House of Representatives
5 November 1947

18th Parliament · 1st Session

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

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Motion (by Mr. Chifley) proposed -

That the House, at its rising, adjourn to to-morrow, at 10.30 a.m.

Leader of the Opposition · Kooyong

– On the question of the time of meeting to-morrow I direct the attention of the Prime Minister (Mr. Chifley) to the fact that the second-reading debate on the Banking Bill is still in progress and will presumably last for some Tittle time yet; and it seems inevitable that next week, probably early in the week, we shall he in committee on thebill. In those circumstances, it is desirable that honorable members should have the opportunity to consider amendments, if any,tobe moved in committee, or matters to be discussed in committee. We on the Opposition side, therefore, would very much like to have, at the relevant time, some adequate opportunity to engage in those discussions. I should have thought that the best thing would be to have a morning off this week for that purpose.

Mr McEwen:

-Government members take time off to attend caucus meetings.

Mr Pollard:

– And Opposition members take time off to engage in electioneering in Victoria. They are A.W.L.


– Those engaged in electioneering activities in Melbourne may be “A” but they are not “WL”. Honorable members can work that out. I should prefer to have a half day off this week rather than next week, because to have time off after the committee stages of the Banking Bill has commenced would notbe so valuable as time off this week. Failing that - although I hope that the Prime Minister will accede to my suggestion - I may be called upon to ask him, not necessarily on the floor of this House, to consent to a longer suspension for luncheon on some days to provide an opportunity, which would necessarily be a limited one, for consideration of the provisions of the bill. However, at this stage, I content myself by suggesting that, instead of meeting at 10.30 a.m. to-morrow, the House should not meet until the afternoon.

Darling DownsLeader of the Australian Country party

. - I associate the Australian Country party with the request made by the Leader of the Opposition (Mr. Menzies), and for the same reasons. The Prime Minister (Mr. Chifley) will appreciate that the sittings in connexion with the Banking Bill have been long and strenuous; we have sat from 10.30 a.m. till after 11 p.m. on a great number of days. Consequently, there has not been time for Opposition members to give consideration to amendments, or to canvass the desirability of submitting amendments, in the committee stage, which we expect will occur next week. I trust that the right honorable gentleman will give serious and favorable consideration to the request.


.- I emphasize what has been said by the Leader of the Opposition (Mr. Menzies) and the Leader of the Australian Country party (Mr. Fadden). I am sure that honorable members from all parts of the House will appreciate the reasonable content of this request. The Banking Bill is, admittedly, one of the most important pieces of legislation that this Parliament has been called upon to examine, and it is incredible that the Government would refuse a proper opportunity for members of the Opposition to examine in detail the clauses of the hill and any proposed amendments. Our experience has been that although a bill is presented to the House in a particular form, every major piece of legislation in recent years has been accompanied on the first on second day of the committee stage with a series of Government amendments.It will be impossible for members of the Opposition parties to consider the bill properly in detail, and also to study Government amendments, at one party meeting. I think it might reasonably be stated that if Government supporters themselves wished to hold a party meeting to discuss this matter the Government would not hesitate to afford the necessary opportunity. If we of the Opposition are to discharge our responsible duties in a proper fashion we should not be denied an opportunity to meet and consider proposed legislation. Therefore, I hope that the Government will accede to this very reasonable request.

Prime Minister and Treasurer · Macquarie · ALP

in reply - The Government is anxious that the debate on the second reading of the Banking Bill should be concluded. I had hoped that it would be possible to finish it this week, but at the moment that does not seem to be likely unless some of the candidates are “ scratched “, or become physically exhausted. The Leader of the Opposition (Mr. Menzies) spoke privately to me about a party meeting, and I can appreciate that there may be a desire among the members of the Opposition to move amendments to the bill. I can relieve the mind of the honorable member for Fawkner (Mr. Holt) about any great number of government amendments being introduced. He can be reasonably easy about that.

Mr Francis:

– Then it will be the first time on record.


– Not with my bills. I remind honorable members of the Opposition that they can get together on Monday to discuss the bill.

Mr Menzies:

– Is not the Prime Minister aware that there is a sporting event on Monday afternoon next ?


– I had heard of that, but I thought that members of the Opposition regarded the Banking Bill as of greater importance than anything else at the moment. I cannot accede to the request not to call the House together tomorrow morning. I appreciate what has been said about long sitting hours, but I think it is far better to have day sittings than all-night sittings. In this, I am moved by consideration of the Hansard staff. It is better for that staff that there should be day sittings. If it is suitable for the Opposition parties to have a break next Wednesday morning, that matter might be considered, and if it is desirable to have a longer suspension for luncheon to-day, I will join with other party leaders in making a request to Mr. Speaker on the point. That is the most that I can do to meet the wishes of the Opposition in this matter.

Mr Menzies:

– It would help me today if the sitting were suspended for the luncheon break until 3 p.m.


– I make that request to Mr. Speaker.

Question resolved in the affirmative.

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American Decorations - Australians in Japan: Servicemens’ Wives.


– Last week I asked the Minister for Defence a question concerning the failure of the Australian Government to approve the issue of high United States awards to 200 Australian soldiers, and the Minister replied that the matter had been taken up with the United Kingdom Government. In making those representations to the United Kingdom Government has the Australian Government taken into consideration the nature of the work performed during the war by those 200 Australian soldiers? Is it a fact that those men were part of an allied force that carried out a daring plan of espionage and sabotage behind the Japanese lines, that they penetrated to every area in the islands under Japanese occupation, and that many members of that force lost their lives, whilst a number is still unaccounted for? Is there any truth in the report that the United Kingdom Government told the Australian Government that it was at liberty to agree to the issue of United States awards to Australian servicemen on whatever basis it thought fit ? If that is so, what is the intention of the Government in this matter?

Minister for Defence · CORIO, VICTORIA · ALP

– I said last week that a number of difficulties arose in this matter: At present those difficulties are being examined, and I hope to be able to make a statement very shortly when I also expect to be able to announce that a. number of these decorations have been awarded. But, for a number of reasons, not all of the awards recommended by the United States authorities will be awarded. To mention one reason, for example, the principle has always been observed with regard to decorations awarded by His Majesty the King that no awards, or decorations, are made posthumously except in the case of the Victoria Cross. A u umber of the awards recommended by the United States authorities are to men who, unfortunately, have fallen on active service. I mention that aspect in order to show that there are some difficulties. I hope to be able shortly to announce a number of these awards, and when I do so I shall explain why all of the awards recommended by the United States have not been agreed to.


– Has the Minister for the Army seen a press report that the Australian Occupation Force in Japan will probably be withdrawn in June, 1948? Will he state whether this report is correct? If it is, what action is to be taken by Australia to participate in the control of Japan after this force has been withdrawn? The Minister will realize that any decision on the withdrawal of the Australian Occupation Force is a matter of vital concern to Australia.

Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– I have seen the report in this morning’s press. I am not in a position to say whether the Australian Occupation Force will be withdrawn from Japan in June. It will not be withdrawn, of course, until after the signing of the peace treaty with Japan.

Mr Francis:

– Then the statement that it will be withdrawn in June, 1948, is incorrect?


– I cannot give any indication to the House that the Occupation Force will be withdrawn in June of next year. As I have said, it will nol, bo withdrawn until after the signing of the peace treaty with Japan. What will happen after the signing of the treaty has yet to be decided.


– Did the Minister for the Army read in this morning’s press a statement relating to the Australian Occupation Force in Japan ? If so, is he correctly reported in the same article as indicating that he has decided that no’ additional wives and families of Australian servicemen shall be permitted to join these members of the force in Japan after December next? If so, what is the reason for this decision?


– I am correctly reported in the article to which the honorable member referred. The conditions which govern wives and families joining members of the Australian Occupation Force in Japan are that they shall remain in that country for at least twelve months. Taking a long range view of the situation, I .believe that it would be unfair to continue to allow wives and families to proceed to Japan after January next, because they would have to break up their homes in Australia, and perhaps in six or nine months would have to return here. They would be confronted with many difficulties. In view of all the circumstances, I consider that it is only fair to give some indication at this juncture so as not to place them at a disadvantage early or late next year.

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– In the Riverina electorate and in many other centres of New South Wales the weighbridges are too narrow to take large-sized trucks of the military- type. I have been asked by representatives of the Wheat Growers Union, and many carriers and farmers to draw the attention of the authorities concerned to this matter. I realize that it is a matter primarily for the State Government and the boards controlling silos, but I request the Minister for Commerce and Agriculture to take up the subject urgently with those authorities. I have in mind particularly the weighbridges at Ganmain, Grong Grong, Barellan and Garoolgan, but the weighbridges at many other sidings and receiving stations also need to be enlarged.


– The adjustment of gunnels on weighbridges at silos and railway sidings come under the jurisdiction of the State authorities. I shall be glad to bring to their notice the representations made by the honorable member and to suggest that action be taken to adjust the gunnels so that outsize trucks and vehicles may be accommodated on the weighbridges.

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– On the 10th October I placed a question on the notice-paper drawing the attention of the Minister for Commerce and Agriculture to a newspaper report that farmers on the Darling Downs were greatly concerned at the shortage of cornsacks and that sorghum growers are anxious that the export ban be lifted. As nearly a month has elapsed since I asked the Minister to make immediate inquiries in regard to these matters, and in view of the widespread concern at his attitude toward the ban on the export of sorghums, when mayI expect a reply to my question ?


– I regret that the question placed on the notice-paper by the right honorable gentleman has apparently not yet been answered. On the motion for the adjournment of the House last Friday, I made a statement indicating that the Government had decided that the export of grain sorghum would not be permitted. Every bushel of grain sorghum exported means that there will be one bushel of wheat less for export to the people who so badly need it overseas. It is well within the capacity of the poultry industry to absorb, within the next few months, the grain sorghum now in Queensland. Of an estimated crop of from 3,500,000 to 4,000,000 bushels, more than 3,000,000 bushels have already gone into consumption.

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Fishing Craft


– Can the Prime Minister inform the House how much was expended on the provision of small craft for fishing purposes in China and how many vessels were sent by Australia to Unrra for that purpose? Have any reports been received regarding the purposes for which these vessels are being used ? Has he received a report that large numbers were used by the Chinese for the construction of a pontoon bridge ? Have any reports been received from independent observers regarding the activities ofUnrra?


– The story regarding the operations ofUnrra in the Pacific, particularly in Shanghai in relation to fishing boats and the use of small craft, is a fairly lengthy one, the telling of which would involve a longer answer than

I would be justified in giving during question time-. The Government has a good deal of information about the activities ofUnrra, but I have not heard it alleged that small craft have been used for the construction of a pontoon bridge in China. Apart from official reports, the Government has received a number of private reports from individuals associated with the work ofUnrra. I shall obtain the information sought by the honorable member and shall furnish him with a reply as early as possible.

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– Has the Minister for Commerce and Agriculture seen a report which appeared in the Melbourne Argus last Friday headed “Farmers at Ballarat asked to grow Flax” and stating -

Mr. J. A. Stevenson, chairman of the Flax Production Committee asked Ballarat district farmers at a conference yesterday that all should try to plant 15 to 20 acres of flax each year to keep the Ballarat flax mill going. Last year only 500 acres were planted in the district, though the mill was designed to take production from 1,500 acres.

Has a flax mill in the western district of Victoria been closed? If so, on what date was it closed, and for what reason, if there is a need for production to continue ?


– Flax production comes within the province of the Minister for Supply and Shipping. However, I do know that there is a flax mill at Ballarat and others in the western district of Victoria. I know also that there has been some slackening of production, and that flax-growing has been confined by the Flax Production Committee to those districts most suited to this crop. I shall ascertain whether any mill has been closed in the western district, and shall supply the honorable member with the information.

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Rural Workers - Housing


– At a recent meet ing of the Murgon Chamberof Commerce, a letter from an ex-serviceman was read stating that Australia House officials in London had told him that farming was not considered important in Australia at present, and that farmers were definitely not required. He was told that Australia wanted only industrial and building workers. I ask the Minister for Immigration whether it is correct that farm workers are not included in the first priority category of migrants. If this statement is correct, since when has the Government not regarded farming as a necessity in Australia, particularly in view of the need for increased primary production? Will the Minister take up this matter with Australia House officials and ensure that a correction shall be made so that rural workers who desire to migrate to this country may know the true position?

Minister for Immigration · MELBOURNE, VICTORIA · ALP

– I do not believe that anybody in Australia House said any such thing as has been quoted by the honorable member. I am sure that nobody in that establishment would be foolish enough to say that farming was not of the greatest importance to the economy of this country. As I explained in this House some time ago, the responsibility for determining the classes of people who shall be brought to Australia under the free and assisted migration scheme rests with the States. Nominations are made by Australian relatives or friends for people in Great Britain who want to come to this country, .and the State authorities which handle the appli-cations in the fi-rst place give us a list of priorities of occupations based on the needs of each State, and ask us to bring to this country the particular types of individuals that they want. If they want nurses more than any other type of workers, they give nurses first priority. If they want building tradesmen, they give them a high priority. If they want farm labourers, they indicate the rating that should be given to these workers. All States do not think alike on this matter. We assemble their various requests in Canberra and then transmit them to Australia House with instructions to our officials to find the people of the types that each State requires. I think this is a matter that might best be taken up with the State government concerned, that is the Queens land Government in this case, or with all the State governments if honorable members on both sides feel that they have particular cases that they want examined. With regard to workers in rural districts, the Department of Immigration is doing its utmost to obtain requirements. For instance, the honorable member for Herbert is pressing the need for canecutters. Other kinds of agricultural workers are also wanted. A number of the displaced persons from Europe whom we are bringing to this country will do that class of work, because people in Britain wanting to come to Australia are not necessarily skilled in Australian agricultural pursuits. I think that, like most Australians, they will want to live in the cities.


– Have many migrants, recently arrived in this country, complained of the shortage of accommodation, and have some announced their intention of leaving Australia for this reason? Has the Minister for Immigration seen the complaint of the President of the United Kingdom Ex-service Welfare Association and his assertions that, whatever is said at Australia House, the British Labour Exchanges, which act as agents for our Immigration Department, are giving questionable and incorrect information to prospective migrants? What steps are taken to prevent those Labour Exchanges from misrepresenting the position?


– I do not believe that the British Labour Exchanges or officers at Australia House misrepresent the position. I do agree that some people who have come from Great Britain in recent times have expressed the desire to go back because they have not found the accommodation that they thought they could get when they arrived. But every person who has gone to Australia House and announced that he is prepared to pay his own fare to Australia and does not desire to take advantage of the free and assisted passages scheme on nomination of friends or relatives in Australia has been told about the housing shortage in Australia. I again insisted when I was in London recently that the truth must be told to intending immigrants and that conditions in Australia must not be overstated. It is better to understate, if anything. Nevertheless a number of people insist on coming to Australia after they have been told that there is no housing for them here. They have been advised to wait but they still come, and in some instances they have found that their expectations cannot be realized. A few of them have returned to Great Britain. We cannot be certain of success in all cases, and I shall be happy if 90 per cent of those who come here are contented. We do not want even 1 per cent. to go back, but the proportion of those who are discontented at present is considerably less than 1 per cent. If the president of the association whom the honorable member mentioned is a gentleman in Sydney-

Mr Ryan:

– No, he is in London.


– If it were a Sydney gentleman, all that he is doing is to try to deride our immigration proposals continuously by means of letters in the Australian press and the British press. If the honorable member will give me the complainant’s name and some further information, I shall do my best to satisfy him and the honorable gentleman.

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– Last week an English family arrived in Australia to settle. They travelled by air and were accompanied by their pet fox terrier dog. It was passed by veterinary surgeons and airport authorities before leaving England. The dog did not leave the aeroplane en route. Although the owners are prepared to pay to have the dog quarantined for six months, the Commonwealth authorities have ordered its destruction. I ask the Minister representing the Minister for Health whether it is not possible for the quarantine law in respect of dogs transported to Australia by air from overseas to be brought into line with that in respect of dogs brought here on ships. I cannot see why there should be differentiation.


-Order ! The honorable member is not entitled to debate the question.

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

– All countries have quarantine laws. The practice has been to quarantine dogs arriving here. I do not know whether it has been altered, but I do not think it has. Honorable members will remember the Alsatian dog Caesar that was brought to Canberra for honorable members to see. It was quarantined for six or seven months before being released. I will confer with the Minister for Health with a view to seeing whether the dog in question could be quarantined instead of destroyed.

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Charter Services

Mr.FALSTEIN.- Iask the Minister for Civil Aviation whether it is a fact that a British firm trading under the name of London Aero Motors recently announced its intention to operate a freight service between London and Sydney, commencing towards the end of this month.Is it also a fact that Birt and Company (Proprietary) Limited, a firm of Sydney shipping agents, has circularized a number of business houses inviting offers of charters for the British firm to fly within Australia or between Australia and neighbouring countries ? Is it a fact that the Minister has persistently refused to give permission to other companies to operate similar services? Will the Minister state on whose representations approval has been given for London Aero Motors to operate these services and whether other operating companies will be given similar treatment ?


– I have seen an announcement in the press that a firm such as the honorable member has mentioned - I think it is called London Aero Motors - is about to operate from Australia, but no permission has been granted for it to do so. The question as to whether I have persistently refused to grant permission to other operators to conduct services refers, I think, to charter services. Other companies have been given permission to operate charter services, but the Government does not intend to grant licences for services that would have the effect of taking away either freight or passengers from operators who are obliged to run according to time-tables on regular services. This policy will be readily (appreciated by everybody who regards civil aviation from a common-sense point of view. The honorable gentleman’s questions were rather detailed, and if he wishes to have further information I shall be happy to supply it to him. I emphasize that persistent refusals have not been made to other companies which have legitimate claims, but I point out that whenever a firm has to operate from another country to Australia it is necessary to secure an agreement with that country so that reciprocal services can be established.

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– Last week, the “Minister for Commerce and Agriculture promised me that he would investigate the possibility of providing sacks, even second-hand sacks, if possible, for the interim potato crop in northern New South Wales. As the problem has become much more urgent as the result of rain last week-end, will the Minister inform me whether he has been successful in securing the sacks? If not, can he indicate the prospects of obtaining them ?


– The officers of my department are doing everything possible to ensure that sufficient sacks shall be available for the potato crop in the right honorable gentleman’s electorate.

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– Has the attention of the Minister for Commerce and Agriculture been directed to a statement in to-day’s press which claims that pyramids of Australian and New Zealand butter are being sold on the black market in Shanghai? Will the honorable gentleman have this report investigated? If he finds that it is correct, will he endeavour to divert Australian butter to the United Kingdom? Will he also investigate how this butter could have arrived at Shanghai if it had been consigned to the United Kingdom?


– I have not read the statement to which the honorable mem ber referred, but I have been told about it. Of course, the statement could mean anything or nothing. One could make a pyramid of 10 lb. of butter, or 1,000 tons of butter. The plain fact is that, with the exception of 500 tons of butter, the whole of Australia’s production is’ under contract to go to the United Kingdom or destinations nominated by the United Kingdom Government. No doubt a small proportion of the 500 tons which goes to destinations other than the United Kingdom, and those nominated by it, will find its way to Shanghai and Hongkong. When it reaches those destinations, it is in the hands of private merchants for distribution, and, possibly, some of it may be disposed of on the black market. I do not know what precautions against black marketing are taken in Shanghai and Hongkong, and the honorable member for Wide Bay will understand that the Australian Government has no control over Australian butter when it reaches China. It appears to me that the position described in the report regarding black marketing and pyramids of Australian butter in Shanghai, if it exists at all, is a gross exaggeration.

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New Zealand Legislation


– I desire to ask the Minister for Labour and National Service a question relating to a recent amendment of the Industrial Conciliation and Arbitration Act of New Zealand. The amendment provides for a secret ballot to be held on the matter of strikes or lockouts. Has the honorable gentleman studied this amendment? Will he obtain from the New Zealand authorities a report as to how the provision is operating, with a view to inserting a similar provision in the Commonwealth Conciliation and Arbitration Act?


– I have heard of this experiment in New Zealand, and the Department of Labour and National Service has a copy of the legislation or regulations, but I have not obtained any reports indicating whether the provision is operating successfully. Before my department or the Attorney-General’s Department could decide whether this. provision should be adopted in Australia, the matter would have to be regarded as one of government policy, and be considered by Cabinet.

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Motion (by Mr. Holloway) agreed to-

That leave be given to bring in a bill for an act to amend the Tradesmen’s Rights Regulation Act 1946.

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Second Reading

Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to continue the operation for a further period of twelve months of certain National Security Regulations, the operation of which has already been prolonged by the Defence (Transitional Provisions) Act 1946 until the end of December, 1947. When the Attorney-General (Dr. Evatt) introduced the bill for that act, he dealt fully with the constitutional basis of the bill, and there is no need for me to cover this ground again. At that time, I think that we all believed that by December, 1947, we should be able to dispense with many of the regulations then in operation. However, events have proved otherwise. The principal reason is. that western Europehas not succeeded in regaining a state of economic health.. At this time last year, it appeared that the economic recovery of Europe would not be unduly delayed, but since then. Europe has experienced an. exceptionally severe winter, followed by a drought. During 1946, the fact that the balance had been upset between the productive power and resources of the western hemisphere, on the one hand, and those of the rest of the world, on the other, was obscured by the vast quantities of goods poured into Europe by Unrra and other organizations. The disastrous effects of winter and drought were followed by the dollar crisis. Those events have had repercussions extending far beyond Europe; indeed they threaten the foundations of world economy. The AttorneyGeneral in his speech last year emphasized the need for the retention of measures designed to check inflation and maintain stability. The Government at that time indicated its view that the operation of regulations covering prices control, rent control, capital issues, and land sales, would need to be continued beyond December, 1947. The bill makes provision for the continuation of those regulations for a further twelve months.

No one would argue that prices control has not been highly successful in helping to keep the economy of Australia steady. A comparison of the figures of the cost’ of living in Australia to-day with those for theperiod following World War I., and those of countries which have abandoned prices control, prove the wisdom of the Government’s action in continuing the operation of war-time prices control regulations in the post-war period. To-day, Australia is one of the countries which shows the lowest increase of prices, and a comparison of our living costs with those of other nations where prices control has lapsed, or has never been enforced, proves how well we have controlled the post-war boom. The United’ Nations’ monthly bulletin of statistics for September, 1947, shows that Australia is the only one in a list of 35 countries in. which the rise of wholesale prices since 1937 has been less than 50 per cent.

Mr Menzies:

– Are the same items taken into account in each of the countries mentioned in compiling those statistics ?


– Not necessarily.

Mr Menzies:

– Can the Minister indicate what items are taken into account in compiling wholesale and retail price indices in Australia?


– I shall obtain that information for the right honorable gentleman. The same authority gives the following percentage increases of retail prices from 1939, to June, 1947: - Australia 28 ; South Africa 39 ; Canada 32 ; United Kingdom 29 ; United States of America 57; Argentina 75; Sweden 52;

Switzerland 56; Spain 109 ; Ireland 70; Turkey 245; Poland 15,010; and China 3,087,900. The indications are that during 1948, the Australian price level will be subjected to pressure, as it was in 1947. By V.P. Day, export prices had increased by 7S per cent, over pre-war prices, and by 183 per cent, by June, 1947. Import prices rose by 99 and 147 per cent., respectively. There is no sign of the increase of overseas prices steadying as yet, and there is no doubt that a serious post-war boom is taking place in the international field. Under these conditions it would not be wise to remove the existing control over prices.

An attempt to control prices generally without controlling the land values would, because of the present demand, permit serious distortions of the whole cost-price structure. Excessive land values would greatly inflate the cost of home-building and would make the administration of rent control extremely difficult, if not impossible.

The effect on rural industries must also be particularly serious. When producers are receiving high returns for their products, speculation becomes rampant and land changes hands at boom prices financed by mortgage loans. Then, when export prices decline, many producers find themselves burdened with debt and high costs. A long and painful readjustment becomes inescapable; and the result is a general state of depression throughout the rural industries. To prevent a repetition of such experiences, and to prevent excessive land values from unduly inflating costs generally, it is proposed to continue the control of land values for a further twelve months under this bill.

Speculative investments are not confined to land. At present there is a large supply of capital awaiting investment, but it is impossible for all of it to be employed without making inordinate demands on the available resources of material and man-power. It is clearly desirable that resources should be concentrated on essential production and not be diverted to speculative or unnecessary enterprises. It is, therefore, proposed to continue the Capital Issues Regulations. Bent control is a special aspect of economic controls, and its continuance is rendered necessary by the present shortage of accommodation of all kinds. It ensures a measure of stability where stability is most needed. Its removal, and the removal of control over evictions under present conditions, would result in inflation of rents, wholesale evictions, exploitation and much misery.

