18th Parliament · 1st Session
Mr. Speaker (Hon. J. S.Rosevear) took the chair at 10.30 a.m., and read prayers.
Mr. FRANCIS presented a petition from certain electors of the division of Moreton, in relation to banking in Australia.
Petition received and read.
– I ask the Minister for Defence whether, as Brigadier Blackburn, V.C, stated at the annual congress of the Returned Sailors, Soldiers and Airmen’s Imperial League ofAustralia, the Government is holding up efforts by the United States of America to award high decorations to 200 Australian soldiers, and that General MacArthur’s head-quarters have endeavoured for two years to obtain Australian approval of them?Were the soldiers concerned apart of an allied force that was dropped behind the enemy’s lines to obtain information, and did they do a wonderful job? In view of the fact that the British and Dutch Governments have approved the award of high decorations by the United States of America to their troops who were members of the same force, and that those awards, have already been, made, will’ the: Minister state the reason for the: withholding by the- Australian Government ofits approval of awards to Australian,, inthe face of the persistent endeavours that have been made, by the’ American authorities f
– It is true that proposals have been received through the American Embassy in Canberra about the awarding of.’ a number of decorations to Australians who participated in the war in the Pacific. This raises a little difficulty. It would be easy to decide on the principles under which awards by other countries should be granted to Australians and awards by Australia to servicemen of other* countries should, be granted if Australia had a system of awarding decorations.
-ebon. - I thought all awards were made by the King.
– That is’ what I am pointing out. The system of awarding decorations within the British ‘Commonwealth is that the dominions make recommendations to the United Kingdom authorities in relation to awards and the United Kingdom authorities have certainprinciples that they think ought to apply. For example; the United Kingdom authorities think that awards made by foreign countries to servicemen ‘ of the British Commonwealth- should ‘be on the scale of one award by a foreign country to a British serviceman as against one by Britain to a foreign serviceman. Another principle is that, in general, the United Kingdom authorities think itwould be wrong for two awards to be made for the one action. That is, if the United. Kingdom authorities, on the recommendation of the Australian authorities, have made an award to an Australian serviceman for service in the Pacific theatre it would not be right for another award to be made to him by the United States authorities for the same action. However, the matter has been taken up with the United Kingdom authorities, and I believe that we shall soon arrive at a solution of the problems I have outlined in relation to the general subject of the making of awards by foreign countries to Australian servicemen.
– Representations have been made to the honorable member for Fremantle and myself regarding the projected cut in dollar expenditure, and its effect upon the importation of university text-books. “We have been told that licences that had been used, for the importation of such text-books have been recalled, in common with licences forother dollar purchases, in order that they may be reconsidered. . Will the Minister representing the Minister for Trade and Customs ensure, by consultation with that Minister, and, if necessary, the Cabinet, that any dollar cuts shall not apply to. the importation-, of text-books for schools or universities, the effect, of which wouldbe to hamper- the development of learning ?
-.- I shall be glad to consult with, the Minister for Trade and Customs, ‘but -I am confident that the. importation of text books will not beprohibited and that sufficient will be admitted to meet educational requirements.
– About a month ago I asked the Minister for Commerce andAgriculture whether he would make a statement on the policy of the Australian Government, regarding the wheat- inr dustry. In view of the fact that thelegislation for the stabilization of the wheat industry passed by this Parliament could not be implemented because of the failure of certain State parliaments to pass complementary legislation, and further, that some of. them did not intend’ to do so, the Minister promised to make. a. statement. I now ask him when- we- may expect such .a statement ?
– I shall honour my promise^ and at the appropriate time. I shall make a full statement on the subject. Despite the honorable member’s statement that some State parliaments will not pass’ the requisite complementary legislation, I am confident that, followingthe Victorian State elections, the Legislative Council of .that State will be muchwiser than in the past, and that there willbe no difficulty in having the necessarylegislation passed by that chamber.
Malayan Campaign - Percival Report
– I understand that on his return to Britain General Percival prepared a report on the Malayan campaign but that the United Kingdom Government refused publication of it at the time. A few weeks ago there was a press report that the Malayan authorities objected to its publication. I now ask the Prime Minister whether the Australian Government has received a copy of the report and, if not, whether it will make the report available when received?
– I understand that General Percival intended to prepare a document relating to the operations in Malaya. Certain communications passed between the Australian and United Kingdom Governments regarding certain passages proposed to be included in it. I do not know that any objection was offered -by the Australian Government to those passages, but it was suggested that they might cause unnecessary criticism and friction. ,Since then I have not heard anything more on the subject. The Australian Government made its views known, and I understood that the report was to be published later. I have no official knowledge of any difficulty regarding its publication. The Government has not received a copy of the report, and I do not know when it will be available. Therefore, I am unable to comment on the report. Should a copy of it be received, the Government will consider giving publicity to its contents, but I understand that it is the intention of the United Kingdom Government to release it for publication.
Living CONDITIONS of ex-servicemen-
– As the question which I propose to ask concerns two departments, I address it to the Prime Minister. Has he seen in the Sydney Daily Telegraph of to-day’s date an item headed “ Ex-servicemen in New Guinea ‘ live under scrap-iron ‘ “. The report arises out of the Returned Sailors, Soldiers and Airmen’s Imperial League conference in Canberra, and according to the statement of one delegate, ex-servicemen are living with their wives and children in tents, and .under scraps of iron in New Guinea, while nearby natives are living in beautiful houses. The delegate was Colonel H. T. Allen, an officer who served in the Middle East, and who has had 27 years’ experience in New Guinea. He said that the administrative policy in New Guinea had caused the conditions which existed there. The provisions of the War Service Homes Act did not apply in New Guinea, he said, and the conference unanimously decided to ask the Government to apply the War Service Homes Act and the Australian Soldiers Repatriation Act to ex-servicemen living in New Guinea. I ask the Prime Minister to ensure that this request is complied with. As it has been reported in the press that the Minister for External Territories proposes to visit New Guinea in regard to the development of oil resources, will the Prime Minister ensure that the Minister goes as far north as Rabaul and Kavieng in order to see for himself the conditions under which white settlers arc compelled to live?
– I have not seen the report in this morning’s Sydney Baily Telegraph. Indeed, I have not yet seen to-day’s newspapers. I have not as yet received any representations from the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia regarding the matter mentioned by the honorable member, but I have been informed by the Minister for Repatriation that to-morrow he will interview representatives of the organization, and I have agreed to see them myself for a short while. As for the living conditions mentioned by the honorable member, 1 will certainly have inquiries made, and I will ask the Minister for External Territories to examine the position when he visits New Guinea.
– Before the war, two banks were operating in New Guinea - the Bank of. New South Wales, and the Commonwealth Bank. Since the end of the war the Bank of New South Wales has not operated for various reasons, and the Commonwealth Bank has a monopoly. I ask the Prime Minister, in his capacity as Treasurer and virtual controller of the Commonwealth Bank, whether it is a fact that before the war it was the practice of settlers who required financial accommodation to be given advances by the trading bank, which advances were secured against copra harvested and awaiting shipment? Will the Prime Minister ascertain whether it is a fact that this financial accommodation enabled the planters, most of whom are returned soldiers, to finance their field operations, such as the payment of labour, &c, while awaiting the ultimate disposal of their crop? Is it a fact, however, that to-day in New Guinea, with the trading bank eliminated, the Commonwealth Bank declines to give this service? Is it a fact that the Commonwealth Bank will make advances only when the copra is delivered to the depot of the Copra Production Board, which ls situated hundreds of miles from many plantations and whose owners have not adequate facilities to transport their copra to the depot ? Is the position, therefore, that in many cases the copra is on the plantation at, say, Bougainville, the planter is unable to get it to the depot, and, at the same time, he cannot obtain financial accommodation which the trading bank previously afforded? This information has been given to me by a returned soldier who is attending the ex-servicemen’s congress now being held in Canberra. Will the Prime Minister investigate the matters I have mentioned ; and, in order to elicit the facts for himself, will he grant an interview to one of the planters who will have to return to his plantation within a few days ?
– Although the honorable member is correct in addressing the question to me as Treasurer, he is sadly misinformed in saying that a.3 Treasurer [ virtually control the Commonwealth Bank. Naturally, I have no detailed knowledge of the advances that are made for the purpose he indicated. Advances were made to planters in New Guinea by trading companies in respect of the marketing of copra, and in some cases the lending companies had liens over the. plantations.
– The trading companies are now eliminated too.
– I understand that there has been some change. I shall have a close look at the questions asked by the honorable member’ and discuss the matter with the Governor of the Commonwealth
Bank, who is responsible for the administration of the bank. If a suitable time can be arranged, I shall be prepared to give a brief interview to the gentleman whom the honorable member mentioned.
– The annual conference of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia held in Canberra expressed a desire that it should be represented on the Advisory Immigration Council. Has the Minister for Information and Immigration yet done anything about the matter? Has the Minister seen the report submitted on immigration by the Australian Capital Territory Branch of the league?
– I have read a newspaper report dealing with the matter mentioned by the honorable member, but I have not yet done anything about it. I propose to act on the suggestion made by the conference; but I point out that this matter has been under consideration for some time. Indeed, it was the honorable member for Parkes himself who first suggested it to me. I am glad that the conference of ex-servicemen agreed with the chairman of the advisory committee, and I will take the action desired at an early date.
– Has the Prime Minister seen a report published in yesterday’s press that a stoppage is threatened on the southern coalfield over a dispute concerning compensation to “ dusted “ coalminers on which matter negotiations are taking place with the State Government? Is not the Australian Government co-operating with the State Government in the provision of compensation for “ dusted “ coal-miners ? In view of the representations made by a deputation which I introduced to the Prime Minister some time ago, has he yet conferred with the State Government with a view to making some arrangement for the payment of compensation to what is known as a third category of “ dusted “ coal-miners ?
– It is true that representations were made hy a deputation of officers of the coal-miners’ federation which was introduced to me by the honorable member for Hunter in .respect of the provision of compensation to a third category of “dusted” coal-miners. Arrangements were made with the previous Premier of New South Wales, Mr. McKell, covering about 246 men who were still working in the mines, or had just given up coal-mining, or on health grounds, were adjudged unfit to continue working in the mines. In that arrangement the Commonwealth undertook, as a temporary measure, to provide a subsidy and the then Premier of New South Wales arranged to make available certain hospital accommodation in Sydney. At a later stage, a second category of “ dusted “ coal-miners came in, and I understand that the State Government, without consulting the Australian Government and without receiving any subsidy from this Government, arranged to pay compensation to “ dusted “ coalminers in that category. The request now being made by the miners’ federation and the honorable member for Hunter is that a third category of “ dusted “ miners - those who, I think, came out of the mines prior to 1.946 - should be provided for. I understand that the miners’ federation has had some consultation with State Ministers on that aspect of the problem. I have received certain information from the New South Wales Government in regard to it but there has been no consultation between Commonwealth and State authorities relative to a proposal that the Commonwealth should subsidize the State on a £1 for £1 basis for expenditure incurred in that way. The Commonwealth is concerned with the payment of moneys contrary to the general principles of the workers compensation legislation. I have written to the Premier of New South Wales indicating the views of the Government relative to the situation of “ dusted “ miners, and I have also taken the opportunity to make known to one of the State Ministers my own views on the subject. I felt that, generally speaking, these miners could be covered by an amendment of the New South Wales Workers Compensation Act or by new legislation such as that dealing with silicosis sufferers in the metalliferous mines. I wrote to the Premier of New South Wales on the subject only this week and I have not yet received a reply.
– During the debate on the Estimates, I drew .the attention of the Minister for Works and Housing to certain correspondence which had passed between myself and the Victorian Minister for Housing, Mr. Barry. The Minister may recall that Mr. Barry’s reply revealed a lack of sympathy, amounting almost to complete indifference, as to the housing requirements of a certain most deserving exserviceman. Yesterday, Mr. Barry is reported to have made some very slighting remarks about ex-servicemen. He is reported to have said that the men who died in Greece and Crete were in overseas graves because they had to join the Army to get a job. He is also reported to have referred to the term of imprisonment of a prisoner of war in Japan as “ not having done him much good “. Does Mr. Barry act as the deputy of the Australian Government in any respect, in Victoria? Does the Minister consider that Mr. Barry is a fit and proper person to be in charge of the allotment of houses to ex-servicemen in that State?
– The answer to the last question is definitely “Yes”. I hope that he will retain that position for many years to come.
– He seems to be completely biased.
– To the question of whether Mr. Barry acts as deputy of the Australian Government in Victoria, the answer is “No”. Under the Commonwealth-State housing agreement, the Victorian Government acts as the direct housing authority. The Commonwealth makes available the requisite finance and lays down certain conditions governing the erection of houses and the adoption of certain standards and building specifications. That is the sole part played by the Commonwealth under the agreement. If the ex-serviceman to whom the honorable member has referred is eligible for the purchase of a war service home he may apply direct to the Director, War Service Homes. In that event, the application will be dealt with by my department. The Directorate of Works and Housing has a branch office in Melbourne and such an application would he lodged at the Melbourne office. The officers attached to that office are responsible directly to me.
– In view of the acute shortage of accommodation at the Federal Members’ Rooms, Brisbane, and the fact that the Australian Government is using business premises in Brisbane for the housing of its activities, have the plans for the extension of the Commonwealth offices in Brisbane yet been completed? Is it the intention of the Minister for Works and Housing to refer these extensions to the Public Works Committee? Does the honorable gentleman consider that these extensions will interfere with housing construction in the Brisbane area?
– The plans for the Commonwealth offices which will house many departments as well as federal members in Brisbane, are nearing completion. When they have been completed, they will be considered by a cabinet subcommittee of which the Minister for the Interior is chairman, and I am a member, in the light of the overall demand for offices in all capital cities. Should that sub-committee reach a favorable decision on the project, it will be submitted to the Public Works Committee for an opinion as to whether it is necessary immediately and whether it will interfere with the construction of homes.
– Has the Prime Minister seen the latest figures released by the Commonwealth Statistician showing that the Australian Government employees now number 159,210, an increase of 90,000 or 134 per cent, on the prewar figure? Has the right honorable gentleman also read an appeal reported to have been made by the Minister for
Labour and National Service to workers of this country to increase production? Can the Prime Minister explain to the House how it is intended to produce more goods in view of the continual increase of the numbers of public servants who “ toil not neither do they spin “, and who like “ Solomon in all his glory was not arrayed like one of these “ ?
– Order ! It appears to the Chair that it would take the wisdom of Solomon to perceive the honorable member’s question.
– I am not being personal, Mr. Speaker; I am referring to King Solomon. Will the Prime Minister say whether, in view of the fact that employment in the Public Service has increased by 20,900 since the 1st January of this year, it is the intention of the Government, at a time of full employment, to continue to divert men from productive industries into the Public Service ?
– The Leader of the Australian Country party has kept me very well informed about employment figures in the Public Service. I have seen the figure of 159,210 mentioned by the honorable member for New England, and I am aware, of course, that the pre-war figure of employment in the Public Service has been considerably increased. I have pointed out on several occasions that the staffing of all Commonwealth departments is being closely examined by the Public Service Board. Quite a number of instances of alleged over-staffing have been referred by me to the Chairman pf the Board for investigation. It must be remembered, however, that the Commonwealth Public Service has expanded considerably since the pre-war days, and that its activities now cover a much wider field. Examples of this expansion include the Postmaster-General’s Department, which is an essential public utility, and the Department of Social Services, the responsibilities of which have increased tremendously. The honorable member for New England has asked whether I shall make a statement on the matter : I have made several statements from time to time, but I shall see whether there is any additional information that can be supplied to the honorable member.
– How can production be increased when labour is being diverted to the Public Service?
Mr. CHIFLEY. The increased number of public servants is fully warranted.
– Has the Minister for the Army seen the report in the Sydney Daily Mirror of yesterday about dangerous army material on the surf beaches of Sydney ? If the report is true, will he take action for the removal of dangerous material from the beaches?
– That statement was brought to my notice this morning. Whenever my attentionhas been drawn to dangerous debris on the beaches I have bad it removed. The article also referred to the Stockton beach. During my visit to Newcastle I accompanied the Lord Mayor and aldermen of the Newcastle City Council to the beach and made arrangements, which, I understand, were quite satisfactory to the council, to have debris cleared from it. Honorable members will realize that debris that has been washed ashore frequentlybecomes deeply covered with sand. Then, in the event of an exceptionally high tide, the sand covering is washed away and the debris exposed. The debris referred to in the article probably comes within that category. I assure the honorable gentleman that action will be taken immediately to clear the beaches of dangerous debris.
– I have received ad vice that Guinea Airways Limited has stated that without an adequate subsidy it will probably have to discontinue its intra-state services to Whyalla and other isolated places, such as Cleve on Eyre Peninsula. In view of this, does the Australian Government contemplate compensating Guinea Airways Limited for the loss of its licence to operate a service between Adelaide and Darwin?
– This matter is at present the subject of discussion between representatives of Guinea Air ways Limited and of the Government.. Certain submissions were made by the company to the Government, and discussions have taken place on those submissions. The matter, therefore, is being dealt with and it will not be settled perhaps for several days.
– I ask the Minister for Commerce and Agriculture what steps are being taken by the Government to overcome the tinplate shortage, which is having an adverse effect on the export trade in canned fruits and jam? A recent press report stated that exports from the United States of America and South Africa are pushing Australian canned goods off the market at Hong Kong as the result of the shortage of cans in Australia. If the tinplate shortage cannot be overcome in the near future, what steps is the Government taking to follow the lead of other countries, such as Norway and the United States of America, which are using aluminium for the manufacture of cans? If it is not possible to use aluminium for export, could that material be used locally, and the cans treated and used again for manufacturing purposes in order that such tinplate as is available may be used for export?
– The shortage of tinplate is one of the great difficulties confronting the Government. “When it became imminent last year, the Government sent a special mission to the United States of America and to Great Britain. The mission included a representative of the manufacturers and a representative of the Government. It could not secure additional tinplate supplies from the United Kingdom and, when I was in the United States of America, I made special representations on a very high level in an endeavour to obtain extra supplies. I found at that time that the United States Government was already rationing the end use of tinplate. Only by means of rationing and alterations of the permissible sizes of certain classes of cans have we been able to carry on in Australia. I confess that I have not previously heard any suggestion that cans might be made of aluminium. I know that aluminium containers can be used for certain purposes, but I understand that it has many disadvantages for the canning of food. I assure the right honorable member that the Government has left no stone unturned on the highest possible levels to secure increased allocations of tinplate for Australia. “With regard to the use of aluminium, about which I am not well informed, I shall arrange for the Minister for Supply and Shipping to make further inquiries and inform the right honorable member for Cowper of their results.
– Will the Prime Minister say whether the voucher for Mr. Lewis’s expenses as government delegate to the Unesco Conference at Mexico City was signed by Mr. Millwood, an officer of the Department of External Affairs? Will the right honorable gentleman indicate the total amount of dollars and sterling which the Treasury has granted to Mr. Lewis? Of that amount, how much will be paid by the Government? WillMr. Lewis enjoy diplomatic privileges while he is abroad? As Unesco is directly concerned with important scientific matters, will the Prime Minister issue an instruction that Mr. Lewis shall not be allowed to have access to government files?
– Mr. Lewis has been approved as a delegate to the Unesco Conference, which will be held at Mexico City. The Minister for Post-war Reconstruction has already made it clear to members of the delegation that the only dollars which will be made available to them will be for the purpose of carrying out their work as delegates at Mexico City, and that dollars will not’ he available to enable them to travel in other parts of America. The difficulty of providing sterling credits for any travellers, including business men, is not so great, because our position regarding sterling is much better than it is regarding dollars. I understood from the latter portion of the honorable member’s question that he suggested that Mr. Lewis and his colleagues will have diplomatic passports. I inform him that it is not the practice to provide diplomatic passports for a member of such a delegation. 1 shall ascertain whether Mr. Millwood, of the Department of External Affairs, signed Mr. Lewis’s voucher. The persons whose names the Minister for Post-war Reconstruction announced in a press statement have been approved as the delegates to the Unesco Conference, and the expenses of the delegation to Mexico City wiill be met by the Government. Any further travel which the delegates may undertake will be a matter for other people, except where it involves providing dollars,- and I have already dealt with that aspect.
– On several occasions, the honorable member for Reid has directed to the Prime Minister questions regarding the appointment or the election of Mr. Lewis, of the Teachers Federation of New South Wales, to represent Australia at the Unesco Conference. Has it come to the right honorable gentleman’s notice that Mr. Lewis has denied pointblank that he is a Communist, or is in any way associated with the Communist party? Has the Prime Minister any information, other than that supplied by the honorable member for Reid in this House, as ‘to whether or not Mr. Lewis is a Communist?
– I have no knowledge of the political views of Mr. Lewis. However, I have seen reports in the press that he has denied any association with the Communist party, but that, of course, would not matter to the honorable member for Reid. I can assure the honorable member for Herbert that no information has come to me from any source at all that Mr. Lewis is connected with the Communist party.
– As the Minister for Commerce and Agriculture knows, the number of tractors which Australia has imported in recent years has been quiteinadequate to meet the demand. Will the Minister inform me whether the dollar shortage will reduce appreciably in the immediate future the importation of tractors, particularly from the United States of America, and thus accentuate the tractor difficulty ?
– The dollar shortage, for the time being, will have no influence whatsoever on the supply of tractors. To date, the Governmenthas decided to sponsor the importation of as many tractors as the United States of America can supply.
Mr. POLLARD (Ballarat- Minister for
Commerce and Agriculture) [11.16]. - I move -
That the bill be now read a second time.
The purpose of this bill, which proposes to amend the Customs Act 1901-1936, is to remove an anomaly which has existed for many years. That act prescribes that all duties shall be paid in British currency, and that the values of goods shown on invoices shall ‘be converted into British currency for the purpose of calculating the value on which ad valorem duties shall be charged. Although the term “ British currency “ may mean the currency circulating in any part of the British Empire, only Australian notes and coins are legal tender in Australia, so that duties must be paid in Australian currency. However, when Australian currency ceased to be equivalent to the currency of the United Kingdom the calculation of the value for duty of goods imported into the Commonwealth became a problem which could not be solved readily. The Crown Law authorities, after careful consideration of the matter, advised that the most reasonable course to follow was to regard the expression “ British currency “ as meaning simply “ sterling “, that is, pounds, shillings and pence, without making any distinction between the currency of Australia and the currency of the United Kingdom. This advice was based on the grounds that the currency of the United Kingdom came within the term “ British currency “, and that the Customs Act made no provision for the conversion of United Kingdom currency into Australian currency. Accordingly, the practice has been followed of calculating the value for duty of goods in United Kingdom currency and accepting Australian notes and coins in payment of the duties.
The effect of this procedure is that the ad valorem rates of duty prescribed by the Customs Tariff indicate higher tariff levels than are actually operative, and, as it is customary in tariff discussions or negotiations between countries to compare actual tariff rates, this is an undesirable position.
Another factor is that while imports are recorded in sterling, which is the currency of the United Kingdom, exports are recorded in Australian currency. To make comparisons it is necessary to convert the recorded values to a common basis. Furthermore, the Customs Act prescribes that in calculating the value for duty of goods subject to ad valorem duties 10 per cent. of their value, which is commonly referred to as “ the statutory 10 per cent.”, shall be added to the sum of the price paid for the goods or the current domestic value of the goods, whichever is the higher, and the free on board charges. Provision for this addi- tion of 10 per cent. was incorporated in the original act and was apparently intended to cover the cost, over all, of the transfer of the goods to Australia. This addition has already lost its significance, and the result is that the ad valorem rates prescribed by the Customs Tariff indicate lower tariff levels than are actually operative. It is proposed to abolish this addition.Whilst the change of method proposed for calculating the value for duty of goods in Australian currency would increase the amount of duty collected at ad valorem rates by 25 per cent., the abolition of the statutory 10 per cent. would reduce such amount by oneeleventh. If the two changes are made concurrently the amount payable would be increased by approximately 132/3 per cent.
The amendments proposed in the bill are of an administrative character only. It is not desired that it should, if enacted, lead to additional amounts of duty being collected. It is therefore proposed that appropriate reductions of all ad. valorem rates of duty prescribed by the Customs Tariff shall be made, so as to ensure that approximately the same amount of duty will be collected on the new basis as is collected at present.
Accordingly, the bill provides that the amendments shall be brought into operation on a date to be proclaimed. Such date will coincide with the operation of the reduced ad valorem tariff rates of duty.
The ‘bill contains a further amendment, to section 157 of the Customs Act, in relation to the declaration by the Minister where there is a doubt as to a fair rate of exchange for the purpose of converting values to Australian currency. This is merely a variation of the method of exercising the power which the Minister already possesses. The existing power may be exercised only in respect of each invoice. This procedure is far too cumbersome where a doubt exists, not in respect of a particular transaction only, but also in relation to the exchange value of the currency of any particular country. In such circumstances, the Minister should be able to specify a fair rate of exchange in respect of such currency for each day or for a period, in order to avoid the delays which, would be attendant upon a declaration in relation to each invoice.
Debate (on motion by Mr. Harrison) adjourned.
– I move -
That the bill be now read a second time.
This bill, the purpose of which is to amend the New Zealand Re-exports Act 1924, is complementary to the bill to amend the Customs Act 1901-1936 which T have already introduced.
The New Zealand Re-exports Act prescribes that the value, for purposes of duty, of goods not the produce or manufacture of New Zealand, which are reexported from that dominion to Australia, shall be the sum of the current domestic value of the goods in the country whence the goods were exported to New Zealand and the charges for placing the goods free on board at the port of export in that country, with the addition of 10 per cent., and with the addition of a further 10 per cent. - “ the statutory 10 per cent.” However, it is provided that in any case the value for duty shall not be higher than the sum of the current domestic value of the goods in New Zealand and the charges for placing the goods free on board at the port of export from that dominion, with the addition of 10 per cent. - “ the statutory 10 per cent.”
In view of the proposal in the bill to amend the Customs Act 1901-1936 to abolish the addition of “ the statutory 10’ per cent.” in ascertaining the value of goods for purposes of duty, it will be necessary to delete from the New Zealand Re-exports Act 1924 the provisions, twice occurring, in section 3, for the inclusion of “the statutory 10 per cent.” in the value for duty of goods re-exported from New Zealand.
Debate (on motion by Mr. Harrison) adjourned.
Debate resumed from the 29th October (vide page 14S8), on motion by Mr. Chifley -
That the bill be now read a second time.
– I desire to make a passing reference to the statement last night by the Minister for the Interior (Mr. Johnson) that he represents perhaps the greatest goldmining electorate in Australia. The honorable gentleman evaded the very pertinent point that had been made previously by the honorable member for Barker (Mr. Archie Cameron) in regard to the excessive . profits, totalling £4,754,954, that had been made on gold sold by the Commonwealth Bank. Apart from that, his contribution to the debate consisted entirely of a review of the depression period. I summarize his speech hy saying that the farther he went the greater was his condemnation of the failure of the Scullin Labour Government to measure up to the needs of that time.
I have had dealings with five trading banks in various centres and in connexion with different jobs or businesses with which I have been associated, each of which gave very satisfactory service. Also, through the medium of the Peanut Board, with which I am associated, I have had quite a lot to do with the
Commonwealth Bank, with which my relations have been equally happy. This measure is not so much a matter of the Commonwealth Bank versus the trading banks as of the right to do just what we like with our own money. It involves freedom of choice. The fight . is one against regimentation, and the continuance of excessive controls. It is against the attempt by the Government to get its hands on the people’s savings. As a representative of the people, I say on their behalf, “Hands off the people’s savings “. No representative in this honorable House who has any concern for the welfare of this nation can fail to feel the weight of the responsibility which devolves upon him in having to make a decision on the bill, involving as it does a revolution in the whole of our national life. We must immediately analyse its provisions, in order to ascertain whether its effect will be a progressive betterment of the laws of the land in the interests of the people, or whether it is beset with dangers that will lead to the undermining of the freedom and privileges which for so long have been associated with British citizenship, and which should still be our rightful heritage. Not much study is needed in order to discover that the banner under which the Government is marching is that which was held aloft by the right honorable member for Yarra (Mr. Scullin) when, in 1921, he set the object to be attained as -
The right honorable gentleman also said on that occasion that if he thought that an imperial federation meant a republic, he would vote for it. It will thus be seen that the deception sought to be practised on the people to-day is neither more nor less than the attempt to impose upon Australia national socialism, with all its vices and all its ills.
The Prime Minister (Mr. Chifley) failed to show in his second-reading speech, that the Government was in any danger of losing control of the country’s monetary policy by allowing the trading banks to keep the business they have earned; earned, I may say, by giving service to the public. The right honor able gentleman did not try to prove that continuance of private banking would be a menace to Australia’s economic stability and prosperity. I submit that such proof was indispensable before proceeding to take the extreme step of the compulsory liquidation of private banking. On the contrary, the right honorable gentleman gave most striking testimony to the great aid which had be,en” rendered by the trading banks in Australia’s greatest emergency. Here are his words -
During the war and since its conclusion, the Australian economy has been kept more stable than the economy of any other country; in the world,
Yet the purpose of the bill that he warintroducing when he made those remarksis to scrap the- very banking system, which made possible that great achievement! One of his excuses was that economic difficulties were increasing overseas and that, therefore, the Government must be in a position to act effectively and with certainty in order to ensure the fulfilment of its policy of full employment and the maintenance of economic and financial stability. But he and his Government have shaken the confidence of countless Australians in the future under a government banking monopoly -plainly designed to further other adventures into socialism.
Much. has been heard of the Government having no mandate for this legislation. I strongly support that view. Should this legislation be passed and become operative, we shall have a revolution in our national life. In his policy speech for the last general election the Prime Minister said–”
Imbued with political honesty the Govern.ment makes no extravagant promises. It has a full recognition of its responsibility as a government.
At those elections there were two main issues, of which taxation was one. The Prime Minister promised no reduction of taxes. He is a “ grab all “ Treasurer, determined to get money by hook or by crook, even by such means as the iniquitous proposal now before the House. That was one outstanding factor which influenced the electors. The other factor was the Government’s claim that it had done a goob job in the rehabilitation of ex-service men and women, and it asked the people for the right to continue that work. What other factors entered into the elections? There was no mention of grabbing the people’s savings, or “ pinching” from them the freedom which they enjoyed as Britishers. The people granted the request of the Labour party to be given a chance to continue with its rehabilitation proposals. They were entitled to accept the policy speech of the Leader of the Labour party as being the broad charter under which it would legislate. The State president of a trade union, who had been president for three years before the war, writing in an outstanding Queensland newspaper, criticized the Prime Minister for ignoring the people. He wrote anonymously, although he said that he knew that anonymous writers were usually treated with contempt; but he went on to say that that was how the people of Australia were treated by the Government. Any government worthy of the name must have regard to the moral and spiritual needs of the people. These proposals constitute a disregard of personal and civil liberties by a government which is determined to put a socialist programme into effect, regardless of the wishes of the people. In war time we were obliged to surrender some of our liberty in the cause for which we fought, but we do not intend that that condition shall continue in times of peace. These powers, if granted, will exceed the powers over individual liberty which were given to the Government in an emergency. Labour is working on the controlled minds of the people resulting from restraints placed upon them during the war. To-day, 25 per cent, of the voting population of Australia consists of men and women who never voted in pre-war days. Each year, 120,000 people in Australia attain the age of 21 years. That means that, in the course of eight years, nearly 1,000,000 Australians have become entitled to vote. By working on the controlled minds of those voters, the Government is getting its own way. Labour, which has boasted of freedom, will, in a few years, deceitfully have substituted controls and regimentation for freedom, because those to whom it talks of freedom never knew of the liberty that the people of this country enjoyed before the war. The bill before us destroys freedom of choice in banking business. I submit that that freedom is most desirable. With this legislation in operation, there will be no right of appeal from a monopoly institution, so that a man who does not get from the bank the service to which he considers he is entitled will have nowhere else to go. Various measures brought before the Parliament show clearly thai the Labour party desires to dispense with the right of appeal. It is true that that right still prevails in our courts, but it does not prevail in arbitration matters. In some legislation brought before us there is provision for the arbitrary use of the power of veto by a Minister. Conciliation commissioners have been given supreme control in industry. Although it may be desirable that in some matters the final decision shall ‘be made in Australia, prominent officials of the Labour party are going beyond mere criticism of the courts which still exist to protect the rights of the people and are abusing the judges and attempting to belittle the judicial system, which has stood the test of time. Australia does not want a nation of robots; yet we are well on the way to becoming a nation of robots. If the process continues, where shall we get originality of thought, or any incentive for progress in industry? How shall we discover and reward genius? The Government is well on the way to the creation of a greater Public Service. I do not agree with those people who say that all public servants are uncivil; I have found many of them most courteous and efficient. But that was not the experience of a resident of Roma, Queensland, in his dealings with the Commonwealth Bank. In a letter, he states -
Heaven save us if we have officials in the Commonwealth Bank such as some of the man-power officers who were operating throughout the country during the period nf the war.
