged for another currency, and by granting same assistanceto countries when they experience financial and economic difficulties.

An exporting country like Australia can easily suffer a “big “slide “ in itseconomy from causes beyond its control. Because of drought conditions, -our .sheep flocks have decreased by .25j0.0.G,00Q. Twosuccessive droughts could cause a big decline .of our exports. This, in turn, could reduce our overseas .credits to dangar point. We .should -then he obliged to restrict the importation of many .goods. Our .membership of thefund will entitle us to assistance from its reserves. By this means, nations will be tided over the effects of national catastrophes such as drought. To-day,, we must look beyond domestic issues,, because time and events have proved that attacks on workers’ conditions are attributable partly to economic trends in other countries. By endeavouring to createinternational stability, we help to maintain and uplift domestic conditions. 1 accept the agreement, with the Prime Minister’s reservation. I say, “ Give it a go “. It is a move towards international co-operation. If it does not meet our expectations, we can withdraw from the agreement, after having met our obligations, at any time on our own decision. I support the bill.


.- Thepurpose of this bill is to approve of Australia becoming a member of the International Monetary Fund, and a member of the International Bank for Reconstruction and Development. This is an endeavour to create exchange stability by an exchange pool, and with capital provided for reconstruction and development, to assist member nations. No one can deny that the world is in need of this kind of help to-day. We have definite loyalties, particularly to those in our native land. Australia must come first. We also have a loyalty to a league of nations, including the British Empire. But we have also a third loyalty which we should not avoid, namely, an international obligation. In the past, we have been participants in experiments designed to achieve international co-operation. The fact that those experiments have failed should not discourage us from endeavouring to help nations less fortunate than ourselves. Who will deny that Germany to-day, defeated and impoverished, is not in need of resuscitation ? Who does not feel that the satellite States near Soviet Russia which have been plundered, and nations which have been impoverished - China has been engaged in war and has been rent by civil war for a decade - require assistance ? We have an immense opportunity which outspans our lifetime and that of another generation. Therefore, I do not intend to cast a silent vote on this bill. As the Bretton Woods Agreement has been widely discussed in many parts of the world, each honorable member of this chamber should explain his reasons for supporting it. That belief has actuated me in speaking this evening.

Certainly, the Bretton Woods Agreement is an experiment, but out of this economic collaboration, much good can come. We are committed to supporting the United Nations. No one would pretend that that organization is perfect. It has had a few minor successes, and some large failures. It is dominated by the great powers. Russia is taking up an attitude that is not convincing if it really believes in peace. But with all the imperfections and the grim possibilities, there is a degree of collaboration that may prevent a third world war, which would be immeasurably more dreadful in its consequences than any conflict in the past. We are also signatories to the Food and Agriculture Organization, an international body which endeavours to collect food and provide machinery for distributing it to displaced peoples and impoverished nations. We are a member of the International Labour Organization which has survived. Formerly that organization was a branch of the League of Nations which was established with high hopes after World War I., but it .failed because the originator, the United States of America, did not join it. Although the league had some minor victories, it became an empty tenement. After World War II., we have endeavoured to create an improved league of nations. Unrra, another international body, was also imperfect and had its failures, but it has saved the lives of millions of people. Honorable members have only to read the reports of the International Red Cross units and Unrra officers in Greece, Hungary and Austria to realize the excellent work that this organization has performed. We are contributors to it in a financial and a physical way. Those people who condemn the Bretton Woods Agreement, because they allege that the adoption of it will mean the surrendering of our sovereignty, are going to extremes. Any democratic community must surrender a measure of its sovereignty. We could not set up any form of government unless the citizens were prepared to yield some of their liberty so that they could be governed, and a police force and law courts established to ensure justice, law and order in the land. Therefore, I dismiss that objection.

Other people have showered us with propaganda and literature, sometimes of a reasoned nature and sometimes of an abusive character. These organizations, which appear under various nom de plumes, assert that the Bretton Woods Agreement is the work of a cartel, and of sinister men with foreign names. Some of those names have been mentioned during this debate. These critics profess to believe that half a dozen men, as the result of the Bretton Woods Agreement, could dominate the finances of the whole world. That claim is utter nonsense. Speculation, exchange depreciation and currency quotas were used in the old order. The idea of “smash and grab” prevailed in regard to trade and finance. But the Bretton Woods Agreement will give stability and ensure that the machinations of bodies, which would like io operate as under the old order, should be curtailed. That is an important reason why we should support the bill. By creating this fund, we can overcome some of those difficulties.

Great Britain lost a great citizen in lord Keynes. Possibly he was the greatest economist of a generation - a man whose predictions after World War I. proved to be correct; a man who was largely responsible for the Bretton Woods Agreement. He did not get entirely his own way. He wanted something in the nature of an international clearing house. After discussion, the nations resolved that they should establish a pool or fund to which they would subscribe according to their economic strength. We could not expect that- the opposition of one government, or individual could completely prevail ; and the Bretton Woods Agreement represents the cross section of the views of the participating countries. It is a sincere attempt to rehabilitate the nations and allow some stability in trade. Lord Keynes was largely responsible for it. The assertion that the organization could bo dominated by private financiers is utterly ridiculous. Let us examine the personnel. The governors who will be appointed by the member governments, will decide the policy to be adopted. Generally speaking, the governors will be the finance Ministers of the various nations. The administrative officials will be appointed by the governors. Private financiers will not have a place in the organization, or a voice in formulating its policy. It is strictly an international body, created and controlled by governments in the interests of their own countries, and indirectly the whole world. It is sufficient to know that the chairman of both the fund and the bank is Dr. Hugh Dalton, Chancellor of the Exchequer in Great Britain. I know this gentleman. I met -him frequently during World War II. in England, and also in Australia. He is a Labour member of the House of Commons - a man of great ability who is carrying a tremendous responsibility to-day. I have sufficient knowledge of him to believe that he would not sign a document which, he thought, would undermine in any way either the stability or prestige of Great Britain. The personnel of the fund and the bank provides a sufficient answer to those who see these lurking figures of international financiers.

Many of the protests against this proposal emanate from bodies interested in social credit. I shall not go into the ramifications of their theories. They had a “ run “ during the financial and economic depression fifteen years ago, and had their opportunity to give evidence before the Royal Commission on Monetary and Banking Systems. The Prime Minister (Mr. Chifley) was a member of that body. In the province of Alberta, in Canada, the only part of the world where their theories have been given effect, they have not been successful. They would probably dispute that, and say that it never had a fair deal. The real objection of course is that the scheme will prevent excessive inflation. One can see that the limits within which the depreciation of currency can be effected by agreement among the nations in only .1.0 per cent, in either direction. Any one who has lived in a country -in which the currency is useless knows how hopeless is the position. There are European countries in which millions of marks were necessary to make ordinary purchases of food. In Greece, the currency fabricated by the Germans was useless when they vacated it. The same applies to Hungary. The nations which are signatories to this agreement could not allow that to happen. The stronger nations will’ protect the weaker nations. The fear that we are going as sheep to the slaughter is unfounded. We are going into a strong organization which will help us if by any chance we find ourselves in distress. The scramble for trade during the years after the depression showed what can happen. Germany had to meet tremendous reparations, and at the same time compete with other nations, including the United States of America, which in its Hawley-Smoot tariff of 1930 raised the walls of prohibition so high that it drew to itself the gold and not the goods of the world. The United States of America helped to precipitate the depression. Germany devised devious ways in which to carry on. I did not have much sympathy with that country. It had a financial wizard in the person of Dr. Schacht, who thought of the barter system of trade. He made agreements with all contiguous countries. Yugoslavia was to exchange timber, Greece tobacco, and so on. He made overtures to us on many occasions. I, as Minister for Trade and Customs at the time, received many representations from Germany. I was surprised at the degree to which some of the members on our own side in the Parliament were deceived by those overtures. Germany offered to take £1,000,000 worth of wool every year if we would take £1,000,000 worth of manufactured goods from that country. Obviously an arrangement of that sort would have lessened Britain’s trade with us. Germany worked such schemes with adjacent countries with such success that it received all the materials it wanted in order to prepare for war. In 1928, I saw factories in Germany filled with copper, cotton, wool and all the other raw materials that were necesary to prepare for war.

Mr Archie Cameron:

– The Bretton Woods Agreement is supposed to encourage that sort of thing.