I shall mention briefly some of the marketing regulations which it is proposed should be continued. The regula- tions under this group, which it is sought to ‘continue, include those relating to the control of barley, apples and pears, hides and leather, potatoes, rabbit skins, as well as the acquisition of wheat and the stabilization of the wheat industry. The reasons for continuing these regulations are simply that the conditions which necessitated their introduction are still with us, and the Commonwealth must keep faith with the primary producers. The detailed considerations differ somewhat, depending on the commodity. In respect, of the Australian Barley Board, it was expected that legislation would be enacted by the South Australian and Victorian Governments to carry on after the end of 1947 the authority originally established by the Commonwealth, but the sudden dissolution of the Victorian Parliament has delayed the necessary legislation in that State, and the Commonwealth is accordingly obliged to continue the regulations so that there will be no disorder in the handling of the forthcoming crop. Refrigerated shipping space for the apple and pear crops of Tasmania and Western Australia, the main exporting States, is still inadequate, and hence the continuance of assistance is necessary to protect the growers in those States. As regards potatoes, the Commonwealth has let contracts to growers for the 1947-48 crop, and the regulations are intended to control marketing until the crop is sold. It is hoped that by the end of 1948 the organizations of the States will be ready to take over potato marketing

The wheat regulations are intended to cover the period of marketing the 1947-48 crop, which will undoubtedly be a record one. It has not been practicable to reach agreement on a permanent marketing ;;t:heme for the industry, but a further conference with the States on this matter will he held shortly. Meanwhile the Commonwealth is continuing the Australian Wheat Board in accordance with the desires of the growers and all the State Governments. In fact, no other organization could satisfactorily market the crop. The controls over hides, leather and rabbit skins are necessary mainly for price stabilization purposes, as the world prices of these commodities greatly exceed the domestic prices. A limited section of the food control regulations is preserved so that the distribution of certain fats and oils can be equitably arranged, and also that essential service supplies may be obtained.

Quite different considerations apply to some of the other regulations. There is a croup of regulations which affect servicemen still in the Australian Occupation Force in Japan. It is obviously necessary to keep in force the Military Forces, Naval Forces and Women’s Service ^Regulations. There are still a few internees and prisoners of war in Australia, and although there are very few affected by the provisions under which their detention is regulated, those provisions must remain in force.

During the last couple of years Parliament has considered several bills dealing with industrial conditions - notably the Commonwealth Conciliation and Arbitration Act 1947, the Stevedoring Industry Act 1947 and the Coal Industry Act 1946. These enactments go back some distance in bringing back to a peace-time footing the framework within which industrial conditions are settled. There are still, however, fields to which attention has not been given, particularly the maritime industry and the craft unionists who are employed in the coal industry. Pending some further clarification in these fields, the existing regulations must be preserved for a time.

Superphosphate regulations have been discontinued and the operation of the Agricultural Aids Regulations restricted to a single item of nicotine sulphate. The prospect of a record harvest has aggravated the demand for both cornsacks and galvanized iron, and control over these commodities must be continued for some time longer. As I have said, the recovery overseas has not been as rapid as we expected last year. While the position of the United Kingdom is so critical it is unthinkable for Australia to remove all restrictions on commodities which are needed so badly there, and accordingly ration schemes are being continued, particularly in relation to meat and butter.

About one dozen sets of regulations will be continued. They are those under which war materials are being disposed of, war damage claims settled, compensation with regard to requisitioned cargoes assessed, property of enemy nationals administered, and the hundred and one other things that are necessary to unwind the war effort. A good many of the provisions of this sort cannot be dispensed with until the Treaty of Peace is signed with Japan.

I turn now to the other part of the bill. Last year, a few amendments were made in permanent legislation. This bill also gives permanent expression in appropriate acts to some provisions that have hitherto been contained in National Security Regulations.. The Acts Interpretation Act is amended in two respects. One provision is made to cover the case where the functions of one department are transferred to another department. Reference to the former department or its Minister will be read in an agreement as referring to the latter department or its Minister. Secondly, there is a provision relating to delegation of powers or functions. This provision permits the exercise of powers or functions by a delegate in circumstances in which the exercise of the power or function is dependent upon the opinion, belief or state of mind of the person exercising the power. An amendment made last year to the Land Tax Assessment Act is continued for a further year. This amendment continued for land tax purposes pegging of land values which, up to that time, had been pegged at 1939 values by regulation under the National Security Act. The assessment of land tax upon land owned as at 30th June, 1948, will be based on the 1939 value.

Action is being taken by clause 9 to amend the Defence Act by exempting from jury service members of the Citizen Forces who are engaged on war service. Probably the most important of these changes in permanent legislation is clause 10, which repeals the- National Registration Act 1939. This legislation has for most purposes been in abeyance since Supplementary Regulation 65 was gazetted on the 15th August, 1942. This regulation suspended the obligation to furnish a form in pursuance of section 21, or to advise any change of address in pursuance of section 22 of the act. The Government regards the National Registration Act as a type of legislation which is undesirable during peace-time. The effect of repealing Supplementary Regulation 65 would be to revive the National Registration Act and, accordingly, it is proposed to repeal the act.

It is the policy of the Government to embody in permanent legislation at the earliest possible date provisions which are now contained in National Security Regulations and which it is desirable shall have permanent effect as part of the law of the Commonwealth. This bill is one of a group of about half a dozen bills which deal with matters that have previously been covered by National Security Regulations. Already the Dairy

Produce Export Control Bill has been dealt with, and one of the effects of its passage will be that the Dairy Produce Acquisition Regulations will be permitted to lapse at the end of the year. The Minister for Repatriation (Mr. Barnard), has introduced the Australian Soldiers’ Repatriation Bill 1947. This bill contains a provision permitting regulations to be made covering patriotic funds, and accordingly the Patriotic Funds Regulations will not be continued, next year.

Other legislation involving . amendments to other acts is in train, and will be introduced at as early a date as is possible. When these bills are introduced, the opportunity will be taken to enact in permanent form some of the provisions now carried on temporarily.

I have had prepared for the convenience of honorable members, the following table showing how the various provisions now in force by virtue of the Defence (Transitional Provisions) Act 1946, are dealt with in this bill, or by other legislation to be presented during this sessional period and with the concurrence of the House I shall incorporate it in Hansard -

Debate (on’ motion by Mr. Menzies)’ adjourned.

page 1685


Second Beading.

Debate resumed from the 4th November (vide page 1667),- on motion by Mr. Chifley -

That the bill be now read a second time.


.- I support the bill. That would seem to go without saying, but for the fact that I have been misrepresented in a section of the press as being opposed to the bill. I am supporting it for the old-fashioned reason that I think it is right. I accept the view expressed by the honorable member for “Werriwa (Mr. Lazzarini) in the course of his admirable speech - and I may say that there have been many admirable speeches delivered during this debate, and I do not even exclude from consideration those speeches that have been made from the opposite side of the House. I accept the view of the honorable member for Werriwa that national finance should be controlled by the nation. First, ohe has to be satisfied that the bill is right and should be passed, and secondly, and only in a secondary sense, that we can win an election on it. E am not so sure as are some honorable members on my own side that it is a winning ticket ; neither am I so sure that it is a loser.

Mr McEwen:

– The honorable member should back it for a place.


– I do not want to be unctuous, but I believe that the most important thing is to be satisfied that the bill should be passed. I add that I am not quite sure that it will win an election for the Labour party. To support the bill because it is right is more creditable than if I were to support it knowing that it was fundamentally wrong - which I do not.

I was displeased to hear the honorable member for Deakin (Mr. Hutchinson) say in the course of his speech that the position bad been reached when he would not accept the word of the Prime Minister (Mr. Chifley). I believed, as did most honorable members, that the Prime Minister could be relied upon to give a perfectly candid and honest exposition of the bill, and that is what he did. We have had a barrage of letters hurled at us on this subject. I use the word “ hurled “, because no other would be adequate to express the number of letters and telegrams which we have received. I do not mind saying that they are mostly in opposition to this measure. However, I am aware that a Liberal party candidate in my electorate although unsuccessful obtains a very considerable number of votes; and it is, perhaps, significant that he obtains many more votes than the number of telegrams and letters which I have received in respect of this matter. I venture to assume that Liberal party supporters are largely against this legislation, whilst Labourites are largely in favour of it, although that, perhaps, would be a rash statement seeing that some Liberals have represented themselves as being in favour of this measure. Most of the letters and telegrams which have been addressed to me protesting against this legislation are couched in truculent terms, and, to a large degree, are offensive. For instance, some demand that I oppose the nationalization of banking. No one can suggest that those people are speaking for the majority. Their letters contain very little argument. In fact, they are devoid of argument. After all, I am an elector in my own electorate. I am entitled to a vote in my own electorate. Having that voice, I have views ; and I am at least as well qualified to pass judgment on this legislation as those who have forwarded a barrage of letters of protest to me on the subject. In any case, I am at least as much entitled as any other elector to express my opinion; and I believe that the bill is right.

Those who have sent letters to me protesting against this legislation demand that the Government should hold a referendum on this issue, because they claim that the Government has no mandate to enact it. A referendum is unknown to the Constitution. Although I may not discuss that aspect, I have heard arguments, and very good ones too, directed to show that the referendum is unknown to the Constitution; at least the referendum has been regarded as inapplicable and I submit that a mandate is unnecessary. A referendum suggests that there is something to be referred. Democracy at work clearly proves that a referendum is un- known to the Constitution, and that a mandate for this legislation is unnecessary. We cannot bring the whole of the electorate into the Parliament, and, therefore, we have to content ourselves with nominees of each division. The electoral divisions are determined by dividing the Commonwealth into areas of more or less equal size. In the Parliament, however, the position is different. The views of the Parliament are determined by the presiding officer, who is chosen by the nominees of the electorates, putting the question and stating that the “Ayes” will pass to the right of the Chair and that the “ Noes “ will pass to the left of the Chair. In the final analysis the matter is determined only by a count of beads. That is how parliamentary government in a democracy works out. There is no reference in that mode of decision to a referendum. I agree that it does not constitute a perfect means of determining the minority view, which is also entitled to be heard. It was Adam Smith, I think, who said that a minority, however small, is just as entitled to have its views recorded as is a large majority. Honorable members opposite who oppose this bill can satisfy themselves - indeed they are entitled to plume themselves - upon the fact that they undoubtedly represent a chosen minority. “Whether they represent a majority of the electorate is not known. I do not believe that they do. I think that a majority of the electors will decide in favour of the Government in this House at any rate. I sometimes wonder whether, if the position were reversed in this chamber, the House would be of the same opinion on this question. If socialization were already an accomplished fact, would the Parliament decide against socialization, or would it accept socialization just as it has accepted the State railways or the Postal Department, the ramifications of which extend throughout the Commonwealth? The objections to this bill are not insuperable, indeed they are easily overcome. The private banks are operated for profit. That they are above suspicion should be enough, because, like Caesar’s wife, they should be above suspicion. That is unanswerable; but as with judges it is not enough because suspicion should be impossible. The holders of shares in the private banks desire the most liberal return possible for their investment, and I arn sure that the trading banks are not any less susceptible to the influence of lucre than any other section of the community. The profit motive should disqualify them. Although the Opposition has shown that the profits derived from the shares are not extravagant, I maintain that the fact that the private banks are not above suspicion constitutes a fatal objection to them. I was pleased to hear the honorable member for Riverina (Mr. Langtry) applauding those who had participated in the formulation of the 1911 bill constituting the Commonwealth Bank. I had that honour among many others. Perhaps I have been in the Parliament for too long - no doubt the Opposition will say so. However, the main honour is due to Mr. King O’Malley. He was the power behind the throne. I do not think that either the right honorable member for North Sydney (Mr. Hughes) or Mr. Fisher was in favour of the bill.

In regard to communism, I have nothing to say at this stage except that the Labour party must dissociate itself absolutely from communism or perish utterly. Apparently that view is accepted by the Labour party as a whole. The change to a socialized banking system will make little difference. I am inclined to agree with the honorable member for Hindmarsh (Mr. Thompson) that there will be a change of the registered name of the banks, but not much else. I am not sure that Australia is ripe for socialism, though we have had socialism in our programme for years. It has been in our programme because in an elementary sense it is right and I do not think that, being right, it is to be regarded as an evil. The most important point of the 1945 legislation was that the bank shall consult the Treasurer as to its monetary and banking policy, and in the event of disagreement between them the view of the government should prevail, and that, in my opinion, is as it should be. A government must rule within its jurisdiction. The State governments do, and the Commonwealth Government should. I heard the Prime Minister move the second reading of the bill. Up to that time we had not known much about it. I myself knew little about it, hut I accepted the Prime Minister’s admirable exposition of it. I heard with interest the Leader of the Opposition make a masterly attack on the bill. I say it was a masterly attack and I listened to it with what I have described as interest because I marvelled that the Leader of the Opposition could make an impressive speech in reply to the equally masterly exposition of the bill uttered by the Prime Minister. I am content that the Prime Minister made a good case for socialization of the banks which we had not understood so clearly until he made his admirable speech. The speech of the Leader of the Opposition was equally impressive. I take the risk of saying that I am not sure that we are ripe for socialism though we have had it on our programme for years. I do not say I disagree with socialism. As a matter of fact I agree with it especially christian socialism. I agree that socialization of the banking system is desirable. I accept it, but I do not accept that as proof that even the Labour party is convinced of the truths of socialism.

Mr. Sheehan

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

Wide Bay

– The Banking Bill provides for the control by the Government of the people’s money and the destruction of the private banking institutions which they have entrusted with their financial transactions. This policy is foreign to British traditions and may be termed a Communist swoop or a bloodless revolution. It has been decided upon without the people’s consent. Worse than that, their demand for a referendum has been scoffed at by the Government. The Labour party boasts that the Australian people are entitled to free speech. That is why the Government will not ban the Communists. I have presented to the Parliament the protests against this bank “ steal “ of thousands of electors in the Wide Bay constituency. They cannot come to the Parliament to exercise their freedom of speech personally. The only reply of the Prime Minister is the state ment that he made to about 70 electors and friends in his own electorate in which he said -

I will not beside-tracked by such issues as the claim for a referendum.

He wants no help. Neither does any pickpocket want any help. The Government is prosecuting the desire of the Labour party to socialize the means of production, distribution and exchange. Hansard reports the honorable member for Hume (Mr. Puller) as having said in this House in 1943-

I submit that the Commonwealth Parliament should assume supreme control of land-

That is all the farming land, all the grazing land, and all the land on which homes and other buildings stand or will be erected, when the Government enables sufficient to be erected - and all other national resources, including money. Founded on the nation’s wealth and national resources, the Commonwealth Bank is the key to progress. It follows that the national wealth becomes the bank’s capital asset.

The national wealth is the return of the labour of the person who produces it. I am at a loss to understand how a socialist could claim in this House that all the goods produced by individuals and companies in this country must be considered as the property of the nation.

Mr Fuller:

– Who said that?


– I am reading-

Mr Fuller:

– It is a deliberate lie.

Mr. ACTING DEPUTY SPEAKER (Mr. Sheehan). - Order!


– I do not take any notice of him, Mr. Deputy Speaker. I shall re-read that portion of his statement which I have quoted and its accuracy can be proved by reference to Hansard -

I submit that the Commonwealth Parliament should assume supreme control of land-

Mr Fuller:

– That is a deliberate lie.


– It is a lie, but it is the honorable member’s lie.

Mr Fuller:

– It is not in my speech.


– This must be a speech that the honorable member has forgotten. I agree that it is a lie to claim that the wealth produced in this country belongs to the nation, not to the individual. The honorable member can refresh his memory by referring to Hansard of the 29th September, 1943. If he does so, he will see that I have correctly quoted from his speech. He said -

I submit that the Commonwealth Parliament should assume supreme control of land and all other national resources, including money. Founded on the nation’s wealth and national resources, the Commonwealth Bank is the key to progress. It follows that the national wealth becomes the bank’s capital asset.

In my opinion, the nation’s wealth belongs to the dairyman, the grazier, the manufacturer, and everybody else who slaves and works to produce it.

Mr Fuller:

– Why talk drivel?


– It is not drivel. The honorable member’s agitation shows that he considers it to be something more than drivel. The proposal to give the Commonwealth Bank the ownership of the products of individuals and private industry generally for all time is most dangerous. Many people have expressed their fear that, with a monopoly of banking, the Government could exercise unfair political discrimination. Members of the Government have reputed such a possibility. I claim that a Labour government has exercised political discrimination, and anybody who wants to obtain proof of my claim may refer to statements that were made by the present Minister for Transport (Mr. Ward), as reported in Hansard of the 25 th November, 1931, at page 1895. The Scullin Labour Government was then in power. People were looking for employment. Bread-winners needed work, so that they could feed their hungry families, and work was being made available because the banks were making advances to governments and to industry. This is what the honorable gentleman had to say regarding the Labour Government of that day-

Discrimination was exercised against certain men because their political views were known; because they were not supporters of the Premiers plan and of the present Commonwealth Ministry. No known Lang supporters were given work.

The honorable gentleman also read a statutory declaration signed by James Frederick Baird, which contained these words -

When I arrived on the job at Balmain, which cost me tram fares, I was informed by a Mr. Gardiner that he had received instructions not to start me.

The honorable gentleman claimed that those instructions were given by the Government. That shows that a Labour government is capable of discriminating against men who seek assistance or employment under Commonwealth legislation. Therefore, we believe that it would be dangerous for the Government to be given complete control of banking in this country. Any monopoly is dangerous, and a government monopoly created by force would be the worst form. The operations of the trading banks, free of government control, have been most successful. The Government and its supporters condemn monopolies, but the monopolies which they propose to take over - banking first, and perhaps the iron and steel industry and the insurance companies later - have become successful as the result of the diligence, pluck and enterprise of individuals. Their records are vastly different from those of government monopolies, which have invariably failed the people. If banking is a monopoly, as the Government claims, it is so as the result of the successful investment and re-investment of money by private citizens. The fact that they have been successful is not proof that a government monopoly bank will be successful.

The plan for the nationalization of banking has been dictated to this Government by a shadow government formed by extremists in the trade unions of Australia. This shadow government knows that, under the system of socialization, its members will eventually become the governing class in a supreme economic council, the establishment of which is the pledged policy of the Government itself, whose members are pledged to create such a body. Personal freedom and thrift are to be eliminated and the States are to be hamstrung for all time. This class of government monopoly is based on a great lust for power. The bill represents the culmination of a vendetta, in which one of the most effective weapons was faked propaganda, used by people who envy the success of the banks. These people have never developed anything for themselves but hatred. By prostitution of the term “ the working class they have spread their political disease throughout Australia and the rest of the world. It is easy to say that the present banking system should be abolished and that a monopolistic State hank could take its place. But the people who invented this story, and who have persuaded the Government to force their policy upon us by means of this bill, have never earned anything and have never created anything except trouble and hatred. Because of the success of those who have tried to develop Australia and who in the process have provided work and created wealth, they “ point the bone “ at private enterprise, as the honorable member for the Northern Territory (Mr. Blain) “pointed the bone” at the Government yesterday when he quoted the writings of Lenin.

In defence of its proposal, the Government asserts that banking has been nationalized not only in Russia but also in Prance. Russia did nationalize its banking system, but France has not done anything of the sort. Four of the hundreds of banks in Paris, if they could be rightly called banks, have been nationalized and already two of them have revealed a deficit. The Government cannot boast that this bill follows the pattern set by the Governments of Great Britain, Canada, South Africa, New Zealand and other members of the British bloc. It has had to turn to Russia and to France for its inspiration. What do we find in France to-day? It is a Communist-ridden nation, a wrecked country which De Gaulle is attempting once more to save from anarchy. France has been white-anted and politically depraved by Communists to such a degree that, even with a trained army of 12,000,000 men, it was not able to carry on a war. Proud France was rendered politically rotten by the efforts of Communist traitors who formed 30 per cent, of the population. Yet honorable members opposite assert that Australia should follow the example of France in nationalizing the private banking institutions. However the claim that France nationalized its banks is untrue. They have not been nationalized, and it cannot be claimed that France is so far depraved as the Government, under this bill, proposes to deprave Australia. At the direction of the Communists, who comprise only 3 per cent, of the population of the Commonwealth, we are advancing towards Red Fascist Russia. We are retreating from the United States of America and the United Kingdom. The greatness of the United States of America, which is the most prosperous country in the world, is directly attributable to the system of private enterprise. The Australian Labour party has rejected this system in favour of a system of a nation of slaves dictated by a small minority. By the encouragement of private enterprise and the application of science, the United States of America has used the brains of men to design the great machines which enable the workers of all countries to increase production with a minimum of sweat, toil and brawn. If the people of this country desire to succeed, they must follow the example of America. Are we to be branded as a people who stole the wealth that private enterprise produced? While the Government of the United States of America is now engaged in fighting all un-American activities, we in Australia, under a Labour Government, are establishing an un-Australian monopoly by un-British and revolutionary means.

The Government is resisting an urgent demand that the people should be consulted, by way of a referendum, before this far-reaching change is made. So widespread and insistent is this demand that, in resisting it, the Government has virtually insulted many thousands of people who signed petitions in favour of the holding of a referendum on the banking proposals. Mr. Fisher, a former Prime Minister, who was responsible for the establishment of the Commonwealth Bank, was the first member for Wide Bay, which I now have the honour to represent. The Commonwealth Bank, which is filling the proud place and important role of a central bank, was designed not to enter into competition with the private banks. The Australian Country party, of which I am a member, is more democratic than the former

Labour Prime Minister. We do not contend that the Commonwealth Bank should not compete with the private trading banks. Such competition would be a healthy thing in comparison with the stigma which the Government’s banking proposals cast upon the institution. When banking becomes a government monopoly, it can also become the monopoly of a political party. The Prime Minister, in a statement to the press, said -

On the occasion of the depression the private trading banks refused to co-operate with the Commonwealth and State Governments for relief of unemployment and the revival of business activity.

The right honorable gentleman knows that the Royal Commission on Monetary and Banking Systems, of which he was a member, examined this charge and found that it was without foundation. Why, the right honorable gentleman even signed the report of the royal commission! The private banks would have had cause to hesitate as to whether they should give full assistance to the Commonwealth and State Governments of the day, because the several Labour Governments could not- co-operate among themselves. They had under consideration the Premiers plan, the Lang plan, the Theodore plan, the Gibbons plan, the Scullin-Lyons plan, and a number of so-called plans that had been formulated for the economic rehabilitation of Australia. This disunity did not encourage the banks, or inspire confidence. But the private banks endeavoured to guide the Government and the country through this maze of trouble. In the bad years of 1930-33 the private banks advanced more money than during earlier boom years. In fact, a personal friend of the Prime Minister, Mr. W. 0. Taylor, whom the right honorable gentleman appointed to the Commonwealth Bank Board, contended that the private banks caused the financial and economic depression by advancing too much credit, and thus causing a boom. During the term of the Scullin Government the Governor-General used these words when opening a new session of the Parliament -

The causes of the difficulties re* seasonal in character, and there is no reason to believe that the continuance of those conditions is likely, and there should be a return to normal conditions in the coining year.

A stupid canard, circulated by Communists, and repeated by honorable members opposite, claims that the private banks made a handsome profit out of the financial and economic depression. The truth is that their profits were reduced, and the value of bank stock fell below par. The banks actually lost money. But they assisted primary producers and businessmen, and, by increasing the exchange rate with sterling to £130, gave to the Australian producer a higher price for his exports, and created avenues of employment.

One of the reasons which the Prime Minister advanced in support of this bill is that the private banks are conducted for profit. I ask: What man will invest in any enterprise which is not conducted for profit? It is an elementary business principle that enterprises shall be conducted for profit. Would any honorable member opposite invest his capital in a non-profit-making concern? Is not the Commonwealth Bank conducted for profit? Indeed, so substantial are the profits of that institution that honorable members on this side of the chamber are wondering why the Government stands idly by, and does not extend greater assistance to primary producers and others who require advances from the Commonwealth Bank. Do not the various State banks make profits? I have here the annual report of the Rural Bank of New South Wales. I do not object to the manner in which it conducts its business. In fact I admire the Rural Bank, its valued help to primary producers, and the excellence of its operations. I know that it has assisted many primary producers in New South Wales. This institution, after meeting all commitments and providing for contingencies, including doubtful debts, derived a total net profit of £71,147. I ask: Who receives these profits? On page 7 of the report, the information is given that this amount in carried to the bank’s reserve fund, increasing it to £2,175,323. That amount represents a profit derived principally from primary producers and home builders. If honorable members will dissect this total they will discover that £1,074,779 was obtained from the rural department and £1,100,544 from the home building department of the .bank. Of those reserves, £1,649,121 is invested in Australian consolidated and inscribed stock and £525,511 in the inscribed stock of the Sydney Metropolitan “Water, Sewerage and Drainage Board. So, under a. Labour government a State bank is conducted for profit. How, and at whose expense, do State banks make profits? Nearly every honorable member opposite, including possibly the honorable member for Batman (Mr. Brennan), stated that the private banks must be acquired because they make profits, and foreclosed during the financial and economic depression on persons who were unable to meet their obligations to them. The canard circulated by the Communists, and repeated in this House, that the banks made money out of the depression is obviously silly and without foundation. Actually the banks did not make any profits at that time, and their shares dropped to below par value. No justification is to be found in the works of Professor Copland or in those of any other reputable economist for the Communists’ contention. But let us look for a moment at what happened in regard to the Rural Bank of New South Wales, which is a State-owned enterprise, established by a Labour government. The annual report of that institution for the year ended the 30th June, 1946, shows that “ circumstances made it necessary “ for it to call up the advances made to 21 borrowers during the preceding financial year. At the time of furnishing its annual report the bank was in possession, as mortgagee, of nineteen properties, of which one was leased with the option to purchase, three were available for private sale, and the remainder had been withheld from sale for various reasons. Thirty-eight properties were sold during the year, and 68 had been declared forfeited and had reverted to the Crown. In addition to the sales which had been made, contracts were made for the sale of 34 properties, and negotiations were going on. for the sale of an additional 56 properties. After evicting people from their properties, the bank’s operations for the year resulted in a profit of £41,881 19s. lid. That was not unusual, because in the previous year the bank had made a profit of £40,830.

