18th Parliament · 1st Session
Mr. Speaker (Hon. J. S.Rosevear) took the. chair at 3.15 p.m., and read prayers.
Petitions in relation to banking in
Australia were presented as follows: -
By Mr. FRANCIS, from certain electors of Queensland.
By Mr. HOLT, from certain electors of the division of Fawkner.
Petitions received and read.
Supplies for South Australia
– According to a report in the Adelaide Advertiser, 12,000 tons of coal arrived this week in Adelaide, whereas at least 17,000 tons were needed, with the result that reserves are now being depleted. Can the Minister representing the Minister for Supply and Shipping state when increased supplies of coal will be forthcoming?
– I have no up-to-date information regarding coal reserves, but I shall refer the matter to my colleague, the Minister for Supply and Shipping and ask him to supply the information) to the honorable member.
Darwin andmaryborough Services.
– For the last two years,. I have been advocating a shipping service twice, or at least once, a month between eastern ports and Darwin. Can the Minister for the Interior state whether thereis any possibility thatDarwin will have the benefit of a service from the eastern ports as well as one from Fremantle?
– Yes. On the 22nd October, there was held in Canberra a conference consisting of myself as chairman, the Minister for Supply and Shipping, the Administrator of the Northern Territory, Mr. A. R. Driver, the Secretary of the Department of Supply andShipping, Mr. F. A. O’Connor, the Director of Shipping, Mr. R. A. Hetherington, the Chief Administrative Officer of the Stevedoring Industry Commission, Mr. W. A. Darbon, the Assistant Secretary of the Department of Supply and Shipping, Mr. G. G. Sutcliffe, the manager of the Western Australia State Shipping Service, Mr. T. E. Owen, and the secretary of the
North Australian Workers Union, Mr. J. Walker, the purpose of the conference being to discuss methods for improving shipping services to Darwin. It was decided to appoint a Harbour Board, with the Administrator as chairman, in order to deal with matters affecting the loading and unloading of ships. It was agreed that the labour force to be employed should be on a permanent basis, that it should be uniform as to its functions, and should be adjusted by the Harbour Board as experience proved necessary. The two ships Koolinda and Dorrigo, at present operated by the State Shipping Service in Western Australia which carry pasengers, refrigerated goods and general cargo, are to be supplemented by an additional ship early in the new year. Another ship is expected to make at least nine trips a year between eastern ports and Darwin. This, it is considered, will provide Darwin with an adequate shipping service. Labour difficulties experienced in the past, because of intermittent employment, are expected to disappear under the new arrangement, as all interests associated with the control of Darwin have guaranteed their closest co-operation.
– To-day I received a letter from the secretary of the Maryborough Chamber of Commerce pointing out that not one vessel has arrived at the port of Maryborough from Sydney since the 20th July last. As the result, many commodities urgently required by people in the Maryborough district are in very short supply, and some merchants who are normally in receipt of monthly quotas believe that their future orders will again be seriously curtailed. It is consequently of the utmost importance that ships be directed from Sydney to Maryborough. Will the Minister representing the Minister for Supply and Shipping ensure that ships are directed to Maryborough from Sydney in order to supply the long awaited requirements of stations, farms and homes, as well as food and essential commodities for the people of the Maryborough district, and the requisite materials to enable their industries to continue to function?
– I am under the impression that the Australian Government no longer controls interstate shipping. If that be correct, the Government has no power to direct ships to proceed to Maryborough or to any other port. The honorable member frequently complains about the controls exercised by the Government. In this instance he virtually asks that a control, which was formerly exercised by the Government, be re-imposed.
– The Govern-‘ ment still exercises control in this matter.
– I shall ask the Minister for Supply and Shipping to look into it.
– Has the Prime Minister seen the report published in the Melbourne Herald, last Friday, under the heading “ U.S. Companies Face Antitrust Suit “ under which is published the following cablegram dated Washington, Thursday -
The Attorney-Geneva] (Mr. Tom Clark) announced to-day that he was filing an antitrust suit against seventeen of the largest investment and banking firms in New York, alleging a conspiracy to monopolize the handling of securities issues.
The Government, he added, would ask for the dissolution of the Investment Bankers’ Association of America which has its headquarters at Chicago.
The report mentions the names of seventeen banking firms, one of which appears to have been the chief underwriter of the recent series of Australian Government conversion loans, whilst another has been prominent in Australian flotations. Does the Prime Minister know whether there is any truth in the report? Was he aware that these proceedings were imminent, and did such knowledge influence him in introducing the Banking Bill at present before the House ?
– I have not seen the report mentioned by the honorable member; but my attention has been drawn to a statement that the Attorney-General of the United States of America intended to take action against a number of banking and investment firms in that country. Two of those firms, Morgan, Stanley and Company and Kidder, Peabody and Company, have acted as agents on behalf of Australian governments and also Australian local governing bodies, including, for instance, the Brisbane City Council. I understand that the Lord
Mayor of Brisbane had been negotiating a loan for the Brisbane City Council through one of the firms mentioned in this respect. The Government had no knowledge that the action now reported was pending. The firms in question have acted for various Australian governments and, so far as we know, have given a fair and reliable service. I understand that the action is on a broad basis, and naturally I am not in a position, particularly if the action has been brought before the court, to make any comment with respect to the justification for the suit.
Motion (by Mr. Chifley) agreed to -
That the House, at its rising, adjourn to to-morrow, at L0.30 a.m.
– Is the Minister for Works and Housing aware that large quantities of timber, iron, steel, cement and other building materials are being exported to New Zealand? Would not the retention of these materials in Australia enable builders to obtain supplies which they now cannot obtain? If so, why are licences granted for the export of such materials? “Will the Minister also furnish to the House the totals of export of these materials to New Zealand during the last three financial years?
– It, is true, as the Minister for Post-war Reconstruction has informed the House on previous occasions, that a certain quantity of galvanized iron was exported to New Zealand, the Mandated Territories and islands under our control. Those supplies have been sent forward over a period of years. It is true that a quantity of timber goes to New Zealand; but, on the other hand, we import a like quantity from New Zealand. This is really reciprocal trade; and were we to refuse to export hardwood required by the Government of that dominion, it would probably refuse to supply us with timber of various classes which we require. On balance, we import from New Zealand a greater quantity of timber than we export to that dominion. T shall ask the Minister for Commerce and Agriculture, who is responsible for these matters, to prepare the requisite figures and to forward them to the honorable member.
– Last week I asked a question relative to a report in a Sydney newspaper concerning the existence of dangerous army materials on surf beaches. Is it a fact that the Greater Newcastle Council is very concerned about the reference in the press statement to the Stockton beach and that it is claimed by the council that the Stockton beach is perfectly safe for bathers and that there is no evidence of neglect on behalf of the Army in removing dangerous materials ?
– It is a fact thai a report appeared in the press last week complaining of the unsatisfactory state of the Stockton beach. I have just received an urgent telegram from the Lord Mayor of Newcastle which reads as follows: -
Resent criticism re Stockton beach. Your department has done everything required of it. Position satisfactory.
Appointment of Mr. A. R. McComb - Ansett Airways Limited - Omnibus Drivers.
– I have seen the article to which the honorable member has referred. The reference in the Melbourne Sun Pictorial to the appointment of Mr. A. R. McComb is as full of ignorance, inaccuracies and subtle innuendo as it is possibile to crowd into a short article. The writer does not even seem to be aware that the organization is the International Civil Aviation Organization and not the Provisional International Civil Aviation Organization. Such ignorance might be excusable in a person who claims to know everything, but in fact knows very little about this matter, but the assertion that Mr. McComb’s friends feel that he was cold-shouldered by the Civil Aviation Department on his return to Australia has not a shadow of justification. He was brought back largely at his own wish to fill what amounts to the third highest position in the department after completing the period for which he was appointed to represent Australia on the council of the international authority on civil aviation, so that his place in the Australian set-up should be preserved. He had just been selected, and his passage was booked to go to Geneva to attend the conference to be held to finalize a multilateral agreement, if possible, when word came of his appointment to the International Civil Aviation Organization at Montreal. Mr. McComb was not passed over by the Civil Aviation Department nor were Mr. Berg and Mr. Adam. Each of these men was the best available in his respective section to represent Australia overseas. The Commonwealth has not hesitated to send its most capable representatives to international conferences to exchange information and ideas with the world’s best authorities in regard to technical, administrative, and governmental matters and it is a great tribute to the high standard of the Civil Aviation Department, and the training and experience that these men have obtained in it, that they should be selected for very important posts in the Internationa] Civil Aviation Organization. But it would be a miracle if the Melbourne Sun Pictorial were to give credit to a government department for producing such high-class men, or if it were to print a truthful presentation of civil aviation affairs by the gossip writer of this mostly mischief -making column.
– Oan the Minister for Civil Aviation inform me whether Ansett Airways Limited has refused to raise its fares on the Sydney-Canberra.Melbourne service on the ground that the additional call which its aircraft are required to make at Wagga involves a delay which makes it difficult for it to compete with other “ through “ services ?
– I am aware that Ansett Airways Limited has made a request to reduce its fares, notwithstanding that it participated in the decision of a recent conference to raise fares by 20 per cent. I have previously explained that that conference decided that a 20 per cent, increase of fares should be made by all airlines. Ansett Airways Limited will not be permitted to reduce its fares, because that would result in price cutting, which is undesirable in the interests of air travellers and other airlines. I might add that, although this firm is now seeking to reduce rates, it has received for a considerable time, and still receives, a subsidy of £22,000 per annum.
– I ask the Minister for Civil Aviation whether the South Australian Road Transport Workers Union has declared’ Guinea Airways and Australian National Airways “black” because some of their omnibus-drivers have not joined unions? If so, what action does the Government propose to take regarding this attempt by the union to intimidate the drivers and the companies? Is union membership compulsory for Trans-Australia Airlines omnibus drivers, and if so, what intimation to this effect has been given to those drivers ?
– I have seen a report of the incident to which the honorable member has referred but, so far, no particulars have been brought to my notice. It is an industrial matter, and not a departmental administrative matter. No orders have been given by me to drivers employed by the TransAustralia Airlines. I shall endeavour to ascertain whether there is any more accuracy in this report than in others published in the press, and when I receive the information I shall give it to the honorable member.
– After World War I. there was a private bequest which provided “ extras “ for the education of children of deceased or disabled exservicemen. I ask the Minister for Repatriation whether it is the intention of the Government to provide educational facilities above the minimum needs of children of ex-servicemen of World War II. or whether the Services Canteens Trust Fund is to be used for this purpose?
– I assume that the honorable member is referring to the McCaughey Bequest which provided for education, above a certain standard, of children of deceased or disabled exservicemenof World War I. The Services Canteens Trust Fund does not come within the administration of my department, but consultations have been held between the Minister for the Army, the Chairman of the Services Canteens Trust Fund, Brigadier Blackburn, and myself, concerning the general question of the education of ex-servicemen of World War II. A final plan has not yet been evolved, but it is hoped that the educational facilities provided by private bequest after the first world war will he available to children of ex-servicemen of World War II.
Mr.TURNBULL. - Owing to the state of the railways in Victoria and the infrequent running of trains, Mildura is without a daily mail service. I think the Minister representing the Postmaster-General will agree that a place of such importance should not be so inconvenienced. Will he direct the attention of the Postmaster-General to the urgent necessity to restore a daily mail service to Mildura?
– I shall be happy to direct the attention of the PostmasterGeneral to the honorable member’s request. A place of the importance of Mildura should have a daily mail service. I only wish that the Minister for Transport had been able to complete his railway gauge standardization proposal before this, because that would end many mail and other difficulties.
– I direct the attention of the Minister representing the Minister for Social Services to what I regard as an anomaly in the section of the Social Services Consolidation Act relating to invalid pensions. It occurs in the section providing for the payment of attendance allowances. The daughter of a widower is entitled to the invalid pensioner’s attendance allowance if she looks after her father, but a similarly placed daughter of a widow has no claim to the allowance. I should like the Minister to examine that section, with a view to rectifying the anomaly.
– Iwill refer the honorable gentleman’s suggestion to the Minister for Social Services, but I doubt whether an anomaly exists. The attendance allowance is paid to persons who attend to invalid pensioners. If the father was an invalid but the mother was not, the daughter would notbe entitled to an allowance for looking after her mother, but should she be in necessitous circumstances, the Director-General of Social Services has power under , a special section of the act to take those circumstances into consideration in determining whether or not she should be paid an allowance.
– Recently, in reply to some questions that I asked upon notice, the Minister for the Interior advised me that more than 300,000 enrolled persons did not record votes in the general elections for the House of Representatives in September, 1946. He advised me further than 1,039 people were prosecuted and that the total amount collected from fines imposed in consequence of those proceedings was £369 6s. Does the Minister consider that an average penalty of less than one farthing spread over the total number of people who did not vote, or 7s. 6d. spread over the people prosecuted, represents an adequate penalty for failure to obey the electoral law in respect of compulsory voting? If not, what action is the Government taking to ensure that a bigger percentage of persons enrolled shall vote at general elections ?
– The Minister for the Interior may answer the question in order to clear up the point raised, but the question clearly invites the Minister to debate the matter.
– I did not follow the honorable member’s method of calculation. Notices were sent to all enrolled persons who failed to vote at the general elections in September, 1946, asking them why they failed to vote. I have previously explained that during the war it was almost impossible to keep the electoral rolls up to date because of the great movement of people in the services and the munitions industry. Consequently, many notices that were sent to people at addresses that they had left remained unanswered.
Exports of Woollen CLOTH SHORTAGES
– I ask the Minister representing the Minister for Trade and Customs what percentage of woollen cloth manufactured in Australia is being exported?. Is there a great shortage of woollen cloth in the country, and can it be substantiated that the small tailors or small tailoring firms are being forced out of business, or will be forced out of business, together with their employees, within six months if the position does not improve? Can we assume that there are 35,000 tailors in Australia? If so, with a minimum of three employees each, would not that mean that about 140,000 persons are involved? Can immediate steps be taken to improve the position?
– It has been alleged that there is a shortage of cloth for the manufacture of men’s clothing in Australia. I think that the honorable mem? ber refers to worsted, from which men’s, suits are made. Approximately 4 per cent, of Australia’s total production of worsted is exported in order to preserve the markets which we have had for a number of years and which we are now obtaining for the period when we may have a great surplus. I shall make inquiries in order to ascertain whether the shortage amongst tailors is as severe as is alleged, but I know that production of worsted materials increased substantially during the last twelve months. The increase amounted to millions of yards of material, and this should relieve the position which is alleged to exist.
– I direct a question to the Prime Minister with reference to the acute crisis in relation to dollar funds, which affects both Australia and the United Kingdom. Last May, when the crisis had not reached its present acute form but was commencing to reveal itself, I asked the right honorable gentleman whether, as a means of conserving dollars, he would set up a committee to investigate the possibility of increasing the production of tobacco, the importation of which causes one of the very important drains upon our dollar resources. He said then that he would consider establishing such a committee. Has he taken any steps to appoint a committee, and, if so, will he have a statement submitted to the Parliament setting out the plans that the Government has devised to increase tobacco production in Australia in view of the seriousness of the dollar shortage?
– The importation of tobacco has received close consideration because of the expenditure of dollars which it involves. An examination has been made of the prospects of obtaining tobacco from sources outside hard currency areas, and investigations are now being made in Rhodesia. No special committee has been set up to inquire into methods of increasing production in Australia, but investigations have been proceeding. I shall endeavour to have a statement prepared for the honorable member setting out the present position and the prospects of further development.
– Recently, in reply to a question asked by the honorable member for Calare, the Minister for Commerce and Agriculture said that he would give consideration to the importation of farm tractors from the United States of America. I have since received a letter from an importer of tractors stating that, although his firm has had an assurance from the Minister for Commerce and Agriculture that he will support the importation of tractors, it has been experiencing considerable delay in obtaining the necessary import licences from the Department of Trade and Customs. Will the Minister do what he can to reduce this delay?
– The importation of tractors from the United States of America is sponsored by the Department of Commerce and Agriculture. Before sponsoring those importations, the department must be careful to ensure that the tractors are suitable for Australian agriculture. We should not be wise to issue the necessary licence merely because some importer desired to import a specific type of tractor about which we had no informa- . tion. In all cases where we are satisfied that the tractor is of a satisfactory type, we take steps to issue the licence. Recently, some applications were received for permission to import a particular type of tractor. We do not know whether the machine will be suitable for Australian conditions, and, therefore, we have asked the applicants to supply the specifications in order that we may ensure that we shall not waste dollars in bringing to Australia tractors which will not be suitable for Australian requirements.
– I have received a letter from an ex-serviceman who applied recently to the Repatriation Commission for medical treatment, and who received the following reply : -
After full consideration of all the available evidence, the Commission is unable to connect rheumatoid arthritis, both knees, as being due to or aggravated by war service. You ave therefore ineligible to receive medical treatment at departmental expense.
Will the Minister for Repatriation inform me whether it is a fact that, previously, ex-servicemen received treatment for any complaint, whether or not it was due to war service? If so, why is the Government depriving ex-servicemen of this privilege when the equipment required for their treatment is available?
– The honorable member for Flinders has been misinformed regarding the treatment which ex-servicemen are entitled to receive free of charge from the Repatriation Department. Ex-servicemen have never been entitled to medical treatment from the department for other than war-caused disabilities. If the exserviceman to whom the honorable member referred has not been able to satisfy the medical board which examined him that his rheumatoid arthritis is due to war service, he is not entitled to medical treatment from the Repatriation Department. However, if the honorable membe will supply me with details of the case, I shall be glad to examine them for the purpose of ascertaining whether anything can be done for the patient.
– I was at Meringur, in the far north-west of Victoria, yesterday, where I met a disabled exserviceman who informed me that his pension had been reduced without any prior notification to him. He protested to the Repatriation Department against the reduction, and was informed that his protest would be dealt with in due course. This man was wounded at Finschaven, as the result of which one of his legs is still in surgical irons. His case is being taken up by the local branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, but in the meantime he is not receiving an adequate pension. Can the Minister for Repatriation inform me whether it is the usual practice of the department to reduce exservicemen’s pensions without prior notification to them? What can the exserviceman to whom I referred do to have his pension restored, or, alternatively, to obtain from the department an official refusal to entertain his protest?
– Obviously, I have no knowledge of the particular case to which the honorable member has referred. If be will let me have particulars of it I shall have inquiries made to ascertain whether any injustice has been done to the ex-servicemen mentioned. I greatly doubt that the statements are in accordance with the facts.
Railway and Tramway Fares
– In regard to the fixation of maximum fares for railway and tramway travel, can the Minister for Commerce and Agriculture inform me whether any control is exercised by the Prices Commissioner over the authorities which operate those services? Do they confer with the Prices Commissioner or any Minister before increasing fares?
– I understand that the Prices Commissioner does not control fares charged by governmental or semigovernmental authorities operating railway and tramway systems. I do not know whether those authorities confer with the Prices Commissioner before increasing fares. I shall refer the honorable member’s question to the Minister for Trade and Customs and obtain a reply from him.
Assent to the following bills re ported : -
Salaries (Statutory Offices) Adjustment Bill 1947.
Dairy Produce Export Control Bill 1947.
Motion (by Mr. Dedman) agreed to-
That leave be given to bring in a bill for an act to amend the Defence (Transitional Provisions) Bill 1946 and for other purposes.
Bill presented, and read a first time.
Debate resumed from the 31st October (vide page 1603), on motion by Mr. Chifley -
That the bill be now read a second time.
.- I support the bill, and in doing so I want to make my position crystal clear to this House, to the people of Australia, and particularly to the Hume electorate. I have waited twenty years for such legislation as is now before us to become an accomplished fact; it isa measure that will save democracy from destruction and hold civilization together. The control of money is the most powerful weapon that has been placed in the hands of man.
The love of money is the root of all evil; it creates wars, depressions, booms and slumps, and causes untold misery and degradation. The Government is determined to destroy this great monster and to make money the servant, not the master, of the people. Therefore, I now declare in no uncertain terms that the credit resources of the nation must be in the hands of the people, instead of in the hands of private vested interests, whose only concern is for profits, and who demand their “ pound of flesh “ even if it means bloodshed. I am proud to be associated with a Government that realizes its responsibilities to the nation, and has the courage to go ahead, notwithstanding the opposition of pressure groups which have used every weapon at their disposal in an effort to stampede its members. As the GovernmentWhip in this chamber I say to the Parliament and to the people of this country that there has never been a more united party in the history of this country than the Labour party on this great and momentous issue.
This is not the first time that the enemies of democracy have attempted to stampede me on a political issue. I clearly recollect the time, not many years ago, when thousands of breadwinners in this country were fighting for their birthright - the right to work and live. At that time there was an army of 750,000 Australians suffering the pangs of hunger; thousands ofbusiness men and women, as well as farmers, were on the brink of bankruptcy, notwithstanding that at the same time there was a glut of foodstuffs throughout the world. Opposition members know that at that time wheat silos throughout Australia were practically bursting because of the great quantity of wheat stored in them. I know of many people in my home town of Tumut who sold all their personal belongings, including their furniture, in order to provide food and clothing for their children. Those were dark days indeed, and they will never be forgotten by the people of this fair land. At this point I ask the bankers what they did to alleviate the position at that time? Did they come to the assistance of the starving people, or of the farmers who were being: driven to the wall, or the business men who were passing through the bankruptcy courts? Not on your life! On the contrary, the hankers called up overdrafts and restricted credits. In other words, they became richer at the expense of those who were in difficulties. Did the bank managers then send their accountants and tellers around with petitions to get more food for little children and aged people who were suffering from malnutrition? Again, the answer is an emphatic “ No “. They were to be found among those who said that wages and working conditions must be slashed, and that governments which did not fall into line with their policy must be destroyed. All sorts of organizations were built up for the overthrow of the Labour party. Prominent among them was the New Guard, with which the honorable member for Wentworth (Mr. Harrison) was so closely associated. My part in that struggle is well known. The enemies of democracy shadowed me wherever I went, and planned for my destruction as they planned to destroy the honorable member forReid (Mr. Lang). But I was not to be stampeded. The fight for humanity meant more to me than my life. And so from my place in the National Parliament I say to the bankers and their “ stooges “ that I shall not be stampeded in this campaign. My soul is not for sale. I believe that the electors of Hume are with me in this struggle. I have faith and confidence in them and I am sure that they will stand their ground. In order to show that the people are not to be stampeded on this question, I shall quote the remarks of two persons in my electorate, and I shall let the Opposition and the bankers’ “ stooges “ say whether they would link these gentlemen with communism merely because they support the Labour party’s proposals in regard to banking. Last week, the honorable member for Wimmera (Mr. Turnbull) said that all those who supported the nationalization of banking were in the Communist pen. I ask him whether he would put in the Communist pen the two gentleman whose utterances I am about to quote-
– I said all those who had not agreed to the taking of a referendum.