– I am sorry that the honorable member for Barker does not understand the difference between the barter form of trade and the trade that will take place under the Bretton Woods Agreement. As the result of trading with Germany, many countries found themselves landed with obsolete goods and weapons. Greece received hundreds of tons of aspirin, and Turkey received thousands of dozens of mouth organs. By these dishonest agreements, Germany drew to itself the raw materials of the world, and unloaded its goods on the nations which came ‘under its control. The economic war was in progress years before tho fighting commenced, and many people could not see it. Germany had false invoices, and exported goods which had no home-consumption value. Goods landed in Australia pay duty at the f.o.b. price or the home-consumption price, whichever was the higher. Thus, also, Germany torpedoed the tariffs of many countries, including the Australian tariff for some time. Those are some of the tricks which the Bretton Woods Agreement will prevent. Japan was equally unscrupulous. The Japanese, in an economic assault upon the industrial nations of the world, set out to undersell other countries. The right honorable member for Cowper (Sir Earle Page) will remember quite well that we were constantly at a loss to deal with Japan, in spite of numerous Tariff Board inquiries and the protection of textile manufacturers to a degree which would enable them to compete with other nations. Japan’s currency was depreciated. Raw materials cost that country more to purchase, but it had advantages in the export markets. It actually exported cotton goods to Lancashire, causing unemployment in the cotton mills there. I emphasize this because it is necessary to show what the Bretton Woods Agreement will prevent. It is easy to criticize this big scheme from a few points of view. If I thought for a moment that it would jeopardize Empire preferential trade with Britain, I would reject it wholly; but it will not. It is separated from trading between the nations. Honorable members who questioned Professor Melville during his recent talk, know that. If we do not become a signatory to the agreement, we may incur certain penalties. Australia will suffer a distinct disability. First, discriminatory action could be taken against us as a nonmember, and it might be difficult to sell our goods to countries which are signatories. Honorable members will recall that during the depression millions of pounds had to be taken from the taxpayers to subsidize primary products. But for the agreement that was made in 1932 after a world economic conference had failed, the depression would have lasted considerably longer. The Ottawa Agreement saved the primary producers of Australia. Britain, instead of buying in the cheapest market, bought from the Dominions. Britain took larger quantities of goods from us on a reciprocal basis, thus benefitting us and the world generally. That waa an example of co-operation which foreign nations were not slow to heed. Here I digress to answer a statement by the honorable member for Hunter (Mr. James), which revealed what lack of knowledge there is in the matter of trade between nations. He said that he had always felt that we should have had a tariff lower than the foreign tariff towards the United States of America. The Australian tariff is one of three columns - the preferential tariff in respect of trade with Britain, the general or foreign tariff, and the intermediate tariff. Under the intermediate tariff, any country can come to a trade treaty with us. We approached the United States of America on numerous occasions with the offer of a trade treaty, but without success. An International Trade and Employment Conference is shortly to be held. I hope that the United States of America will live up to the idea that it now holds in regard to an increase of world trade. It can come to a separate trade treaty with us if it so chooses. That will depend upon its delegates - whether they intend to accept multi-lateral or bi-lateral trade agreements. I do not suggest that we should sign the Bretton Woods Agreement because of the existence of penalties. There arc obligations also. We shall have to make a payment into the fund and we shall have no drawing rights on the fund or the international pool. That might be a distinct disability. If the prices of primary products were to fall, if our overseas balance were to dwindle and we were not able to pay for necessary imports, we might have hunger and unemployment in Australia and not be able to turn to this fund for a penny. It is only economic insurance, and I am surprised that honorable members are not far-sighted enough to see that we would be beneficiaries. There could he a backing of our currency. The principal disadvantatge if we did not sign the agreement, is that we would not be a member of the Internation Trade and Employment Organization - that is the international organization that is to meet in Geneva - and be able to come to terms in the discussion of tariffs and mutual trade. I submit that this is a sincere effort to cope with some of the difficulties of the past in. regard to exchange, and to deal with dishonest trading between nations, thus shutting out the nefarious activities of the large private financier and ensuring that trading shall be more stable and that prices will endure. Therefore, I consider that, as we are a party to all the other international arrangements that have been set up, we should not miss the opportunity of being one of the parties to this agreement. If there is one word signifying what can adjust our problems, be they domestic or international, to-day, I should say that it is the word “ cooperation “. That is lacking to-day in large measure as between employer and employee. It is lacking in many trade activities. It is lacking in the associations between nations. Here is a proposal in reasonable terms. It may have imperfections, but they may be adjusted later. It may completely fail. If it does, we will he able to withdraw from it, as other countries withdrew from the League of Nations, and the organization will break up. Here is an opportunity to join with about 40 other nations in an endeavour to make a fairer world and a better international position, helping to resuscitate those nations which have lower living standards than our own, and assisting those countries which were punished by the ravages of war as we were not, except, unfortunately, in respect of the value of the lives that we lost. We should not be isolationists. We should not oppose this proposal. We should not stand in with Russia, the great enigma, whose people live behind an iron curtain and in political darkness. We should stand in with Britain and the United States of America and other democratic nations in hammering out this plan. We have had the best intellects in the world to fashion, it. As one of the small but important nations, in the matter of trade, we should support the agreement. If we do not, we shall show that we are too timorous, that we fear that the obligations are too great, or that we are isolationists, and that will not be good for Australia.


.- I shall not speak at great length. We have had a flood of words to-day, and I believe that I know very little more than I did at the beginning of the day, as the result of having listened to the various speeches. But I should like to ask a few questions, and to put forward a few points that I have gathered from the different members who have spoken. It can be argued that we should support any good and useful international agreement; that if this agreement can be proved to be good and useful we should become a party to it. I have not been convinced that it io good and useful. There are a few evils which seem to me to be prominent in it. The fund and the bank, being international, must be placed on the lowest level, so as to meet the requirements of the weakest or the worst countries. By “ worst “, I mean countries that ‘ are moved by the most mercenary motives. My next point is that the agreement must not be regarded as being merely for currency and exchange purposes. Currency is wanted for the transfer of goods, and if goods cannot be shifted because of currency shortage, then production must inevitably be affected. The limitation by the fund would be greater than limitation apart from the fund. We cannot pretend that there will not be any interference with our domestic affairs if we become associated with this fund, although it has been argued by some honorable members that there will be no such interference. All international policies to-day interfere with the domestic affairs of other countries. The essence of the fund is in its restrictive effects. The fund, as a matter of fact, may cease to operate if currency becomes short. This is provided in Article V. (3) (ii) which honorable members would do well to examine. Australia can act on the principles of the fund and then members can trade with Australia but they will not find themselves in trouble with the fund. That is provided for in Article XI.

I ask some questions which I hope a representative of the Government will answer: Has the Government considered the effect of Article VI. on ‘borrowing in London, if such borrowing should be proposed in the future? Has Great Britain expressed any views on this point? In my opinion this is an extremely important matter. Will the Australian Government accept any proposals that may be made by the governor of the fund for the removal of tariff walls? The argument has been advanced that control in the case of this financial set-up, will be different from that which we have experienced in the past. It has been said that the people of Australia will have an opportunity to express their opinion because Australia will have voting strength in relation to the operations of the fund, but it has been pointed out that our voting strength will be only 2 per cent, of the total. Although the financial recources of this country may be involved to the extent of millions of pounds through the operations of the fund, this agreement has not been placed before the Australian people for the expression of their opinion upon it. The people should be given an opportunity to express their views. I cannot accept the attitude that by voting for the return of this Government the people must accept all the decisions of the Government. I cannot accept the attitude, either, that, having returned the Government to power, the people must be regarded as having endorsed this agreement, particularly as we find that some honorable members of all parties in the House are supporting its ratification, and seem to be in agreement as to the value of the International Monetary Fund and the International Bank whilst others do not. Finally I must point out that the agreement which we are being asked to ratify is designed to prop up an order of society that many people believe to be outworn. The introduction of this bill seems to me to savour of the placing of another prop under a system of society which during the days of the war at any rate, we freely discussed and generally agreed should be altered. I cannot, see that our acceptance of this measure will do anything to lead us to the world peace which we so “urgently desire. I therefore cannot vote for the measure.


– This hill has been described as a remarkable measure. I consider it to be remarkable for two reasons: first, it is the most important bill that has come before the Parliament since I have been a member of it; and, secondly, it is a measure on which there is an extraordinary and widespread lack of knowledge among honorable members and the general community. Very few of us, on this side of the House, have had an opportunity tolearn much about the Bretton Woods Agreement. I had not heard much about it until a few days ago when I had the opportunity to listen to Professor Melville discuss the subject. When I came out of a prisoner of war camp just over twelve months ago and first heard Bretton Woods mentioned, I recalled the name of a British politician, Brandon Brecken and I thought that Bretton Woods was alsoa man’s name. Since realizing the significance of the Bretton Woods Agreement, I have gathered as much information as possible on what it involves. Some honorable members have quoted to-day opinions which they attributed to Professor Melville, but in most instances they only partly quoted the remarks of that gentleman.

My lack of knowledge on this subject is, I freely admit, considerable; but I desire to direct attention to two or three important aspects of it on which I have reached conclusions. First, I shall deal with our obligations if we become a member nation. The honorable member for Martin (Mr. Daly), the honorable member for Hunter (Mr. James), the honorable member for Darwin (Dame Enid Lyons) and also the Prime Minister (Mr. Chifley) have stated that if, after having become members of the fund, we find that its administration is not to our liking, we can withdraw by merely giving notice.

It is as easy as that. We may “ take our change in Wrigley’s “ or some other product and walk out if we so desire. Yet section 4, paragraph a of Article VI. of the agreement in the second schedule of the bill, which deals with withdrawal and suspension of membership and suspension of operations, provides -

When a government ceases to be a member, it shall remain liable for its direct obligations to the bank and for its contingent liabilities to the bank so long as any part of the loans or guarantees contracted before it ceased to be a member are outstanding.

Mr Burke:

– That is ordinary commercial practice.


– It is of paramount importance that we should realize that whether we withdraw from the fund or not we shall remain liable for our obligations under that article. Yet the statement has been made this evening that we could withdraw without any difficulty whatever. As I read the agreement that is not the case.

The next point I wish to make has relation to the present and future position of the British Empire. Some honorable gentlemen have adopted a most pessimistic attitude in this connexion, and it appears to me that we all could do with a good “pep talk” about the greatest Empire that the world has ever known. Notwithstanding all that has been said about the League of Nations, the United Nations and the Bretton Woods Agreement, in spite of the bad time through which the British Empire has been passing in recent days, I believe, with all my heart, that the British Empire is still the greatest power in the world for liberty and freedom. The Empire has very great recuperative resources. According to some honorable gentlemen, power has passed from the British Empire for ever. I entirely disagree with that view and refute it with all the strength that I possess. During the most critical period of the war the late President

Roosevelt sent a few lines of tribute to the British Commonwealth to Mr. Winston Churchll. They were as follows : -

Sail on, O Ship of State!

Sail on,O Union, Strong and Great!

Humanity with all its fears.

With all the hopes of future years,

Is hanging breathless on thy fate.