With regard to the bank’s homebuilding activities, the report states that it was necessary for the bank to re-possess three properties, and that at the 30th Juno, 1946, it was in possession of 343 securities. I mention this not in criticism of the bank’s activities, but to rebut the contention of honorable members opposite that the trading banks are the only ones which foreclose on properties. Of those 343 properties, 33 were available for sale, and the remainder were occupied in almost every case by satisfactory tenants. Properties sold by the bank during the year numbered sixteen. After providing for possible contingencies, the net profit made by this branch of the bank amounted to £32,265 2s., which was carried to the branch’s reserve fund, increasing it to £1,100,544 5s. 7d. This money was then loaned out to the New South Wales Government.

Mr McEwen:

– Was this a government bank?


– I am referring to the Rural Bank of New South Wales. However, I want to tell honorable members something about the operation of the State-owned Agricultural Bank in Queensland. The last report of that institution shows that the number of applications for advances was 2,032, of which 1,244 were approved. The others were not offered an advance. The aggregate advances made totalled £1,03S,589, and the instalments repaid amounted to £446,681. Commonwealth money distributed by the State to ex-servicemen under the Re-establishment and Employment Act amounted to £40,275. Although the Lyons Government made available £12,000,000 for the reduction of the debts of the primary producers of Australia, the Queensland Agricultural Bank did not write off a single shilling of farmers’ debts; but it loaned at interest amounting to £939,000 debt reduction money received from the Commonwealth fund, and it is still receiving interest on that money.

The contention of supporters of the Government that industries should be. socialized because they are making profits from the community is not new. It was continually expressed by members of the Australian Labour party in Queensland, and many years ago a Labour government in that State decided to socialize quite a number of industries. That Government printed at The Worker office a small red covered book, bearing a union label, which conveys quite a lot of interesting information. Incidentally, the book was filled with political propaganda for the socialization of industry in accordance with the Australian Labour party’s policy of “socialization of the means of production, distribution and exchange “. Unfortunately, I have not time to give honorable members the benefit of the interesting information contained in this remarkable little book. Having published it, the Government then set about introducing practical socialism. Later it published a pamphlet entitled Socialism at Work. We will find that it did not work. However, it did not publish another red-covered volume to tell the community just what had happened to the industries which had been socialized and had failed. The socialist government to which I am referring did not attack the trading banks; on the contrary, it was quite happy to sell the State bank to the Commonwealth Government. It was more concerned with such important transactions as the sale of the steamer Sir Douglas Mawson. It proceeded to acquire an arsenic mine, which it claimed was producing, under its enlightened management, for sale to commercial enterprises, arsenic of 98 per cent. purity. However, the purity of its product was challenged by myself, and was ultimately tested by the Government’s own analyst. I was nearly gaoled for asserting that the arsenic which the State was selling to primary producers was not 98 per cent. pure, but official analysis showed it to be only 14 per cent. pure. It fertilized prickly pear that was used for its destruction. The Queensland Government lost £61,300 in that venture, and to that sum must be added another £27,540, representing interest which should have been charged on the capital invested. In coal mines the Government lost £328,650, and £110,343 which should have been appropriated for interest was not charged. Of course, no income tax was paid in respect of that undertaking. I believe that the net result of the State’s activities in this direction was that one of the mines was used to supply water for dairy cattle. The State Government established sawmilling. It made a profit of approximately £17,000, but that was more than offset by its losses on the operation of the Hamilton cold stores, which cost approximately £60,000, plus an additional sum of approximately £9,000 which should have been charged as interest on the capital invested. The Queensland Railway Refreshment Rooms made a profit of approximately £135,000, but the explanation is that the refreshment rooms charged people too much for too little. Another venture was the purchase of the trawler Bar-ea-mul, which we called the “ Barrel of mud “. The vessel, which had to stop in order to whistle, cost the State £35,000 to which should be added £9,990 in respect of uncharged interest. Then the State entered the business of supplying fish to the public. That cost £36,012, plus £16,440 in respect of uncharged interest. The Government also acquired the Babinda Hotel, which was a great success, because it made a profit of £62,217. A cannery was also established, which cost the taxpayers of Queensland £112,696, apart from uncharged interest which amounted to £26,970. Primary producers were compelled to send food to the government for sale to the public. The State Government lost £1,669,804 in respect of cattle stations which it acquired, and £28,014 in respect of butcher shops which it operated, apart from sums of £324,498 and £3,396 representing uncharged interest on those respective ventures. The State operated 72 butcher shops in 1923, but by 1929 that number had dwindled to 39. The operation of metalliferous mines, smelter and treatment works cost the State £1,288,236, and uncharged interest amounted to £461,431.

Sitting suspended from 12.45 to3 p.m.


– It must be remembered that when those undertakings were conducted by private enterprise they made profits on which taxes were paid. A great number of stations were taken over by the Queensland Government, but instead of being conducted at a profit, as they were when in charge of private enterprise, losses amounting to £1,669,804 were incurred, and, in addition, interest amounting to £324,498 was not charged. The net losses, including uncharged interest, on State enterprises in Queensland was more than £4,600,000. Later some, and eventually all, of those enterprises were sold. According to the Daily Standard, the Townsville Labour convention agreed in 1928 that State enterprise in Queensland had proved a failure. At that conference Mr. McCormack, the then Premier of the State, said -

Labour’s objective, and practically the main plank in its platform, was the nationalization of industry. There was nothing wrong with the plank if they got social service. They had been absolutely compelled to close down the State instrumentalities because they could not got the service necessary to render them sufficiently profitable to justify carrying them on.

According to the Auditor-General for Queensland, as reported in the CourierMail of the 23rd October, 1947, heavy losses were made on State enterprises in the last financial year. It must be remembered that the Government had a monopoly in some fields. The office of Public Curator showed a profit of £5,487, but that was after £5,833 had been received from the State Treasurer. The figures in respect of the “Workers’ Compensation Department and the State Government Insurance Office are interesting. The latter office was established because it was thought that there were big profits in the insurance business. It was not realized that insurance companies had had to build up large credits which were to be later drawn by the policy-holders. The State Government Insurance Office of Queensland made a loss of £32,713 last year. Another monopoly in that State - the Workers’ Compensation Department - showed a loss of £107,911 for the year. The miners’ phthisis section was conducted at a loss of £28,348. During the war the Queensland railways made huge profits, but notwithstanding increased freight and fare charges to country people, a loss of £712,573 was incurred last year. In the light of those results of government trading, the prospect of the Commonwealth Bank making big profits does not appear particularly encouraging.

The Government claims that Australia emerged from World War II. in a sounder financial position than any other country. It is true that this country, with its population of a little over 7,000,000 people, has achieved wonderful results in a comparatively short while. We have developed great areas and created great wealth and the institutions largely responsible were the private banks, which established their business and grew with the country. The Government cannot claim that the Commonwealth Bank has a better record than that of the private banks. The Commonwealth Bank has taken £267,000,000 deposited with the trading banks and is paying interest at the rate, of 10s. per cent, per annum or -J per cent,, per annum on that amount. But themoney has been let out to borrowers at from 3 per cent, to 4 per cent. Although; interest up to 17s. per cent, is authorized’ by the act, so far the rate has not exceeded 10s. per cent. We have been told that the private banks do not allow their officers to marry until their salary reaches a certain amount. That statement is untrue, for it is the Commonwealth Bank which restricts marriage. The Commonwealth Bank allows its officers to marry only if they are in receipt of at least £300 a year, or with the consent of the Governor of the bank. That is in line with the practice of Soviet Russia, which allows its women to marry other nationals but not to leave Russia with their husbands. The Minister for Post-war Reconstruction (Mr. Dedman) said that the nationalization of banking will control money in all forms. He used the right word, when he said “ forms “. We have had plenty of forms, coupons, zoning, rationing, quotas, permits and official forms of all kinds. It would appear that the Minister abhors the idea that any profit should be made out of industry. His argument is that industry should not be carried on forprofit. Money should not Abe invested for profit, but, apparently, for the benefit of the Minister himself and the “ Comms”. That idea was tried in Queensland, resulting in losses, there, the Government took over various profit-making enterprises, which were run by the State at a loss for years, after which the State sold them back to private enterprise. Mr. Nash, the Treasurer in the New Zealand Government, said in 1943-

There has been some argument in our party about taking over the trading banks - personally, I think these banks are doing a better job than we can make of it . . .

So do the thousands of electors of Wide Bay who have sent their protests to me. Mr. Nash added -

Under the present system customers who are dissatisfied with one bank can take their business to another bank. Under a State ownership system they could not do this . . . The resistance of the trading banks to the importunities of borrowers who want to commit themselves beyond their resources is a valuable bulwark to any government . . .

That statement was made by the Treasurer of a Labour government, and I am sure that he would object to the policy which the Prime Minister is advocating to-day.


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

Minister for Works and Housing · Forrest · ALP

– I rise to support the bill because I believe that if ever democracy is to be tried, it can be tried only when the Parliament has complete power over the broad financial policy of the nation. If we are to maintain a stable economy it is essential that there should be a banking monopoly. The competitive form of banking can no longer operate. Under the competitive system, when times are good, the various banks compete against one another to lend money, and this leads to a condition of inflation. During the years from 1920 to 1929, that was what actually took place in Australia. When economic conditions are buoyant the financial institutions are all anxious to get money out on mortgage, so that they may present to their shareholders balance-sheets showing that their position is as good as that of their competitors. Then, when the economic wave recedes, there is competition between the financial institutions to call up overdrafts for their own protection, so that the managements may demonstrate to their shareholders that their business acumen was such as to preserve their assets. Thus, there is a contraction of credit at the very time when it should be expanded.

My experience of private banks and financial institutions during the depression convinced me that, when fear gripped the community, those in charge of banks and financial institutions were the first to take to the life-boats. They were quite prepared to sacrifice the economic lives of their individual clients - as well as of the wives and children of the wage-earners. The financial system was such that they contracted credit and reduced the spending power of the people and the national turnover, thus making conditions even worse than they need have been. Let me quote a pertinent paragraph from the report of the Royal Commission on Monetary and Banking Systems. Paragraph 214 states in part -

One of the most important factors was undoubtedly the incompetent direction and management of the smaller financial institutions whose weakness brought about the crisis. But the directors and managers of some of the trading banks were not free from responsibility. These banks competed for both deposits and advances.

That was when there were 23 banks. Gradually, that number was reduced to nine, through some going bankrupt, some being bought out and others amalgamating. Just before the present bill was introduced, it was proposed that two of the remaining nine should amalgamate. As the number of banks is reduced, those remaining tend to become a monopoly, and there is a steadying down of the vicious economic fluctuations. This proves that if we are ever to achieve a stable economy there must be a banking monopoly.

Let us now ask ourselves who is to control such a monopoly. Is it to be controlled, as in the past, by firms conducted for the sole purpose of profit? After all, we must, recognize that the person who invests his money in bank shares does so in order to obtain a. profit, just as does the person who invests in a rubber company or a life insurance company. The alternative to this system is to place the control of the banking monopoly in the hands of the nation itself, so that the people may be fully employed operating productively upon the nation’s resources, and so as to ensure that there will be enough money available to enable the people to buy the goods that they themselves produce. The people are being asked to decide between those alternatives. I have no hesitation in saying that when the full facts are made available to the people - as they will be by the example which the Government will set - they will endorse the action which it is now proposed to take. “When the history of these limes is written, it will be admitted that this is an historic occasion in the history of Australia - that Lt is, indeed: the first time that an attempt has been made to put real democracy into operation.

The honorable member for Wide Bay declared that our prosperity was due to the action of private banks. When Australia was passing through the greatest crisis in its history; when it was threatened by invasion by the Japanese who had penetrated as far as to the islands to our immediate north, did the banks do anything to stop them? No, they were stopped by the men and the physical resources of the nation, directed by a good government. The reasons for the introduction of this legislation will be clearly appreciated when it is viewed against the background of the whole financial policy which this Government has pursued since it assumed office. Right from the beginning of its regime, the Government determined that this nation should not be placed in pawn to outside money-lenders as happened following World War I. When it became clear that we would require thousands of millions of pounds to finance our war effort, the Prime Minister (Mr. Chifley), who was then Treasurer, laid down a definite financial policy on the basis of the lessons which were clearly to be learned from our experiences following World War I. Governments of those days were noted for the extravagance of their borrowings. They raised loans in London at rates of interest from 5 to 6 per cent, and in New York at rates of interest from 6 to 7 per cent. The result was that when the prices of our exportable commodities decreased, our interest burden correspondingly increased. The Prime Minister had those lessons in mind in framing the Government’s financial policy. I recall that when he assumed office as Treasurer, he said that the Government would not mortgage Australia to foreign bond-holders. He said that our capacity to prosecute the war would be based primarily on the physical capacity of the nation, its man-power and the degree to which our national genius could develop and exploit the country’s resources. He laid down three main principles for financing the war effort. The first was that there should be equality of sacrifice. Honorable members opposite have had much to say about equality of sacrifice, but, when the Government applied that principle by increasing taxes, the interests which they represent in this Parliament were the only ones to “ squeal “. In doing so, they ignored completely the sacrifices that were undertaken by the men and women who interposed their bodies between the enemy and those assets. The second principle was that the greater proportion of the requisite finance should be borrowed from the Australian people. The Prime Minister was determined not to allow private financial interests to benefit from the nation’s necessity by buying up government securities to the degree to which they were permitted to do following World War I. The money was to be borrowed from the people themselves. Therefore, the Government relied upon internal loans. The full value of that policy will be reaped by the people when, as is inevitable, the prices we are receiving at present for our exportable commodities decrease. When that occurs, we shall not be confronted with a greatly increased foreign debt, as was the case following World War I., due to the policy adopted by anti-Labour governments. The third principle of the Government’s financial policy was applied when the enemy was at our doorstep and when, indeed, things looked very black for this nation. The Government then decided to use a certain amount of central bank credit. Thus, from the time the Government assumed office, its financial policy was designed, not only to finance our war effort but also to protect our people as far as possible in the post-war years from a recurrence of the evils which beset this country following World War I. Despite the huge cost of the war, the Government, instead of increasing the nation’s overseas indebtedness, as previous governments did, actually reduced our overseas obligations by over £70,000,000, and, at the same time, increased our overseas balances from £56,000,000 to £200,000,000. I repeat that, although this country had to find £2,498,000,000 to finance our war effort, this Government did not increase our overseas indebtedness, but, on the contrary, increased our overseas balances from £56,000,000 to £200,000,000. In addition to implementing that sound financial policy, from which we are now reaping such great benefits, the Government instituted economic planning and controls which were designed not only to reinforce our war effort, but also to protect our people in the post-war period. Let us look at the results achieved by the financial and economic policies which I have just outlined. I take the following’ extract from a bulletin of the United Nations : -

Australia is the only country where the rise in wholesale prices since 1937 has been less than 50 per cent.

The September issue of the bulletin lists price rises over ten years in 35 countries.

On a basis of 100 per cent, in June, 1937, Australia’s price index figure for last June is giveil aa 148.

Only 10 countries show an increase of less than 100 per cent. in wholesale prices.

In the large majority of countries for which data is available wholesale prices have more than doubled.

In France, the index figure for last August was 99S.

Wholesale prices hi Italy last July were more than 5.000 times higher than in 1938.

In Finland and Bulgaria to-day prices are about seven times the pre-war level.

That is a tribute to the policy implemented by the Government immediately it took office in the dark days of the recent war. As the result, Australia has succeeded to a greater degree than any other country in stemming inflation. Following the end of the recent war, the Government entered into the Bretton Woods Agreement, which, in the international sphere, was equally as important ss the internal financial and economic policies which it has pursued. In criticizing the Government’s proposal to enter into the Bretton Woods Agreement, honorable members opposite contended that because Australia would have only a small voice as a member of the International Bank for Reconstruction and Development on the basis of only 3 per cent voting strength in respect of the International Monetary Fund, it was surrendering sovereign rights to an outside authority. However, I point out that at that time honorable

Ifr. Lemmon. members opposite did not contend that the Government should hold a referendum on that issue. The Government joined the International Bank for Reconstruction and Development because it saw in the bank a means of stabilizing international finance; because the Bretton Woods Agreement is designed to prevent a recurrence of the conditions’ which followed World War I. when individual nations indulged in exchange depreciation for the purpose of exploiting their unemployed and thus caused economic chaos throughout the world. That was but another step taken by this Government as part of its plan to ensure the financial stability of Australia. This Government has provided for this country the most stable economy in the world. That sound state of affairs is acknowledged in the statements issued by the United Nations. It is against that background that the people should view this present proposal. The Leader of the Opposition (Mr. Menzies) has said that the Prime Minister took this step towards nationalization in a fit of pique. Others have said that he took it because it was planned in 1921 by the right honorable member for Yarra (Mr. Scullin). Still others say that the proposal emanated from the teachings of Lenin, producing his books to prove their contention. As was shown by the former honorable member for West Sydney (Mr. O’Connor) the policy of a central control bank, responsible for and controlling the finances of the country, was first advocated long before Lenin was born. This step was taken, not in a fit of pique, but after due consideration and in the belief that it was essential to protect the people from a repetition of the unfortunate conditions which existed after World War I. Let us consider for a few moments what has happened in the not distant past as the result of the financial system being left in the control of the private banks. In the ‘nineties, the bank crash disorganized industry and brought untold misery and suffering to the people. Scarcely had they recovered from the impact of that catastrophe when World War I. broke out. After the termination of that war we experienced a very brief period of boom and inflation which was followed by the economic and financial depression of the ‘thirties. That was followed by “World War II. Now, soon after the termination of that war, we are again in a spiral of inflation. Are we to continue the present financial system which has caused so much unnecessary suffering? When we refer to the past the honorable member for Indi (Mr. McEwen) accuses us of being concerned with things that are out of date. History, however, has a habit of repeating itself. We believe that if an economic blizzard should ever again strike this country the government of the day should not be able to say that Australians shall not eat or be clothed, while food and clothing exist in abundance, simply because they cannot find employment and consequently have no money. It is not possible for this country or any other country economically to stand alone. All must be affected by world conditions; and who can say that another economic blizzard will not strike again? Irrespective of what government occupies the treasury bench, we wish to ensure that it shall not be able to shelter behind the banks and shelve responsibility for what may happen to them. As the result of this measure, sufficient money will .be made available to ensure that the people are looked after. We are determined that never again will this country find itself in a condition in which there are more men outside the factory gates than jobs inside to be filled. We have pledged ourselves to prevent a repetition of that, and we believe that the best way to do so is by instituting a national bank controlled by the people with provision for that control to continue to reside in the people.

The central theme of the speech made by the honorable member for Indi was his statement “ I shall show you how this Government has exploited the people”. The honorable member went on to say that under the National Security (Economic Organization) Regulations and the 1945 banking legislation, this Government is exploiting the private banks. He said that the Government compelled the private banks to deposit a certain amount in a special account on which they received only one-half per cent. In fact, he made the headlines with that statement. It is rather strange that the headlines are made so often by statements that are untrue. He said that the Commonwealth Bank lends this money to home- builders at 3^ per cent, and to borrowers from the Mortgage Bank Department at 4 per cent. He continues to utter these untruths either to cover up other untruths or because he has not taken the trouble to inform himself of the facts. Listening to the honorable member one would think that the banks came along with the money in notes and placed it on the counter of the Commonwealth Bank which, in turn, lent it out at 3, 4 or 5 per cent. The fact is that this money- £252,000,000, and not £300,000,000 as was stated by the honorable member - stood to the credit of the private banks in London. Australia took over the London credits and gave to the banks in return credits in Australia, investing the funds in short-term securities in London, for which we receive 1 per cent, out of which we have to carry our own administrative costs and also meet the one-half per cent, due to the private banks. On the portion which was deposited in Australia, the Government received interest at the rate of one-half per cent. - the same as was paid to the private banks, but on this portion it had to bear the administrative costs itself.

Mr Rankin:

Mr. Rankin interjecting ,

Mr SPEAKER (Hon J S Rosevear:



– This is the true story of those transactions. The honorable member for Indi was just as inaccurate in that respect as was the Leader of the Opposition when he said that only section 48 of the Banking Act of 1945 had been challenged in the High Court.

Mr Rankin:

Mr. Rankin interjecting,


– Order! I shall not warn the honorable member again.


– The Leader of the Opposition said that only section 48 of the 1945 legislation had been challenged and that the private banks were quite happy to allow the remainder of the legislation to operate. The Minister for Post-war Reconstruction (Mr. Dedman), the honorable member for Perth (Mr. Burke), and the honorable member for Fremantle (Mr. Beazley) all effectively answered that deliberate untruth. I have known the Leader of the Opposition since I was a boy. My father was associated with his father in a State Parliament. Ihave alwayshad a great regard for him and for his capacity, and I never thought that he would stoop so low as to prostitute bis talents for the purpose of serving the money masters of this country. The right honorable gentleman has completely forfeited the respect of every decent citizen.

Mr Harrison:

– What nonsense!


– Order !


– He is respected as an authority on the Constitution, but he has abused his talents and his position for no other reason than to serve the powerful financial interests which he represents in this House. The strong pressure brought to bear by the private banks on a man of the highest capacity should be an object lesson to people both inside and outside this Parliament. If they can exert such influence on a person of the calibre of the Leader of the Opposition what will they do to the ordinary humble citizen? The case that has been presented by these two gentlemen has been based entirely on untruths or a lack of knowledge of the position, and I am prepared to affirm that they have a full knowledge of the facts. They have argued that this bill will mean a loss of the freedom of the individual. They, and their colleagues have stumped up and down the country endeavouring to instil fear into the minds of the people that their freedom is to be taken away from them,. But almost every law that is passed by this Parliament or the State parliaments restricts, to some degree, the freedom of citizens of this country. However, this loss of individual freedom means a gain of collective freedom, which is far more important. The freedom that individuals will lose under this measure will be that of going from one private bank to another; but they will gain a far greater freedom collectively by being released from the domination of private financial interests. As I have said, every law means a loss of individual freedom to some degree. Our marriage laws restrict the liberty of the individual as do thelaws relating to the registration of doctors. We all realize that the registration of medical men is essential to ensure that only those individuals who possess prescribed academic qualifications shall be permitted to operate or to treat diseases. There again, the loss of individual freedom brings a far greater collective freedom. State and Commonwealth laws relating to health also impose certain restrictions on the liberty of the individual, but once again with the same compensation. Dentists, chemists, and even lawyers must be registered for the protection of the public generally. Therefore, the argument that this measure will rob individuals of some measure of their freedom carries no weight at all.

The honorable member for Swan (Mr. Hamilton) stated -

This all-powerful Government - perhapsI should say this power-drunk Government - is going to defeat the inexorable law of supply and demand and prevent the fall of export prices. Those are causes of depressions.

He further stated -

Once again I remind the House that it was for that freedom that the people of Australia fought for six long years. The people of this country have nailed their colours to the mast of free enterprise. They are determined that the native genius of free adventure by which we have developed this country shall continue to be given free rein. Furthermore, they are determined that the spirit of risktaking shall continue in peace as well as in war.

I wonder who wrotes those passages. I am certain that the honorable member himself did not write them. The great principle for which his party has stood throughout its history has not been free enterprise. The main plank of its platform is the organized marketing of primary products. How else could that be described than as an attempt to iron out the inconsistencies of supply and demand ? Members of the Australian Country party have always featured their belief in organized marketing as a means of maintaining payable prices for primary products. We have the Australian Potato Board, the Australian Meat Board, and the Australian Wheat Board, and even’ in the lifetime of this Parliament we have set up an organization to operate in conjunction with other countries to stabilize the price of wool. Are all these things manifestations of free enterprise? Obviously not. Their purpose is to render a better service to both producers and consumers in a co-operative spirit. The issue that gave birth to the Australian Country party was the establishment of a compulsory wheat pool in Victoria.

Mr McEwen:

– To what clause of the bill is the honorable member referring?


– The very history of the Australian Country party shows-

Mr McEwen:

– What clause of the bill mentions the history of the Australian Country party?


– Order!


– The honorable member for Indi is the biggest “ squealer “ that this House has ever produced. When any one replies to hia statements, he squirms and twists. It is the only time that he ever goes white.

Mr McEwen:

– I like a fair umpire.