The basis of sound finance is confidence in the system. We cannot accuse the trading banks, or, indeed, the Commonwealth Bank, of any breach of confidence, but I submit that Labour desires to institute a system of industrial conscription. The Labour Government would like to enjoy the powers which were refused it by an overwhelming majority of the people in the referendum of 1944. Later, the Government submitted the same proposals again, with an assurance that they would not be used to apply conscription of labour. Everybody knew, however, that if the powers were granted the Government would have had effective control over labour by virtue of the power which it would have enjoyed over industry. The Labour Government wants to regiment labour so that it can put its proposals into effect.
Apart from the loss of individual freedom, the chief objection to a banking monopoly is that it would create a bottleneck in the making of advances. Even at the present dime delays occur in the making of decisions regarding advances. [ agree with the honorable member for Reid (Mr. Lang) that the Commonwealth Bank is the most conservative of all the banks operating in Australia. Undue delay in the making of advances will create chaos, will hamper production, and prevent the economic expansion which is so necessary for Australia.
There has been much talk during this debate about the depression, and how the primary producers were assisted, or harshly treated, by the banks. I now ask the Government this pertinent question: [f the banks are nationalized, so that the Commonwealth Bank has a monopoly, what will it do to assist primary producers should the price of their products decline on overseas markets? Will the bank issue money ad lib to assist the primary producers to carry on? We remember that during the depression the overseas price of wool fell from ls. 8d. per lib to 9d. per lb., while the price of wheat fell from 5s. 6d. to 2s. 6d. ti bushel. I want to know, on’ behalf of the primary producers, what is to happen if such a decline occurs in the future. Everybody knows that one of the factors responsible for the depression was the decline of overseas prices for our primary products. What will the Government do to meet such a situation in the future? Not one government spokesman has given any indication. The Commonwealth Bank is now politically controlled. The public servants appointed to the advisory board do just what the Treasurer tells them. They are his “ stooges “, so far as policy is concerned. If prices for primary products fall, how is the Government going to keep the economic position stable in
Australia? If we may judge from experience, the Commonwealth Bank will not make advances if there is a surplus of production and no markets are available. I can speak from my experience of the peanut industry. During the depression, no advances were made by the Commonwealth Bank to this industry unless a State government guarantee was forthcoming, and this attitude was persisted in right throughout the ‘thirties. It might be suggested that the Commonwealth Bank Board was at fault, but I remind honorable members that in 1928 we erected storage accommodation at Kingaroy. On the strength of a State government guarantee, we obtained an advance from the Commonwealth Bank for a period of ten years, and repaid the debt in eight years. In 1938, we obtained another advance on the same terms, and repaid the money in eight years. Then, last year, when the Commonwealth Bank was no longer under the control of a board, but directly under the control of the Treasurer, we again applied for a loan. Was it forthcoming under any more liberal terms than before? No. The Commonwealth Bank still insisted that the State Government should guarantee the loan before an advance was made, and this attitude has been adopted with an industry which is worth over a £1,000,000 a year to the country. It was the present Minister for Agriculture in Queensland who, as chairman of the Maize Board, supported the proposal to take the board’s account from the Commonwealth Bank to the English, Scottish and Australian Bank. For some time, I have been appealing for a licence to export grain sorghum, but the application has been consistently refused. On the recommendation of the Queensland Minister for Agriculture, the growers formed a voluntary pool, and approached the Commonwealth Bank for an advance against their crop. They had obtained no income from wheat last year because the crop failed, and so they grew a summer crop to carry themselves through. They have now been holding the grain for five months. Although, on the recommendation of the State Minister for Agriculture, they approached the Commonwealth Bank for an advance on which to live, they have received nol’ ofl© penny. Therefore, I ask again, what’ will the Commonwealth Bank do to help the primary producers when prices’ for’ their export commodities’ fall, and they’ have a surplus’ on their hands? We know that the whole’ economy of Australia depends’ upon the sale of our primary products
There has been much talk of the attitude, of the Opposition in regard to banking,. I do not know what happened in this Parliament before I came here; but X atn not afraid to go into the record of the Opposition parties in their relation to the Commonwealth Bank. The report of the Commonwealth Bank, issued on the 30th June of this year, shows that the Rural Credits Department of that bank is the only department which is doing an effective job, and it was created by the right honorable member for Cowper (Sir Earle Page), when he was Treasurer. It has advanced a total of £113,755,000, plus £36,259,000 in order to finance the export of meat, butter, cheese, eggs and fruit to the British Ministry of Food. It is also interesting to examine the interest rates which have been charged by that department. In spite of all the talk by honorable members opposite about high interest rates, that department reduced the rate from 4 per cent, to 3$ per cent, in 1934. What Government was in office then? In 1940, the rate was further reluced to 3-J per cent. What government was in office then? The honorable member for Riverina (Mr. Langtry) claimed credit for this Government for the reduction of interest rates. The facts show that that credit is due to governments formed by the Opposition parties. But what has this Government done? Has it decreased interest rates since it assumed office? No. We are informed, however, in this report, that the rate of interest of 3i per cent, applies only to loans guaranteed ‘by the Government. Those . facts prove the real attitude of. the Opposition parties towards the Commonwealth Bank when they were in office. The bank then operated to the advantage of the people.
I come now the Mortgage Bank Department of the Commonwealth Bank. In 1935 mortgage indebtedness in Australia totalled approximately £500,000,000. If we accept that figure as correct, we can say that to-day, in view of increased values, mortgage indebtedness should be approximately £700,000,000; but in a period of five years the Mortgage Bank Department of the Commonwealth Bank has advanced only a miserable £3,759,000 to help enterprise in this country. Those facts illustrate the conservatism of the Commonwealth Bank; and I have not the slightest doubt that it will become still more conservative when it is controlled by a political Treasurer out to grab every penny he can. Undoubtedly, lending will be restricted when this measure is implemented. Consequently, production will be reduced. Further, the bank, forced to operate within the four walls of government regulations, and possessing no discretionary powers, will be merely another government institution. Persons having dealings with it will be exasperated by delays, and advances, when they are made, will be found to be inadequate for the purpose for which they are required.
I illustrated that procedure on the part of the Commonwealth Bank when I was speaking in the budget debate. I cited the cases of two ex-servicemen who had obtained holdings under the soldier settlement plan. When they approached the Commonwealth Bank for an advance the “ know-alls “ in the bank refused to grant the full amount applied for. They told one of the applicants that he did not need money to construct a new tank because water was already available on his property. Of course, those officials, sitting in their offices in Brisbane, would know all about the property, although, it is situated in the west of Queensland. The advances originally applied for were reduced by approximately 50 per cent. The second ex-serviceman was granted the sum of £400 to build a “ mansion “ on his property, but the bank would not advance that sum until he had expended £150 on the construction of the building. That meant that the building had to be under way before the bank would make the advance available. How could the applicant commence the work until he had the necessary finance to enable him to sign the contract? Those are the conditions under which this monopoly bank will operate. Those two ex-servicemen, subsequently, applied for advances to private trading banks and were given the full amounts applied for. But, in the meantime, following good rainfalls, they lost the opportunity to buy stock at reasonable prices.
The commissioners of the State Savings Bank of Victoria stated in one report -
The Bank Commissioners have been advised that in view of the necessity of restricting borrowings in Australia for the time being, adanves of the Credit Foncier Department mustbe reduced. Ill view of this intimation the Commissioners are not for the present entertaining applications for mortgage loans.
Apparently they adopted that policy under instructions from the Treasurer, who was intent upon restricting loans. Thus, people were prevented from obtaining advances to carry on their industries. The Prime Minister paid a tribute to the private trading banks when he stated that Australia to-day is the most stable country in the world. Does not that tribute justify a continuance of the system that produced that result? Obviously the funds of the trading banks made available to the nation under national security regulations helped us to achieve that stability.
The Prime Minister also said that the Commonwealth Bank has in view the building up of a highly qualified. 3taff which will enable the bank to give skilled advice as part of its service. Skilled advice! He said that secondary industries will be able to turn to the bank for advice. Production engineers and cost accountants employed by the bank would be available to help secondary industries in their problems. He also said that primary industries would have the aid of agricultural experts as part of the bank’B service. Experts, forsooth ! These “ know-alls “ who know nothing about the practical side of primary industries will, a pparently, tell the practical man what he shall grow and how he shall grow it. Very probably, if one asked those experts what time of the year a crop should be planted they could not say. According to my information we are having a sample of this expert assistance at Stanthorpe, where officers of the Council for Scientific and IndustrialResearch are telling orchardists how to grow apples and when to pick them, whereas those officers should be endeavouring to find ways and means of combating diseases which are destroying the fruit. The Government’s proposal is deceitful, because its intention is that these “ know-alls “ will be primarily inspectors who will determine how march money shall be advanced to primary producers. These agricultural experts sitting in their offices in the cities will advise primary producers what they shall grow, and when and how they shall grow their crops. That system will be bitterly resented by primary producers. Obviously, the Commonwealth Bank will act upon the recommendations of those experts in making advances. Producers have had experience of that system in dealings with State agricultural banks; whose experts, withno practical knowledge, have had producers at their mercy. The producers themselves will have practically no say in their own work. To-day, a farmer who has a block of land and wants to clear another 100 acres is readily given accommodation by a private bank to enable him to do so. Officers of private banks are not hindered by red tape, but are able to tell an applicant immediately to go ahead, because they knew that once cleared the land will produce a crop. On the other hand, officers of the Commonwealth Bank, subject to regulations of all kinds, will not be able to give speedy decisions, and this will hamper production .
The Government claims that it will fully safeguard the interests of present employees of the private trading banks. After two Ministers let the cat out of the bag, the Prime Minister was obliged to go to great pains to save the Government’s face in that respect. He said that the employees of private banks would be guaranteed conditions at least as good as they now enjoy. However, it is clear to any employee of a private bank who has regard for his future career that under the new set-up there will be fewer opportunities to attain executive status and fewer opportunities for promotion. Obviously, the Minister for Post-war Reconstruction (Mr. Dedman) and the PostmasterGeneral (Senator Cameron) expressed the mind of the Government when they said that some of these officers would be transferred to the PostmasterGeneral’s Department. I wonder what the postal officials will say when these bank “ Johnnies “ come in and “ pinch “ their jobs. Does any one think they will accept that with pleasure? Obviously not. There is no reason for it. What Vill be the prospects of promotion when the number of executive positions is reduced? The employees of the private banks have been guaranteed at least their present pay; but for how long? If we cannot accept the assurances of the Prime Minister as the charter under which the monopoly bank intends to work - and the right honorable gentleman has already shown how deceitful he is in this matter -we cannot accept his guarantee that the jobs of the banks’ officials will be secured.
The Prime Minister inserted a clause in the bill guaranteeing secrecy concerning accounts. That is as it should be. No charge has been laid against the private banks of any breach of confidence concerning the accounts of their customers, nor, up to the present, has any such charge been laid against the Commonwealth Bank. We recall, however, that when the Prices Branch was first established, notwithstanding that the same guarantee of secrecy and inviolability was given, the information collected by the Prices Branch was subsequently made available to the Taxation Branch. What a vicious combination we shall have with a politically controlled bank working in conjunction with the Taxation Branch. It will be applied supersovietism. Could we have a more vicious, more totalitarian, more nationalist-socialist proposal than that? We have a politically controlled Commonwealth Bank now. Not one of the civil servants appointed to the advisory council will be courageous enough to oppose the Treasurer’s wishes, irrespective of what government may be in office. After the deceit of the Prime Minister practised upon the .people of Australia by the introduction of this revolutionary proposal, we can no longer trust the right honorable gentleman or his party in their desire to become commissars not to take the one additional step that will combine the two.
Mr. J. W. Warren, who had 30 years’ service with the trading banks, partly in high executive positions, and who was employed for nineteen years as chief executive officer of a government-owned trading bank, has said that his sympathies have always been towards the humanitarian side of money power and to the progressive evolution of banking technique to meet the changing conditions of modern life. He gives his opinions, not for the shareholders, because he expects that they will be compensated; not for the staffs, although he knows from experience that they will be disturbed and, in many cases, may see the end of their aspirations and careers; but for the benefit of the members of the community for whom the banks were created and by whom alone they are sustained. He says that a banker knows that although he deals in money that is merely the symbol of his privilege and power, that what he really deals in is human nature, that intangible and incalculable commodity that lies at the root of all our productive efforts and commercial transactions. He says that a depositor lodges his money in the bank because he has confidence in the bank to repay him in full, with or without interest, according to contract, and that the banker knows that, in order to retain that confidence, he must lend money prudently and retain a high degree of liquidity. Dealing with the human factors, Mr. Warren said that when a borrower approaches a bank - and it is this function of a bank that plays the most vital part in the production and distribution of wealth - all the latent, attributes of human nature come into operation, that a banker must assess the integrity, business capacity, industry and skill of its prospective debtor, as well as the intrinsic merits of his proposal, and that to do so he must rely on his own knowledge, experience and judgment. Prom his vast experience as an executive officer of trading banks, Mr. Warren says that flexibility must always be allowed in the banks’ business transactions. Many great undertakings in every country have been built up from these beginnings of personal worth, individual enterprise and ability. Mr. Warren goes on to say that in a government banking monopoly all the vital health-giving factors are eliminated, and that that, of necessity, must result in a rigidly regimented system. He points out that the monopoly bank can permit of no discrimination in that careful assessment of human values, nor can it evade all responsibility to assume its true and proper burdens. He says, further, that under its administration the same conditions must be given to all, irrespective of their merit, unless varied by direct and indirect political pressure by the government in power. The Minister for Postwar Reconstruction (Mr. Dedman) said that there would be no discrimination, but before he concluded his speech he admitted that, because applications would be made for advances beyond the ability of the bank to grant them, there much obviously be some discrimination. “Who will be discriminated against? Certainly not the Government. If the Commonwealth Bank fails to attract to any marked degree the banking business of the community it is for some reason inherent in its structure or administration. That an element of compulsion should be introduced to force into its channels those innumerable streams that give life and fertility to this vast continent is repugnant to all true conceptions of freedom and fair play. And let it not be supposed that this will affect only the capitalists and those large businesses and industrial organizations that occupy such an important place in our economy. It will have a profound influence on every individual, whether he uses banking facilities or not.
The key to our problems is production. The manipulation of money will not in itself increase production. Overseas prices cannot be controlled by any Australian government, nor can the wishes and desires of a free people. Expressing an opinion, Henry Wallace, who might be described as a leftist, said -
There will be one great teat of statesmanship after the war. and that is our ability to maintain useful employment over a long period of years and, at the same time, preserve our democratic liberties.
We do not want a nation of robots. Incentive, initiative and enterprise are required. If we kill incentive, we kill the man, and he is the representative of the nation. People talk of gold- or diamonds in backyards. The real gold in our national backyard is the producing citizen who brings in our national wealth. As Mr. Churchill said, “The right to guide the course of world history is the noblest prize of victory. I hope and pray we shall not be found unworthy of the victory”. To be worthy, the course we should set should be morally right. A thing cannot be politically right, or nationally right, unless it is morally right.
– I welcome this measure. In my opinion, it is long overdue, and the Government is to be congratulated upon its courage in launching a complete banking nationalization scheme. I trust that the Government will not falter in the face of the barrage of protest that has been made to certain members of this Parliament, and the pressure that is being puton Labour supporters, particularly those in doubtful .seats. For many years, the nationalization of banking has been part of the platform of the Labour party, but this is the first occasion on which Labour has had an opportunity to take this step, because until now it has never had a majority in- both houses of Parliament. Before proceeding farther, I think it necessary to answer some of the arguments that have been advanced by Opposition members in the course of this debate. The honorable member for Maranoa (Mr. Adermann) waxed hot “ under the collar “ in his enthusiasm - almost as hot, in fact, as the Leader of the Australian Country party (Mr. Fadden), whose collar stud apparently melted with the outpouring of his abuses of the Government and of this measure, which he described as revolutionary, and dictated by the Communist party. I take the honorable member for Maranoa to task for saying that the Scullin Government failed to measure up to its responsibilities. The Scullin Government was unable to implement its legislative programme because of a hostile Senate. In addition, when it assumed office, it received an inheritance from the “ borrow-and-bust “ policy of its predecessors. The honorable member for Maranoa further said that Labour had not a mandate for this legislation; but the Prime Minister (Mr. Chifley) in his policy speech at the last elections made it abundantly clear that he would undertake a comprehensive programme of social services, and every one knows that this can be done only if a government has control of the finances of the nation. That was amply demonstrated during the regime of the Scullin Government, which, at the instruction of the private banks, had to reduce social service payments, including invalid and old-age pensions, and pensions payable to dependants1 of deceased servicemen.
The honorable member condemned State- monopolies and said that under this measure the banking system of the’ Commonwealth would be such a monopoly. I have no hesitation in saying that a nationalized banking system in this country will do a far better job than the private trading banks have ever done. We all know that private banks, including the great Midland Bank, the Bank of England, and certain American financiers, actually helped Hitler to power. Under bank nationalization in this country, no political party will be helped to power. The honorable member said also that the Prime Minister as Treasurer, who also administers the taxation office, would be able to exercise Gestapo-like supervision over the private affairs of individuals because- he would have access to the banking accounts of taxpayers. But that authority has existed for many years, and there has not been a squeal about it. Incidentally, I do not think that it was a Labour administration that gave to taxation officials the right of access to private banking accounts. So, why the squeal now? The honorable member admitted that he was a “ Johnny-come-lately “ in this Parliament, and perhaps, on that ground, he can be excused for not knowing these things. [Quorum formed.~
The honorable member for Barker (Mr. Archie Cameron) made some remarkable statements last night regarding the purchase by the Commonwealth Bank of shares in the private trading banks. The honorable member claimed, first, that the Commonwealth Bank had no power to purchase shares; secondly, that if it did purchase shares, the- shares” should be registered in the names of the nominees; and, thirdly, that the Commonwealth Bank had been guilty of malpractice, dishonesty, and faking with regard to the publication- of its accounts. As regards the power of the Commonwealth Bank to purchase shares, the honorable member has already been provided with some information. He has been informed that in buying the shares, the Commonwealth Bank was acting under section 13 of the Commonwealth Bank Act. which unreservedly empowers the bank to act as Australia’s Central Bank.
Surely it is the function of the Central Bank to keep the share market stable’ if there is a possibility of selling by shareholders who do not understand what isinvolved. The Commonwealth Bank was’ also giving effect to the Prime Minister’s undertaking that any shareholder in a private bank who wished to sell his shares- would be given a guaranteed- price for them. With regard to the registration of shares’ in the names’ of the nominees’, it may interest honorable membersto know that at least one private bank is prohibited by its own rules from accepting a body corporate’ as a- shareholder. Therefore, this private bank, under its own rules’, could not registershares’ in the name of the Commonwealth’. Bank. In any case, it is iri accordance with normal prac’tice for the shares tobe registered in the names of the’ nominees. Each nominee executes a deed showing that he holds’ shares on behalf Of the Commonwealth Bank. The honorable member for Barker also saw something sinister in the fact that the figures published by the General BankingDivision of the Commonwealtth Bank did not show the acquisition of the shares in private banks. His statement would be quite understandable if the General Banking Division of the Commonwealth Bank had purchased the shares; but the fact is that the shares were not bought by the General Banking Division but by another section of the bank altogether, namely, the Central Bank Division. As the honorable member is aware, the accounts of the Central Bank Division are published separately from those of the General Banking Division. I believe, therefore, that in justice to those individuals who compiled the figures that were so unfairly criticized by the honorable member, he should withdraw his imputation of dishonesty.
The right honorable member for North Sydney (Mr. Hughes) is “ father “ of this House,- and, because of his age and the wonderful service which I concede he has given to this country, none of us likes to attack him; but I remind honorable members that he was cradled in the Australian Labour party. He was one of the founders of the Labour movement in Australia. He believed in it. It was his gospel. But now he says that Labour members are dominated by outside bodies. In his time, there was always an executive power, and conferences met to lay down the party’s policy. He subscribed to that principle. How he can to-day say that he does not believe in that dictatorial power is beyond my understanding. Like other honorable gentlemen opposite, however, the right honorable gentleman jumps on the band waggon shouting such catch-cries as “ Freedom and liberty ! “ But in 1910, when he was still a Labour man, he wrote a book that contained the following passage: -
Once postulate that such interference is desirable and it is not the right to interfere that is then in question, but only the method and extent of such interference. The right of personal freedom is the basis of all individual liberty, yet nothing is more clearly established than the right of the State to restrain this freedom by imprisonment. There arc no individual rights which, in a proper case, the State cannot and does not invade. lt can deprive a man of his property, inflict corporal punishment and even take away life itself.
We boast about our liberty, but the only people who want liberty are the evildoers, the criminals in intent, and the exploiters. The exploiters are the private banking institutions, which have done so much to bring ruin and degradation to citizens. I have in my possession a most interesting letter that shows how far the private bankers are ready to go. The letter was written to the Minister for Information (Mr. Calwell), who passed it on to me. It concerns a man who was a member of not the Australian Labour party but the Country party and a Minister in a Queensland government. Itisworthquoting -
Box 500h. G.P.O.. Brisbane. 23rd October, 1947
Hon. A. A. Calwell. M.H.R.,
Dear Mr. Calwell, - There is one classical case of inhuman treatment meted out by the private trading banks to an individual in Queensland and so far I have not heard it mentioned since the nationalization bill has been mentioned.
Tt refers to the late Honorable W. H. Barnes, a torypolitican who held cabinet rank on many occasions previous to 1915 and was the Treasurer in the infamous MooreGovernment during 1929-32. He carried out the trading bank policy to the letter during those years and died in 1934.
After his death his widow went to Smith’s Weekly with a story of what the banks did to him - would not give him credit to carry on his business and demanded that he reduce his overdraft. According to his widow this hastened his death and, needless to add, Mr. Barnes did not die with the same faith in tha trading banks as he demonstrated in life.
The facts are well known to Senator Collings and he could give you further details. As a matter of fact, I think he may be able to give vonthe story as it appeared in Smith’s because he circularized all Australian Labour party branches with the extract at the time.
Trusting the above facts may bc of use to you,
I am, yours faithfully,
I have heard honorable gentlemen opposite present petitions against this legislation with the averment that they are “ respectfully worded “ as a prelude to moving that they be received and read. I have not been bothered with petitions, but I have received a letter from a constituent that shows that people welcome this legislation. It is as follows : - 101 Emily-street,
Marks Point. 25th September, 1947
I am being ear-bashed every day by the radio to write to my member.
Well I am writing.
The Bank Bill should of been passed bloody years ago.
– Order ! The honorable member is not entitled to use such language.
– That indicates that the people are willing to adopt the Government’s banking policy. Every time anything in the nature of curtailing the power and influence of the private bankers has been passed most of the people in the Hunter electorate have been in favour of it. I do not say that I have not received protests against this legislation, for I have; but, during the debate on the motion of want of confidence, in which the Opposition first attacked the proposal, most of the protests that I received by mail were posted to me, not from the Hunter electorate, ibut such Tory centres as North Sydney and Bondi. The Government fears a further depression if conditions are allowed to remain as they are. The Scullin Labour Government was smashed because it. had to obey the dictates of the private bankers led by Sir Otto Niemeyer. We do not want that to happen again. Owing to the curtailment of the powers of the Commonwealth Bank by the amending legislation passed in 1924 by the Bruce-Page Government, in which the right honorable member for Cowper (Sir Earle Page) was Treasurer, the Scullin Government was absolutely helpless when it was dictated to by private bankers. In fact, it is interesting to note that in letters sent to the Treasurer, Mr. Theodore, the chairman of the Commonwealth Bank Board, Sir Robert Gibson, stated quite clearly that the Commonwealth Bank could not further finance the Australian Government in creating work for the unemployed. As a result, the Government had to adopt the Premiers plan. In proof of the fact that the banks exercise dictatorial powers, 1 refer to a statement made, by David Lloyd George, Great Britain’s foremost war-time Prime Minister, when speaking at the peace negotiations in 1919. He said -
The bankers are absolute monarchs. The bankers swept statesmen., parliamentarians, jurists, journalists, all on one side und issued their orders with the imperiousness of absolute monarchs who knew .that there was no appeal from their ruthless decrees.
Some opponents of this bill have tried to agitate the churches in order to bring pressure to bear upon members- of Parliament. Australians have learned from experience that the private banking system does not serve our interests as a community to the degree that banking systems should. This is clearly illustrated in statements by high church authorities. The late Anglican Primate, Archbishop Le Fanu, speaking at Perth, said -
Every man in the community is heir to all the inventions and scientific knowledge which have made easier life possible, and yet the enhanced values and opportunities of life ure not shared as they should be. Our present financial system is not doing its job. The fundamental Christian objection to the existing capitalistic system and the bankers’ control of money, which seems insufferable, is that it holds persons in serfdom to the exigencies of financial policy.
The Commission of Assembly of the Presbyterian Church of Victoria reported as follows: -
The monetary system is at present controlled by a group of private individuals and is not performing its proper functions of facilitating the production, distribution and exchange of commodities and services.
His Holiness, the Pope, even comes into the picture. In one of his encyclicals he stated -
It is patent that not only wealth is accumulated, but immense power and despotic domination are concentrated in the hands of a few. This power becomes particularly irresistible when exercised to govern credit and determine its allotment.
The nationalization of banking is long overdue. It is designed to banish the dole and the unemployment of pre-waT days and to assure to our citizens a prosperous way of life in the post-war years. That is the objective of this Government. We do not want to see dole queues in this country again. The bitterness of those days still lingers. When .the dole was instituted in Victoria, a single man received 4s. . 9d. a week, a married man 7s. 6d. a week, a man with one child 8s. 6d. a week, a man with two children 9s. 3d. a week, a man with five or six children lis. a week, and one with seven or more children 12s. 9d. a week. The maximum permissible income was 40s. a week.« The scale was increased slightly until, in 1931, a single man received 5s. a week and a man with a family of ten received 20s. a week. Conditions in New South Wales were -much the same. A man could not work and continue to receive the dole. A family unit was not allowed to draw more than 50s. a week. Therefore, a man with able-bodied sons who were willing to work had to keep his family on a dole of 50s. a week or send bis sons out of the home. Because of this, young men had to wander about the countryside in search of the elusive job. Australians do not want a repetition of such dreadful events. Men who fought in World War I. were not anxious for their sons to fight for the country again in World War II. because the promises thai had been made to them were never fulfilled and they feared that their children would be treated in an equally callous fashion. We must not allow the promises that we made to our own citizens to be dishonoured again. The soldiers of “World War I. were told that they were fighting to make Australia a country fit for heroes, but they were later treated like outcasts. They were forced into unemployment and had to knuckle down under a government which, although elected to succour them, was helpless against the dictatorial powers of the private banks. It was forced even to reduce the allotments paid to dependants of soldiers who were killed. All this is history, and history has an unhappy knack of repeating itself. We want to prevent any recurrence of such a dreadful state of affairs. It is an interesting fact that, when the original Commonwealth Bank legislation was introduced in this Parliament, the same arguments as are now being directed against this measure were used. The then Leader of the Opposition, Mr. Deakin, said in this House on the 22nd November,
The argument for growth is another argument for commencing this bank with the simplest duties, and gradually enlarging its scope and sphere as experience enables. However, except by the interjection, these remarks are not called for. All that will be necessary in the present circumstances of the Commonwealth, when we are in a position to deal with the debts of Australia and provide for its’ future borrowing, is a bank - a bank in embryo - which will really have enormous interests and a high financial status, while, at the same time, its operations will* be confined within a distinctly defined sphere.
Such a bank may, as I have said, before long, and J hope soon, become a necessity in our development. The States will need it, and should share in it. Undoubtedly, when, the greatest of our financial problems is faced - that of bringing the Commonwealth and States into harmony, not only in their financial relations, but in their financial operations - this will lie, and indeed is, the most important work a.t present on the federal horizon. Anything helping towards that end should meet with our hearty support. We may soon find ourselves, as a Commonwealth, called upon to establish some kind of financial institution to protect the public interests of the people of this, country; and to undertake those great dealings in the money markets of the Old World, and in our own markets, which will be called for when the Commonwealth and the States together accept their full responsibility. There is a great deal of public business to be done, and that business might well be done by a public institution.
Then the following exchange occurred : -
Mr. Higgs. ; The honorable member holds that we ought to have a national bank?
Mr. DEAKIN. ; In my opinion, we must arrive at a stage in which a national bank will be an essential instrument in our national development.
Mr. Higgs. ; In that regard the honorable member differs from most of his followers.
Mr. DEAKIN. ; I do not think so; some have spoken of the situation as it is to-day, whereas I am pointing to the future.
The right honorable member for North Sydney also participated in the debate on the Commonwealth Bank Bill on the 22nd November, 1911. Before I proceed to read extracts from his speech, I desire to make it perfectly clear that Mr. Deakin spoke in favour of the Commonwealth Bank, but submitted the following amendment : -
That all the words after “ That “ be left out, with a view to insert in lieu thereof the words “ the bill be referred to a select committee for full inquiry into its provisions and, more particularly, into the need for a Federal Government savings bank”.
Some honorable members opposite offer a similar excuse for delaying the present bill. They claim that all Australians will become robots if this legislation becomes law. However, the right honorable member for North Sydney, on that occasion, said -
There never was a successful business institution run by more than one man. There may lie many men about him, but it is the brain of some one man that directs and governs all.
That is perfectly true; but to-day, the right honorable gentleman believes that the Commonwealth Bank should be controlled by a board. Years ago, he advocated that the institution be controlled by one man. His speech continued -
Whenever it is proposed to tax the rich man there goes out a wail from honorable gentlemen opposite-
Members of the Opposition are wailing to-day - not on behalf of the rich man, but on behalf of the poor man-
That is true - who is warned to beware of the Labour party. It is the little land-owner who is told to look nut for the land tax-
– From what chapter is the honorable gentleman reading now?
– I am reading extracts from the speech which the right honorable member for North Sydney delivered on the Commonwealth Bank Bill on the 22nd November, 1911. My purpose in doing so is to contrast his attitude then with his attitude towards the Banking Bill which is now before the House. Long after the right honorable gentleman made that speech, he “ ratted “ on the Labour party, and the National party, which was the forerunner of the Liberal party to-day, made him a donation of £25,000.
– The right honorable member for North Sydney is a better Australian than any dozen members of the Labour party.
– The Liberal party used the right honorable gentleman until it no longer required him. Then it dumped him. For years he was a lonely, pathetic figure in this House. He did not have a friend. Then he assisted the Labour party to defeat an anti-Labour government which had been supported by the predecessors of the honorable member for Wentworth (Mr. Harrison) and the honorable member for Fawkner (Mr. Holt).
– ‘Order 1 I ask .the honorable member to address the Chair.
– I shall do so ; but I ask you, Mr. Speaker, to exercise your authority to prevent members of the Opposition from interjecting. Their remarks are most disorderly.
– Order ! The honor.able gentleman is not contributing much to maintain order.
– The right honorable member for North Sydney said’ also -
It is the little land-owner who is told to look out for the land tax; it is the man with £100 in the bank who is told to beware of the Commonwealth Bank. Is it the little man who provides the powder and shot for these attacks on Labour legislation ? No ; it is the man with plenty of money against whom the legislation is directed. The honorable member says that the bill aims a blow at the depositors in the savings banks. It does not do anything of the kind.
I have now read sufficient to demonstrate the points which I am making. It is a tragedy that a man who helped to build up the Labour movement for many years, should join an anti-Labour party in his old-age. If I should depart from the principles of the Labour party, and forget my mother’s teachings in my early childhood, I pray that God Almighty shall strike me dead !
– That is a remarkable statement from a former member of the Lang Labour party.
– I make that statement with reverence because I mean it. I never speak with my tongue in my cheek. The principles of the Labour movement, I hold very dear. I have been a member of this Parliament for nearly twenty years-
– That is too long.
– I shall still be a member of this Parliament when the honorable member for Wentworth is defeated. After the next general elections, he will be replaced by “ Jessie “. The catchcry of political interference which the banks have raised may be safely ignored. In 1893 the private trading banks were involved in a disastrous economic crash.
Sitting suspended from 12.45 to. 2.15 p.m.