In my opinion the British Empire is still a. great force for freedom and liberty, and anything that I can say in this Parliament or elsewhere to stimulate Empire sentiment I shall say gladly and with great enthusiasm. I consider that the interests of the British Empire and also those of Australia are likely to be greatly affected by the Bretton Woods Agreement. It has been said to-night that unless we participate in this international financial agreement we shall find ourselves isolated. That view does not seem to me to be justified, for Professor Melville told us a few days ago that even if Australia did not sign the Bretton Woods Agreement its trade with other countries would not, in his opinion, be seriously jeopardized. It is a fallacy therefore to think that our great primary industries will be ruined if we do not join with the other nations in the International Monetary Fund and become associated with the International Bant. I consider that the Bretton Woods Agreement and the decisions of the International Conference on Trade and Employment will be as closely associated as Siamese twins. I fear that our participation in this scheme may seriously endanger our Empire trade preference policy and the exchange rates among Empire countries. If this should happen, a serious blow will have been struck at our primary producing industries, which are the life-blood of the country. The pros and -cons of this agreement should therefore be carefully considered before we become implicated in this expensive experiment. It is strange that almost every honorable member who has participated in this debate has made some kind of a policy for advocating Australian association with the International Monetary Fund. They have said, in effect. “ This is not quite what we wanted or expected, hut it seems to be the best that we can get ; therefore we should take it “. That is an entirely wrong way to regard the matter. A principle is either right or wrong. If it is wrong, we should have nothing to do with it. The argument that we should “take things on the average” is like taking an average on a man’s honesty; it never pays. We need to be assured that a proposal is right before we adopt it. It has been made clear to us that the international financial proposals now before us are experimental. Australia should be careful about participating in such experiments. If we become participants in this scheme we shall undoubtedly place ourselves in the hands of those who administer it, and I am not happy about that. It has been stated that this scheme will be administered by men of great knowledge and repute, but about 43 nations are involved and the representatives of each will have a say. In the past, some of them, have not been able to run their own countries. How often has the British. Empire had to give succour to some of the countries which are signatories to this agreement? They have not been able to manage their own affairs ; how then are they qualified to run ours? This is an experiment which may react disastrously upon the standard of living in Australia. We cannot afford such an experiment, and I will not support it. There arc many other men in this House who do not agree with it, either, but they are silent. Honorable members on this side who disagree with the proposal ais free to express their opinions about i.t. We must be very careful to hold what we have. We fought for Empire reciprocal trade for years, and for our exchange rate. We must sec now that they are not taken from us.

During this debate, concern has been expressed regarding the position of the United Kingdom. Professor Melville said at the meeting which I attended that, in his opinion, the Bretton Woods Agreement had not the kind of mechanism to aid Britain. Which honorable members here are qualified to put their opinions before his? I know that one of the conditions of the American loan to the United Kingdom, was that Britain should adopt the Bretton. Woods plan, and now we are trooping along behind. Perhaps, if we stood out we could be of more use. I am convinced that we could help Britain more by making a gift of food, as was advocated by the right honorable member for Cowper (Sir Earle Page). Great Britain has the power to survive if help is forthcoming. We have the food it need’s, and we should send it.

Australia, is to put into the International Monetary Fund £62,500,000, but of this only £2,500,000 is to be supplied in gold, and the rest in promissory notes. The other nations are to contribute in various proportions. It has been admitted that some of the nations may not honour their promissory notes, and if this should happen, the countries who supply them with food may not be paid. It has also been made clear, as the honorable member for Barker (Mr. Archie Cameron) pointed out, that the fund will help only those countries which are already in a reasonably sound economic position. Professor Melville said that it was very doubtful whether a loan would be made to China, which certainly needs help because its economic position is chaotic. The directors of the fund will probably make loans only to those countries which have a reasonable chance of repaying them. Other countries will receive only what they pay into the fund. Australia may suffer by selling goods to such countries, and eventually having to go without payment. For this and other reasons, I find it impossible to support the bill. I believe that Australia can do better by helping to strengthen the British Empire, and by developing its international trade. We cannot lose anything by standing out of the agreement, but we may lose by entering it because, even though we should withdraw later, we would still be responsible for the loans made while we were a member. Those loans a millstone about our neck for years to come.


.- It has been said many times that this is a remarkable measure. I admit that, but I suggest that the manner and time of its introduction to this Parliament is even more remarkable. For its introduction we are indebted to the sustained efforts over a long period of the Prime Minister (Mr. Chifley). It is known that the agreement was negotiated as far back as July, 1944. We have before us the report of Professor Melville on the Bretton Woods Conference, and the agreement was signed in August, 1944. We also know that it was then agreed that the countries concerned should sign the agreement before the end of 1946. Australia, owing to the inability of the Government, or of its masters, to make up their minds, was placed in the humiliating position of having to ask for an extension of time, and even that extra time was not sufficient.

It is curious that the Government could not come to a decision on this relatively simple proposal. When I say that it is relatively simple, I do not suggest that the agreement itself is simple. Indeed, it is most complex, but the simple question to be decided is whether or not Australia ds to sign the Bretton Woods Agreement. We are entitled to survey the- agreement and its implications, but we cannot put any of our own ideas into the agreement itself. After a great deal of labour, the Government at last obtained authority from another body to bring this measure before the Parliament, and to-day we have seen how rigid is the regimentation of the Government’s supporters in this Parliament. We are not unaware that there are great differences of opinion among its supporters. However, although the opinions are strongly held, not one of the objectors in the official Labour party has risen in his place to explain the reason for its objection. This spectacle has been presented by a party which pays lip service to the principle of freedom of speech. I suggest that the principle to which they subscribe is freedom to express what the party thinks ; otherwise, no expression of opinion is permitted.

It is also strange that the Australian Labour party should have taken so long to make up its mind when, we recall how promptly the Labour party in Britain reached a decision on this issue. The representatives of the British Labour Government engaged in the conference which framed the agreement. They reported to the Government, and when the agreement was presented to the House of Commons it was quickly ratified. T can. imagine how the honorable member for Reid (Mr. Lang) would have wallowed in his denunciation of a British Tory Government if it had been, responsible for foisting such a “ nefarious “ instrument upon, the people of Britain. He would have declared that such a government was working hand in hand with international financiers. However, the sting has been drawn from such a line of attack by the fact that it was a Labour government which participated in the original discussion, and introduced the agreement to the Parliament of the United Kingdom for ratification.

I agree with those who say that the Bretton Woods Agreement is an experiment. Of course it is. It is an experiment based on the experience gained over a number of years, and particularly during the period between the two wars. Let us not forget that tj: any of the international activities in which: we are engaged to-day are also experimental in character. I am under no illusion as to the possible force- which, this: instrument may exert* upon; internnational trade and monetary ‘system’s-. While:!, recognize its: limitations,, one-, of the great things itsets out to do and can. possibly achieve in1 a very great measure is the” statoillization of inter national exchange.. Whilst that has1 n;ot been placed’ in the first, order- of importance by many speakers? - I do> noli believe’ the* Prime Minister’ himself so: regarded: it - in my view it is most” important aird’ useful, if capable of achievement. We have all had: a good, deal of’ experience- of what these fluctuations of the- exchange: rates, of other’ Coll11’tries has meant. Being, an.’ exporting; country, Australia is vitally interested’ in’ the stabilization1 of exchanges. We know that, during the. intervening’ period between the two wars a number* of countries varied their exchange rates violently, some deliberately and other because theyhad to do so in order to sustain -their’ own economy. Under this agreement very d’efinite limitations will be placed oh the variations of’ exchange that signatory countries may make without the approval’ of the fund. As all of the important countries- with, the exception of Russia are signatories to, the fund, the- possibility of getting, stable exchanges is- most helpful. A fear has been repeatedy expressed- by some- people, mostly outside this chamber,, that interference- with exchanges’ may have- a- very detrimental effect upon our internal economy. If the. stabilization of exchange and- the- operations of the International Bank, approach anything like success’ the effect upon this: country will, be.- more: beneficial than adverse, because of the.- restrictions which are placed upon those countries which are signatories to the. fund. Apart from the question of exchanges’ we- must not expect either the. International Monetary Fund or the- International Bank to influence trading very materially. Taking world trade as a whole, the, resources at their disposal are very limited. It is. envisaged that countries .will carry on their normal trading, activities without reference either to the monetary fund or to the bank. With the exception of the provisions relating to exchange control there is nothing in this, proposal to prevent the- continuance of normal trading by any signatory to: the> agreement. I envisage that the- great bulk of the-, business- undertaken by Australia, and the rest of the” world willi be carried on> ire the normal process of trade and that the’ financial arrangements will be similar

Co those’ that would, have’ been made had) the agreement not come into existence. The advantage of both these organizations, is- that when under normal, conditions some1 countries cannot engage- in> trade which, they wish to undertake), assistance will be: given to them either through the monetary fund on the bank. I am- not’ unaware- of the- definite distinction between; the operations, of these- institutions. The monetary fund is- obviously an institution, designed to finance trade and commerce om a temporary basis: It is expected, that it” wall fill a- gap which otherwise could not be filled, by the ordinary financial institutions. I am also aware- that. the. bank is designed to’ fill’ a gap where the normal! financing of long-term credits: cannot be undertaken1 by existing institutions. It- is expected, that normal trading, and finance ing activities will continue. Neither, the; fund’ nor the bank; will be called, upon to enter’ into these negotiations at all unless they cannot’ be’ carried out, in the normal processes’. We- have every reason to believe- that the normal processes of finance’ and trade will be very substantial in the. years that lie ahead. I also suggest to the opponents’ of the scheme that, had this agreement for the: establishment of the fund and the bank not existed*, trading would go on in the immediate future on a basis equal to that: of the most prosperous- pre-war years. The- cold fact is that there is a tremendous demand for commodities of all types, both primary and secondary. Consequently, it does not impose any great strain on the imagination to believe that in most cases trade will continue, though on a stimulated scale. We are, however, also aware that owing to the devastation of war some countries- in desperate need of. many commodities- cannot finance their purchase out of their own- resources. Nations which in the. past, have given credit to others in distress are still ex. tending very- substantial’ assistance- to them. In pre-war days, Great Britain was one of the greatest international financiers, but owing to the war its capacity to extend loans to other countries has been definitely limited. One of the most satisfactory developments that have taken place in the post-war years has been the willingness of the United States of America to do something in the foreign investment and lending field. Already that country has shown its willingness in many ways to fill the gap created by the inability of Great Britain and the British Empire to continue operations in that field. I have no doubt that the United States of America, and Great Britain, within the limits of its capacity, will continue to lend money to countries which can offer reasonably good security. When there are countries that have not the same security to offer, the banks come into the picture. In consequence of that it is futile to suggest that the credits extended by either the fund or the bank will have anything like the same backing as loans made in the normal way by Great Britain, the United States of America or any other similar country. There is no doubt that the operations of both these organizations will be undertaken on an international banking basis. But they are transactions in which there must be an element of doubt as to whether the recipient nations will be able to meet their obligations. In thisway I suggest we are opening up a new field of trade.For that reason, if for no other, I think that Australia should be particularly interested in these developments and should give its wholehearted support to the project.