– This letter was written by Mr. George Angus Bell, of Mullenjandra, which is about half way between Albury and Holbrook - “ Bundaberg,”
Mullenjandra. 14th October, 1947.
Dear Mr. Fuller,
As doubtless you are aware I do not belong to any Labour organization, and as I own 5,800 acres of land besides 1,000 acres I lease from my good wife, with no mortgage on any. of my property, and quite a few thousand pounds in cash, it cannot be suggested that I am a Communist, in fact, I am very much opposed to communism. Nevertheless as one who always desires to do honour towhom honour is due, I am writing this letter for the sole purpose of congratulating your party through you, for the nationalization of the banking. The only thing wrong about it is that it was not done many years ago. 1 also desire to congratulate your party for not putting it to a referendum of the people, as first of all, we electors do not send you members to Parliament to be submitting everything or anything. The press, Opposition or outside bodies wish you to, besides there are too many electors with a limited amount of knowledge of finance and general action of private banks could be too easily’ misguided by the so-called red herring across the trail, such as communism, or what the Government may do next, &c. &c, to take the issue away from Parliament. Had there been a referendum taken when the Commonwealth Bank was instituted it would have been stopped by a very large majority. But where is the man who would oppose it now? The answer could only be, in an asylum. .
I would have written to you much sooner on this matter, only I was busy at the local shows with my stud sheep, and since then with the shearing of my sheep, which is going on at the present moment, under the control of my manager, H. Morley, who says he met you one time in Albury.
Please convey my congratulations to your party, and as I am worth in the vicinity of a hundred thousand pounds they will know that a man who has made such a success in life from a small beginning, cannot be a Communist, but has a good idea from practical experience whether the nationalization of banking is good for the country or not.
With best wishes for your success in this matter as any fair-minded person must recognize that the profits of banking are as well kept in this country as the majority going overseas. I could quote many severe deals the private banks meted out to people in this district principally before the Commonwealth Bank was established, but suffice it to say they were damnable.
I am well known in the Albury district, having lived here all my life, and have been a justice of the peace for over 50 years, a member of the Local Land Board for about twenty years, and a shire councillor for about twenty years.
You can therefore make any use of this letter that you may desire.
George Angus Bell.
Let me now read from an article entitled The Bank Question” written by the Right Reverend H. Devine, in St. Mary’s Messenger, for October last, a periodical published in the parish of Young -
There is a great deal more in the bank question than meets the eye; and a great deal more than has so far been presented by the defenders of the banks. It must also be said that their anxiety for the freedom of the people is at least a little overdone. Freedom is most certainly involved, but it is the freedom not of the people but of the banks themselves which is giving life to their fierce campaign for a referendum.
The real question is not who shall be my banker, but who shall be my ruler? It is a question of sovereignty. When thebanks say that the power is too great to give any government, they have not the wit to see that it is the power which they themselves have had too long. Governments rule only at their pleasure, when they have control of the nation’s credit as they had had it up to the present. Certainly it is a great power. Bead what Pope Pius XI. says about it - “ This power becomes particularly irresistible when exercised by those who, because they hold and control money, are able to govern credit and determine its allotment, for that reason supplying, so to speak, the life-blood of the entire economic body, and grasping, as it were, in their hands the very soul of production so that no one dare breathe against their will.”
There is not the least doubt about the power, and, in theory, at least, there can be no doubt that the power should reside in the sovereign state to be used for the common good and not to be given over to private bands to be used for their own private good. That must be clear to all. For to allow the credit structure to remain in private hands is to give sovereign rights to the banks, and that certainly is immoral. It is nothing short of political suicide. The reason is that “ No one dare breathe against their will “.
And if one must choose between irresistible power residing in private hands, responsible to no one but their shareholders; and the same power residing in elected government responsible to the people who elected it, then the choice is plainly enough for government control. There can be no alternative.
The antagonism displayed to these proposals by the banks is but a continuation of the hostility exhibited by the commercial and financial interests in 1910, when a Labour government introduced the
Commonwealth Bank Bill, and again in 1945, when the present Government brought in the Banking Bill of that year. In 1910, it was predicted that the establishment of the Commonwealth Bank would push Australia over the edge of the precipice, and that industrial chaos and general disaster would result. The people were warned against the Commonwealth Bank. It was predicted that “ Fisher’s flimsies” would not even buy the worker a pot of beer. There was a concentrated effort to frighten the working men and members of the middle class, in an endeavour to stampede them into taking action to defeat the 1910 legislation, and the same tactics were applied in 1945. Again, they concentrated their efforts on the working men, who were warned of the terrible consequences that would follow the passing of the legislation. According to the Sydney Daily Telegraph, of the 13th March, 1945, the Leader of the Opposition (Mr. Menzies) said that the Banking Bill introduced that year would, if passed, give political control of the note issue to the Government, with the result that the people’s money would not be worth taking home. So far, nobody has heard of the right honorable gentleman refusing to take home any money that comes his way. Those who are leading the fight against the nationalization of banking contend that this legislation is opposed to all ideals of democracy, freedom and liberty. Those people become staunch advocates of those principles only when it suits their purposes; but that is not the real reason for their violent opposition to this legislation. They are not concerned about the ordinary man whom they use for their own ends. The real reason for their antagonism to this legislation is to be found in a statement by the Honorable R. McKenna, former Chancellor of the Exchequer of Great Britain, and Chairman of Directors of the Mid- lands Bank, the largest trading bank in England. Addressing the shareholders of that bank in 1924 he said -
Those who control the credit of the nation direct the policy of governments and hold in the hollow of their hands the destiny of the people.
In the past, the private trading banks have completely controlled the credit of the nation. As is well known, the large commercial and financial interests are directly connected with the directorates of the trading banks, and, consequently, are able to manipulate money in order to bring great profits and further power to themselves. Seeing this power slipping from them and being placed in the hands of a national hank responsible to the Government, which, in turn, is responsible to the people of the country, those interests are desperately using any and every means to retain their power. The contention that the people will suffer in any way as the result of the nationalization of the trading banks is so much humbug, because the Commonwealth Bank, as it has done in the past, will continue to give as good, if not a better, service to the people than that now provided ‘by the private banks. To-day, thousands of people are dealing with the Commonwealth Bank both in its trading and savings hank sections. Those people would not be dealing with the nation’s bank if they were not satisfied with the service that the .bank renders to them. Whilst our opponents complain that some people will be deprived of the right to deal with the private banks, it will be remembered that in 1924 the Bruce-Page Government enacted legislation which converted the Commonwealth Bank into what is known as a “ banker’s bank “, and the people were practically prohibited from trading with the Commonwealth Bank. Prospective clients were told by the officers of the bank to take their business to private banks.
In dealing with this issue it- is well to recall certain actions on the part of the private banks which adversely affected the nation’s economy and .brought ruin to thousands of Australians. Those who are inclined to favour the continuance of the private banks should recall what transpired in the past. The records tell of the bank smashes that occurred 50, or 60, years ago. Thousands of people were ruined because they placed their trust and money in the private hanks. I take the following extract from an advertisement which appeared in Williamson and Musgrove’s theatrical booklet announcing the presentation of a play in December, 1893-
Bank deposits receipts bought for highest cash prices or advanced against. - R. H. Wilson, 409 Collins-street, Melbourne.
Many victims of the 1893 bank smash were repaid only last year money which they had deposited in the private banks. In pamphlets now being issued by the Institute of Public Affairs, which is the mouthpiece of the private banks, it is alleged that but for the help given by the trading banks in 1930 the depression would have done much more harm in this country. That statement is entirely untrue. It will be remembered that from 1929 to 1939 the average number of unemployed in Australia was 250,000. Allowing for the families and dependants of those unemployed, it can safely be said that approximately 1,000,000 persons were on the dole during that period. When the right honorable member for Yarra (Mr. Scullin) was Prime Minister in 1930, he submitted a proposal to the private ‘banks for the purpose of providing full-time employment for 50,000 men. He pointed out that such action would be the means of giving employment indirectly to many thousands more, and would thus relieve the suffering and misery which existed in the community at that time. The private bank? rejected his appeal. The so-called shrewd, intelligent bankers told the right honorable gentleman that in making such a proposition he was only “ painting pictures “ and “ dreaming pipe-dreams “. The banks then refused to provide one penny for the Government of the day.
The Royal Commission on Monetary and Banking Systems dealt with phases of the depression, and clearly indicated that the private banks were, to a large degree, responsible for the suffering which existed in those days. In its report it stated that the private banks must bear some responsibility for the severity of the depression, that their fixed exchange policy was unsound, that they unjustifiably raised interest rates in January, 1930, and that they failed to co-operate with the Commonwealth Bank. Much controversy has arisen over the causes of the depression. Sir Herbert Holdon, an eminent banking authority in Great Britain, expressed very definite views on this subject when he said -
What brought about the depression? Everybody knows that the depression was caused by the bankers the world over in following up their time-old policy in calling up overdrafts and advances.
It will be seen, therefore, that the private banks were responsible to a large degree not only for the depression, but also for the continuance of the suffering and misery which existed during that period. When the private banks are no longer operating, such a state of affairs will never recur. Honorable members will recall that the royal commission which inquired into the wheat industry estimated the total indebtedness of wheatfarmers in Australia at £151,000,000. The Wheatgrower, of the 20th August, 1936, reported that in Western Australia alone, 2,791 wheat properties had been repossessed by the Agricultural Bank. The Melbourne Herald, of the 19th March, 1940, reported that Mr. Dunstan, the then Premier of Victoria, declared that 2,000 wheat farms in that State had been abandoned. Mr. E. A. McLarty, managing trustee of the Agricultural Bank, Perth, when giving evidence before the Commonwealth Grants Commission some years ago stated that the cause of the wheat-farmers troubles were indiscriminate lending to farmers, excessive credit, extravagance of farmers, high interest rates and over capitalization. That clearly shows how during the boom period the private banks made available excessive credits to the farmers. They went as far as to urge the people to accept overdrafts. Advances were made so that people could buy properties at exorbitant prices, and when the boom burst and prices dropped, the banks foreclosed and the farmers were forced off their properties. No restraint was exercised by these private banking institutions during the boom period; they safeguarded themselves in every deal and, as usual, it was the farmer who paid. In about the year 1925, the private banks went on strike and refused to finance the wool clip unless they got £15,000,000 worth of notes from the Australian Government. The Sydney Morning Herald described the situation as . a financial hold-up, and the Melbourne Herald pointed out that business men were unable to secure credit on the best security at any rate of interest. There is every reason to believe that the private banks actually borrowed this money at 4 per cent, interest, but that they advanced credit to the extent of four times the amount demanded in the knowledge that they could secure notes if there happened to be any great demand, and they charged more than 4 per cent. The attitude of the private banks was one of stand and deliver. This is how they held trade, industry and commerce at their mercy. They dictated terms to the Commonwealth Bank, which did as it was told.
For many years past the primary producers have suffered bitterly at the hands of the private banks, especially during the depression, when thousands were ruined and forced to leave their holdings. They received no consideration from the private banks, which relentlessly foreclosed on all who could not immediately meet their obligations. To-day it is being stated that the average countryman is opposed to the nationalization of banking. That is not correct. The primary producer has not forgotten his bitter experience of the private banks in the past, as is proved by the following decisions which were reached by various primary producers’ organizations. At a conference of the Victorian Wheat and Wool-growers Association held in March, 194’5, it was reported in the Melbourne Age that more than 200 delegates voiced their approval of the banking legislation and declared that unless the National Government had continuity of financial control it could not run the country. It was also reported in the Sydney Morning Herald that at a meeting of the Farmers and Settlers Association of New South Wales a motion for the nationalization of banking was lost by 31 to 24 votes. In New South Wales two motions protesting against the Government’s banking legislation were defeated. The Sydney Morning Herald also reported on the 24th March, 1945, that at a meeting of the Executive Council of the Primary Producers Union, a similar motion was lost by 11 votes to 5. At the annual conference of the Farmers and Settlers Association, 194.2, a motion, for the nationalization of banking was defeated by only two votes. This gives a good indication how the primary producers have felt towards the private banks. It shows that they realize that only if the Government be given complete control will their interests be safeguarded.
The pamphlet issued by the Institute of Public Affairs asks, “ Who will control the politician; who will control a nationalized banking system ? “ The answer is simple - the people will do so. For several years the Australian Government has had very complete powers in regard to banking and finance and the control it has exercised has proved very beneficial to the nation. If the people are dissatisfied with the manner in which, any government administers the financial affairs of the country, they can turn it out of office and elect another in its stead. That is demo,cratic government. On the other hand, the private banks are responsible to nobody. In the past they have done just as they liked, irrespective of the Opinion of governments or the people, and the people have had no power whatever to interfere with their administrative actions. In 1931, Professor Copland had this to say -
Banking is more than mere finance. It is a social function which should bo controlled in the permanent interests of the people.
And, in 193S, he added-
No government can absolve itself from the ultimate responsibility for banking policy.
On the 29th August, 1938, even the Sydney Morning Herald said -
It is inevitable in a federation that the Federal Government must be responsible ultimately for monetary policy as it is for defence.
To be absolutely responsible, the Government must have complete control. If we leave the private banks to operate as they do at present, as soon as a LiberalAusttralian Country party government gets into power, it will immediately restore to tie banking institutions the full power which they held in pre-war days, which proved so disastrous and ruinous to thousands of people throughout the country. The Opposition parties have boasted in effect that they will do this, and given the opportunity they will do so, because they are merely the servants of the vested interests which control their organizations.
Mr. Mackenzie King, leader of the Liberal party and Prime Minister of Canada, is very emphatic on the question of monetary control. Recently he said -
Until the control of currency and credit is restored to the Government and recognised as its most precious and most sacred responsibility, all talk of the sovereignty of parliament and democracy is idle and futile.
To sum up the position: First, the people will have nothing whatever to lose over the nationalization of banking. Secondly, when banking is nationalized they will be able to secure banking service as good as, if not better than, they received from any private institutions. Thirdly, the people will then negotiate with the national bank, which will be their own bank and have the backing of the nation. Fourthly, the only person to lose by nationalization will be the leaders of commercial and financial institutions whose power and profits will be considerably curtailed because they no longer control credit. Those who are fighting against the Government’s proposal are in effect fighting to restore to vested interests the power they originally held in pre-war days. It must be apparent, even to the most casual observer, that a very vicious and savage campaign of hostility against the Labour movement, and especially against the Australian Labour Government has been undertaken by the traditional enemies of organized labour, and that every reactionary agency and instrumentality has now been mobilized for that purpose. Evidence of this savage campaign may be seen in practically every issue of every capitalist newspaper published throughout the Commonwealth and heard “ over the air” from almost every capitalistcontrolled broadcasting station, from this Parliament itself, and from wherever else the political agents of vested interests are to be found assembled. Tirades of abuse and unjust criticism are hurled with everincreasing bitterness against the Labour Government. I ask this Parliament and the people of Australia, “Why are the newspapers so bitterly opposed to the nationalizing of the banks? “ Let me tell this Parliament and the people the real reason: The newspapers are owned and controlled by those individuals who also own and control the private trading banks and other big monopolies. And who are these gentlemen? The deputy chairman of the Melbourne Herald is also vice-chairman of the National Bank of Australasia Limited. Members of the Fairfax family, which owns the Sydney Morning Herald, sit on the boards of two
Australian banks. Sir Frederick Tout is a director of the Sydney Sun, as well as a bank director. The immediate objective of this campaign, of course, is to prejudice and inflame the minds of the people against organized Labour, because, in Australia, we have reached a very important phase of our social and political life, and one that will determine quite definitely, for many years to como, whether this country will continue to develop on sound democratic lines, or whether it will be overwhelmed for yet another period of exploitation by the forces of reaction and conservatism. The people of Australia, from the standpoint of economic freedom and social security, were never more favorably situated than they are to-day. They have in power a government which is concerned mainly with the happiness and security of everybody. That this Administration is also efficient and outstandingly capable, was revealed at a most critical period of the war when the responsibility of saving the nation from destruction was placed upon it, and its capacity has ‘been revealed on many occasions since the end of the war. The Government has vision and foresight, and is determined, wherever possible, to give effect to the democratic policy that was outlined in the Atlantic Charter, and which has been the policy and the noble objective of the Labour movement.
Money power is the worst monopoly in the world. It is the cause of all evils; it strangles all competition, and it holds governments up to ransom. In all great crises, the banks have failed the nation. They have restricted credit and called in mortgages. They crashed in the crisis of 1.893, and only recently were some people compensated for their losses at that time. In the period just after World War I., the banks placed obstacles in the way of marketing our two greatest primary products, wool and wheat. Sheep-breeders and wheat-farmers know that to their sorrow. The banks also refused finance for a voluntary wheat pool and bulk-handling organization, and they would not transfer money that’ wheat-farmers raised abroad. In the depression of 1929-35, they fiercely restricted credit, sold up farms, forced hundreds of thousands of people to live in “ bag “ towns and slums, existing on the dole. They drove many hundreds of primary producers off the land. In fact, 20,000 wheat-farmers had to walk off their properties, and 750,000 Australian citizens went short of bread. I ask honorable members in the name of humanity, “ Do -you want this country to have another taste of what happened after World War I.?”; and I ask people of this country, “ Are you prepared ever again to trust the forces of any reactionary government to control your destiny ? “ If the trading banks had not pursued their unsympathetic policies in the depression days, probably one-third of Australia’s population would have been spared misery and want.
In an uncertain post-war period we cannot trust the banks again. The nation must have full and complete power over the national credit. We must take our own measures to ensure that we shall not suffer because of the shortage of money credit. I recall that Mr. Winston Churchill once said, “ Whatever is physically possible is financially possible “. I believe that the nationalization of the banks will greatly assist this country. It will remove the fear of overseas domination of our finances. It will make us masters of our own finances by permitting financial policy to serve the people instead of serving vested interests which have so abused their position in the past. In a time of impending international financial crisis, no nation can afford not to be master of its own financial destinies. Banking can be a great power for good; but not while it is the tool of the forces of private monopoly and evil. Like fire, banking can be a good servant but a bad master.
– The honorable member’s time has expired.
– I rise to make a personal explanation.
– Does the honorable member claim that he has been misrepresented ?
– By whom ?
– By the honorable member for Hume (Mr. Fuller). The honorable member said that I had put those who supported the nationalization of banking in the same pen as the Communists. That is quite incorrect. I said that if any man or woman agreed with the Government’s proposal to nationalize the banks that was all right with me, because he or she was entitled to his own opinion; but in a like manner I believed that every Australian was entitled to his own opinion on the subject, and that those individuals who did not think that the people should be allowed to express their opinions on this legislation by means of a referendum would be found in the same pen or group as the Communists. That is quite different from what the honable member for Hume has claimed that I said.
– I am pleased, indeed, to be the second speaker this afternoon, because the third speaker, who will be a government spokesman, will have a chance to indicate by “ red fury “ how near this totalitarian Government is to winning the race for complete Communist control of Australia.
I intend to approach the subjectmatter of this bill from the point of view of monopoly. The Government has made it clear that the main principle upon which it is proceeding with this measure is that it must establish control of banking, because banking is a monopoly which is” in a position, in its own interest and to the detriment of the people, to dominate the community, and defy, the Government. In the light of my experience in my own electorate, this is sheer humbug, and as bare-faced a piece of hypocrisy as it would be possible to hear from any government. In electorates like mine, where the electors have no vote in this Parliament, but are thrown on the mercy of the Government, we can 3ee exactly what the principles of the Government are. In slave electorates like mine, the Government can operate unchecked, and, when it does operate unchecked, its first consideration is not only monopoly, but the big overseas monopoly which it professes to hate more than anything else. Let us see how it operates the principle of monopoly control, which is alleged to be of the essence of this bill, in the Northern Territory.
The good land is divided almost exclusively between the big English meat monopolies. The principles of land legislation as operated in the Northern Territory are a direct negation of the alleged principles on which the Banking Bill is based. Whenever land comes up for resumption it goes back to Vesteys or Bovril Estates (Australia) Limited. The covenants, which are rigidly enforced against the small man, are never enforced against them. I am sure that if this bill goes through exactly the same principles will be applied by the Commonwealth Bank as are now employed in land matters in the Northern Territory. We had the shocking example in 1942 when Alexanddria Station, 11,000 square miles, was again leased for 42 years extending to 1984. Even when the Legislative Council is set up it will not be permitted to deal with lands matters.