– Before the suspension of the sitting I was speaking of the value which should be attached to the criticism of the Banking Bill made by the right honorable member for North Sydney. In 1910 he published a book entitled The Case for Labour, in which he referred to the doctrine of “individualism”’. In fact, he spoke of it as “weak-kneed individualism”. He referred to the decline. of the individualists and stated that even then forces were stirring to weaken their grip on the system. He wrote -
These break out in the most unexpected directions. For instance, it w,as not to be thought that black danger lurked under so laudable a project as a Child Study Association. At first sight nothing could appear more patriotic or more innocent, and yet it will be hardly realized that a number of prominent citizens, of whom one is a Minister of the State Government, the other a member of the Federal Parliament, and both of them avowed anti-Socialists, deliberately get themselves under cover of this insidious device to stab individualism in a vital part. How cunningly Uley masked their attack by this pretext is seen when we learn the details. For who could deny that to the little child it is of first importance that its milk should be pure, and to the growing youth that there should be a sufficient and wholesome supply of fresh fish? But that these should have been put forward as an excuse for a resolution in favour of municipal depots for the sale of pure milk and fresh, cheap fish is nothing less than a base and contemptible surrender of principle. If private enterprise cannot sell fresh milk and cheap fresh fish, what in the name of ali that is manly and independent can Lt do? According to Upton Sinclair, it certainly cannot sell potted meat lit to ea-t, and with difficulty is induced to refrain from labelling tuberculous and cancerous beef as prime sirloin, lt playfully persists in calling fusel oil and white spirit “Three Star Brandy” and puts plaster of Paris in lollies to give them “body. It is notoriously very Shaky in its idea of how many ounces make a pound of jam or candles, and it prefers tq sell saddles made of offal, instead of leather, in order to discourage Australians going to war. And now we are told by anti-socialists that it cannot be trusted to sell milk or fish! Of course some of us have suspected this before. Boracic acid in large quantities is really not good for babies, in spite of divided medical opinion on the subject. And it is rather hard to pay 5d. a quart for milk.-
– Order ! What has this to do with the Banking Bill?
– I am quoting words written by the right honorable member for North Sydney, who is to-day on the side of private enterprise. However, the condemnation of private enterprise which he published in 1910 speaks for itself. As I remarked earlier, it is tragic to see an old man like the right honorable member, who uttered such forceful criticism of private enterprise in former years, putting .himself forward to-day as the champion of that system, Prior to the suspension of the sitting I referred to the bank crash in 1893, when my parents lost their life’s savings of £100 which they had deposited in Creer’s bank in Old Lambton. The bank smash also affected Victoria seriously. The banks have raised a catch-cry of political interference, yet there was a time in this country - I refer to 1893 - when it was only the interference of the Government which they had deposited in Creer’s Bank financial structure which the banks had created. That is one skeleton in the cupboard which the banks would like to forget. It is a skeleton of repudiation, and broken pledges, and it contrasts with the attitude of virginal purity adopted by the banks and their friends to-day. Let u9 consider for a moment the financial crisis of 1893, and the subsequent establishment, in 1911, of the Commonwealth Bank. History has a lesson for us all. In 1893 almost every bank in Victoria collapsed. All of them had to be reconstructed, and some have never repaid what they owed their clients.
When the banks crashed, the depositors and shareholders did not get anything. Records of the Melbourne Stock Exchange show that £890,000 is still owed to the people by the private banks as the result of the crash in 1S93. No wonder that the private banks to-day want to be free of any sort of government control! In Victoria, twelve trading banks closed their doors, 100 organizations dealing in land transactions failed, 500 land syndicates collapsed and 48 building societies defaulted. The twelve trading banks alone had liabilities of £104,000,000, of which £80,000,000 represented the deposits of the public. A reign of terror prevailed in Victoria because of the panic amongst the private banks. Thousands of people were ruined, and soup kitchens had to be opened to feed the impoverished multitudes who had lost their money to the privately owned and controlled banks. Many people became mentally deranged when the banks could not repay their deposits. This was all the result of private banks exercising absolute control of finance. So was born the idea that private banks should not be permitted to be a law unto themselves and that a people’s bank, sponsored by the Australian Government and backed by the whole of the enormous resources and the national credit of Australia, should be created. That is precisely what Labour’s policy in regard to banking has achieved.
One further reference should be made to that grim human story involved in the collapse of the trading banks in 1893. Dr. Leslie C. Jauncey, in his book Australia’s Commonwealth Bank, states that the trouble in 1S93 began with public distrust of the building and land companies, whence it spread to the private banks. He states -
During the crisis, banks, having 905 branches, throughout Australia, with aggregate liabilities of over £100,000,000 suspended operations. Twenty-three banks failed between July, 1890 and May, 1893. Only ten banks weathered the storm.
The great bank panic of 1893 is only a memory now, but behind it lies a grim, human story which cannot be explained away by economic post-mortems and learned dissertations on finance. It was revealed that exponents of the private banking system had for years been gambling frantically with public money. The result was that the life savings of thousands of small investors disappeared overnight. There was no outcry then about “ political interference “.
In New South Wales, the State Government passed an act which made the note issue of four large banks legal tender for a period of six months. The State Parliament later authorized the Treasury to advance to depositors one-half of the balance which the provisional liquidation of the suspended banks disclosed was standing to their credit. The Queensland Government took over control of the issue of bank-notes and maintained a monopoly of their issue in Queensland until the Commonwealth authorities established an Australian bank-note issue in 1910.
-Order ! The honorable member’s time has expired.
.- The House will agree that the honorable member for Hunter (Mr. lames) did not introduce anything new in his speech, unless it was his dissertation on inf ants’ diet. One wonders why he pursued that course, but I believe that be lives in the past. He raked up ancient memories-
– They are always a guide to the future.
– I have very vivid recollections when I first entered this House of the honorable member complaining in season and out of season of the injustices done to coal-miners. I have no doubt that, under the conditions that then existed, there may have been some cause for complaint. In more recent times, the honorable member ha3 not been able to raise that bogy, and now. if there is any cause for complaint in respect of coal-miners, it should come from the general public. I have not heard the honorable member complain, on behalf of the general public, about the poor effort which at present is being made by our coal-miners.
The honorable member also resurrected that very old canard about the Scullin Government having been dominated and instructed by Sir Otto Niemeyer. He overlooked, or at least did not state, that
Sir Otto Niemeyer came to this country at the invitation of the then Treasurer.
– That is not true.
-Sir Otto Niemeyer came to Australia to advise, not to instruct, the Government. It is true to say that the Scullin Government, and the State governments throughout Australia,, listened very attentively to what Sir Otto Niemeyer had to say, and then decided to implement what was known as the Premiers plan. That plan was introduced in this Parliament by the Soullin Government. As has been mentioned already, had that Government not been in agreement with the plan there was no compulsion on it to introduce and pass certain measures associated with the plan through this Parliament. Had it objected to the plan, it had open to it a course which is now open to the present Government in connexion with this measure, namely, it could have gone to the people. I believe that we areentitled to assume that, at that stage in our history, the Scullin Government was thoroughly convinced that the Premiers plan was the only solution of the problems which then confronted this country. It comes with very bad grace from the honorable member for Hunter that he should talk about the difficulties of the Scullin regime, when he was one of those honorable members who deserted his party and voted that administration out of office.
– Not on that issue.
– Honorable members who sit on this side of the House can consider this proposal completely unfettered and unbiased. . We are not cramped by any political philosophy on the subject of public utilities, and are not fettered by any instruction from our party, or organizations outside the party. My view, which I believe conforms with that of the other members of my party, as well as of the Australian Country party, is, simply, that we believe in private enterprise. We consider that the greatest progress and the highest standards of living are achieved under private enterprise. But we are not unmindful of the fact that some services can be more effectively rendered ‘by government enterprise. That is nothing new. It existed as a feature of our philosophy before the Labour party came into being. One service, or, if the phrase be preferred, public utility, which has been rendered by governments for centuries, is the postal service. The first act establishing a government post office was passed by Cromwell in 1657. Many other utilities which render service to the public were brought within the ambit of government activity. I cite as examples in Great Britain the Metropolitan Water Board, constituted under an act passed by a Conservative government in 1902, the Port of London Authority, constituted under an act passed by a Liberal government in 1908, and the Joint Electricity Board, constituted in 1926. Examples nearer home are the Postal Department, railways, water supplies and sewerage systems, which have been under government or semi-governmenta.1 control ever since this country became developed. So we have no inhibitions, and are quite prepared to consider this matter on its merits. Birt what is Labour philosophy in this connexion? As the right honorable member for North Sydney (Mr. Hughes) said last night. - and he is in a position to know - Labour philosophy has changed somewhat during the passage of the years. We know that, although the socialization of industry, production, distribution and exchange has been a plank on its platform, even in those spheres its ideas have changed materially. I believe that you will agree, Mr. Speaker, that Labour policy and philosophy in connexion with banking have also changed materially. When the Fisher Government had brought down legislation to establish the Commonwealth Bank, Mr. Fisher had something very important to say about the institution which, it was hoped, would be set up under it. At the opening of the Commonwealth Bank, he said -
This institution is now established as a going concern. T,t will stand upon its merits, and must not be subject to political influence either in support or in derogation of it. It is now quite outside the political arena. Banking is not a political matter.
That is the idea which prompted the then stalwarts of Labour when they established the Commonwealth Bank. But the party has moved a long way to the left since those days, and the mere idea that the Commonwealth Bank should be free from political control is simply anathema to every honorable member opposite who so far has expressed views on this measure: and I have no doubt that those who speak later will support the present idea of Labour, that the Commonwealth Bank shall be an appendage of the Commonwealth Treasury, or of the party, caucus, or other body that is completely outside this Parliament. Indeed, Dr. Jauncey, who has written on the subject of theCommonwealth Bank, has said this -
The Commonwealth Bank is not the result of any particular banking ills, but is rather in consequence of a political philosophy which holds that the happiness of the community can be enlarged by regarding almost all forms of economic activity as pub itutilities that, the State should own.
That states clearly Labour’s view on this question.
I now wish to speak of the method adopted by the Prime Minister (Mr. Chifley) in bringing this matter before the public in the first place, and more recently, before the Parliament. On the 16th August last, the people were stunned by a brief statement issued by the Prime Minister in relation to banking, which read -
Cabinet to-day authorized the AttorneyGeneral (Dr. Evatt) and myself to prepare legislation for submission to the Federal Labour party for the nationalization of banks, other than State banks, with proper protection for shareholders, depositors, borrowers and staffs of private banks.
That was a significant statement because, so far as I know, the Australian Labour party had not given instructions that that course was to be adopted. . It is true that in 1943 it gave instructions that the regulations then operating in respect of private banks should be given the sanction of legislative force. That was done in 1945, but the Prime Minister, without instructions from that source, decided to nationalize the banks. I assume that his statement was made after consultation with his Cabinet. The really significant thing about the announcement was that he committed, not only his Cabinet, but also his party. I have reason to believe that many members of that party were just as stunned by the announcement as were members of the public. I have no doubt that the Prime Minister knew what the effect of the announcement on his party would be. He knew, for instance, that it would resolutely commit thi. party to a certain programme; that having signed a pledge to support the party’s platform, every member of it was committed, and had no means of escape. Accordingly, this thing was done without any consideration at all by the party. It is not surprising that, in those circumstances, the caucus meeting which was eventually held was a notable one. Some members who went in as lions came out as lambs. Of course I was not present at the meeting but, according to press reports of it, there were no dissentients. It would probably be more correct to say that there was nt> vocal dissent, because I believe that many who attended the meeting dissented in their minds, even though they did not express their opposition. As a result of the decision then made we have this bill before us to-day. Until the Prime Minister delivered his second-reading speech, the people of Australia knew nothing more than had been conveyed to them in the press statement of the 16th August. And so it was with considerable interest that members of this House - those on this side, at any rate - and the public generally waited for the Prime Minister to explain, not only the provisions of the bill, but also the reasons for its introduction. Speaking for myself - although I believe that I express the views of honorable members generally on this side - [ must say that I was thoroughly disappointed with the effort of the Prime Minister on that occasion. I shall comment on some of his observations. Obviously, he made many misleading statements, although, perhaps, none that was completely inaccurate. I shall show how undue emphasis on a certain feature of monetary policy was designed to mislead the public of Australia. In the course of bis remarks the Prime Minister said that no single factor can do more to influence the welfare and progress of the community than the management of the volume and flow of money. That argument has been used by the Labour party for over fifteen yea.rs. The suggestion underlining it is that, once the control of money is obtained, everything else flows naturally. Tt is fortunate that the people of Australia can gauge the accuracy of that statement, by “what is happening in Australia at this time, because never before in Australia’s history has there been more money or credit in the hands of the community. I suggest, ‘however, that never before have there been so many shortages of goods and services required by the people which are necessary for the development of Australia. It is f utile to say that some flimsy goods, and unimportant articles are for sale in the shops. The simple fact is that the things that the people require to increase essential production are wanting. And so it is clear that something more than money is required to bring prosperity to a community. The people have before them an illustration of the ineffectiveness of those panaceas offered to them from time to time by the Government. During recent years there have been more regulations and more legislation than ever before in the history of this Parliament with a view to establishing industrial peace in this country. I leave it to honorable members tojudge for themselves the success of thosemeasures. In the present position of thepeople of the United Kingdom we have an outstanding example of the limitation of the effectiveness of money and credit. There is in office in Great Britain, agovernment which has nationalized theiBank of England and taken full control of the country’s monetary and financial policy. There is a greater volume of money in the pockets of the people of Great Britain than ever before, but howfar short are they of being able to purchase the things that they need! Neverbefore, at least in modern times, have thepeople of that country been subjected toso many shortages and so much hardshipand sacrifice as they are now experiencing.. It is about time that the people of Australia realized the limitations of the money power in any community. That reference was placed in the PrimeMinister’s speech, not to enlighten thepeople regarding the limitations of themoney power, but to mislead them into believing that any government, given, control of a nation’s finances, could bring about the “golden age” - that age sooften mentioned by the Prime Minister a little while ago, but less frequently now.
Speaking of the policy of the private- banks, the Prime Minister said -
Time and again the policies of the private banks ran counter to national need* for steady growth and high level of employment. To go some years back, it is correct to say that the banks fed a boom and promoted unsound development in the twenties. When the depression came, the- banks as a whole restricted new lending, and called in advances.
On all the evidence available that statement is inaccurate. A great deal of capital is being made out of the fact, that during the depression, many men, both on the land, and in business, went bankrupt, but I do not think any honorable member on the other side of the House is prepared to deny that the prime cause of the depression was the drastic decline of the overseas prices of our commodities. For instance, the’ price of wheat in 19-27 was 5s. 4$d. a .bushel, in 19-28 it was 4s. 9d., in 1929 it was 4s. 3d., but in 1930 it was. only 2s., 4d. Now let us take wool, a commodity of even greater economic importance to Australia. The figures in respect of wool are as follows : -
1 1 is evident, therefore,, that the primary cause of the depression was the decline of prices for- overseas exports, but having said that, I am still not prepared to admit that the policy of the banks had any major effect upon conditions. The figures indicate, that the trading banks strained their, resources to the utmost to make advances during the term of office of the Scullin Government - that their percentage of advances to deposits was higher than at. any other time, before or since. The figures, are as follows : -
It is evident, therefore, that the banks, to the very limit of their resources, maintained the level of their1 advances in order to assist the people through the difficult times.
A feature of the depression not often mentioned here,, but which calls for some comment, is that preceding, governments were themselves partly responsible for the difficulties in which many primary producers, at least, found themselves. After World War I., governments opened .up and developed new land settlements in various parts of Australia. On these lands they placed settlers^ many of them returned soldiers, although much of the land was entirely unsuitable for the form of production in which the settlers were engaged. This Parliament voted £20,000,000 for the repatriation of returned soldiers, many of whom were placed’ on the land. The difficulties in which the- settlers became involved were not the responsibility of the trading banks1. I am not criticizing the governments of those days for what they did’. They acted in good faith. Many of the land settlement schemes were ineffective because of inexperience, but why the banks should be asked to accept responsibility for the failures that occurred, I am unable to understand.
The Prime Minister spoke of competition between the banks. He said that the Royal Commission on. the Monetary and Banking Systems went into the- matter of competition, at great length, and found that the trading banks did not compete in any serious way regarding interest rates andi other charges,, but sought, rather, to, attract customers by offering various other inducements. It is true that the trading, banks do- not compete with one another regarding interest rates-, but let it not be forgotten- that interest rates are now controlled by the Commonwealth Bank, so that any opportunity for competition in this direction has been greatly curtailed’. However, the private banks do compete strongly with one another in regard to the services and advice which, they are able to place at the disposal of their clients. That this competition, is effective is, proved by the failure of the. Commonwealth Bank itself to capture any considerable amount of ordinary trading business. The Commonwealth Bank was instructed to compete with the trading banks for this- class of business, and it is interesting to note that, during the last two years; when building materials and labour have been scarce, there, never seemed! to be any shortage of either materials, or labour when the Commonwealth Bank was erecting new premises, or converting old ones, in order to extend its operations. Honorable members opposite seem to be very interested in the advances made by the banks, so let us compare those made by the trading banks with those made by the Commonwealth Bank. In 1945, the trading section of the Commonwealth Bank did 6.5 per cent, of the total banking business in that field, leaving 93.5 per cent, to the trading banks. After two years’ strenuous effort to increase its business, the Commonwealth Bank’s advances had increased from 6.5 per cent, to only 6.S per cent. I have no doubt that this competition has been one reason why the Prime Minister decided not to try to beat the private banks on their own ground. He realized that if he wanted lily a national bank to do the business it the country he would never achieve chat end in competition with the private banks. I have no doubt that he watched the figures from day to day, and seized upon the first excuse afforded to him to wipe out the private banks. All honorable members opposite will claim that under this measure the Government is giving effect to Labour’s platform, in spite of the fact that this proposal was never mentioned at the last general elections, and that, when the Banking Bill was passed, in 1945, they said that that legislation gave to the Government all r.he powers it required to control the monetary and banking systems. In spite of those facts, the Government has now decided to nationalize the banks.
Whilst nationalization may be regarded as Labour’s long-range policy, it is, however, the immediate policy of the Communist party. It is futile for honorable members opposite to try to dissociate themselves from communism. It is useless for them to claim that communism is not gaining in the public favour. But, whilst election results support that claim, it is true, nevertheless, that Communists are gaining control of various organizations on whose support the Government has relied during the last three or four years, to a degree never known before. It is also true that Communists are obtaining positions in which they can dictate the policy of the Labour party and the Government. Honorable members opposite are constantly attempting to dissociate themselves from the Communists.
In doing so, they have repeated their favorite catch-cries and canards. Consequently, I shall repeat what is the Communists’ policy on this subject. I goto the fountain head. Lenin said -
We are nil agreed that the fundamental first step in this direction must be such measures as the nationalization of the banks and: the trusts. Let us put into practice these and similar measures and we shall see.
This will interest very much the constituents of the honorable member for Wannon (Mr. McLeod), who is interjecting under his breath -
We cannot at once nationalize small consumers’ concerns, namely, those with one or two employees - nor can we place them underreal workers’ control. But the role of thesesmall men can be made small to vanishingpoint, and through the nationalization of the banks they can be tied hand and foot.
Then we have the sentiments expressed by the right honorable member for Yarra (Mr. Scullin), a former. Prime Minister of this country. When he was chairman of the committee appointed to recommend ways and means to give effect to Labour’sobjective of nationalization of the means of production, distribution and exchange
– Is not the honorablemember a bank director?
– No; and neither do I own a single share in any bank. Wedo not need to fight the battle of the private banks, because, probably, they will get a better deal under this legislation than under the Banking Act of 1945r which was deliberately designed to destroy their assets so that the Government could,, in due course, take over those assets at its own price. Therefore, if we considered only the shareholders of the private banks we should probably support this legislation. But we are opposing this legislation in order to protect the interests of the people of this country, particularly the small people. When the right honorable member for Yarra moved the adoption of the report of that committee in 1921, he said -
The parliamentary machine has been used to give sanction to the schemes of the capitalist system. We. want the parliamentary regime to give sanction to our .proposal and te the scheme that we have prepared. From those industries nationalized shall be chosen a central economic council which will really take the place of our parliaments of to-duy.
Let us see how far along the road to a supreme economic council the Labour party has already gone. Honorable members opposite are bound hand and foot, not by decisions of their own meetings, and not even by decisions of Australian Labour party conferences, but by the decisions of certain unions into which Communists have infiltrated, and through which they dictate to the nominal government of this country. I do not need to draw attention to what has happened on the coal-fields, or to the number of regulations and acts passed by this Parliament, which this Government has not failed to enforce. The same observation applies to happenings on the waterfront. Not only does Mr. Healy decide when, what and how ships are to be loaded and unloaded; he goes further, and decides the foreign policy of this Government in respect of our relations with Indonesia. From the Government’s actions one can only assume that it has fallen in with his wishes. Mr. Healy decided to place a ban on all Dutch ships.
– Order ! The honorable member must confine his remarks to the bill.
– 1 am showing that this bill has been evolved, not by honorable members opposite, or even by the Labour party, but by an outside junta which is not responsible to the electors of Australia.
– That has nothing to do with Dutch ships.
– This legislation is completely in line with Communist policy. Furthermore, every honorable member who votes for this bill will support Communist policy. The Communists themselves want it that way, knowing perfectly well that if they come out into the open and advocate this proposal the people of Australia will not stand for it. The people have shown by their votes at elections just what they think of the policy of the Communist party. The only difference between socialism and communism is the time factor. The socialists try to calm the fears of the people by saying, “ We shall attain our objectives by constitutional means “. The Communists say, “ We shall go straight ahead and get what we want by revolutionary means “. The result is the same in both cases; it is only in point of time that a difference lies between the two. The Communists are foisting their policy upon this country, using the present Government and its followers as the medium for doing their dirty work. If the Government is in any doubt as to the wishes of the people on this question, it has a very easy way of ascertaining them. In season and out of season, Labour supporters have proclaimed their adherence to democracy and democratic principles, and, accordingly, it comes with poor grace for them to refuse to consult the people on the most important measure that has ever been placed before us. I have no doubt that honorable members opposite know what the result of such a referendum would be. Doubtless they have scanned with very anxious eyes the Gallup polls held recently in connexion with this proposal. At one time I did not consider that public opinion polls gave a true indication of the feeling of the people, hut over the last few years our experience has proved them to have been fairly accurate. The trend disclosed by the polls covering the last two elections was too accurate for my comfort. It would be almost impossible to raise a political issue in respect of which a Gallup poll to-day would show a three to one majority against the opposition parties. ‘ The results of public opinion polls have surprised honorable members on this side of the House who are in close touch with public opinion; I have no doubt they have also surprised and depressed honorable members opposite. The people of this country will not suffer the flagrant abuse of power contemplated in this bill by a government which is representative of a party that was brought into existence to wipe away social injustices and, as it claimed, to give the people control over their own lives and their own government. After having shouted that catch-cry from the roof-tops for the last 30 or 40 years, when the testing time comes the Labour parly, without a qualm, departs from it.
– Order ! The honorable member’s time has expired.
.- Politically, this is the happiest moment of my life. I am elated at the opportunity given to me to support a bill which has been introduced into the House for the express purpose of nationalizing the banking institutions of Australia. I am happy to support the bill, because I am well aware, from my own observations, of the injustices that have been perpetrated on the people, not only of this country, but also of every country of the world, by the private banking institutions A great deal of argument has been adduced by honorable members opposite against :he proposals of the Government. I have always maintained that the control of the monetary system, of finance and of real credit, should lie in the hands of the Government which represents the people. Under any monetary system, the natural or real credit of the country, the ability to produce and consume, cannot be transformed into actual production and consumption until there is created against it by the Government a corresponding amount of credit which consists of acknowledged and transferable claims to the goods and services produced. These claims are known as currency or money. The financial credit of a nation is its ability to produce money, and although money in itself is not wealth, it is the only claim upon any wealth that may exist. That, is a fair statement, because it is typical of what happened in Australia in the past* There is no need for me to traverse the history of the failure of the private banking system in Australia and the financial and economic depressions that have marked our history. It is too well known. We had ample for every one, but in spite of the wealth of real credit, people were starving. Even in times of freedom from financial depression, when governments supported by honorable members opposite claimed that the revenues of the Commonwealth were in a state of buoyancy, thousands of our people lacked things necessary to the maintenance of good health. All real credit is the joint property of the producer and consumer. It follows that all financial credit is national property and that no one but the nation has any right to create or destroy it or to enjoy the fruits of its use. We have heard a good deal from honorable members opposite about conditions in the United Kingdom. We are well aware of the difficult crisis through which the people of the United Kingdom are now passing. In medieval England, any one caught issuing financial credit or money outside of the King’s mint was promptly boiled in oil, an even worse punishment than that meted out to the ordinary thief in those days.
– Ha, ha!
– The honorable member for New England (Mr. Abbott) laughs. If he reads the pages of history he will find that what I have said is true. In Australia the private banking system, by a series of clever manipulations, has obtained complete control of the issue of finance against the real credit of the nation. The power which was formerly in the hands of the Parliament has been filched away and monopolized by private organizations entirely for their own benefit. In the course of my remarks I shall demonstrate how the banks are linked up with our whole system of production, distribution and exchange. Here are a few facts which may “ stick in the gizzards “ of honorable members opposite. During the war between the northern and southern States of the United States of America, the London Times, commenting on Abraham Lincoln’s monetization of the national credit to finance the war, said -
If that mischievous financial policy in the United States of America should become indurated to a fixture then that Government will furnish its own money without cost, it will pay off its debt, it will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized government of the world. That government must be destroyed.
That was the dictum of the private banking institutions of England at that time, issued through their mouthpiece, the capitalist press. The only fear in the mind of the writer was that the country would become too prosperous, and that is the fear in the minds of the Opposition to-day. In a letter written from London by the Rothschild brothers, the well-known international bankers, to their New York agent, when arranging to introduce modern banking methods into America, appears the ‘following passage : -
The few who can understand the system will either be so interested in its profits or so dependent upon its favours that there will be no objection from that class - while on the other hand that great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system will bear its burden without complaining and perhaps without even suspecting that the system is inimical to their interests.
The Rothschilds obviously did not suffer from the delusion that the welfare of the general public and the welfare of the private banking system were identical. In the United States of America Banking Magazine, of the 26th August, 1924, appears the following statement : -
Capital must protect itself in every possible manner by combination and legislation. Debts must be collected, bonds and mortgages must bo foreclosed as rapidly as possible. When through a process of law the common people lose their homes, they will become more docile and more easily governed through the influence of the strong arm of the government, applied by a central power of wealth under control of leading finance.
History shows that on every occasion in the past when governments have not controlled the banks, the banks have controlled governments. For almost every economic disaster involving the loss of homes, farms, and means of livelihood, the fault has lain with the private banks - those damnable institutions that have inflicted so much poverty and misery upon the people. In the Bank of International Settlements in Switzerland, we have the nerve centre of the worlds banking system. We are aware of the control that that institution exercises on the Australian banking system. We can still remember the time when that fine old scion of the English aristocracy, Niemeyer, came to Australia and imposed his will upon the people of this country. Upon his return to Great Britain, Niemeyer, that “ grand . little fellow “ of the private banks, was, in. common parlance, honoured by the King with a knighthood. He is a German Jew - not that nationality means anything to me, and the private banks, of course, know no nationality, creed or responsibility. Niemeyer was made chief of the Bank of International Settlements, thus showing a definite link between the banking system of Australia and that of the rest of the world. Nobody can deny that, international financiers have had Australia in their grip. Fortunately, with Labour in power, that grip is to be broken. Mr. W. E. Gladstone, one of Great Britain’s most famous Prime Ministers, dealing with this question, said -
From the time I took over as Chancellor of the Exchequer I began to learn that, in the face of the bank and the city, the State had an essentially false position as to finance.
The hinge of the whole situation was .this - the government itself was not to be a substantive power in matters of finance but was to leave the money powers supreme and unquestioned. In the conditions of that situation, I was reluctant to acquiesce, and I began to fight against it, by financial self assertion - from the first I was tenaciously opposed by the Governor and the Deputy Governor of the bank.
It will be seen, therefore, that even as far back as the days of this “ grand old man “, the bankers had the same set-up, and the same fight was being waged against them that we are waging now. Thomas Jefferson, when President of the United States of America, dealt with the position in these words -
If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the corporation that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.
That is true not only of the United States of America, but also of this country, because many children of the past are waking up to the fact that their homes and land that were won by their forefathers no longer belong to them but have been taken over by the private banks. Only in time of war, when their own property and lives are threatened, do the private bankers take any interest in the people who have enabled them to amass their wealth. That interest, of course, is dictated by the need for protection. It is undeniable that, due to the activities of the private banks in Great Britain, thousands of people in those countries are born on the dole, live on the dole, marry on the dole, and rear their families on the dole, because the private banks choose to restrict production and do not give to the working people an opportunity to earn a livelihood. Wesley C. Mitchell, one time director of the Bank of England, has said -
During this year (1921) millions of ns were idle when we wished to work, billions of dollars worth of plant and machinery stood unused when the owners longed to start their furnaces, and what wc wanted to produce we wanted to consume.
The edict of enchantment which forbade us to do what we wished was pronounced by the money economy. We are periodically mastered by this social machinery we have made, and stand idly and needy at its bidding-
That is fitting -
Since the money economy is a complex of human institution, it is subject to amendment. What we have to do is to find out just how the rules of money making thwart our wishes and to change them in detail or change them drastically as the case may require.
That is what this Government is doing. We ‘realize that we have to take drastic action to save the people of this country from disaster. Mr. Mitchell continued -
On the contrary the work of analysis is difficult intellectually and the work of devising remedies and .putting them into effect is harder still. But one has slender confidence in the vitality of the race and in the power of scientific method if he thinks a task of this technical sort is beyond man’s power. lt is not beyond the power of the Labour party to alter it. We intend to do just what he says and alter the banking system in order to allow production to proceed as it should so that the people shall have all they require. In 1921, Lord Bryce, writing in Modern Democracies, said -
Democracy has not more persistent or insidious foe than the money power, to which it may say, as Dante said when he reached in his journey through Hell the dwelling of the God of Riches, “ Here we found Wealth, the great enemy “. That enemy is formidable because he works secretly by persuasion or deceit, rather than by force, and so takes men unawares. He is a danger to good government everywhere. The truth seems to be that democracy has only one marked advantage over other governments in defending itself against the submarine warfare which wealth can wage, viz., publicity and the force of public opinion. So long as Ministers can be interrogated in an asembly, so long as the press is free to call attention to alleged scandals and require explanations from persons suspected of an improper use of money or an improper submission to its influences, so long will the people be at least warned of the dangers that threaten them. If they refuse to take the warning they are already untrue to the duties that freedom prescribes.
Notable and intelligent men all over the world have made utterances condemning the private banking system. Honorable gentlemen opposite have said that this Government controls the finances of Australia. It does not. No government of any country has ever controlled its finances. All governments -do what the banks tell them to do and spend only as much money as they will allow them to spend. That has been the experience of Australia ever since the political system was introduced. One of the most vicious and conservative Premiers that this country has ever produced, “ Tubby “ Stevens, a former Premier of New South Wales, when I lived in that State and was closely associated with State politics, made a startling admission about the power of the private banks over the Government.
– Plenty of work could I* had when he was in charge.
– Plenty of work! The honorable member must have been dancing a hula-hula up north with the kanakas, for he evidently did not have any knowledge of what was happening in the south. Speaking at Deniliquin. Sir Bertram Stevens showed the extent of the private banks’ control of finance in these words -
Within the last few months, the Government has been endeavouring to lay the foundation of proper economic progress.
Fancy any government other than a Labour government trying to do that -
Now that we have done that we are prepared, as courageously as our bankers will allow, to get out into the field of development to assist in arresting the drift from the country to the city. “ As our bankers will allow “ ! What an admission from a man whose politics are identical with those of honorable gentlemen opposite. Sir Bertram Stevens’ was & close associate of Sir Alfred Davidson, formerly chairman of directors of the Bank of New South Wales. He provides an indictment of honorable gentlemen who claim that the Government controls finance’s, because he openly confessed thai his Government had no control over money. In 1931, when the Premiers plan was being formulated and thai “ grand old democrat “ Sir Robert Gibson was chairman of the Commonwealth Bank Board, the right honorable member for North Sydney (Mr. Hughes), in his book Bond or Free, wrote -
Sir Otto Niemeyer represents a private bank ; he represents not the people of England, but great financial interests. We are not going to shape our policy as any bank or group of financiers, no matter how powerful, directs.
What did Niemeyer do? What did “Billy” Hughes have to say about it?
– Order ! The honorable member must not refer to honorable members by name.
– Well what did the right honorable member for North Sydney say about it? What did any honorable member of the Opposition say about Niemeyer, or Guggenheim? The only people with anything sensible to say about them were those who suffered- the damnable consequences of their dictates. They ousted from office the parties that supported’ Niemeyer’s orders and returned the Australian Labour party to power. The late Ramsay Macdonald, a former Prime Minister of Great Britain, whom I defy honorable members opposite to describe as a fool, made the following candid statement about the private banks : -
Finance can command the service of every stream that runs to turn the wheels of industry and can put fetters on the feet of every government that is in existence.
Honorable members opposite are clamouring against this bill in the hope that they will be able to place fetters on the feet of the Labour Administration, but they will not be able to do it. The late President Wilson said -
Financiers are more powerful than the nominal rulers.