– Order ! That is a grave reflection on the Chair, and the honorable member for Indi must withdraw it and apologize.

Mr McEwen:

– I withdraw it and apologize.


– The honorable member must not repeat it.


– I recall that on one occasion the honorable member for Indi stumped this country, saying, amongst other things, that the financial system of Australia was outmoded. In fact, he tabled a motion in this House seeking an inquiry into that system. The motion was supported by the Labour party, then in Opposition; but when the testing time came what happened? So that the matter would never be debated, the honorable member was offered a portfolio, which he accepted.

Mr McEwen:

– In what clause is that mentioned ?


– Obviously, the honorable member for Indi does not like to be reminded of these things. He achieved political success by climbing on the bended backs of farmers already heavily weighed down with debts to the private, banks. He used the unfortunate primary producers to reach for the richer fruits of this life, but as soon as he got them he kicked the farmers from under him. This is the man whose party came into being with a move for the establishment of a compulsory wheat pool in Victoria. And what was the result? The first time Country party candidates faced the electors they secured five seat3 in the Victorian Parliament. When the Parliament met, the Country party members moved for the establishment of a compulsory wheat pool, and received the support of the Labour party, then in Opposition. The then Premier, however, immediately dissolved the Parliament, went to the country, and branded members of the Country party as something worse than socialists, namely syndicalists. The result was that the Country party came .back with its number increased to six, and this time some of its members were offered certain positions in the ministry. They accepted the positions, and thus sold the farmers, just as the honorable member for Indi sold them when he accepted a position in a composite ministry in this Parliament and abandoned his move for an inquiry into the financial systems in this country.

The honorable member for Swan said that he believed in free private enterprise. I well remember what happened during the depression years under this system of free private enterprise, when the banks contracted credit. I was chairman of a roads board at that time. The manager of one of the banks went around the district visiting all the farms. An engineer had one of the finest properties in Western Australia, employing four men, three of whom were married. The bank manager walked on to that property and sacked three of them. I discussed the matter with him several days later. I was interested because he was the manager of the bank that held the account of the roads board of which I was chairman. In discussing a loan to assist some of the unemployed men, I asked “ Where do you think this policy will finish? “ He replied, “ All that concerns me is that I have to answer to my inspector “.

Mr Holt:

– What bank was that?


– The National Bank, and the manager’s name was Reever. That can be checked. My signature is cn the accounts of the board mentioned. He said, “ All I am concerned with is to answer to my inspector. I am not going to feed them. Let the Government feed them.” Another farmer with a son of fourteen and three daughters, one eleven, another nine and the third only a toddler, were living in a house with only two rooms. The kitchen did double duty, being used at night as the bedroom for the children. He wanted to build another room, but could not get the money from the private banks to do so. He came to the roads board and asked me for sufficient contract work to enable him to earn £15 with which to buy some timber and iron for the construction of the additional room. I said “ Certainly”, and gave him a job. He had to be paid with a non-negotiable cheque because of the requirements in the State law. “When he paid it into his account and desired to draw against it, the manager, the same gentleman as I referred to before, refused to allow him to do so, saying, “ That goes to pay your interest bill “. When I heard about that I told the manager that, if the cheque was not handed over within 24 hours, the roads board’s account would be taken from the bank and the public would be told why. According to honorable gentlemen opposite the private bankers are the servants of the people and the little men. Their actions during the depression and the report of the Royal Commission on Monetary and Banking Systems, however, prove that in a crisis their first obligation is to the shareholders. They are the first to take to the life boats and they have no regard for the rest of the community.


– To-day is the 5th November, significantly the anniversary of the plot of Guy Fawkes and others to blow up the British Houses of Parliament. It is more than a coincidence that on this day we should be debating a scheme of nationalization that is a part of the plan, not only to destroy the Australian Parliament, but also to infringe the rights of the people generally and to take away their freedom. The Minister for Works and Housing (Mr. Lemmon) has just apologized for the Government’s intention to deprive the people of their freedom. It was interesting to hear the honorable gentleman’s tirade against the private trading banks. It contrasted strangely with what he wrote in a publi cation entitled AboutHousing, which bears the imprint -

Commonwealth of Australia.

Issued under the authority of the Hon.

Nelson Lemmon, M.P., Minister for Works and Housing, April, 1947.

I direct the attention of honorable members to the foreword written by the Minister -

About Housing first appeared during the terms of office of my predecessor, the Honorable H. P. Lazzarini, M.P. So constant was the demand for it that a reprint quickly became necessary. I have, therefore, arranged for the issue of this second edition, which not only brings up to date the information contained in the first edition, but embodies as well several additional chapters rendered desirable by the passage of time.

The information in these pages will,I believe, be of considerable value to all authorities interested in housing and its associated problems.

Nelson Lemmon,

Minister for Works and Housing.

Canberra, April, 1947.

I admit that the information contained therein is valuable to Opposition members, because I propose to read what the honorable gentleman had to say about trading banks in April, 1947 -

Generally speaking, any person who has a suitable proposition may be accepted as a customer of a trading bank, and may borrow to finance the erection or purchase of a home. Such a person would normally operate a cheque account.

Advances. - The size of the loan depends on three main factors: -

  1. Amount required by the borrower;
  2. his capacity to repay; and
  3. the value of the property itself and/ or other assets of the borrower or a third party available as backing for the loan, e.g., a guarantee of a third party acceptable to the banker as a surety.

Rate of Interest and Repayment Particulars. - The present trading bank rate of interest is 4½ per cent. per annum. Although interest is debited half-yearly, it is calculated on the daily balance of the customer’s account. Because of this, every amount deposited in the account - whether in permanent reduction of the loan or not - means an immediate lowering of the interest cost. This method of charging interest on the fluctuating balance results in the effective rate of interest being generally more favorable than a flat rate calculated on a fixed basis.

The amount of deposit required generally ranges from 30 per cent. to 40 per cent. of the bank’s valuation of the land and buildings, although a smaller deposit or no deposit at all may be arranged in some circumstances, e.g., where additional security is available. Types of additional security include assignments of life policies and lodgment of war savings certificates, treasury bonds, debentures, shares and title deeds to other property. When such securities have been lodged by a borrower, they remain his property andmay be released when the loan has been reduced to a figure which the bank considers safely secured by the title deeds to the borrower’s house. Another type of security acceptable to banks is a guarantee by a person regarded as safe for the amount of his guarantee liability.

By means of a satisfactory “ security,” arrangement, advances are frequently made by banks up to the full cost of the house and land being acquired. This flexible deposit arrangement is not generally acceptable to other types of lending institutions.

The personal element is regarded by the banker as important in deciding how much he will lend. A person known to be trustworthy is likely to be able to borrow a higher percentage against his securities if need be. Dearer houses can therefore be financed than by any other means.

A great diversity of repayment arrangements is possible, depending mainly on the borrower’s circumstances. Generally, home purchasers desire to reduce their loans steadily, and in the normal case bankers like to see a reducing trend. Where a debt is safely secured, however, banks do not insist on a “hard and fast” reduction plan. For example, a business man may wish to borrow part or the whole cost of a home from a bank and then maintain the advance at the original level, thus leaving his own funds free for business purposes. As a general principle, borrowers for house-building are encouraged to reduce their debts, and eventually free their homes from encumbrance so that they are in a position to permit of further investment. Where misfortune such as illness or temporary unemployment overtakes the borrower, sympathetic consideration is extended to assist in rehabilitating his affairs.

Although a bank overdraft technically is repayable on demand, this right is exercised only in those rare cases of failure on the part of the borrower to co-operate with his banker, and then only after all other means of obtaining reductions in the loan have been explored. A borrower who conducts his account satisfactorily need have no fears of his loan being called up.

That is in striking contrast to the remarks of the Minister to-day -

Rather, a good deal of latitude is given in cases of genuine difficulties.

Incidental expenses involved in acquiring a home are kept at the minimum by trading bank methods, e.g., as a general rule, no valuation or mortgage fees are charged. Bank managers are usually expert in valuing and experienced in real estate and building finance. Their advice is freely available to all persons seeking guidance.

In addition to home purchasers, trading banks finance builders erecting houses for sale, as well as those interested in subdividing new areas of land for housing. Finance is also made available to co-operative and other building societies for re-lending to individual home-builders.

That is the kind of speech for which the Minister condemned the Leader of the Opposition (Mr. Menzies). After hearing the Leader of the Opposition speak on this measure, one could almost believe that he, not the Minister for Works and Housing, had written the article which I have quoted. I envy the capacity of the Minister for changing his mind so completely and rapidly in the course of a few months.

Mr Lemmon:

– That article was written by the banks themselves.


– The Minister issued it to the people of Australia with his compliments as a book of advice. Now he has the sheer audacity to try to “ sneak out from under “. He complained a few minutes ago about honorable members “ squealing “, but he will not even stand up in defence of a publication which bears his own name. Compare the statements made in that booklet with the speech which the Minister made to-day. There is infinitely more truth in the booklet than there was in the speech. The honorable gentleman said that, according to his experience, trading banks are the first to contract their activities when the economic situation becomes difficult. He did not say so in that booklet which he issued to the people of Australia. He has also complained to-day that thebanks are conducted for profit. I am sick and tired of hearing complaints about the “ profit motive”. What is theobject of the big trade unions if not to secure profits for their members in the form of better conditions of work, shorter working hours and higher wages? After all, is it not the hope of reward that sweetens labour? How many men would be working to-day if they did not derive some profit from their efforts? The Government and its supporters did not deny the right of profit to its friends who were defeated at the last elections. They see no harm in those gentlemen accepting big monetary grants for work that would be better done by other men who had no chance to secure the appointments.

The Minister has said that democracy has been tried. If this bill is passed, democracy will be found guilty and the Government’s day will be over. This measure represents the first step towards the elevation of that supreme economic council which will, in effect, take the place of this Parliament. Several Ministers have been associated with that supreme economic council, and they are proud of the fact. We are told that the banks are to be’ nationalized in the interests of democracy and that the people’s money will be safeguarded. In effect, this Government has the colossal audacity to say to the people, “We can spend your earnings much better than you can. Entrust them to us and we will provide you with the necessaries of life. You will have food, shelter and clothing as well as sickness, unemployment, medical and hospital benefits, and when you die we will pay a funeral benefit. Do not worry about anything”. In the eyes of the Government, thrift, industry, energy and enterprise are qualities to be discouraged. I believe that future generations of Australians will suffer untold harm as the result of the forced passage of this bill through the Parliament. The Minister for Works and Housing declared that members of the Opposition “ squealed “ when income tax was raised while men were offering their bodies as barriers to the enemy. Must I remind the honorable gentleman that more than half of the members on this side of the House did offer their bodies in defence of the nation and that many of them to-day bear wounds which they will carry to their graves because they thought that freedom was something well worth fighting for? His cheap gibe was without justification.

The Minister also boasted that the Government had reduced its overseas financial obligations by an amount of £70,000,000. Must I remind him that the trading banks of Australia did a great deal to help the Government to meet its obligations and fill the loans which were floated during the war? Almost every member of the Opposition helped in the raising of those loans and the Government also had the full co-operation of officials of the trading hanks. But for that cooperation, Commonwealth war loans would never have been so successful as they were. The Minister also boasted that Australia has achieved a greater measure of financial stability than any other country. I shall not question that. But I tell the honorable gentleman that this happy state of affairs has been brought about as the result of the work that has been done by the trading banks in co-operation with the Commonwealth Bank. He may laugh off that statement if he can. The Minister admitted that the enactment of this measure would cause the loss of individual freedom, and he made an abject apology on behalf of the Government for taking away the liberty for which men and women had fought and died. The apology will give no satisfaction to people who still value freedom. The honorable gentleman made some uncomplimentary remarks about the Australian Country party. It has been rumoured that on one occasion the honorable gentleman offered his services as a Country party candidate for parliamentary honours. I do not know whether that rumour is true or not. I merely mention it in passing and, if it is incorrect, I shall have nothing more to say about it. If it is correct, it ought to make the honorable gentleman more kindly disposed to the men who bear the banner of the Australian Country party to-day.

Before this bill was submitted to the Parliament, we had reason to expect that the Prime Minister would advance adequate reasons as to the necessity for nationalizing the banks. However, we were profoundly disappointed. No satisfactory reasons for introducing a measure of such far-reaching consequences were given to us. The right honorable gentleman was able to offer only feeble, puerile excuses. The honorable member for Fremantle (Mr. Beazley) has said that the bill will put into operation a plank of the Labour party’s platform. This is the party’s plan of action -

  1. The operation of the Commonwealth Bank to he removed from, and made entirely independent of private banking interests, and free from sectional interests and restraints.
  2. The abolition of the Commonwealth Bank Board, and the re-establishment of the original method of control as set up at the lime the Commonwealth Bank was founded.
  3. Expansion of the bank’s business as a trading bank, with branches in ail suitable centres, in vigorous competition with the private hanking establishments. ff that is the only mandate that the Government has for introducing a bill of this character, then it is standing on peculiarly unsafe ground. All of those objects were dealt with in the Banking Act of 1945. If that is the only mandate which exists, there can be no wonder at the uproar which the bill has provoked among the people of Australia. But the Labour party’s plan goes much deeper than this bill indicates.

We know that every member of the Australian Labour party has signed a pledge to do all things in his power to bring about the socialization of industry, production, distribution, and exchange. Industry involves all the factories. Productions covers all the farms. Distribution involves all the business houses - the grocer, the butcher a.nd the baker. Exchange relates to the. banks. Why is the Government tackling the last first? The simple reason is that it knows that the power which controls the purse strings of the nation also controls the people.

Mr Blain:

– Lenin said that !


– That is true. The bill has not been inspired by the average citizen, who votes for the Labour party. It is the product of CommunistLabour.socialist propaganda. That cannot be denied. The nationalization of banking is a. leading plank of the Communist party’s platform. The. Government would have us believe that it is the undying enemy of the Communists; but, in fact, it is working hand in glove with them to secure this power which will fasten upon the Australian people shackles that they will never be able to shake off. Honorable members opposite have declared that a considerable percentage of the correspondence which we have received protesting against this bill has been inspired by the private banks. For the purpose of disproving that, I shall read some of the letters which I have received on the subject, and give the names and addresses of the writers. One is from Mr. W. T. Howlett, of 116 Highstreet, Ararat, Victoria -

As a labourer I wish to strongly protest against the Labour Government proposal to nationalize the private banks. My wife also has the same views. I served in the 1914-13 war for 27 months, being wounded and gassed and also served in Australia for 51 months during the second World War, my four sons also serving in the second World War. Two of my sons are still serving in Japan for liberty and freedom, which the present Government is fast taking away from us.

Another letter is from Mr. W. J. Run ting, of Berrybank, Victoria -

Having heard over the wireless an attack by a member of the Government on the English, Scottish and Australian Bank for having remembered for 50 years and eventually repaying losses of their customers. I would like to bring to your notice the acts of the branch and branch manager of the same bank ii.t Cressy, Victoria, following the terrible fires of the 14th January, 1944, which caused such havoc through a large area of th* western district of Victoria.

The branch manager had started his annual holidays a few days before the fire, but, as soon as he heard of it, he and his wife returned to help, to the best of their ability, both inside and outside the bank, the bank’s customers and non-customers - their many acts of friendship will never be forgotten by those of us who suffered.

Many had been dependent on the sale of sheep and/or crops to meet expenses incurred ».nd for the following year, the loss of these assets, in some cases uninsured, brought added worries, and, on his own initiative, the branch manager advised them to carry on and that the bank would back them up; this statement was later confirmed from the head office.

This branch then credited to the accounts of their customers who had been burned out a sum equal to 40 per cent, of the interest paid by them to the bank in the previous twelve months, following this by a reduction by 40 per cent, of interest chargeable by the bank for the next twelve months - this was a gift to some customers of several hundred pounds. Trusting that you will bring these acts to the notice of the House.

Will any honorable member opposite venture to assert that letters of this character were inspired by the private banks? Obviously, they were written by persons who had received assistance from them at a time when they required it most urgently. For people to say that this volume of letters, telegrams and petitions, which has poured in to every member of this House, was inspired by the private banks, is too silly for words. If those institutions should take action to protect their interests, how can they be blamed for doing so? It is a poor dog that will not fight for its own bone. But, after all, in the words of the Minister, in the book which he issued to the people of Australia, we have evidence that three months ago he was of exactly the same opinion as members of the Opposition. I envy his ability to turn a complete somersault so rapidly in such a short time.

The Prime Minister explained that one of the reasons for the introduction of this bill was the decision of the High Court, which declared invalid that section of the Banking Act of 1945 that compelled local governing bodies to transfer their accounts from the private banks to the Commonwealth Bank. In passing, I point out that local government, in Victoria at any rate, has a proud record of great achievement, of which any government in Australia could be proud. They have performed their functions efficiently and economically, with an absence of red tape. The attempt to compel them to transfer their accounts, at the behest of the Prime Minister, from the private banks to the Commonwealth Bank is a poor sample of the Government’s gratitude. Is it any wonder that they resented this cavalier treatment? Every municipality in my electorate, with one exception, wrote protesting against this direction. The sole exception stated that it was in favour of the direction; but when the Prime Minister announced that he proposed to introduce legislation to nationalize the private banks, this municipality was one of the first to write to me, stating that it strongly protested against this intention. I ask: Has the farmer sufficient confidence in the way in which this Government has carried on, to desire that it should further interfere in his business?

Mr Fuller:

– Yes.


– I invite the honorable member for Hume (Mr. Fuller) to visit the wheat-growers in his electorate, and remind them that the Labour Government was responsible for the AustraliaNew Zealand wheat agreement, which provides for the sale of Australian wheat to New Zealand for five years at 5s. 9d. a bushel. When the contract was signed, world parity was approximately 14s. a bushel.


– Order! I ask the honorable member to relate his remarks to the bill.


– With due respect, Mr. Deputy Speaker, I contend that primary production is inextricably linked with this bill. According to the Prime Minister, one of the purposes of this bill is to assist primary producers.


– Order !

Mr Holt:

– The Minister for Works and Housing (Mr. Lemmon) has just developed that theme.


– That is true. I have a note of it. He commented on the orderly marketing, for which this Government had been responsible. If we require the best example of disorderly marketing we have only to cite the Australia-New Zealand wheat agreement. Under the terms of that contract, the taxpayers of Australia will be mulct in the sum of approximately £2,000,000 a year for the next five years. That is an example of “ benevolent Government interference “ for the purpose of assisting primary producers. That story may be accepted in some quarters, but I notice that the honorable member for Hume is now silent. I ask: Does the Government intend that this bill shall be the means of effecting economies? Surely not! We have the assurance of the Prime Minister that, .under this legislation, every employee of the private banks will be employed in a similar or better capacity in the re-organized Commonwealth Bank. Of course, the Minister for Post-war Reconstruction (Mr. Dedman) gave an assurance, before he had consulted with the Prime Minister, that the nationalization of banking would enable the services of 5,000 employees of the private banks to be dispensed with. After that, the Postmaster-General (Senator Cameron) rose to the occasion and announced that those 5,000 employees could be absorbed in the Postal Department. That would be a wonderful career for an official who had set out, as a young man, with thu idea of following the banking profession and who is now told, after the lapse of ten, fifteen or twenty years, (hat he can have the job of delivering letters. Even among Ministers, there is no unanimity. At any rate, I accept the word of the Prime Minister on this occasion-, and if it means that every employee of the private banks will he employed in the Commonwealth Bank, the result will be that the nationalization of banking will not produce any saving to the community. The expense will be as great as ever. Does any honorable member believe that we shall get added efficiency as the result of the passage of this bill? Does our experience during the last eight or ten years inspire us to believe that we shall receive better treatment and greater efficiency from a concern conducted by the Government than from private enterprise? For example, I remind honorable members of what has happened in the Postal Department - a huge nationalized concern. Because of the infrequency of rail services, country residents are asked to provide and pay for the means of transporting their mail to the city. Do honorable members think that any private contractor could “ get away “ with such a thing? Another example of the inefficiency of the Government is supplied by the position in regard to telephone connexions. Thousands upon thousands of people have made application for telephone connexions and extensions to the Postal Department, which receives millions of pounds in revenue. Many of those applications come from people living in the backblocks who are without any means of rapid communication. The department’s invariable reply to those people is that they must construct their own telephone lines. I know of a man with a young family who had six years’ war service, during which lie was twice decorated, who lives in a remote part. He believed that he was entitled to the amenity of a telephone connexion, and he made application to the Postal Department. The department informed him that if he himself constructed a telephone line from his home to the nearest town which was over eight miles away, and completed the work by July, they would install a telephone. He fulfilled his part of the contract, but no telephone has yet been installed. When it is installed he will have to pay the full rental and call charges. Is that a sample of the fair and impartial treatment which we can expect from the monopoly bank to be created by the Government? This Government believes that it can manage the business of the individual far better than he can, a contention which is too silly for words. If the people accept the Government’s proposal then the time is not far distant when Australians, instead of being a proud, independent race, will have become spineless jellyfish, dependent upon the bounty of the Government for everything. They will be going cap-in-hand to the Government, presenting forms begging per-mission to do this or that. During the war years restrictions had to be imposed on people’s freedom; but does any one believe that people are prepared to tolerate that sort of thing in the piping times of peace? The Government is so drunk with power that it craves for more and more power. During the war years it tasted the exhilaration of almost uncontrolled power conferred upon it by the National Security Regulations; now it seeks to perpetuate those regulations in another guise. Recently a bill was introduced which provided that the Government should continue to exercise all the powers, immunities and authorities conferred upon it by those regulations. I believe that the time is* ripe for an awakening of the people of Australia. The experience of the people of the United Kingdom during the last few years, when they have had conferred upon them the “ boon “ of nationalization, but little else, must cause sensible Australians to realize what will happen here. The opportunity of the British people to purchase the things which they need has gone. Those things which were produced in abundance under the “ bad old system “ of private enterprise are unprocurable to-day.

This country has made extraordinary progress in the last 100 years. That progress was accomplished under the system of private enterprise. If honorable members were to travel the electorate which I represent they would find in the Ottway and other forests evidence of the accomplishments of men who confronted that rugged country when there was no road of any kind, when the timber was so thick that it was impossible to see for more than two yards, and they could see for themselves the progress which has been made. Those pioneers penetrated into that wilderness, developed it and established a heritage for their children and their children’s children. Does any one mean to tell me that the pioneers who accomplished so much would have done better if they had been working under government direction; if there had been a body of professors and planners to tell them what to do and how to do it. A vast amount of hard work still remains to be done in this young country, and the sooner we all realize that the better. With the present high taxes and the system of regimented control by the Government, is it any wonder that the people have lost the will to work?- People say, “It is not worthwhile doing anything because any profit we make we must hand over to the Government in taxes “. As I said, this Government wielded extraordinary powers under the National Security Regulations, and it is reluctant to relinquish those powers; in fact, to-day it demands more power. Members of the Government say, “If we had control of all the money there is nothing that we could not do “. A few supermen propose to arrogate unto themselves control of the destinies of Australia. Democracy is to be superseded by a supreme economic council, a body which is to be above Parliament, above democracy and above the people. Who are the people who are to be appointed to this august body? Experience of this Government teaches us that to qualify for a first-class job a candidate must be either a defeated Labour politician or a militant union organizer. If he is not he is out of the running. We have only to recall the contention which followed the recent appointment of Brigadier Blackburn, V.C., to the position of conciliation commissioner. The honorable member for the .district in which Mr. Blackburn resides was called upon by the local committee of the Australian Labour party to justify the Government’s action in appointing Brigadier Blackburn. The committee contended that because bis political opinions differed from those of the Government the position should not have been offered to him but to a Labour supporter. Are all positions of importance to be given, not to those best fitted to fill them, but to those who support a political party at election time?

The passage of this bill will be a very bad thing for the country, because it will show only too clearly that the will of the people and their right to control their own destinies has disappeared overnight. The undeniable right of the people to control their own affairs is to be arrogated by those who control the purse strings of the country. Even Mandrake, with al] the ability in the world, could not carry out successfully the functions which members of the Government propose to take unto themselves. One has only to look at Ministers and ask oneself whether he would be prepared to appoint any one of them to the management of an ordinary concern. I suggest that a second look at any one of them would convince one that they are utterly hopeless. Yet those are the people who are saying now, “ Give us the people’s money, and leave the control of affairs to us “. The people’s money has disappeared from their pockets and has found its way into the coffers of the Government, where it is to be used for political purposes, including the socialization of our economy.

I remind honorable members of some of the things which, have been accomplished in Australia and which have made this country the envy of the world. I refer particularly to the evolution of the merino sheep breeding industry. To-day the merino wool produced in this country is superior to any other in the world. That achievement has been made possible by the industry and the initiative of the old flock masters. They certainly did not think of going to governments for assistance ; they preferred to rely on their own enterprise and diligence. The result of their efforts is that they have built something which benefited, not only themselves, but has also conferred enormous wealth on the whole community. Australia to-day is riding on the sheep’s back as never before, but unfortunately most people do not realize it. Does any one believe that governmental interference is going to result in the further improvement and development of our flocks and herds? If we deprive the primary producers of their right to exercise their initiative and their independence, do honorable members imagine that there will be an advancement in the next twenty years comparable to that of the last twenty years? Of course not. Primary production will stagnate, and before long we shall have to take drastic action to restore the right of men to work and prosper. We shall be compelled to do that, not only in the interests of the individual, but also in the interests of the whole community.