We have heard a great deal from the Minister for Transport (Mr. Ward), about the Colonial Sugar Refining Company Limited, the Broken Hill Proprietary Company Limited and other institutions, on which the defence of this country has been based, and of how they are interlocked with the banks. But I can tell you, Mr. Acting Deputy .Speaker, on the basis of our experience in the Northern Territory, that the considerations that those so-called monopolies receive from the private trading banks will be nothing compared with the favoritism that will be shown to very much less desirable, bodies, mostly overseas, when the private trading banks are wiped out. It will then be “ the devil take the hindmost “, as it is in the general life of the Northern Territory and New Guinea to-day, where the only people who receive real consideration are the big monopolies, which are powerful enough to fight the Government or to buy preference over the little man. The small man was considered last in allowing settlers to go back to New Guinea after the war. The big companies were given every opportunity to obtain a foothold before small settlers were allowed to go back. The same principle applied to the Northern Territory. The big companies were given every opportunity to obtain a foothold in Darwin. This Government first established the Mount Isa line and later, the Pine Creek line north of which the old residents were not allowed to return while the big companies were allowed to entrench themselves in Darwin, well ahead of the small man. That state of affairs was permitted by the Government that claims to hate monopolies. In both my electorate and in New Guinea the principles of this bill are flouted by the Government. They would be flouted throughout the Commonwealth if the Government were not checked by fear of the votes of the electors. They will be flouted deliberately and universally when this bill is passed and the wiping out of the private banks places the country under full control of the caucus and those behind it. Without reflecting on or suggesting anything against the Government or its administration, I say that this bill opens the way for the grossest corruption and for the government of Australia by outside interests, which are powerful or rich enough to grasp the opportunities that the measure offers to turn the whole of the Commonwealth into a replica of the Northern Territory and New Guinea - a 3lave area in which the only two sections which have freedom are the big foreign monopolies and that other wicked monopoly - the so-called Commonwealth Government, which is not a government at all these days, but an agency of Communist tyranny, which is imposed on the country at the will of the Communists’ central committee and its Moscow masters. I may be wrong in my fears or have the wrong slant on them. Perhaps the Government is fattening the goose in the Northern Territory - that is the monopolies - before coming in at the kill. The £100,000,000 that will be involved in the acquisition of the private trading banks is a huge sum of money that ought to be spent judiciously in the development of the Northern Territory. The correct policy to apply in that territory is that followed by democratic governments in dividing the land among family holders and developing the country in the same way as western Queensland has been developed, by utilizing the inherent value of our lands to the optimum carrying capacity of humans engaged in economic endeavour on economic areas. The Commonwealth Bank ought to be used as it now stands to finance areas that the private banks are, because of their remoteness, unwilling to finance. The Government ought to obey the dictum of Abraham Lincoln that it is the Government’s job to enter the field of activity only on matters that the people are unable to deal with themselves and to leave other matters that the people can do better themselves to the people. I think that is a fair paraphrase of his words.
The press summed up the position when the Leader of the Opposition (Mr. Menzies) replied to the second-reading speech of the Prime Minister (Mr. Chifley). I think it was the Sydney Sunday Telegraph that indicated that after the devastating criticism by the Leader of the Opposition of the bill little more needed to be said. The bill has now been dealt with from so many angles that I find it difficult to find a new slant or throw anything fresh into the ring without mining or quarrying into the basic limestone - the political immorality and dishonesty of the totalitarian government and its totalitarian piece of legislation. I refer to limestone because it is so subject to being withered away by water if the water has injected into it the poison gas known as carbon dioxide, leaving nothing but a cave or shell of its former self. Obviously, the Labour party,, following the policy of Lenin, has been withered away to a cave or shell of its former self. That reminds me of the mighty pile of books that I have on my desk before me. I think it was the honorable member for Denison (Dr. Gaha) who referred to “ mighty tomes “ used by the Opposition in criticism of the Government. You will note, Mr. Deputy Speaker, that I have these mighty tomes in the form of a pyramid. The base of the pyramid consists of a dozen or more books by Lenin. At the apex is the book Foundations of Leninism, by J Joseph Stalin, with a foreword by “ Comrade Sharkey “, in which he indicates how this legislation should be administered.
– Order ! The honorable member must confine himself to the bill. He is not entitled to use the forms of the House for the purpose of advertising Communist or any other kind of literature.
– As you rule, Mr. Deputy Speaker, that I may not read the foreword. I will confine myself to two lines -
Socialism in Australia can only triumph when the banner of the trade unions is the banner of communism.
Those are big words. The pressure groups outside have dictated this policy and every other leftist policy of the Government. I ask honorable gentlemen to note the colour of these mightytomes. It is yellow, a significant colour when referring to this Government..
I indicated that it would be difficult for me to make a speech with a new angle, but the angle that I am taking is surely not obtuse. The Government may be prepared to admit that it is a re-entrant angle. This blank cheque form in my hand is sufficient to indicate what the man in the street thinks of this legislation -
That blank cheque sums up the meaning of this bill.
We all know how this plan was sponsored by Government supporters in the Domain at Sydney a few weeks ago. On that occasion, the Minister for Information (Mr. Calwell) lapsed almost into ornithological parlance. He did not use the exact terms of Cayley’s book on ornithology, What Bird is That?, but he indicated that the Government would strip the banks until they looked like plucked galahs. Then the honorable member for Dalley (Mr. Rosevear) addressed the gathering in similar strain. I heard his words. I shall not mention what he said against the High Court, because that statement has already been debated in this House, but he said, “ The Government has a blank cheque and it intends to fill it in”. Such declarations expose the totalitarian character of this Government, and show how it is influenced by such books as those of Lenin which I have before me now. This Government, obsessed as it is with totali tarian ideas, must have been influenced somewhat within the last year by the superfluity of silliness which has been exhibited by the British Government. That government has gone “socialistcumcommo “, but in the last few days the borough elections in Great Britain have shown that the people have become fearful of its policies. The results of those elections indicate that freedom is now in the ascendant in Great Britain, and that the people will wipe out the British Government at the next elections, just as the Australian people will wipe out this Government when they have a chance to express their will two years hence. The socialist tendencies of the British Government are dealt with in a book which has been written by a Mr. Pollitt, a Communist spokesman. Writing from the Communist point of view, he has indicated that the British people are being ground gradually into totalitarian communistic channels. However, it seems that thegradualness of the inevitable is not fast enough for the pressure groups in Australia, which want to adopt revolutionary tactics. The Australian Communists’ opinion of Mr. Pollitt’s book is dealt with in an article by Mr. Sharkey in theTribune of the 25th October last. That article contains the following passage : -
There are some extraordinary formulations in this production that cannot be passed by without comment.
Here, I will only briefly deal with several of the more fundamental ones, and more detailed criticism, if necessary, can be made later on.
On page 38, Pollitt says: “I am convinced that once we force the Labour Government to operate a real socialist policy, both at home and abroad, then in every nation in the world the progressive forces will be strengthened “, &c.
In spite of the fact that the Labour Government has to be “ forced “ to operate a “ real socialist policy” on page 104 we are told: “ I have no hesitation in declaring that the essence of the period we are now in is that of a transition stage towards socialism “.
How delightful ! They are hiding behind gooseberry bushes and shooting covertly from safe ambush. Now the theories pronounced at the 1921 congress are coming to the fore. How appealing this lovely scheme of transition must be to the Minister for Labour and National Service (Mr. Holloway). He sees his grand policy of 1921 being consummated to-day by means of a gradual transition. Sharkey’s article continues -
In regard to the first point of “ forcing “ the Labour leaders, who Pollitt himself points out are following an imperialist policy, along a socialist road; can this be achieved, or is such a conception in line with the teaching of Marxism-Leninism on the role of socialdemocracy, or with the historical experiences of the last 40 years since Lenin explained the nature of the 2nd International?
I would say that the answer is very definitely, no.
He sums up the article in these words -
These views of Pollitt would mislead the British working-class, which is dangerous, not only for itself-
-Order! The honorable member is straying a long way from the bill. He will have to connect his remarks with the bill, or resume his seat.
– I have used those quotations merely to indicate how this Government is “ falling “ for the insidious propaganda of the Communists as the result of the activities of pressure groups within its own organization. Sharkey means by the statements which I have quoted that Pollitt is too weak and does not move fast enough. Had you allowed me to finish the quotation, Mr. Deputy Speaker, it would have indicated that Sharkey desires a blood bath and faster transition than Pollitt, who advocates a gradual change.
– Perhaps Sharkey and the right honorable member for Cowper can accommodate one another.
– I was about to point out that the very thing for which the right honorable member for Cowper has been criticized by the Government is the thing that Sharkey, the main man who dominates Labour policy, has recommended in cold print. r Mr. DEPUTY SPEAKER.- Order ! The honorable member must connect his remarks with the bill.
– We know that this man has masticated the books of Lenin and is trying to get the policies they contain adopted in Australia. The words he uses are identical with phrases which I have extracted from books written about the Russian revolu tion in 1917 by Lenin and by Read, whom Labour party supporters admire very much. Lenin and Trotsky- ‘
– Order ! Apparently the honorable member is reading from notes to which he intends to adhere. I shall not allow him to do so. He is not allowed to engage in a dissertation on international communism. He must deal with the bill.
– If you refuse to allow me to quote from that book, Mr. Deputy Speaker, I can do no more than point out that Read was buried in the Kremlin’ and honoured by Stalin.
– Order ‘
– Very well. I shall carry on with my notes a few pages ahead. However, I point out that this Government is deviating neither to the left nor to the right from the programme laid down in Communist manifestoes. The people of Russia opposed the stealing of their money by those gangsters at the time of the revolution. -
Let us get down to the basic facts. I refer to the speech made by the Prime Minister (Mr. Chifley) and to the abhorrence which he and his party seem to have for the profit motive. This seems to be the bug-bear, the great obstacle that the Government is trying to surmount. It believes that the people of Australia supports its views. That is a mistake. The people have no time for the Government’s theories, which are supported only by minorities. I am prepared to wager £100 to a gum leaf that during the war members of the Government, far from despising the profit motive, were banking rolls of notes that a kangaroo dog could not jump over even if it had a spring board. Why does the Government try to deceive the people? We know that this is hypocrisy and humbug. The Prime Minister’s second-reading speech contained two extraordinary suggestions. The first was -
Where the activities of large institutions have a bearing upon the public welfare, they should not be conducted on the basis of a search for profit.
The second was -
In any event, profits made by the banks were too high.
The first suggestion gives rise to most disturbing possibilities. First, it dismisses the profit ‘motive as the mainspring of all human progress. It rejects the view that thrift should be rewarded. All pioneering endeavours must be stifled. Secondly, it rejects the concept of competition, since this is merely a reflection of the search for profit. Thirdly, it means that all enterprise which is conducted for profit should be taken over by the Government. Upon this legislation, I cannot place any other interpretation. Fourthly, it implies the need for a completely socialized system of production and distribution. This is a revival of the theory which delegates to the conference of the Labour party in 1921 expounded. If that policy is to be pursued, soon no taxpayers will remain. How the Government will be able to carry on in those circumstances, I do not know. It follows that if the Prime Minister proposes to act in accordance with this basic view, he cannot stop with the nationalization .of the banks. He must nationalize everything. Even that should not surprise us, since it agrees with the socialist pledge which the right honorable gentleman took when he sought the endorsement of the Labour party as its candidate for Macquarie. The conference of the Labour party in 1921, I remind honorable members, proposed that Australia should be controlled by a supreme economic council. The Minister for Labour and National Service (Mr. Holloway) was proud of the decisions of that conference. He has never wavered from the beam.
Honorable members would be well advised to regard this legislation to nationalize the private banks not as an isolated measure but as an important step towards achieving the full pattern of total government ownership and direction of the community. I believe that history will record that this so-called quiet and shrewd Labour leader, by one stroke, arising, I presume, from his obsession with economics and finance, to the detriment of that broader vision so indispensable to true Labour progress, is destroying the force of the Australian Labour party and will bring it to its doom. After the next elections, the Labour party will not rise for two decades. For that submergence, the Prime Minister will be responsible. Why does he seek to nationalize the banks? Why does not he nationalize the huge retail distribution organizations - the chain stores? The honorable member for Hume (Mr. Fuller) delivered a tirade against the Fairfax family and other wealthy people who have invested their capital. Recently, the honorable member for Robertson (Mr. Williams) also delivered a tirade against people who had invested their money in banks - as if it were a crime to invest money in a proposition which might return a profit. In the circumstances, I consider that I am justified in suggesting some of the industries which might be nationalized. If the Prime Minister wants to nationalize something, why does he not nationalize the huge retail organization conducted by C. J. Coles Limited of which his former colleague. Mr. A. W. Coles, is a director. He has chain stores throughout the country. I? not that a fair suggestion?
– Does the honorable member suggest that those chain stores should be nationalized?
– If the Government wants to nationalize something, surely it should start with the chain stores. Before long they will be selling goods which were made in Japan. Of course, those goods will be exported from Japan to the United States of America and thence to Australia, but the Government will not have the intestinal fortitude to order that they he marked, “ Made in Japan “. The profits from these sales should be regarded as reparations from Japan, and distributed among former prisoners of war.
– Order ! I ask the honorable member to direct his remarks to the Banking Bill.
– I shall do so. The socalled firmness and conviction of the Prime Minister become sacrificed on the altar of expediency and weakness. If he wants to nationalize something, he should consider the newspaper industry in Australia. He should know all about newspapers, because he is such a large shareholder in a newspaper at Bathurst - it is conducted for profit, too - that he is virtually a monopolist proprietor. If the right honorable gentleman be the man of principle to which, he lays claim, he must surely have some memorable struggles with his conscience about his position as a newspaper capitalist. Probably he falls out of bed every morning with laughter at the way in which he is endeavouring to deceive the people of Australia regarding the Banking Bill. There is less reason for nationalizing the private banks, than for nationalizing the chain stores conducted by G. J. Coles and Company Limited or the newspaper at Bathurst which I mentioned. After all, the profits and activities of the private banks are already closely controlled through the hanking legislation of 1945. Nearly every detail of banking activity must now be approved by the Treasurer. Bank profits have never reached the level which the right honorable gentleman regarded as reasonable when he was a member of the Royal Commission on Monetary and Banking Systems in 1936. No case can be made against the banks on the’ grounds of excessive profits. The Leader of the Opposition demonstrated this in a devastating manner. In all the circumstances, we must come to the conclusion that the main reason for the introduction of this legislation is to satisfy the Prime Minister’s desire to become, not merely a newspaper capitalist, but also a banking monopolist.
The Prime Minister has been represented as a determined man. He now stands revealed as a stubborn and designing dictator. His excessive stubbornness leads him to act foolishly, for only an abject fool could delude himself that the Australian people can be frustrated. Their will cannot be disregarded, and their rights as citizens will not be impaired if they are given an opportunity to express, at a referendum, their views regarding the bill. The Government now is in a cleft stick. It knows that the Premier tff South Australia, Mr. Playford, and the Premier of Western Australia, Mr. McLarty, are on their toes. What is more, the people of Victoria, at 8 o’clock next Saturday morning, will go to the tapes, and from the fall of the flag until the crack of the whips they will be voting for democracy, and against the policy of a government which does not act in accordance with democratic principles. The people of Australia will refuse to be frustrated in this matter, or allow their liberty to be invaded. There is no reason why the Prime Minister should not seek to ascertain by way of referendum the people’s views regarding this proposal. Venturing an explanation, the Minister ‘for Transport (Mr. Ward) could muster only the weak suggestion that a referendum would involve considerable expense. That is utter humbug. A referendum on the banking proposals could be conducted concurrently with, and at no additional cost to the Government’s referendum on prices control next year. Thus the so-called champion of the people is revealed as the dictator of the people, who denies that they are the ultimate masters in deciding the way in which their country shall be governed. The Prime Minister would do well to remember that in the whole history of the British speaking world, no one man has proved mighty enough to take unto himself the right to determine what the people want, or the power to deny to them their constitutional right to be consulted about radical changes in the system of society under which they desire to live. If a man were really great, this is the last thing that he would seek. In my view, a great man gives away power. It is the small man who grasps power. The Prime Minister, and also his uneasy colleagues, will be deprived of their greatness by the people from whom they claim to draw their powers.
In the limited time remaining to me, I desire to reply to some of the statements made by the Minister for Repatriation (Mr. Barnard). In his speech he quoted the views of the reverend Coughlan - the privilege to fiirt with communism and associated matters, the “ social gospel “. The fact that other honorable members opposite do not feel inclined to bolster their case with these views indicates that they know that this legislation is based on false premises. In my opinion, only two speeches by Government supporters call for a reply. First, the Minister for Information (Mr. Calwell) quoted wrongly a. passage from The Forgotten People. written by the Leader of the Opposition. The second is the honorable member for West Sydney (Mr. O’Connor). His speech was sincere and from the Labour party’s point of view, he made .a better case for the bill than did any other Government supporter. However, his speech was loaded with communism, and he not only deceived himself but sewed himself up very neatly in a bag. I pay him the credit of saying that I think “that he believed most of it, and I wish that there were more of his type amongst supporters of the Government. The Minister for Labour and National Service Stuck his chin out, but he was answered very effectively by Dr. Mannix. Then the honorable member for Denison (Dr. Gaha) told us recently that he was a regionalist like myself, that he believed in the devolution of power, but now he advocates socialization. However, I remind him that members of this Government posed as members of a “ gimme club “ at the last elections; in fact, they promised to give the people everything. But now that they are in their stride they propose to take something from somebody and to give it to somebody else; a delightful scheme. I should not mind greatly if the Government proposed to take something from the great slum-owners of Surry Hills; although I am doubtful whether they would be constitutionally entitled to do even that. However, there might be some moral justification if they sought to achieve something for the people of Australia. I propose to address my next remarks to quotations made by the Minister for Repatriation from discursions of the Reverend Coughlan, whom he quoted with great gusto. I have spent some time browsing in the Parliamentary Library, and I propose to read to the House some interesting extracts from The Rediscovery of Morals by Henry C. Link, Ph.D. This work has been described by a reviewer in the following words : -
A thought-provoking analysis of one of the most important problems of to-day, “ The rediscovery of political morals “, is Dr. Link’s answer to the question being asked by people everywhere, “ What is wrong with the world to-day, and, What can be done about it? “
In the section of his book headed, “ The Significance of the New Social Gospel”, he states -
The Christian churches, under the secular influences already described, are also being emancipated from the authority of the Ten
Commandments. But what is still more significant, an important minority, especially in the Protestant denominations, has systematically if unwittingly encouraged their violation.
A leader in this minority was the late William Temple, Archbishop of Canterbury and head of the Episcopal Church of England. Speaking in 1942 before 0,000 workers in the Albert Hall, a mass meeting organized by the Industrial Christian’ Fellowship, he advocated a socialized economy. Speaking of material goods, he said: “ … of these, so far as they are purely material, it is true to say that the more one has, the less there is for others, so that each man’s success represents corresponding failure in his neighbours.”
Obviously, those are false premises. He continues -
That is to say, if a man has less than his neighbour it is not necessarily through any fault of his own but because that neighbour has obtained more than his share. If one man catches ten fish and another only one, the latter’s failure is due to the former’s success.
The Australian Labour party is playing on that silly sentiment. The paragraph goes on to state -
Whatever the truth of the Archbishop’s premise, and it is basically false, it is an incitement to class warfare of the most inflammatory kind. It says, in effect, you should not only covet your neighbour’s wealth but you should take steps to get your just share of it.
This Social Gospel is a far more subtle provocation to class hatreds than the preachings of Marx and Hitler ‘which were based on exactly the same premise. Marx claimed that the capitalists grew rich entirely at the expense of the wage earners, and Hitler condemned the Jews for having obtained their wealth at the expense of the German working class. But whereas Marx and Hitler proposed the redistribution of wealth in spite of religious morals, the new Social Gospel-
The beautiful thing with which the Minister for Repatriation is flirting. The statement concludes - calls for this redistribution as a religious crusade. “In the name of God and the Kingdom of Heaven on earth,” it says, “ let us take the wealth of the exploiters who have it a.]id distribute it among those who have less: Let us, as Christians, do -this with as little injustice and violence as possible. We do not have to steal or kill to effect this redistribution if we use the democratic process of the popular ballot! “
– Hear, hear !
– The Minister for Information says, “ Hear, hear ! “ ; I am surprised, ! The comment continues -
This, with minor variations, is the new Social Gospel or Christian Socialism of a powerful collection of highly organized minorities in the churches throughout the world. “ Challenging the Enemy “ read the heading of a pamphlet distributed by one of these “ social service “ church groups. The “ enemy “ were the owners of property and the pamphlet went on to say - “ It does not take long to write, ‘ Transfer . . from private property to social ownership ‘. “ But to start to do it ! Then you run into laws that were made to stop you. Little laws about disorderly conduct and obstructing traffic. “ Big laws about taking property without reasonable compensation. “Bigger laws about advocating the overthrow of government by voice and violence.”
That is the position -which the Government seeks to bring about to-day. I have not time to read much more from this valuable book, but I shall read one of the concluding paragraphs, which states -
Outstanding among the few religious leaders who have condemned the preaching of class hatreds in the name of religion has been Pope Pius XII. In his messages to the world on the 1st September and the 25th December, 194.4, and in subsequent messages, he condemned not only the methods but the aims of communism as being directly opposed to those of the Catholic Church. In January, 1945, the Vatican explicitly repudiated the so-called Christian Left “ party. This party was originally the Catholic Communist party which the Pope and the Vatican had repudiated in clear terms. To meet that condemnation it has changed its name but had retained its adhesion to Marxism and communism in general. Therefore, the Vatican condemned its principles, its tendencies and its right to represent Christian thought or to seek Catholic members.
Until the majority of Protestant, Catholic and Jewish religious leaders repudiate the gospel of hatred, no matter under what name it parades, there can be little hope for social harmony. [ think that that is a thorough-going indictment of this wretched Government, which seeks to propagate the doctrine of class hatred and to exploit it for political ends. I think that that is a craven attitude, and it is shameful to Australians to think that a national government would stoop to such a thing. Furthermore, I believe that the Government should be condemned for other reasons, quite apart from its political morals. For one thing, its economic and defence policies are absolutely unsound.
In my maiden speech in this House on the 9th December, 1934, I said, in the course of remarks concerning the Northern Territory, that I looked forward to the light of a new star that would burst through the firmament of Australia’s activities - ‘the star of the Northern Territory! But what do I find now? The main constellation of Australia, the Southern Cross, which is known astronomically as the “ The Crux “, is in the process of being blotted out by this Government, and even the pointers, alpha centaur] and beta centauri, have so dirty a mist obscuring them that it is difficult to see those two well-known stars pointing to the Southern Cross. Instead of permitting our country to be dominated by this filthy doctrine of Marxism, let us tear down the hammer and sickle and nail the flag of optimism to our mast, and let us, in the name of democracy, obliterate this Government at the next election. That is something which I feel confident the people of Australia will achieve, and I trust that never again will a government of this character disgrace the treasury bench of this, my country.