We do not need to be told that. We have studied the problem and know the power, of the financiers. What I have said about the “United States of America and other countries applies equally to Australia. The tie between the banks is absolute.
Many people are waking up to the fact that their home3 and land which were won by their forefathers no longer belong to them - but have been taken over by the private banking system. Only a handful of people who add to their ill-gotten gains by manipulation of the legal and black markets have anything to fear from the Government’s proposals. The workers, the small business men and the farmers are not blackmarketeers or manipulators, but honest people forming the tremendous majority of Australians. They have nothing to lose but a lot to gain from this proposal. The Ministers who have spoken have provided evidence of that. Australian history proves that government banking is much safer than private banking. I now propose to see how “ good “’ the private trading banks are and how well they are able to meet their obligations. Of an original total of 58 private trading banks in Australia, only nine were left a little while ago and I understand that practically only seven are left to-day. Nine of those banks went to the wall as the 1893 crash approached and, in that year, fifteen more of them closed their doors. . In the last depression, the Producers and Federal Deposits Bank in Queensland was closed. In every case it was not the big man, but the small depositor, who suffered, the farmer or householder who suddenly found that his mortgaged property had been sold over his head for “ a song “ in order to satisfy the avaricious demands of the shareholders in the big private banks. Those who remember the depression will recall those details. Farmers were refused overdrafts and driven off the land. I particularly remind members of the Australian Country party of this, because they must know of many such cases. Small business men were driven into bankruptcy. Others were saved because government banks were able to offer them better terms and were prepared to save them when the monopoly banks were determined to crush them. The business of profit-making went on.
In 1932, in the depth of the depression, as Australian working mothers tried to make the dripping which they spread on their children’s bread go a little farther, the Bank of Australasia declared a dividend of 9 per cent. - although an honorable member opposite said last night that it did not declare a dividend during the depression - and the seven big banks raked in a total of over £1,750,000 profit. Yet honorable members opposite oppose this measure, which will prevent the return of such conditions! The banks dictated to the government rather than the government to the banks. This bill will prevent them from doing so again. The Opposition has been loosely throw- ing about such terms as “ totalitarianism “ fascism “, and “ dictatorship “. The Leader of the Opposition (Mr. Menzies) said -
The move will go a long way toward the totalitarian control which it has been the pride of the Australian people to light and defeat during the war.
The truth is that totalitarian and fascist countries never nationalized their banks. The private banks financed Hitler, Mussolini, Tojo, Franco, Horthy and other fascist dictators. The Bank of England, under Montagu Norman, built up Germany until it had the greatestmechanized army in history. As the Minister for Transport (Mr. Ward) said earlier in this debate, the Bank of England advanced £S0,000,000 to Germany just before the war, with the result that misery was brought upon people throughout the world. The private banking system was an integral part of the monopolistic fascist dictatorships in Germany, Italy, and Japan. The private bankers, such as Dr. Schacht and Kurt von Schroeder, who financed Hitler’s thugs and warmongers, are the real totalitarians. They exercise dictatorship, subject to no parliamentary checks, over the lives of workers, farmers and small business people. They have ordered drastic cuts in wages and social services and they have evicted farmers from their properties and turned them into wage slaves. The liberty of all useful people will be increased by the nationalization of banking. In fact, nationalization is essential to the preservation of liberty. If honorable members opposite had studied this problem as true Australians and wished to accept their responsibility as Australians, they would not oppose this measure. There is some human feeling involved in this matter, and I am so deeply affected by it that I want to get rid of the people who brought wai1 upon this country and every other country in the world.
In the Australian bank-bursting panic of 1893, many producers and traders were driven into insolvency as the result of the banks contracting the medium of exchange by millions of pounds. The classes of property which possessed value - the homes which furnished shelter, the farms which pro- duced food and clothing, the manufacturing plants, warehouses and other buildings necessary for trade and commerce - had no market value during the panic. Those who had invested in equities were ruined. Labour, the basis of all wealth, was in a state of starvation. More than 250,000 able-bodied workers were in the ranks of the unemployed. Boodlers said that the cause of all the chaos was over-production. The real cause was under-production, because the people were not allowed to produce. At no time during the panic, would homes not have been in demand for occupation or products of the farms and factories for consumption had the workers possessed the means of purchasing them. The unemployed had the capacity to consume everything that their labour would have produced, and by this means the normal equilibrium between supply and demand could have been maintained. The cause of the panic was the suppression of millions of pounds of the medium of exchange as the result of undue restriction of the function of supplying credits. No class of the people is more deeply interested in the successful operation of the Commonwealth Bank than the debtors and the workers. With the Commonwealth Bank capable of sustaining legitimate credits, there can never again be a panic which could destroy the market values of goods, ruin creditors and deprive the people of the right to work.
In 1920, a conference or world banking monopolists, including old men like Montagu Norman, met in Brussels. Later in the same year, the banks which they represented started to implement a policy of restricted credits and deflation in order to raise the value of currency of all kinds high enough to enable them to gain control of it and thus secure the real wealth of the nations for themselves. In the winter of 1920-21, price levels fell alarmingly. Price levels are governed by bank policy, not by the so-called law of supply and demand, for the simple reason that both demand and supply are controlled by financial considerations. The Australian trading banks set out to follow the example of overseas banks, but Sir Denison Miller, Governor of the Commonwealth Bank, quickly brought that bank to the rescue of the threatened people. Partly by purchasing Commonwealth and other government securities and partly by increasing advances, he realized, between June and December, 1920, a total of £23,000,000 of additional currency. This gave a slight hint of what he would do should the necessity arise, and so deflation was deferred. In other words, the Commonwealth Bank prevented a depression in 1920 and gave the clearest possible proof that Australia was not bound to follow the banking policy of other nations. There can be no doubt that, had Sir Denison Miller lived, there would not have been a depression in 1929-31. It is easy to see why the trading banks watched with concealed rage and fear the progress of the Commonwealth Bank.
– Is that so?
– The honorable member for Gippsland (Mr. Bowden) knows that it is true. I have heard him tell of his experiences with the trading banks. No section of the community is more interested in this proposed expansion of the Commonwealth Bank than those people who count for something in Australia. If the Commonwealth Bank is capable of sustaining legitimate credits, panic cannot develop to destroy market values. Every one will agree with the honorable member for Werriwa (Mr. Lazzarini) that it is not the will of God that financial and economic depressions occur. He did not intend His people to suffer the dreadful consequences of disturbances of our economic system. That being so, who does decree it ? Obviously, a few men are responsible for those conditions, because they are spiteful and. vicious. If the Almighty does not decree that the world shall suffer financial and economic depressions after He has placed on the earth an abundance. of the necessaries of life for all the people, we might well ask why a few men are permitted to cause all this suffering. Governments have attempted to prevent it, and individuals have been burned at the stake because they dared to express an opinion as to means for eradicating these sinful things which, lead to so much injustice to humanity. Every one will admit that it is not the will of God which produces panics, but a want of an intelligent banking system.
In 1825, a parliamentary commission proved that, in the panic of 1793, nearly 100 English banks failed. In the period 1810 to 1817, 6,000 banks failed, and in the panic of 1825 about 26 banks closed their doors. They paid only a small percentage of their indebtedness. In the great panic of 1837-38 in the United States of America, more than 1,000 banks, or nearly all the financial institutions in that country, failed. At present, the United States of America is putting the thumb-screw on every country at the dictation of the Wall-street bankers. In 1856, nearly every bank in the United States of America put up its shutters, and few of them re-opened. In 1893, most of the Australian ‘banks became financially sick, and hung- out signs, “ Business suspended pending reconstruction “. This crash ruined thousands of producers and traders. I do not desire to deal with their reconstruction; other honorable members have adequately described it. The people who controlled the banks made profits amounting to millions of pounds, and the indebtedness to the depositors was never met. In times of panic the people distrust the solvency of the private banking corporations.
Now, I shall examine the banks in Australia. The banking business in this country is controlled by a small ring, which has rapidly grown even smaller. To-day there are nine great trading banks, which are ruled absolutely by small boards of directors. Even the shareholders get no more information than the scanty and almost meaningless items which appear in directors’ reports and balance-sheets. The nine associated banks determine how much money shall be issued to the community, and when and how it shall be withdrawn. They also have the sole voice in determining what individuals, companies or industries shall receive advances to enable them to carry on, or expand their operations, and what rate of interest shall be charged. The Australian banking monopoly is only a part of the world monopoly. I hold in my hand a book which proves this point, and if time permitted, I should read it to the House. It deals with trustee and pastoral companies, and shows how industrial controls are operated .by the private trading banks. At a move suitable opportunity, I may ask honorable members to consent to the incorporation of the book in Hansard. The Leader of the Opposition and all members of the Opposition declare that our sailors, soldiers and airmen fought for liberty.
– Absolutely !
– I yield to no one in ‘ my admiration for the determination and courage of our servicemen. I “ doff my lid “ to all who had a responsible part in making Australia secure from invasion. However, I emphasize that our servicemen did not fight for the retention of tha private financial institutions. They fought for the freedom of our people, and not for the private trading banks. After World War I., an anti-Labour government reduced soldiers’ pensions and other social services, and deprived exservicemen of their war service homes. It also reduced the standard of living of the Australian people to a very low level. What liberty did ex-servicemen have after World War I. They were compelled to walk the highways and by-ways seeking employment. They sold bootlaces, or begged for alms in the streets of our capital cities. I saw them. So did members of the Opposition. Yet they assert unblushingly that in World War I., our servicemen fought for liberty. A government which honorable members opposite supported imposed all manner of onerous restrictions on them and deprived them of the right to work. The financial and economic depression of the early ‘thirties, which caused so much suffering among ex-servicemen of World War I., was produced by a manipulation of credit, which caused a reduction of production and a resultant contraction of employment. I regard this bill as being of the greatest national importance. It will give to Australia an opportunity for development which has been denied to it in the past. Above all, the bill will give to our people security and happiness. I ask: Are members of the Opposition Australians ?
– Yes. Is the honorable member an Australian?
– If honorable members opposite were true Australians, it is their bounden duty to fight for this country and its people.
– We are doing so.
– They should fight to prevent a recurrence of an economic crisis. My ambition in life is to see the Australian people happy, contented, and secure in the knowledge that never again will they need to fear the damnable consequences of unemployment and want. When, as a young man, I travelled through this country, I often asked myself why people had to beg for the right to work, which is only the right to live. Often, I was victimized and boycotted, and told that there was no work for me. That occurred in this country of untold wealth - a country that is capable of producing all the necessaries of life. It occurred at a time when the people were prepared to produce an abundance of food and goods, if they were given the opportunity to do so. Often in the past they have been denied that opportunity. In my lifetime, I have seen this system functioning in all its viciousness. I have seen people begging for food. Honorable members opposite may smile, but that is the truth. Little children, cold and hungry, have scoured the garbage tins for a morsel of food, while those people who controlled the private trading banks lived in the lap of luxury and enjoyed all the good things of life. They did not care whether the children of the “ common people”, as the Opposition describes them, suffered severely. But it is the “ common people “ who produce the wealth of the country. When the children -have been cold and hungry, I have seen the mothers distracted and driven almost to desperation because they could not give to their offspring, the food, clothing and warmth that mothers want them to enjoy. Who was responsible for that?
– The Soullin Government!
-The honorable member said, in his ignorance, that it was the Scullin Government; but the ‘Scullin Government was not really in power when that happened, it was merely in office, and it had to accept the dictates of
Sir Robert Gibson and Sir Otto Niemeyer
– Order ! The honorable member’s time has expired.
Hr. TURNBULL (Wimmera) [3.56]. - ‘Supporters of the Government have referred to the experiences of men in far-away countries. They have not quoted the experiences of modern Australians. The honorable member for Lilley (Mr. Hadley) said that he might have gone farther than he did, but, in point of fact, he did go as far as quoting Dante’s experiences in hell. The honorable member inquired whether we knew certain people to whom he referred, and in reply I should like to know whether supporters of the Government have heard of the devil. I think that they must have, because surely they realize that they will play the devil with the economy of Australia if this bill becomes law. I agree with the Prime Minister (Mr. Chifley) on two points. During the debate on the motion of want of confidence in the Government, the Prime Minister pointed out that indulgence in abuse will get us nowhere. Logical thinking is required of members of Parliament at all times, but particularly is it required now when the Government is forcing through this House a bill which is without support or approval by the people. That the bill is not approved by the people is demonstrated by the result of recent Gallup polls. Generally speaking, Gallup polls have shown themselves to be reliable indicators of public opinion. The latest Gallup poll taken in regard to this proposal indicated that only 23 per cent, of the people were in favour of the Government’s proposal.
Whilst it is true that socialization and nationalization have long been included in the platform of the Australian Labour party, the fact remains that those proposals have not been mentioned in policy speeches delivered by Labour leaders during recent election campaigns. It has been explained in this House that the policy of a party consists of the promises and undertakings which it makes to the electorate immediately prior to an election, whereas its platform is of long standing and is something about which few people outside the party know any thing. As I say, socialization has long been included in the platform of the Australian Labour party, but this is the first time that the Government has attempted to implement it. That leads one to consider why the Government has chosen the present time for its introduction. Surely it is not because the High Court refused the Government permission to force municipalities to bank with the Commonwealth Bank. Obviously, that cannot be the reason. It is clear that the Prime Minister and the AttorneyGeneral (Dr. Evatt) must have anticipated the decision of the High Court. That being so, it is my considered opinion that the procedure adopted by the Government in it9 attempt to coerce local government bodies, was adopted deliberately in the hope that local government bodies and banks would resist and enable it to ‘Utilize the present opportunity to introduce its proposals to nationalize the banks. The present was chosen because it is a most opportune time from the Government’s point of view. Members of the party opposite wanted to be absolutely sure that the people would not have any chance of expressing an opinion. Because of the fact that people had tolerated a great number of restrictions over the last seven years, the Government believed that the public would not offer any substantial resistance to this major socialistic venture. It also hoped to exploit the element of surprise, and I believe that even now it clings to the hope that opposition to its proposals may prove to be nothing more than a nine days’ wonder. All the circumstances surrounding the introduction of this measure at the present time point to the execution of an old plan. Gentlemen who are to the Prime Minister’s liking have already been appointed to the highest positions in this country, Labour has an overwhelming majority in the Senate and in this House, and normally some time will elapse before the next elections. Furthermore, the absence abroad of the Attorney-General is not without significance, because the right honorable gentleman has said and written so much, in previous years, in regard to the present proposal, repetition of which would be embarrassing to himself and to the Government to-day. Those are all links in a chain of causation.
Every one agrees that this is the most important measure which has ever been introduced into this Housed Even the Prime Minister shares that belief, because he chose S.15 p.m. as the time to make his second-reading speech. He thought that the subject wa3 of such importance that he selected a time when the number of radio listeners is believed to be the greatest. However, the people whom he hoped would listen to his speech were not sufficiently important to cause him to take into consideration their opinion on the action which his Government proposes to take. A great democrat, Grover Cleveland, defined democracy as “ a jealous care of the right of election by the people ; absolute acquiescence in the decisions of the majority “. The Government’s procedure is a direct negation of those principles. The excuse offered by the Government that the people have not officially expressed their opinion cannot be taken seriously, nor should it be taken into any consideration at all. The action of the Government in refusing to allow a referendum to be taken is of the essence of tyranny. The people have clearly expressed their disapproval of the Government’s banking proposals. The giant public meetings which have been held, the petitions presented to the House, and the letters and telegrams which have been written to members in opposition to the Government’s proposals refute any suggestion to the contrary. Public bodies and private citizens throughout the country have indicated clearly that they oppose the measure. The protests come from people in every walk of life. People who regard freedom as the basic principle of happiness. We have not heard- a great deal of what the people are saying because it is only now and then that people get an opportunity to express their views in the Parliament; they can he heard only through their representatives and with your permission, sir, I propose to allow the people to express their views by reading some letters which I have received. The first one comes from Woomelang, in my electorate. .It states -
When I first heard the news that the banks were to be nationalized you could have knocked me down with a feather. In fact, so calamitous was it, that I am still dazed. What did you and I .give all those years of our lives away from our loved ones for? To have our land turned into a totalitarian State? Are we to hand over our all to dictators? Is not that what we tried to prevent?
The letter goes on to state -
My parents and grandparents left Europe to escape tyranny and they made good here, and we are glad and grateful for the freedom they enjoyed. If the banks are taken it is the beginning of the end of freedom. I enjoin you to do all in your power to defeat this diabolical move, and I am behind you up to the hilt.
Another letter reads -
I have had dealings with a trading bank and have found them most convenient and sympathetic, more especially during my husband’s absence while in the services. I consider, .as a citizen, that each person should trade and do business just where they wish.
Another letter reads -
Being a farmer, I am greatly concerned, ai I have to deal with private banks to carry on production. If the bill goes through I will reduce my production by half. I cannot bring myself into line with this Hitler method.
Another letter which I have received comes from the Kowree District Council of the Victorian Wool and Wheat Growers Association at Edenhope, in the electorate of Wannon. It points out that a ballot was taken of members in connexion with the Government’s proposal to nationalize banks, and it goes on to state -
The result was, of 244 papers sent out, 165 were returned, and only one voted in favour of the proposal.
Surely that shows just where primary producers stand! Another man points out: -
I am quite satisfied with the present set-up. The idea of doing business with a government department tangled with red-tape is a position I do not want myself forced into.
A further letter states -
I am not in favour of nationalization of the banks. I have been dealing in the same bank for over forty years, and have owed the bank a lot of money at different times, I am very much indebted to the bank for carrying me on. There has been different managers in charge of the bank during the past forty odd years .and never at any time was I refused to increase my overdraft. The courtesy and attention that has been extended to me I will never forget, I am Australian bred and born and Australia is .a free country and it is our duty to keep it free for the benefit of our descendants.
That man is a true Australian. Mr. R. A. Schooling, a solicitor of Ultima, Victoria, has written in these terms -
The Mallee country of the State of Victoria is an area of recent growth and development.
During the ,last .fifty years Lt has steadily become .one of .the great granaries of the world, and the original settlers, who, at the time of opening up -this country, had as their only assets stout hearts -and an .unconquerable will, have in many instances now attained a sturdy financial independence. This result has entirely been achieved by and is attributable to ‘the financial assistance ‘afforded by private trading banks and private enterprise and to commendable financial nursing by them. On the contrary many government .institutions, Whic’h ‘lent money in the Mallee, became impatient ‘during periods -of ‘drought and called Up thai .money or foreclosed and one in ‘particular “foreclosed .on so much .land that it appointed a special .supervisor of the properties taken over.
Shortly after ‘the ‘.Commonwealth Mortgage -Bank came “into being one client of ‘mine instructed me to apply to this ‘bank ‘on his behalf ‘for a loan and “the cumbrous slow methods .adopted ‘by ‘such bank <were ‘painful in the extreme. ‘The preliminary application consisted of four closely written pages and the formal application of eight closely written pages and this bank required particulars of the applicant’s assets and liabilities each year over -a long -period of ;years and detailed particulars -of his : income :and expenditure for each year ‘during such period and, most absurd of all, his detailed contemplated income and detailed .contemplated expenditure for the ensuing twelve “months. After many months df ‘correspondence and ‘the acme of trouble his application was rejected. Needless ‘to state I .have not :since had .another .application .to this bank.
I should say not We all know what the red tape of government departments is like. Another letter states - 1 am an elector and a taxpayer. I trust you will .help in the fight against the bushranging policy of the federa-1 gangsters who are undoubtedly disciples of Hitler under the cloak of -democracy. We left this country in 1014-18 to fight for ‘.freedom and democracy. Anzac will have been .in vain if Chifley and his gang drag us down to the level of Franco Spain. Thank you for - what services you can render along tie lines -of freedom from ‘this money grabbing dictator Chifley.
Not only -private individuals, but also companies, have engaged in the controversy. 1 instance the great dried fruits industry in the northern portion of my electorate, and quote the views of the Mildura Co-operative Fruit ‘Company, expressed in a letter written by Mr. Winterbottom, who .points this out -
The proposal of the Government to nationalize the Trading Banks is one, the magnitude of which, the government has failed to grasp. So far as the Trade, Commerce, Industry and “Rural Production of Australia is concerned, the Commonwealth Bank only serves !) per cent., this leaves 91 per cent, of Australia’s ‘business doing its banking with the trading ‘banks. This means that 91 per cent of the employees in the business of .the country, apart from -Commonwealth Government employees, are paid their wages by cheques drawn on ‘the trading banks. -All the businesses all -over ‘the Commonwealth have their goodwill established with the trading -banks, and some of :these businesses have been banking with the same bank for periods of many many years, CO and ‘70 years -is not -at ‘all uncommon, and this is all to be swept a-way without -either rhyme or .reason. A lot is being said about the banks causing depressions, but I .have seen .remarkable and magnanimous things done by .trading .banks for clients in time of .stress and -trouble..
The letter ‘concludes -
The Commonwealth Bank owes the trading banks £270,000,000 and the Government now proposes to -spend .£ £100,000;000 of the trading banks own ‘money to buy -them out. Surely this is the first time in Australian history when a debtor has bought out his creditors with their own money.
Another letter is from the Australian Dried Fruits Association, a major organization in .industry in this country. Others have come .from the Red Cliffs Chamber of Commerce, progress associations all over the country, fire brigades, branches of the Australian Natives Association, shire councils, ‘agricultural societies, the ‘Red- Cliffs Co-operative Packers Association, even sewerage trusts, and others -too numerous to mention. The Mildura and “District -Hospital Fund points .out -
We represent 4,000 subscribers, and .we emphatically .protest against the nationalization of banks.
I could keep on quoting similar letters. The .few that I have read are sufficient to show how the people of Australia feel about .this legislation.
The interests of banking are deep and vital, but I regard them as of secondary consideration. .There are interests that are deeper and more vital. I believe that the destiny :of .the Commonwealth of Australia .’is at .stake in this titanic political struggle.
I quote from Hansard this statement by the honorable member for Parkes (Mr. Haylen.) - .
When ex-servicemen write to me and .tell me that this Government is attacking the freedom for which they fought, I say that ‘they are labouring under a misapprehension ; it cannot ‘be anything- else.
The honorable member made that statement during the debate on the motion of want of confidence in the Government ,-n connexion with its banking proposals. I can answer it best by reading to the House a letter that I have received from the Boort, Victoria, sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, in which is stated a motion that was carried at one of its meetings, in these terms -
That the members of this sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia do hereby strongly protest against the Government’s proclaimed intention to nationalize the Australian trading banks, on the following grounds, namely -
That it would be undemocratic, and a direct challenge to our personal liberties, for which members of the league fought through two wars to preserve, and in which cause many of our comrades paid the supreme sacrifice. (ft) That it would split the nation and divert its energies at a time when these should be united towards recovery from the war.
– The action of that subbranch is contrary to the instruction given by the general secretary of the league not to enter this controversy.
– All that I can say to the honorable member for Parkes is that ex-servicemen cannot be under any misapprehension when they say that they fought for the liberties which the Government is now trying to override ; exservicemen who fought in the air, on the sea, and on the different battlefields, some of whom suffered the pangs of starvation at Changi, in Japan, and on railway construction, which the honorable member for the Northern Territory (Mr. Blain) so vividly remembers. If this bill establishes the basis of future life in Australia, ex-service men and women in this country will have reason to believe that they misunderstood what they and their comrades had fought, suffered and died for in two world wars. The people know these things.
– The honorable member is patriotically mad.
– It is a pity that we cannot get some true patriotism from the Government of this country. In his speech during the budget debate the honorable member for . Hindmarsh (Mr. Thompson) said -
The great difficulty with which the hardworking settler has to contend has not been lack of legislation but lack of rain at the right time.
Just before that, the honorable member had said that the trading banks had been the cause of his failure as a primary producer. He cannot have it both ways. Quoting again from the Hansard report of the honorable member’s speech, 1 read -
Australians must recognize that we cannot continue to prosper as we should like to do if other countries also do not prosper. We must realize that Australia is a unit among the great countries of the world, both exporting and importing, and our future depends not only upon our own budget but also upon the purchasing power of people abroad who buy our goods.
How can the honorable member reconcile those remarks with his previous statement in which he blamed the trading banks f ot the depression? How is it possible for an honorable member to change his views so quickly? It reminds me of a Tivoli act. As the honorable member said that he was in the Pinnaroo district, a letter which I received this morning from Pinnaroo will be of interest.
– I have never lived in the Pinnaroo district.
– Whether it was Pinnaroo, or Wallaroo, or some other district does not matter much. The letter was written by Mr. E. Venning on the 25th October, and is as follows: -
As one of the reasons given by the Government for the nationalization of private banks is that the private banks forced farmers off their holdings during the depression and sold their securities to the advantage of themselves, I have been dealing with my bank for many years and during that period 1 have received the best of service and advice. During the depression I was assisted, and wa* not sold up or embarrassed in any way, and I know that there are others who also have been assisted. I would appreciate it if you would make it quite clear to the Government that their statement is quite wrong.
I hope that I have made my point clear.
I shall make brief reference to the Prime Minister (Mr. Chifley) because, as Treasurer, he is responsible, in the first place, for the Government’s financial policy, and as Prime Minister he has much influence in his Cabinet. In his second-reading speech, he said -
No single factor can do more to influence the welfare and progress of a community than the management of the volume and flow of money.
I propose to put his words a little differently, and to make them read, “ No single factor can do more to. retard the progress of a community than the mismanagement of the volume and flow of money”. The right honorable gentleman went on to say -
Customers will not notice any difference a after the control of the bank with which they have been dealing has passed to the Commonwealth Bank. They will be able to continue their banking business without change or interruption. [f that be so, why make this great change? His speech continued -
The bill provides for the establishment of a Federal Court of Claims consisting of a Chief I udge and such other judges as are appointed.
What power will the court have? The qualifications of its members will be no higher than that of having served as a barrister for five years. Referring to the Federal Court of Claims, the right honorable gentleman said -
A determination of the court will be final and conclusive and not subject to appeal to the High Court.
In this connexion, I draw attention to clause 34 of the bill, which reads - -A judgment or order of the court -
shall be final and conclusive;
Honorable members will see the dictatorial attitude adopted by the Government. There is to be no appeal. That is in accordance with the policy of the Government as revealed in other legislation recently introduced. Such a policy is wrong, and will not have the support of honorable members on this side. The Prime Minister continued -
Industries will expand in all fields and we must extend our markets abroad.
In the light of the statements made by the Prime Minister, the attitude of the Minister for Transport (Mr. Ward) is interesting. According to a report in the Melbourne Herald, the Minister, speaking in New York in August last, on hearing of the Government’s banking proposals, said -
Controls are going to be exercised and the workers protected. Even if people abroad decide not to have anything to do with Australia. I am sure that Australians can develop their own resources.
I draw the attention of honorable members to the #f act that the opposite view was expressed by the Prime Minister. When speaking of the future welfare of Australia, the right honorable gentleman said in his budget speech -
Much depends, of course, on our success in expanding the volume of our exports and our policy is to ensure the maximum volume of exports consistent with meeting essential needs at home.
Obviously, his colleagues in the Ministry do not agree with that view. The Minister for Transport thinks that we can set aside our export trade, if necessary, and carry on as an isolated community. The Government should not be so divided ; there should be more logical thinking. It is clear that the bill has been introduced without proper consideration of its effect on the people of Australia. Reference was made by the Prime Minister to agricultural experts. Were it not for the damage which agricultural experts have caused in my electorate, their activities would be regarded as a joke. I have in mind the case of Mr. Percy Vaughan, who during the war had a basic wheat acreage of 400 acres. He also had 50 acres of self-sown wheat. He wrote to Melbourne and asked whether, in addition to his basic acreage, he could strip the 50 acres of self-sown crop which, he said, would yield about eight bags to the acre. The authorities wrote back refusing permission. He again appealed to them, and they wrote saying that he could strip the 50 acres of self-sown crop, but that he would have to leave unstripped 50 acres of his basic crop - which happened to be a heavier crop. He again wrote, and said that he- would use the wheat from the extra 50 acres to feed his own pigs and fowls, but. permission was once more -refused.
– It was a government of which the honorable member approves which brought in that provision.
– At the time of which I speak, the provision was administered by the Government which is in power to-day. Agricultural experts play havoc with the primary producers. In 1946, Mr. Lightbody, of Minyip, wrote, through me, asking for an increase of his basic acreage by 30 acres, in case the Government re-imposed acreage restrictions. The authorities wrote back saying that no farm in that district could be successful with a greater basic acreage, although every one in the district knew that on rich land such as that the area could have been increased. However, some one sitting in a city office would, not allow it.
Speaking a few nights ago, the Minister for Post-war Reconstruction (Mr. Dedman) quoted a series of headlines from various newspapers, for the purpose of showing how companies were making greater profits now than ever - that the profit of such and such a company was so much last year, while this year it had increased. My comment is that probably next year those companies will be acquired by the Government: However, let me also read some- newspaper headlines’. I did not make any particular choice, but the first newspaper I picked up was the Sydney Morning Herald, of the 30th October, 1947, from which I quote these headlines, “ Public service swelling - National trend unchecked”. The reportcites the latest figures, which show that Commonwealth employees- now number 159,210, an increase of 90,000. Then follows a comparison with the increases which have taken place in the productive industries - manufacturing 40 per cent., building and! construction 6.8 per cent., and agriculture 0.57 per cent. Government departments, in the same time, increased their staffs by 134 per cent. How can Australia progress while this trend continues unchecked ? Now, the Government has introduced this: bill for the nationalization of banking, which,, if carried- through, must have the effect of increasing still further the number of public servants. I quote again from the speech of the Minister for Post-war Reconstruction -
Far more people think they can use our resources than there are resources to use. Therefore, there will need to be careful, selection of those regarded as suitable.
Fancy this Government doing the selecting! We have had an example of the Government selecting men for overseas posts - every one of them defeated Labour politicians. We have also seen the Government selecting conciliation commissioners. We may be sure, that when the selection is being made of those, who are to develop the nation’s resources favorable consideration will be given to those who are prepared to serve the Government best, those who will bow to the Prime Minister. Most people who have bowed to him recently have been rewarded with very good positions. I, who represent the division of Wimmera in thisParliament, need’ explain myself no further: The Minister for Post-war Reconstruction made his greatest misstatement when he said -
True democracy cannot flower in this country until the- trading banks go.
Democracy in this country is past the flowering stage. We have been enjoying its fruit for years. Men and women in Australia have tasted its full flavour,’ and have seen fit to fight and die. in its defence; yet the Minister for Postwar Reconstruction says that democracy cannot even flower in Australia until the trading banks go. I leave it to the people of Australia to judge the truth or otherwise of that. The people know well enough that Australia has been developed in accordance with democratic principles, which were handed to us by our forebears to cherish and preserve, principles which we hope to pass on to future generations. That is what the people know, and it is in marked contrast to what the Minister for Post-war Reconstruction - a very irresponsible Minister, I may say - said in his speech in this House..
Prosperity does- not flow from unwise restrictions which interfere with, individual initiative. Such restrictions have been imposed in. great numbers by this Government. Much of the legislation introduced by the Government postulates that individual success is a national peril, and must be -shackled’ by a multitude of regulations, restrictions and rules. It postulates that industry can be developed only by the suppression of profits, and the cramping of the activities of individual business men. The truth is that the successful development of Australia was due to the freedom of individual enterprise, but this socialistic government will throw us back to the conditions which existed a century ago if it is allowed much longer to pursue its objectives. Progress was achieved by the initiative of men and women who wanted freedom, and who were prepared to do a little more, and do a little better - the people who were prepared to go the second mile. That i3 the spirit which made possible the development of Australia until it became the nation it is to-day.
When a man tells me that he believes in ‘the nationalization of banking I take no offence, because I believe that every man is entitled to his own opinion, but [ do take offence at the refusal of the Government to give the people of Aus- tralia the right to express their opinion on the subject in a referendum. If it were possible to place all the people of Australia in a big paddock-
– Like sheep.
– Well, since I am >a sheep man, I will take up the simile, and assume that the people are to be drafted into this pen or that, according to their opinions on this issue. If those who said they believe in nationalization of the banks were placed in one pen, and those who oppose nationalization of the banks were placed in another pen, what would I find ? In the small pen, among those who believe that there should not be a referendum, what would I find?
– A lot of fools.
– I quite agree with the -honorable member, but as I do not use that kind of language, I would find in that pen all the Communists, all the disloyalists, and, to use the words of the honorable member for the Northern Territory (Mr. Blain), all the “ratbags” and “ hillbillys “. In that pen also I would find every member of the ministerial party in this Parliament and in the (Parliament of Victoria. What would I find in “the other pen ? I would find some people who believe in nationalization of the banks but, a t the same time, hold that the people should be consulted on this issue at a referendum. I would find some people who think it is of the utmost importance to look after their money. I would not -pay much attention to them. But I would find also all those people who are loyal to King and country, who believe in the principles of democracy, honesty, justice and liberty.