One of the major objections to the scheme is the contention that Australia, if it joins the fund and the bank, may be faced with difficulties if, for any reason, it wishes to withdraw. In reply to that I say that if Australia has not drawn upon the fund or the bank to any extent its withdrawal will be comparatively easy. Of course, if we operate extensively on the credit of the monetary fund or the bank and wish to withdraw we. will obviously have to make acceptable arrangements. Australia will be in entirely the same position as any private borrower who has obtained an advance from a bank. I know that under adverse circumstances private individuals, and even nations, who have borrowed to the limit of their credit sometimes attempt to repudiate their debts. But there are only two ways in which a private individual can discharge his obligations - either by making a satisfactory settlement with the lender, or by having himself made bankrupt; there is no alternative. I suggest that the same thing will apply to nations which become signatories to this agreement. If they operate substantially on the funds of these organizations and wish to withdraw they will be called upon to make satisfactory arrangements. Australia, as a nation, has always met its obligations, internal and external, despite the efforts of the honorable member for Reid when he was Premier of New South Wales; and I have no doubt that in future Australia will continue to do so. Therefore it is fatuous to suggest that if, having joined these organizations, we wish to withdraw, the way out willbe made easy. On the other hand, the fact that we will be called upon to make acceptable arrangements does not deter me from supporting the proposal that Australia should sign the agreement.

Australia has itself embarked in a minor way on the business of lending money. In the early stages of the war we had to extend credit to some countries to dispose of our surplus primary produce, but. every one of those loans was repaid promptly. I have no doubt that in the years to come Australia will have to make advances to purchasers of our exports if we are to develop a substantial overseas trade. At the present time we are disposing of our produce on a credit basis, not because we have extended credit to other countries, but because another nation has made itself responsible for their debts. Only recently we entered upon negotiations under which Australian wool is to be sold to Japan, and I understand that those negotiations have been successful. According to the press reports, payment for that wool will be made not by Japan but by the United States of America. I repeat that before many years Australia will have to extend credit to other countries and to incur risks in doing so. I believe that the purpose of the International Monetary Fund is to finance such transactions, and I hope that when the occasion arises for us to extend credit the financial responsibility will be undertaken by that institution.

Very little has been said about the bank because apparently, there is no -violent opposition to it. Under the conditions of membership of the International Bank we shall also run certain risks, because the bank will make advances for much longer periods than the monetary fund, and consequently the risks will be greater. Notwithstanding this I am perfectly satisfied - and I am sure the Prime Minister will agree - that the bank will serve a very useful purpose in the period of reconstruction through which we are now passing and which will continue for some years.

A great deal of the financial responsibility for the reconstruction of warravaged countries is to be undertaken by the nations themselves. Great Britain has already made loans to various countries in a most magnanimous fashion, having regard to its resources, and the United States of America, which obviously must be the biggest financier of the future, has shown similar readiness to make advances. No doubt most of the finance for reconstruction will bo undertaken by individual nations, even the smaller nations. But there will be many instances when individual nations will not incur the risk of lending to others, so, that recourse will require to be had to financial institutions. It is then that the International Bank will be called upon to finance these transactions. It follows that if the bank makes the required advances the security demanded will not be nearly so substantial as that which would be required by individual nations. I believe that the assistance of the bank will be necessary to expedite reconstruction and the development of world trade. The right honorable member for Cowper (Sir Earle Page) has given us an illuminating talk about the needs of Great Britain and the Empire generally. I do not think anyone would suggest that America, with its tremendous resources and amazing development, is in anything like the difficult position in world trade that Great Britain is. Consequently, as our development depends more on the prosperity of Britain than anything else, whatever we do to help it towards recovery helps this country too. I imagine that all the dangers and difficulties inherent in these problems have been carefully examined by those in control in Great Britain. I recognize also, that the Bretton “Woods Agreement is linked with the American loan to Britain, but I am pleased that before that loan was -accepted, the British authorities made a careful purvey of all the dangers and difficulties inherent in it. So I am. .prepared to accept their decision that both the loan and the agreement will be helpful to Britain in the reconstruction period. That will be more helpful if Australia plays its part as a signatory to the agreement by doing everything possible to ensure its success. Consequently I have no hesitation in supporting the bill.


– This measure is among the most important placed before the Commonwealth Parliament since federation. Doubtless, it will permanently affect Australia’s destiny. Yet it has been introduced with a singular lack of enthusiasm. The Government is less enthusiastic about it than it has ever been over any bill, major or minor, that it has placed before honorable members. The Prime Minister (Mr. Chifley), who introduced it, has not been supported by one of his Cabinet colleagues. Some honorable members have been loquacious, but no Minister has risen to reply to arguments from both sides of the House about the difficulties associated with the Bretton “Woods Agreement. The Government, through the Prime Minister, says that the measure is vital to Australia. We all agree. I repeat that it is one of the most important measures ever brought down. Yet it is being rushed through this House in a one-day sitting, only a few days after the delivery of the Prime Minister’s second-reading speech. It had, however, a long incubation and gestation period in the Labour party. This child of the Government has a most curious history, as the honorable member for Wakefield (Mr. McBride) said. It was conceived in July, 1944, so it is not a nine months child. It is a two year and nine months child that has been produced in this House in March, 1947. Its delivery was possible only as the result pf caesarian section of the Labour party, which has been practically split in two. But since the birth of the child what has happened to it ? To my mind it is a wonder that it is still alive. It has been carried from place to place without regard for its infancy. It was baton to the Federal Labour caucus, to the federal executive of the Australian Labour party, and to the State executives, but every one of them said “ For God’s sake take it somewhere else !”. After that peripatetic experience, we now see it on the table in this chamber.

We have not been told why this measure, which is admitted by the Government to be vital to Australia and to the rest of the world, should have been delayed so long before being presented to this Parliament. It is admitted that in May, June and July, 1944, the Australian representatives . were at Bretton Woods and helped to draft the document. We were to have accepted the agreement before the end of December, 1945, but we were given a year’s grace, to the end of 1946. We are now in March, 1947. We are the dirty cow’s tail of the procession, because about 40 other countries, some of them former enemy countries, have joined the agreement before us. Therefore, it is little wonder that the Government should be ?o unenthusiastic about it. I confess that I, too, have little enthusiasm. My enthusiasm may be a little greater than that of the Government. My reason for lack of enthusiasm, however, is not the Government’s reason. I am not enthusiastic because I doubt the efficacy of any international organization that is set up before wo have made a strong peace with Germany and Japan. I congratulate the Government on its late-found insistence that there be an early peace treaty with Japan. I wish there could be a quick treaty with Germany, because I do not believe that we shall see the world begin to be restored until Germany and Japan know exactly where they stand. I should like to see terms provided that they shall join these international organizations so that the whole world shall be represented. They should take a part in forming the organizations. One of the reasons for the resentment and ill feeling between the two wars was the fact that the defeated nations played no part in the preparation of the peace treaties. We have finished the war. Let us impose the penalties and when we have imposed them, let us say, “ Peace is here ! Let us build a new world that is worth while !” Medical experience shows that when parts of the body are diseased or inflamed the effect is felt all over the body, even in parts that are apparently whole. We shall not be able to shape the future of the world until we remove its sore spots.

Professor Melville, in addressing a meeting of the Australian Country party on this subject, said quite frankly that there would be very little for the fund to do if there were not a satisfactory result from the international trade organization. It would have a function to perform, it was true, but that function would be limited if there were not an exchange of goods between the various countries of the world. There cannot be an international exchange of goods unless the high American tariff wall is substantially reduced, because America is the only country with plenty of money to buy the goods that the other countries have to sell. As America is finding most of the money to be paid into the fund, it will control it. It cannot be denied that it will be dominant. Its dominance has been demonstrated already in its loan to the United Kingdom. It said. “ We will lend you £1,000,000,000, but you must sign the Bretton Woods Agreement and do something to unfreeze your sterling balances “. The United States of America has the power of the purse, and I fear that so long as we in this chamber are alive we shall find that “ money makes the mare go “.

There will be very little for the fund to do unless the tariff barriers of the world are lowered. During the depression the United States of America passed the Hawley-Smoot tariff, which imposed very high duties on imports. It is true that the barrier has been lowered a little, but the duties are still high. They must be reduced considerably if development is to take place. The United States of America must be prepared to buy more than it sells, so that other countries may be able to pay to it interest on the loans advanced for their rehabilitation. As those countries have no spare money the only way in which they can pay their indebtedness is in the form of goods. And so I repeat that there must be a variation of the American tariff to enable that to take place.