We are proud of what our forefathers have accomplished in this country. When they pioneered it they built even better than they knew. They were the fathers of those who comprised the first Australian Imperial Force, the men whose names will live in history, and they were the grandfathers of the second Australian Imperial Force, the gallant men of the Royal Australian Navy, and the Royal Australian Air Force, who carried on so magnificently the traditions of the first Australian Imperial Force Are the liberty and the freedom secured for us by the sacrifice and sufferings of generations of Australians to disappear overnight because of the act of a government which does not understand the enormity of the inquity which it seeks to perpetrate ?


.- I am honoured to be a member of this Parliament when a measure of such importance as a bil] to nationalize banking is being considered. The people who have been waiting for its introduction have every reason to believe that the interests of the nation have been safeguarded. Their experience during the regime of the Curtin and Chifley Labour governments ensures that their interests will be preserved, and I am confident that they will show their trust in the Government by again returning it at the next elections.

I was astonished at some of the remarks of the honorable member for Corangamite (Mr. McDonald). The honorable member is usually cool, calm and collected, but this afternoon, he worked himself into a fury. However, he made a serious slip when he said that the Opposition parties had co-operated with the Government in the raising of war loans. I remind him that the leaders of the two Opposition parties pulled out on one occasion and would not assist the Government to raise money for war purposes.

Mr Fadden:

– Only because we were disgusted with the Government’s financial policy.


– The Opposition leaders should have stood behind the men who were doing a good job. The honorable member for Corangamite also said that the telegrams which were being sent to honorable members were not inspired by bankers. I have in my hand a letter from a banker - not an officer of the Commonwealth Bank, but of an associated bank, in which he says -

It is known that a bank manager, of a country branch of the Bank of New South Wales has been filling in telegrams of protest, and getting school children to sign same, and then forwarding the telegrams at the bank’s expense.

The honorable member also said that those who control the banks control the people. What an admission! His statement is tantamount to saying that the private banks are the real government in this country. He went on to say thai the banks were fighting this legislation. I can understand that, because it is a poor dog that will not fight for its own bone.

I well remember the period when I was a bank officer. I gave honorable service to the private banking institution with which I was connected. In the last six months of my service with that bank, as the accountant of a senior branch, £2,596,000 passed through that institution. On one occasion when I was a bank teller, £88,000 passed through my hands in two hours. At that period of my life I was a married man, with one child. For my services I was paid the magnificent sum of £3 17s. a week out of which I had to support a home and maintain a personal appearance in keeping with the social standing of a bank officer, and also contribute to the Bank Officers’ Fidelity Fund. The bank granted to me a teller’s risk allowance of £10 per annum, which represented 16s. 8d. a month, or 4s. 2d. a week. Later the bank brought in a compulsory scheme of life insurance, the reason being that in many cases the families of bank officers who died were financially embarrassed. On every occasion that an officer received an increase of £10 per annum, he had to take out a further £50 insurance policy. Honorable members will readily understand that the £10 per annum increase meant very little personal advantage to him.

In speaking to this measure, I do not blame the associated banks for their past actions. I lay the whole onus and responsibility for not bringing about this reform in banking methods at the feet of previous governments. As this is the first occasion on which the Labour party has really been in power in this Parliament, it has taken the opportunity to introduce a measure to implement its policy in respect of banking. I listened with interest to the second reading speech of the Prime Minister (Mr. Chifley) when explaining this important legislation, and I am sure that the high degree of satisfaction that I felt on that occasion was experienced also by my colleagues on the government benches. One did not need to be a keen student of psychology to observe the expressions of dismay on the faces of some members of the Opposition during the delivery of that speech. No doubt they were overwhelmed by the evidence of care and patience in the drafting of the bill which was so evident. They realized that the immediate reaction of the people would be favorable to the Government. I hold that belief, and it has been greatly fortified by the numerous letters of appreciation of the bill that I have received from all sections of the community. When the Prime Minister first announced that this legislation would be introduced I naturally thought of the effect it would have on the community, and particularly on my old colleagues, the bank officials. Knowing the reputation of the Prime Minister for integrity and fair play, I had no doubt that proper provision would be made to protect all persons associated with the private banks. The secondreading speech of the Prime Minister fully explained the provisions of the bill in that connexion and showed that they were adequate. My next thought was for the customers of the banks, and whether the passing of this legislation would cause them any embarrassment. A study of the measure soon convinced me that there would be no need for them to be embarrassed. They will make their approach to the same managers, accountants and tellers as in the past; they will conduct their banking business in the same build- ing and they will be able to do so in the full knowledge that the officers with whom they transact their business will have a complete understanding of their needs, and their disabilities, and will maintain the human touch. From my close association with bank officials I know that the employees of the associated banks have always been desirous of becoming members of the staff of the Commonwealth Bank. The reason is that the salaries paid to Commonwealth Bank officials are higher, and their conditions of employment generally, including annual leave, are more favorable. I am confident that when this legislation has been placed on the statute-book these officers will give just as loyal and efficient service to the Commonwealth Bank as they have given in past years to private employers. And so I say to any persons who may entertain doubts as to whether their business will be as efficiently and harmoniously transacted as hitherto, that their fears can be dispelled.

I have been amused at the opinions expressed by persons who, not knowing what the bill would contain, yet went about addressing meetings in opposition to the Government’s proposals. They were loud in their condemnation of the bill, and most indignant that such legislation should be introduced. I well remember a former Minister of Agriculture in South Australia, Mr. Blesing, approaching me and saying that he and the present Minister for Agriculture in that State, Sir George Jenkins, were to address a meeting at a certain centre in South Australia, at which they would tell the people that certain organizations, which, had been conducting banking business for pastoralists, graziers and others, would not be permitted to carry on their business. It must be most annoying to them to know that their predictions were so far astray, and that stock-owners and others will still be allowed to do their business with these institutions.

I feel it incumbent on me to refer to some of the propaganda that has been forwarded to me. I believe that every elector has the right to approach his representative in the Parliament, so long as he does so in a courteous and gentlemanly way. I agree also that members of the Parliament should be courteous in their dealings with their constituents. I have received numerous telegrams couched in such terms as the following: “ The Labour Government is ruled by Communists. You are in that boat”, or “ Members of caucus are not true Australians “, or “ Caucus is not for Australia. You are not either “. From one centre in my electorate I have received a large number of telegrams couched in similarly offensive terms. The bank officials in Adelaide, knowing that I resented that type of telegram, took action, and thereafter the telegrams which reached me were expressed differently. Some of them read - “ Our federal representative expected oppose bank nationalization “ or, “ My Federal Parliament representative expected oppose bank nationalization “, and so on. I do not like to get down to personalities, and E have never in my public life used the “ two p’s “. If I differ politically from a man I never differ personally. No honorable member opposite can ever accuse me of saying anything disrespectful of him. In the district from which these telegrams have come there is a gentleman whom I remember well before World War I. He used to get around on Saturdays mounted on a magnificent steed, and immaculately dressed in a military uniform. His name was H. J. Cadd, and on the outbreak of war, in went his commission, and in went his saddle. That is the chocolate soldier who is now sending me these contemptable telegrams. He is to-day a paid agitator, but during the last war he asked me to get a man out of the Army so that he could work on his property. I got him out, while Mr. Cadd was travelling about South Australia condemning every action of the Commonwealth Government. I have nothing to hide concerning my own record. During the first World War, I was not a malingerer. I am not the fortunate wearer of a returned soldier’s “badge, but only six weeks after the war broke out I offered my services. I have here two papers rejecting my services. I have kept them ever since. Recently, I received a miserable, contemptible letter from a Doctor A. R. Magarey, who referred to me as a naturalized German. I make no secret of the fact that my name is not Russell. My name is Degenhardt, and I changed ray name because the bank by which I was employed compelled me to change it. However, if some person with such a name as Schmidt, Heinsich, Geblich or Heuzenroeder had come into the bank and wished to place £5,000 on fixed deposit the bank would have been quite prepared to do business with him. If he had had securities to the value of £15,000, and wanted an advance of £5,000, the bank would still have done business with him, but to one of its own officers it said, in effect, “You must change your dirty, filthy name “. That is what the bank by which I was employed did to me. I return to the doctor, that cultured, refined gentleman, who wrote to me. I- lost a brother in the first World War, fighting with a gentleman for whom I have the greatest respect. I refer to the present honorable member for Barker (Mr. Archie Cameron), who was in the 27th Battalion, of which my brother was a member when he was killed. This cultured gentleman, this doctor, had the audacity to write to me referring to me as a naturalized German - to me, who lost a brother fighting for him, at a time when he was still in napkins - which, as a matter of fact, he should still be wearing. I have many friends among the medical fraternity, but I would not like this doctor to flatter himself that he is one of my friends. I do not like referring to such matters, but I cannot allow to pass without comment the action of persons who send through the post letters of the kind which I have mentioned. Honorable members on the back bench opposite may laugh, but this is not a laughing matter, and the Parliament is not a humorous institution.

As a matter of fact, I consider that, es a politician, I have a unique record. I have never attended any political meeting outside the Australian Labour party, and the Liberal Country League. The latter is the name of the combined parties which oppose the Labour party in the South Australian Parliament. I have never attended a meeting of the Lang party, the Parliamentary Labour party, the Common Cause party, the Communist party, or any other party which has considered itself a subsidiary vein of the great Australian Labour party. I recognize only one major political opponent, and that is the Liberal Country League party - hence my reasons for attending meetings under its auspices in order to gain first-hand knowledge in connexion with the opposition to my own party.

I have listened to discussions as to whether it was permissible for officers of the associated banks to marry before they were receiving a certain salary remuneration. In the bank in which I was employed no officer was allowed to marry until he had a salary of £200 a year. The result was that many officers never married at all, because they never reached the £200 mark. Honorable members opposite have stated that when this proposed legislation comes into operation there will be no banking competition. I should be astounded to learn that there ever was any competition among the associated banks. No officer was ever allowed to approach the customer of another bank with a suggestion that he should transfer his account. Such action was described as touting, and was contrary to etiquette. The only time I ever heard of any competition between the banks was when they wished to unload a financially weak customer. Then they were always very anxious to find some private person who wished to take over a first mortgage. Generally, a pretty hard individual was chosen, and on the first opportunity that person would foreclose, and take over the property which was the security for the loan, thus making his own first entry into the sphere of high finance. As a matter of fact, there seemed to be some kind of code by which one bank had a pretty good idea of the financial standing of the customers of other banks.

I now quote the following evidence of Mr. P.F. G. Gordon, general manager of the Commercial Bank of Australasia Limited, given before the Royal Commission on Monetary and Banking Systems : -

The Chairman:

– Take a case such as this: A man comes to you with first-class security which will amply secure the advance he asks for; would you, merely because you knew some other bank had been charging more than that, refuse business that you were in the habit of doing with other clients?

  1. F. G. Gordon. - In the first place, he is the customer of another bank. I presume that is the question you are referring to, Mr. Chairman ?
The Chairman:

– He happens to be dealing with another bank, and in the ordinary course he is a customer. Do you think that your understanding would carry you so far as that?

  1. F. Gordon. - My strict interpretation of it is that I would not quote him a lower rate.
The Chairman:

– Although the rate which the other bank is charging appeared to you. to be utterly extravagant and unfair?

  1. F. G. Gordon-Yes.

This is the evidence of Mr. O. L. Isaachsen, assistant general manager of the Bank of Adelaide -

The Chairman:

– It has been put to us that the amalgamation of banks with separate territories and different classes of business has enabled banks to spread their risks and thereby employ their resources to greater advantage.

O.L. Isaachsen. - There is the opposite view, that it enables banks also to transfer their risks. In other words, if there is a bad time in one State, it enables them to place their money to advantage in a State which is prosperous. A bank dealing in a State which is having a bad time is not going to put its money into that State, but into a State where the bank is going to have a better chance of success.

The Chairman:

– You say there is a danger that the people in a State needing assistance are going to be left without it?

  1. L. Isaachsen. - That is for other people to say.
The Chairman:

– That is a matter for us to infer?

O.L. Isaachsen. - What you infer is your own business.

Evidence of L. J. McConnan, chief manager, the National Bank of Australasia Limited. -

There is a general understanding among the associated banks that we shall not compete with one another on questions of rate. The charges for other services, such as the keeping of account, internal and external exchange, &c, are also fixed by agreement between us.

Evidence of W. A. Leitch, general manager of Union Bank of Australia Limited. - In that case, if you pay regard to the Union Bank, you will find that we have not gone out into the highways and byways, out into the wilderness, to such places 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.

About two months ago I was approached by a person who had received notice from his banker to liquidate his overdraft. In the same mail, he received a form, which his banker asked him to sign and forward to me as a. protest against this legislation. Prior to interviewing me, that man went to a neighbouring town to see if he could get accommodation from another bank, but he was astounded to learn how much the other bank knew about bis position. I might add that that man is now banking with the Commonwealth Bank, where he received the accommodation that he required. Like other honorable members, [ have received petitions protesting against this legislation. These petitions have been .addressed to either myself, or the Prime Minister. When addressed to the latter the petitions have been forwarded to the Prime Minister; and the reason why I have not presented any petitions in this House is because none that 1 have received has been addressed in the proper manner, namely, to Mr. Speaker.

Honorable members opposite are attempting to create the impression that they are the only honorable members in this House who have succeeded in the world of finance or in a business sphere. I have not the slightest doubt that some honorable members on this side of the chamber have been just as successful as honorable members opposite in the commercial sphere, and that their knowledge of finance and commerce generally is equally as reliable. Much has been said in the press to the effect that when customers make withdrawals from the Commonwealth Bank they are asked by officers of the bank what they intend to do with the money. I know that Commonwealth Bank officers are instructed not to make such inquiries. However, when persons making withdrawals are aged, or the amount is very large, they are informed by the teller that if they wish they can have a bank cheque in order to avoid the risk of carrying a large sum of money about with them. But the practice with the associated banks is quite ;he contrary, because in private banks the teller and accountant are instructed to make diplomatic inquiries as to what the customer intends to do with the money, and in each bank a report is furnished weekly in respect of all amounts in excess of a certain sum on the basis of such inquiries. Those inquiries are made diplomatically. For instance, the bank teller may say, “ Do you intend to put this money into shares-, or to use it to buy stock or property ? “ If the bank officer succeeds in extracting any informa tion from the customer he furnishes that information in a report to his manager each week.

As soon as adverse seasons and prices are experienced, governments are called upon to make assistance available to primary producers. From this fact one can only conclude that the banks have refused to make further advances. Thus, governments are called upon to provide finance in order to preserve the banks’ equity in the farmers’ properties. The most telling evidence that can be advanced against the banks’ claim that they operate in the interests of the community is the value of assistance which governments have been obliged to provide to primary producers in times of stress. The banks cannot have it both ways. They cannot be permitted to take advantage of good times to make profits out of the farmers for their shareholders, and then let governments “ carry the baby “ in times of stress. In this respect it is illuminating to review the assistance that has been provided by the Australian and State governments in various forms during the past 25 years. The amount involved proves conclusively that many farmers would not be on their properties to-day but for the fact that they received assistance from governments. During that period, loans made available to the States for distribution as drought relief and debt adjustment, and in respect of loss caused by bush fires and floods totalled £13,679,997. The Australian Government arranged with the Commonwealth Bank to make available between September, 1939, and September, 1945, a total sum of £408,386,000 in respect of commodities acquired, or purchased, by the Commonwealth. In addition, an amount of £377,052,000 was handled by the Commonwealth Bank under special arrangements made in respect of wool, and £9,S93,000 in respect of sheep skins, making a grand total of assistance rendered to primary producers by the Australian Government of £795,331,000. Amounts written off and concessions to primary producers made by the Government of New South Wales amounted to £3,60S,467, whilst concessions granted by the same Government from May, 1941, to June, 1947, under State lands legislation totalled £3,225,282, and concessions in respect of closer settlement amounted to £2,171,850. In respect of reductions on re-appraisements, other concessions amounted to £945,293. Assistance rendered to primary producers in New South Wales by way of advances and grants from government funds amounted to £35,280,859. Advances to primary producers through the Rural Bank in New South Wales amounted to £35,000,000.

During the last 25 years the Government of Victoria has advanced to primary producers by way of assistance £16,927,938, whilst amounts written off advances to producers from 1941 to 1947 amounted to £140,931. In Queensland, moneys paid by the government to primary producers by way of assistance from 1921 to 1947 amounted to £356,239, and assistance to producers made available by the Australian Government through the Queensland Government during the same period amounted to £550,098. In South Australia, payments of non- repayable grants made by the government to primary producers from 1931 to 1947 amounted to £5,402,101, whilst amounts written off accounts of producers as at the 30th June last amounted to £1,494,977. In Western Australia, assistance made available by the State Government to primary producers during the last 25 years amounted to £15,000,000. In Tasmania, advances to orchardists totalled £641,511. The amount written off by the Tasmanian Government in respect of such advances was £34,195 15s. 5d. The total amount made available by the Australian Government and the State governments for the assistance of primary producers was £S7,288,646. Where would many of the primary producers be to-day but for that assistance? The banks had practically closed down on them, and in many instances when they got the assistance a large portion of it was immediately grabbed by the banks in payment of overdue interest. Yet honorable members opposite still argue that the private banks are the friends of the farmers. Before I leave this gloomy picture, I propose to read a statement which appeared in the Adelaide News of the 11th February, 1947, attributed to Mr. Walter Higgs, former Conservative member for

Birmingham West, in the British Parliament. Speaking at Wellington, New Zealand, Mr. Higgs said -

We want eleven people after ten jobs, eleven firms seeking ten orders - its the only economic way. … An empty belly is one thing which will make Britons work. They will get empty bellies quicker than any one else.

That is the statement of a former tory conservative member of the British Parliament. The people, fortunately, clumped him and he is now globe-trotting and living on the best. What a tribute to the people of Great Britain who suffered so much during the last eight years! Empty bellies to make them work! What a cruel statement! No wonder the people of Great Britain saw fit to return a Labour government to office.

This impels me to touch on the economic and financial depression in Australia in the late ‘twenties. God forbid that such evil days should occur again. The ration scale in South Australia then worked out to an approximate allowance of 2$d. a meal for each adult and 1-J’d. a meal for each child. In South Australia, the adult scale was 4s. lOd. a week for groceries. That amount included the cost of matches, candles, and kerosene for the purpose of lighting, and also soap. And at that time no allowance was made for wood. I could draw a picture of the sufferings of the people in those days, but the whole subject is so sad that one desires to forget it, at the same time resolving never to let such things occur again. This banking legislation is of paramount importance in the prevention of a return to those frightful conditions.

I am sure that many honorable members opposite can see much good in this legislation, and I am appreciative of the delicate position in which they are placed, because of the policy of the party to which they belong. As a former bank officer, I well remember the treatment meted out to primary producers in certain parts of South Australia. I remember interest being charged at rates as high as 8 per cent. That crushing burden made it impossible for those unfortunate farmers “to carry on their operations. That condition of affairs will not be experienced under this legislation, as there will be a flat rate of interest, and the farmer in the not-so-sure areas will, as is right, be charged the same rate as the farmer and grazier in the assured districts.

Since I have been a member of this House, I have taken up the matter of the iniquitous rate of exchange charged to residents on Eyre Peninsula, and I asked that the rate of 2s. 6d. for each £100 should be reduced to that paid by residents in the more central portions of the State, namely, ls. for each £100. I am the only member, Labour or Liberal, State or Commonwealth, who for some reason or other, has ever introduced this matter. And what a howl of opposition I met. The exchange rate is based on the time taken to effect a clearance. There may have been some justification for this charge 50 years ago, but to-day, with our quick means of transport, our daily aeroplane service, our fast steamer service from Port Adelaide to Port Lincoln and other ports on Eyre Peninsula, and the fact that mails are delivered from place to place by speedy motor transport, this is a most iniquitous charge to impose on settlers who have gone to the backblocks and have opened up and developed the country, sacrificing all the amenities and pleasures of city life. I found it was impossible to break down the barrier until such time as I had convinced the authorities that it would be wise to open a branch of the Commonwealth Bank at Port Lincoln. As soon as the associated banks heard of this move they immediately reduced the rate of exchange to the lower level, which was tantamount to saying, “We shall bring this measure into force prior to the Commonwealth Bank opening here, because, if we do so after the branch of the Commonwealth Bank has been opened the people will then say that we introduced this innovation only because the Commonwealth Bank opened a branch here “. I! trust that the day is not far distant when all cheques made payable to various government departments in the country, such as those in respect of income tax, land tax, water rates, and all government registrations, will be free of exchange. I shall not be satisfied until a flat rate of exchange is applicable throughout the Commonwealth. I say this because, as the result of the quick means of transport now provided by air, rail, motor and steamer, cheques can now be cleared from any centre within 48 hours.

In their propaganda against this bill, the trading banks and honorable members opposite have pleaded for the shareholders of the associated banks who will be affected by these proposals. There are approximately 100,000 shareholders in the private banks; if they were all resident in Australia they would represent only about 1^ per cent, of our population. Surely it would be more truly democratic if the whole of the people were shareholders in a purely national institution, than that the banking system should be owned by only 1£ per cent, of the population. Honorable members opposite do not say how much of the subscribed capital of the private banks was provided by persons resident outside Australia. It is evident that the large financiers in England hold considerable values in shares, and are reaping the benefit of the efforts of the Australian community, without any individual endeavour on their own account. Well do I remember when the officers of the banks’ awoke to the necessity for forming themselves into an association. What cry was then raised by the representatives of the banks? It was that the banks would not be able to pay the wages of their staffs. However, the courts decreed otherwise, and to-day the officers of the banks are receiving a living wage. The position was entirely different when I was a bank officer, and I make bold to say that if the bank officers submitted a claim for an increase of their wages to-day they would not meet with any opposition from their superiors, because of the fear of what the repercussions might be. I also draw attention to the huge profits being made by the associated banks today. They are on an ever-increasing up-grade. Honorable members opposite talk about a monopoly, but they do not say anything about the monopoly that has been built up over the last 30 years by the merging of the banks; nor did they show any outstanding sentimental thought or practical assistance for bank officers who were being displaced from their employment by the mergers, which occurred over a period of years.

Australia, a great and glorious country, a country of unlimited possibilities and prospects, has, under its present banking system, drifted badly. A mere handful of people occupy only a portion of this country near its shores. The population should be spread out, making the best use of our land, which the pioneers worked and struggled to develop; but the soil is drifting towards the eastern fringe of this continent. The land is drifting, and the people have been drifting - they drift from the farms to the over-congested cities. Statistics tell the grim story of centralization - nearly 5,000,000 of Australia’s 7,500,000 people are crowded into a few big cities, and we have a steadily declining birth-rate. Around these coastal regions, so pitifully vulnerable to attack, stand the buildings of our great industries, our munition works, our factories of all kinds, our petrol supplies, our sources of electricity - all the pulses of the national body. One aircraft carrier could destroy the whole lot. Therefore, for the benefit of Australia, this drift of people from the country must be stopped - and the first and necessary step is the development of a national bank. Plans must be made for irrigation, exploration, decentralization of industry, and the full use of the continent’s national resources. These plans are being brought into effect by the Australian Government, but the whole world has tightened up, as distances have shrunk, in point of time, under the new mastery of the air. Australia is no longer isolated. But what of to-morrow ? Our fate stares us in the face unless we can check the drift to the cities, turn back to the development of our land, and breed a virile population, Tasmania, the smallest State of the Commonwealth, has shown us, by its area schools, what can be done in training children to be happy, healthy, and prosperous farm workers. Such schools do not train only the children. They also train the people of the districts surrounding the schools. They engender the pioneer spirit, and, aided by modern scientific methods, tackle the problems which the pioneers of old faced bare-handed. In order to achieve that degree of development and progress we must have a Commonwealth Bank with an entirely national outlook.

I do not propose to detain the House by citing facts which are well known to all honorable members. In the limited time at my disposal, I desire to state why I support the placing of full power in the hands of the principal parliament of Australia in order that the financial policy may accord with the needs of the people. Banks wield a tremendous influence through their power to create and cancel credit - that they do create credit is no longer denied by individuals having any knowledge of the subject. Mr. Reginald McKenna, ex-Chancellor of the Exchequer and chairman of the Midland Bank, says on page 76 of his book Post-war Banking -

The amount of money in existence varies only with the action of the banks in increasing or decreasing the profits. We know how this is effected. Every bank loan, and every bank purchase of securities creates a deposit, and every payment of bank loan, and every sale destroys one.

When addressing the shareholders of the Midland Bank in 1924, Mr. McKenna said -

I am afraid the ordinary citizen will not like to be told that banks can and do create and destroy money.

In the course of the same address, he further said -

And they who control the credit of a nation, direct the policy of governments and hold in the hollow of their hands the destiny of a people.