We have defeated our external enemies; we must now fight the internal enemies of this country. Unless1 we defeat them we shall not reach the heights which are our destiny. If this legislation be implemented and becomes the first step .of .the future .policy of this country, we shall not justify the inclusion of the Union Jack in the corner of our -flag, because the Union Jack is the emblem of democracy; it -stands for freedom and justice, and we s’hall have no right to ‘fly it in ‘this country. ‘We shall have to tear it out of the corner of our flag. I believe that the great majority of -Australians will continue to fight against this legislation until they defeat it. The urge of democracy is irresistible ; people born in the light of free institutions will .not turn back into the darkness. T am reminded df the -words of Abraham Lincoln. No speech on freedom would be complete wi thout some mention of ‘him. He said -
A house divided against itself cannot stand. I believe that this Government cannot endure permanently, half-slave and half-free. I do not expect the Union to be dissolved. I do not expect the House to fall: but I do expcct.it shall cease to be divided.
If that great democrat could .look upon Australia to-day, I believe he would say, Th’is country, Australia, cannot long remain ‘free with a socialist government in its national ‘Parliament “. I do not expect our stubborn Prime Minister to deviate from his intention .to nationalize banking. I hope that the progress of Australia will not be unduly retarded; but I do expect the people of Australia to continue this fight in defence of democratic .principles.
- DEPUTY SPEAKER (Mr. Sheehy): - Order! The honorable member’s .time has expired.
– I wholeheartedly support the bill. Indeed, it is long overdue. I am pleased to be a supporter of a government which has the foresight and the courage to introduce this important legislation in the interests of the people of Australia. The principal objects of the bill, which are set out in clause 3, are -
Those objects are fair and reasonable, and provision is made whereby the Commonwealth Bank will take over the assets of the private trading banks on equitable terms. The arguments which are being used to-day against this legislation by honorable members opposite, the press and opponents of the measure outside the Parliament are the same as those which were directed against the Labour party and the Fisher Labour Government when it established the Commonwealth Bank under the Commonwealth Bank Act in 1911. Indeed, the same arguments were used against this Government when it amended the Commonwealth Bank Act in 1945. I well remember when the Fisher Government established the Commonwealth Bank to function in the interests of the people. As I shall show, it has functioned very successfully. Indeed, it has been far too successful to suit the private banking institutions. Those interests are represented by the opposition parties in this Parliament.
Under theCommonwealth Bank Act, the Commonwealth Bank was empowered to engage in every kind of business carried on by private hanks, including savings and general banking business. The bank was intended to compete actively with the existing private banks. Its capital was fixed at £1,000,000 to be raised by the issue of debentures, but, actually, the bank commenced operations without any capital whatever because it was backed by the resources of the nation. Its initial expenses were met by an advance of £10,000 from the Treasurer of the day, and the bank repaid that amount soon after it was established. It opened its doors on the 15th July, 1912. In order to show the value of the bank to the people of Australia, I shall make certain quotations. At the outbreak of World War I. a conference was held between representatives of the Commonwealth Bank and the principalbankers of Australia, as the result of which provision was made by the Commonwealth Bank to support any bank upon which the stress of war might impose too great a burden. Throughout that war the Commonwealth Bank continued to build up its position as leader of the Australian banking system. If a rush took place on any bank in Australia more tellers were placed on duty and normality was achieved within a few hours.
In London, it was the only bank, apart from the Bank of England, which did not observe the banking moratorium proclaimed there. During the war years, the bank conducted and assisted in the financing of many war-time commodity pools, raised and managed war loans, handled the greatly increased government business, provided facilities for members of the forces, and conducted numerous other operations naturally falling to it as a direct or indirect result of the war. Over £437,000,000 was handled on behalf of all the commodity pools, and war loans raised totalled over £250,000,000. That proves the importance of this fine national institution, which was established bya Labour government under the leadership of the late Mr. Andrew Fisher. The bank carried on very successfully until 1924. when the Bruce-Page Government realized that it was competing too successfully with the private banks. Prior to the 1924 elections the trading bankers and other financial magnates of Australia, realizing the enormous progress that had been made by the Commonwealth Bank, became alarmed at the prospect of it reaching the goal set for it by its founders. The then Prime Minister, Mr. Bruce, and the then Treasurer, the right honorable member for Cowper (Sir Earle Page), and other Ministers agreed to confer in Melbourne with representatives of the bankers and financial magnates. They were told that if they expected the financial support of the private banks they would have to carry out certain instructions. Upon a promise to do so being given, the necessary finance was made available to enable the parties supporting the government of the day successfully to fight the elections and to defeat the Labour party candidates. The Bruce-Page Government was returned to office, and immediately began to carry out its promise. Legislation was introduced amending the Commonwealth Bank Act by abolishing the position of Governor of the bank and providing for the control of the bank to be vested in the Commonwealth Bank Board.
As has been pointed out by honorable members on this side of the House, the board was composed of men representing private financial institutions, directors of big companies, and others who had had no interest in the functioning of the Commonwealth Bank and who were, in my view, selected with the object of retarding the progress of the people’s bank. Bankers, however, were not content with that, and they prevailed on the Government to take away from the Commonwealth Bank every vestige of competition with the private banks, with the result that the Commonwealth Bank became virtually an ordinary trading bank, trading hand in glove with the private banks. That state of affairs continued until 1941, when the Curtin Labour Government, by the National Security (Economic Organization) Regulations, restored to the Commonwealth Bank the powers it originally exercised prior to the 1924 legislation.
It has been contended by honorable members on this side of the House that the financial and economic depression which hit Australia and many other countries during the period 1929-33 was caused by the private banks. I have held that view for many years. I have always believed that the private banking institutions have controlled the destinies of the people, not only of Australia, but also of all other countries. They have dictated the policies of governments the world over. I well remember the attitude of the trading banks during the depression. Many hundreds of thousands of unfortunate people in Australia will never forget what took place during those dark and dismal years. By interjection, honorable members opposite have twitted members of the Labour party by saying that those conditions were experienced during the regime of the Scullin Labour Government. Nothing happened in this respect under the administration of the Scullin Government that would not have happened had any other government been in office. The Bruce-Page Government had been defeated on the floor of this House in 1929 because some of its supporters refused to endorse certain legislation brought before them, but, unfortunately, only the House of Representatives was dissolved. At the ensuing elections the Labour party was returned to office with an overwhelming majority. Unfortunately, it had an overwhelming hostile majority in the Senate. However, when the Scullin Administration occupied the treasury bench - in office, but not in power - and the then Treasurer, Mr. Theodore, took stock of the position, he found that this country was on the verge of bankruptcy. He re-submitted to the Parliament the Estimates that had been presented by the Bruce-Page Government, but had not been passed when that Administration was defeated. I shall quote from a speech made by Mr. Theodore on that occasion, because it goes to show the position in which the Scullin Government was placed, and the part that the private banks played in the attempt by that Government to extricate this country from its awkward plight. Mr. Theodore said, amongst other things -
Since the new Government assumed office there has not been sufficient time to call for fresh estimates in detail from all departments and construct an entirely new budget based upon the policy of the new administration. Therefore, the major portion of the Estimates of the late Government has been adopted.
It was the duty, however, of the new Government to examine the Estimates and revise and amend them so far as was necessary to disclose the true position of the Commonwealth finances. This examination revealed that in. some important instances the late Government had greatly understated the expenditure requirements and over-estimated the probable revenue. The late Treasurer has grossly miscalculated both the cost of the definite commitments of the departments and services for the year, and also the probable revenue.
It is now apparent that if the actual requirements of the year had been provided for in connexion with war pensions, repatriation, other war services, old-age pensions, iron and steel products bounty, prospecting for oil and sundry other items, for all. of which definite- commitments had been entered into, the estimates of. expenditure should have, been increased’ by approximately £500,000.
He went on further to say -
It is. also apparent that the customs and excise, revenue,, laud tax. and. income tax, and other receipts would have fallen short of the estimate by at least £1,050,000. The late Treasurer would, therefore have finished’ the year with a deficit, of about. £1,200,000, instead of a surplus of £300,000 as promised, by him in. his budget, speech..
In conclusion;. Mr.. Theodore said -
P think- if will- be generally^ realized* that’ the’ new Government, has. assumed control at. a. period of extreme difficulty. We inherited an empty treasury, and an impaired credit at home and abroad. However, we do not view the future with alarm or pessimism. Australia has wonderful recuperative powers, and. a stout-hearted and industrious community. If we are blessed with good seasons, our troubles will soon disappear, and we shall commence a new era of progress and prosperity.
I” reget that printed” copies of the -Estimates are not available for- circulation;
On many occasions, and once again inthe course of this debate, the right honorablemember for Cowper has endeavoured to mislead this House and. the people of this country in- regard’ to the- positionin which- the Scullin Government found itself when it assumed office. Literally; Mr: Theodore found the Commonwealth Treasury empty: Figures have been quoted1 to- show that there, was- only l:2s. 6d’. in the £1’ in the Treasury with which to pay public servants and meet all1 other governmental expenditure. The country was. practically bankrupt.. For that reason, the Scullin: Government was compelled to do certain’ things-; but L remind honorable members- that thesethings were done with the support of. the parties- then,, and now,, in opposition..
– The proposal’s were introduced’ by the Scullin. Government.
– The Scullin Government w.as compelled to introduce them, or to default*.. Had ifr nott acquiesced, public servants; and all those in receipt of Commonwealth social services, would have, been deprived, of their income.. And what did1 the banks’ do ? I say confidently that Mr. Theodore was one of Australia’s most. able. Treasurers. He and the then- Prime Minister, made. overtures ,to the banks- for assistance. When the Scullin Government came’ te power Australia has a1 substantial adverse trade balance. Both exports and import’s had fallen considerably, with the result that’ the Australian economy was in a perilous position - much more perilous than- the people of the country realized. The task of bringing- our finances back to an even keel was left to Labour, and records prove that, notwithstanding all the obstacles that confronted the Scullin Administration - a hostile Opposition, press, and banking system - it was able to hand over to the succeeding Lyons Government a sound treasury. In addition, an adverse trade balance of approximately £20,000,000 had been transformed into- a favorable trade balance. It is true that the Labour government of those days was compelled to do many unpalatable things, and’ I make no apologies to-day for those actions,, but there would have been no necessity for them had the banks played their, part. Whilst I shall not say anything about who was responsible for bringing Sir Otto Niemeyer to this country. I remind honorable members that, when that gentleman left, his parting words were to the effect that, regardless of. the consequences to the people of this country, the Australian Government had to. tighten its belt. ‘Of. course;, in saying., that,, he was carrying out the- instructions! of the international banking institutions, and the Australian private banks.
I frankly admit that I have had my share of protests and petitions against, this legislation.. I have duly handed themover to. the. Prime Minister. (Mr. Chifley)-, but I am. convinced, that most of them, have been signed and forwarded under duress-. I do. not wonder that this bill, is. meeting- with bitter opposition from honorable members opposite, the; privatetrading banks> and the press’.. In my opinion this- is the most courageous- legislation. ever ‘ introduced- into- this; Parlia-ment”, or any other democratic, parliament’ in. the world. I am proud! to. be1 asso-dated: with a”, government; with the courage, to Bring down this, legislation; I. am satisfied’, that people” who. signed: the-, petitions; and other protests’ had no: idea off the” contents: of this- bill whew they signed. I believe,, too, that most1: of’ the signatures are those of employees of the private banks and their friends.
– Do not delude yourself.
– I am not deluding myself. I am saying what I believe to be true.
– The employees must have a lot of friends, because there are not a great many employees of the private banks.
Mn GEORGE LAWSON.- Any way, the petitioners are only a small minority of the Australian public. I am speaking . for myself. Let the honorable member for Moreton (Mr. Francis) speak for himself when he gets the call. I know the petitions and protests that I have received. It is only natural that the unfortunate employees of the private banks should have been stirred to protest by the wicked and poisonous propaganda of honorable members opposite, their friends, the private bankers, and the press, that the Government intended to confiscate this and that and that they would be thrown out of employment, but that fallacy has been destroyed by the bill itself and the second-reading speech by the Prime Minister in explanation of it.
Every honorable member on this side of the House is pleased that provision has been made to protect the employees and all those associated with the ramifications of private banking in this country. We should have been deeply dis- appointed if that, provision had. been omitted. I am not at all concerned, though, about the bankers, themselves, because, they have looked after themselves very well throughout the. years in. which they have been allowed to conduct banking. My main, concern is that the people shall be given a. better deal now than they have been in the past. I know a lot about the conditions of the employees of private- banks;, because,, for many years before- 1 entered the Australian Parliament, I. was connected with the. industrial movement and. saw many industrial organizations formed. Indeed,. I was closely associated with the formation, of most’ at them. I. know what took place in. Queensland, as far as? the employees, of private banks are concerned. When the first bank officers’ association was formed, its officials were looked upon by the bankers as black snakes. All sorts of threats were made against them. Some of them were dismissed and were never able to regain their jobs. In those days, the employees of private banks were the lowest paid of any employees. I heard you, Mr. Speaker, refer once to the fact that they were bound hand and foot by regulations. One regulation, which, I think, still exists, was that no employee could marry until he received a certain income, and, even then, he had to get the sanction of his employer, the banker, before he was permitted to take unto himself a wife. Thank God, no such a restriction on. the freedom of employees in any other branch of industry in Australia has- existed in my experience. The Bank Officers Association battled along until the establishment of the Common^ wealth Bank. As it grew and employed extra staff, the members of the staff formed their own association, and, ever since, the employees of the private banks have taken their lead from the conditions given to Commonwealth Bank employees. Every time advocates of the private Bank Officers Association appear before the industrial courts, they found their arguments on the pay and general conditions of employees of the Common*wealth Bank in order to ensure that their members shall enjoy similar pay and conditions. So the employees of the private banks have not anything to fear, because this Government will never do anything to interfere with their conditions of employment, or, indeed, the conditions of the employees in any branch of: industry.
– Yet they are almost wholly, opposed to this legislation.
– The honorable member, is entitled to his own opinions; but I am. convinced that, the majority of the employees of the private banks are not opposed to. this Government. They may have signed petitions:’ of protest; against tha nationalization: of; the; private banks; but it is’, significant that’ 60; 80 off 100- signatures’ on petitions arrive in. envelopes bearing, the names of the banks” in< which, the- signers’ work-:
That shows conclusively that they were coerced or intimidated into signing and were told plainly that, when the Australian Government took control, their jobs would be gone and they would be out on the street.
Never before in my political life have I been so keen on supporting a measure as I am on supporting this one. Thank God, I have lived long enough to see this legislation brought down. I regret the absence of the honorable member for Darwin (Dame Enid Lyons). Had she been present, I would have taken the opportunity of replying to some of the things she said. She did refer to the 1 921 conference of the Australian Labour party at which this policy was formulated. I take this opportunity of expressing my pride at having been a member of that conference. My opinions then are my opinions now. I have never deviated one iota from them. If anything, I am more convinced to-day than ever before of the absolute need of the people of Australia for this legislation. Every one in Australia knows, except those who do not want to know, what the private bankers and financial magnates have done and how they have done it. I remember when a former Treasurer, Mr. Theodore, sought the assistance of the private banks during a period when Australia was on the verge of bankruptcy. The Scullin Government had only sufficient funds in the Treasury to pay 12s. 6d. in the £1 of its committments. I was not a member of this Parliament then, but I have a very clear recollection of events.
In response to Mr. Theodore’s appeal, the Commonwealth Bank said, in effect, that although it was not prepared to assist directly it would co-operate with the private banks, provided that the Government did certain things. The banks stipulated that the Government must reduce social services and other items of expenditure. Having insufficient money for its purposes, the Government was forced to comply with that demand. It was in office, but not in power. It tried to pass a bill which would have enabled it to survive the crisis, but it was powerless to do so. The bill was for the purpose of raising a fiduciary note issue amounting to about £20,000,000. This would have enabled the Government to carry on and meet all of its commitments. Most of the issue would have been used for reproductive works, which would have provided employment for many thousands of people and placed money in circulation in the community. However, the Government was defeated by the Opposition and its masters, the banks and other financial institutions. Although the House of Representatives passed the bill, the Senate, where the Opposition had a majority, postponed it from month to month. The result was that the Government was hamstrung. Eventually, it went to the country, and the Opposition parties were elected to office under the late Mr. J. A. Lyons.
Did the new Government provide the work, food and shelter which were needed by hundreds and thousands of unemployed Australians? Of course not! It remained in office throughout (he .remainder of the depression, but, in 1937-38, thousands of unfortunate citizens were still travelling the roads, grateful for any chance to do an hour’s work. As the honorable member for Hunter (Mr. James) said, youths who had never had a job were turned out of their homes because their parents could not afford to keep them on the income from the dole, and they themselves were ineligible for the dole unless they left home. They were compelled to walk from town to town for the sake of receiving an allowance of 5s. or 6s. a week. This state of affairs continued throughout the term of office of the late Mr. Lyons. Even when war broke out, hundreds of thousands of men were still out of employment. What did the banks and other financial institutions do about this sorry state of affairs? Nothing! The Commonwealth Bank, hamstrung as it was, was powerless to help, even though it was anxious to do something to alleviate distress. It was forced to operate hand in glove with the private banks.
This bill is long overdue, and I welcome it. Our opponents are endeavouring to make political capital by declaring that it will deprive the people of their freedom, of the right to bank where they wish. They, also claim that it is a socialistic measure, the terms of which have been dictated by the Communist party. That is a wicked, untruthful statement, and they know it. For years they have accused the Labour party of being in league with the Communists. They dropped the cry for a while, but they are now using it again as a weapon against this Government. If I am a competent judge - and I have had a great deal of political experience - this Government will be returned to power with an overwhelming majority at the next elections, when the people have had an opportunity to observe the operation of this legislation. This Government is not controlled by the Communists. At least three honorable members opposite from Queensland know of my fight against the Communists, and what it has cost me. No man in Australia has suffered more than I have suffered physically because of my temerity in opposing them. I still hold the opinion which I have always held about communism. However, we are a freedomloving people, and we believe in freedom of thought and speech. The Communists enjoy equal rights with other citizens. The fact that they may support this bill - is no indication that they support the Government. They have a perfect right to support whatever policy they wish, and I notice that they support the Opposition more often than they support the Government. I and other honorable members on this side of the House have been opposed by Communist party candidates at elections, but rarely have honorable members opposite been so opposed. That proves, if it proves anything, that the Communists support the Opposition parties, not the Government. This is not a Communist-dictated bill. The Labour party planned this measure long before the Communist party came into existence in Australia. It has remained faithful to its policy, and I am pleased that the Government has at last decided to put it into effect. It will be of benefit to all Australians, particularly to those who will be employed in the new Commonwealth Bank organization.
.- The honorable member for Lilley (Mr. Hadley) and the honorable member for Brisbane (Mr. George Lawson), treated the House this afternoon to two extraordinary speeches. Both honorable members began with loud, confident, ringing tones. They explained that when they rose to support the bill, it was one of the happiest moments in their lives. But in weakening voices which had almost faded away at the conclusion of their addresses they endeavoured to apologize for having to vote for the bill. Never in my parliamentary experience have I known such double-crossing and manoeuvring. That exhibition should convince the House that at least those two honorable members are “ whistling in the dark “ in an effort to keep up their courage. Both of them made similar speeches. They blamed the private financial institutions in Australia for all the economic difficulties that have ever afflicted the world, and particularly the financial and economic depression of 1929-33. Such nonsense and “ hooey “, I have never heard before. The honorable member for Lilley told a story about land “ grabs “ in 1893. He devoted a good deal of time to recalling what Gladstone said about credit. Apparently, he did not understand it, because he read that part of his speech very badly, and apart from that, the subjectmatter was not worth reading. He also explained that in mediaeval Europe some hapless people had been boiled in oil because they advocated monetary reform. Then he repeated the hoary chestnut that Sir Otto Niemeyer came to Australia, collaborated with the banks and made the financial aud economic depression in this country worse than in any other.
I am not here to apologize for the trading banks, and my purpose in referring to this subject is to correct the mis-statements which the honorable member for Lilley and the honorable member for Brisbane made this afternoon. The banks did not cause the financial and economic depression of the ‘thirties. If honorable members will make careful examination of the facts, they will find that the depression of the ‘thirties, of which both honorable members spoke so glibly, occurred first in Europe and the United States of America, and spread to other parts of the world. The cause was attributable mainly to the decline of the prices of primary products. The Australian banks - and their record is perfectly clear - cushioned the severity of the depression here. They suffered considerable losses. I shall give the figures to prove this. The trading banks honoured their obligations ‘ to their depositors, and have a record of which any public institution may be justly proud. The decline of the prices of primary products, which Australia exports, was catastrophic. Wheat fell from 5s. 6d. a bushel in 1927-2S to 2s. 6d. a bushel in 1930-31. In the same period wool declined from ls. Sd. per lb. to 9d. per lb. At that time, Labour governments, Commonwealth and State, were living in accordance with a policy of “ borrow, boom and burst “. When they were no longer able to obtain loans, Australia began to suffer a depression. To-day, the price of wheat is nearly £1 a bushel, and the price of scoured wool is 99½d. per lb. These comparisons prove that the decline of the prices of primary products was a substantial cause of the financial and economic depression of the early ‘thirties. The trading banks were not responsible for it. The present high prices for primary products is the reason why, in spite of this Government, Australia is enjoying a measure of prosperity. As honorable members opposite have heard these facts on many occasions, I am. amazed to find that some of them still endeavour to push around a long-defunct stalking horse.
Despite what honorable members opposite have said, the trading banks actually increased their advances from £222,000,000 in June, 192S, to £239,000,000 in June, 1931. In the same period, deposits fell from £273,000,000 to £259,000,000. If time permitted, I could read the opinions of many prominent people who took an active interest in the conditions in Australia in the early thirties, and refer to their part in helping the country to emerge from the effects of the depression. I place on record again that Sir Otto Niemeyer was not brought to Australia by the Lyons Government or at the request of English or Australian financial institutions. He came here at the invitation of the then Treasurer in the Scullin Government, Mr. E. G. Theodore, for the purpose of conferring with him. Sir Otto Niemeyer did not cause the depression.. Nor were the banks responsible for it. As I have placed these facts on record, I hope that honorable members opposite will refrain from attempting to misrepresent the position. Lest they decline to accept my statements, I quote some of the observa- tions which were .made by responsible men. A former Prime Minister, the late Mr. J. A. Lyons, said -
Had it not been for these institutions-
He referred to the private banks - we should have been faced with complete and inevitable collapse of everything worthwhile in this country.
The Royal Commission on Monetary and Banking Systems, in the report issued by it in 1937, said -
There is no justification for the view that the trading banks, in order to enlarge their profits, deliberately expanded credit to produce a boom and then contracted so as to produce a depression.
Despite those statements, the honorable member for Brisbane and the honorable member for Lilley made assertions which are emphatically denied by the report of that royal commission. It is futile to have royal commissions if honorable members opposite will not read their reports. Professor Copland, who was the economic advisor of this Government for a long time, wrote-
In the second place Australia did not waste all her gains for the years of prosperity. She had very substantial exchange reserves (London funds and internal gold reserves). Banking policy was responsible for this, not only the policy of the Commonwealth Bank, but also the policy of the trading banks.
In other words, the private banks were, one of our sheet-anchors during the financial and economic depression. Although Professor Copland paid a tribute to their efforts, honorable members opposite choose to disregard these truths and repeat ad nauseam that the banks were responsible for the depression. Professor Copland also expressed this view -
During 1933 and 1934 Australia was no longer feeling her way. She firmly trod the path towards recovery, which was less difficult for her than for most other countries owing to the policy she laid down in 1931 and 1932.
That policy was framed at a conference of Commonwealth and State Ministers, but honorable gentlemen opposite have implied that it was formulated ‘by the political parties which now constitute the Opposition in this Parliament. The truth is that ‘the Premiers’ plan was introduced by the Scullin Government. We, who were then members of the ‘Opposition, supported it because we believed that it provided the only way in which to restore cOn’fidence, and to :*ive ‘the people hope. The adoption of that policy enabled the Lyons Government, and those associated with it, speedily to restore confidence, and Australia rapidly regained an even keel in the economic sphere. Unemployment declined at a greater rate than in any other country. I have before me figures showing the percentage of unemployment in Australia, the United Kingdom, the United States of America and Canada for the years 1932 to 1937. Those figures show that the percentage of unemployment declined in Australia from 29 in 1932 to 9.3 in 1937, whilst the percentage in 1937 in the United Kingdom was 10.5, in the United States of America 15.8 and in Canada 12.5. 1 do not wish to occupy any more time in replying to the extraordinary assertions of the two honorable members opposite, who did .their’ best in :their speeches to apologize for the introduction of this measure by the Government. In one breath they said that the introduction of this measure was the happiest moment of their lives, whilst in ,the next breath they sought to justify the Government in taking such revolutionary action. I regard the hanking bill as the most immoral one ever introduced into a British parliament. Because of that I intend ‘to put every obstacle I can, both inside and outside Parliament, in the way of the Government implementing its proposals. The bill attempts to bribe the shareholders of the trading banks, and it seeks to seduce from their allegiance the directors of the banks who have been appointed to their positions by the shareholders.
The Government proposes to establish a ‘hand-picked court to decide claims for compensation. I have never heard of such a contemptible proposal by any government, and it shows clearly that the Government will stop at nothing. The Government knows very well that it is only a matter of time when the axe must fall upon it and its members will be obliterated, just as the Scullin Government was in 1931. I believe that the dishonesty and audacity of the Government is resented by a vast majority of the electors, and they will, no doubt, express their Resentment .at the next elections.
When the Banking Act 1945 was enacted, *the ‘trading banks Were given a licence to carry on from year to year, and there was no suggestion made that they were to be wiped out in a moment. The passage of that legislation authorized them to continue to function. Yet this Government proposes, without any mandate whatever, to wipe out the trading banks which have done so much for the development of the country. This totalitarian, dictatorial action will be resented by the people even more when they appreciate the dangerous implications of this legislation. It represents a complete repudiation of the pledges given to the electors by the Australian Labour party. The proposal put forward then by members of that party was that the present associated trading banks were to function in co-operation and competition with the Commonwealth Bank, and no suggestion whatever was made, either in the policy speech delivered by the present Prime Minister or in that of his predecessor., the late Mr. Curtin, that they should be nationalized.
The introduction of a bill of this type reduces political -morality to the lowest possible level. Members of the party opposite sought the suffrages of the people with a mild proposal, and, having been elected to office, they proceed to implement an entirely different policy. The Government is introducing gangster “principles in levelling a pistol at the heads of bank shareholders. It is inviting them to surrender their shares by agreement, holding out the inducement that income or profit arising from such transactions is not to be taxed; but if they do not surrender their shares they are to be subjected to heavy taxation. It is attempting to re-impose the conditions which operated in the time of Charles I., when Hampden asserted the right of the people to resist tyrannical government. To-day the freedom and liberty of every individual are in the balance. The Government’s action conforms to the general pattern it has ‘woven of totalitarian dictatorship. I know that the Prime Minister ‘always squirms when ally one refers to his actions as being totalitarian or. as savouring of ‘dictatorship, but the fact remains that all free men, and all who love freedom, must be prepared to ‘fight this issue. The fight is not for the banks, but for the people of this country whose freedom is at stake.
The Prime Minister has been unable to point to any authority for the action which his Government is taking, and he cannot point to any, because he has no constitutional mandate. In proceeding with his attempt to enact this proposal he exhibits an utter contempt for the electors, and manifests a dictatorial attitude on the part of his Government, which is determined to legislate in defiance of the public will. The Government is denying and repudiating the rights of democracy, and is treating the electors with scorn and indifference. In his policy speech the Prime Minister described the Banking Act 1945, which treated the trading banks as an integral and continuing element in the system, as being, in effect, sufficient for his party’s purpose. He went on to say -
In short, the Government’s hanking legislation has been designed to adapt the - banking system to present-day conditions and to provide the Commonwealth Bank, as Australia’s central bank, with adequate power to serve the national interest.
At most he sought approval for “ adaptations of the banking system already made”. It cannot be contested that the Prime Minister, when he delivered his policy speech, gave no indication of his intention to introduce legislation of this kind. The basic principles of Parliamentary democracy require that a party t> bich puts forward certain proposals when seeking the suffrages of the electors must be prepared to carry out those proposals; and that, conversely, it is not empowered to carry out radical proposals which it has not enunciated. This Government never at any time submitted to the people the principles embodied in this legislation. Indeed, in the light of its present intentions, its action at the time of the last elections indicates that the policy which it put before the electors was a bogus one and that it had no intention of implementing it. The proposals which it placed before the electors were mild, kid-gloved ones; but when it was elected it sought, almost immediately, to implement proposals of an entirely different type. The Government has followed similar tactics to those adopted by Mussolini and Hitler, tactics which are the very negation of democracy.
This bill is intended to force the finances of the country into one channel, which is to be controlled by the Government. The financial affairs of every business concern and of every citizen are to be directed and controlled by government ‘servants. The passage of this measure will create a highly dangerous government monopoly, because it will deprive citizens of their right to choose the institutions which are to handle their financial affairs, and eventually it will deprive them of their freedom. It will inevitably lead to a poorer standard of living. Industrial conscription of manpower will follow as surely as night follows day. Passage of the bill into law will involve the expansion of irksome controls of all kinds, and will complete the regimentation of the people. It will replace confidence with a feeling of doubt and insecurity. That leads to fear, and once fear stalks the land that is the end of stable government. With a complete monopoly of banking, the Government can take over any business whatever, and the individual will be placed even deeper in the toils of a swelling Commonwealth bureaucracy. If the banks are nationalized other industries will follow quickly. What are the industries which are to follow - insurance, broadcasting, the press, heavy industry or shipping?
I do not attempt to prophesy which industry is to be selected first, but I believe that ultimately they will all be nationalized. The possibility that those industries will be nationalized must create an atmosphere of insecurity and doubt of the future of free enterprise. Free enterprise now employs more than 80 per cent, of the workers of this country, and the creation of a state of uncertainty can only work the most serious harm to our economic progress. Pear, doubt and uncertainty interfere with the forward movement of any government. What the nation needs to-day is not fear of its own development, but, above all, production and still more production, brought about by confidence, harmony and co-operation between all parties in industry. Goodwill will be lacking under this legislation. -There will be no pulling together. Fear will stalk the land. It is clear that the Government desires to set up a financial dictatorship, which will completely destroy goodwill and co-operation. Fear, distrust, frustration and despair in the community, with the consequential loss of confidence, will completely destroy the whole of the economic life of a nation. The methods that are being adopted for the establishment of a financial dictatorship follow the totalitarian design to which I have referred. I remind honorable members opposite that those methods include the lowest political practices of the bludgeon and the bribe, and the abrogation of the right of our citizens to the protection of our courts, by the establishment of specially selected tribunals, composed of picked individuals, with no appeal.
Never in the public life of this country has more immoral legislation than this been introduced in the Parliament. The volume of protests throughout the country has1 become thunderous, and is without parallel, to my knowledge or from my reading, in our history. At a time when there should be political co-operation, harmony and goodwill, and the Government should be doing everything possible to increase production, more than one-half of the community is filled with fear, and is fighting against these communistic proposals of the Government. Ten thousand persons who had never before been vocal on political issues have been aroused by righteous indignation to storm this House with petitions. Public meetings are being held in every town, hamlet and village throughout Australia. I have received more than 20,000 letters, more than 3,000 telegrams, and petitions containing many thousands of signatures which I have presented to the House and the Prime Minister. Those petitions are spontaneous, because the people fear what is going to happen as a result of this legislation. At public meetings similar protests are voiced. The people claim that they should be consulted before revolutionary steps affecting their personal freedom and liberties are taken. The Government should either consent to a referendum and thus obtain a mandate from the people, or take its courage in its hands and appeal to them at the polls.
I should like to quote extracts from one or two letters that I have received in this connexion. There are a few ex- firemen and locomotive experts in the ranks of the Government and its supporters. The first letter from which 1 shall quote was sent to me by a locomotive driver in the railways workshops, Ipswich, who said in it that he had always been until now a prominent member of the Labour party. He went on to say -
This letter is posted to register the vehement protest of a free-born Australian against the perfidious legislation with which the Federal Labour party proposes to fetter, emasculate and destroy democracy. . . .
Continuing, he said -
A suburban storekeeper in my area - essentially a working man’s shop - avers that nearly all his customers are hostile to Chifley and the Government’s measure; and I can positively assert that in the loco in Ipswich (I am a locomotive driver) all but a few died-in-the-wool Communists and Labour feetwashers are strongly opposed to the Government’s despotical, irresponsible proposals.