I shall vote for the second reading of this bill so that in committee an opportunity may be provided to make amendments to ensure that the proclamation and implementation of this legislation shall not take place until the United Nations Conference on Trade and Employment at Geneva has concluded, when we shall know whether the American tariff is to be reduced and concessions made to enable world trade to develop. Those who have discussed this matter have said that the International Monetary Fund and the International Bank of Reconstruction and Development are Siamese twins. As a medical man I tell the House that if one of the twins dies the other twin will die also.

The proposals before us are not perfect and therefore I hope that certain alterations will be made, because I believe that success will depend on those alterations. The first alteration, which must be made as soon as possible after the inauguration of this fund, is that the function of the fund to lend for short-term periods to cover deficiencies in trade balances must bo extended to longer periods than four or five years. If we study the trade history of the United States of America, a continent of about 3,000,000 square miles, we shall find that during the period that its population increased from 7,000,000 to 107,000,000 in the nineteenth century, it started with an adverse trade balance over twenty years. Later, its trade balance improved and production increased. The United States of America then developed its own great transportation system with importation of capital and for another twenty years it again had an adverse trade balance. There must be a long period to allow for such aspects of the case to be dealt with in regard to adverse trade balances.

I am confident that the rehabilitation of the world will depend largely upon longterm lending by the international banks. In order to improve the standard of living in backward countries, such as China, India, South Eastern Europe and undeveloped Australia, there must be substantial sums of money available to lend to those countries for the construction of public works. When I was in Washington, in 1942, there -was a proposal that the United States of America should lend to China between £30,000,000 and £50,000,000 free of interest for a period of twenty years to enable public works on the YangtseKiang River to be started, thereby giving employment. The aim was to increase the buying powers of the people of both countries. We must know whether the United States of America is willing to lower its tariff barriers to enable Australia and other countries to trade with it. When I, on behalf of the Commonwealth Government, tried to make a treaty with the United States of America in 1938, 1 found that that country desired to make great inroads into Australian secondary industries. I pointed out that Australia wanted to develop those industries. The recent war has shown how sound that policy was. Our secondary industries will become more and more necessary as our population increases. If the United States of America is willing to lower its tariffs, we shall then want to know whether it will provide money on long terms to other countries for their development. We shall also need to know whether the United States of America is prepared to make advances to enable capital works to be undertaken in undeveloped parts of the world, and to improve the purchasing power of the people and raise their standard of living so that people everywhere will be able to buy food and clothes and enjoy proper amenities. Will the United States be willing to buy goods to the extent that they sell them ? When that stage has been reached we may hope for an era of peace. I hope that the bill will reach the committee stage, when we shall be able to give reasons why the amendments that we desire to be made should be incorporated in it. I trust that the Prime Minister will accept them when they are submitted.

Prime Minister and Treasurer · Macquarie · ALP

– m reply - I do not propose to take long in my reply to the debate on this bill. I have considered the question of international organizations in a broader sense than material gain for some country.

During the last 30 years the world has experienced two major wars and a serious depression. I believe that every reasonable man hopes that the misery and suffering of those years will never be repeated. The appalling devastation which would result from an international conflict 25 years hence, might destroy civilization itself. No honorable member, whatever his political philosophy may bo, desires a recurrence of the misery, unemployment and suffering that the world experienced after the war of 1914’-18, and during the financial and economic depression of the early 1930’s.

Some honorable members have discussed at length the gold standard. I did not believe that any honorable member would express himself so strongly in favour of the rigidity of the gold standard as did the honorable member for Barker (Mr. Archie Cameron). The speech, which the honorable gentleman delivered this afternoon, showed that hia studies of modern monetary problems are a long way in arrears. I have been an ardent advocate of all international organizations, because I believe that through them, we are engaging in a great human experiment, which is designed to prevent the catastrophes that result from wars and financial and economic depressions. It is easy for some persons to examine a complex subject such as the Bretton “Woods Agreement, and with perhaps a half-baked knowledge of it, point to the mechanics of the proposed fund or any international arrangement and expose some defects in them. They may even succeed in instilling in the minds of other people a fear of the possible consequences of Australia becoming a party to such an agreement. “When people start a club or a company, they find from time to time that some of the provisions of the original arrangement must be varied in the light of experience. I have no doubt that, at intervals, defects will be revealed in international organizations and charters. Some honorable members have referred with deep feeling to the plight of the United Kingdom. Having poured out blood and treasure in the fight for human liberty and freedom, Great Britain is now in a serious economic position and unless something is done to re-establish its economic situation, the people will have had a pyrrhic victory. All their sufferings and sacrifices will have been in vain if, in the final analysis, they become economic serfs.

Mr Holt:

– Those are fine words. Australia can assist them by providing them with more food.


– I shall not be diverted from this great world problem by interjections that are designed to make some political capital. Arrangements have been made for the establishment of an international bank. The honorable member for Reid (Mr. Lang) referred to the Bank of International Settlements. The proposed international bank and fund will not resemble in any way the Bank of International Settlements. Even these people who fear the power that international financiers might exert over the Bretton “Woods scheme, and who regard them as the destroyers of the economic liberty of mankind, must admit that it is infinitely better, if a world monetary organization is to exist, to provide for its control by governments and their representatives. This is the first time in the history of the world that the governments of many countries have made an attempt to create economic stability. Great issues are at stake, not perhaps to-morrow, next year or even five years hence. “We all must give every possible encouragement to international organizations for the preservation of peace. In doing so, we must have economic stability, because many of the conflicts in our history have been due to economic causes. If we are able to cure one of the fundamental causes of war, we shall have made substantial progress, and a contribution to the welfare of not only Australia and its people, but also the people of the whole world, for generations to come.

I do not contend that arguments cannot be adduced against the mechanics of this scheme; but, at this late hour, I do not propose to examine them, because other honorable members have been good enough to curtail their speeches. I shall not indulge in a lengthy exposition of the technical features of the arrangement. At all times, I try to look at the broad general outline of. these matters without thought of any political advantage to the

Labour party or any other party. I think of the advantages that the -whole of mankind should derive from any such international arrangement. On that basis, the Bretton Woods Agreement is justified. Perhaps the experiment will fail; but every country which has any regard for the cause of humanity cannot, for some selfish reason, or because some ghosts of the past happen to walk, or because of fears created by their experiences of a financial and economic depression, refuse to become parties to this agreement. Great as are the difficulties of making these international organizations work successfully, I believe that it is not in the interests of any political party to gain credit from them. The personal pride of some individual, or the desire of some nation for isolation, should not be permitted to stand in the way. If we have any love for mankind and a desire to free future generations from the terrible happenings of the last 30 years, we must put our faith in these international organizations. Even the youngest member of this House has seen two world wars, and a world-wide financial and economic depression from which people are still suffering. Even in Australia, the number of young people entering industry is much smaller than it would have been if, in the early 1930’s, there had been economic prosperity instead of economic misery. I can easily understand the fears of some honorable members - none more than the right honorable member for Yarra (Mr. Scullin) - who, as administrators, have seen and felt the despair and misery of those years.

The right honorable member for Cowper (Sir Earle Page) referred to the plight of Europe to-day. There has never been in history a more dismal picture of human misery presented to the world than that which exists in Europe to-day. In Europe itself some measure of economic stability must be established in order to enable future generations, if not even the present generation, to attain a. reasonable and decent standard of living to which every human being, black or white, is entitled. For that reason, the nations of the world, particularly the more fortunate nations, must do something to achieve some measure of economic security and a decent standard of living, even, as it has been said, for the people of ex-enemy countries. If we fail in that task we shall allow to exist another fever spot to breed war in the future. In the broadest world sense, regardless of party political implications, that is the lesson we must learn from events of the last seven, or eight, years. Having regard to the welfare of mankind, and ignoring personal, or national gain, no country in the world, not even a great nation like the United States of America which now dominates the world economic position, can be blind to the possible disaster to civilization in the future. All nations, great and small, owe a duty not only to their own country, but also to all peoples, to do everything they can to avoid that fate, even though it may involve experiments which may fail. All nations must at least strive to build up safeguards through these world organizations. Certainly criticism can be levelled against the mechanics associated with these organizations ; but it is the duty of all governments, regardless of party politics, if they have any thought for future generations, to aid this cause as far as they possibly can, even, as may be the case with Australia - because of limited influence - in only a small measure.

However, as the honorable member for Barker (Mr. Archie Cameron) would say, “ Every mickle makes a muck le “. It is perfectly true that all of the smaller nations can make their contribution to this great aim. I am sure that none of us, because of some party political consideration, would to undertake a responsiblity, if such failure would again cause the devastation, misery and sorrow which has visited the world, economically and militarily, during the last 30 years. I could speak at considerable length with regard to the technical side of this agreement, and in answer to the criticism levelled, against it. It is true that some of the mechanics of this agreement may have to be changed ; but that is no’ reason why any country should not help the world to achieve the great objective and ideal behind the United NationsOrganization. It is for those reasonsonly, and not for any national, personal or political reason, that I have alwaysbelieved that the Parliament, and the people of this country, in their own small way, are justified in their own interests in entering into this agreement.

Question put -

That the bill be now read a second time.

The House divided. ( Mr. Speaker - Hon. j. S. Rosevear.)

AYES: 55


Majority . . . . 50



Question so resolved in the affirmative.

Bill read a second time, and committed pro forma ; progress reported.

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Chifley) proposed -

That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to approve of Australia becoming a member of the International MonetaryFund and of the International Bank for Reconstruction and Development and to make such provisions as are necessaryor expedient by reason of the membership of Australia of the fund and of the bank.