.- In the course of his address, the honorable member for the Northern Territory (Mr. Blain) challenged the next speaker from the government benches to answer his charges. I can only describe his speech as the weirdest diatribe that I have ever heard. I let it go at that.
I am proud to associate myself with the bill before the House, because I believe that it is the most important measure that has ever been presented to the Parliament. Since the first announcement by the Prime Minister (Mr. Chifley) that legislation to bring the trading banks under public ownership and control was made, and even before the contents of the bill were made known, the full weight of the organized wealth and the vast resources of the private banks were thrown into one of the most vicious’ and intense campaigns of falsehood and misrepresentation that this country has ever known. Through every medium that they control - and they are many, as they include the press and the radio - the Liberal party and the Australian Country party, aided by the unlimited money which had been provided in their support, have poured out a flood of poisonous propaganda in violent opposition to the Government’s proposals. In doing so they claim to be the great defenders of democracy. Just imagine democracy in their hands, the liberties of the people being entrusted to such “ defenders “ ! One can almost imagine their hearts bleeding for the working man, the farmer and the “ little “ man. Listening to them, one would almost think that they had a loving concern for the welfare of the “ little “ man and, indeed, that the smaller he is the more they love him. But the people are not deceived. As a result of the hardship and suffering which they experienced during the depression, they know that this simulated concern on the part of the Opposition for the welfare of the ordinary people is pure humbug and lying hypocrisy, a smoke-screen to protect private interests and profits. In the past the private banks have completely controlled the credit of the nation. Whenever their own interests are challenged, and the unjust privileges which they have enjoyed at the expense of the “ little “ man are pointed out, they claim to be concerned about the interests of the “little” man. I shall show how greatly they were concerned for the “ little “ man when he was in distress. They then showed their interest by callous, and even inhuman, treatment. No one knows that better than does the honorable member for Moreton (Mr. Francis). Even -the bankers themselves, when addressing their shareholders, admit that they have exercised control. They have boasted of the great powers that they hold and the way in which they have been used, in the interests not of the people but of their shareholders. I draw the attention of the House to a statement made by Mr. Reginald McKenna, a former Chancellor of the British Exchequer, and chairman of the Midland Bank, the largest trading bank in England. In 1924, Mr. McKenna said -
They who control the credit of the nation direct the policy of governments and hold in the hollow of their hands the destiny of the people.
The ramifications of financial and semifinancial institutions, including the big pastoral companies, are well known. They are all associated by an interlocking of directors, so that they form one great monopoly. They act as one body, and they control the press and other forms of propaganda. To-day they are making full use of their control of newspapers and radio stations, and are flocking to the defence of those who control money. They have so consolidated their strength that the power they exercise is greater than that of any government. But the people are not likely to forget their bitter experience of unnecessary want in the midst of unsaleable plenty in the depression years, when children went hungry and ill-clad, while their fathers tramped the roads seeking work without success and were forced to accept a miserable and soul-destroying dole. There was no great concern then for the common people on the part of the moneyed interests. Money and profits were more sacred than human life. As I have said, business men and farmers became bankrupt and homeless. That is the wages of debt. Those dreadful experiences have taught us the evil consequences of allowing this great power, which is so vital to the economy of the nation, to be left in the hands of the private banks. These financial fascists now have the audacity to claim to be the defenders of democracy and the champions of the liberties and freedom of the people.
As this bill provides that the banking system of the nation shall be controlled by a public authority which shall be responsible to the people, through the Parliament and the Government of the country, it is therefore of the very essence of democracy because, as has aptly been said, government is finance and finance is government. That is why all this propaganda is being indulged in. Those who control money have wielded their power too long. President Lincoln’s words, when he spoke of government of the people, by the people, for the people, are often quoted to describe democracy. Honorable members opposite, including the honorable member for Gippsland (Mr. Bowden) would have us believe that what Lincoln really meant was government of the people by the banks for the financiers. It is unfortunate for the honorable member for Gippsland that in his desperate attempt to bolster up the case for the private banks he should have quoted some lines from Lincoln’s famous
Gettysburg speech, because I propose to quote some further remarks of that great man. On another occasion he said -
I have two great enemies - the Southern army iti front of me and the financial institutions in the rear. Of the two, the one in my rear is the greatest foe.
That great democrat incurred the hatred of the private bankers of America years ago when he refused to pay the exorbitant, rates of interest which they demanded in order to prosecute the civil war. Lincoln broke the rules of “ sound finance “ and trespassed on what the private banks considered to be their sacred rights and privileges by issuing interest-free treasury notes to the value of $450,000,000, thereby saving the people interest on that amount which otherwise would have been paid to private financiers in perpetuity. Lincoln realized with clear vision that it was wrong for anyone except a government responsible to the people to possess the power to regulate the credit, of the nation when he said -
The privilege of creating and issuing money is not only the supreme prerogative of the government, but it is the government’s greatest creative opportunity. . . . Money will cease to be master and become the servant of humanity. Democracy will rise superior to money power.
For the information of honorable members let me point out that Lincoln fought to set men free from actual physical bondage. He also fought to set men free from economic and financial bondage. He succeeded in the former, but did not live long enough to succeed in the latter. He was assassinated. An interesting book was written by an American congressman, Jerry Voorhis, called Out of Debt, Out of Danger, in which he comments upon the assassination of President Lincoln. He describes how Lincoln had defied the financiers of those days by issuing treasury-bills to the value of $450,000,000, thus depriving the financiers of interest on loans. The author wrote -
Lincoln was killed by an assassin’s bullet in Ford’s Theatre, Washington on the 14th April, 1865, only one month after he had taken office for -his second term. It was also five days after Lee’s surrender to Grant at Appomattox - the end of the Civil War. Why was Lincoln shot? We probably will never know. But it is hard not to believe that there was far more behind the thing than just John Wilkes Booth j and it is hard not to believe that if it were the Southern cause that prompted the killing it would have been done before that cause was finally and irreparably laid away.
That was written by an American in’ 1943, and the suggestion was that there was something more behind the assassination than appeared on the surface. I leave it to honorable members to guess what that was. Indeed, the right honorable member for Cowper (Sir Earle Page) expressed sentiments of the kind when he suggested that there should be physical resistance to the Government’s banking proposals. I have no doubt on what side honorable members opposite would have fought in the American Civil War. It would not have been with Lincoln. They would have been with the southern slave-owners, fighting gallantly in defence of their rights, and the freedom to hold men in physical bondage, just as they are attempting now, in an unconvincing fashion, to defend the rights and freedom of the private banks to control the credit of the nation, and to hold the people in economic and financial bondage. Like Lincoln, the Australian Labour party reflects the democratic spirit of the country. It will be remembered that the Labour party took the first step towards economic freedom 37 years ago when it established the Commonwealth Bank, the people’s bank. The opposition to the proposal was very strong, and the same silly old bogys about socialism were raised, and the same stupid predictions were made of dire disaster - all of which were, of course, proved false. Instead, the people’s bank flourished. It rendered magnificent service to the people of Australia during World War I. In fact, it was too successful, and the private bankers quickly realized that if this great institution - the people’s bank - was not restricted, it would grow in strength, and they themselves could not survive. Therefore, in 1924, it was sterilized at the instigation of the agents and servants of the private banks - known as the Bruce-Page Government. The actual operation was performed by the right honorable member for Cowper (Sir Earle Page), who was’ then Treasurer. The Commonwealth Bank was rendered impotent by being placed under a board consisting of representatives drawn from financial, commercial and industrial interests. It was not permitted to compete for business as a trading bank. In the words of the “ Tragic Treasurer it became a prop for the private banks. During the years from 1924 to 1929, the private banks were allowed to expand credit to an unlimited amount without a word of warning from the Commonwealth Bank Board, and without its taking any action to prevent what was going on. Land and property -prices soared, and speculation was rife. Then the inevitable crash came. During the same period, the Bruce-Page Government applied a reckless policy of borrowing large amounts of money from overseas until its credit was stopped - and all this without a word of censure from the Commonwealth Bank Board. “We all remember how, during those boom years, men mortgaged their farms in order to buy more land at inflated prices.
What a different attitude the board adopted when the Treasurer of a Labour government - a government without a majority in the Senate, submitted certain proposals which, if they had been accepted by the board, would have done much to relieve the distress then existing. I propose to quote from certain correspondence which passed between the Treasurer of the day, Mr. E. G. Theodore, and the Chairman of the Commonwealth Bank Board, Sir Robert Gibson. This correspondence shows how humiliating was the experience of the representative of the Government - in other words, of the people - in having to submit to dictation from the bankers. This is the letter which Sir Robert Gibson wrote to Mr. Theodore on the 30th February, 1931, in reply to certain proposals which had been submitted to him by Mr. Theorore -
Dear Mr. Theodore - With reference to your discussion with the directors of the bank board on the subject of rehabilitation of the financial and industrial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation and so avoid, if possible, the ultimate disaster which will otherwise eventually face the country, I am requested by my board to convey to you a resolution of the board as set forth hereunder -
Subject to adequate and equitable reductions in nil wages, salaries, and allowances, pensions, social benefits of all kinds, interest and other f sisters which affect the cost of living, the Commonwealth Rank Board will actively co- operate with the trading banks and the Govern ment of Australia in sustaining industry and restoring employment.
It is also interesting to quote a letter written by Mr. Theodore to the Commonwealth Bank Board, because it shows how consistent has been the policy of the Labour party throughout the years in regard to these matters. The letter is as follows : -
In February last I submitted to ‘the Com monwealth Bank Board comprehensive proposals which had been adopted by the Government as a means to ease the financial stringency’ and assist the nation towards budgetary stability. The co-operation of the bank in giving effect to these proposals was sought by the Government, but was refused by the bank. The board now intimates to the Government that it will not provide financial accommodation to the Commonwealth or the State Governments beyond a point which will be reached in a week 01 two. The attitude of the board throughout the recent negotiations and as disclosed in the letter now referred to, can only be regarded by the Commonwealth Government as an attempt on the part of the bank to arrogate to itself a supremacy over the Government in the determination of the financial policy of the Commonwealth, a supremacy which, 1 am sure, was never contemplated by the framers of the Australian Constitution, and has never been sanctioned by the Australian people. Those who are responsible for the general monetary policy, especially for the disastrous contraction of credit, are answerable for the present unhappy state of things.
The productive capacity of the country has not been impaired. In Australia nature, has not failed, but is as generous and bountiful a? ever. What we are suffering from is a complete breakdown of the man -con trolled mechanism of exchange. Catastrophe has come upon us from a failure of the monetary system to meet the credit and exchange needs of the community. The Australian banks, more particularly the Commonwealth Bank, cannot escape their share of responsibility in this matter so far as it affects Australia, for they blindly followed the overseas banks in pursuing a policy which forced Australian prices down in consonance with the slumped prices in overseas countries. The rapid deflation of credit which has taken place in Australia in the last eighteen months has brought in its train a collapse of trade, loss of commercial profits, thousands of business bankruptcies, and the creation of unemployment on a scale wholly unprecedented in the history of the country.
How well Mr. Theodore put the position in those days: and it is now well worth while for the people of this country to mark his words in case those conditions should recur. He continued -
These calamities could have been mitigated if not wholly avoided, if the Commonwealth
Bank, with the co-operation of the private banks, had adopted a more liberal policy. If, instead of starving the community of credit in this period o! crisis, they had pursued a policy of maintaining industry until it could adjust itself gradually to the altered economic conditions, Australia could have easily weathered the storm.
The suffering imposed upon the com.munity by the banks in those days, when they were the real governors of the country, was, indeed, tragic. Mr. Theodore continued -
That this was within the power of the banks cannot seriously be denied. The Banks them selves have given a clear indication of their ability in this respect in their communications to the Commonwealth Government. In a communication from the Commonwealth Bank Board in February, the undertaking was given that, conditional upon wages, salaries, pensions and social services being adequately reduced the banks would provide funds to sustain industry and restore employment.
In other words, the banks then told the government of the day to inflict further hardships upon the people. Such hardships were unnecessary, as Mr. Theodore pointed out. I, myself, recall the bountiful harvests that were garnered in those years. Yet, many people and their children in this country were suffering from malnutrition. Such facts are a disgrace to Australia. Private individuals, through the banks, controlled the nation. This Government, as is its duty, now proposes to take that control from them and place it where it should reside, namely, in the Parliament which is responsible to the people. The letters which I have just read illustrate the danger of allowing such great power to pass into the hands of any section of the community. It is the duty of any government to exercise that power subject to the wishes of the people. Discussing the action of the private banks in 1936 in increasing the interest rate on fixed deposits which forced the Commonwealth Bank to do likewise after it had made available £1,000,000 of treasurybills, the Melbourne Age of the 25th March, 1936, stated-
Whether the reasons are sound or not the fact that impresses and startles the community is that in a matter of such vital national importance the Federal Government can be a mere cypher and the great institution which is owned by and acts for the people - the Commonwealth Bank - instead of making policy is forced to follow a course dictated by others.
The weakness is due directly to the Federal Ministry’s abdication of its power and evasion of its responsibility. If the National Government deliberately excludes itself from all participation in the making or changing of monetary policy obviously it cannot govern except in a secondary degree.
Labour has always held that that right, should rest with the Parliament and the people. For that reason, this Government passed the Banking Act in 1945 by which Parliament assumed greater control over banking policy. Much the same opposition was directed against that legislation as is now indulged in by honorable members opposite in opposing this measure. All honorable members will recall the flood of telegrams and letters sent to them when the Banking Act was before the House in 1945. All of the telegrams and letters of protest which we are now receiving are paid for by the private banks. Quite recently a man told me that the local bank manager had urged him to send a protest by -telegram to his member against the Government’s banking proposals. The bank manager said to him, “Just give me your name and I will send a telegram to your local member. It won’t cost you anything “. That man, remembering his own sufferings during the depression, told the bank manager promptly where he could go. Another man told me that he had been requested to sign six petitions protesting against the Government’s banking proposals. The private banks have sent their employees from door to door to obtain signatures to these petitions. Of course, those employees were forced to do so. The private banks had no regard for their dignity in making them undertake such work. We are aware also of the activities of the little snobs among local liberal leaders, who go among the people and urge them to sign their petitions. Obviously, many people agree to sign in order to avoid inconvenience, and, perhaps, merely in order to get rid of the canvassers. 1 have been informed that boys of fourteen and fifteen years of age have been asked to sign these petitions. The threat implied in these protests is that if the local member does not do what he is asked to do he will lose his seat. I would be prepared to lose ten seats if I could. I am not like members of the Australian Country party, who are prepared to sell their souls on issues of this kind. The Leader of the Opposition (Mr. Menzies) pledged himself to repeal the Banking Act of 1945 if his party were returned to power. All members of the Australian Country party voted against that measure. The Leader of the Australian Country party (Mr. Fadden) said that it was nationalization “ on the cheap “.
– Of course, it was.
– But to-day the right honorable gentleman is lauding the virtues of the Banking Act of 1945. Yet, when that measure was before this House,, he could not say anything sufficiently bad about it. Of course, honorable members opposite are just gramophones for the private banks. I repeat that the Leader of the Opposition pledged himself to repeal the Banking Act of 1945 if the opportunity occurred. The Government went to the people twelve months after that legislation was enacted, and from every platform Labour candidates expounded the benefits conferred by that act. I dealt specifically with that legislation, and pointed out to my constituents that the Australian Country party was pledged to repeal it if Labour were ejected from office. I explained to the farmers in my electorate the benefits which that legislation would enable the Commonwealth Bank to provide by financing the marketing of their products. The Government was returned to office, and that was one of the issues. However, during the election campaign honorable members opposite remained silent with respect to that legislation. They did not say a word about it. After the general elections, the Banking Act of 1945 was challenged and the High Court declared section 4S to be ultra vires. The court’s judgment threw grave doubt upon the validity of the act as a whole. Is it not a remarkable reversal of opinion on the part of the Leader of the Opposition, in view of his hostility to the Banking Act of 1945, that he should now laud the virtues of that legislation, and endeavour to convey the impression to the people that it gives to the Government effective and unchallengeable control over credit and banking. He declared that sections 18 to 22 had never been challenged, and that they are not susceptible to challenge. He said that they were not even challenged in the writ before the High Court.
Sitting suspended from 5.59 to 8 p.m.
– In order to demonstrate how false are the statements of the Leader of the Opposition in this respect I propose to quote the words in the statement of claim in the banking case. Any one who reads them will see at a glance that section 48 of the Banking Act of 1945 was challenged. The plaintiffs claim contained this paragraph -
The Banking Act 1045, or alternatively section 48 thereof, is beyond the powers of the Parliament of the Commonwealth of Australia, contrary to the provisions of the Constitution of the Commonwealth and is void.
In order to demonstrate that it was the intention of the private banks to challenge the validity of the act when it suited them I quote the following letter which was sent by one of the private banks to the Commonwealth Bank: -
We are most anxious to co-operate with your bank to ensure the continuance of our present harmonious relations, but you will appreciate that our duty to our shareholders compels us to have regard to our legal position ; therefore, we feel it necessary to advise you, with all due respect, that acquiescence or compliance on the bank’s part with any request or directions from you is not to be taken to import any contract with your bank in the terms of the act.
As it is clear that the whole of the foundations of the Banking Act of 1945 are of doubtful legality, the Government has decided to implement its policy of full public ownership of the banking system. As a Government responsible to the people its first duty is to make provision for safeguarding the economic stability of the nation and give financial security to the people. Bank directors do not have to account for their actions to the people; their first concern is profit and security for themselves, irrespective of the consequences to the people. To-day, as they did prior to 1929, the trading banks are expanding credits. In boom times, when business is good and securities are sound, they advance money heavily, thereby accentuating the boom; but, in the inevitable slump that follows, they contract credit, foreclose mortgages, call up overdrafts, and follow a restrictive policy which accentuates the slump.
To-day we are witnessing world conditions somewhat similar to those that preceded the financial and economic depression of the late ‘twenties. In view of the dollar crisis and the great inflation in the United States of America and its effect on world conditions, an economic collapse seems inevitable. Such a collapse would have repercussions in Australia, and we must be prepared to meet them. It would be wrong for the Government to await the onset of such a crisis and then try to implement a remedial policy under the dictates of private financiers.
In an attempt to prove his case for the private banks the honorable member for Gippsland (Mr. Bowden) cited the experience of the Chicory Board in 1938, when the Commonwealth Bank was under the control of a board consisting of representatives of the private banking institutions. The Chicory Board applied unsuccessfully to the bank for an advance of £3,000, offering as security assets valued at £15,000. The honorable gentleman did not tell all the facts. He failed to mention that one of the then members of the Commonwealth Bank Board was also a director of one of the largest companies purchasing chicory. It was because of that that the business went not to the Commonwealth Bank hut to a private bank. For a similar reason, the Melbourne Harbour Trust took fine care that its business did not go to the Commonwealth Bank. Representatives of the Australian Country party in this chamber pose as the advocates of the private banks. On the hustings they pose as the representatives of the farmer, but in this House they are only too willing to do the work of the farmer’s most bitter enemies, the financial institutions which, throughout the years, have got more out of the land than have the farmers themselves, reaping huge rewards by the imposition of high rates of interest- on advances and at the same time manipulating the markets upon which the product of the farmer’s labour is sold. Despite the fact that they could not tell the difference between a come-back ewe and a shorthorn bull, these financial magnates make much more out of the labours of the primary producers than do the primary producers themselves. Members of the Country party cannot have it both ways; they must either truly represent the farmers or come out in the open and say that they are the avowed representatives of the private banks. Let us test their sincerity in this matter. At the annual conference of the United Country party held at Ballarat in March, 1941, the chief president, the honorable member for Gippsland (Mr. Bowden) in his presidential address said -
Australians as a whole have never been afraid to examine economic practices, and, where necessary, to point out their failure and the need for a change. No doubt this characteristic has been engendered by the pioneering experiences of this great continent. The man in the street has already made up his mind that economic practices, which in times of peace keep the people hungry in the midst of plenty, are doomed.
These economic practices are not doomed by the representatives of the Australian Country party in this House. On the contrary, members of that party are fighting for their preservation. The honorable member continued -
He has decided that the system which compels willing workers to remain idle and in want when there is work to be done requires changing.
The Labour party is attempting to change it -
The rank and file of the United Country party are also critical of financial and economic practices which have reduced a large proportion of those engaged in primary industry from a free and unfettered people to the status of a peasantry.
– Who said that?
– The honorable member for Gippsland said that when delivering his presidential address to the annual conference of the Country party at Ballarat in 1941. If those are the sentiments of the Australian Country party, every representative of that party in this House must vote for this bill. The honorable member continued -
One thing is clear. It is that Australia cannot in the future finance national obligations and undertakings through the medium of borrowed money carrying high rates of interest, the payment of which will enslave the whole of our people.
That is what we have argued. But mark this ! -
Parliament, therefore, with ample power and resources at its command, must face and adjust economic practices to meet the people’s needs. It is becoming obvious that at the conclusion of this conflict Australia will no longer bc able to afford the luxury of politicans who psychologically- belong to the “ cannot “ brigade.
Every member of the Australian Country party in this House belongs to the “ cannot “ brigade -
I want to say very deliberately that Parliament is not the place for any individual who is afraid to face facts as they are unfolded before him, or who would blindly lead the nation along the orthodox track - and over the economic precipice.
Inside the Parliament the representatives of the Country party oppose a measure which is designed solely to give to the people the very things which they advocate outside of this House -
At this moment of the nation’s extremity, advanced thought among economic -reformers is somewhat subdued by the march of events. With that attitude I am entirely in accord. My object is to urge that the people’s confidence in our legislative institutions can be enhanced only by the adoption of an economic plan for post-war reconstruction which will stabilize incomes, abolish unemployment, relieve the community of its increasing load of debt and the interest burden thereon. The obligation to solve economic problems belongs to Parliament and should be shouldered by it.