If this be true - and the authority of Mr. McKenna to say so is undisputed - banks hold and wield a power which should never be in private hands. From Mr. Winston Churchill we have a telling description of this power. In his book Aftermath hesays, on page 32 -

On the morning of the 1 1th NovemberI assembled the Munitions Council and directed their attention to the immediate demobilization of British industry.

Referring to the Munitions Council, he stated, on page 33 -

There was little in the production sphere they could not at this time actually do. A requisition, for instance, for 500,000 houses could not have seemed more difficult to comply with than those we already had in the process of execution for 100,000 aeroplanes, or 20,000 guns - or the medium artillery of the American Army, or 2,000.000 tons of projectiles - but a new set of conditions began to rule from 11 o’clock onwards - the money cost which had never been considered by us to be a factor capable of limiting the supply of armies asserted a claim to priority from the moment the fighting stopped.

One object of the present banking proposals is to prevent this priority from operating in Australia. Apart from the existing war-time regulations controlling the policy of the banks, this Parliament does not control the finances of the nation. It should do so - and will do so. Money is not wealth. It is purchasing power - a title to the produced wealth of the nation. The nation does not exist merely to ship its wealth and fertility out of the country. Our job is to build up the home market to the limit, and to exchange our surplus for the surplus of other people. No bank to-day could meet more than a fraction of its deposit Liabilities. Banks are the only institutions that are permitted to maintain this position. I do not desire to be misunderstood. There is nothing wrong in this so far as the assets of the banks are concerned; but the fact remains that every bank would, to-day, have to close its doors if the people made a united demand for their deposits in cash. The enormous superstructure of book assets and liabili-ties has, generally, a relation of ten to one to the liquid assets of any trading bank. Geoffrey Crowther, editor of the London Economist, in his book An Outline of Money, says that the power of the banks is “ an enorm ous one “. It is a power that should never be in private hands. An equally important point is that it has never worked satisfactorily. “When the supply of money is dependent upon the liquid assets of the banking system, even on terms of ten to one, there can never be sufficient money to distribute the requirements of the people in consumer goods. Industry languishes because it is not producing its potential output. Another limiting factor is the price received for our exports. It has been stated that in one year the value of wheat and wool dropped by £75,000,000, and this fact has been cited by the banks as a reason for the stagnation of the depression period. I support the bill.

Mr. Hadley

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


– In supporting this measure, I should like to point out first that during the 1946 election campaign I explained, and advocated the implementation of, the planks of the platform of the Labour party. Therefore, I can truly say that the people of the electorate of Bourke at least were prepared at that time for the introduction of legislation such as this.

I support the bill for a number of reasons. First, the exclusive possession by a small group of persons of the trade in money is not in the best interests of the people. Instead, there should be democratic control exercised by the people, through their properly elected government. The nation’s money should be in the hands of the people. There is sufficient evidence to show that modern banking or trade in money is a monopoly. For many years, the nationalization of monopolies has been part of the platform of the Labour party. Much suffering has been caused through the unequal distribution of the world’s wealth. The real power in the modern industrial state rests in the hands of a few captains of finance and industry. A few rich old people have power to send millions of young men and women to death on the battlefields, or sometimes to worse than death - sufferings in depressed industries. The power over peace and war, employment and unemployment, should not be in the hands of a few individuals to be exercised in their own interests. Only yesterday, in the Melbourne Argus there was an article stating that World War II. cost the world 15,000,000 dead and missing. Some years ago, a prominent British statesman, Mr. Lloyd George, said -

We may be moving towards an era of world sanity in which international commerce will be less subject to the interests and juggling tricks of bankers and high financiers.

I support this measure because it could prove - I hope it will prove - to be one step on the way towards that era of world sanity. The last two wars have revealed the enormous wealth of modern society and have shown that poverty is an unnecessary and preventable evil. The real cause of the manifest unrest among the workers in connexion with social matters, declared another British statesman, a moderate Labour leader, J. H. Thomas, in 1918, was the recognition by the working class of the cause of their misery and degradation. He further stated : -

While they used to be content when told that any reform costing a few millions a year would moan bankruptcy to the State. the most ignorant people now understand that if the State could spend £8,000,000 a day on the destruction of humanity it could at least find some millions for the reconstruction of humanity.

This is more likely when the money is in the hands of the people.

Those are some of the reasons for my support of this bill. I, among other honorable members, have received letters of protest and petitions in respect of this measure. The points of protest that were put to me in letters were such as this: “ The Government has no mandate and therefore should hold a referendum”. The Government definitely has a mandate to bring forward this legislation. The plank of the Labour party’s platform, of which I shall soon make more, in favour of this legislation has been before the people for many years. General elections were held after the passage of the Banking Act 1945, and I am satisfied that the people well knew that such legislation as was necessary along the line of sane banking and control of currency and credit in the hands of the people might follow at any time. The votes given to the Government then are a sufficient mandate for the introduction of this legislation. Another point made was that nationalization of banking was not put forward during the campaign. As I have previously said, I brought it forward in my electorate, and I can only speak for myself. In answer to the letters that came to me on that point, I was able to say that I had mentioned the subject and told the people that I was in favour of it. Another point brought forward amongst the points of protest was that this bill meant interference with the liberty of the individual. A great deal has been made of the matter of the freedom of choice of all the people. Where has been the freedom of choice of all the people? Economic insecurity has been a factor in deciding the choice of the mass of the people. They could not choose their own employment. They were forced into whatever avenue appeared satisfactory from the point of view of wages. Fm long years the people have had no freedom of choice under capitalism. Another point was that there would be interference with the lives of people in their private business. There is not likely to be any change under this legislation as far as that is concerned. As far as I know, and I believe it to be true, the trading banks, or any banks, at any time may, for business reasons, or as the result of legal action, disclose the state of their depositors’ bank accounts. There is a provision by which the state of depositors’ accounts can be arrived at by certain persons conducting inquiries. Another point made was that the private banks had developed this country and that without them there would have been no progress. In reply to that, I say that the great wealth of this country has been produced by the hard work of the people. The petitions that reached me I sent to the Prime Minister. They were not couched in language that enabled them to be presented to this House. The first 200 letters I received I answered personally, and, after the presentation of the bill in this House, I called a meeting in my electorate last Monday week and addressed the people on the banking legislation. I shall read one of the many letters I received, but I shall not reveal the name of the writer, because I have been asked by him to refrain from doing so for personal reasons, which will become apparent to honorable members as I read the letter. If Mr. Speaker desires, I shall disclose to him confidentially the name of the writer. The letter reads as follows: -

A circular letter protesting against the nationalization of banks has been signed by me after interview with my employer and will be forwarded to Mr. Menzies. This letter is to inform you that my views are the complete opposite of those stated on the circular and that I support the measure. I have signed the above for fear of prejudicing my promotion and security of employment. It is probable that many others are placed in my position and it is hoped thai Mr. Chifley realizes this fact.

I have read this so that the views of the writer shall be appreciated by honorable members.

I have said that in my opinion the trade in money to-day is a monopoly. I have tried not to find support of that idea from writers in the Labour cause. I have looked for support from persons who would normally be regarded as friends, shall I say, of the Opposition. At any rate, they are in the same class of thought. Referring to the City of London financiers, David Lloyd George wrote -

These men establish a veto upon every proposal which is made for national development. We got rid of the veto of the House of Lords. Take care that you do not establish a more sordid one. If you go to the city of London, what is their only remedy for depression? Their only remedy is by placing artificial barriers to prevent plenty from reaching want.

In a press interview, the same man said -

The City is a stronghold of reaction. All the time when I was Chancellor of the Exchequer up to 1914, I had to fight the City. . . Talk about public control. It was that that saved the City in 1914. No government will ever get a big programme through unless it is prepared to face un to the reactionary money interests in the City of London.

Mr. Gladstone expressed similar views.

He said -

From the time I took office as Chancellor of the Exchequer, I began to learn that the State held in the face of the bank and the City an essentially false position as to finance.

There is a great deal more in the same strain. President Woodrow Wilson, of the United States of America, bad this to say in The New Freedom -

We have restricted credit, we have restricted opportunity, we have controlled development, mid we have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world - no longer a government by free opinion, no longer a government by conviction or the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.

Again I went to conservative sources to obtain support for those opinions. I read The Evolution of the Money Market, by Ellis T. Powell. This is his contribution -

In the wider arena of world finance it is the money power which sits in solemn judgment and metes out the weighty reprobation or approval that mean so much to-day, and are destined to mean infinitely more as international credit tightens its grip upon the world. A thousand years ago it was the fear of ecclesiastical censure which held the unruly elements in check. The Reformation, and the simultaneous modifications of the political and social fabric, made the civil power into the censor. To-day it is financial opinion which has to be considered and conciliated.

I do not believe that nationalization of banking is a panacea for all of the ills of this country, or of the world, should other countries follow” Australia’s lead. However, it is a wise step and a democratic one and should be given a fair trial. The people should have complete control of their own lives as far as the members of any society can control their own lives. The workers to-day understand something of social ethics. They are ho longer willing to be treated as a commodity, and I h’ope that they are hb longer willing to he drawn into war through the pulling of financial strings. We have heard the claim that personal freedom is being attacked through this measure, but I Call to mind the economic insecurity which spoiled the lives of many people in former years. The finance monopoly has grown powerful at the expense df the struggling people and, as the honorable member for Fremantle (Mr. Beazley) has reminded us, very often at the expense of children.

I emphasize again that there is ample evidence that modern banking, or trade in money, is a monopoly. Nationalization of monopolies is a part of the Labour party’s platform. Throughout the history of the Labour movement in Great Britain and Australia its policy has centred on the idea that the wealth of the world should be justly and properly distributed for the benefit of all people. The Labour party has accepted the principle that it is unethical for a small group of persons to monopolize food, clothing, cleanliness, or the means of production of these things. The planks of the Labour party’s platform were not decided upon hastily. There has been gradual development through the years, and I do not claim that the expression of the party’s ideals is perfect even yet. The records of that development are extremely interesting. Nationalization was dealt with in the early days of the party’s existence. A platform adopted by the Australian Labour Federation in Queensland in 1890 provided for the nationalization of all sources of wealth and all means of producing and distributing wealth. An examination of reports through the succeeding years shows that the principle of the bill now before this House was implicit in the decisions of. all Labour party conferences, both State and Commonwealth. Nationalization of many things, including land, was advocated in the early years of this century.

Various honorable members opposite have said that the 1921 Labour party congress was important* It was important. However, a great deal of weight has been wrongly attached to the shaping of the party’s platform in that year. Honorable members opposite have claimed that the platform was altered in that year to include the first reference to the nationalization of banking. The honorable member for Darwin (Dame Enid Lyons) claimed that in 1921 the first section of the platform was taken away and replaced with the present plank. She complained that the congress deleted the sentence referring to the “ cultivation of an Australian sentiment in the interests of racial purity and the development in Australia of an enlightened and self-reliant community”. That plank was not removed from the platform in 1921. It was put into the fighting platform and removed from the objectives of the party. The objectives were altered to provide for the nationalization of banking and all principal industries. Very little alteration was made to the platform at the 1924 conference. A further change was made in 1927, and in 1983 the objective of the platform was amended to its present form. This history shows that the party arrived at the expression of its opinions and objectives by a gradual process. There was no hasty decision in 1921 to fight for the nationalization of banking. That part of the party’s policy had been included in the platform prior to 1921. In fact, it was the second plank of the party’s fighting platform in 1919.

These facts disprove the assertions of honorable members opposite that the platform was altered in 1921 to embrace the nationalization of banking as the result of the formation of a Communist party in Australia in 1920. That plank was in existence before the Communist party was established in this country. It is important that the people of Australia should know this. Honorable members opposite have repeatedly declared that this socialist idea originated in the Communist party. That is wrong, and it is about time that such propaganda should be debunked. The general trend of socialist thought in the years immediately following the French Revolution followed parallel lines, between all of which there was no certain or proven contact. The socialist idea developed in various countries in different ways; and rather than the idea of the socializa- lion of banking having its origin in the Marxist philosophy, there is evidence in British writings that the idea had been conceived even before the conference which led to the publication of the Communist manifesto. For instance, James Bronterre O’Brien expressed views on this subject before Marx and Engels held their conference in London. The following passage, from the writings of O’Brien, appeared in the National Reformer and Manx Weekly Review of the 30th January, 1847: -

With the Charter, national ownership of land, currency and credit, people would soon discover what wonders of production, distribution and exchange might be achieved by associated labour.

There is no evidence to show that the idea of the nationalization of banking owes anything to Marx more than to any other socialist thought. The records are quite sufficient to show that people had this idea in Great Britain before the subject had been introduced from other countries.

Mr Burke:

– It was known in the reign of Queen Elizabeth.


– I believe that, it was indigenous, as it were, to British thought. The assumption that all these ideas originated with Marx is wrong. All these dates have been carefully checked, and honorable members will find that 1 have quoted them accurately. Sheer ignorance is responsible for much of the loose talk which we have heard lately on this subject.

I now desire to quote from a statement which the right honorable member for North Sydney (Mr. Hughes) made. I have shown, and I believe that it is easily proved, that modern banking and finance is a monopoly. The right honorable gentleman said, at the Sixth Commonwealth Conference of the Australian Labour party, which was held in Adelaide in May, 1915-

The idea was to nationalize monopolies . . . Once let it be shown that any monopoly prejudiced the interests of the people the power to nationalize must be exercised Labour men were-

And, I am sure, still are - against all monopolies, root and branch, from Alpha to Omega.

The money power should be in the hands of the people. Much has been said about banking in this country. Again, I have searched for my information from the pen of a banker. In an article on banking in the Australian Encyclopaedia, published in 1927, 1 found the following paragraphs written by James Turnbull, who was formerly manager of the Cootamundra, Rockhampton and Geelong branches of the Union Bank of Australia : -

A description of banking as practised in Australia to-day would have horrified an English banker of a century ago, but happily the heresy of one generation often becomes the orthodoxy of the next.

That might be remembered if honorable members opposite describe the nationalization of banking as a heresy. The quotation continues -

It cannot be claimed that any one of the leading traits which characterize contemporary banking practice in Australia is by itself peculiar to the country. It is rather in their combination and rapid adaptation that the distinguishing feature is to be found.

Under a sub-heading, “ Legislation “, he wrote -

Banking is within the scope of the powers delegated to the Commonwealth Parliament, but these have not yet been exercised with respect to the regulation of banking operations in general.

That was in 1927-

Australian banks have developed with the country, and have adapted themselves to the growing needs of its commerce and industry.

The next passage is most important -

Freedom has been the rule; where restrictions (either legal or institutional) have proved irksome, they have been avoided or circumvented - sometimes even defied.

The various financial crises are described in this article. As other honorable members have already covered that aspect, I shall do no more than state that James Turnbull dealt with the subject in great detail, and without unduly supporting the bankers or the banking institutions, told a story of the disasters that happened over the years. As any time is limited, I shall read only a brief passage from this section -

Over-speculation in sheep and cattle between IS25 and 1830 ended disastrously; again in 1842-4:1, after a land boom, the New South Wales banks, owing to the withdrawal by the Government of its deposits in order to meet special obligations, were forced to restrict credit to such an extent that the whole financial machinery of the country was upset. The Bank of Australia (Sydney, 1826) and the Royal Bank of Australia (London, 1840) not to be confused with the present Royal Bank of Australia Limited - were liquidated in 1848. The Bank of Queensland failed in 1800, and the Oriental Bank Corporation in 1884, and a few other banks were absorbed. These, however-, were mere financial ripples compared with the cataclysm that over-whelmed the banking world in 1893.

After describing that cataclysm, he wrote -

This money, shared by land companies, mortgage and investment companies, building societies, municipalities, &c., was for the most part squandered in unnecessary undertakings.

Finally, he pointed out that the restoration of stabilization was a long and painful process. I now propose to read an extract from a European source. The author is an Englishman, the Bight Honorable Thomas Johnston, a former Lord Privy Seal. I selected this paragraph, which was written after World War I., because it shows how Australia has been involved in overseas financial affairs -

When the war began the belligerent nations carried national debts amounting to £5,775,000,000. When the war ended these same belligerent nations carried national debts amounting to £40.000,000,000. In so far as the British national debt was concerned, the gentlemen of the City had a cheerful and half-witted formula with which they airily disposed of it; Germany would pay! In 1919 a Reparations Commission under the chairmanship of Mr. Hughes, the Prime Minister of Australia, advised Mr. Lloyd George that Germany could and should pay £24,000,000,000. Two years later this figure was cut by half. In 1922 the London Agreement reduced it to £0,000,000,000. In 1924 the bankers and financial pundits, led by General Dawes, reduced the figure still further. Then in 1929 the so-called Young Plan reduced it to £1,700,000,000, or onefourteenth of the original lunacy, and despite the fact that the victorious powers - or some of them - have lent the Germans all the wherewithal to pay what reparations they actually have paid, even the limited Young Plan payments are now suspended sine die.

That was written in the years between the two wars. It is evident that the international financiers pulled the strings during the period which culminated in the recent war, which inflicted untold suffering on millions of men, women and children throughout the world.

I support the bill. I do not propose further to cover the ground which has been so well covered by previous speakers. I believe that the Government’s proposal is in the interests of democratic government. The prophecies made by members of the Opposition that the powers of the nationalized bank will be deliberately misused are as erroneous and as absurd as anything to which one could listen. Moreover, those who contend that the people’s deposits and investments will be misused assume that those who act for the State will do so corruptly or foolishly, whereas they imply that those who at present act to line their own pockets do not so act. The absurdity of that contention is obvious, and I do not subscribe to it. The Government’s intention is a good one, and I believe that the real motive which actuated it in introducing the bill is to protect the people from a possible future disaster. I wholeheartedly support the Government in this proposal, and shall vote for the bill.

Sitting suspended from 5.67 to 8 p.m.


.- The issues raised by this bill seem to me to fall into two separate compartments, one raising deep and far-reaching issues in respect of the federal system under which we live in this country, the purpose of the Government being, I believe, to destroy that system, and the other equally deep and far-reaching, touching and affecting the economic and political life of Australia. Before dealing at some length with the second aspect, I want to say a few words about the first. It seems to me that the present Government is determined to destroy the federal system under which we live. It is determined to obtain and keep all the powers of all the legislatures in its hands, if it can. This, I believe, has been borne out, in the first place, by uniform taxation, and in the second place, by the provisions of this bill. Under uniform taxation during the war, it being then clearly a war measure, the purpose was to have only one taxing authority, and the result during the war was to exclude completely the States from the taxation field, making them economically dependent in taxation matters upon the Commonwealth. That destroyed very largely the sovereignty of the States during the war. When the war came to an end the Government, as the result of a decision of the High Court in respect of legislation providing for uniform taxation, found that it had power to continue uniform taxation in times of peace. And so, despite protests from the States, the Government has refused to budge. Its policy is to make the States continually dependent upon the Commonwealth for their revenues. This bill, by monopolizing the whole of the banking system, will prevent the States from having any resources from which they can finance their affairs, except at the will of the Commonwealth Government. And so, as the honorable member for Indi (Mr. McEwen) pointed out last evening, it must be observed that the whole trend of this Government’s legislative actions is to destroy the federal compact. I regard that as a most serious aspect of the Government’s policy, which is evident in these two measures. Let us take two outstanding examples to which I shall refer in passing, namely, the provisions in legislation affecting coal and aluminium, whereby under agreements with willing Labour governments the Commonwealth Government entered into fields for which the Constitution gave it no warrant, and which it was never intended the Commonwealth should enter.

The passing of this measure will, I believe, put an end to any real sovereignty of the States. They will not be able to act of their own free will in the field of finance whether in respect of borrowing or taxation but will have to come cap-in-hand to the Commonwealth Government for the money to carry on State activities. Consequently, the States structure will in reality be destroyed. It seems to me that it is being destroyed because that destruction is consistent with the policy of the Labour party to have the most complete power vested in a central government. During the last seven years, we have seen how the States have been dependent on the will of the Commonwealth Government. The effect of this legislation will be felt not only by the States, it will extend right down into the sphere of local government. In the future it will be found that no local governing authority will be permitted to do what it thinks fit in respect of its local affairs unless it gets permission from Canberra.

Having said thai - and I admit that it opens up a wide field - I propose, in the limited time at my disposal, to deal with the economic and political aspects of the bill. It cannot be too frequently stressed that this measure is the first giant stride in the creation of a super State, under which new masters will determine how each man shall conduct his life. Not content with the manner in which it introduced the bill, for which it had no warrant at all, and despite the opposition, I believe, of the majority of the people of Australia, the Government has added to. its offence - and for this I believe the Prime Minister (Mr. Chifley) must accept the main responsibility - by including in the bill provisions which can only be described as provisions giving sanction to legislative bribery and intimidation. For a long time we have seen this type of conduct revealed in different ways in the administrative acts performed by the Government, but for the first time we now see it in legislation. This raises a matter of prime principle, namely, whether any government, in a democracy at least, is entitled to entice people by bribery, as is done by the taxation provisions of this bill, or to intimidate them in different ways such as provided for in this measure if they do not enter into a voluntary agreement with the Commonwealth. Under clauses 22 and 24 the private banks will not get concessions in respect of taxes which otherwise they would receive unless they enter into a voluntary agreement with the Commonwealth. I regard that as a serious matter for which the Government must take the responsibility. During the time that he has been in office in this country the Prime Minister has revealed a psychological fixation in respect of private enterprise and all that it stands for. Under his rather pleasant demeanour he hides a determination to bring into this country a complete system of socialization. When we consider the terms of this bill it can not be disputed that that is what this bill intends.

Having said that, I turn to deal with an observation made by the Minister for Post-war Reconstruction (Mr. Dedman).

In an attempt to protect the Prime Minister, in respect of this charge of legislative bribery, the Minister for Postwar Reconstruction sought to explain away the provisions of clause 23. Either he was completely ignorant of the bill, or he was prepared to mislead the people of this country. I do not care on which side of the fence he comes down. What he did was to compare like with unlike. Referring to clause 23 the Minister said -

All that section 23- which is a section giving concessions of taxation - does is to place shareholders in a bank acquired by agreement in approximately the same position as shareholders in banks whose shares are acquired compulsorily. No reasonable person– he unctuously added - could take any objection to that.

When we examine the hill we find that there are two methods by which the Government may obtain control of the banking system; and both of them it proposes to use as circumstances dictate. The first is found in clause 13 which authorizes the Commonwealth Bank to acquire shares compulsorily, and the second is contained in clauses 22 and 24 under which the Commonwealth Bank can acquire the assets of the private banks either by agreement or compulsorily. The provision with regard to clause 13 has nothing whatever to do with clause 23, which contains these taxation enticements. In that, the Government says to the bank, “ Either you will come into the scheme voluntarily - and we hold a carrot in front of your nose in the form of certain taxation concessions - or, if you do not come in within the prescribed limit of two months, or such time as we may specify, we will take your assets over compulsorily, and you will not get any taxation concessions at all “. The Minister sought to explain this away in a manner that revealed either ignorance, or a desire to mislead the electors, by comparing clause 13 with clause 23, to which it hears no relation.

Mr Burke:

– That is a matter of opinion.


– It is purely a matter of statute, and there is no way of getting out of it. In this matter, the

Government is doing -what in certain cases it has already done in relation to the doctors and the national medical scheme. It has, in certain cases of which I have heard, said to doctors, “ If you come into the scheme now before we enforce it, we will give you compensation at a fair figure, but if you do not come in you will get no compensation at all “. This bill, which provides for the granting of taxation concessions purely as a form of bribery, again reveals the length to which responsible Ministers are prepared to go in order to mislead the people. What are the real issues? It is well that they should be stated. In order to clear the ground, let me state that they are not whether currency or credit should be controlled. Neither are they whether the trading banks should be controlled, or whether the policy of the trading banks in regard to advances should be controlled. None of these issues is disputed by any member of the Opposition.

If one reads the debate on the Banking Bill of 1945, it will become quite clear that those issues are not disputed. My own speech at that time can be read as evidence of the fact that those issues were not then disputed. However, the speeches of all government supporters pretend to make those things an issue, and then to demolish the issue. The real issue is whether the people should be controlled. The proposals of the Government are, I believe, without justification. What cause has been shown to destroy the present banking system, and to substitute therefor a colossus in the form of a government monopoly, a monopoly, the dangers of which have been abundantly exposed by honorable members on this side of the House? These proposals, if given effect, will affect, not only the lives of persons who deal directly with the trading banks, but the lives and activities of every person in the community. This bill, in essence, represents an essential step towards complete socialization.

I do not wish to recapitulate the arguments used by other honorable members. It is sufficient to point to a statement made by the Prime Minister himself, in his second-reading speech on this bill. It is as follows: -

The Labour party has held that since private banks are conducted primarily for profit and therefore follow policies which in important respects run counter to the public interest, their business should be transferred to public ownership.