.- I opposed the bill to approve of Australia becoming a. memberof the International. Monetary Fund and the International Bank of Reconstruction and, Development; therefore, in order to be consistent I must, oppose an appropriation of money for that purpose. I do not know whether it is usual for the Prime Minister (Mr. Chifley), or the Minister in charge of legislation, merely to ask the committee to appropriate an undetermined sum. If the amount of the appropriation is to be £1,000,000, £2,000,000, or £3,000,000, it can reasonably be urged that the committee should know the amount which it will commit the people of Australia to provide. I realize that a certain sum is mentioned in the bill with which the Househas dealt; but that has been increased, and possibly doubled. If it be usual to state the amount of the appropriation, I ask the Prime Minister whether he will give the necessary information, either now, or perhaps at a later stage.

Mr Chifley:

– It is already stated in the bill.


– It would not be right for me to agree to an appropriation unless I was sure that at some stage of the proceedings honorable members would know the amount of it.If the information is to be given to honorable members later, I shall reserve whatever remarks I intend to make in regard to the appropriation until the stage has been reached at which the amount is to be mentioned.

Prime Minister and Treasurer · Macquarie · ALP

– If the honorable member for Reid (Mr. Lang) examines clause 8 of the International Monetary Agreements Bill he will find that the appropriation of a particular sum may not be necessary for any particular period. The Commonwealth may appropriate such amounts as Australia may from time to time be required to pay to the fund in pursuance of certain paragraphs of section 8 of ArticleV. of the fund agreement.

Barker · ALP

– I am afraid that the explanation given by the Prime Minister (Mr. Chifley) does not meet the situation. There are only two appropriation clauses in the bill, and neither touches upon the most important disposal of Commonwealth funds which is provided for in the agreement. Clause 7 simply provides for the appropriation of such moneys as may be borrowed under clause 6. Clause8 provides for the appropriation of such moneys as may be necessary to carry out the Commonwealth’s liabilities under paragraphs c or d of section8 of Article V. of the fund agreement. These are purely machinery measures which cannot possibly involve any appropriation of money until such time as the Commonwealth of Australia uses the fund and incurs certain liabilities to the fund. The appropriation provided for in clause 8 does not deal with immediate matters. Paragraphs c and d of section 8 of Article V. of the fund agreement will not come into operation for a long time. The point I wish to make is this: Where is the authority for the Commonwealth to dispose of £2,500,000 or £3,000,000 worth of gold which is the property of the Commonwealth, and which must be, in accordance with the agreement deposited outside this country, and outside the control of the Commonwealth.

Mr Chifley:

– Of what gold is the honorable member speaking?


– The gold that has to be paid into the fund.

Mr Chifley:

– But that gold is not the property of the Commonwealth.


– Then whose is it ?

Mr Chifley:

– It is held by the Commonwealth Bank.


– It must be the property of somebody. If it is the property of the Commonwealth Bank, and the Commonwealth is to dispose of it outside Australia, it has no power to borrow it because the only authority that the Commonwealth will have to borrow will relate to securities. The power provided for in clause 6 of the bill is in respect of Commonwealth inscribed stock. So, there is nothing in the bill to give the Commonwealth authority to dispose of £2,500,000 or £3,000,000 worth of gold held by the Commonwealth Bank but not the property of the Commonwealth. Therefore, the committee cannot carry the motion in its present form.


.- This motion provides for the appropriation of moneys in. accordance with clause 8 of the International Monetary Agreements Bill. I assume that there is not to be a special bill to appropriate the money.

Mr Chifley:

– This gives the power of appropriation.


– That clears the matter up. The passing of this motion appropriates thefund. Therefore, there will not be another opportunity for honorable members who object to this money being appropriated to discuss the matter. That being so, I know what to do.

Question put -

That the motion ( vide page 1004)he agreed to.

The committee divided. (The Chairman - Mr. j. j. Clark.)

AYES: 53


Majority…. 48



Question so resolved in the affirmative.

Resolution reported and - by leave - adopted.

In committee: Consideration resumed (vide page 1004).

Clause 1 agreed to.

Clause 2-

This Act shall come into operation on the day on which it receives the Royal assent.

Barker · ALP

– I move-

That the words “ it receives the Royal Assent” be left out, with a view to insert in lieu thereof the following words: - “an Act to ratify the International Trade Organization Agreement receives the Royal Assent”.

There is no need to speak at length on this. The right honorable member for Cowper (Sir Earle Page) has stressed the need for knowing where the Government is going. I shall leave the matter at that.

Amendment negatived.

Clause agreedto.

Clauses 3 to 5 agreed to.

Clause 6 (Authority to borrow).

Barker · ALP

– I should like to hear an explanation of what is meant by Commonwealth inscribed stock. I did not get the explanation just now when I asked for it. Does the Treasurer (Mr. Chifley) propose to export between £2,500,000 and £3,000,000 worth of gold, which is not his property, nor that of the Commonwealth Government, but of the Commonwealth Bank, and issue in payment for it inscribed stock - particularly when the reported price of gold in the only part of the world where there is still a free market is £30 an ounce? During the economic depression, a good deal of Australia’s gold was sold at a fixed price, which was doubled shortly afterwards. Does the Government intend to issue inscribed stock to the Commonwealth Bank in payment for gold, and if so, how much stock is to be issued for every £100 worth of gold at the present fixed price of £10 17s.6d. an ounce?

Prime Minister and Treasurer · Macquarie · ALP

– This clause merely gives the Commonwealth Government authority to borrow money, which can be used to buy gold from the

Commonwealth Bank, and to pay for it. in such form as is acceptable to the bank.

Clause agreed to.

Clauses 7 to 11 agreed to.

First and Second Schedules agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 1006


Bill received from the Senate and (on motion by Mr. Pollard) read a first time.

page 1006


Bill returned from the Senate with amendments.

page 1006


The following bills were returned from the Senate without amendment: -

Stevedoring Industry Charge Assessment Bill 1947.

Stevedoring Industry Charge Bill 1947.

page 1006


Industrial Unrest Victorian Metal Trades Dispute

Motion (by Mr. Chifley) proposed -

That the House do now adjourn.


.-I refer to an industrial crisis of the first magnitude which has developed in Victoria and which, obviously, is likely to extend to every State of the Commonwealth. As honorable members are aware, a metal trades dispute has been in progress in Victoria for a number of months and its repercussions are making its significance felt in all sections of industry in that State. However, in the last 24 hours a serious development has occurred which may affect not only Victoria and every other State, but also the fate of this Government. The matter has been examined by the courts, and, more recently, by a conciliation commissioner of very considerable ability in the person of Mr. George Mooney. The commissioner made an order which has been rejected by the unions affected and, according to information in the newspapers, the Amalgamated Engineering

Union, which is probably the most powerful union in the Commonwealth, has determined to withdraw its members from power and transport services in Victoria as from to-morrow. Associated with that union in the decision are the Federated Ironworkers Association and the Engine Drivers and Firemen’s Association. The implications of this decision should be obvious to everybody. One of the immediate effects, I understand, will be that railway services will be reduced by 50 per cent. If the Newport power house is closed, there is likely to be a stoppage of suburban train services throughout the metropolitan area. The tram and the electric supply services w-ill be gravely affected ; there is every’ possibility that over the weekend they will be unable to maintain anything like a normal service, and there may even be a complete hold-up.

The implications of this decision cannot be ignored by this House. The first is that the Government’s method of solving industrial problems by appointing conciliation commissioners does not meet the needs of this situation. The conciliation commissioner in this instance is a man of considerable ability, fair mind, and sound judgment. Mr. Mooney has been known to many members of this Parliament for many years. He was a close associate of the honorable member for Batman (Mr. Brennan), and he was appointed to the position of conciliation commissioner by myself, as a member of the Menzies administration. Everybody who knows of his work will agree that his appointment was one of the successful ones made at that time. I have had every confidence in the work that he has done, and I have admired the way in which he has exercised his authority and his judicial approach to the very difficult problems which have come before him. He has examined, the causes of the present dispute and has given a decision. Not only has that decision been rejected by the men concerned, but also that rejection has been followed by the threat, which presumably will be translated into action to-morrow, to withdraw the key engineering employees from the great power and transport’ facilities of Victoria.

The second significant implication is that the union’s decision represents a rejection of the advice of the disputes committee of the Australasian Council of Trade Unions. I understand that Mr. Clarey, who is president of the Australasian Council of Trade Unions, and who is also a member of the Victorian Government, has been involved in the discussions.

Mr Menzies:

– And he also appeared before Mr. Mooney.


– Yes. He was one of the representatives who appeared before Mr. Mooney in the discussions. The union decision, therefore, represents a defiance of the recommendations of an officially constituted committee of the Australasian Council of Trade Unions. For this reason, it is fair to ask the Government where authority resides in this matter. This is not merely an internal revolt in the ranks of the trade union movement, as would appear on the surface. It is anarchy. There is no orderliness in it. There is no strong co-ordinated body giving directions in the matter. It represents disruption, inconvenience, discomfort, hardship, and, indeed, chaos for many private citizens and the community as a whole. It is serious enough that there should be disruption in one State, but the implications of the decision go far deeper than that. As honorable members are aware, there were elements in the trade union movement which set out many months ago to achieve certain objects. Their objects were to remove the wagepegging regulations, secure a 40-hour week, and obtain a reduction of taxes and an increase of the basic wage. Even those in positions of authority and responsibility, such as Mr. Monk and Mr. Clarey, have left no doubt in the minds of members of the Government, or the public, that they are determined to achieve their objectives by constitutional methods, and if those constitutional methods fail, by industrial violence. Mr. Monk, the secretary of the Australasian Council of Trade Unions and spokesman for the movement in relation to the 40- hour week case, said, “ Either we get this decision through the court, or it will be a long and bitter fight”. People who indulge in inflammatory statements of that kind offer a direct challenge to the Government.