The best thing that honorable members opposite can do, therefore, is to take their own advice that this country cannot afford luxury of politicians, particularly of the Australian Country party type, who, psychologically belong to the “ cannot “ brigade, and get out of the Parliament.
We heard some extraordinary statements from that great champion of exservicemen, the honorable member for Wimmera (Mr. Turnbull). The honorable member should realize that exservicemen are alive to what is going on to-day, and to some of the men who would climb on their backs. It has been said that British soldiers have fought and died for democracy in two wars. I fought in one of them, but I did not fight for the banks. I fought for the liberty of the people. In the depression years, hundreds of thousands of returned .soldiers were on the dole and walked the streets. They did not fight for the freedom of the banks, but for the freedom of the people of this country, and to-day they are fighting with the Labour party to make Australia a country fit for exservicemen and their children to live in.
Consider the recent actions of these socalled democrats in the Victorian Legislative Council. I hope that some day the people of that State will be democratically free. I have a vote at the Legislative Council elections, but only one man in three has that privilege. The council is the most reactionary body that could be found anywhere in the democratic world. It has denied to returned soldiers the unqualified right to vote at its elections. But the honorable member for Wimmera has not said anything about that. Surely a vote is the least concession that should be granted to an exserviceman. The “ democrats “ of the anti-Labour parties are prepared to conscript youths when they reach eighteen years of age, and to put them in the firing-line between the enemy and the lives and property of vested interests; but they are not prepared to give a vote to all ex-servicemen. Like other citizens, ex-servicemen may vote at the Legislative Council elections only if they have certain property qualifications. Members of the council can dominate governments. They are superior to governments - these privileged wealthy men, who represent privilege and wealth. They can destroy governments. The sentiments of the honorable member for Wimmera will take some explaining when the ex-servicemen ask why he does not support their demand for a vote. The following statement was made to the Royal Commission on Monetary and Banking Systems by Mr. W. A. Leitch, general manager of the Union Bank of Australia Limited, in answer to a question : -
In that case, if you pay regard to the Union Bank, you will find that we have not gone out into the highways and by-ways, out into the wilderness, to such paces as Ouyen and Walpeup, but we have reserved our operations for places where we think settlers and so on have a chance of doing some good. We have not gone out into the wilderness and we do not intend to.
That is what the private bankers think of the settlers who pioneer far-flung places. It is to be hoped that before long there will be a branch of the Commonwealth Bank in every remote township. The honorable member for Maranoa (Mr. Adermann) cried in a voice as hollow as a peanut shell, “ What will the Commonwealth Bank do when the prices of our primary products fall overseas ? “
It will not do what the private banks did during the depression - foreclose on mortgages. It will keep the farmers on their properties, because it will realize that it is far better to maintain a farmer in production than to take over his property, [n times of economic adversity, the first concern of private banking institutions is to secure their own mortgages. I am confident that when the new Commonwealth Bank is in operation it will make advances at low interest rates for the building of homes, and for business purposes, and, generally, will give a service to the community such as the private banks have never given.
-Order! The honorable member’s time has expired.
.- The speech to which we have just listened reminds one of the speeches of almost every Labour Minister and member. There has been a succession of speeches from the Labour side which those of us who sit in Opposition almost know from memory. We have become accustomed to this continual diatribe from honorable members opposite. The speech that the Minister for Transport (Mr. Ward) has made, all through the years, I could almost make from memory. I thought it was a good speech when I first heard it in 1934. It did not sound bad in 1935. But to those of ns whose fate it has been to sit in this chamber year after year, it has become rather wearisome. In the same category is the speech of the honorable member for Wannon (Mr. McLeod). No matter what measure is before the House, the honorable member tells the same old story. To-night, he read from a report of the proceedings of the annual conference of the Country party at Ballarat in 1941. He read the same extract in the course of his speech on a wheat industry measure passed through this Parliament recently, on the Dairy Produce Export Control Bill, and on the budget for nearly every year that he has been in this chamber. We have become quite accustomed to all this sob stuff, and the gruesome stories of the tragic fate of the farmers at the hands of the private banks and governments composed of the parties now sitting on this side of the chamber. We have heard all these things until we are sick and tired of hearing them. Perhaps the honorable member believes that they are worth repeating “ over the air “ and that is why we have heard the same old story to-night. I have no doubt that that type of speech makes an impression on some people. But surely the plain answer to what the honorable member has said is. this: If the primary producers of Australia felt that they were being exploited by the private banks during the depression why have they not transferred their accounts. to the Commonwealth Bank?
– There are not sufficient branches of the Commonwealth Bank.
– Honorable members opposite always have an alibi. There are branches of the Commonwealth Bank in every State of the Commonwealth. It is no use in this year of grace, 1947, trying to incite people against the banks because of something that is alleged to have transpired in 1931 and 1932, and to portray as the villains of the piece, the private banks and the political parties that sit in opposition at present. The plain truth is that the memories of the depression years were much fresher in the minds of the people of this country in the election years of 1934 and 1937 than they are to-day, even under the influence of visions conjured up by the honorable member for Wannon and others; and what was the verdict of the people of this country, including the allegedly exploited farmers, when at those elections they had an opportunity to accept the remedy of the Labour party for the financial ills of this country? Why, it is history that, in the midst of the depression, with all the memories of whatever may have been their experience of the private trading banks, members of the farming community of this country voted overwhelmingly against Labour and retained their bank accounts in the private trading banks. Labour went to the people in 1937, under the then newly appointed leader, the late Mr. Curtin, and propounded the nationalization of banking and the acceptance of a Labour government as the solution of all the alleged ills from which they had not recovered. That was a clear-cut proposal that the people of Australia contemptuously rejected!. lt is futile for Labour supporters to stand up in Parliament and to try to persuade the people that the things that happened in 1931, 1932 and 1933 justify the imposition of a banking system that they, with all their experiences fresh in their memories, have already rejected overwhelmingly. The honorable member for Hume (Mr. Fuller) may read all the letters that he wants to and other honorable members opposite may paint all the awful pictures they can, but the answer is that the people have refused to accept Labour’s solution of their alleged ills by nationalizing banking. It is useless for Government supporters to broadcast to the nation from this chamber to-night, in an attempt to justify the Government’s unprecedented, action, speeches about the alleged history of the depression. As honorable members opposite have read letters from people in substantiation of their case, I could read voluntarily written letters from reputable men and companies in country districts stating that they have never known of a private bank to foreclose on a farm in their localities. But I do not rest my case on them. I rest it on the verdict of the people. What we have to examine is the proposal of Mr. Chifley to exterminate private banking in this country.
– Order ! There is no Mr. Chifley here. The right honorable the Prime Minister is here, not Mr. Chifley.
– Well, the proposal of the right honorable the Prime Minister to abolish private banking in this country and to mould Australia in respect of banking and, as I propose to show presently, many other things. This will be the first country to copy the pattern of Soviet Russia by nationalizing banking. That is what we have to examine, not what happened, or books that were written, 20 or 40 years ago. We must examine the relative merits of government monopoly banking as against competitive government and private banking. Secondly, we have to examine the strength of the Prime Minister’s reasons for and justification of this revolutionary step, the like of which has never previously been proposed in the Parliament of any British community. The Prime Minister proposes to take to himself or to the Australian Parliament, if honorable members like that better, through the Commonwealth Bank complete power over banking. A curious sidelight is that if his proposal is agreed to, perhaps the only device that could strip the Commonwealth Parliament of exclusive power over trading banks will be created. The 1945 Banking Act gives the Parliament, through the Commonwealth Bank, complete authority over every aspect of banking except the accounts of individual depositors, power over which is the only additional power that this bill proposes. State governments have been provoked to declare that they will exercise their right to set up trading banks if this bill becomes law. The Australian Parliament will be powerless to do anything about them.’ Under the existing legislation, the Australian Government has 99^ per cent, control over banking in this country, but if State governments are provoked to exercise their constitutional right to set up trading banks, the Prime Minister will have achieved by the only means possible a banking system in this country over half of which the Australian Parliament will possess no power at all. That is a paradox that the Prime Minister seems to have overlooked.
I turn now to examine the relative merits of monopoly banking as against competitive banking. Who are the people most concerned with banking problems? Are they wealthy people with surplus funds on deposit in the banks? No! The people concerned are not the depositors but the borrowers or the prospective borrowers. Wealthy companies need not rely on overdrafts from banks should they need additional funds at any time. All that they need to do is to call up new share capital. So one quickly realizes that those concerned are not wealthy companies and men but average men, men who developed this country magnificently to leadership of civilization in 100-odd years by skill, industry, initiative and enterprise, financed by the system of banking that the Prime Minister proposes to destroy overnight. That is the kind of person who must concern himself with the implications of this bill.
Look at it through the eyes of the average man - the farmer who notoriously, by virtue of the nature of his industry, relies upon borrowed money, the storekeeper, the enterprising man who goes in for building houses or who sets up a carrying business. What do we discover when we look through his eyes at the prospect of being confined to dealing only with a. monopoly government institution? In this day of controls, few people have not had dealings with government departments. Everybody knows that the atmosphere surrounding a transaction with a government department is completely different from that which prevails in dealing with a private individual or a private company. Nobody will deny me when I say that it is harder to get a job with a government department than with a private individual,” that it takes longer for an applicant to learn whether he has got a job, that there is more selection in choosing candidates, that there are more forms to fill in, more examinations to pass and more delays to be endured. If a man wants to borrow money in order to build a home he can go to a building contractor, a building society or a bank and discuss the kind of home he wants, the price and the specifications and go away with a decision, but the man who wants to build a home with the aid of a government department must fill in forms and comply with rigid specifications. If the specifications for his house provide for softwood flooring, he is not able to say, “ I cannot get softwood. Use hardwood flooring “. There is an inflexibility which distinguishes transactions with government departments from all other kinds of transactions.
That is the first thing that the average man must bear in mind. In his dealings with a government monopoly bank, he will encounter rigidity and inevitable delay, which he has not had to endure in his transactions with private banking institutions. There will be an air of impersonality in his dealings with such a monopoly. Go to the Commonwealth Bank office, in Collins-street, Melbourne, on any business day. There one will find a mass of people such as one may see outside the totalisator windows at a racecourse, though not so well organized. Each person will hold in his hand a slip of paper and will stand meekly awaiting his turn to be called. He will stand there to-morrow, the next day and everyday, waiting until No. 361 is called. Not Mr. Jones or Mr. Smith, but No. 361 ! Then he will submissively present himself and he will be allowed, perhaps, to withdraw the money which he has deposited. When all banking is concentrated in the hands of a government institution, that will be the experience of the average man. He will be to his banker, not Mr. Smith or Mr. Jones, but No. 361. That is so in the Commonwealth Bank to-day, and it will be so in every large country town when banking if nationalized. There will not be any individual customers with separate personalities. There will be only ciphers. I do not draw upon my imagination. I invite any person to walk into any substantial branch of the Commonwealth Bank on any weekday and see whether that is the true picture of the present state of affairs or not.
One does not have to draw upon imagination in order to learn how a government-controlled bank will do business. There is a Mortgage Bank Department of the Commonwealth Bank to-day. I advocated its establishment for years. The present Prime Minister established it. Whereas a farmer dealing with a private trading bank can only raise an overdraft which will be on call from day to day, the Mortgage Bank Department of the Commonwealth Bank will make him a loan for any term between twenty and 40 years. Whereas he will pay 4£ per cent, interest on an overdraft, he may borrow from the Mortgage Bank Department at 4& per cent, interest. Whereas the private trading bank will lend him only slightly more than 50 per cent, of the value of his security, the Mortgage Bank Department, by statute, will advance money to the value of 70 per cent, of the security. That is all very attractive. But how does it work out? I shall explain how it works out, and I invite anybody to check my statements. Go to the Mortgage Bank Department of the Commonwealth Bank and say that you are interested in a loan and the first thing that you will be handed will be the inevitable form. When you study it you will find that you are required to answer, according to my most recent count, 104 questions. You would have to be a crystal-gazer in order to answer some of them accurately. “ What was your income last year? What was your income the previous year? How do you derive it? What were its details? What do you expect your income to be next year? What are its details? What price do you expect to get for the wheat that you expect to grow next year ? “
I ask the Minister for Commerce and Agriculture (Mr. Pollard) whether he could answer the last question? He could not. Nobody could answer such a question satisfactorily. Nevertheless, the prospective borrower from the Mortgage Bank Department of the Commonwealth Bank is expected to answer it. What does thb average farmer, do if he is not immediately dismayed? He carries this incredible form away and ponders over it. Of course, he does not leave the office without paying £5 as a deposit on a valuation fee - a charge that the “ exploiting “ private banks have never been enterprising enough to think of levying. However, the Commonwealth Bank demands your “ fiver “ before it will consider your application for a loan. Having paid his deposit, the applicant will go to a lawyer and pay him a couple of guineas for his help in filling in the form. Then he will wait, and wait, and wait. So incomparable is the conservatism of the Mortgage Bank Department of the Commonwealth Bank, which sets out to be liberal in its lower rates of interest and its higher percentage on advances, that last year, in its fifth year of operation, it attracted to itself only 416 customers. That is the record of this bank, which is spread throughout the six States of Australia, and which can give to the farming community the security of a loan for 40 years instead of an overdraft which is due from day to day. Only 416 customers from all the farmers of Australia who, uncording to Government supporters, have been exploited through the years by the private banks ! Why, if bank offices in tho neighbouring town of Queanbeyan did not engage in more than 416 transactions last year, I will eat my hat !
We are not called upon to imagine what may happen under government-controlled hanking. That is the story of its operation. It can not offer the excuse that it has been controlled by a board or by a reactionary government. It was established by a Labour government and placed under direct political control. As one would expect, the published accounts of the Commonwealth Bank conceal the cost of those transactions. Any listener can imagine the indefensible cost per transaction to a bank of that size which handles only 416 transactions in a year. That is how the bank operates in competition. How will it operate when it has no competition - when it has a monopoly? This is the bank which is to “ protect us from exploitation “. The phrase rolls easily off the tongues of the Labour party members. It is a nice, smooth-flowing phrase.
– The honorable member will hear a lot more of it, too.
– The House will hear a lot more of it from me. The annual report of the Commonwealth Bank states that–
-Order! The Chair would like to hear something about th, bill.
– I was about to refer to it.
– I have been listening for half-an-hour and have not heard the honorable member refer to it yet.
– Well, I thought 1 had been dealing with the bill in an interesting way.
– Order ! The Chair i9 interested in the bill.
– The bill will perpetuate a condition of affairs which exists to-day through the operation of regulations. The trading banks are compelled to deposit with the Commonwealth Bank nearly £300,000,000 for which they receive interest at the rate of one-half of 1 per cent, per annum. This money belongs, not to the trading banks, but to the people of Australia. The fact that the trading banks are paid interest at the rate of only one-half of 1 per cent, interest is reflected in the extraordinarily low rates for fixed deposits which they are permitted to pay. These rates are one-half of 1 per cent, on fixed deposits for three months, and rise to 1-J per cent, on fixed deposits for two years.
What does the Commonwealth Bank Ho with the £300,000,000? What will the monopoly Commonwealth Bank, which will be created under this bill, do with the money abstracted from the people? Here is what it does to-day. By compulsion, it has taken nearly £300,000,000 from the private hanks at an interest rate of one-half of 1 per cent, and relends it to the farmer on mortgage at 4 per cent, or 4$ per cent., to the prospective home-builder at 3$ per cent., to the Australian Wheat Board at 3^ per cent, for the purpose of financing the Australian wheat crop, and to the Australian Meat Board at 3J per cent, for the purpose of financing Australian meat production. Exploitation! I ask my listeners: Is there anything in the financial records of this country which compares for exploitation with this instance of the Government taking from the private banks nearly £300,000,000 at an interest rate of one-half of 1 per cent., and re-lending it to those people who are allegedly exploited by the trading banks, at a profit of 600 per cent, or 800 per cent. What is the answer to that?
– The silence of the grave.
– There is no answer to it. No instance of exploitation in the records of trade and commerce in Australia is comparable with the exploitation that the Commonwealth Bank, under political control, i9 practising to-day. This will be perpetuated, and, I have no doubt magnified, when the Commonwealth Bank becomes an exclusive monopoly. Under this bill, the trading banks will be destroyed. If honorable members will read the financial columns of the newspapers, they will find that the owners of the trading banks are reaping on their investments returns of 3.6 per cent., 3.5 per cent., and 3.7 per cent. I ask some of the wealthy investors and hotel-owners, who sit on the government benches, whether they would be satisfied to conduct their businesses for a return of 3-i per cent. - the return which the trading banks of Australia are receiving to-day on their investment? I declare unhesitatingly that the average man has nothing to gain from the substitution of a government monopoly for the competitive system that operates to-day; but he has very much indeed to fear from a monopoly bank.
The honorable member for Swan (Mr. Hamilton) cited many instances to expose the Commonwealth Bank for abstracting from the accounts of its clients sums of money which it paid to government departments. If the Commonwealth Bank acts in that manner when it is competing with the private banks, what will it do when it is a monopoly? Therefore, the average man has nothing to gain, but he has very much indeed to fear from this bill. I point out to those hundreds of thousands of people who have no trading bank accounts, but who work for wages, that Australia is still, by the grace of God, a country in which nearly all production and employment result from private enterprise and private ownership. The people who depend for their employment upon private individuals, and others who rely confidently in days of ill-fortune for credit from the stores, are, indirectly, as dependent upon the private trading banks as those who actually have accounts with those institutions. If, as a result of policy, and the application of the ordinary rigidity and inflexibility of government transactions, customers are not able to get decisions so quickly as they need, or such reasonable treatment as they received from the private banks, thousands of clients will be driven into the hands of money-lenders. Nothing is surer than that; and no government and no act of Parliament will ever be able to prevent it. It will be a sad day for this country if we establish a condition of affairs under which thousands of honest people, who have been able to do business with the private banks, find it impossible to deal with a rigid government institution, and are driven into the hands of moneylenders.
I turn from the position of the average man to the Prime Minister’s attempt to justify these extraordinary proposals. The right honorable gentleman advanced two reasons for them. He said, first, that we must place ourselves in the position to be able to deal with another financial and economic depression. His second reason is that the private trading banks conduct their operations for profit. Let us examine each of those reasons. The story that we are preparing for another financial and economic depression is, at the best, the story of a man in a rut, who cannot direct hia mind away from experiences of fifteen or sixteen years ago. At the worst, it is a political trick which the Government is using in order to try to play upon the fear complex of people. What is the truth of the depression story? As history now reveals quite clearly, the impact of the financial and economic depression upon Australia was due, first, to the decline of overseas prices for our primary products. This bill will not be able to control that factor. Secondly, we were obliged to import many of the requirements of our daily life. Thirdly, overseas borrowing was suddenly suspended. Fourthly, there was exchange parity with sterling. Fifthly, We had no currency reserves overseas. We had, at best, a comparatively primitive knowledge of central banking technique. Not one of those circumstances - and all those circumstances were responsible for the impact of the depression on Australia - pertains to-day. Many of the goods, which fifteen years ago were imported, are now made in Australia. To that degree, our requirements of overseas currency are reduced. Overseas borrowing has completely ceased. Exchange parity with sterling, by virtue of a decision of a private bank in defiance of the obstinate attitude of the government of the. day, has gone, and the primary industries have since had the advantage of a difference in exchange of 25 per cent. To-day there are immense resources overseas to be drawn upon, and the whole world has gained by developments of the technique of central bank operation and the provision of credit.
Therefore, any man who to-day really believes that we must prepare to protect the country against a depression of the kind which we experienced in the early thirties is in a rut and has not learned from the past. Nothing can be more menacing to any business, whether private or government, than the direction of a man who cannot learn from experience and move with the times. For the Prime Minister to suggest that we must adopt measures such as this in order to prepare ourselves against a recurrence of the depression of years ago is nonsense. It is just as illogical and stupid as it would be tor some one who believes that another war may come upon us to advocate that we should equip ourselves with an abundance of howitzers, trench mortars, and: Lewis guns and the rest of the apparatus of the era of trench warfare. The statement which the Prime Minister made when he attempted to justify the introduction of this proposal furnishes an insight into his mind, because if a recession does occur it will obviously he of a completely different character to the depression of the ‘thirties. In any event, I think his reference to the possible occurrence pf a recession is nothing more than an attempt to play on the fears of the people. I think that the real motive for the introduction of the bill is to be found in the second part of his speech, when he said that the trading banks operated on a profit motive. Of course, that is not a political explanation; it is an exposure of an ideological process of reasoning, and is something which we must examine, because its implications are very farreaching. I think that such an examination will reveal the real motive and the true parentage of this bill.
The Prime Minister admits that he did not propound nationalization of banking at the last elections, that he did not seek a mandate for it, and that he is denying the people a voice in their government by refusing to take a referendum on the subject. He rests his authority to impose this radical change upon the people upon the platform of the Australian Labour party. Objective No. 1 of that platform provides for the socialization of the means of production, distribution, and exchange. The Prime Minister points to -that objective as sufficient warrant for the introduction of this measure, because he states that banking is included under “ exchange “. It follows that the third leg of the first objective of the party is to be implemented first. If that is the Prime Minister’s justification it requires serious examination by all sections of the community. I ask members of the Government and their supporters who have committed themselves to support of this measure by signing their party’s .pledge, do they propose to implement the third part of the first objective of the party’s policy whilst denying the other two ]>arts of that objective? I ask them whether they are honest in their declaration that they propose to socialize banking as a “ means of exchange “ and not socialize the means of production and distribution ? 1 notice that there are “no interjections from Government supporters.
– Order! The Chair will not tolerate interjections.
– >My remarks have not resulted in any strain being placed upon the Chair.