An ex-locomotive. driver is in charge of this House. I wish that he shared the views of my locomotive friend in Ipswich. I should like to know what has gone wrong with the Prime Minister. Has he gone “ loco “ ? He has “ run off the rails “, and the nation will be wrecked if we and those who are co-operating with us are not able to save it from the threatened disaster. Let me read another letter that I have received from an ex-serviceman -
I desire that you enter my protest against the Federal Government’s plan to nationalize the trading banks. I went through Hell, with a capital aitch, along with you and thousands of others, in 1017 in order to protect my personal liberty. This scheme is nothing more than an attempt to take away that liberty so dearly bought.
I emphasize that. I read in the press to-day the report of a meeting of the Moreton district executive of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia that was held at Laidley. That district covers a very large area, and embraces the major portion of southern Queensland to the electorates of Moreton and Darling Downs, as well as , in the other direction into a portion of the Griffith electorate. With only two members dissenting, the meeting opposed the banking proposals of the Government. Those who attended it clearly indicated, by the discussion that took place, that the organization is entirely non-sectarian and non-political. They view these proposals very seriously, in the light of what they have been through and suffered, and the fight they have waged for liberty. A large number of them served this country well in World. War II. Ex-servicemen opposite ought to think twice before bringing this country into chaos by supporting this proposal. I say to the 25,000 or 30,000 people who have written and sent petitions to me, as well as to the people of Australia generally, and Victoria particularly, that the time they have so far spent in opposing these proposals will have been wasted unless they carry their objection to its logical conclusion, by fighting them in season and out of season, organizing, and voting against them,. and voting against any per1 son who,. whileclaiming to be a Labour man; support’s them. Everybody who has written, sent telegrams, or signed petitions, is under the obligation to work and vote against the Labour party. If they do that, they will honour the undertaking that they gave when they wrote letters, sent telegrams- and signed petitions of. protest. This country will never be safe; nor will its people feel secure, while there is in power a Labour government able and willing to introduce legislation of this kind. The only way to prevent chaos is to remove Labour from office. Russia and Argentina are the only countries in which the banks have been nationalized.
– That, is not so.
– Even after an absence of many months, during which he toured Europe and other countries, the honorable member for Martin (Mr: Daly) does not know everything. He still has a lot to learn. I shall remind honorable members on the government benches of a few facts. Among them is the following- statement made by Lenin, the high priest of communism. Addressing a Bolshevik conference in April, 1917,he said -
We are all agreed that the first step in this direction (i.e., towards communism) must lie such measures as the nationalization of the banks. Let. us put into practice these and similar measures and we shall see.. Wecannot at once nationalize the small consumers’ concerns- i.e., one or tw.o wage workers - or place- them under a real workers’ control. Through the nationalization of banks they will be tied hand and foot.
That is the object of the present Government. We on this side ask that the people of Australia shall continue to enjoy the liberty for which they have worked and fought. They do not want to be tied hand’ and. foot. I. draw attention to another observation by Lenin; it is an extract from his book Preparingfor the Revolt -
It is essential to proceed immediately with the nationalization of the banks, insurance companies, and the most important branches of industry. . . . One State bank as huge -as possible with branches in every factory - this is already nine-tenths of the socialist apparatus.
The Prime Minister’s policy, under which all the trading banks in Australia would be combined to form a great banking monopoly, is the policy of Lenin. Honorable members will be interested also in the following statement of Mr. C. H. D. Cole, a. famous. British socialist economist -
Before a Labour government nationalizes any other productive industry, it should nationalize the banks. . . . With the banks in our hands, we can take over other industries at our leisure.
It will be seen that the Government is? blindly following the lead of Lenin and others with similar views. The proposals in this bill are in line with Communist doctrine. Men like Mr;. Sharkey, the” federal president of the Communistparty in Australia, are throwing their weight behind the Labour party in the Victorian State electionsbecause, as Communists, they believe in the nationalization of banking: Mr: Sharkey hassaid -
We do not claim that bank- nationalization is the sovereign remedy of all the evils’ of’ capitalism. We must go. farther. The key industries must be brought in. This is only the commencement, but it is an important commencement - the most important step even taken by the Labour movement- here. We must support it.
Communists in New South Waleshave flocked to Victoria to assist in the election campaign there, because the parties opposed to Labour have made the nationalization of banks the main election issue, and have asked the electors of Victoria to register their protest in the ballot-box. I am confident that the people of that State will rise to the occasion and cast an overwhelming vote against these proposals, thus demonstrating clearly that they object to the nationalization of banking, believing that it would destroy Australia’s economic structure and deprive them of the liberties which they have enjoyed hitherto, and for which they have struggled and fought.
Sitting suspended from 6 to 8 p.m.
– I desire to inform the House that the Right Honorable the Earl of Scarbrough, G.C.S.I., G.C.I.E., a member of the House of Lords, is within the precincts of the chamber. With the concurrence of honorable members, I shall invite him to take a seat on the floor of the House beside the Speaker’s chair.
Honorable Members. - Hear, hear !
Lord Scarbrough thereupon entered the chamber, and was seated accordingly.
– This bill openly offers bribes to the directors of the trading banks, by inviting them to sell out their honour, and betray the trust imposed on them by the shareholders, in return for taxation concessions. The bill proposes to establish a. hand-picked’ court to decide the amount of compensation, to be paid to the shareholders for the commandeering of their property, and. it refuses the shareholders the right of appeal’.. This is the first time the proposal has been put forward in an Englishspeaking community that this right of appeal should be denied. These are the tactics of the bushranger and the highwayman: Two years ago, in the Banking Act 1945; the private banks were, in effect, given a charter to carry on indefinitely. They were not. then told that they would be wiped out. without a mandate to do so being given to the Government, or without their enjoying the right of appeal. The Government has received no- mandate to do what it proposes to do, andthe Prime Minister has not claimed to, have one; The introduction of this legislation is the act of a totalitarian dictator. It is a repudiation of the policy upon which the Government went tothecountryatthelastgeneral elections. That policy included the continuation of the present banking system. The present proposal exemplifies the lowest possible standard of government, and I protest against it. I say, further, that it amounts to the act of a gangster, by pointing a pistol at the heads of the trading bank directors and saying, “ Surrender your money without protest, and’ we will not tax you. If you refuse to surrender, you’ will be taxed “.
This legislation is, as a matter of fact, an effort to bring about unification of government in Australia. I say to the people of the remote States - Queensland; Tasmania, South Australia and Western Australia - that by the nationalization of banking, together with uniform taxation, the States will become political nonentitles to an even greater degree than is the case to-day. The State governments will be wiped out, and the Labour party’s policy of unification will be implemented. The nationalization of the banking system would mean that the States, as States, would no longer enjoy political independence.
Other speakers have pointed out that, this legislation must be viewed against the general socialistic policy of the Labour party. It is not just a coincidence that the Labour party, at the time of its adoption of the socialization objective,abandoned the two planks of its platform; advocating “ The cultivation ofanAustralian sentiment “,. and “ The development of a self-reliant community”. It was the only logical thing to do, because the Communist authors of the socialist objective recognized that it could not. march together with those other two objectives. The Australian sentiment favours freedom, initiative and progress; and these cannot exist ina socialized community., The Australian people ought to realize; as I think they do, that this proposed legislation is not just the beginning of regimentation, but is actually the keyto it - that it opens upa vista of queues, black-market’sand bribery, because no socialized, State is ever likely to have- enough ofthe things we want.
Under a system of complete socialization the people cannot retain ownership of private property, and since Labour lias set out to socialize the means of production, distribution and exchange, the individual cannot retain the ownership of property, with the exception of his clothes - and even his clothes are three times as dear as they were in 1939. What is more important still, socialism means the loss of our freedom. The socialization of all enterprises conducted for profit must include the socialization of the press and radio, with the result that there will be no vehicle of public opinion in opposition to the Government. No injustice can be ventilated except by a method of filling in endless forms, which will eventually choke the pigeon holes in government offices.
The deadly effect of the Government’s proposal can be stated briefly and simply : It is dangerous and unsettling to our people. It is destructive and frustrating - destructive of a hanking system which, despite all criticism, has served Australia well through for over a century ; frustrating because it will mean the extension of central Commonwealth control into every industry, into every business house, and, indeed, into every home. For six years, the Labour Government has applied its policy which has resulted in the cramping of our national life, of the individual and his future, and the withholding of a proper reward for his work. The result is a deep sense of frustration among the people - a sapping of enterprise and initiative under the present system of bureaucratic control. Fear stalks the country to-day, and this fear will make itself manifest in the result of the Victorian elections to be held on the 8th of next month. I say. to all those people who have addressed hundreds of thousands of letters to members of this Parliament that the mere writing of letters i3 not enough. They must enter into an alliance with us to fight these proposals to the end - to continue the fight until the Prime Minister and the gang behind him are rendered politically impotent. It is up to the Australian people to realize that their free, ‘ easy-going, way of life is at stake, that their liberty is at stake. I assure members of the Government that the people are rapidly becoming aware of this, and are becoming conscious that an effort is being made to make them, the victims of a confidence trick.
.- The private trading banks to-day provide the circulating medium for the carrying on of commerce, trade and industry. Upon the contraction and expansion of bank credit depends whether work shall be provided or money obtained for social, cultural or other purposes. It is clear, therefore, that a power so enormous cannot continue to be exercised at the whim of some person who may, or may not, be versed in the ways of finance. Moreover, the expansion and contraction of credit cannot continue to be dependent upon the private profit motive. The nature of bank credit, and its effect on the life of every nation, has been demonstrated and recorded in a thousand books that have been published in recent years. The situation is aptly summed up by Professor Lister in his book Monetary Experiments, published recently by the International Finance Section of the Departments of Economics and Social Institutions of Princeton University, in which he says -
Thus the banks really act as private mints, manufacturing money by lending cheque accounts (overdrafts) and destroying cheque accounts when they reduce their loans and investments.
That states the position clearly. There is only one answer. Even the most reactionary politician, or section of the community, would not return mints to private control. The best summing up of the position as it exists to-day is recorded in Hansard of the 12th August, 1910. Speaking on the Australian Notes Bill, the right honorable member for North Sydney (Mr. Hughes), who was then Attorney-General, said -
The theory and practice of banking so far as basic principles are concerned, have long been settled, and where these have been modified in recent times, it has been in the direction necessitated by the tremendous expansion of credit, and consequent greater liability to crises. There is, therefore, very much greater reason why in practice the control of all currency, and, so far as it is possible, of all credit, should be confined to one body.
That was undoubtedly true in 1910 when the Australian Notes Bill was introduced. The only thing that can be added to-day to that sound summing up of the banking position in every nation is that the history of the 37 years which have elapsed since that measure was introduced into this Parliament has demonstrated still more clearly the urgent need for placing the control of credit under an authority operating solely in the public interest.
One could say just that and no more, and yet prove conclusively that bank credit to the degree that-it is provided and withdrawn must be in the Government’s hands, or in the hands of a government instrumentality appointed by and responsible to the elected representatives of the people. However, a great deal more can be said on this matter, and I hope in the time at my disposal to disprove the arguments, or rather reveal the lack of arguments, against the Government’s proposals. It is interesting to recall that the Australian Notes Act passed in 1910 was attacked by just the same people, the Liberal party - it had even the same name as the major Opposition party in this Parliament to-day - the press and the financiers and all the things which were said against that legislation are being said to-day in opposition to this measure. That is almost incomprehensible to-day; but that fact is clear. Mr. Massey Greene, the then member for Richmond said -
I do not think that the opposition to the measure on the part of the great financiers of Australia is based on the opinion that the institutions which they control will suffer directly by the change.
Sir John Quick is recorded in Hansard as having said -
Such being the position of the Australian banks under the existing law, and such being the foundation of paper currency of Australia in recent years, there appears to be no justification for, and no argument in favour of the revolutionary changes now proposed to be introduced by this bill.
Later the same honorable gentleman said -
Mr. Fairbairn, the then honorable member for Fawkner, had this to say -
It is said that when his “ satanic Majesty “ is out for real mischief he generally poses as an angel of light.
Those words bear a striking resemblance to the words of the present honorable member for Barker (Mr. Archie
Cameron), with his knowledge of the Good Book -
That is just what this bill does. It look-; a harmless sort of measure, but I. can assure honorable members, as one who has had considerable financial experience, that if passed in its present form it will do more harm te Australia than any measure that nas been brought before this House.
The same sentiments were expressed when the Commonwealth Bank were established in 1911. The Australian Banking Record of the 21st November, 1911. said -
It will probably take some years to unmask the fallacy that a government bank, controlled by political amateur financiers, can add anything to the well-being of a community when financial requirements are as vigorously catered for as they are in Australia.
The same journal, in its issue of the 21st February, 1912, said -
The establishment of a Commonwealth Bank is not only unnecessary, but is likely to be a source of danger, inasmuch as its supreme control is to be political.
The Commonwealth Bank will be extremely costly to organize and conduct, and it will be unable, if soundly managed, to offer facilities to the public greater than those which already exist.
The Government account will be of little benefit to it, possibly in bad times a source ot weakness and danger.
Yet we know how eagerly private bank? seek government business to-day -
Its London branch, when established, will be conducted at a loss.
Yet we know that the London branch of the Commonwealth Bank was the only bank in Great Britain that remained open in the dark early days of World War I.-
The proposal that it shall manage the proportion of the Australian public debts incurred in Britain is a preposterous one.
I could make many more quotation* in similar vein. The Sydney Morning Herald, one of Australia’s great newspapers, which has sacrificed the mission a newspaper should pursue in order to serve the interests of a particular party and vested interests in the community, emphatically protested against that proposal. We hear to-day the self-same cry, the self-same speeches repeated ad nauseam. We hear the self-same stories which have been told against every Labour government which, springing from the people of this country, has acted solely from desire to ensure that mankind generally, and not any particular class, shall enjoy the benefits which modern industrial and technological progress can provide. It is true that the Labour party’s fundamental allegiance is to the working class of this country, but the basis of its philosophy, the way in which it works, ensures that by lifting up the working class of Australia we shall serve the interests of all sections of the nation by making our people more contented and prosperous.
I shall now deal with some of the statements made by honorable members opposite. The honorable member for Moreton (Mr. Francis) gave voice to the same sentiments as those expressed by his colleagues who preceded him. There was nothing remarkable about his speech except, to use an expresssion of the Chair, that he appeared to read from copious notes. In my suspicious mind, that unusual procedure on the part of the honorable member was associated with the presence of advisers of the private trading banks in the precincts of this chamber. He continued, of course, in the usual vein about the necessity to resist this measure. He endeavoured frantically, as the Victorian daily press is doing, to cloud the real issue in the impending Vic,torian State elections, which is, in fact, the challenge to a democratic government by vested institutions repre-, sentative of a very small minority of the people of Australia. In his desperate endeavour to disseminate propaganda, he tried to persuade the Victorian people that they should ignore that fundamental issue, and confine their consideration to something which they have no power to influence. I understand that the Liberal Premier of Western Australia, when asked if he was willing to hold a referendum on the proposal for the nationalization of the banks, replied wisely that a referendum would prove nothing. and refused to hold it. It is idle for honorable members opposite to endeavour to cloud the issue in Victoria, and it will be idle for them to attempt to do so when next this Government appeals to the people.
The right honorable member for Cowper (Sir Earle Page) referred to a tribute paid to him in the book published by Dr. Jauncey, Australia’s Government Bank. Dr. Jauncey pointed out that after the spokesmen for the private banks had met members of the Government in 1910 and explained the intricacies of banking finance, the bankers’ representatives appeared to be satisfied that the private banks would go on and that no government bank would be established. Dr. Jauncey, who was accepted by the right honorable gentleman as an undoubted authority on this subject, added that had Mr. King O’Malley not worked in secret the Commonwealth Bank would never have been established because, he said, the bankers would have had time to organize and with the powers at their command and with strong political powers ready to do. their bidding they would have frustrated the proposal. The right honorable gentleman also referred to the opposition that invariably emanated from Labour members in respect of financial proposals made by him. He referred, in particular, to the opposition levelled at his proposal in 1924 to transfer, control of the note issue from the Treasury to the Commonwealth Bank. If Labour members erred in connexion with that proposal, they sinned in very good company, for the great British economist, the late Lord Keynes, said in his book, Tract on Monetary Reform -
I make the suggestion that the note issue should be in the hands of the Treasury and unlimited as to volume.
The right honorable gentleman, in ‘making these statements, has merely proved that members of the Labour party at that time held views similar to those expressed by a great Liberal thinker, one of the greatest economists the world has produced in recent times. In the newspapers, over the radio and in this House we hear repeated the parrot cry that the Royal Commission on Monetary and Banking Systems pointed out that there was no evidence to prove that the trading banks had deliberately expanded advances in order to make big profits and had deliberately contracted them during the depression. The royal commission did say that, but it went on to point out that the trading banks did expand advances substantially in pro-depression years, that they earned, big profits and placed large sums in reserve, and that they contracted advances sharply in the depression years. It is a significant pointer to the weakness of the bankers’ case and that presented by honorable members opposite that it must rest solely on the words “ deliberately expanded advances in order to make big profits”. This was what the royal commission had to say on the matter -
Along with other parts of the system, the trading banks must hear some responsibility for the extent of the depression. In the more prosperous times preceding the depression, they went with the tide and expanded credit. At the outset of the depression the trading banks . . . were forced to adopt a policy of contraction which intensified the depression.
At page 247, paragraph 651, the royal commission said -
The statistical tables included in the report show that for many years the trading banks made large profits and built up large reserves.
The table showing profits earned bears out, if confirmation be needed, the statements I have made. Apart altogether from what was written into the royal commission’s report, we have perhaps even stronger evidence as to the part played by the private banks. The honorable member for New England (Mr. Abbott) was a member of the commission, and while subscribing to the majority report, apparently thought it sufficiently important to sign a reservation in which he said -
The results which follow from the Australian practice are, that whenever the banks find their cash reserves being depleted, they put up the rate of interest on advances, in order, as one banker put it, “ To warn their customers “, and they must call on their borrowers to reduce advances. Both actions impose a strain on the- community, which causes shocks throughout the whole economic structure.
Day after day the honorable member asked one bank manager after another, whether the banks had compelled people whose wool shipments they financed to ship through a certain overseas shipping line. One after another the bank managers denied that that was done, but finally it was admitted that the practice had been followed and that such an agreement ‘existed. Mr. G. D. Healy, superintendent of the Bank of Australasia in
Melbourne,, and chairman of the Associated Banks of Victoria, when asked whether he had signed any agreement with the shipping lines represented in the Australian Overseas Transport Association, replied to the question in this way -
I have a hazy idea there was something of the sort; that if I put all my wool shipments through them I would get a rebate, but would have to look it up.
I ask the honorable member, who makes such laudatory statements on behalf of the private banks to-day, to explain to the House and to the country, and in particular to the wool-growers, whose interests he claims specially to represent, what part the private banks played in the shipment of our wool, and why the woolgrowers were forced to ship their wool through the Conference Line.
The honorable member for Gippsland (Mr. Bowden) said that bank shares are held by a large number of people in small holdings. Let us consider the proportion of shares and the percentage of the total held by individual groups of shareholders. On page 156 of the report of the Royal Commission on Monetary and Banking Systems, we find an analysis of the shareholdings of the six banks with head offices in Australia. That analysis shows that 40,260 shareholders, representing 87.46 per cent, of the total shareholders, owned 38.89 per cent, of the total share capital; that 5,774 shareholders, representing 12.54 per cent, of the total number of shareholders, owned 61.11 per cent, of the total capital. The figures relating to three banks with head offices in England follow the same pattern. Of 25,043 shareholders of these institutions, 22,220, or 88.73 per cent, of the total number of shareholders owned 46.9 per cent, of the total shares, while 2,823 shareholders, representing 11.27 per cent, of the total number of individuals comprising the companies owned 53 per cent, of the total share capital. If the honorable member endeavoured to show that the banks are democratically controlled, he is. welcome to such comfort as he may derive from these figures.
The principal speech in opposition to this bill was made by the Leader of the Opposition (Mr. Menzies). Prior to delivering his speech the right honorable gentleman is reported to have addressed a meeting in Victoria in support of the Liberal party, in the course of which, with that disarming modesty so characteristic of the right honorable gentleman, he is reported to have said, “ After I have spoken the Government is a ‘ goner and members of the Government in swing seats will feel the cold hand of death upon them”. I am afraid that only the members of his own party had those dire forebodings. When the right honorable gentleman delivers himself in these high-sounding phrases, he is almost certain to say something for which the members of his party will have to accept responsibility and for which they will have to continue to apologize for many years. So it was in this case. We had listened to a trained elocutionist and a practised lawyer. His elocution was perfect, but the case that he presented on. behalf of the banks in condemnation of this Government and this measure was completely lacking in worthwhile content and failed utterly to come to grips with the proposals. The right honorable gentleman dealt with .a number of things. The first was the part played by the trading banks in the depression years. The second was the measure passed by this Government in 1945 to control the activities of the trading banks. The third was competition amongst the banks, and the fourth was what the right honorable gentleman described as the second battle for Australia. There is a battle for Australia going on to-day. This Government is waging that battle against the most powerful group of organized financial interests that the modern world has known. It is not a new battle; it is the last round of the fight that has continued since banking began in this country.
In 1S17, the Bank of New South Wales was established under the authority of Governor Macquarie. That bank, as the honorable member for Werriwa (Mr. Lazzarini) has said, enjoyed prosperous times originally, but struck great difficulties in the latter years of the nineteenth century. In fact, at one time it received a loan from the New South Wales Government on the understanding that it would wind up its business, but it repaid the loan and failed to wind up its business. Professor Shann records in his Economic History of Autralia that in 1S66 a Treasurer of New South Wales proposed a State bank of issue, but the private banks opposed the suggestion on the grounds of political money - there is the same opposition to this measure today. Ostensibly, that was their only objection, but Professor Shann points out that another consideration undoubtedly was the profits derived by the banks from the issuing of notes. In 1895, a royal commission in Victoria recommended the establishment of a State bank of issue and deposit, but that proposal too was killed. Mr. Andrew Fisher pointed out that the private banks were just beginning to find their feet again after the disastrous crash and were able to negative the finding of the royal commission. In 1910 a bitter fight was put up against the Australian note issue. How simple that sounds to-day; but it was bitterly opposed by the private banks at the time because the issuing of notes was one of their most profitable lines of business. In 1911, the proposal to establish the Commonwealth Bank was bitterly assailed, and that bank would never have been founded had the private banks not been taken unawares. The Scullin Government of 1929-31 has been vilified over the years, but that administration should be given credit for a great deal of the valuable work that was done to rescue this country from the depths to which the anti-Labour forces had dragged it. A remarkable tribute was paid to the Scullin Government, but not in Australia. At the Ottawa conference in 1932, Lord Bruce said that a practical miracle had been accomplished in Australia between 1929 and 1931. He pointed out that although Australia had had a heavy adverse trade balance in 19.29, after two years of Labour administration that adverse balance had been converted into a small favorable balance.
The Leader of the Opposition spoke of what he called “ the blow to democracy “. I say that this is the final blow in the struggle that has been waged since banks were first established in this country in 1817. An efficient banking system is vital to the functioning of any economy, to the work of any individual, and to the cultural development of any society. Control over that system should not be in the hands of private individuals operating for profit, but in the hands of a government or public instrumentality, operated by individuals experienced in the banking system. That is what this’ bill proposes. The final responsibility must be to a government of the people, elected by the people. The real battle, therefore, is very different from that described by the Leader of the Opposition. An indication of just how weak is the case that Opposition members and their banking supporters can advance against this is found in the fact that the Leader of the Opposition quoted from a work by Professor Douglas Copland, written in 1931 - too close to the depression, and before great advances in banking theory and practice took place. But even the arguments that the right honorable gentleman sought to prove by his quotations are disproved by that very work of Professor Copland itself. There we find the intellectual honesty of the scholar and teacher breaking through. Professor Copland says -
To this general confusion of thought, and interplay of self-interests, the banks contributed in the early stage of the crisis.
He says further -
Banks are proverbially conservative institutions. They dislike innovations and cling to tradition. There was much evidence of this innate conservatism in their actions during the crisis, and in their general unwillingness to break new ground.
Does that indicate that the trading banks followed a wise policy? Does it not indicate that they did ‘not do what they might have done in those dreadful depression years?
Professor Copland says, further - and this is printed right under the table of figures from which the Leader of the Opposition quoted - that it was difficult to make a real estimate because banks had different classifications of their assets and their liabilities. He points out that, although the table showed that they had a cash ratio to deposits of IS per cent., they had included in advances, subscriptions to treasury-bills, which, as he rightly says, are cash, or its equivalent, and that, counting them as cash, the liquid assets in the banks’ hands had improved from 1.8.5 per cent, in 1929 to 22.5 per cent, in 1931.
Let honorable members opposite, or the bankers, who for years have rested their case on the work of this great Australian, read what the professor obviously intended,’ namely, that the figures supplied by the trading banks should be regarded with caution because of their source. This caution was justified by the report of the royal commission. The, figures given by Professor Copland showed that the banks advanced up to 105 per cent, of their total deposits. The Leader of the Opposition quoted that figure, dishonestly I believe, when be sought to correct a statement made by the Prime Minister. The real figures supplied by the banks themselves as sworn evidence before the royal commission proved that the figure he quoted was absolutely incorrect. The figures given in the royal commission’s report showed that the ratio of advances to deposit? never rose beyond 98.6 per cent, and that was in the second quarter of 1930.
– That was on the 30th June balance.
– That was on the fourquarterly figures. I remind the honorable member, who was a member of the royal commission, that in the minutes of evidence Mr. McConnan, the chief manager of the National Bank of Australasia Limited, said -
At one stage our advances went over 100 per cent.
– That is probably quite true.
– He was asked to produce figures, but did not, indicating that advances exceeded .deposits. But the ratio of advances to deposits has been used to cloud the issue. In fact, the relationship is relatively unimportant. The McMillan commission, the most competent authority ever assembled in a British community, including in its membership Sir Reginald McKenna, chairman of the Midland Bank, Lord Keynes, and many other brilliant men in the field of finance and economics, reported -
It is not unnatural to think of the deposit? of a bank as being created by the public through the deposit of cash representing either savings, or amounts which are not for the time being required to meet expenditure. But the bulk of the deposits arise through the action of the banks themselves, by granting loans, allowing money to be drawn on overdraft or purchasing securities.
The simple fact, of course, is that every advance finally ends, as that report points out quite clearly, as a deposit within the banking system itself. So the relationship is not of major importance. That was pointed out by Mr. McConnan, at present chairman of the Associated Banks, in his evidence before the royal commission, in which he said -
Although the ratio between advances and deposits is not regarded as of primary importance … it is of some significance . . “We - regard .00 per cent, or a little over as -our most satisfactory level.
When asked by the chairman what he meant by “ satisfactory “ and whether he meant “ profitable “, he said -
Profit certainly was in my mind. 1 would not say profit alone.
The simple fact so regularly overlooked is that the banks act upon the basis of cash reserves and expand or contract solely upon that basis. That is the inherent weakness of the banking system and it cannot be removed if the banking system is to function under, private ownership. That is “why the banks in this and other countries cannot fail to be nationalized within a comparatively short period. I said earlier that the Leader of the Opposition had again made a statement for which his supporters would have to apologize throughout their political lives while he remained their leader. Commenting upon the lessons of the slump, he said, “ What else could have been done but follow the policy that was followed ? “ - that is, under pressure from the hanking system. He still believes that from a depression we must starve ourselves back to prosperity. The answer was given years ago by Lord Keynes in a letter to the then Prime Minister, the late J. A.. Lyons, in which he said - you cannot cut cost6 down. Prices are already below the costs of -production in every line. The .obvious thing to do it to stimulate expenditure by an increased volume of bank credit.
The 1937 report of the Director of the International Labour Office .said -
If the depression has shown one thing more clearly than anything else, it is that economic prosperity and social security depend more on monetary policy than on any other single factor. In this field more than any other lies the key to economic prosperity and social progress. The demonstration that, in one .country after another, the upturn in business and employment coincided, not with the reduction of wages, the cutting of .costs or the deterioration of working conditions, ‘but with the abandonment of deflation, and’ the adoption of monetary expansion ‘has made a deep impression upon the world. As -a result, the whole outlook on the future of social and economic policy has .undergone a radical change.
He should have added, “Except the Leader .of the Opposition “.
One of the major claims of ‘the Leader of the Opposition was that we have to-day ‘a competitive banking system that the ‘Government intends to replace with a government monopoly. The minutes of evidence of the royal commission point out that we have the type of competition that “we can expect from semimonopolistic institutions. On page 27 of the History, Theory and Practice of Australian Banking, Currency and Exchange, H. E. Teare, editor of Business Conditions Service, Alexander Hamilton Institute of Australia Limited, calls the system a “close banking monopoly “.
Professor A. J. Baxter writing in Imperial Banks states -
The idea of a banking ring was nothing new, but the Australian ring seems to have been of a very ‘thorough-going order by the 20th century.
The royal commission reported that the bank crash in the ‘nineties was due more than anything else, to bad management, which consisted in the banks competing for advances and deposits. As a witness before the royal commission, Mr. G. D. Healy, chairman of the Associated Banks of Victoria, was asked : “ Is there any agreement between members of the associated banks not to take customers from each other ? “ He replied, “ There is “no agreement, hut there is a “sort of understanding that we would not take business from each other “. He added that competition was really a two-edged sword, saying, “If I were to -take an account from a bank, it might retaliate and take another account from me, and in the end we would be no better off”. The honorable member for New England (Mr. Abbott) was a little inquisitive, and asked Mr. P. F. G. ‘Gordon, general manager of the Commercial Bank of Australia Limited, what competition existed, -and Mr. -Gordon said that the banks did “not -compete for business or customers and that there “was “ what you might call a gentleman’s agreement”. The cha’irman asked, “You .think ‘that if another bank were charging more than a .fair thing you would not take the business”, and Mr. Gordon .replied, “That is the position as far .as the .rate is concerned”. The chairman then asked, “ Suppose you regarded the rate as an extravagant rate, having regard .for the .security offered, would you not .take the account?”, .to which Mr. -Gordon replied, “ We may,’ or we may .not, .but in most .cases I should say No “. The .chairman then asked, “ Even .if the rate was wholly extravagant?” Mr. Gordon answered, “Yes”. -Mr. McConnan is reported on page 164 of the jininut.es of evidence of .the .royal commission as .having said -
There is a general understanding among the associated hanks that -we shall not compete with one another on questions of rate. The charges for other services, such as keeping of accounts, internal and external exchange, &c are also -fixed by agreement among us.
Asked whether the ‘banks let accounts go if they had invested to heavily in one field, he said -
Yes; we hare to spread our risks.
I think that disposes completely of the argument that competition exists amongst the trading banks. I do not condemn the absence of competition, because I say it is not -possible to have competition in a banking system. It is impossible for one bank to follow for long a policy that is out of step with the policy being pursued by other banks. That is because the banking system allows only for a monopolistic type of structure. An advance made by one bank .when others are not making advances has the effect of increasing the deposits, not of the bank that is lending freely, but of the banks that are refusing’ to lend. The main question into which this debate resolves itself is as to whether the 1945 Banking Act gave this Parliament and the Government sufficient control over banking operations. I was very disappointed when the Banking Act of 1945 was introduced. I knew, or I thought I knew, at that time, that the Government would not have sufficient power under that law to provide what was required. The legislation was .acceptable to the Government but it was .challenged. When the Prime Minister (Mr. Chifley) and the Minister for Post-war .Reconstruction (Mr. Dedman) said that the .act was challenged in respect of sections .18, 19, 20, 2-1 and 22, the .’Leader of the Opposition disputed their .statements and told -them in -words that were as plain as any .could be that they were telling deliberate .untruths. The right honorable gentleman :said that .those sections -were mot ‘challenged and were not susceptible to .challenge. -He made that statement “not only as ‘the .leader of .a party in this Parliament, -but -also :as a constitutional .lawyer of high .standing. When making lie .assertion he .said, “ I have -the document before me “. 1, too., have the document ‘before une. .It proves that the Prime Minister and the Minister for Post-war Reconstruction -were completely .right. Therefore, the Leader of the Opposition must have deliberately told an untruth,, seeking to deceive the Parliament and .the people for a contemptible reason. He thought that he had a huge audience and that no refutation of his statement could later .reach the ears of the pe’ople to whom he had access at that time. Tie claims made by the Melbourne City Council in relation to the act .contain the following declarations : -
Only secondarily did they seek a declaration that section 48 of the Banking Act 1945 was of no effect by reason of its inclusion in a law imposing taxation. If the Leader of the Opposition values a reputation for honesty, he ought to make a public retraction of what he said to the Prime Minister and the Minister for Post-war Reconstruction.