What should the Government do? It is not for honorable members on this side of the House to offer specific remedies ; if we were in authority, it would be our responsibility to deal with this matter. The Government, which has responsibilities in these matters, must govern. There is no alternative. It has created all the paraphernalia of the courts, additional judges and conciliation commissioners; but, if its authority is defied, there can be no effective substitute for discipline and authority. In the issue that has developed, the Government must be prepared to act. This is not merely a local dispute; it is not confined to Victoria. It is significant that the matters which I have mentioned were enumerated in the objectives of the trade union movement as a whole. It is all the more significant that the federal president of the Amalgamated Engineering Union, Mr. Cranwell, a member of the committee of the Australasian Council of Trade Unions, has, according to the press, thrown in his weight behind this decision. If that be so, it is no longer a local issue; it becomes a national issue. The Prime Minister (Mr. Chifley) should look to this Parliament, as the freely elected representatives of the people, to back him in whatever action he considers necessary to prevent defiance of the democratic tribunals of this country. If the Government is not prepared to accept that responsibility, there can be no alternative but chaos in this country.

This is industrial rebellion. If great public utilities, such as the tramways, the railways and our electricity supply undertakings are to be disrupted, if these important and essential services are to be discontinued, if the people are to be plunged into confusion and made to suffer untold discomfort, the issue must be similar to that which would occur if an external enemy were bringing about these things in time of war. This is a crisis in time of peace. In Canberra, Ave are remote from the great centres of population, and, accordingly, these things may seem distant from us. However remote they may seem, they constitute a challenge to the authority of the Government and the duly elected representatives of the people. Conciliation commissioners such as Mr. Mooney, and judges of the Arbitration Court, have been made responsible for giving decisions in matters of this kind. If their decisions are to be ignored and openly defied, by these people, who are prepared to disrupt essential services in order to gain their ends, the Government must act swiftly and surely.

The Prime Minister is a temperate and reasonable man. As far as tolerance and reasonableness are concerned, the right honorable gentleman has probably gone as far as any man could be expected to go in his dealings with the spokesmen for these men. But this issue goes far beyond that. These people despise the Prime Minister and his Government for the action which they have taken. They have sufficient effrontery and strength to challenge what should be the strongest force in any democratic country, namely, the elected representatives of the people. If this challenge goes without remedy, we can hope for no industrial peace in Australia within the discernible future. This is not a matter of party challenge or criticism. Members of the Opposition willi do what they can to back up whatever action the Government feels to be necessary to deal with these people. The time has long passed for smooth words, or any suggestion that “ time will cure the evils that have developed “. Here is a real threat to the people of Victoria, and it will spread throughout the Commonwealth if it be not grappled with resolutely and firmly. I cannot help but feel that this action has been inflamed by the feebleness with which the Government has faced the upheaval on the waterfront in New South Wales. What does the Government propose to do in regard to this matter? I have presented issues squarely, and I invite the Government to give its answer.

Friday, 21 March 1947


– I asked a question on this matter in the House yesterday. I pointed out that this anarchy has been going on since last July. It is being conducted in a most insidious way by the Communists. Mr. Flanagan, an official of the Ironworkers Union, has established a virtual dictatorship over the industry which he controls.

He has withdrawn moulders from factories, and has determined which businesses shall be carried on and which shall not. Gome of the largest engineering works in Victoria have reached a standstill. By the 14th November last, 70,000 men had left the industry. These wicked men in the unions are sabotaging a skilled industry. The engineers are being told by the union to leave their employment, and that other jobs, all in unskilled trades, would be found for them. These men, who have bad a life-long training in engineering shops, arc being dispersed into unskilled occupations from which many of them will not return. Their leaders have defied the court and the conciliation commissioner, and have thereby jeopardized the jobs of decent men, and have been allowed to “get away with it “. When the full measure of what is threatened happens to-morrow, the people of Melbourne will be without electric power or transport. If a man were to break into my house and put out the light, I should either throw him out or give him in charge; but apparently, evilly disposed men can with impunity plunge hundreds of thousands of lawabiding people into a state of darkness and chaos. The Minister for Labour and National Service (Mr. Holloway) is well aware of the facts of the case. These are the personalities involved in this dispute and these arc their records: I shall first refer to C. Southwell. He is the metropolitan organizer of the Amalgamated Engineering Union, and he has been as busy as possible for months pulling men out of their jobs. He is a Communist. Then there is Mr. Flanagan, Thornton’s lieutenant in Melbourne, a man who forced out of existence a small union in the munitions branch, and who brought about this trouble in the first place. Thornton himself takes his orders from Moscow. Other men who are not Communist are Clarey, Monk and other leaders of the Labour movement. These men, fearing that they are being outrun by the Communists, are endeavouring to outdo the Communists. The people of Australia know what happened in Sydney. It will happen in peaceful Victoria. It is not for the Opposition to suggest what measures the Government should take, but the Minister knows that there is provision in the Arbitration Act to deal with any one who incites men to strike. The penalty imposed is a fine. Inciters of strikes should be fined, and fined again. Take a warrant out for this man. The matter is urgent, and unless the Government acts within the next day or so a very serious state of affairs will arise in Victoria.

Minister for Labour and National Service · Melbourne Ports · ALP

– What the honorable member for Fawkner (Mr. Holt) has said is true and I think he has stated the facts very fairly. The press reports agree with the account he has given of this occurrence. Immediately on receipt of a rumour that this was about to happen “I made inquiries. I was informed that an unofficial decision was reached by the district council of the Amalgamated Engineers Society, but it did not have the approval of the federal body and it did not have the approval of the federal council-

Mr Holt:

– My information is that Mr. Cranwell is supporting Mr. Southwell.


– I am not denying that, but the information from my department in Melbourne is that when the Melbourne district council of the Amalgamated Engineers Society carried that resolution they called upon their members to attend a stop-work meeting. A mass meeting is to ‘be called on Monday of the rank and file of the Ironworkers Union to ascertain whether they are prepared to support this resolution. I understand that in the meantime the Disputes Committee, representing the whole nine unions involved and the Australasian Council of Trade Unions, is taking action to meet the position. The next, step will have to be taken by Mr. Mooney, who, no doubt, will submit the matter to the judge who referred it to him in the first place. I understand that Judge Sugerman would have dealt with the dispute himself but for the fact that he was dealing with a more important matter. However, in view of what has occurred, it is probable that he will deal with the matter immediately. We cannot take it out of the hands of the court; the law must he observed.

Mr.White. - The Minister means that the court is impotent.


– I am not admitting that the court is impotent.

Mr.White. - The honorable gentleman can order the court to deal with the matter.


– There is no need to make such an order, because the order has already been made. I referred the matter to the court some time ago.

I agree with what the honorable member for Fawkner said of Mr. Mooney. Mr. Mooney is one of the most experienced of the conciliation commissioners. He heard this case and made a decision. He awarded increases to the limit of the regulations, as he understood them, and to the extent to which he thought they would be approved by the Chief Judge. Whether the Chief judge could make a more favorable award I do not know, but I understand that the matter has been returned to the Chief Judge for review.

Mr White:

– The country is losing £500,000 a week in wages.


– I know all about that. This matter is very serious, but I do not think it is quite as bad as the honorable member for Fawkner suggests. However, I think that if something is not done within a week the position may become most serious.

Mr Holt:

– The press reports suggest that the members of the unions involved will be called out to-morrow.


– I realize the seriousness of the matter and that something will haveto be done by some one-

Mr Menzies:

– When the Minister says “something will have to be done by some one”, by whom does he mean?


– By the court.

Mr Menzies:

– I thought the commissioner had made a decision - he is the court.


– The commissioner submits the matter to the judge who referred it to him in the first place. If the commissioner’s decision is not satisfactory the judge deals with the matter himself.

Mr Menzies:

– And if the award does not settle the matter the dispute continues ?


– The Government will deal with that position when it arises. I do notwant to discuss the merits of this dispute now. There are two sides to it, although I do not suggest that they balance. The engineers did not go on strike at all. Every one is sorry now that the strike happened. The engineers were locked out-

Mr Francis:

– But what does the Minister intend to do?


– Until I receive different instructions I am going to do what the Opposition has always asked the Government to do - not to interfere with the court.

Question resolved in the affirmative.

page 1010


The following papers were pre sented : -

Commonwealth Public Service Act - Appointments - Department of the Interior - K. Gottlieb, C. A. Maddern, D. G. Thomas.

Lands Acquisition Act- Land acquired for Postal purposes - Toowoomba, Queensland.

House adjourned at 12.12 a.m. (Friday).

page 1010


The following answers to questions were circulated : -


Mr Fadden:

n asked the Prime Minister, upon notice -

  1. Has his attention been drawn to statements made over the Australian Broadcasting Commission’s network recently by Sir Douglas Mawson and Mr. H. E. Sizer, regarding the development of the Australian quadrant of Antarctica, with particular reference to the whaling industry?
  2. If so, has the Government taken any steps to give effect to their proposals?
  3. Will he make available a copy of the report of the Australian delegates to the Washington meeting of the International Whaling Convention?
  4. Will he make a statement regarding the Commonwealth Government’s relations and/or negotiations with the controlling authorities in Japan, by which Japan was permitted to resume whaling operations in the Antarctic.
  5. Is it intended to obtain a satisfactory working quota of Antarctic whales to be taken by Australian interests which will permit establishment of the whaling industry in Western Australia and Tasmania?
Mr Chifley:

– The answers to the right honorable gentleman’s questions are as follows : -

  1. Yes.
  2. The question of Australia’s entry into the pelagic whaling industry has received detailed consideration in recent years, but final decision was deferred until after the International Whaling Conference held in Washington from the 20th November to 2nd December, 1946. This decision to defer final consideration on pelagic whaling did not alter earlier plans to proceed with land-based operations, and the Commonwealth Government is at present negotiating with the Western Australian Government in the formation of plans for a whaling station. The ultimate organization to develop and operate the projecthas not yet been set up.
  3. The report has not yet been considered by the Government.
  4. On the 7th August, 1946, the Supreme Commander of the Allied Powers in Japan authorized the Japanese Government to undertake a whaling expedition to the Antarctic region during the 1940-47 season. The principal reasons given for this action were the shortage of food in Japan, and the world shortage of oils and fats.