– Speakers from both sides of the House must be heard in silence.
– It is quite clear that every word that has been uttered in attempts to justify socialization of banking can be used in attempts to justify the socialization of farming-
– Collectivist farms!
– Or to justify collectivist farming, as the honorable member points out. Australia has been the first country in the world to copy Russia in socializing banking; why should we not copy Russia in socializing farming, by introducing collectivist farming? What is the answer to that? There is none. [ say to every one engaged in primary industry, and to all- who are engaged in transportation and other facets of distribution, and who earn their livelihood by the exercise of initiative, that a political party which will point to the political platform objective which I have mentioned as justifying the socialization of banking will not demur at carrying out, in due course, the rest of that platform, lt will be remembered that that platform provides for the socialization . of the means of production, distribution and exchange. That is the prospect which we have before us, and every primary producer in this country must realize that at some stage one reaches the point where one must drive in the peg; that we have come to the parting of the ways, and that we must continue along this road, or turn right away from it. It is not the nationalization of banks which is the issue for the Australian people to decide; it is the socialization of the entire Australian economy which is involved. It is here that we must decide to continue along, or to turn away from, the road of socialism. If we once set ourselves upon that road there can be no turning back. That is quite clear.
The influence of the Communist party is quite obvious in this proposal. There was a day when the Australian Labour party was composed of individuals in the community who joined branches of the party, which elected delegates to formulate its policy and to control it. That was a democratic organization, and it was the strength of the old Labour movement. To-day all that has disappeared, and the strength and backbone of the Australian Labour party is found now in the affiliated trade unions. With the single exception of the Australian Workers Union, the unions concerned in the important industries of this country, including the metal trades, the waterfront,’ shipping, coal mines and railways, are dominated by avowed Communists. The fact that Communist-controlled unions dominate the Australian Labour party to-day throws a lot of light on the real origin of the Government’s proposals for the nationalization of banking. The political parentage of this proposal is to be found in communism, and that proposal must not be regarded as an isolated one; it is merely part of a wider pattern. When the Prime Minister came into office he found in Australia a federation of free people, who were suffering some temporary restrictions on their freedom by reason of war-time controls. What is the pattern to-day? Is it any longer that of a free federation? Of course it is not. By the introduction of uniform taxation, the Prime Minister has reduced the sovereign States to the position of mere delegates of his will. No constructive proposal, which requires money, can be introduced into the legislatures of the States without the consent of the Treasurer.
– The honorable member must return to discussion of the Banking Bill.
– With respect, I am endeavouring to explain the real origin of that measure.
– .The Chair is anxiously waiting to hear about the bill.
– Just as the States have been stripped of their independence, so the private citizens of this country are to be stripped of their independence by the passage of this measure. I do not wish to speak lightly of freedom and liberty; they are words to be cherished. But I am convinced that if this measure becomes law it will strip the citizens of their freedom and their liberty and reduce them to mere cyphers under the control of the State. To-day every person possessing property in this country is beholden to the executive head of the Treasury for permission to sell it, and for approval of the price which he- proposes to charge. The whole of private industry has been brought under government control. To-day no one can grow wheat, produce meat, or do anything else, except by government consent. All this is part of the pattern of converting this country into a socialist State. The Government is setting up Soviet Russia as an example, and we are witnessing more and more attempts to copy Soviet Russia. The inspiration of those attempts -comes from the Communist party, which used to be merely a wing of the Australian Labour party, but which has now relegated that party to the status of a mere feather of the wing of the great industrial unions of this country. As I said previously, those unions are dominated by Communists. In conclusion, I am convinced that this is a bad and dangerous measure.
– Order ! The honorable member’s time has expired.
.- We have just heard an able and dignified address on the bill before the House by the honorable member for Indi (Mr. McEwen), who is Deputy Leader of the Australian Country party. It was, I think, the second ablest exposition of the case for the Opposition to which we have listened. The tone of the Opposition debate, or at least the substance of it, was set by its leader (Mr. Menzies) and, therefore, I propose to direct my remarks chiefly to the speech of the right honorable gentleman. However, I wish to make one reference to the speech to which we have just listened, in which the honorable member for Indi referred to the Labour party’s platform on the subject of banking. As on several occasions, the Leader of the Australian Country party (Mr. Fadden) has erroneously referred to that platform, I point out that it is no vague and indefinite thing, containing only generalizations about socialism of the means of production, distribution and exchange. The actual wording shows the objective of the party to be -
The extension of the scope and powers of the Commonwealth Bank until complete control of banking and credit 13 in the hands of the nation.
The progressive steps whereby that objective is to be achieved are set out equally specifically -
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.
That was the interim policy leading to the objective, which was, as I have stated, the extension of the scope and powers of the Commonwealth Bank, until complete control of banking and credit is in the hands of the nation. Whatever may be said of that platform - whether it is wise or unwise - it cannot be alleged truly, as Opposition speakers have persistently done, to be something vague and indefinite. On the contrary, it is most specific. Moreover, it has been adhered to closely in its transitional phases in the Banking Act of 1945, and in its final phase in the bill now before the House.
I wish, however, to deal chiefly with the speech which the Leader of the Opposition (Mr. Menzies) made in this chamber last week. It was an extraordinary mixture of major points, and some minor ones, which had a direct bearing on the Victorian elections. In referring to those elections, the right honorable gentleman suggested that the State Savings Bank of Victoria in the hands of what he termed a socialist collaborationist government would be handed over to the Commonwealth Bank, so that we need not expect, if Labour governments continued to exist in that State, that there would be an independent State savings bank. The history of the handing over of State savings banks to the Commonwealth Bank neither bears out his suggestion that Labour governments were exclusively responsible for handing them over, nor his other suggestion that those actions were taken in the interests of a centralizing philosophy. The first instance of the handing over of a State savings bank was in 1913 during the regime of the Fisher Government. The State government which handed it over was the Solomon Liberal Government of Tasmania. The second instance of the handing over of a State savings bank was when the Nationalist party was in power in the Commonwealth and the right honorable member for North Sydney (Mr. Hughes) was Prime Minister, and the State Government of Queensland had as its leader, Mr. E. G. Theodore. The third instance of the handing over of a State savings hank to the Commonwealth was when Sir James Mitchell was Premier of Western Australia, and led a Nationalist government. The government in power in the Commonwealth at that time was a Labour government, with the right honorable member for Yarra (Mr. Scullin) as its leader. The fourth instance of a State savings bank coming into the hands of the Commonwealth Bank occurred in December, 1931, when a Labour government in which the present honorable member for Reid (Mr. Lang) was Premier, was in office in New South Wales, and the Lyons Government was in office in the Commonwealth.
It will be seen, therefore, that in this matter there is a fifty-fifty mixture of Nationalist governments handing over State savings banks and Labour governments receiving them - if it can be said that governments received them or that governments were in charge of the Commonwealth Bank. Moreover, the handing over was never done in the interests of a centralizing philosophy. In every instance action was taken to safeguard the depositors in the State savings bank concerned. Opposition speakers have suggested that the placing of the deposits with trading banks in the hands of the Commonwealth Bank constitutes a danger to the individual. A man’s beliefs are not the principles which he professes, but the assumptions on which he acts. Authorities in the sphere of the States have sought to safeguard the interests of the depositors in State savings banks by handing them over to the Commonwealth. Bank when instability threatened. That is not a matter of opinion ; it is a matter of history. It is all very well for Opposition members to pretend now, for the sake of this debate, that they fear for depositors whose business passes into thehands of the Commonwealth Bank, but their, actions in the past show that they believed that that was the way to safeguard them.
The second point made by the Leader of the Opposition purported to be made in rebuttal of the Prime Minister’s suggestion that the fact that there were 3,800,000 customers of the Commonwealth Bank as against 1,250,000 persons with accounts in private bankswas a sign that there was public confidence in the Commonwealth Bank. The right honorable gentleman pointed out that there was a difference between the types of accounts held in the trading banks and those held in the Commonwealth Bank. He said that the former were trading accounts whilst the latter consisted largely of savings bank deposits. I do not know what that proves. One would think that when a man puts his own money into an institution it is as much a sign of confidence in that institution as to borrow .money from it on overdraft. In support of his contention that there was a difference between trading bank accounts and savings bank accounts, the right honorable gentleman rather unconvincingly suggested that the trading bank accounts were indications of greater confidence. The right honorable gentleman went on to speak of the Commonwealth Bank having only 120,000 trade accounts, as compared with 1,250,000 held by the private banks ; but the Prime Minister himself pointed that out in his speech, and it is astonishing to see the press hailing the point made by the Leader of the Opposition as a highly significant one. This is what the Prime Minister said -
Since trading banks have handled practically all commercial lending within Australia, their influence on the state of business has been enormous - indeed dominating.
It is a matter of history that it was the recent banking act which enabled the Commonwealth Bank to appear in the field in competition with the trading banks. There is no significance in making such a comparison as was made by the Leader of the Opposition unless one recognizes the longer period of time during which the private banks have been operating trade accounts. The third point made by the right honorable gentleman was that no deflationary policy was applied by the banks during the depression. He quoted from Professor Copland’s magnum opus, What the Banks Rave Done. I am fascinated at the evolution of Professor Copland’s status. In 1931, he was a press hero. In 1944, when he came to Western Australia, and spoke in respect of the referendum proposals of that year, he was a star-gazing professor, a long-haired intellectual, and was execrated by those who advocated a “ No “ vote. Some observations can be made on his book in which he stated in 1931, that the private banks had largely saved the country from the depression. Unfortunately, however, unemployment continued to rise until 1933, so that his hailing of the private trading banks as the saviours of the country from the depression was a little premature. It so happens that he has gone on in his thought to repudiate the sentiments which he expressed in the book, What the Banks Have Done. In a book written in 1945 called The Road to High Employment, he condemns the deflationary policy applied during the depression. The policy of making budgets balance he specifically repudiates. He sets out tables of figures showing that public investments fell as private investments fell during the depression. He says that the policy should have been to expand public investment in order to offset the decline of private investment, and to keep up the level of employment. He says that there should not have been balanced budgeting, but deficit budgeting, during that period. That is the policy which the private banks were at great pains to ensure should not be applied. I am not drawing that statement from my imagination.
I was astounded to hear members of the Australian Country party, one after another, speak of the excellent rural policy of the banks during the depression, especially when we remember the number of royal commissions which inquired into rural indebtedness, and called attention to the high rate of interest charged by private banks on loans at that time. I am not going to twit members of the Australian Country party with inconsistency, because I do not believe that the fact that they are repudiating sentiments which they formerly held proves anything, but I do say that the policy which they advocated in the thirties was a reflection of very great disquiet among the farmers. This disquiet was voiced by Australian Country party members in Western Australia, followers of C. O. Barker, a heterodox financier, by the honorable member for Gippsland (Mr. Bowden), and the honorable member for Barker (Mr. Archie Cameron), who made speeches in the South Australian legislature from which the Minister for Information (Mr. Calwell) has quoted. They acted as they did because they were conforming to the alarm and distress prevailing among farmers, who, in Western Australia alone, were indebted to the extent of £33,000,000. At that stage, many of them were, walking off their properties, while others remained in possession only by paying high rates of interest on the money they owed. Since Professor Copland has been quoted - and I have pointed out how in his later book he advocated n policy of deficit budgeting and the expansion of public investment - let me quote now a letter which incorporates a statement of the private banks on the financial situation, a statement issued on the 19th December. 1930-
Unless effective steps are immediately taken by the governments of Australia to balance their budgets and reduce costs, the time is coming when tonks and other financial institutions will be unable to assist the governments to meet salaries, wages, and other commitments except at the expense of widening the gap already in evidence between the costs of and the returns from Australian industries.
The seriousness of the drifting position wai; fully explained to the representatives of all the Australian governments at the conference of Premiers held in Melbourne last August. If the policy embodied in the resolutions of that conference had been fully carried into effect the drift could have been checked. Unfortunately, that policy is not being fully observed, and hanks are faced with heavy demands to enable governments to meet their daily obligations.
The continuance of such demands, in disregard of the heavy reduction of the real income of the nation, will force upon the hanks drastic curtailment of advances to customers, which axe imperative to the continuance of productive industry.
This would involve serious loss to many of our industries, both primary and secondary.
And then they go on to demand drastic reductions of government expenditure. At that time, the Commonwealth Treasurer was Mr. E. G. Theodore, who believed that the proper policy was that which had been applied by Sweden during the depression, namely, the expansion of public expenditure and public investment. The Leader of the Opposition stated in his speech on this bill that all the world admired the rapidity of Australia’s recovery from the depression. I should like him to define what he means by recovery. In 1939, there were still 239,000 persons unemployed in Australia. If that constitutes recovery from the depression, it is an astonishing form of recovery, indeed.
Now, honorable members opposite speak of the economic woes of the country when there are fewer than 10,000 unemployed. Mr. Theodore’s statement was characterized by the private bankers and their spokesmen in this House as an advocacy of inflation. At a time when bethere was a deficiency of purchasing power, a large percentage of our labour was unemployed, a-nd many of the resources of the country were unutilized, we were supposed to be in danger of inflation. What is inflation? By definition, it is a condition of sharply rising costs. During the depression, there was a condition of sharply falling costs, and a spectacular fall of prices. .Mr. Theodore proposed to use the sovereign power of the Parliament to expand the purchasing power of the people through a fiduciary issue of currency. The Leader of the Opposition, who is now Chief Justice of the High Court of Australia, Sir John Latham, sat opposite Mr. Theodore in this chamber, and interjected while he was speaking, “ This is inflation “. Mr. Theodore asked him what was inflation; and pointing out that inflation was a condition of rising prices, asked him if he could see in the spectacular fall of prices in the depression any sign of inflation. The honorable gentleman, who is now Chief Justice and a Rationalist, made the very irrational reply that we were suffering from inflation and deflation, too. That was the substance of the argument advanced against the policy of expanding purchasing power to meet the glut of unconsumed goods; and the whole weight of the private banks was thrown against that policy.
At the conference of Commonwealth and State Ministers knowing that the Commonwealth Government was incapable of controlling its finances because its measures were blocked in the Senate, where the Government did not command a majority, the banks imposed upon all governments a policy of drastic reduction of government expenditure, involving cuts in pensions and wages; and this further accentuated the deficiency of purchasing power which then existed in the community. The Leader of the Opposition says that the banks then made advances to the Government, and that if we offset those advances against the fall in private advances which the Prime Minister quoted, a fall of £45,000,000, we might find that the. fall was not so great as the Prime Minister thought. When the banks imposed a deflationary policy upon the governments of this country they augmented the value of their own loans. They offset any advantage of purchasing power which those loans might have made. At the same time, they augmented the value of the interest charges they made upon their own loans. By definition, a deflationary policy is a policy to increase the purchasing power of money. If the Government had followed normal budgetary practice, and if on top of that the banks had made adequate advances, there would not have been a deflationary policy; but had they done so they would have reduced the value of their own advances. Thus, their policy of making advances and imposing contraction upon the Government was one admirably designed, to suit their own purposes.
There was one part of the Prime Minister’s speech to which the Leader of the Opposition did not refer, and which was eliminated from every daily newspaperwhich I have read wherein the Prime Minister’s speech was published. The Leader of the Opposition, attacking the idea that the vital sections of the Banking Act of 1945, sections 18 to 22, were liable to be overthrown, directed his argument to the section 48 case and the withdrawal by the Melbourne City Council of its intention to challenge sections 18 to 22. The Prime Minister- did not rest his belief that sections 18 to 22 would be challenged on the challenge made to section 4S in the High Court. I. shall quote his own words whereon he did rest his own fears with respect to sections 18 to 22, the very words which were eliminated by every daily newspaper in its report of his speech, and to which no reference has been made in this debate. These were his words -
Towards the end of 1945, when .the bill had become law, they were required to transfer their war-time special deposits to the special accounts established under the new legislation and to make their first monthly lodgment “to these accounts. The private banks, obviously acting in concert and on legal advice, made it clear at that time that, while they were submitting to the legislation for the time being, they were reserving the right to challenge it at a suitable opportunity. The following reservation was made by one of the banks. in a letter to the Commonwealth Bank: -
We are most anxious to co-operate with, your bank to ensure the continuance of our present harmonious relations, but you will appreciate that our duty to bur shareholders compels us to have regard to our legal position; therefore, we feel it necessary to advise you, with all due respect, that acquiescence or compliance on this bank’s part with any request or direction? from you is not to he taken to import any contract with your bank in the terms of the act.
Statements to a similar effect were made in letters sent by six of the other banks. These reservations -were brought to the notice of the Commonwealth Government at the time for legal consideration.
Perhaps a case can be made out that the Prime Minister’s fears are unfounded, but, at least, his argument should be quoted and dealt with and not suppressed, or ignored, and his case made to rest altogether on some other point on which he did not rest it. That is what the Leader of the Opposition endeavoured to do when dealing with the challenge te section 48.
The policy- pursued by the private banks in the depression was the policy of the dominant financial institutions of this country. The honorable member for Moreton (Mr. Francis) described the policy of Labour governments as being one of “ borrow, boom and bust “. I am amazed at the number of sins that can be visited upon the head of the Scullin Government, which was in office for only two years. Prom 1916 to 1941, a period of 25 years, non-Labour governments were in office for 23 years; yet the depression, the state of disarmament of this country and every other evil believed to have emerged as the result of government action, is visited upon the head of the Scullin Government. That Government was in office but not in power, just as in. the State parliaments we have Labour, governments in office but not in power because of hostile majorities in their upper houses. However; I notice that we never hear any reference to a mandate from the people when bills are submitted by State Labour governments and thrown out. by minority oppositions in the upper houses.
Reverting to the policy, so-called, of “ borrow, boom and bust “, I shall have a look at the period, from 1920 to 1929, that’ is, before- the wicked Scullin Government emerged. During that period the right honorable1 member for Cowper (Sir Earle- Page-)?, when, he: was Treasurer; borrowed £103,111,000. in London and 234-,000;000! dollars in. New York. That heavy,; borrowing was1 used to finance imports, into Australia, during that period. Ass goods- came into the- country as the result of those bor.row.ings, tariffs were imposed upon them, and. those tariffs bumped up the- customs revenue obtained by the Commonwealth. I shall, not weary the House with figures in that aspect; but in 1920 customs< revenue amounted to £21,574,5.59,, whereas by 1929 customs revenue: amounted to £41,058,571, and formed a major item of the budget, in which the. total income was £24,000,000. When that policy of borrowing ceased with the depression,, the Scullin Government, was in office,, and Australia was faced, with the task of finding £38,000,000 a. year to meet interest on borrowing, in which, the Scullin Government had. had. no part during the preceding, period. I shall not denounce the right honorable member for Cowper for- his policy of borrowing. It is one. of the techniques of the press to imagine that every policy is either all black or. all white. The policy of the right honorable member for Cowper proved disastrous in the depression, because: it left a legacy of difficulties for the incoming, government.. However,, it proved most beneficial to us during the war period, because by that borrowing we were enabled’ to import many capital goods which, unquestionably, helped Australia very greatly in its war effort. I am not denouncing his policy ; but, faced’ with the loss of foreign borrowings due to the world depression, the Scullin Government endeavoured, despite the opposition of private finance,, to expand our purchasing power so that the glut of consumer goods might at least in part be consumed. It is useless to discuss this matter as a “ dead “ depression issue. When I was a schoolteacher I had the: opportunity to see the- result of the depression in the poor physique of many children. Physique is based! on food ; and whatever might be said about the difficulties caused by a collapse of overseas markets, there- was no- excuse whatever for any one in this’ country to go- short, of food when there was a glut of consumer, goods in- Australia-. Any honorable member- who- likes- to, read the report ofl the- height-weight survey, of school; children in. Western Australia will find reproduced in Australia the phenomenon of class physique, a vastly lower physical standard being found among children- in the basic wage areas as- compared with those- attending privateschools in the more prosperous areas, a. legacy of the depression years. The depression is not a dead issue. It is built into the physique of hundreds and thousands of young people under the age of twenty years who- are the victims of the financial and’ economic depression when the private banks imposed a. deflationary policy in circumstances in which Aus. tralia- could not have had inflation if ifr had tried, with private financial interests holding- the whip hand at every con:brough Mort and Company Limited’ with isters by their control of the Commonwealth Bank.
I have very little, time at my disposal, but I wish to draw the attention of the House to the circumstances wherein, the private banks, exercise victual politicalcontrol’. They possess it. wherever there is a conservative upper house,, as there was in the Senate during, the Scullin Government’s regime, and as. there is to-day in Victoria. We are told by the press,, that organ of democracy, the Melbourne Argus,, that the upper house in. Victoria has safeguarded the interests of the common man. Let us look at the common, man who, was chosen, to do it. I speak of Sir Frank Clarke,, vice-chairman-, of the National Bank of Australasia Limited,, a concern with a capital of £97i,000,.000’ and a director, of Goldsbrough Mort and Company Limited with a capital of £9^000,000.
– Order !
– An hereditary baronet. A staunch upholder of the rights of the common man!
-: - The honorable, member, should he careful whom he attacks.
– Order !’ If the honorable member for Fawkner (Mr. Holt) does not remain quiet I shall name him.
– The Victorian upper house repudiated a principle which it had itself previously enunciated, namely, that an upper house should not interfere with a supply hill. Sir Frank Clarke himself had enunciated that very principle. In Western Australia Sir Hal Colebatch, Liberal member of the Legislative Council, writing to the Sunday Times on this subject, said -
I read with interest your article “ W.A. Upper House could block supply “. On this matter there is difference of opinion although so far as I am aware, all legal opinion is that our Upper House could not block supply. Our constitution in this respect is the same as the Commonwealth, and it is accepted that the Senate cannot block money bills.