– There has been a strange psychological reaction to this bill on the part of honorable members on the Government side of the House. I draw attention to it because it is significant that, although honorable members addressing this House usually contribute some ideas on the subject under discussion, this debate has been completely devoid of any such contribution by Government supporters. They have not advanced any valid arguments ‘ regarding the need for this measure. Indeed, almost to a man, they have come into this House with speeches prepared by somebody outside and have read them, or, alternatively, they have quoted statements made by other speakers dating as far back as 1793. Why have they done this? Because they have been endeavouring to convince themselves that at some time somebody has said something which supports .the attitude that they have adopted. They have risen in their places to say, with a gloomy air, “ It is with great elation and enthusiasm that I rise to support this bill”. The Minister for Post-war Reconstruction (Mr. Dedman) used those words, but nobody who saw his morose expression would have believed him. However, if he did speak with enthusiasm, that fact surely did not give him the right to deliberately mislead the House!
I shall not discuss the speech made by the honorable member for Perth (Mr. Burke), which was based almost entirely upon extracts from statements by some obscure economist - most economists are obscure - and some politician of former days, who never thought in his lifetime that he would make the grade and be quoted in this House as an authority. All of this was done in order to support a case that was obviously so weak that the honorable member himself could not contribute one constructive idea to the debate. I shall pass over that speech as being unworthy of comment, and refer to statements made by the Minister for Post-war Reconstruction. The Minister accused the Leader of the Opposition (Mr. Menzies) of indulging in mendacious statements. I accuse the Minister of deliberately indulging in false statements in this House. But I propose to do more than he attempted to do. I shall submit proof of my argument. I have examined his statements, because I have been singularly favoured in being presented with :a copy of the prepared speech which he made. He claimed that the Leader of the Opposition had said that banks had been nationalized only . in totalitarian countries, and then said -
That statement is also untrue. France has a nationalized banking system, and France is not the only other country with a national- ized banking system. France’s decision to nationalize the banks was, no doubt, related to the fact that its post-victory government found that the private bankers had been the quisling collaborators with Hitler.
That was a serious statement. If it wen; true in essence, the honorable gentleman might have had some reason to add the last deep insult. But, if it be untrue in essence, then it must be regarded merely as a vehicle from which to pour out vituperation and abuse on some other country. I refer now to the notes that have been given to government supporters on the subject of banking, a document from which they have been quoting extensively. lt contains instructions that have been issued to them. Perhaps if one looked at this document closely enough, one might find the hammer and sickle printed somewhere in the text. These notes refer to the “ Great Four banks “ of France thai have been nationalized. They make no mention of the multitude of smaller banks that have not been nationalized and that still retain their identity in th* many villages and cities of France to-day. There is not a complete scheme of bank nationalization in France, as this Government would have us believe. Thi? is demonstrated by the following extract from the Economist relative to the nationalization of the four banks that have been mentioned -
Their nationalization has had no tangible practical effects at all. The Government ha.s appointed certain representatives to the boards of directors, but, as in the case of Italy, their appointment seems to have had no practical effect on the business of the banks. The main commercial banks are still very much in competition one with the other and their normal business is carried on in just the same way ns> it was before.
That refers to the four great banks. The smaller private trading hanks in France are not nationalized. I shall now examine the board of directors. In the notes which were issued to honorable members opposite, the following statement appears -
Government appointees in four tries representing industry, commerce and agriculture: the trade unions (one representing the bank employees) ; the Bank of France and public credit institutions; the persons with banking experience.
That passage is strangely reminiscent of the Commonwealth Bank Board, which thi9 Government abolished! That body did an excellent job on behalf of Australia, and raised the Commonwealth Bank to the stage where honorable members opposite cannot praise it highly enough at the present time. If we are to believe the Minister for Post-war Reconstruction, four of the principal banks of France have been nationalized, but they are under the control of a bank board similar to the Commonwealth Bank Board which this Government destroyed. Let us examine the effect of nationalization generally in France. The following quotation is taken from the Journal of Industry for the month of September, 1947 - ‘
It is over two years since large sections of French industry, banking, insurance, aircraft production, electricity, and gas were nationalized.
The results are now available in balance sheets as at the 31st December, 1940. Coal mines have reached normal production, but the State has to continue its subsidies. It costs About 1,570 francs to raise a ton of coal. The coal sells at 1,350 francs - a loss of 220 francs. liven at 1,350 francs it is very dear - beyond the reach of many consumers. At 1,570 francs it would be prohibitive. No early solution appears possible. The taxpayer must continue to foot the bill.
Before the war electricity and gas undertakings were .prosperous. It was argued that (.he profits should go into the nation’s purse.
That is precisely what honorable members opposite say about the profits of the Commonwealth Bank -
Now, it is announced that the deficit is 18,000 million francs!
To meet these huge losses the prices of gas and electricity must be raised or the taxpayer must fork out.
In the aircraft and automobile enterprises the complete flop of nationalization is obvious. Renault, for instance, shows a trading loss of :(43 million francs!
The French people will certainly have to pay for their expensive experiments.
Honorable members, who have a knowledge of State enterprise in Australia, will recognize, in that description, a complete forecast of what is likely to happen here if this first step towards the nationalization of our industries continues. Having dealt with that aspect, because I believe that the Minister for Post-war Reconstruction’s statement should be corrected, I turn to another remark which he made, and which I read with considerable interest. The speeches of the Minister bear reading, because one can make a speech, as honorable members opposite have done, upon the remarks of the honorable gentleman. Here is an interesting observation. He was speaking about the expanding economy in an expanding population, and he said -
Let us assume that in the next twelve months the amount so required will be £10,000,000.
The Minister, being an economist, proposes the sum of £10,000,000 -
In such circumstances there are always far more people who think they can use the additional resources than there are resources available for use. In the aggregate, demands for advances to use the resources may total, let us say, £20,000,000. To avoid inflation, there must be, somewhere in the banking system, an authority exercising careful selection with a view to limiting total advances to £10,000,000. But the private banks have gone beyond careful selection of those to whom advances should be made, and have exercised wrongful discrimination against many people.
When I heard that, I looked for some results, because that is a strong statement, and one naturally expected the Minister to offer some proof in support of his contentions. But when he went back 23 years in order to produce the proof of a statement of that nature, I discounted almost entirely what he said about it. I do not propose to go back 23 years, because I have no reason to do so. I am perfectly well aware of the careful selection that the Minister had in mind. I remember the careful selection that was made of the conciliation commissioners under the Commonwealth Conciliation and Arbitration Act. I remember the careful selection which was made of supporters of the Labour party who were defeated at the last elections. They were appointed to high positions as representatives of this country in the diplomatic sphere. I remember, also, the careful selection which was made of some person of great importance here. Therefore, I have some knowledge of what the Ministerreferred to as being a method of careful selection.
But let me cite as an instancethe Commonwealth Bank itself, because the institution has not always made a careful selection. A. E. Goodwin* Limited, general engineers and shipbuilders, originally, held an account. with the Bank, of New South “Wales, but later transferred it to the Commercial Bank of Australia. The company approached this trading bank for a loan of £100,000 for a building which it had leased from the Commonwealth Government at St. Marys in New South Wales. After a complete investigation, the bank refused to grant the loan on the ground that the business did not warrant it and that the security was not adequate. Then the Commonwealth Bank, as the Minister said, with careful selection, advanced, not £100,000, but £200,000, allegedly without any additional security. Out of that £200,000, the company expended between £46,000 and £50,000 on improvements to the building, which, mark you, was to revert to the Commonwealth Bank without- compensation when the lease had expired. During the last fortnight the Commonwealth Bank has been obliged to put a receiver into this particular firm. The whole of the funds are frozen, and the shareholders’ capital is placed in jeopardy. Being the secured creditor, the Commonwealth Bank has first call upon the assets of the company, and the unsecured creditors, who furnished the goods and services, and the shareholders will not receive anything, because of the careful selection which the Commonwealth Bank made in granting financial accommodation to the company.
I pass from that matter to deal with another observation of the Minister. He said that, in this bill, the Government had “forged the most powerful weapon possible “. Now, the strongest weapon in finance is a cheque, and it is true that the Government has forged a signature, upon a blank cheque.
I now propose to deal with the principles of the bill. The matter which concerned me most when I listened to the second-reading speech of the Prime Minister was the pity of it that the right honorable gentleman, by a single action, was to destroy a great political party that had played a conspicuous part in building up industrial conditions in Australia. By introducing the Banking Bill, the Prime Minister has. destroyed effectively and completely the Australian Labour party. In this speech I do not propose to deal with the technical details of the bill. 1 shall reserve those comments for the committee stage, because the principles of the bill far outweigh in importance the mere technicalities contained, in its clauses. The Prime Minister’s speech was a cunning one. Its cleverness consisted not in what it contained but in what it omitted. I could state a case in this House on behalf of the trad’ ing banks or on behalf of the 20,000 workers in those banks, and I could state a case on behalf of the 70,000 shareholders of . those banks. However, I do not propose to do that, except so far as it may be incidental to discussion of more important matters. But I believe that a case should be stated on behalf of the 7,500,000 people of Australia whose liberties are in jeopardy because of this bill. Notwithstanding anything that has been, or may be, said by honorable members opposite, the issue raised by this bill is not one of the Government versus the banks, but one of the Government versus the people. It is a challenge by autocracy to the freedom-loving people of Australia.
The Minister for External Affairs (Dr. Evatt), who is always conveniently absent from this chamber when important legislation is being debated, addressing a body of legal men in Melbourne, a few years ago, said -
Parliament- derives its just, powers from the consent of the governed. Approval by the people of specific legislation of great importance is merely an application of the general principles of democracy.
He made that statement in circumstances different from those in which he is placed to-day. Can honorable, members opposite quarrel with a statement of that character? Can they challenge its fundamental correctness? If it is true - and I believe that it is- the principle which it enunciates is vital to our democratic way of life. The Government disavows this principle. It is not prepared to refer its proposals to alter so drastically the way of life of the community to the people for their decision. It has pledged itself, to implement a policy of socialization. The issue, therefore, is one of democracy versus socialism;, in other words, a choice between our present way of life and the. police state. On the 1st
February, 1933, Hitler, in the course of a proclamation to the German people, said -
All those institutions which are the strongholds of the energy and vitality of our nation will be taken under the special care of the Government.
L ask supporters of the Government to note those words, because it was by that proclamation that Hitler introduced the police state. Under Hitler, the police state controlled industry, the courts, the press, and even the parliament of the country. If we look at the trend of the present Government, the similarity to the police state of Hitler will be immediately apparent. Here, the state proposes to take control of finance. The honorable member for Dalley (Mr. Rosevear), who occupies a high and important place in this Parliament, has challenged the courts of law and has endeavoured to whip up support for his contention that the Government should control the courts. The Minister for Transport (Mr. “Ward) has attacked industrial directors, and has been “ hell-bent “ in advocating socialism, come what may. The Minister for Information (Mr. Calwell) has attacked the press; he even seeks to close down the press. That is another example of the state assuming control of instrumentalities, just as Hitler assumed control of them m 1933.
If this bill becomes law, we may still refer to our way of life as a democratic one. But I warn the Parliament and the people that democracy is not complete unless it is practised by a free people. The whole history of the struggle for freedom is the story of the attempts to wrest power from the hands of the few. The powers proposed to be conferred by this bill are of so far-reaching a character, and have such profound implications in regard to the welfare of the people, that they are too great to be concentrated in the hands of any one man. They are certainly too great to be held by the Prime Minister (Mr. Chifley), or even by the Leader of the Opposition (Mr. Menzies), or, for that matter, by any other person in this country to-day. Possibly they are not so .great as to deter the Minister for Transport or the Minister for Information from aspiring to hold them in their hands. Only recently, the latter attended a meeting at Ashfield, in the electorate of Parkes. He had a fairly torrid time at that meeting. In the course of his speech, a member of the audience interjected: “You are doing pretty well for yourself; you .have just increased your “ screw “ by £500 a year, and you will get a few hundred pounds more as a Minister “. The Minister replied : “Yes, I am doing all right. I am not worried about money “. Then, with that fanatical .gleam which comes into his eyes, he added: “But what I want is power
– Do not overdo it; do not exaggerate too much.
– The honorable member for Parkes (Mr. Haylen) does not like me to tell the House-
– You are a liar!
– II object to the use of such language.
– The honorable member for Wentworth must ignore the interjection and continue his remarks.
– I ask for an apology from the .honorable .member for Parkes.
– Very well; the honorable member for Parkes must withdraw and apologize.
– I was saying-
-The honorable member must withdraw and apologize.
– I do as the Chair desires ; I apologize.
– To convince the honorable member for Parkes that I am speaking the truth, I can supply him with a statutory declaration.
– There is no need to dramatize the situation.
– The honorable member for Wentworth must return to discussion of the bill.
– I was pointing out that the powers proposed to be conferred by this bill are too great to be placed in the hands of any member of the Parliament, and since there are members of the Government who are fanatics, those powers are certainly too great to be conferred on any member of the Government. That is why members of the Opposition demand that the Government shall submit its proposals to a referendum of the people, so that they may decide whether those powers shall be placed in the hands of any member of this Parliament. However, the Government is not prepared to adopt the democratic principle of permitting the people to decide by referendum whether their way of life shall be changed from a democratic one to that of a police state. The Government’s bank “ grab “ will result in its securing complete control of our way of life, even to the conscription of labour. Let us examine that aspect of the matter, because it is most important. Since the Government’s proposals must affect industry, it is obvious that they will also affect employment. Recently, a referendum was taken to decide whether the Government should have power to control the operation of civil airlines. The people rejected its proposals. The Government then attempted to secure control of civil airlines by passing legislation, but the High Court rejected its legislation. If the Government succeeds in this proposal to establish a banking monopoly which it will control, it is only reasonable to expect that it will use its dictatorial powers to refuse financial accommodation to private airlines when they apply for it. Indeed, it would regard any such application as a heaven-sent opportunity to crush them.
I suppose that in the archives of this place it will be found that some long-haired crystal gazers have a plan with regard to control of the means of, not only production, but also distribution. The honorable member for Cook (Mr. Sheehan) has said that distribution should be controlled not by private enterprise, but by the Government. He went on to say : “ “We shall control it through this bill “. Of course, there is a plan to establish centres of distribution. But, in order to do that, it may be necessary to close down approximately 25 per cent, of the small shopkeepers in a particular area. What an easy way! Refuse these small shopkeepers financial accommodation, and you succeed in starting your nationalized centre of distribution, because you drive out competition. The Government also has “coming up in the lift” a nationalized scheme of medicine.
– Order! The honorable member must return to the bill.
– I am drawing attention to the effect which the bill will have, in that it will permit financial accommodation to be refused. The Prime Minister has said that allowance will be made according to government policy.
– Nevertheless, the honorable member must deal with the bill.
– I am dealing with it. The national medical scheme, by which the British Medical Association will he affected-
– What has that to do with the bill?
– There are many chemists operating in a small way in the suburbs of Sydney, who may refuse to “play” with the Government, and may consider themselves part and parcel of the great scheme of medical services that is operating to-day. Cannot one imagine the conditions that will be attached to any accommodation that they may require? Cannot one imagine a refusal to accommodate them, if .they are not prepared to come under the Government’s nationalized medical scheme? By means of these controls, the Government will be able, not only to prevent expansion, but also to use nationalized industries to conscript labour and direct the lives of every individual in them.
– Does the honorable member believe all of this that he is saying?
– I am glad that the honorable member for Martin (Mr. Daly) has asked that question. Not only do I believe it, but the arch planner of the Department of Post-war Reconstruction also believes it. I shall quote the views of no less a person than Dr. Lloyd Ross in support of my contention. If there is any doubt whatever in the minds of the people of the Government’s desire to control labour collectively and individually, they should remember that the Minister for Post-war Reconstruction (Mr. Dedman), who has just returned to the table, in the course of a debate in this House, even denied the people the right to own their own homes, and said that if they did so they would be “little capitalists”. He said more than that. The Sydney Morning Herald of the 28th June, 1946, reported that Mr. J. Harrison - no relation of mine - president of the Department of Air Branch of the Returned Sailors, Soldiers, and Airmen’s Imperial League of Australia, following a deputation to the Minister for Post-war Reconstruction in regard to the dismissal of temporary clerks from the Public Service, said -
Mr. Dedman told us that if there were no vacancies for ex-servicemen, trained as clerks, in clerical jobs, they would have to go out and use a pick and shovel.
That is the trend of mind of the Government in regard to the conscription of labour. In case there should be any doubt, let us consider what Dr. Lloyd Ross has said. Who is Dr. Lloyd Ross? He is the son of a man who helped to frame the infamous plan of the Australian Trade Union Congress of 1921. At the summer school of the Institute of Political Science in 1934, he said -
He who would plan economic development even in Australia must learn more from Bolsheviks than from any one else.
He is a .man whom Mr. Speaker, as the honorable member for Dalley, in May, 1940, described as “ a notorious Communist “, adding -
Wherever a Communist places his leprous touch there is trouble for the workers.
Answering an article in the Sydney Morning Herald, by the financial editor of that journal, Dr. Lloyd Ross said -
The thesis of the financial editor is that conscription of labour would follow from the situation in which a single bank distributed credit to industries, and thus disemployed people in some industries.
I agree that this could happen, but (may 1 plead that no phrase lie used out of its text?) results just as horrifying could follow from conscription of the armed forces, which people of the right have supported, and from every governmental power, which forces of the right once opposed and then supported.
Having admitted that the conscription of labour can emerge from this measure, he sought to qualify that effect by saying that results no less horrifying could accrue from conscription for the armed forces. Is there any parallel? Men are conscripted for the armed forces in order to fight for the liberty of this nation in a time of war. But the object of the conscription of labour for industry in peace-time is to .take away the liberties of the individual. I emphasize, for the benefit of the people of Australia, that conscription of labour can be achieved by means of this legislation. The tendency of the Government is to control the way of life of every individual in the community. Mr. Beasley, now High Commissioner for Australia in the United Kingdom, said on one occasion -
Dr. Boss and a few others were responsible for the fact that the Communist party now controls the .policy and domestic affairs of the Labour party in New South Wales.
Yet honorable members opposite say that the Communists have no connexion with them; there is no connexion with the “ firm next door “ ! I assert that the Communists are part and parcel of every move that they make, and direct their policy. Of course, Dr. Lloyd Ross is now the Senior Research Officer of the Department of Post-war Reconstruction.
This is no ordinary political issue. This does not mean a qualified form of socialism, but one which must destroy the democratic State. The bill has not been introduced by chance, it has not arisen out of a fit of pique on the part of the Prime Minister. It is a part of a well-thought-out plan, which was placed in the Labour nest by the Communists, and has been hatched by political Labour. Mr. Kennelly, a Labour Minister in Victoria, said at a trade union conference at Toronto -
The Labour party is there to do what the trade union movement tells it to do.
At the recent conference of the Australian Council of Trades Unions the Communists dictated the policy that was to be followed. This red element, and not the Government, will determine what the banking policy is to be, and will eventually obtain control of the banking structure and, in consequence, the savings of the people. Honorable members know that, at the infamous conference of 1921, the right honorable member for Yarra (Mr. Scullin) sat cheek by jowl with “Jock” Garden, that sinister figure, which still parades along government corridors, and introduced a proposal that was designed to alter our way of life. I shall quote from, the official report of the proceedings. Tie right honorable gentleman said -
Wo want the .parliamentary machine to give sanction to our proposals..
From the industries nationalized shall be chosen a general economic council which will really take the place of our Parliament to-day. …
Honorable members have heard something about that, economic council, and have seen how it worked in the Waterside Workers- Federation when that body took foreign policy out of the control of the Government and refused to load Dutch ships. The Government was powerless to take any action, against them. This plan has been followed assiduously. It has not changed, and the “ red “ hand of Russia still directs it. I challenge the Government to deny that the policy of the Australian Labour party on nationalization is not identical with the policy of the Communist party. In this connexion, I quote: from an article by Mr. C. Griffiths, a member of the Australian Labour party executive, which appeared in the Sydney Morning Herald of the 16th October last -
One of the chief Communist, tactics to-day is to dress up basic Labour policy, such as the nationalization of the banks and coal and steel industries, as Communist policy. . . . All three ideas being fundamentally Labour policy, there was no reason at all why Labour, supporters should not have initiated the move for complete nationalization instead of leaving it to the Communists.
Honorable members opposite say, “ How can we help it if the Communists have taken our policy?” We on this side claim that the policy of the Labour party is synonymous with that of the Communist party. Honorable members opposite know that that is so; An indissoluble link binds the Labour party with the Communists.
I shall now speak of the introduction of capital and immigrants to Australia. Some of us experienced feelings of cynicism when the Government expressed a desire to attract capital and immigrants to Australia, because we knew that such things are anathema to the Labour party. We were sceptical. Do not honorable members doubt the sincerity of the Government in this matter? Can we seriously expect an inflow of capital into Australia from countries which are not controlled by socialist doctrines? Do honorable members seriously believe that the captains of industry in other countries will establish, branches in Australia, where the prying eyes of government officials: will search their every activity and’ control their every action?
Attempts are being made to attract to Australia immigrants from Europe and other countries which suffered during the war, but- do honorable members seriously expect immigrants to come to Australia if they hope to get away from the totalitarian regimentation to which they object? Only recently, Dr. Roland Wilson, the Commonwealth Statistician, released figures showing that last year there were 2,384 more departures from Australia than arrivals. il have little more to say at. this stage, but when the bill. is; in. committee I shall discuss its various clauses. However, before I conclude, I wish to refer to some questions which I asked recently in this House relative to the preference given to a member of this Parliament in the matter of licences. I say nothing, about letters of credit in the recognized form,, but when a member of the Parliament gets, preferential treatment from the Commonwealth Bank in respect of a licence to the value of £45,263 we can form some idea of how the bank will’ exercise its powers in favour of supporters, of the Government should this bill, become law. Is it any wonder that- an officer of the Department of Trade and Customs regards all politicians as racketeers? He has some knowledge of what is going on. I shall say no more, but if honorable members are true democrats, and believe in the liberty of the individual, they may be influenced by the following quotation from the American Declaration of Independence : -
When in the; course- of human events it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth the separate and equal station to which the laws of nature and of nature’s God entitled them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation. We hold these truths to be selfevident, that all men are created equal, that they are endowed by their Creator-with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive of these ends, it. is the right of the people to alter or to abolish it, and to institute new government, laying ite foundation on such principles and organizing its powers in such form as to them shall seem most likely to effect their safety and happiness.
Those words are an inspiration to all who oppose the Government’s proposals. All who believe in life, liberty and the pursuit of happiness should rise to overthrow the present Government and replace it by a government which will preserve the rights of the people.
– From the moment- that: the Prime Minister (Mr. Chifley) announced the Government’s proposal to nationalize the banking system of Australia, a carefully organized campaign of wilful misrepresentation, sponsored by the private banking institutions has been waged by every known means of publicity in an attempt to undermine the public morale and frighten the people into the belief that this longoverdue monetary reform is contrary to their best interests. The bulk of this reactionary propaganda has been designed deliberately to mislead the people, and to discredit the motives behind the Government’s intention to assume control of the currency and credit of the nation. It is, therefore, my intention to deal with certain aspects of this bill in order to remove any misunderstandings that this deliberately false propaganda may have created. I shall refer, first, to the early history of the Commonwealth Bank. Despite violent antagonism from the very institutions which to-day are preaching the advantages of open competition between the trading banks, the Fisher Labour Government in 1911 introduced legislation for the establishment of the Commonwealth Bank. At that time the private banking institutions were loud and bitter in their condemnation of that government’s intrusion into lucrative business. They vigorously opposed the legislation providing for a new competitor, but to-day the story is somewhat different. The bankers now declare that competition between banks is in the best interests of Australia. We see that they have reversed their policy to suit the circumstances of the day.
Arguments advanced in 1911, in attempts to defeat the Fisher Government’s monetary reform, are now being resurrected in another guise, and no effort or expense is being spared to scare the people against nationalization of banking. A typical utterance at that time was that of Sir Joseph Cook, who, speaking as a conservative on behalf of the banking interests in opposition to the Commonwealth Bank Bill, said -
Those who will benefit from the proposed bank will be the capitalists who are engaged in trading concerns as speculators.
He argued that the Labour party’s attempts to give the people banks would not increase their welfare’. He scathingly referred to the Australian note issue as “Fisher’s flimsies”, and claimed that the new currency would not be worth the paper on which it was printed.
Another typical outburst at the time was that of the then acting general manager of the Bank of New South Wales, Mr. T. B. Heffer. This is what he had to say -
There are provisions in the bill that might do incalculable harm, not only to the banking system but to the whole economic life of’ the- country.
History, of course, has falsified those pessimistic prophecies. The frantic predictions that are again being advanced in efforts to discredit the Government’s new proposals for monetary reform bear a remarkable resemblance to the arguments directed at the banking legislation introduced by the Fisher Government. However, despite the gloomy forebodings, the Commonwealth Bank was established, and it rapidly grew into the powerful financial institution which has served Australia is a way that private banks would never have been prepared to do. In support of this contention, I quote the observations of the late Governor of the Commonwealth Bank, Sir Denison Miller, who said, in 1922, that during the 1914-18 war, war loans were floated in Australia totalling £250,000,000. He pointed out that flotation charges by private banks were £2 7s. Id. per £100, as against the Commonwealth Bank rate of 5s. 9d. per £100, whereby this country was saved more than £5,000,000. For many years, the Australian Labour party has recognized the need for banking reform, which has always been an important plank, of its platform.
During the spurious campaign of misrepresentation financed by the private trading banks, much of which has been conducted by the Opposition, it has been stated that the Government has no mandate from the people to amend the banking legislation. I disagree with that. As I have said before in his House, during the last elections and those immediately preceding them, I frequently announced from the public platform that if I were returned to Parliament I would regard it as my duty to do everything in my power to bring about a reform of our banking system and to make the Commonwealth Bank a people’s hank, capable of operating in the way that was intended when the bank was first instituted.
– Did the honorable member use the words “nationalizationof banking “ ?
– Yes, it is on record that I used those, words, and other members on this side of the chamber have done likewise. Ever since the Fisher Government went out of office, the Labour party has proclaimed that when it was returned with full power to govern, financial reforms would be introduced. That time has now arrived. On every occasion Labour has taken steps in this direction a fearful howl has been raised that the very liberties of the people are threatened. I challenge those who have always been responsible for these outbursts to quote examples to prove that the private financial powers of this land have ever taken any spontaneous action to reduce rates of interest. I challenge Opposition members to produce evidence that they or the private banking institutions have ever advocated any progressive monetary reforms. I further challenge them to prove that the banking monopolies have ever yet made any voluntary sacrifices to assist the nation at the expense of their shareholders’ profits; I know these answers will not be forthcoming. Instead, we shall get nothing but destructive criticism.
While on this subject, I point out, that despite the fact that whenever Labour governments have sought to legislate for monetary reform in the face of concerted resistance by the financial powers, Opposition members have never advanced alternative methods designed to solve the economic problems of a financial system that has outgrown its usefulness. In truth, there is only one real solution - nationalization.
The Government believes that while private banking institutions control money they dominate the economic welfare of the country. There can be no dispute on this point, and most eminent economists and social reformers the world over agree with this contention. Recently, the Full Bench of the Commonwealth Conciliation and Arbitration Court, in a written judgment, commented on the private control of credit in these words -
Under the world’s banking system it has become an instrument for controlling the future production of wealth. Whether thic control is for ever to be left in the hands of profit-making institutions has become a question which has been agitating the minds of thinking men in all .parts of the world. Many eminent economists and statesmen to-day support -the idea that the control of money should be a State function rather than a field for dividend making.
And the former United States President and eminent statesman, Thomas Jefferson, when denouncing the American banking institutions, had this to say -
Already they have raised up a money aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it .properly belongs.
And so it is apparent that, for many years, the manner in which the privatelyowned banking institutions have manipulated the finances and credit of the nation in their own selfish interests has been publicly denounced by an ever-increasing number of writers and economists.
Now let us look at what the Royal Commission on Monetary and Banking Systems had to say on the subject. This commission, ‘appointed by the Lyons Government, was very outspoken in its dissatisfaction with the role of the trading banks during the depression. It is a significant fact that the outstanding recommendation of the commission was that the Government must be responsible for the monetary policy of the country. Other findings of the commission were -
The central bank should be the Commonwealth Sank. Because its sole concern is the general .public interest, the central bank should be publicly owned and controlled.
And further -
The Federal Parliament is ultimately responsible for monetary policy.
An interesting sidelight on this subject was provided by the right honorable member for Cowper (Sir Earle Page), when, during his reign as the “tragic treasurer “, he introduced amendments of the Commonwealth Bank Act more than twenty years ago. On that occasion he said -
The important functions of banking can properly be performed only with the guidance and control of a central bank. Decision and settled policy are essential. Divided counsel and clashing interests of individual bankers must, in the end, be fatal to good credit management, and banking can be raised to its greatest perfection only by the action of a central bank working always for the good of all.
Judging from the remarks of the right honorable gentleman in this House last night, it is obvious that he, too, has also changed his ideas to suit the times.
Professor Copland, in 1931, declared that banking was more than mere finance. He said it was a social function which should be controlled in the permanent interest of the people. He stressed that it was inevitable in a federation that the Federal Government must be responsible ultimately for monetary policy, as it was . foi- defence. To-day, the powerful financial institutions, which have flourished on the cream of Australian industry and the toil of the nation’s workers, realize that once the Commonwealth Government assumes the complete powers over banking vested in it under the Constitution their stranglehold on the wealth and resources of Australia will be broken for ever. 1 For this reason colossal sums of money are being spent and will continue to be poured forth in the fight for their existence. They say that the nationalization of banking is contrary to the spirit of democracy and beyond the powers of the Parliament; but we say that their selfish actions in the past during times, of financial crisis were contrary to democracy. The Government, as the Prime Minister stated when he introduced this bill, has no doubt that it has full power under the Constitution to enact legislation for the complete control of banking. This power has never been disputed, and no political party, I repeat, would ever propose that it should be taken from this Parliament. The avowed policy of the Labour party in regard to banking is set out in the following words, which I quote from the party’s constitution -
The utilization of the real wealth of Australia to ensure a maximum standard of living consistent with the productive capacity of the Commonwealth through national control of its credit resources and the establishment of an efficient medium of exchange between production and consumption.
In view of those facts, how can it be argued that the Government has no mandate from the people to nationalize the banking system? In the deluge of anti-Government propaganda, it has even been “ suggested by the opponents of nationalization that this legislation is totalitarian. However, as the Prime Minister pointed out, the Axis dictators were helped to power by the banks, which financed industry to provide the sinews of war. No honorable member opposite has yet answered the Prime Minister’s question -
Is it argued that this Parliament, composed of elected representatives who must submit themselves later to the people, is not entitled to exercise the powers which have been vested in it by the people?
The Prime Minister also asked -
Is it suggested that control by a government of a great public utility is a negation of democracy ?
That question also has not yet been answered by honorable members opposite. I again remind them that, on the contrary, before this Government came to power a dictatorship was exercised by persons who were not responsible to the people. That cannot be denied, however subtle the propoganda of the opponents of nationalization may be. Had the Government harboured any ulterior motives in regard to banking as is suggested by honorable members opposite, surely it could have used the powers which it possessed under the National Security Regulations accordingly. But not one single violation of the rights of the private individual has been cited to support those extravagant claims. Honorable members opposite and the private banks, in their vicious campaign against nationalization of banking, have laid great stress on their argument that the 1945 banking legislation endowed the Government, through the central banking authority, with powers wide enough to control the financial and credit policies of the nation. In that respect they speak with their tongues in their cheek. They are fully aware that the real “ nigger in the woodpile” in the Banking Act of 1945 is the vital section concerning the Commonwealth Bank’s control of the ebb and flow of credit under sections 18 to 22 of that act. Those sections, which are vital to the effective control of credit, provide for the lodging by the trading banks of their surplus investible funds in special accounts with the Commonwealth Bank, and events have proved that those provisions are vulnerable. The trading banks are eager to regain control of those excess deposits in order to exploit them in the interests of their shareholders.
Therein lies the whole crux of the present struggle. Should the private banks survive - and this legislation irrevocably seals their doom - the fight for this power to control the finance of the nation will go on. On the other hand, the Government desires through this legislation to assume control of those assets in order that the credit of the nation may be regulated and controlled to avoid the instability that results from booms and depressions. To illustrate this point further, I point out that during the boom of the late ‘twenties which preceded the depression, the banks paid an average dividend of 11.3 per cent.; but in 1946, after the Labour Government had enacted its reform banking legislation, the average dividend paid was 3.7 per cent., and the Australian people in general benefited to the degree of the difference in interest rates.