Those words have direct application to many industries apart from banking, particularly to those industries which, for a long time, the Labour party has said it proposes to nationalize. Those are the industries which the Victorian Minister, Mr. Kennelly, said would be nationalized when the direction was given by the Industrial Labour party to their henchmen in this Parliament. According to the Prime Minister, the banks must be nationalized because they are operating for profit, and therefore, he asserts, their policies run counter to the public interest. There is, of course, nothing new in that. There is a plank in the platform of the Labour party providing for the complete socialization of the instruments of production, distribution and exchange. Indeed, the first part of the Prime Minister’s speech on .this bill indicates clearly what is the ultimate purpose of the measure. It is only necessary to look at those provisions in the bill dealing with the establishment of a Federal Court of Claims in order to realize that this is not a bill designed merely to deal with alleged abuses of the banking system, but a bill designed to put in train the complete socialization programme of the Labour party. The bill provides that three judges are to be appointed to the Federal Court of Claims - especially appointed to a special court. They are to be appointed for life. They are to be given the high salaries applicable to judges of the Court of Conciliation and Arbitration, and provision is made to pay them pensions upon their retirement. It must be obvious that such a court is not to be created merely for dealing with claims for compensation arising out of this legislation. The key to the matter is to be found in sub-clause 2 of clause 33 of the bill, which provides -

  1. The Governor-General may, under any other Act, make regulations conferring jurisdiction on the Court to hear and determine claims for compensation arising under that other Act and any regulations so made shall have effect notwithstanding any provision of that other Act.

Labour supporters have advanced the view that the scheme for the nationalization of banking will be fully implemented within two years - indeed, before the next elections .are held - so that it becomes evident that this special court is intended to be a permanent court which will settle claims for compensation in connexion with other schemes for socialization which the Government proposes, if it remains in power, to introduce.

What urgency, if any, is there about this bill? No one in his senses can pretend that there is any urgency of such a degree as to render it necessary to bring the bill down now without first seeking the approval of the people. The powers to be conferred by the bill are not needed to meet a coming depression, nor to meet unsettled world conditions. The real explanation may perhaps be found in the Prime Minister’s speech wherein he sought to justify the urgent introduction of the bill. The right honorable gentleman said -

When challenged in the High Court, however, section 48 was held to be invalid on the grounds that so long as private banks existed States and State authorities could not bo denied the use of their facilities. The decision showed that full control of banking, as sought under the 1945 legislation, could not be secured without public ownership of banking.

I have taken the trouble to read and reread the judgment of the court in that case, and all I can say, speaking for myself, is that I cannot imagine any lawyer finding justification in the judgment of any of the justices to support any proposition of that kind; but that was the first proposition he advanced. He then said that, as section 48 was challenged successfully, he rather feared that the special accounts provisions, sections 18 to 22, would also be challenged successfully. The honorable member for Perth (Mr. Burke) said that the claim in the case which went to the High Court sought to have the whole act invalidated; and from that he sought to obtain some comfort. As the Leader of the Opposition pointed out, there was never any argument addressed to the High Court on that matter at all, nor is there any reference in the High Court’s judgment to it. There was no reference whatever in the High Court in favour of that proposition; so, if any inference is to be drawn from the fact that the claim challenged the whole act, that inference must be that there is nothing whatever in it.

Mr Burke:

– Does the honorable gentleman admit that it was mentioned in the pleadings?


– Yes.

Mr Menzies:

– I said so; I read the pleadings.


– So, it is said that these sections are likely to be challenged at some future time; and for that, the Prime Minister relied on certain letters written by the private banks to the Commonwealth Bank which would have been written in any event in order to protect whatever rights the private banks had. But if the special accounts sections, which, by the way, are not to be repealed by this bill, are not provisions with respect to banking, who in his senses would imagine that this measure, which goes the “whole hog” is likely to be held to come within the Commonwealth’s power with respect to banking? But it does not rest there. My own view is that there was never any attempt to challenge any provision of the special accounts sections; but I want to deal with other provisions contained in the bill. The Prime Minister, in his speech, said -

In the absence of control, private banks can expand or contract the volume of their lending and so vary within wide limits the supply of money available to the public. They can also determine when and where they will lend and upon what terms; . .

It seems to me that Labour’s views are completely reactionary. They are all based upon what took place in the depression. They are all based upon ideas and concepts which were the ideas of socialists before central banking had developed, or when it was in its infancy. Their arguments, certainly, have no application to the conditions which appertain in this country, because the very argument which was advanced by the Prime Minister as one of his principal claims in support of this legislation will be found to be negatived in sections 27 and 28 of the Banking Act of 1945, to which little or no attention has yet been paid. 1 want to refer very briefly to those sections, because in them it will be found that the most complete power is given to the Commonwealth Bank to control advances and to control the whole lending policy of the trading banks. Sub-section 1 of section 27 of that act reads -

Where the Commonwealth Bank is satisfied that it is necessary or expedient to do so in the public interest, the Commonwealth Bank may determine the policy in relation to advances to be followed by banks and” each bank shall follow the policy so determined.

And -the Commonwealth Bank is empowered to give specific directions to the private banks as to the classes of purposes for which advances may be made. So, under that section and section 28, which control completely the investments which may be made by trading banks, the Government has the most ample control over the whole policy of the trading banks quite apart from the special accounts provisions. The only thing the Government could not do under the Banking Act of 1945 was that it could not control transactions of individuals who sought accommodation from the banks, or wished to make withdrawals from the banks. That is the crux of the matter. There is also the most complete power under the Banking Act of 1945 under provisions which have never been challenged, and which no honorable member opposite has said are ever likely to be challenged, to control interest rates and foreign exchange. Therefore, this bill is not required for any of the purposes upon which honorable members opposite have centred their attention in this debate, because the Government now has the most complete power over the volume of money, the purposes of advances, the rates of interest to be charged and, so, the profits of the banks. Therefore, this legislation must be obviously concerned with doing something else ; and an examination of it makes it patent to the people of this country that it is not concerned with re-enacting controls which the Government already possesses but with fastening upon the country a complete socialist scheme and control of the lives of the people.

Honorable members opposite have said that there was no competition among the trading banks. Of course, there was no competition with respect to interest rates or the purposes for which money could be lent, because those factors are already controlled by the Commonwealth Bank, but in respect of types of securities and the credit of borrowers there was competition. Indeed, there was at all times the Commonwealth trading bank to which recourse could be made by the people if they thought they had received a hard “ spin “ from- the private banks. That answers the mumbo-jumbo poured out by honorable members opposite about the harsh treatment which people received from the trading banks 50 years ago, and which, they say, is likely to be repeated if the private banks are not nationalized. The people are now able to go to the Commonwealth Bank; and under section 18 of the Commonwealth Bank Act an obligation is imposed upon the Commonwealth Bank to deal with them. If unrestricted competition has not existed, it is because the Commonwealth Bank already exercises complete control over banking policy ; but in respect of individual transactions, competition does exist between the trading banks as between themselves as well as between the Commonwealth Bank on the one hand and trading banks on the other.

Time does not permit me to deal with all the likely effects of the measure in all its categories, but I draw attention to the effect it will have upon the employees of the trading banks. The Government has said - and here again is a prime piece of misrepresentation - that this legislation gives the most ample safeguard to the employees of the banks to be taken over. Under the measure there is, in my opinion, no protection of any real value given to the employees of the trading banks. There are two categories of employees who will be affected. The first is those who are employed by trading banks the shares in which are compulsorily acquired under clause 13 of the bill. The second category is employees of trading banks whose assets are acquired either voluntarily, if that is the right term to use, or compulsorily, under clauses 22 and 24 of the bill. I shall deal first with the latter category because the issue will then become quite clear. When one looks to see what protection is given to those employees one has to look at other provisions of the bill, and this matter is dealt with in clause 49. That clause reads -

Each person employed in Australia by a private bank -

to which the Treasurer has given a notice under sub-section (1.) of section 22 -

That is the provision dealing with the compulsory acquisition of assets - of this Act; or

  1. b ) wich has made an agreement with the Commonwealth Bank under that section, shall, unless he elects otherwise not later than the date upon which the business in Australia of that private bank is to be taken over by the Commonwealth Bank, be employed by the Commonwealth Bank as from that date.

Then, after such a person becomes employed by the Commonwealth Bank, it is provided that until he is appointed to a position in the Commonwealth Bank Service under clause 50 of the bill his employment shall continue on the same terms and conditions. Clause 50 imposes an obligation upon the Commonwealth Bank to find for such an employee a position in the Commonwealth Bank Service. It is left entirely to the Commonwealth Bank to decide what appointment should be given to him. He could be appointed either to a temporary or a so-called permanent position at the will of the bank. Then we come to sub-clause 3 of clause 50, which reads -

After a person is appointed to a position in the Commonwealth Bank Service under subsection (1.) of this section, the provisions of Part XIII. of the Commonwealth Bank Act 1945 shall apply to and in relation to him.

May I quickly recapitulate what the bill provides ? The Commonwealth Bank takes over the assets of a trading bank under clause 22 or clause 24 of the bill. From that time onwards the employee of the trading bank is employed by the Commonwealth Bank, and there is an obligation on the Commonwealth Bank, as soon as practicable, to find him a position in the Commonwealth Bank Service, which is that body of people who are at present in the Commonwealth Bank Service as defined by the Commonwealth Bank Act 1945. When he is appointed to the Commonwealth Bank Service the provisions of Part XIII. of the Commonwealth Bank Act should apply. Let us now look at those provisions, in order to see what a scurvy trick is being played on these employees. The relevant provision of the Commonwealth Bank Act is section 169, which falls within Part XIII, which, by the clauses of this bill which I have just read, then becomes applicable to these trading bank employees. Section 169 of the Commonwealth Bank Act 1945 provides - (1.) If at any time the Bank finds thata greater number of officers is employed than is necessary for efficient working, any officer whom the Bank finds is in excess may be transferred to such other position of equal classification as the officer is competent to fill, and, if no such position is available, the officer may be transferred to a position of lower classification. (2.) If no position is available for the officer, the Bank may retire him from the Service of the Bank. (3.) An officer shall not be retired from the Service of the Bank under this section unless he has been given one month’s notice or is paid salary in lieu of notice.

This is the kind of thing the Labour Government seeks to perpetrate upon the employees whose interests it pretends to preserve. The Minister for Post-war Reconstruction (Mr. Dedman), who, when he opens his mouth always puts his foot in it, before this legislation was introduced, said that the 5,000 surplus employees of the private banks could be better occupied elsewhere. The PostmasterGeneral (Senator Cameron) then said that he could employ them in the Postal Department - presumably licking stamps and doing work of that description. When this bill was broughtbefore the House the Prime Minister (Mr. Chifley), in his second-reading speech, advanced the proposition that the most complete protection would be given to these employees. Listen to his words -

The bill makes provision for the protection of officers of private banks in respect of continuance of employment, salaries and conditions of service. The bill provides that when the Commonwealth Bank proceeds by way of acquisition of the shares of a private bank, the salary and general conditions of service of officers of the private bank will not be disturbed, and will be secured to them. Similarly, when the Commonwealth Bank takes over the assets of a private bank, including the assets of a bank whose shares have previously been acquired, each officer of the private bank who was employed in the service of that bank in Australia, will be entitled to be employed by the Commonwealth Bank at the salary and on the general conditions of service applicable to his existing employment.

The right honorable gentleman then said -

There are special provisions of the Commonwealth Bank Act which give them the right of appeal.

If one looks at the provisions of the Commonwealth Bank Act it will be found that the only sections giving a right of appeal are contained in Part XIII., Division 4, and are confined to the retirement of inefficient, incapable or incompetent officers. There is no right of appeal for those who are discharged because they are surplus to the staff requirements of the bank. The Government, which pretends to give protection to the employees, has been guilty of a pretty shabby trick.

The other category of employees comes under clause 13, by which the Commonwealth Bank is to acquire compulsorily the shares of certain trading banks listed in Part I. of the First Schedule. In respect of these there are special provisions, but we must observe what the Government proposes to do. It proposes first to acquire the majority of the shares of the private banks. It proposes then to retire all the existing directors. It then proposes to appoint its own directors in the place of the present directors and, by clause 19 of the bill, to give to its own directors upon these trading banks power, among other things, to dispose of the business in Australia of the Australian private banks to the Commonwealth Bank. The scheme is, of course, the same in essential features as was adopted in Russia in 1918. I have no opportunity at this stage to develop that aspect of the matter. Suffice it to say that the scheme is designed to enable the Commonwealth Bank to take charge of the private banks through the shareholding of the private banks and then to liquidate the banks and transfer the whole of their assets to the Commonwealth Bank. Let us see the provisions of the bill dealing with the employees of these trading ‘banks. In these circumstances, the trading banks will, until liquidation, continue as separate legal entities. Clause 48 provides -

Upon and after the date upon which the Australian shares in an Australian private hank become vested, in the Commonwealth under sub-section (3.) of section thirteen of this act, the persons employed upon that date by that Australian private bank shall continue to be so employed-

That is, by the Australian private bank - upon the terms and conditions applicable at that date or as subsequently varied by competent authority.

The question I ask the Government is: What is to happen to these employees when ultimately, as the scheme develops, these banks are liquidated and their assets are transferred to the Commonwealth Bank? I defy the Government to point out one provision in the bill which gives them any protection after that date. Yet this is a government which pretends that it stands for the workers of this country, when it is obvious that it stands only for the imposition of its ideological socialism upon the country, and which gives through the mouth of its Prime Minister the most complete assurances to the employees of these banks that, whether they be taken over one way or another, they will have the utmost protection of their rights and the most adequate safeguards of appeal in cases where they think they have been unfairly dealt with. In not drawing attention to the provisions of section 169 of the Commonwealth Bank Act in their second-reading speeches members of the Government have been guilty of a most disgraceful sham. Why did not some one point out to these employees how they are to be treated or what their legal position was to be? Knowing that the Minister for Post-war Reconstruction has said that the 5,000 surplus employees of the private banks could be more usefully employed elsewhere, having regard to what the Postmaster-General said as to how they could be employed, why did not members of the Government, in common decency and fairness, say to these employees, “ You will have no redress if you are dismissed because it is. found that there are more employees in the Commonwealth Bank after the transfer than are required for the efficient conduct of the business “ ?

Time does not permit me to develop other arguments I should have liked to place before the House. I must content myself with saying I regard this measure as a wicked bill, which has been put before the House without real necessity and without any warrant from the people. It is a hill which, on examination, is found to introduce, for the first time, statutory bribery and intimidation. The Labour party has debased democracy in this country. Instead of encouraging people to think of the State in terms of opportunity, it has taught them not to think of receiving rights of freedom, liberty and opportunity, but to regard the State merely as a meal ticket to provide for them in every possible emergency. And let me say this : Poverty cannot be abolished, abundance cannot be created, and evils cannot be completely eradicated from the community by any act of any parliament, r regard it as political fraud for any government to tell the people that by passing this measure we can provide all the things which human experience tells us can be achieved only by the sweat of man’s brow. What we need in this country is not so much a democracy debased as it is by pretending that the State can provide everything; but democracy that breathes life into people, that gives opportunity, and encourages the initiative and drive upon -which this country has been built.

I am no apologist for private enterprise, because it does not need an apology. This country was created on private enterprise. Its banking system, whatever its defects of old may have been, has been dealt with completely by the Banking Act of 1945. In fact, many of the controls contained in that legislation were imposed originally by honorable members on this side of the chamber when we occupied the treasury bench. The great difference between us, as revealed in the debate on the Banking Act 1945, is that whereas we do not believe in political control of the Commonwealth Bank, honorable members opposite do. We believe in control of currency, control of credit, control of general banking, and control of trading banking but we differ from honorable members opposite on basic principles in regard to the method by which these controls should be imposed. The Government believes that they should be imposed through political dictation to the Commonwealth Bank so that that institution may be turned to any political use that the Government may have in mind. We do. not. So, it seems to me that the people of this country would be wise if they took no notice of anything that the Government said, but examined everything in the bill to see to what degree the Government’s arguments have any bearing at all. My own view is that the Labour Government, bogged down in the morass of the depression of 1932 has never been able to extricate itself. It is negative in its approach to, and its conception of, its governmental duties, and until we have in this country a more positive approach to the problems which are threatening us, we cannot win to greater frontiers of abundance which can be achieved, but only within the framework of freedom.

Melbourne PortsMinister for Labour .and National Service · ALP

– The honorable member for Warringah (Mr. Spender) made only one utterance with which I can agree. He commenced his speech by saying that this bill contained fundamental reforms. That is quite true. It embraces reforms more fundamental and far-reaching than any proposed by this Parliament since the birth of federation. For that reason I believed that the measure would be discussed in this chamber on its merits, and with the object of letting the people know what it means, and why it is necessary. I had hoped, too, that the discussion would be free from personalities and party propaganda, and would be on the highest possible plane from both the logical and moral point of view. This measure, which is certain to be passed by the Parliament, will become more and more historical as the years pass, and those whose names will be registered on the division lists will be regarded by future generations with admiration or shame according to the manner in which they have cast their votes.

I believe that our first duty is to clear from this question of banking, credit or currency, the artificial mystery with which it has been surrounded in the last few centuries. We should endeavour to make the public understand just how the money system functions. An understanding of currency, credit, and the banking monopoly system is well within the grasp of the ordinary intellect. The idea that it is something that we should treat as sacrosanct and leave to experts has long been exploded. “We should tell the people just what it is all about. Money, in all its forms, is created to be used as a medium of exchange, to facilitate the business operations of the people both inside and outside a country. It is merely a standard of exchange with one function for internal or domestic affairs and the other for international activities.

Mr Blain:

Mr. Blain interjecting,


– Order ! I shall not again ask the honorable member for the Northern Territory to be quiet.


– We should also make it quite clear to the public that money in all its forms is created by law; “that law is made by parliaments, and that parliaments are made by the people. So, all forms of money can be accepted without doubt or scepticism by anybody in the community. No person, persons, or private interests can issue money in any shape or form unless it bears the imprint of law. That cannot be contraverted.

I shall now endeavour to show what an important part money plays in the affairs of the community, and how it affects every man, woman and child. Nothing else of which I can conceive plays such an important pant in the economic or social security of the people as control of the releasing or withholding of currency or credit. Some of the greatest writers in the world have called this control the bridge between production and consumption. That bridge, of course, has been controlled almost entirely during the last 300 or 400 years by the private banks, and has been allowed not only to fall into yearly disrepair, but in cycles of four or five years it has broken down altogether. The intelligent people of the world to-day - not negative people as the honorable member for Warringah said, but the most modern thinkers on finance and economics - have all agreed that some change in the control of this bridge should take place. This service is the blood-stream of our economic system and is just as important to our economy as it a man’s blood-stream to the human system, and control of it can no longer be left in the hands of private enterprise which, as is generally admitted, is anti-social. So, the only thing left to do is what this bill proposes, namely, to take over complete control of the releasing and withholding of credit and to make it a national possession, serving all the people, rather than a possession of private enterprise serving a few.

We have been chid with having stated or implied that the depression was created and developed in Australia and was confined to Australia, whereas, as every one ought to know, the depression was world-wide and was caused by the bad handling and distribution of credit, the economic blood that means the life or death of industries and the people who live on them. In 1932, a special session of the International Labour Conference was held at Geneva in an attempt to put the finger on the reason for the development, depth and continuance of the depression. In 1931, the International Labour Office sent out questionnaires to 46 countries asking them to state how many people were unemployed who used to be employed. Unemployables were to have been excluded from the returns. The questionnaire was sent only to countries with white populations that recorded statistics. The Asiatic countries were excluded because they kept no statistics. Those countries had six months in which to make the returns. When the conference concluded, I recorded in Hansard its finding from those returns in 1932 which showed that 30,000,000 Europeans, who had been on some pay-roll or other before the depression, were out of work. The conclusion of the conference was : “ We find that the cause of the continuance of the depression is that 30,000,000 people who had spending power have no income “. Taking the conservative basic wage of one dollar a day for each of. those 30,000,000 workless people, which would have to be multiplied five or six times now, the conference worked out that the real cause of the continuance of the depression was the continued absence from world trade of a purchasing power of 30,000,000 dollars a day that had formerly absorbed commodities. Such noted economists as Professor Cassel, of Sweden, Professor Soddy, of England, and Mr. Fisher, of the United States of America, and, later, Lord Keynes himself, confirmed the conference’s finding. They said that the cause of the continuance of the depression was the cutting off of the spending power of great numbers of people who were a considerable part of the market for the goods the world produced. The debate that took place at the conference was the most scientific I have experienced. It was clearly indicated that the only legitimate aim of production was the transfer of products from the producers to consumers and that the bridge over which those products ought to have passed from the producers to the consumers had broken down. Thus we had the paradox of plenty on one hand and poverty on the other. It was pointed out that if the beam tipped too far one way deflation resulted and the other way, inflation. The aim now is what is known all over the world as stabilization.

With the exception of the honorable member for Warringah, all honorable gentleman opposite who have spoken have described this measure as revolutionary. The honorable member for Warringah says that it is negative and that we want something progressive. He also said that the Labour party was not concerned with the interests of the people. Not concerned with the interests of the people ! Their interests are our main concern. We do not need to cite international unemployment figures to prove that this bill is the product of our concern for their interests. Between the two world wars there was not one winter in which an Australian capital city was devoid of marches of the unemployed asking for help. Not one winter passed without appeals to governments for relief for the unemployed. Winter after winter, the Australian Government was appealed to to distribute to the workers unused military uniforms and blankets held by the Department of Defence. How can the honorable member for Warringah say that we are not concerned about the people ? How can he want us to leave the position as it is? The honorable gentleman’s attitude is, “ Why do this now ? There is no need for it “. He implied that this legislation might be needed when a depression came. Yet three judges of the Arbitration Court, in pronouncing in favour of a 40-hour week for Australia, said that when work was plentiful and the economy of the country sound was the time to reduce hours of labour. The honorable gentleman must have been astonished. We say that this is the time to prepare against the burst that may end the boom. Booms and bursts go in cycles. It may not be necessary to do the things that we shall be able to do when this measure becomes law. We hope that we shall not have to do them. Nevertheless, we need to have ready for instant operation the machinery that will enable us to do those things. We can no longer afford to lurk in the coward’s castle. I agree with the sentiments of the honorable member for Reid (Mr. Lang), who said that he would vote for the bill - he almost implied that he would vote for it against his will - so that the Commonwealth Parliament should no longer be able to avoid responsibility on the plea of lack of power to undertake the responsibility. For too long federal politicians have been able to shrink from responsibility by saying, “We would do that if we had the power “. It is because of the refuge that that excuse offers that some politicians do not want to have the Commonwealth Constitution amended in order to enlarge the powers of the Australian Parliament.

Because we are determined that we shall never again be caught napping, as we were in the last depression, we have brought down this bill. It will provide the machinery for corrective action that we shall take should we again see the never-failing signs of an approaching depression that are signalled by falling prices. We do not want to be placed in the position of having to ask for power to cope with that situation when it has snowballed to a stature too great for any government. When the bridge between production and consumption falls into disrepair we have minor depressions- and then major depressions. We have had minor depressions every year and major depressions every five or six years under private banking control. “With the capitalist system becoming more and more complex, the periods between the depressions, minor and major, become progressively shorter as the years go by. So that we shall be able to ward off the depressions that blight our progress we say that the trading banks shall no longer be controlled by private enterprise. We say that, not because we hate the people who profit from their control, but because the system of private trading banks makes it inevitable that those in control of it will not risk their money in order to serve the people by ensuring that they shall -have work. The system is wrong. The manager of a branch of a bank (must make it pay. Otherwise he loses his job. At any rate, promotion depends on the profits that he makes for the people whom he represents. Under the system of private management, the banking system will never change, lt would not matter if any of us took charge, to-morrow, of the banks under the present conditions. Things would go on in exactly the same way as they are going on to-day. If I were appointed manager of a bank to-morrow, would I not try to be more efficient than the man whose place I took? Of course I would! I should want to make all the profits that [ could in order to prove my efficiency. This is not a matter of class hatred and class war. It is a matter of changing a system. All of us are in the grip of the iron law of competition, which makes it impossible for the private banks to serve the people, and, at the same time, make their own business enterprise profitable. We have to change this system, take over the private banks, and make banking a nationalized project, answerable to the Government, through the Treasury, and using the machinery of the Commonwealth Bank. That is what the Commonwealth Bank is for, and that is what, will be done.