That principle, which may not be stated in specific terms of the Constitution, but is nevertheless a convention of the Constitution, was repudiated by the party in the upper house in Victoria which acts as the agent of the private banks, with the result that a popularly elected government in the lower house, popularly elected under a gerrymandered electoral system which gives to non-Labour rural areas with 350,000 votes equivalent voting strength to Labour metropolitan areas with approximately 650,000 votes, was overthrown. Surely we can see what the private banks will do if they have the opportunity. Having rejected the supply bill, the private banks offered to pay the salaries and wages of civil servants affected by the rejection of that legislation. It is to the credit of the civil servants that fewer than 100 of them accepted that offer. That offer constituted the most flagrant attempt to huy votes ever made in the history of Australian politics and reached the lowest level of political morality which it has been our experience to witness. Having used their votes to reject the supply bill, and perceiving that the civil servants, deprived of their wages, might be alarmed, they attempted to buy them off by arrogating to themselves the sovereign prerogative of the government to pay civil servants. While honorable members opposite are weeping over the plumage of the private banks and asking us to forget the dying bird, we can see in the situation in Victoria that the bird has not changed its nature.
References have been .made by the honorable member for Indi to the fear complex which he alleges the Prime Minister has endeavoured to stir up. I should like to know if there is a better description of the propaganda financed by the private banks than the propaganda of the fear complex. It has been suggested that the taxpayers’ money will be subjected to government confiscation and surveillance. If that were so, the £428,000,000 deposited in the Commonwealth Bank would be run upon by the depositors. That is not taking place because, in spite of all the propaganda of the private banks, .there is no real belief on the part of any depositor in the Commonwealth Bank that his savings are in danger. It has also been suggested that government institutions are inefficient. The government institution in question is the Commonwealth Bank. I submit that no convincing case of its inefficiency has been made by honorable members opposite during the course of this debate. At the outset of the campaign against this bill they sought to stir up the fears of the bank clerks. Since the publication of the terms of the bill that line of propaganda has vanished. . It was also suggested that great increases in taxation would take place to finance the “ just compensation” to be paid to the shareholders of the private banks. That line of propaganda has vanished, too, since it has been revealed that the Commonwealth Bank will itself manage that aspect of the proposal as part of its business activities. Then, by an astonishing reversal of tactics, it was suggested as an inducement to trade unions to oppose the banking proposals, that the enactment of this law will enable the Commonwealth Government to freeze or impound the funds of trade unions, or in other ways, to discipline them. When industrial bills have been brought before this chamber, the right honorable member for North Sydney (Mr. Hughes) has advocated the freezing and impounding of the funds of trade unions.
Honorable members opposite also suggested that if the Commonwealth Bank were controlled by an Opposition government, they would be able to implement their policy. If any Australian Government passed a law to compel unionists to obey a finding of the Arbitration Court or of a conciliation commissioner ‘ on pain of impounding their trade union funds, that would he a valid law which would prevail whether the funds had been deposited in a private bank or in the Commonwealth Bank. That line of propaganda is both specious and dishonest. Lastly, it has been said that this proposal is national socialism. To-day in Germany we are indicting leading industrialists as war criminals. Dr. Schacht, the former president of the German Reichsbank, was recently indicted as a war criminal. In the course of evidence in his case it was shown that far from Hitler creating a nationalized bank it was the private banks that created Hitler. Since references have been made to fascism let me say that one of the leading characteristics of- the fascists is that they believe in the destruction of trade unions, and it is from the other side of the House that that policy is advocated. I could give countless instances to show how the Nazis militarized German youth. Rightly or wrongly, the Labour party is always denounced for refusing to militarize Australian youth. The Nazis also followed an aggressive foreign policy in the interests of German industrialists where German capitalists sought to expand their activities, mainly in southeastern Europe. Nazi-ism, like fascism, was not class war upwards but class war downwards. It was defence of the right to exploit when the right to exploit was threatened. No better description of the attitude of the Opposition to this measure could be coined than to describe it as the defence of the right to exploit when the right to exploit was threatened.
.- Before replying to certain statements that have been made by the honorable member for Fremantle (Mr. Beazley), I wish to record my most emphatic protest against this measure and the manner in which it has been introduced. I do this, not so much for myself, as for the many thousands of Australian .citizens in my own electorate of Flinders who have expressed strong opposition to the measure, particularly because of the fact that it has been .brought in without any mandate from the people. The Prime Minister (Mr. Chifley), in his speech, put forward the pretext that he had a mandate because his government had been returned to office at the last elections. The Minister for Post-war Reconstruction (Mr. Dedman) also said that the Government’s success at the elections meant that it had been given a blank cheque. But if there is any substance at all in these assertions, they can only mean that policy speeches, as we have known them for many years, are completely out of date, and that any government that is returned to office has not only the power, but also the moral right, to do as it pleases, regardless of any programme that it has announced or failed’ to announce on the election platform. This would be a complete reversal of the democratic processes as we have known them in British countries for the last 150 or 200 years. However, I shall not dwell on the question of mandates. The upsurge of the people of this country to-day against this proposal is sufficient proof that the Government has no popular mandate to deal as it proposes to deal with the private banks. Approximately 30 per cent, of the electors of Flinders have indicated to me by telegram, letter, or petitions in various forms, their opposition to this bill. This shows the feeling that the bill has aroused in the community. For further proof, I refer honorable members opposite to the results of the Gallup poll which shows that no less than two out of every three people in this country are opposed to the measure. Another point of some importance is that although the Government has a very large majority in this House, at the last elections Labour candidates polled a total of approximately 2,133,200 votes, whereas Liberal party and Country party candidates polled no fewer than 1,775,000 votes - not a very great majority in favour of the Government, and one which I am certain will vanish at the next elections.
The honorable member for Fremantle dealt at some length with the recent actions of the Victorian Legislative Council, which, he claimed, was not democratically elected. Certainly it has been constitutionally elected to perform the functions that appertain to the upper house in the Victorian legislature, and in giving to the people of Victoria, at this moment, an opportunity to express their views on the banking issue, it has done a right and proper thing. It is ali very well to argue that Ae -council does not have any constitutional right to take this action; undoubtedly it does have that constitutional power., :and it also has the sanction, of past practice. At any time in the last two years during which a .Labour government has been in office, the Legislative Council .could have taken action against it, but it refrained from ‘doing so until a few weeks .ago because no vital issue arose. The power that it has exercised on this -occasion is only to be resorted to in unusual circumstances and, such ‘circumstances having arisen, I maintain that the council had every right to do what it did.
– It has done something that -the House of Lords would never have done.
– I have no doubt that the House of Lords would have done the ‘same thing in similar circumstances.
– It has not the power.
– The issue is not what the House of Lords would or would not have done. In his opening remarks, the honorable member for Fremantle directed attention .to Labour’s policy for the control of banking, .and read at .some length .the principles enunciated in what I took .to be a pamphlet on Labour’s policy. My -recollection of what the honorable member quoted is that no mention was made of the complete destruction of the private banks, and .that the course advocated was ito increase the ordinary trading business of the Commonwealth Bank in -competition with the (private hanks. However, the quotation is of little importance. The fact is that under this measure the private banks are to be wiped out. The honorable member went on to cite certain instances in which State banks had been handed over to the Commonwealth by both Labour and antiLabour governments on the ground that this course was necessary in the face of threatened instability. That proves nothing at all. We all know that in the past State banks have been ‘by no means safer, or even as safe, as the private banks. We had the example of the Government Savings Bank of New South Wales which, fourteen years ago, handed its affairs over to the Commonwealth Bank in order that its liabilities could ;be .met. The Minister for Transport (Mr. Ward) claimed that the failure of this bank w.as due to political action. That may <or .may not be,; I am not prepared to anglie that question. What I want to refer to particularly is that under the proposals now before us the private trading banks are to be handed oarer to a political bank, although, as we know, political control was responsible in part at least for the failure of the Government Savings Bank of .New South Wales.
An examination of our hanking history shows that ‘State banks generally are less stable and less sound than the private trading ‘banks. Private banks, run on sound business lines, have a much larger safety factor than ‘State ‘banks run by politician’s. I propose to give a few examples to prove my point. ‘There have been, as honorable members may know, several ‘State banks. ‘Their history -dates back for a great many years. The first bank that I desire to ref er to is the Bank of Amsterdam, which failed at the end of the eighteenth century. It was conducted by the City of Amsterdam, and its history was similar =to that of many
Other State banks, and, indeed, private banks, in that at lent its money unwisely. When the f acts became known, there was a run on the bank, and it folded Tip, never to ‘be revived. In Russia in the preBolshevist days, about 1-50 years ‘ago, the only banking was state -banking. The Bank of Russia was a monopo’ly. It issued the currency and credit, made loans and conducted all Russia’s financial transactions. It passed through -a series of crises involving debasement of the currency, and then reconstruction of the ‘bank and of the .currency. In 1862, the bank lent large -sums .of money to the nation and got into difficulties. The following is a comment on the history of that bank, made about 25 years ago, before banking was a political issue: -
The bank was -entrusted in 1862 with the mission of buying lands for the peasants, aided by the deposit of treasury funds free of interest. These funds were partly employed in commercial discounts, which were so freely presented that a mass of doubtful paper was left in .tile hands of the government. The expansion of credit was chiefly confined ;to Petersburg and Moscow and the provinces suffered the usual ends o’f .a country endowed with a single great bank, the lack of capital, of currency and of facilities for -credit.
In Trance, at the beginning of the eighteenth century, as the honorable member for Fremantle, whose knowledge of history is fairly wide, will, I think, remember, a Scotsman named John Law established a private bank that was taken over by the State and eventually went bankrupt. The moral of those stories is that there is less safety in a State bank than a private bank. There is a high prophet of socialism, at whose feet every honorable member opposite sits. He is Mr. H. D. C. Cole, the wellknown socialist-economist of England. Two or three years ago he wrote a book called The Next Ten Years, on page 245 of which the following passage appears : - The socialized banking service will have, at the cost of additional risk, to pay more regard to the merits of the enterprise and less to the question of security. State banking will not be quite so safe as_ joint stock banking has become.
Joint stock banks in England correspond to our private trading banks. If honorable members opposite can refute that statement, they must have more knowledge than is possessed by that high priest of socialism.
The honorable member for Fremantle also referred to the public confidence in the Commonwealth Bank. He instanced the number of depositors in it. The number of depositors in it has grown slowly. In fact, it has hardly grown at all, except in districts where new branches have been established. The 119,000 customers of the general banking division of the Commonwealth Bank, that is the trading section, is negligible compared with the number of customers of the private trading banks. So how can the honorable member say that people have any great confidence in the Commonwealth Bank when they do not prefer it to the trading banks? The honorable member for Denison (Dr. Gaha) talked about the need to build houses, and said that if the private banks were taken over by the Commonwealth Bank it would be able to lend money at a cheap rate for home-building.
– Hear, hear!
– I point out to the Minister for Information (Mr. Calwell), who applauds, that the Commonwealth Bank already has all the facilities it needs to apply a generous housing loan policy and to say to the people, “We are prepared to lend you money at 1 or 2 per cent, interest “. Does any one suppose that if it did so the people would not patronize it. None of us have seen any sign of its doing that.
The third point made by the honorable member for Fremantle concerned the deflationary policy of the banks during the depression. He said that employment increased only slightly for a few years after the depression. He then referred to what he described as a change of mind on the part of Professor Copland. He said that at one stage Professor Copland had said that the policy of deflation was right and that later he had said that it was wrong and that expansion of credit was the right policy. I do not deny that change of mind. All I can say is that one lives and learns. We live and learn on this side, but it is hard to discern Labour members learning anything from the past. If they have learnt anything they have not shown it in the debate. When honorable members opposite talk about the depression and deflation, I ask them who was responsible for it. Who brought Sir Otto Niemeyer and Professor Gregory to this country but the Scullin Government? At the time Sir Otto Niemeyer said -
I came to Australia at the invitation of the Federal Government, arising out of that Government’s having asked the Bank of England for advice in dealing with its- maturities. . . I do not represent either oversea bondholders or British manufacturers, and I have never in Australia discussed the position of either of those bodies of persons. The only institution which I represent is the Bank of England, which has no interest in Australian finance other than a desire to serve the public interest by averting serious financial difficulties.
The right honorable member for Yarra (Mr. Scullin), who was attending an Imperial Conference in London, sent the following cable to the late Mr. J. A. Lyons, Treasurer in his Ministry: -
I do not approve and will not support resolution of party- which was the repudiation of the overseas debts and the creation of credit in this country -
. which I agree is repudiation which is dishonest and disastrous . . . party’s resolution has demoralized Australian stocks here and unless rescinded will render renewal of bills here … as well as conversions in Australia impossible.
Sir Robert Gibson, the Chairman of the Commonwealth Bank Board, who was re-appointed by the Scullin Government for a further term of five years in 1930, said -
It has been suggested that banks as a whole have not made finance available either for government or general purposes, in accordance with availability of credit at their command.
He ought to have known what he was talking about -
Such suggestions are in direct opposition to the facts as arc disclosed by the aggregate figures of deposits and advances. … It must be obvious . . . that banks cannot give credit of which they are not possessed.
That is a complete denial of the statements made by government supporters regarding the action taken by the banks during the depression.
I shall mention only one other point affecting this aspect of the banking issue. During this debate, scarcely one member on the government side of the House has failed to refer to the depression and to declare that the banks were largely responsible for it. The fact is, as everybody should know, that the banks had nothing to do with the onset of the depression. If we are now to set up defences against some depression which may occur in the future, surely those defences must be based on the realities of the last depression, not oh misstatements. The honorable member for Denison, referring to human nature, said that every man must have something to love and something to Iia te. He then went on to talk about the “ Communist bogy in Australia “. That statement was absolutely correct. History has shown throughout the ages that any people or class of people can be wrought up to some enthusiasm by pointing out an object and saying, “ This has been the cause of all your troubles, all your worries, and all the evils of the day “. That is exactly what was done in Germany. The Germans set up the Jew as an object of hatred. It was on this hatred that Hitler managed to form his party and eventually build the whole strength of his Government. Public enemy number one in Germany was the Jew. The same sort of thing happened in Russia. In that country, public enemy number one was not the Jew, but the capitalist, the bourgeois. Ever since the October revolution in 1917, the one enemy that has been held up to the Russian people has been the capitalist. This brings me to the Australian Labour party.
– Why does the honorable member hate the Labour party?
– <1 love the Labour party, when it behaves itself. What enemy has the Labour party set up? Not the Communist party! It well might, but it is frightened to do so. By word of mouth in this House and throughout the country, it has set up the banks as an object of hatred. It broadcasts stories about the banks which are just as false and illfounded as any of the stories told in Russia about capitalists or in Germany about the Jews. This propaganda still continues. During .this debate, honorable members on the government side of the House have risen one after the other to talk about the iniquities of the banks and to blame them for the depression. I sometimes think that government supporters are victims of their own propaganda and are beginning to believe that the banks were really responsible for those dreadful evils which overcame this country. For their benefit, I shall repeat one or two facts which have been stated previously. What was the cause of the depression? The primary factor was simply the disastrous fall of prices overseas, which cut in half our income from abroad and therefore brought penury and hardship to a large percentage of our population, either directly or indirectly. The second factor was the cessation of loans from abroad. Those two things caused the depression which rested so heavily upon us.
Honorable members opposite and their supporters talk as though they were the only people who felt the effects of the depression. Do they suppose that any section of the population went unhurt and unscathed by it? Why should they take upon themselves the right to say that they alone, of all people, were affected by the depression? Why do they alone say that the banks were to blame for the depression? They are the victims of their own propaganda. Whenever they think, which is not often, they must know perfectly well that the real causes had nothing to do with the banks. They talk about the way in which advances were stopped by the banks. The truth is that advances were not stopped. On the contrary, as the Leader of the Opposition (Mr. Menzies) has said, advances increased. According to figures which I have obtained, advances by the banks rose between March, 1930, and March, 1931, by a total of £45,000,000, instead of decreasing, as the Prime Minister said, by £15,000,000. That increase was made up not only of advances to private individuals but also of advances to governments. Furthermore, it took place at the same time as deposits decreased. “We all know that deposits were considerably reduced. Advances rose from an average of 86 per cent, to over 100 per cent, of the amount of deposits at one stage. In other words, the banks were lending more than they had received in deposits. The propaganda disseminated by the Government and its supporters to ‘ bolster this bill is false.
Statements made by honorable members opposite on the subject of foreclosures have been equally misleading. They have talked as though every second farm had been subjected to some foreclosure, but the figures give the lie direct to all such statements. I have here the figures relating to wheat farms. In 1930-31, there were 59,885 wheat farms of 20 acres or more in Australia. By 1932-33, the worst year of the depression, just after the blizzard had hit us, the total had decreased by only 2,547 to 57,338. In other words, of nearly 60,000 wheat farms in Australia, less than 5 per cent, had been taken over by the banks. Furthermore, those that were taken over, as the honorable member for Indi (Mr. McEwen) knows, were taken over, not because the banks foreclosed, but because the farmers abandoned them. That is true, also, of many other farming properties which honorable members on the government side of the House have accused the banks of taking over.
– Why did the farmers walk off their properties?
– Because prices of primary products were so low that there was no possible hope of their making ends meet and because of a succession of bad seasons.
– Why did prices fall ?
– That is an infantile question. The Minister for Information (Mr. Calwell) is supposed to have more sense than that. He knows perfectly well why prices fell. The economic and financial depression developed overseas, and when business activities principally in the United States of America “ went west “, thus causing a disastrous decline of prices, the depression eventually penetrated even to Australia.
– Does not the ‘honorable member believe that a conspiracy was responsible for the fall of prices?
– I should like to tell the honorable gentleman some of the things about which he knows very little; but in this speech I have not time to do so. At a convenient hour, I shall grant him a quiet interview, and shall endeavour to explain to him matters which he does not know.
The trading banks were accused of being most hard-hearted during the economic depression. Honorable members opposite have declared that if the private banks had been abolished at that time and State banks had undertaken their functions the situation would have been perfectly satisfactory. However, the figures disprove this statement. Indeed, more foreclosures were made by State banks than by the trading hanks. The figures for Victoria, which is a sensible and very generous State, show that the value of properties in possession of the State Savings Bank of Victoria, Credit Foncier Department, at the 30th June, 1930, just before the full impact of the depression, was £34,183. In the following year the figure had risen to £198,628 - an increase of more than 500 per cent. Those properties had been taken up by the State Savings Bank, which, according to the contentions of honorable members opposite, will do everything for the people in. the future. That argument is without f oundation, and I do not know why honorable members opposite continue to advance it.
The issue in this bill is not the issue which we are debating at the present time, as co whether or not the Government should have control of financial policy. Under the banking legislation of 1945, the Government has complete control of all financial policy. Honorable members opposite have concentrated upon the activities of the trading banks now and in the past. Those activities were concerned mainly with the granting and distribution of credit, and the high financial policy which they were supposed to have usurped from the Government. That is ancient history. The banking legislation of 1945, as honorable members opposite are perfectly well aware, gives to tie Government all the control that it could possibly desire over the banking structure. Foi- example, the Treasurer prescribes the conditions under which loans shall be granted. Who can deny that? He may decide that a loan shall be granted to the coal-mining industry and not to the steel industry. He may also fix interest rates, and he has complete control over foreign exchange. Under the terms of sections 18 to 22 of the Banking Act of 1945, the cash resources of the trading banks are entirely at his disposal. He has control of bank investments and profits. Not a single avenue is left to the trading banks which is not subject to government control except one, namely, the retail distribution , of credit. In other words, the private banks are still at liberty to grant credit to those of its customers whom they consider to be credit-worthy and who require it. I refer the House to an opinion which appeared in the Economist, the well-known English financial newspaper which does not hold either extreme conservative or radical views. Referring to the banking legislation of 1945, it said -
The Australian Government has the hest of both worlds. It has all the control that could be desired, and yet has the benefit of efficient and competitive private institutions to operate its policy.
If honorable members desire any other opinions, I refer them first to a statement by the Prime Minister, when introducing the Banking Bill on the 9th March, 1945. He said -
The bills which have been brought down are designed to adapt the banking system to the the changing conditions and to provide the Commonwealth Bank, as the leader of the banking system, with adequate powers to serve the national interest.
Even the Minister for Post-war Reconstruction approved. He said -
I say quite frankly that the present proposals of the Government in no sense mean socialization or nationalization of the banking system.
One might very well ask, in view of those statements, why the Prime Minister has introduced this bill. Labour governments in other parts of the British Empire have not acted in this manner. Although the Labour Government in the United Kingdom has nationalized the coal-mining and transport industries and is considering the nationalization of the steel industry, it is perfectly satisfied to allow the trading banks to continue to operate without interference, except subject to the general policies laid down by the Treasury. Mr. Nash, who is the Treasurer of the Labour Government of New Zealand, said a few years ago -
It seems to me that private banking is infinitely better than the State running the banks - particularly when it comes to the business of deciding whether Jones or Johnson is to have an overdraft - and the question is determined by some one who can be “ approached “ through a Minister.
The New Zealand Labour Conference, which, I suppose, has the same reasoning and the same ideologies as the Australian Labour party, passed the following resolution in 1943:-
That the controls now exercised by the Government over monetary and currency policy are now so effective that the purchase of the Bank of New Zealand or any other trading bank is at present unnecessary.
Only a month ago, Mr. Nash said -
It is not the intention of the New Zealand Government to nationalize the trading banks.
For no reason connected with banking policy, a huge banking monopoly is to be created in Australia, and, with it, we shall have all the bureaucratic control which accompanies a monopoly of this kind. I should like to know whether honorable members opposite are prepared to be subject to the whim of some official in a small branch of the Commonwealth Bank. Indeed, throughout Australia, myriads of small officials will deal with myriads of small accounts of myriads of small depositors, all of whom will be subject to this paralysing influence of ordinary departmental and bureaucratic control.
Yesterday, a man told me of his difficulties in obtaining a permit to purchase a motor car. This procedure should be relatively simple, but it is not. Eighteen months ago, he applied for a permit, but did not receive an answer to his letter. Later, he made another application, with no result. Finally, in desperation last week, he went to see the responsible official. He did not get past the office boy. Experiences of that kind naturally cause feelings of great frustration. However, treatment of that kind will not be confined to one or two people in the future. Everyone who seeks a permit to run a hank account in this country will experience it.