The validity of the 1945 banking legislation now being threatened, following the High Court’s decision, the trading banks must obviously make further efforts to control those excess profits. When money is plentiful and consumer goods are in short supply and strict monetary controls are lacking, unreal or boom conditions invariably result. The United States of America is experiencing such a crisis now. Prices have soared to fantastic levels and the cost of living is spiralling to levels which normally precede a depression. Inevitably, there must come a time for a readjustment and it is during such transition periods that the mass of the people who have small margins after paying their normal living expenses suffer great hardships. The people of Australia will readily recall the chaos that resulted when the trading banks during the depression, contracted credit, called in overdrafts and raised the rate of interest. I vividly remember the conditions that operated during the depression. Honorable members opposite talk of their love of freedom and their hatred of communism and totalitarianism. What of their record when as a government they were expected to provide for the members of the fighting forces who returned from World War I.? They have the audacity and the effrontery to charge the Scullin Labour Government with responsibility for the position which confronted the people in the financial and economic depression of .1929-31. They are well aware that ‘those conditions were not brought about as the result of any failure on the part of the Labour Government. How did anti-Labour governments treat those who returned from the World War I. ? In 1914 honorable members opposite promised those who offered their lives in the defence of the Empire that on their return to Australia they would find this country a land fit for heroes to live in.
– Men volunteered for war service, not because of those promises, but because they believed it to be their duty to do so.
– And what did they get on their return but unemployment? Honorable members opposite, who to-day, claim that the Government seeks to rob the Australian people of their freedom, to conscript them for this and that purpose, were responsible for the state of affairs that then existed, which brought about so much resentment among the ex-servicemen. It was to avoid a repetition of those same conditions that 1 and many other Labour members relinquished lucrative .professions and wellpaid positions in order to engage in a fight against the anti-Labour forces. Those who returned from World War I. came back to a land not fit for heroes to live in, but one in which they very quickly found themselves virtually on the very point of starvation.
– What rot!
– The honorable member says, “What rot!”. I can produce now-
– The Minister can produce anything. It would still be rot.
– The honorable member can “ give it “, but he cannot “take it”.
– That comes very well from the honorable .member.
– The honorable member does not like to hear these things. He knows very well that the anti-Labour governments offered the servicemen who returned from World War I. nothing but unemployment. At one period no fewer than 800,000 people were walking the streets of Australia living on the dole.
– That was during the regime of the Scullin Government.
– It was due to no fault of the Scullin Government. That Government had a majority in this House but not in the Senate, and when it asked the Commonwealth Bank to provide a few million pounds to provide clothing, food and shelter for the 800,000 unemployed the money was not provided, because the bank was then under the control of the Commonwealth Bank Board, which was composed of representatives of the trading banks and directors of large influential financial and other concerns which fattened on the misfortunes of the people. The Scullin Government did all it could reasonably have been expected to do in an attempt to relieve the situation. In order to avoid a repetition of such a state of affairs, this Government has decided to nationalize banking. The passage of this bill will for all time ensure that the people of Australia shall never again become the slaves of the private financial institutions of this country. We have all seen graphic photographs of ex-servicemen from World War I. scavenging garbage tins in the markets of Australia in search of a little food. What was the reason for that? Was it because in those years Australia could not produce the food and clothing needed for its people? Was it because the sun had failed to shine and the rain had ceased to fall? Not at all. Our national resources still remained virtually untapped, and food, clothing and shelter were to be had in abundance; but nobody had the money with which to buy them. I notice that the honorable member for New England does not like these words. He would like to have the people believe that this bill has been introduced from ulterior motives. Not at all. Its purpose is to make certain that if honorable members opposite ever again form a government - and God forbid that that should ever happen - they shall not be in a position to condemn the Australian people again to the conditions that prevailed after World War I.
– The Government has even imposed a means test on the war pensions of ex-servicemen and their dependants.
– After World War I. the anti-Labour government did not even provide a decent pension for exservicemen and their dependants. The ex-servicemen, their wives and kiddies were given relief orders, and throughout the country notices appeared in the shops reading “ Relief orders taken here “. Men who had fought overseas for the private banks were disgusted to find, on their return, that all they could get was a dirty little relief card authorizing them to buy the bare necessaries of life for themselves and their families. I remember the degradation and despair of respectable working people in South Australia who had been evicted from their homes, and were compelled to exist in bag and rusty iron shanties along the banks of the Torrens River. I recall the public appeals for a “mile of pennies” to be placed edge to edge along the footpath of King William-street, from Northterrace to South-terrace, to establish a fund for the alleviation of the distress of those who were suffering misery and poverty through no fault of their own. Collecting pennies to feed the people in a glorious country like Australia! In the winter months during the depression years, I saw children who could not get enough food in their homes, lining up with their plates to get soup from charitable organizations. That is all that honorable members opposite could do for the Australian people in those days; yet to-day they talk of freedom, and claim that this measure will rob the Australian people of their liberty. We are determined that the Australian people shall be free. This bill is the result of that determination, and the Parliament will pass it.
We have heard a lot from honorable members opposite about the protests that they are receiving from constituents against the nationalization of the banks. 1” do not deny that I, too, have received protests. I have received letters and telegrams condemning the Government for its stand; but at the last general elections., while there were many people who on the Friday evening would have been prepared to say, “ Chambers, we shall sign a petition against your entering the Australian Parliament”, there were ten times as many on Saturday morning who said, “ ‘Chambers, we want you in the Australian Parliament “. Not 10 per cent, of the protests against this measure are genuine, and I am confident that the Australian people will give their imprimatur to the bill just as assuredly as they gave it to the Labour party at the last elections. I point out, too, that at both the war-time elections held in this country, the votes of servicemen in all theatres showed a three to one majority for Labour.
Honorable members opposite talk of democracy; but I remind them that their colleagues in that grand, august body, the Victorian Legislative Council, have thrown a government out of office as a challenge to the nationalization of banking. Members of that chamber are endeavouring to force a referendum on this legislation, but they have refused to pass a measure providing for a referendum to decide whether or not the franchise of the Legislative Council should be altered or whether the Council should be abolished altogether. That is the conception of democracy and freedom held by the parties to which honorable members opposite belong. They are seeking now to defend an all-powerful organiza- tion which, throughout the years, not only in Australia, but also in every other country, has been able to control the lives of the common people. But with the passage of this measure, the Australian people will have real freedom, and will no longer be tied by a group of individuals who, through their grip of the monetary system., have been able to exercise complete control over the lives of Australian citizens. I support the bill and I know that it will be carried enthusiastically.
– The Minister for the Army (Mr. Chambers) worked himself into a frenzy in an endeavour to explain to this House and to the Australian people the reason for his support of this measure. Like most other speakers on the Government side, he referred to the depression years. Honorable members opposite do that because they know they are now caught in the tentacles of the octopus that started to crawl into the Labour party in- 1921, when a gang of disloyalists brought about the system under which Labour men are forced to sign a pledge which most of them would reject if they had the courage. .So, there has been this continual harping on the depression and one is inclined to wonder whether we have at last found a match for Harpo Marx.
The honorable member for Perth (Mr. Burke) apparently regards himself as the Government’s counterpart of the leader of the Australian Country party (Mr. Fadden). At every opportunity he endeavours to tear the arguments of that, right honorable gentleman to pieces. Tonight, however, he conveniently, very conveniently, dodged the challenge issued by the right honorable gentleman - a man whose record in his own sphere of business activity will take some equalling by any honorable member opposite - to deny that this Government is using the money in the special accounts held by the Commonwealth Bank, and belonging to the trading banks, to buy the trading banks out. This challenge has not been accepted by any government supporter, and I am confident that it will be conveniently ignored throughout this debate. The honorable member for Perth said that Lord Bruce had paid a tribute to the Scullin. Government for having converted an adverse trade balance into a small favorable trade balance during the depression years; but I contend that it was the Scullin Government that got us into the economic difficulties for which we had to pay in blood and tears. It was the Lyons Government that initiated our recovery, and for its success in this direction it was commended by authorities in many other countries.
Last night, the Minister for the Interior (Mr. Johnson) said that the Australian Country party was supporting the private banking interests of this country. I have no hesitation in saying that I hold no brief for the private banks; but I have even less regard for socialism. I believe that the banks should be controlled, and that they can be controlled, hut this Government is going “flat out” for nationalization. Earlier in this debate, the Minister for Post-war Reconstruction (Mr. Dedman) said that “liberty” was the greatest word in the British language. I remind the House that this Government is now proposing to deprive the people of this country of their liberty. If the Minister really believes in the liberty of the individual, why does he not give to the people of this country liberty to say whether or not they want the banks to be nationalized? The Minister also said that there would be no discrimination from a taxation point of view between those who voluntarily surrendered their shares in the private banks and those who had their shares compulsorily acquired; but the Prime Minister (Mr. Chifley) in his secondreading speech, stated that those who surrendered their shares voluntarily would be exempt from tax, whereas those who had to be forced to surrender their shares would have to pay tax. “We find this senior Minister and the Prime Minister again in disagreement, as they were over the 5,000 bank employees who will be employed in carrying letters or in some other postal job when the monopoly bank is in operation. The Prime Minister said in his secondreading speech -
Mismanagement of money, on the other hand, has contributed to the greatest economic disasters of modern times - booms and slumps, mass unemployment, waste of resources, industrial unrest and social misery.
As a member of the Royal Commission on the Banking and Monetary Systems, this self same Prime Minister subscribed to the belief that there is no justification for the view that the trading banks, in order to enlarge their profits, deliberately expanded credit to produce a boom and contracted it to produce a depression. The right honorable gentleman’s signature is affixed to the report and he, therefore, verily believes that there is no justification for the attempt by Government supporters to make the people believe that the private banks deliberately expanded credit to produce a boom and then contracted it to produce- the depression. Through the lips of the Prime Minister, the Government recently announced that we were approaching the golden age. Now the Prime Minister warns us that we are heading quickly for a depression. This all-powerful Government - perhaps I should say this powerdrunk Government - is going to defeat the inexorable law of supply and demand and prevent the fall of export prices. That is one of the causes of depressions, Instead of amending the Banking Act of 1945 in order to give itself the control over the private banks that it ought to have, the Government has determined to wipe them out. That determination was expressed curtly in a 42-word statement by the Prime Minister. I am afraid that the whip with which the Government intends to flay the private banks will become a cat-o’-nine-tails with which the.Australian people will be uni ornately wealed when the powerful banking monopoly that the Government proposes to establish passes into the hands of some people whom I propose to mention later.
I repeat that I have no brief for the private trading banks and that I believe that they should be controlled. If the Government were sincere and honest in its endeavours to help the people, it would evolve a system of control that would leave the people with liberty to deposit their savings or raise an overdraft whereever they felt inclined. Control for the sake of control is absolutely senseless. Controls imposed on the pretext of war or the aftermath of war, which includes depressions, can be characterized as being designed to favour the accomplishment of a semi-totalitarian or utterly totalitarian system. However innocently designed they may be, whatever guise they assume,, whatever liveries they wear, whatever slogans they mouth, they constitute a fraud which should be mercilessly exposed to the Australian people. From the start of his oration, the Prime Minister tried to mislead the people into thinking that his reason for this measure is his heartfelt commiseration with them in the depression about seventeen years ago. But this “subtle Socialist “ knows only too well that the plan was laid and placed in the incubator in 1921 at the all-Australian Trade Union Congress in Melbourne. That conference set up a committee, of which the right honorable member for Yarra (Mr. Scullin) was chairman, to devise ways and means of bringing into effect the Australian Labour party’s objective of the socialization of the means of production, distribution and exchange. It was at that conference that the late John Curtin had the fact elucidated that the conference was not merely pledging itself to the objective, he also had it made crystal clear that all those offering themselves for political honours under the banner of the Labour party must pledge themselves to work for the objective. Thus we have the pledge signed by every aspirant for political honours in the Australian Labour party. I shall not take up time by reading all the pledge, but the closing paragraph reads -
I also pledge myself to actively support and advocate at all times the party’s objective - the Socialization of Industry, Production, Distribution and Exchange.
Supporters of the Government refrain from mentioning that at that conference this unholy anti-British scheme was evolved at a time the country was flourishing under an anti-Labour Government. They are afraid to do so. They do not want the people to know. Their tactics are to try to delude the people by continually talking about the depression. The Minister for Labour and National Service (Mr. Holloway), the man who says that communism is based on the teachings of Christ, was chairman of the conference. He said, in his closing
Ifr. Hamilton. words, that he felt that the workers of Australia had at last adopted the slogan of Karl Marx - “ Workers of the world, unite “ - and at last one of the dreams of his life had been accomplished. The committee put forward these views -
To the end of socialization we favour the use of the parliamentary system only as a temporary weapon.-
I emphasize the phrase “temporary weapon “ - to expose the true nature and hamper the operations of capitalism and to act as a medium of working class propaganda.
They intend to destroy our democratic system and substitute their supreme economic council. The right honorable member for Yarra also said that it had been suggested that imperial federation might lead to the establishment of a republic. If he thought that, he would support it. Another honorable member of the Labour movement also said that he would support a motion to establish “ a working class republic of the British Empire “. Those facts can be read in the report of the conference. I mention them to emphasize that the purpose of this legislation is not to offset a depression and repetition of the hardships of the thirties, but to bring to fruition the objective that was formulated at the 1921 conference. The legislation is the long hoped for culmination of a long-range scheme of enemies within our’ gates. I shall deal with them later. In his second-reading speech the Prime Minister, referring to the trading banks said -
They can also determine when and where they will lend and upon what terms ; and in these operations they are guided primarily by the Interests of those who own and control them.
Who controls them? I understood that they were controlled by the Government under the legislation of 1945. At any rate, during the election campaign of 1946, the Government declared most emphatically that it had control of the banks. Of course that was so because, under the Banking Act 1945, the trading banks, were prevented from determining when, where and -upon what terms they would lend their money. The Minister for Post-war Reconstruction (Mr. Dedman), a senior member of this Labour
Cabinet, said during the debate on the 1 945 legislation -
The Treasurer himself has made it perfectly clear that all that the Commonwealth Bankhas been given power to do in these bills is to ensure that the general direction in which the moneys available in the private trading banks shall be used must conform to government policy.
E verybody agrees with that, providedthat government policy is honest, fair and straight-forward. But it is not always so. I refer to an incident which occurred not long ago. A private trading bank had made an arrangement to lend a considerable sum of money to an individual who wished to engage in a particular class of business. Before it could make the loan, it had to submit the proposal to theCommonwealth Bank for approval by the Loans Approval Board. That august body refused to allow the bank to make the proposed advance on the ground that the industry in which the applicant wished to engage was a luxury business. Within four days of that refusal representatives of the Commonwealth Bank interviewed the applicant, advanced the sum of money required and promised that more would be available if he required it so that he could engage in what the bank had previously termed a “ luxury business “. Is that fair and honest dealing? If it is, I shall walk from here to the uttermost ends of the earth. That is not the sort of control that we want to see exercised over the private banks. We want to have them controlledso that they will not deal over-harshly with the people or charge exorbitant rates of interest. At the same time, we want our government instrumentality to be honest and straightforward.
During the debate on the 1945 legislation, the Minister for Post-war Reconstruction also went as far as to say this-
The alternative would be, of course, to have only one bank undertaking the activities of the Central bank and monopolizing the whole field of the trading banks as well. That could be, perhaps, described as nationalization or socialization of the banking system. The Government has not selected that systembut proposes an alternative which it thinks is better suited to this country.
Therefore,according to the Minister, the Banking Act 1945 provided the system mostsuitable for this country. For that reason the Government should have endeavoured to amend the act, when it was declared ultra vires the Constitution, so as to retain control of banking by democratic means. But the Prime Minister, after consultation with the Australian Council of Trade Unions, declared in favour of nationalization in a 42-word statement issuedon the 15th August of this year of grace. Never mind the people ! That was his attitude. He did not want a mandate from them. He was not interested in what they had to say. He was interested only in going “ flat out “ for nationalization. Nary a word about nationalization was uttered by the right honorable gentleman in his policy Speech before the 1946 elections. He had no thought ofreferring such an important move to the people. The fact is that the Government lacked the courage to do so. The powers behind the Labour party knew that once before, 31 years ago,a question of similar importance to the well-being of the nation which had been referred to the people had had the effect of splitting the Labour party. They did not want that to happen again. They knew that there was far greater danger of a split in the party this year than there had been in those far-off days, when men who entered the Parliament under the banner of the Labour party were imbued with the highest principles. To-day, they sign the party’s pledge as a stepping stone towards their own personal aggrandisement. A referendum wouldhave given these weak-kneed adherents to the party a chance to sneak from under its yoke.
– Ha,ha !
– The honorable member may laugh. As the honorable member for Gippsland (Mr. Bowden) has said, theGovernment’s supporters would laugh if their mothers were being hanged, and now they laugh while freedom is being taken from the people of Australia. They have been told to present a solid frontonthis issue, but when petitions opposing nationalization of banking have been presented in this House I have noticed that even the reddest of honorable membersopposite turn pale about thegills. They have beentold that, if they present a solid front, they will be assured of re-election in 1949 as the result of a redistribution and increase of the number of electorates. But, thank goodness, the people will decide about that in 1949. Unfortunately, they have not been given an opportunity to say now whether the Government’s proposal is to be or not to be.
If this’ Government is so cocksure that the bill is for the good of the people, why does it not test its faith by asking the people to say “Yes” or “No”? I ask the Government where the pressure applied to it after the High Court ruled against section 48 of the Banking Act 1945 originated? Did the AttorneyGeneral (Dr. Evatt) have anything to say about the matter, or was the order given by the Australian Council of Trade Unions? Did that august and allpowerful body push under the nose of the Prime Minister the’ statement made by Lenin at the revolution conference in 1917? That statement was adopted by the all-Australian Trade Union- Congress in 1921. For the benefit of members of the Government, I shall read a portion of it -
We are all agreed that the fundamental step in the direction of socialism must be such’ measures as the nationalization of the banks and the trusts. Let us put into practice these and similar measures and we shall see. It is possible and even indubitable that the transition will not be made without combined types i.e., we cannot at once either nationalize the small consumer’s concerns, i.e. in one or two wage workers, or place them under a real worker’s control. Their role may be small to the vanishing point; through the nationalizing of the banks they may be tied hand and foot; all that is true, but why throw over the minimal programme so long as vestiges, however slight, of the middle class citizens’ relations remain.
That was what Lenin said in 1917. Mosley, that British fascist who was interned during the war on account of his anti-British activities, said -
Banking and credit are the key to the fortress. Get possession of these and we have them at our mercy.
The Trade Union Congress of 1921 made a similar pronouncement. In an endeavour to hide the real motive behind this bill, the Prime Minister has dressed his action in time-worn phrases. He has said that the private trading banks increase their lending in good times and contract it in bad times. But Professor Copland, that eminent economist whom this Government holds in very high esteem, disagrees. In a book which he published in 1931, he stated -
From 1929 to 1931 the deposits of the trading banks fell from £279,000,000 to £257,000,000, a decrease of £22,000,000, and their advances for the same period decreased from £282,000,000 to £208,000,000, a drop of £14,000,000. The proportion of advances and securities to deposits in 1929 was 101.05 per cent, or in other words, for every £;100 deposit the banks were lending £101.05. In 1931, however, we find that the percentage of advances and securities to deposits had risen to 104.44 per cent., or in other words, for every £100 deposit £104.44 was out on loan.
That shows that the Prime Minister’s assertion is untrue. The right honorable gentleman paid a tribute to the Commonwealth Bank in his second-reading speech, when he said -
We recall how the former Commonwealth Bank Board, which considered itself to be conducting a bankers’ bank, prevented the Commonwealth Bank from competing with private institutions. . . “ In spite, however, of conservative management under a board for many years the Commonwealth Bank, including the Commonwealth Savings Bank, has made remarkable headway “.
With that commendable record, why should there be such great urgency to alter the monetary policy which, in the words of the Minister for Post-war Reconstruction, is the policy best suited for this country? We must not lose sight of the fact that this remarkable headway has also been achieved because the staff of the Commonwealth Bank has been kept on its toes by the competition offered by the trading banks. In spite of this remarkable headway and the view expressed by the Minister for Postwar Reconstruction that the existing system is best suited to Australia, the Government makes this change of the financial policy of the country a matter of urgency without giving one thought to the wishes of the people. It would appear that the Prime Minister is afraid of the amalgamation of the trading banks, as that would accentuate the monopolistic character of those that remain. The right honorable gentleman is afraid of monopolies and the Australian Labour party is diametrically opposed to them. Nevertheless, he now proposes to create the greatest monopoly that the country has ever known. He has informed the House that this monster will be strictly impartial. For example, a system of appeal will be provided so that a person who considers that he has not had reasonable treatment from the local manager of the monopoly bank, may be able to refer his case to a regional authority for reconsideration. Special arrangements will be made to ensure that the case shall be reconsidered without delay. Has any one yet heard of a. government department in which there has not been any delay? -It may be that in the first few years of the life of this monster there will be a measure of promptness -in attending to business because the Prime Minister proposes that the Commonwealth Bank shall absorb the staffs of the private trading banks. Former employees of the private financial institution will not forget in a short period the practice they have acquired in years of employment with the private trading banks. Those methods will be second nature to them and obviously in the early stages of the monopoly we shall receive a measure of prompt attention. But as time passes, the former employees of the private trading banks will meet the frustrations that are evident in all government departments and they also will fall into the groove and be administratively strangled by red tape.
Let us examine the system of appeal. The local manager may refuse an application when a client applies for an advance. The dissatisfied client would then appeal to the regional authority. What can the regional authority do? Will it entirely disregard any report from the local manager, or will it call for a report from that official in order that it may fairly assess the case? Obviously, it will do the latter. It will then have two courses of action to pursue ; either it must uphold the decision of the local manager, or find in favour of the customer of the bank. Let us assume for the moment that the regional authority upholds the decision of the local manager. Where then will the customer be able to obtain the financial accommodation he requires? There will be no other source of supply. I remind the House that when a primary producer requires an advance of £100, it is urgent and he needs the money to-day, not next month or next year. It would be useless to him if the application were delayed for months. The advance would be of real assistance to him if it were granted immediately. What would happen if the regional authority rejected his appeal? He would meet some influential person in his district who would ask whether he knew his local parliamentary representative. If the right kind of government happens to be in office and the applicant for the loan can influence a number of votes in his district, the local member of Parliament will do his utmost to obtain for the man the financial accommodation that he requires. That can lead to graft. We hear of it in government departments and it will occur in the monopolistic Commonwealth Bank, which will become a government department. If, on the other hand, the regional authority upholds the customer’s appeal against the decision of the local manager, what will be the attitude of that official ? His confidence in himself to do the right and proper thing will be lost. After that, whenever any Tom, Dick or Harry seeks a loan he will oblige and fairly splash the money around.
– That will be the time to catch them.
– Yes, that is what will happen. The Minister for Labour and National Service (Mr. Holloway), our “ Christian Communist “, would be one of the first to give the bank official his marching orders, because he did not have the courage in the first instance to give the official a reasonable understanding of his job.
Honorable members know that, during the financial and economic depression of 1929-33, more farmers were compelled to leave their farms as the result of treatment by government banks than by the private trading banks. They were forced to leave their properties because of humbug and delay, while the employees of -the government banks waded through the mass of red tape which wraps itself around the staffs of these institutions. When we have “ one big bank “, there will be no other place where the public can obtain financial accommodation. During the debate on the Commonwealth Bank Bill and the Banking Bill in 1945, the Minister for Post-war Reconstruction expressed himself in favour of people having a choice of banks. He said that he believed that a trader or manufacturer should be able to seek financial accommodation in more than one place. For that reason, he supported the establishment of the mortgage bank department of the Commonwealth Bank. His idea was that customers of the private trading banks, if they so desired, should be able to obtain their needs from the Commonwealth Bank. However, the Commonwealth Bank did not make many advances. In supporting this bill, the Minister is again executing one of his convenient political somersaults. When the monopoly bank is created, where will the thousands of farmers, small businessmen, traders, homeseekers and manufacturers go in order to avoid being strangled by red tape ?
I now desire to make a further few observations on the Prime Minister’s secondreading .speech. He handed to the staffs of the . private trading banks a sugarcoated pill. I ask the right honorable gentleman to state whether he believes that the employees of the private financial institutions accept his assurances regarding their future. I direct that question to the right honorable gentleman because of recent utterances of the Minister for Post-War Reconstruction and the Postmaster-General (Senator Cameron). The. Minister for Postwar Reconstruction stated that the work of the “ one big bank “ could be performed by 5,000 or 6,000 fewer persons than are now employed by all the banks, and the Postmaster-General declared that he could absorb the surplus in the postal department. The staffs of the private trading banks know that this- sugar-coated pill contains arsenic, and they will not swallow it. I also ask the right honorable gentleman to explain what will become of the present staff of the Commonwealth Bank. In this morning’s press, I read that these employees are complaining at the prospective intake of the staffs of the private trading banks, because this influx will deprive them of the promotion to which they are justly entitled. I prophesy that there will be trouble with these staffs when they are taken over. Admittedly, the Prime Minister wants them; he earnestly desires to absorb them in Ms monopoly bank for the simple reason that he has promised the people that there will be experts available in that bank to advise them. I defy him now to produce many experts in the Commonwealth Bank, and perhaps that is why that bank is- not doing so well. . All the banking experts of this country are employed by the trading banks, and that is why the Prime Minister is so anxious to obtain their services. However, I foresee trouble when the officers of trading banks are mingled with the officers of the Commonwealth Bank.
I propose to say a few words with re- ‘gard to the “hand-over take-over” procedure which the Government proposes to adopt. If time permitted I could tell the House a little story about a “ hand-over take-over “ transaction in the north-west, when bren guns and revolvers had to be used. However, the Prime Minister is adopting a more subtle method. He has told the people that they will not notice any change in the service provided by the monopoly bank when the Commonwealth Bank takes over the trading banks. In fact, he is determined that there shall not be any apparent change before the next elections in 1949, because he wants the people to swallow his proposal. He wants that proposal to go down so that when he faces the people at the next elections he will tell them what a magnificent thing he has created - the gargantuan thing which he has created ! However, he is not going to have it all his own way, and members of the Opposition are certainly going to keep the issue alive. The right honorable gentleman is not always going to occupy the position of Prime Minister, and it is quite likely that he will be succeeded by the Minister for Immigration (Mr. Calwell), the Minister for Transport (Mr. Ward), or even by the honorable member for Dalley (Mr. Rosevear), nor do I overlook the fact that he has in mind importing into this House a gentleman from another place with a view to making him Prime Minister. However, we have seen previous schemes like that fade away. What power would any of those gentlemen have in their hands if they occupied the position of Prime Minister? One of them is a notorious rabble-rouser -, I refer to the Minister for Transport. Another wants to see the press prevented from printing anything opposed to this bill. The honorable member for Dalley spoke in the Sydney Domain - and I am sure that Mr. Speaker will agree with what I am saying now, because he heard the speech - and attacked the judiciary because of the age of some of its members, and said that they went to sleep on the Bench. Parenthetically, I point out that one of the gentlemen whom the Government proposes to appoint to certain positions has been sound asleep in this House. However, that does not deter supporters of the Government from decrying the judiciary. What power would any of the gentlemen whom I have mentioned have if the present proposal is enacted? While people are endeavouring to earn an honest livelihood any of the gentlemen whom I have mentioned would be quite prepared to cut the grass from under the people’s feet with a sickle and then hit them on the head with a hammer.
I propose to say a few words with regard to the secrecy promised to customers of the monopoly bank. I referred on another occasion to the way in which the accounts of prisoners of war have been - I shall not say, rifled - but tinkered with. I have received a letter from a gentleman in Perth who states that an inspector of the Department of Social Services told him that he was able to inform recipients of age pensions of details of their accounts although he had not been directed by the department to furnish that information. I agree that certain informatioin should be furnished by an applicant for an age pension, but it is quite wrong for an inspector of the department to inform people that he is aware of intimate details of their position. That may be a fair sample of the treatment which customers of the monopoly bank may expect. Perhaps the notorious Communist, Mr. Thornton, does not welcome this aspect of the proposal, because, I understand, he has accounts all over the place.
The Minister for Labour and National Service (Mr. Holloway) and the right honorable member for Yarra (Mr. Scullin) have advocated complete socialization. In other countries, totalitarianism commenced with, the confiscation of the banks; and that is exactly what the Government proposes to do now. Hitler said the same thing in Germany ; he said. “ Control the banks, and we control every one The fact remains, however, that he did not nationalize the banks to the degree proposed by this Government. All he did was to assume control of them. For six long years this country fought against the tyranny which Hitler attempted to exercise over the world. The people of the allied nations fought for freedom, and the final victory which they achieved was not so much a victory over Germany and Japan as a victory for human rights. It vindicated the conception of the State as a servant, and not as the master, of the people. The Government is bound, as the servant of the people, to afford them the right to decide whether or not they wish to have a monopoly bank. What right has the Government to step in and tell the people where they are to deposit their savings, or invest their money? The freedom of the people of this country demands that all shall be free to invest their money wherever they choose, provided they do not violate the law of the land. Should the Government forbid them to do so, it deprives the people of their freedom. Once again I remind the House that it was for that freedom that the people of Australia fought for six long years. The people of this country have nailed their colours to the mast of free enterprise. They are determined that the native genius of free adventure by which we have developed this- country shall continue to be given free rein. Furthermore, they are determined that the spirit of risk-taking shall continue in peace as well as in war. They know that such a spirit will carry them forward and will find profitable employment for our people. Members of the Opposition are resolved that good and thrifty housekeeping, both national and private, shall sustain our economy. Should this Government endeavour to make serfs of the people, so that the State becomes the master and not the servant of the people, I warn it that trouble lies ahead.
Finally, the fight is on. It is up to our people, all of them, to resist by all constitutional means in their power this encroachment upon their liberty. They must not forget the action of the Government when they vote at the general elections in 1949. I am confident that the people will turn the Government out neck and crop, just as the Victorian people will reject the Labour Government in that State next Saturday.
Debate (on motion by Dr. Gaha) adjourned.
The following papers were pre sented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1947 -
No. 78. - Federated Ironworkers’ Association of Australia and others.
No. 79. - FederatedClerks’ Union of Australia and Commonwealth Temporary Clerks’ Association.
No. 80. - Federated Ironworkers’ Association of Australia and others.
No. 81. - Australian Workers’ Union.
No. 82. - Federated Ironworkers’ Association of Australia and others.
Commonwealth Public Service Act - Appointment - Department of Labour and National Service - A. A. Willats.
House adjourned at 10.58 p.m.
The following answers to questions were circulated: -
Prices Control: Increased Cost op Living.
Mr.Francis asked the Prime Minister, upon notice -
Has he received a communication from the Queensland Trades and Labour Council expressing alarm a.t the extraordinary increase in the cost of living?
Is action being taken by the Government to prevent further increases, and, if so, what is proposed?
– On the 26th September, the honorable member for Parramatta (Mr. Beale) asked the following questions : -
I ask the Prime Minister whether it is fact that the honorable member for Martin left Australia last April to go to Geneva to represent this country at a Coal and Transport Conference held there, and returned to Australia only two weeks ago?
What other countries did the honorable member visit during his long absence and upon whose authority and for what purpose? What was the cost of the world tour enjoyed by the honorable member at the expense of the taxpayers? Finally, is it intended to ask the honorable member to present a report covering his tour? In the event of such a report being received, will the Prime Minister make a copy available to honorable members so that they may have the benefits of the honorable member’s animadversions.
I uow furnish the following information in addition to that already supplied : -
The honorable member for Martin departed from Sydney by flying-boat on the 10th April, 1947, and travelled to Geneva via London. He returned to London via Italy, France, and Belgium (calling at Milan, Genoa, Paris and Brussels), made a short visit to Eire and returned to Australia via Canada and the United States. He arrived at Sydney on the 10th September, 1947. The cost of the mission was borne by the Department of External Affairs and the Department of Immigration, the amounts being £577 and £S40 respectively.
n asked the Minister representing the Minister for Supply and Shipping, upon notice -
What is the total value of disposals property, real and personal, sold by or through the Commonwealth Disposals Commission and/or its agents to the Australian National Airlines Commission, for the financial year ended 30th June,1947?
– The Minister for Supply and Shipping has supplied the following information: -
Sales of real property total £10,942. However, the Disposals Commission has sold a number of buildings, workshops, &c, to the Department of Civil Aviation, which has leasing arrangementswith all operating airline companies including Trans-Australia Airlines. Sales of other than real property total £331,379 and consist mainly of aircraft and aircraft spare parts, mechanical transport,wireless equipment, machines and hand tools, office furniture and office machines.
Commonwealth Bane: Transfers of Shares in Private Banks.
nasked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : -
Armed Forces: Deductions from Bans Accounts.
y. - On the 21st October, the honorable member for Fawkner (Mr. Holt) asked a question relating to the recovery of overpayments made to bank accounts of members of the Services by means of indemnities. I now supply the following information:-
A system under which claims for repayment, under indemnity, from the bank accounts of members of the Forces were made in respect of amounts of which there was conclusive proof of overpayment, was introduced in the case of the Army in 1915. In tho case of the Navy and Air Force thesystem also operated during the recent war. The latter part of the honorable member’s question was covered by the statement made to the House by the Minister for the Army on 21st October.
Cite as: Australia, House of Representatives, Debates, 30 October 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19471030_reps_18_194/>.