As soon as this proposal was made, the Australian Government, as well as other governments, made strong representations to the United States government against the proposed form of the expedition. Considerable negotiation followed but it was considered in the interests of the world food and oil situation that use should be made immediately of Japanese equipment. It was not possible to make the necessary structural alterations to the ships to make them suitable for other than Japanese crews without considerable delay, which would have involved the abandonment of the expedition. As a consequence of Australian representation, however, the Supreme Commander agreed to permit an Australian observer to accompany the expedition.

The expedition was authorized for the 1946-47 season only, and the interested Allied governments will be fully consulted if any further extension of Japanese whaling or fishing activities shouldbe contemplated.

  1. Although the Commonwealth Government favours the division of the total catch in any one season into quotas which would be allocated to the operating countries, no quota system was introduced into the convention drawn up by the 1946 International Whaling Conference. This means that, although there is no bar to Australia’s entry into Antarctic whaling, Australia has not been allotted a production quota, and an Australian expedition would have to operate in open competition with other expeditions, and would have to cease operation for the season immediately the agreed total catch had been taken, irrespective of whether the Australian expedition had taken only a small number of whales or a reasonable catch.

Rail Transport: Alice Springs - Birdum Line

Mr Blain:

n asked the Minister for Transport, upon notice -

  1. When is it proposed to commence the railway connecting Alice Springs to Birdum, the construction of which the Minister announced lastyear had been agreed to by Cabinet?
  2. Will this line firstly be expedited from Alice Springs to the mining field of Tennant Creek, 320 miles northerly?
  3. Can he assure the House that the next section willbe located in a direction from Tennant Creek or through the centre of the Barkly Tablelands, thence to Birdum, instead of the road following an area containing inferior land directly north along the overland telegraph line?
  4. Has he received any recommendations whereby, if the railway be finally located through the centre of the Barkly Tablelands, a spur line could eventually be built to a gulf port, either at Borroloola or Point Parker in Queensland?
  5. Is it proposed to construct the railway throughout Mount Isa across the Barkly Tablelands to join with the Alice Springs route at the same time as the railway is constructed from Alice Springs?
Mr Ward:
Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

– The answers to the honorable member’s questions are as follows : -

  1. The construction of the railway line from Alice Springs to Birdum is included in the works prescribed in theRail ways Standardization Agreement Act 1946, but as the Agreement has not yet been ratified by the Parliaments of New South Wales and Victoria, no authority exists for proceeding with any of the works so specified. 2 to 5. Certain investigations have been carried out and draft plans prepared, but the exact location of the line, and order of carrying out the work will be determined in collaboration with the Department of the Interior.

Department of Trade and Customs: Alleged Irregularities.

Mr Chifley:

y. - On the 7th March the honorable member forWentworth (Mr.

Harrison) asked a question referring to a case recently before the court, in which a former assistant to the Director-General of War Supplies Procurement in Washington was fined on charges of customs evasion. The honorable member asked whether, in view of other cases at present before the court, I would appoint a royal commission or committee of inquiry to investigate the matters concerned.

As the honorable member stated, the other cases referred to by him are still sub judice and therefore it would not be proper to give consideration at this stage to the appointment of a royal commission or committee of inquiry as suggested.

Industrial Unrest

Mr Spender:

r asked the Minister for Labour and National Service, upon notice -

  1. How many persons have been on strike in each of the States for each month of the last six months to the end of February?
  2. How many working days have been lost in each State in each of the last six months?
  3. What amount has been paid by the Government in each State during the last six months to persons out of work as a result of strikes for the maintenance of themselves and their families?
Mr Holloway:

– The answers to the honorable member’s questions are as follows : -

The above figures have references to employees involved in both strikes and lockouts, the information in respect of strikes only not being available.

  1. I am advised by the Minister for Social Services that no unemployment benefit is paid to direct participants in strikes. Non-strikers who are out of work through strikes in other industries or sections of industries are entitled to unemployment benefit. The statistical records do not enable a distinction to be drawn between unemployment benefit paid to nonstrikers as a result of strikes and unemployment benefit paid as a result of lockouts. A very large amount of departmental work would be involved in ascertaining the total amount of unemployment benefit paid to nonstrikers in each State as a result of industrial disputes but it is estimated that payments in the Commonwealth during the six months to the end of February, 1947, were£ 145,000.

Anglo-French Treaty

Mr Holt:

t asked the Minister for External Affairs, upon notice -

  1. Has the recently signed Anglo-French Treaty to operate for 50 years, committed Australia in any, and, if so, what way?
  2. Was the Australian Governmentcon- sulted as to its completion, and did it agree to its terms?
  3. How will the treaty affect Australia?
Dr Evatt:
Attorney-General · BARTON, NEW SOUTH WALES · ALP

– The answers to the honorable member’s questions are as follows: -

  1. No.
  2. The terms of the treaty were communicated in advance to the Australian Government, but its terms were solely a matter for the United Kingdom and French Governments.
  3. The treaty does not directly affect Australia, either in her relations with France or otherwise.


Mr Dedman:

n. - On the 12th March, the honorable member for Boothby (Mr. Sheehy) asked a question concerning large quantities of three ply timber alleged to be held by the Department of Munitions. The Minister for Munitions has supplied the following information : -

It is not correct to imply that my department has in its possession large quantities of surplus timber. A certain quantity formerly used in connexion with thestorage ofcartridge cases has became available as liquidation of thecases has proceeded and some of it is being diverted to other Commonwealth uses. Five thousandsquare feet in sheets of odd sizes havebeen declared surplus in South Australia and liquidation is now proceeding. With regard to ex-servicemen, special consideration has alreadybeengiven to Servicemen’s Co-operativeJoinery Manufacturers Limited,by selling to the firm its immediate requirements as sponsored by the Secondary Industries Division.

Mr Dedman:

– On the l8th March the honorable member for Bendigo (Mr. Rankin) asked a question concerning the issue of licences to retail petrol. The Minister for Supply and Shipping has supplied the following information: -

Under the Liquid fuel Regulations it is necessary that every reseller ofpetrol be licensed. Liquid fuel boards are quite willing to issuea licence toevery applicant who can produce evidence that he is in a position to properly retail petrol, i.e., that pumping equipment isinstalledand that supplies of petrol will be available in : bulk for resale. Atthis stage the oil industry comes into the matter, since thatis the only source fromwhich supplies of petrol inbulk can be obtained, and generally speaking only oilcompanies can provide pumping equipment. The general attitude of the industry, and in this it is supportedby the resellers organization, is that itwill notprovide facilities for theopening of anew reseller outlet in any locality which is already adequately serviced to meet public needs. The matter is thus not one whichis with in thecontrol of the Commonwealth, but we are bringing the matter of exservicemen who already own garages to the special noticeof the industry witha view toseeing whether anythingcan be done in their cases.

Foreign Legations

Mr Gullett:

t asked the Minister for External Affairs, upon notice -

  1. . Howmany citizens of theSoviet Union are - (a) Accredited members of the Soviet Legation in Canberra, (b) accredited members of consular orother official staffs in Australia; and (c) members of the families of Legation and other staffs ? 2.Is any restriction placed uponany mem bers of the legation or consular staffs travelling to any part of Australia, and are they providedwith a guide or escort when so travelling?
Dr Evatt:

– The answersto the honorable member’s questions are as follows : - 1. (a) Diplomatic staff 7; (b) consular staffs, nil; (c) clerical and other staff of legation, 12. Wives of diplomatic, clerical and other staffs,16; children, 20.

  1. No restrictions are placed upon members of any duly accredited legation or consular mission when travelling in Australia, except in areas prohibited to Australian citizens.

Broadcasting : Australian Broadcasting Commissio

Mr Spender:

r asked the Prime Minister, upon notice - 1.Is the government, as reported, consider ing the abolition of the Australian Broadcasting Commission and the placing of national broadcasting under directMinisterial control ?

  1. If so, will the matter be referred to the Parliamentary Standing Committee on Broadcasting so that evidence may be taken on all aspects of such a proposal ?
Mr Chifley:

– The answers to the honorable member’s questions are as follows : -

  1. The Government has not given consideration to any such proposal.
  2. In viewof the answer to No. 1the question of referring the matter to the Parliamentary Standing Committeeon Broadcasting has not arisen.

Oil: Government Aidto Prospectors.

Mr Chifley:

y. - On the 18th March, the honorable member for Maranoa (Mr. Adermann) asked a question concerning the sinking of oil bores in the Roma district. Idesire to inform the honorable member that the Government is not providing financial assistance for the sinking of these bores. However, certain companies approached the Commonwealth for assistancein carrying out geophysical surveys and this request was supported by the Premier of Queensland. Consequently, theGovernment agreed to carry out the required surveys as soon as they can beconveniently arranged. Other technical advice has been and will continue to be givento these companies. A petroleum technologist has also been appointed, whose advice and experience is available to all those engaged in the search for petroleum. Experience has shown that the policy of subsidizing drilling operations did not give satisfactory results, and the Government decided that it could best contribute to the search for oil in Australia by carrying out, as a continuingfunction, regional geological mapping, geophysical surveys and scout drilling.

Cite as: Australia, House of Representatives, Debates, 20 March 1947, viewed 22 October 2017, <>.