It is all very well for the honorable member for Fremantle to speak of the efficiency of the Commonwealth Bank. I agree that to-day the Commonwealth Bank displays some efficiency. Why? Because its staff knows very well that there are eight or nine other banks ready to take over the accounts of its clients if it does not do its job properly. The Government proposes to eliminate that competition, and dissatisfied clients of the Commonwealth Bank will have no alternative bank to which they can turn.
– Of course, there is always “ uncle “, the pawn-broker.
– The ordinary citizen will not be able to obtain satisfactory accommodation there. Then the tempo of the country, which has already been reduced to a very slow speed, will be brought almost to a halt.
Another matter about which I propose to say something is the subject of secrecy in regard to client’s accounts. The Government says that the Commonwealth Bank will observe the strict secrecy at present observed by trading banks. But from whom does the Government mean that clients’ accounts are to be kept secret? Trading banks keep their accounts secret, not only from other banks and from the public, but also, as far -as they can, from the Government. However, when a government monopoly bank is operating there will be a spate of instructions and directions from Ministers reticulating through the bureaucratic hierarchy down to bank officers, and is it to be supposed that information is to be kept secret from government officials?
One honorable member opposite said recently: “Think of the Postal Department, the service it provides and the fine body of people who comprises its staff “. I am not prepared to say that the service provided by the Postal Department is not good, but when one views the activities of that department in the light of the secrecy of the business which people entrust to it, is there any one who is sufficiently naive to believe that all the correspondence handled by the department is treated as absolutely secret? Is any honorable member naive enough -to believe that his telephone line is not “ tapped “ at times ; or that if he has art account at the monopoly Commonwealth Bank which the Government proposes to.establish, some government official] will not endeavour to obtain information! concerning it? Does any one really believe that the accounts of the bank’s clients will be kept absolutely secret from people in authority who desire to know how much money an individual has, and how he became possessed of it? Secrecy must, and will, go by the board.
– It is well observed in the Taxation Branch.
– At times it is violated even by that department. We know that information passes from the Taxation Branch to the Department of Trade and Customs.
The views which I held when I came into this Parliament seven years ago, are not very different from some held by honorable members opposite. I believed intensely in social security. I had a very great hatred of monopolies, and I had an intense sympathy for the man whom I described as the “under dog “. Since then I have had seven years’ experience, and I have learned something about the mental capabilities, the ideals and policies of honorable members opposite. I agree with their ideas of social security, although I do not agree with the methods by which they propose to imple-ment those ideas. However, I emphatically, disagree with them in their proposal to establish a vast monopoly of banking, a monopoly which is to he under direct political control. Any monopoly is bad, but a political monopoly is something which can only be described as an unmitigated evil. Turning to the position of the “ under dog “, it must be admitted that the Government has done a great deal to help him, and that honorable members on this side of the House have also tried to help him. The fact remains, however, that the adoption of the Government’s present proposal will make every man and woman in this country an “under dog”, subject to the word, order, decision or discretion of some government official. That is inherent in this bill, and no man can hope to escape its consequences. I hope that the bill will be rejected.
– Order ! The honorable member’s time has expired.
– I commend honorable members on both side of the House for the contributions which they have made to the discussion of this momentous proposal. However, I think that members of the Opposition have strayed rather a long way from the bill. Some honorable members opposite have even adopted the viewpoint that the Government’s proposals are primarily connected with communism. Obviously, the bill should be discussed from the standpoint of our present banking system and its facilities. That system comprises savings banks, the Commonwealth Bank and private trading banks, and the present debate should be directed towards inquiring whether the system is fulfilling the needs of the community, and whether it requires some alteration. The Leader of the Opposition (Mr. Menzies), whose speech followed that of the Prime Minister (Mr. Chifley), said: “This debate begins the second battle for Australia”, or something to that effect. The honorable member for Indi (Mr. McEwen), in the course of his speech this evening, referred to the views of the Australian Labour party in regard to finance, and mentioned, particularly, the depression of the early ‘thirties. He said that in 1931 members of that party .were practically annihilated at the general elections held in that year, and that they were again rejected by the people in 1934 and 1937. But does the honorable member, or the Leader of the Opposition, realize that when the first battle for Australia was fought, in the early ‘forties, their political parties, which were then in office, were found wanting and were re jected by the people in 1943. At the general elections of 1946 the people of this country again indicated emphatically that members of the Australian Labour party were the only people fit to be entrusted with the destinies of this country.
Coming back to the present position, we ask ourselves again, do we need any alteration of our present system of banking? The honorable member’ for Flinders (Mr. Ryan) repeated something said by the honorable member for Denison (Dr. Gaha), namely, that people must have something to love and something to hate. Judging by the propaganda issued by those who are interested in the preservation of the private trading banks, there is great hatred of the Labour party and its policy. In various newspapers I have seen advertisements that the Labour party will take control of everything, and that the people will have no say at all because Australia will become a totalitarian nation. The three main arguments used against the bill seem to be based on communism, totalitarianism and what I shall call “ refferendumism “. Some honorable members opposite have quoted from letters in which the writers have expressed appreciation of what the trading banks have done for them. I do not know whether the members of the Opposition, the trading banks, and the press realize the effect’ of their propaganda on the minds of the people. I shall read an extract from a letter which I received recently from a woman now living at Katoomba -
I lived in South Australia till my parents died at a great age. When the home was sold I came to New South Wales and I now take a. great interest in the political world. I find it hard to believe that decent men can be guided by a caucus that is ill bred, illiterate and immoral, who arc sponsoring this nationalization of banks bill. The Labour platform and its followers seem to be. devoid of any religious responsibility or commitment, and unaware that there are ten commandments, one of which is “ Thou shalt not steal “.
The letter then makes reference to the employees of private banks in these terms -
The parents of these lads in banks made the supreme sacrifice for these lads to enter colleges and schools such as Chartres and Stotts to fit them for the way of life they sought. All this is to be torn to shreds ruthlessly.
That shows the effect of this kind of propaganda on the mentality of the people. When I receive a letter which informs me that I am ill -bred, illiterate, and immoral, I cannot think that the writer has a Christian outlook. To say that those who believe in the Labour platform recognize no religious responsibility at all and do not even know the ten commandments is ridiculous, and when a person says that bank officers will be ruined by this legislation I reply that the bill before us guarantees to preserve their present rights and privileges, and will in fact place them on a better footing than at present. Some time ago I received a letter from a person in South Australia which prompted me to reply that his own self-righteousness was so great that he believed that any one who did not agree with him could not be a Christian.
– The honorable member does not like to have the bone pointed at him.
– 1 saw the bone pointed at many thousands of people during the depression. I saw the furniture in many homes disappear bit by bit. I saw women and children walking to the city in boots and shoes hardly fit to wear. That was the effect of pointing the bone at them. An Australian aboriginal believes that a person shrivels up and dies when the bone is pointed at him. I am not attempting to decry what the private banks have done, or are doing. Some time ago, I received a letter from a business man in a small way in which he said that the banks had helped him with finance, and he wanted to know whether he would be able to obtain similar assistance if the banks were nationalized. In my reply, I asked him if he knew of any case in which a private bank had made an advance, or granted an overdraft, without first obtaining adequate security. I ask honorable members opposite the same thing. ‘Can they say that they know of a bank which will lend any one £100 without inquiry ? Mention has been made of discrimination, but what does discrimination mean? It means that the bank will inquire from the prospective borrower what he proposes to do with the money, or at least what security he can offer for it. Apart from small cash loans made to men in good positions who the bank knows can readily repay the loans, all business men who require financial accommodation from a bank must submit to inquiry as to the security which they can offer, and the purpose for which the loan is required. Some honorable members opposite have said that the Commonwealth Bank is more conservative than the private hanks. Then, a few days ago, the honorable member for Wentworth (Mr. Harrison) told us about a Sydney firm which was refused a loan of £100,000 by the private banks. He did not state why they refused, but evidently they discriminated against him because they considered it would not be a good business deal. Then, the honorable member informed us, the firm approached the Commonwealth Bank, which lent the firm £200,000, and the honorable member seemed to suggest that the Commonwealth Bank thereby did something which was contrary to sound business practices. I think the honorable member finished up by saying that recently a receiver had been placed in the firm. Well, honorable members cannot have it both ways. They cannot argue that the Commonwealth Bank is more conservative than the trading bank, and then tell us that in the making of advances it is generous to the point of being unbusinesslike.
There has also been much talk of communism, and its association with the Labour movement. In addition to the letters which we receive urging us to vote against this proposal, we sometimes receive others showing that it has received support from some people for a long time. Recently, I received a letter from a man in Brisbane who happened to have heard me speaking on the motion of want of confidence in connexion with the banking proposals. This correspondent said that ‘before federation he had presented a petition to the Philp Government urging the nationalization tff banking. That was a long time before we ever heard in this country anything about communism.
– That was B.C. - “ before Chifley “.
– We have to ask ourselves whether the people will benefit from the nationalization of banking. It has already been recalled that when legislation was introduced into this House to give the Treasury control of the note issue, reference was made by its opponents to “ Fisher’s flimsies and it was saidthat before six months had elapsed it would be possible to buy a drayload of them for 10s. When honorable members opposite apeak of B.C., let me remind them that a search of the records will show once more that there is nothing new under the sun, and that what they are saying now in opposition to this bill is merely a repetition of what was said 30 years ago in opposition to the bill providing for the taking over of the note issue. From the year 1921, when the profits of the note issue were put into a separate fund, until June of this year, those profits have amounted to £38,368,000. One can easily understand why the private banks fought that proposal, and we can understand why the banks are to-day fighting the proposal for the nationalization of banking. The private banks have been on what I would call a pretty good wicket.
The Leader of the Opposition, when speaking on this bill, challenged the statement of the Prime Minister that the private banks, in time of prosperity, made credit freely available, but called up overdrafts in time of adversity. The Prime Minister had said that between December, 1929, and March, 1932, advances fell by approximately £45,000,000. Commenting on this statement the Leader of the Opposition said -
This statement is scandalously misleading. Tt does the utmost discredit to the Prime Minister, because it refers to the period between the high-lending month of December and the low-ending monthof March. Had he taken March, 1929, and March, 1932, he would have found that advances to ordinary customers fell from £239,000,000 to £225,000,000 - that is £14,000,000, and not £45,000,000.
And then the right honorable gentleman made this remarkable statement -
In other words, advances did not fall.
If I were to lose £14,000,000, I should certainly think that my assets had declined. The right honorable gentleman then went on -
On the contrary, they rose slightly on the average for the year. In some instances they rose beyond 100 per cent. of the deposits.
Other honorable members have said that advances amounted to as much as 104 per cent. of deposits.So far as I am concerned, it is not percentages that count. If in a good year, when the community is not in need of accommodation, the banks lend to the community £100,000,000, but in the next year, a bad year, when the community is in need of accommodation, they reduce their lending to £90,000,000, they do a disservice to the country. Honorable members opposite hold it to be sound banking practice that when deposits held by the banks decrease the banks must reduce advances’ to a corresponding degree. Under that system it is mandatory upon the banks in bad times, when the community requires more money, to say that they cannot meet the requirements of the community because their deposits have decreased. All of us know that the banks are enabled to provide overdrafts only from the surplus money of the community which is left with them either on fixed deposit or as non-interest bearing deposits.
The Leader of the Australian Country Party (Mr. Fadden) referred to the amount of £260,000,000, transferred by the private banks to special accounts with the Commonwealth Bank, and he claimed that if the private banks were not nationalized the Commonwealth Bank itself would have to find that money but would not know where to find it. Let us examine the right honorable gentleman’s implication in the light of the methods pursued by the private banks. The Pocket Compendium of Australian Statistics issued by the Commonwealth Statistician shows that as at the 30th June, 1939, omitting a few million pounds represented by inscribed stock, the deposits of the nine trading banks in Australia totalled £321,000,000. Of that sum the private banks’ were paying interest on only £201,000,000, but were not paying any interest at all on the balance of £120,000,000. That was just before the war when interest rates were high. They then had £56,000,000 invested in government and municipal securities and £290,000,000 represented advances to clients, or a total of £346,000,000, which they had loaned and from which they were deriving interest, whilst, at the same time, they held only £200!,000>000 of the surplus money of the community on which they were paying interest. Thus, at that time, they had loaned £145,000,000 on which they were not paying interest -but in respect of which- they were deriving interest. When the deposits totalled only £321,000;000 they had advanced or loaned a total of £346,000,000. I come now to the corresponding figures as at the 30th June, 1946. At that date deposits with the private banks totalled £631,000,000. They were paying interest on £214,000,000, and were not paying interest on £417,000,000. How much had they loaned at that period? They had invested in governmental and municipal securities £173,000,000, whilst other advances amounted to £223,000,000, making a total of advances of £396,000,000. At that time, they were paying interest on only £214,000,000. In addition, they had at that date £258j000,000 in special accounts with the Commonwealth Bank in respect of which they were receiving 0.5 per cent. Can honorable members who ponder over those figures wonder that the private banks desire to retain the present system? Those figures are most illuminating. The Government’s view is that the advantages thus enjoyed by the private banks should he enjoyed by the people.
– It is the people’s money.
– Yes, and the people deposit it in the banks. Very likely, the honorable member, himself, has a few hundred pounds deposited in a bank in respect of . which he is not deriving any interest at all. Naturally, the private banks want to retain that system. However, is it not considered a sound principle of finance that when a person deposits money with a private bank he should be assured of its solidity? What better assurance can be given by the banks than they do not lend to a degree in excess of deposits which would leave them unable to repay deposits? When a depositor places money with a bank, he expects that the bank shall be able to repay that money to him when iia wants it. However, under the present system, as I have shown, when a reduction of prices of our exportable goods occurs, such as occurred in .1931, deposits with the private hanks, seriously decrease and they have no option but to call up overdrafts and to- refuse further accommodation. They are obliged to follow that course under the system under which they now operate and which honorable members, opposite describe as sound. However, a government-controlled bank, backed by the resources of the nation, would be able, as the honorable member for Fremantle (Mr. Beazley) has pointed out, to follow the sounder principle that when times are prosperous and people have plenty of money, more money should not be heaped upon them, inducing them to get into debt. In such times they should to enabled to get a little ahead ; and when bad times come more money should bc made available to the community, and thus enable our economy to retain a sound balance.
Honorable members opposite have had much to say about what the private banks have done for the farmers. I shall refer to an incident which occurred in South Australia in 1936. Verco Brothers, who were clients of the Bank of Adelaide, carried on the business of storing wheat for farmers who desired to await the prospect of obtaining better prices. We have heard much from honorable members opposite about the necessity for having trained men to manage banking on behalf of such concerns. Verco Brothers were virtually holding wheat for farmers who gambled on the future. From time to time they obtained loans from the Bank of Adelaide, until, suddenly, they found that they had sold so much of the wheat they held on behalf of the farmers that they were unable to meet their commitments to the bank and pay the farmers for the. wheat that had been stored with them. Consequently, they went into liquidation. The farmers thought that they could recover what remained of their wheat. We witnessed the spectacle of a conservative liberal, Mr. J. A. Lyons, a leading wheat-grower in South Australia, and others, whose wheat was stored at the railway siding, attempting to take repossession of their wheat. However, they were prevented from doing so by policemen, who informed them that they could not touch the wheat as it belonged not to them but to the
Bank of Adelaide and other secured creditors who had first claim upon it. This caused a furore in the .State Parliament, of which I was a member at the time. The Liberal Country League party, then in opposition, introduced legislation to retain the ownership of stored wheat in the farmers who had stored it. The debate on the bill caused intense interest and I recollect that, on that occasion, the head of the Bank of Adelaide was seated in the front row of the Speaker’s Gallery. I saw how anxious he was that the measure should be passed. The farmers will not forget these things. I do not say that the bank is “ crook “ ; it has no option under what is termed “ sound banking practice” but to do these things at times. Let us have a people’s bank, in order that we may avoid the evils to which we have become so accustomed under the private banking system.
It is remarkable how some people seem to be able to fit their ideas in with their wishes. Recently, Mr. Playford, the Premier of South Australia, announced that, as soon as this bill is passed - and he knows juSt as well as do honorable members opposite that it will be passed - hb will seek from the High Court an injunction restraining the Government from giving effect to its provisions on the ground that it is ultra vires the Constitution. He also said that if he cannot get a favorable decision from the High Court, he will appeal to the Privy Council. Did he seek the approval of the people of South Australia for this course of action? Not at all! Without consultation of any kind, he has made a decision to spend money like water, if necessary, in order to oppose this legislation. Let us examine his history in the sphere of State politics.
Four or five years ago, he introduced in the South Australian Parliament a bill designed to prevent special benefits from being given to shareholders in the Adelaide Electric Supply Company in respect of the acquisition of new shares. The Liberal Government was in office with a majority in both Houses. The measure was passed through the House of Assembly with the support of the members of the Labour party, but the Legislative
Council rejected it. The Legislative Council said, in effect, “ If you want a commission of inquiry into this matter, we shall support you “. The Premier appointed a royal commission consisting of one representative of the Government, one representative of the Adelaide Electric Supply Company and a chairman. As the result of the recommendations of that royal commission, the Government decided to nationalize the undertaking. This is the same Premier who to-day describes this proposal to nationalize banking as “ taking away the people’s rights “. He introduced into the House of Assembly a bill to nationalize the electricity undertaking. The measure was supported by the Labour party, not because of pressure exerted upon it by some militant body outside the Parliament, but because it believed in the principle of nationalization. The measure was passed by the House of Assembly, but when it reached the Legislative Council, it was defeated by one vote. It was supported by members of the Labour party, but rejected by members of the Liberal party, who were opposed to their own Ministers.
Subsequently, the Government decided to hold a special session of the Parliament to consider the matter, and a new bill was introduced into the House of Assembly, where it was again endorsed by a majority. In the meantime, the Premier was able to persuade one of his own f ollowers in the upper house not to oppose the measure. When it reached the upper house, it was. passed with a majority of one vote. In that legislation, provision was made that the amounts to be paid to the shareholders were to be based on the actual values of their holdings in the undertaking at a given date. The Banking Bill contains a similar provision. Then, as now, the proposal was fought by members of the Liberal party and by the press. If it was fair for the Premier of South Australia to nationalize the Adelaide electric supply undertaking, it is just as fair for the Australian Government to nationalize banking. I cannot understand how the Premier can insist on the holding of a referendum on the banking proposal when he not only forced legislation through the South Australian Parliament to nationalize an important private undertaking, but also is prepared, without seeking the endorsement of the people for his action, to spend money like water to fight the bill now before us.
This bill is designed to meet the interests of the people’ of Australia as a whole. Should we encounter a period of low prices and an economic and financial decline, the Commonwealth Bank will, as a result of this measure, be in a position to advance sufficient credit to enable the Australian economy to maintain an even keel, and ensure that the people shall not again have to endure the sufferings which were inflicted upon them during the economic and financial depression of the latetwenties.
Debate (on motion by Mr.Scully) adjourned.
The following papers were pre sented : -
Commonwealth Public Service Act - Appointments - Department - Interior - R. R. Dunstan.
Works and Housing - S. C. Banbrook, K. L. Crowe, H. V. Elcock, H. H. Forder, R. C. Frith, H. K. Graham, R. H. Greenwood, W. R. Moir, H. G. Pechey, R. E. Pennington, W. A. Stoker, R. G. Thornthwaite, A. J. Try.
House adjourned at 11.8 p.m.
The following answers to questions were circulated: -
n asked the Minister for Civil Aviation, upon notice -
Mr.Drakeford. - The answers to the honorable member’s questions are as follows : -
asked the Minister for Civil Aviation, upon notice -
d. - The answers to the honorable member’s “questions are as follows : -
asked the Minister for Civil Aviation, upon notice -
How much money has been expended by Trans-Australia Airlines for publicity purposes in (a.) newspaper advertising, (6) radio advertising and (c) other methods since the first campaign was launched?
d. - The answers to the honorable member’s questions are as follows : -
Trans-Australia Airlines are engaged in commercial enterprise in competition with private airline operators and the AustralianNational Airlines Commission considers that detailed information of its operating costs should not be disclosed for the information of its competitors. Detailed information of publicity expenditure cannot, therefore, be made available, but audited financial statements will be submitted with the commission’s annual report and’ will be presented to Parliament when received.
s asked the Minister for Post-warReconstruction, upon notice -
Mr.Dedman. - The answers to the honorable member’s questionsare as follows : -
Coal: Production Losses.
n. - On the 21stOctober, the honorable member for Deakin (Mr. Hutchinson) asked a question concerning a press report stating that, due to industrial trouble, 1,500,000 tons of coal had been lost to industry during the current year. The Minister for Supply and Shipping has supplied the following information : -
It is true thata certain proportion of the stoppages in the coal industry, which have taken place in the last few months, have been due to demarcation disputes between unions and to a small irresponsible minority of men in the industry. However, the leaders of the mining unions are fully aware of the community’s urgent need for coal and are cooperating excellently with the Joint Coal Board in endeavouring to eliminate unnecessary stoppages. At this stage neither the
Government nor the Joint Coal Board have any intention of endeavouring to impose outside discipline upon the elements involved. We believe that this is a matter which can only be satisfactorily solved by the unions themselves. The achievement of self-discipline by the coal-mining unions will be a slow progress, but it has begun. For instance, the Northern Board of Management of the miner’s federation decided that mine workers who took part in any unauthorized stoppages (i.e., those who struck without the consent of the miners’ lodge involved or of the Northern District Board of Management) should be suspended from the federation for a first offence and should be expelled for a second offence. On the 22nd October, that decision was endorsed by the combined lodge officers. Already the new disciplinary code has come into operation, five wheelers having been suspended from Pelton Miners’ Lodge. The immediate effect of this drive by the mining unions towards self-discipline resulted in excellent production being achieved last week.
Cite as: Australia, House of Representatives, Debates, 4 November 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19471104_reps_18_194/>.