Some honorable members opposite have been intensely critical of the Commonwealth Bank. I was sorry to hear their attacks upon it. I had always hoped that every honorable member would be prepared to raise his hat to this youn? bank that belongs to the people. I though 1 that everybody would be proud of it. Yet pome honorable members opposite have implied almost that the Commonwealth Bank is not safe, that its security is not so good as it ought to be. I shall let somebody else speak on its behalf, rather than rely entirely on my own words. I shall quote what the Chairman of the Commonwealth Bank Board, Sir Robert Gibson, said during the depression. There was a panic in Australia in those days, and there was fear that many banks would close their doors. It was necessary for Sir Robert Gibson to make a statement about the solidity of the Commonwealth Bank. I knew him well. For fifteen or sixteen years I sat with him in conference almost weekly, and I learned to regard him as one of the finest gentlemen in Australia. His political views were diametrically opposed to my own, but this divergence of opinions did not affect my high regard for him. On one occasion, we wanted a man to arbitrate in a major industrial dispute. Conciliation had failed, and the employers and employees at the conference table agreed that Sir Robert Gibson was the most suitable man to act as arbitrator. 1 repeat that I have nothing against him as a man. The Melbourne Age of the 4th May, 1931, reported a statement by Sir Robert Gibson about the Commonwealth Bank in the following terms : -

As the Commonwealth Bank had control of the note issue it could command resource* in the form of currency to a.ny extent which the bank deemed necessary. It was, therefore, in the strongest possible position. He had no hesitation in telling every one that he knew of no safer place in Australia to put money than in the Commonwealth Bank. However, there were a lot of people who had become timid because of what happened to the Savings Bank of New South Wales, and that was why he wanted to give them some reassurances. Some foolish or malicious persons had been spreading reports that the Commonwealth Bank was not the safe place he definitely told them it was. It had even been rumoured that the hank might close its doors. He now told the people that that was absolutely ridiculous, to say the best of it. Finally, Sir Robert Gibson said the Commonwealth Bank can meet any demand which is placed upon it by its customers. People, the Commonwealth Bank will never close its doors so long as the nation itself stands!

Surely such au assurance, from a man who had been appointed Chairman of the Commonwealth Bank Board by » Nationalist government, and who was a pillar of private enterprise, must be treated with respect by everybody. Sir

Robert Gibson considered that private enterprise should be absolutely sacrosanct, especially in the field of banking. He said repeatedly that the Commonwealth Bank must not enter into trade. However, he was not a small-minded Australian, like honorable members opposite, who would risk undermining the country’s bank by questioning its stability. The statement which I have quoted should satisfy everybody.

On this occasion, as on other occasions, the people who represent the private bankers are flocking to the defence of their masters, in fear that they might lose their profits. Forty years ago, the members of the Labour movement believed that it was necessary to have some serious competitor to curb the avariciousness of the private banks.

Mr McBride:

– Free from political control ?


-Order! The honorable member has frequently interrupted. If he does so again, I shall name him.


– As the result of its decision, the Labour party created the Commonwealth Bank. Everybody in Australia should be proud of what that bank did during World War I. At that time, the private banks were asked, individually and collectively, whether they could finance Australia’s participation in the war, but they said, “No”. Then this infant bank, the Commonwealth Bank, came to the rescue of the nation. It financed the Australian Government throughout the period of the war and backed every private bank in Australia so that the people would be satisfied to continue trading with the private banks.

The Commonwealth Bank is the only bank in the British Empire that has never had to close its doors. Even the Bank of England had to take a holiday in order to put its house in order and issue fiduciary notes. The Commonwealth Bank was the only one in the British Empire which refused to accept a moratorium. Even its London branch remained open, and it advertised far and wide during the war that every stranded Australian who could communicate with any of its branches could obtain from it such help as he needed to finance his return to Australia. We have every reason to be proud of the

Commonwealth Bank’s achievements. I come now to 1924. In that year, the Bruce-Page Government-

Mr Blain:

– What about 1921?


– I shall deal with that year later. In 1924, the Bruce-Page Government was anxious to prevent the slightest encroachment upon the profit reserves of the private banks. Therefore, it mutilated, shackled and imprisoned the Commonwealth Bank and prevented it from competing with the private banks. It turned away customers who asked for accommodation from the Commonwealth Bank so that they would return to the private banks. The history of that Government, unlike the history of the Commonwealth Bank, is one of which we cannot be proud. The people must be ashamed of its deeds. It has been said that the Bruce-Page Government did not interfere with the Commonwealth Bank. In order to show what that Government did, I shall quote statements made by the then Governor of the bank, Mr.- later Sir - Ernest Riddle, when speaking at a meeting of the Royal Empire Society in London on the 18th October, 1932. He had been invited to address the members of the society. Most of them were bankers who were interested to learn how the Commonwealth Bank of Australia was conducted.

Mr Holt:

– Were most of them bankers ?


– This was a special occasion. Mr. Riddle had been asked to speak upon the subject of the Commonwealth Bank and financial conditions in Australia, and we can be sure that many prominent bankers were in the audience. The following report of Mr. Riddle’s speech is published in United Empire, volume 23, 1932, at page 603:-

The control of the currency placed the bank in the position of being able to function along the lines of a central bank, and this phase of the bank has been systematically developed under the present management. While the bank still carries on general trading business this side of the business is not actively pushed. The banks have been advised that if their reserves are lodged with the Commonwealth Bank of Australia, those reserves will not be used in competition with them for ordinary business -

I agree that that was the proper thing to do and I agree also with what has been done now, in spite of what I consider to be a very false, and. knowingly false statement - because I know the honorable gentleman is not so foolish and ignorant of these things as he would: have to be in order to believe this - made by the honorable member for Indi (Mr. McEwen) this afternoon.

Mr McEwen:

– I rise to order.

Mr Barnard:

– The honorable member for Indi is not entitled to take a point of order now. He only wants to interrupt the Minister’s speech.


– Order! There is no unparliamentary language.

Mr McEwen:

– I refer to the Minister’s words, “ knowingly false “-


– I ask the honorable member for Indi to resume his seat, or I shall name him.

Mr McEwen:

– The Minister said that I had stated something which was knowingly false.


– Order ! I name the honorable member for Indi. He is only trying to interrupt the Minister’s speech.

Mr Spender:

– I rise to order.


– Order ! There is no point of order involved. I have named the honorable member for Indi.

Mr McEwen:

– You are just a gangster, that is all. The Minister said that I had knowingly made a false statement. He is not entitled to say that, and I am entitled to deny it.


– Order !


Mr. Deputy Speaker, may I make an appeal to the honorable member for Indi-


– No. The honorable member’s conduct since I named him does not warrant his receiving any consideration.


– Knowing that the honorable gentleman can, at the proper time and in the proper place, make a personal explanation, I know that he did not have any right to take the attitude that he did. Therefore, very much, against my will, I shall have to. move -

That the honorable member for Indi (Mr. McEwen) be suspended from the service of the House.

Mr McEwen:

– Do not apologize. This is common practice.

Question put. The House divided. (Mr. Deputy Speaker - Mr. J. J. Clark.)

AYES: 38

NOES: 21

Majority . . . . 17

In division:



Question so resolved in the affirmative.

The honorable member for Indi thereupon withdrew from the chamber.

The banks have been advised that if their reserves are lodged with the Commonwealth Bank of Australia, those reserves will not be used in competition with them for ordinary business

At that stage,I remarked that the Government is continuing to honour that promise, and it has not re-invested money which belongs to the trading banks. It was while I was making that statement that the honorable member for Indi, I am sorry to say, interjected. This after noon the honorable member made the statement that the Government had £300,000,000 in the Commonwealth Bank which belonged to the tr ading banks. He went on to say that the Commonwealth Bank paid only one-half of 1 per cent. interest on that money, which really only involved a transfer from the books of the trading banks to the books of the Commonwealth Bank. He maintained that the Commonwealth Bank, which paid only one-half of 1 per cent. to the trading banks on their money, re-invested that money and drew interest at the rate of 3½ and 4 per cent. I said that that was quite wrong, and that, because of my acquaintance with the honorable member for Indi, I knew that he could not be ignorant of the real position. Mr. Riddle said -

Those reserves will not be used in competition with them for ordinary business-

And he went on to say - and this promise has been faithfully observed. The whole of the trading advances of the Commonwealth Bank are made out of the bank’s own funds.

This is the part which I should like to emphasize. He said -

Moreover, the bank’s policy is not to take advance business from the trading banks, even with its own funds, and when a customer of a trading bank asks for accommodation we arrange to investigate his position. If we think he is entitled to the accommodation, we arrange, with his approval, to interview his bankers ; we then say to the bankers, “ We have investigated the affairs of your customer and consider he is entitled to the advance asked for; if you are prepared to give it to him we will retire from the negotiations altogether and you can retain the connexion, but if you will not make the advance, then we will “. In nearly every case the bank manager thanks us, admits that he does not wish to lose the business, is prepared to make the advance, and all is well.

I have quoted Mr. Riddle’s remarks at length because of statements made by the Leader of the Opposition (Mr. Menzies) and other members of the Opposition during the debate last week. Amongst other things they complained that the Commonwealth Bank had refused to furnish accommodation to people who applied for it, and said that those people were compelled to go to the trading banks to secure it. They quoted an incident involving the former Prime Minister, the late Mr. John Curtin. They alleged that when he was editor of the Westralian Worker he had occasion to seek financial accommodation for that newspaper from the Commonwealth Bank, which refused to furnish the accommodation sought. They went on to say that Mr. Curtin then obtained the accommodation which his paper required from a trading bank. I do not know whether that is true; but, even if it is, it merely bears out Mr. Riddle’s statement. I know of dozens of people who have been refused accommodation by the Commonwealth Bank, many of whom subsequently obtained the accommodation they desired from trading banks. We all know of cases like that, but surely the occurrence of such cases only serves .to ensnare honorable members opposite in their own cunning. They cite occurrences which are perfectly true in themselves, but they do not explain that those things happened because of the policy laid down for the Commonwealth Bank by the Bruce-Page Government. The Commonwealth Bank is not pursuing that policy to-day; it is pursuing the policy laid down for it by this Government. During the years that the Commonwealth Bank carried out the policy established by the Bruce-Page Government, it not only refused to furnish accommodation to prospective customers and sent them back to the trading hanks with which they had been dealing formerly, but it also used public funds to investigate the security of applicants for financial assistance. After using public money in that way, it referred prospective customers to the trading banks and advised those institutions that the applications should bo granted. Surely that was a certain method of shackling the Commonwealth Bank. The point is that the directions of the Bruce-Page Government not only prevented the Commonwealth Bank from seeking new business, but they also resulted in that bank spending public money inspecting securities and carrying out investigations of applicants for the benefit of the trading banks.

When a customer of a trading bank asks for accommodation we arrange to investigate his position. If we think he is entitled to the accommodation, ‘ we arrange, with his approval, to interview his bankers. We then say to the bankers, “ We have investigated the affairs of your customer and consider he is entitled to the advance asked for “.

Then the bankers concerned usually say that they are quite satisfied to make the advance because they do not want to lose the business.

In the course of his speech the Leader of the Opposition said -

I am not afraid that the bankers will lose their assets. I am not concerned about them. I am sure that their assets will be properly compensated for; they will get their money all right.

In making that statement he paid a tribute to this Government. He knows very well that it does not believe in confiscation. The Government tried to carry on the Commonwealth Bank by permitting it to compete with the private banks, but its intention was frustrated by the decision of the High Court. The right honorable gentleman said, “ Whilst I am not concerned about the bankers “-


– I have been listening to the debate on this measure during the last ten days, and a remarkable feature of that debate is that no real attempt has been made by the Government or its supporters to furnish a logical reason for the introduction of this measure or to explain in detail how the measure will operate. On all sides it is agreed that no more controversial or revolutionary measure, or one which affects so fundamentally the rights of members of the community, has ever been introduced into this House. For that reason, one would have expected Government supporters to have made some attempt to explain properly the way in which the proposal is expected to operate. Instead, they have devoted the greater part of their time to canvassing events which happened many years ago. Indeed, some of them have gone back as far as 1910 in their attempts to discredit the present banking system and to disparage anti-Labour governments for their actions during certain periods. In doing so, they have not hesitated to resort to flagrant misrepresentation. One Minister, as well as a number of supporters of the Government, spoke in ridiculous terms regarding the state of affairs which existed during the depression years. The implication in their’ remarks was that, not only the private banks, but also previous governments, were in some way responsible for the depression. There was the further implication that that state of affairs would have been avoided had legislation similar to that now before us been on the statutebook. Even if their contention were sound - and that is not the case - that still would not justify their claim that legislation of this kind would have eased the situation. There have also been instances of members expressing their personal opinions as to the effect of this measure. For instance, the Minister for Works and Housing (Mr. Lemmon) said r.his morning - 1 believe that if we are to have some form nf economic stability wc must have a monopoly bank.

That is not an argument in favour of this measure; it is merely the Minister’s personal opinion. A careful examination of the speeches delivered by supporters of the measure will show that statements of that kind constitute their stock-in-trade. 1 do not deny that they believe that this legislation should be introduced, but their belief does not constitute an argument in favour of the bill. I suggest it is rather dangerous for honorable members on the government, benches to rely on personal opinions. I say, without fear of contradiction, that if this matter were to be determined by personal opinions the people of Australia would defeat the measure.

More than one speaker on the other side has reduced the debate to a ridiculously low level. One of them interrupted his own speech in order to send a private message to his dentist, asking him to send his false teeth along. Is that to be taken as an indication of the attitude of supporters of the Government towards this measure, and the right of the people to know what it means? The proposal before us is so revolutionary that the people of Australia are entitled to know some details as to its operation, so that they may judge for themselves the value of the extravagant claims made for it. by the Government. And after that information had been placed before them they would be entitled to be consulted as to whether it should be put into operation. The Government has failed to justify the introduction of this measure, especially in view of the almost universal opposition to it.

There are many angles from which the measure can be attacked. I propose to deal mainly with its effect on the common people. The strongest argument that can be levelled against it is that it deliberately flouts the will of the people. I do not propose to fall into the same error as that into which some supporters of the Government have fallen, namely, the error of relying on dogmatic statements, and, therefore, I submit that my contention that the proposal before us flouts the will of the people is capable of demonstration. The large number of protests against the proposal, from the time that the Prime Minister (Mr. Chifley) made his announcement as to the Government’s intentions, is clear evidence that the people are being flouted. Thousands of letters have been sent to honorable: members protesting against, the passing of the bill without first consulting the people by way of a referendum and, in addition, many thousands of electors have presented petitions either to you, Mr. Speaker, or to the Prime Minister. There have also been protests by large gatherings of people in places scattered throughout the Commonwealth, whilst gallup polls in each State have shown that at least 75 per cent, of the people of Australia demand that a referendum be held before these proposals are given legislative effect. Honorable members will agree that gallup polls are a fairly accurate reflex of public opinion. Supporters of the Government are not entirely ignorant of public opinion ; yet, they ignore it because of the fear that otherwise they will be crushed by the party machine. In their dilemma they are forced to adopt a variety of excuses. Some claim that the protests which are being lodged are not authentic, or that they have been inspired by the banks or obtained under duress. They base their claim on the fact that many of the protests conform to a certain set pattern, but that contention indicates a complete lack of understanding of human reactions. The opposition to the measure shows that a vast body of opinion, which generally is inarticulate is strongly against the bill. The introduction of this measure has led to such a storm of protest by people who normally do not act in that way that heed should be paid to their views. It is also claimed by supporters of the bill that these protests come only from one section of the community. They argue that it is only natural for persons who normally are opposed to the Labour party to protest against its proposals. As an answer to that contention I propose to read a few extracts from the many hundreds of letters which I have received - letters not written in conformity with any set pattern, but individual letters which clearly indicate the personal views of their writers. The first extract that I shall read is from a letter from Mr. F. C. Hoare, of the Bluff, Queensland, who says -

It appears to me to be a very unjust act. Moreover, it is a slap in the eye to the hundreds of returned nien of both world wars who risked their lives for the freedom of Australia.

My next correspondent, after stating his objection to the proposals, and asking for a referendum, says -

We, the above, are just ordinary workers on wages. Electors of Capricornia.

It is evident that the next man writes out of the depth of his considerable experience. He says -

In the first place, anything undertaken by the Government is certain to be a failure, both financially and for service to the public. And, in the second place, the banks already belong to the people who use them, and we don’t want them handed over to a lot of mad political cranks who can’t mind their own business, but are always poking their noses into other people’s.

Another elector writes -

Can a nonentity like myself voice a protest against the nationalization of banks? What a calamity looms over the small man. What’s wrong with the present system ? Nothing . . . Our soldiers went over to the other side to fight dictatorship, and thus help to keep Australia free. Apparently Hitler escaped in another guise and came over here. - One of Australia’s disgusted thousands.

I am answering the contention that these letters are not sincere and authentic, and that they have been inspired by outside sources. Another elector writes -

I might point out that I have been a supporter of Labour for the past 20 years . . . I therefore wish the matter pointed out that I am not writing as a tory or any money king, but as an honest toiler, who wishes to be let carry on his business in his old way. - Val Mannion, Pheasant Creek.

In order to show that this is a fair crosssection of the community, I now quote a letter prepared by those who attended a meeting of dairy-farmers in the Koko.kungo district -

Strange to say, this move on the part of the Government has shaken every one out of their political apathy. For even the die-hard Labour cranks here view with awe the day when they will be in the hands of an unswerving Commonwealth banking monopoly.

Another correspondent expresses his opposition to the Governments proposals, and states how difficult it would be under a’ system of monopoly banking to obtain satisfaction within a reasonable time. He writes -

One little instance, a friend applied for money to buy wire to keep the wallabies out; by the time he got the money the wallabies had cleared his cotton out.

A school teacher writes as follows : -

Personally, I believe this is the most tyrannical action ever proposed by any Australian government, and one that will have farreaching effects indeed. I have no financial, or even general, interest in private banks, but I have sufficient sense and decency to see that the proposal is an act of savage injustice.

The next letter completely answers the contention that these protests emanate from the members of one political party only. The letter, which was drafted at a meeting of residents of the Mount Larcom district, states -

Our objection against the Government’s intention in this regard is not in any way influenced by our political views, and, indeed, many of us have been, and are, loyal supporters of the Labour party.

Another correspondent writes -

But the worst feature of the whole position seems to be the gradual slipping away of our freedom, which is supposed to be what the last two wars were fought for. It is quite obvious that if the public were not in favour of a private banking system they could easily transfer their business to the Commonwealth. Every private bank in this town would be closed down without any legislation at all and at no cost to the taxpayer.

Can any one say that that man does not know what he is speaking about, and is not voicing his own opinion? My next correspondent writes in these terms -

I am only a working owner of a property, but not yet too dumb to realize the grab-all throttling policy of the present Commonwealth Government against private enterprise. To them it seems we are just a source of revenue and now not to be allowed any choice in the matter of finance. When war began we were told to fight and toil for a “ new order “. Apparently this is it. It closely resembles soil erosion. If not checked wo will perish by it.

Obviously he is a farmer. The last letter which I propose to quote touches upon an entirely different aspect, one with which I shall deal at greater length later. It is written by S. N. Demitrieff, and is as follows : -

As a native of Russia and one who has experienced the effects of communistic government, I strongly appeal to you to do all in your power to defeat the proposed nationalization of trading banks.

In view of past experience, 1 have sufficient reason to fear that nationalization of the Australian trading banks would be the first link in a long chain of communistic legislation which would not only restrict the freedom of the individual but enslave him.

It was to enjoy the democratic conditions prevailing in Australia that I, with my family, loft Russia to settle here and I trust that the freedom and British fair play I have enjoyed since corning to this country will not be superseded by communistic legislation.

The proposed nationalization of trading banks has a decided communistic tendency and must be resisted by every person who has the interests of Australia at heart.

Honorable members opposite have sought to condemn letters of the kind from which I have quoted on the ground that they were inspired. So they were ; inspired by a fierce determination that this legislation shall not go through. The Government is in honour bound at least to submit its proposals to the people in a referendum. It has occurred to me that the action of the Government is an example of the truth of the old saying that those whom the gods would destroy they first make mad. It might be said that this would do no great harm to Australia were it not for the fact that the Government, in encompassing its own destruction, would bring calamity upon the nation - something which we cannot afford. Whatever the reason actuating the Government, the fact remains that it i9 refusing to recognize the will of the people. A government with any measure of self-respect would accept the challenge to refer the issue to the people. Its persistent refusal to do so merely indicates that it is frightened to put the matter to the test. The Government knows that it can use its voting power in the Parliament in order to pass the bill. It hopes that the memories of the people, will prove to be as short as on previous occasions of not so great moment. The Government thinks it can safeguard the interests of its supporters by judicious redistribution of seats at the appropriate time. It believes that it can successfully flout the will of the people but it ignores a most important factor - the present temper of the people.

I pass on to another argument against the Government’s proposals, namely, that they will deprive the individual of his freedom of choice. Ever since the emergence of a democratic form of government the principle has been recognized that the individual has a right to conduct his own private affairs in his own way. That is a fundamental principle of democracy. Every one will admit that the conduct of one’s financial affairs forms an important part of one’s affairs generally. Therefore, any deprivation of the right to conduct one’s financial affairs strikes a blow at that fundamental principle of democracy. In short, the Government thus flouts, not only the will of the people, but also their rights; That is so self-evident that I do not need to demonstrate it. At present, individuals have a choice of a number of banks, and that choice has proved to be of inestimable value to the community throughout the years of Australia’s development. Yet, the Government in one fell swoop now proposes to wipe out all existing private financial institutions and to establish one government monopoly bank. It proposes to substitute for the reliability, flexibility and speed of operation of the presentsystem a soulless bureaucracy. If that is not regimentation I should like to know what is.

But apart from the effect which this legislation will have upon individuals, it must give rise to many evils which we should strive to the utmost to keep out of our private and public life. It will place in the hands of a few unlimited power over the lives of their ‘fellow men; because just as the Treasurer and the ecterie around him, under this measure, will control finance, and just as they will control industrial development and man-power, so also will the local managers of the government monopoly bank exercise complete control over the lives of every individual in their respective communities. Every individual is involved in this matter either directly, or indirectly, because, as has already been pointed out, the measure affects, not only those who require financial accommodation, but also all who are dependent upon industries which require financial accommodation. Thus, this measure will give to local bank managers complete control over the lives of all individuals in their respective communities. It i3 well known that there are very few men, indeed, in the world who can exercise great power without eventually allowing it to go to their heads. Indeed, the introduction of this measure is evidence of the fact that the power exercised by the Government in recent years has gone to its head. That is the explanation for the introduction of this revolutionary bill.

The Prime Minister (Mr. Chifley) in his speech indicated that he realized this danger. He tacitly admitted its existence by making provision against it. He said that provision would be made against the possibility of unfair decisions being given by local bank managers by providing for appeals against their decisions to a regional authority. What a pitiful attempt to explain away, or gloss over, the objections raised to that feature of the measure ! Let us assess the value of that provision by examining it in the light of our own knowledge of the operation of bureaucracy as we have experienced it in this country in recent years. Any honorable member who has had experience of the procedure which one is forced to go through in order to obtain a loan from the various existing State instrumentalities will know of the endless forms to be filled in, the innumerable questions to be answered and the inspections and red tape to be surmounted. The procedure is so prolonged that one might say that by the time an advance is obtained “ the wallabies will have eaten all the cotton “. However, on top of all that, the Government now makes provision in this measure for filling in more forms, because each appeal from a local bank manager will involve inspections and further delays before decisions of these appeal boards are made known. Any one who has had experience of existing boards, particularly those dealing with the affairs of ex-servicemen, knows how long these boards, no matter how efficiently administered they may be, take to arrive at decisions. But the right honorable gentleman says that these appeal boards will give effective protection against decisions of local bank managers. Such a provision is ridiculous. However, this is one feature of the bill which I have no doubt will commend itself to friends of the Government, because, thereby, it will be enabled to provide more fat, cushy jobs for good stalwart Labour supporters. After all, such jobs are now becoming rather scarce. Already, quite a number have been doled out to government supporters, but the higher positions, such as those of trade commissioners and conciliation commissioners, have been filled and, obviously, the opportunities available to the Government to reward those who have rendered good service to the party are diminishing. The establishment of these regional appeal boards will enable it to reward more of its supporters.

Another most objectionable feature of the measure is that it will tend to encourage graft in Australia. Have we not seen enough graft developing in this country? Not so long ago Australians rather complacently used to discuss the prevalence of graft in the United States of America. We prided ourselves that it could not happen here; and, like the Pharisee, said that we are not as they. But under the controls and restrictions imposed during the war we have seen graft steadily developing in Australia. This legislation will give an impetus to that trend. In saying that I do not cast any great aspersion upon our people. But with one man in control of the financial resources of each district, who will have the final say as to whether advances shall be made for this or that venture, is it not obvious that there will be a terrific temptation to both parties to indulge in graft ? We have seen evidence of that in connexion with the sale of cars and property. This measure, I repeat, will increase that tendency by providing further opportunities for graft. Graft unlimited will be .the order of the day after it is implemented.

I turn now to a proposal which was put forward by the Prime Minister in a manner which suggested that he thought it was a splendid idea and would serve the purpose of convincing quite a number of people, particularly primary producers, that this measure was a good one. T refer to his statement that advisers would be appointed for industry. He said -

Hence the Government sets particular store on the development of these ancillary services, tt has in view the building up of a highly qualified staff that will enable the Commonwealth Bank to give skilled advice as part of its banking service. Secondary industries, for example, will be able to turn to the bank for the assistance of production engineers and Cost accountants to help them with their problems. Primary industries will have the aid of agricultural experts.

I shall not attempt to speak .as a representative of secondary industry, but I have had first-hand knowledge and experience of primary industry, and I knowthat primary producers want to have no truck with tlie so-called experts proposed to be appointed for the purposes mentioned by the right honorable gentleman; because the Government, in making such appointments, has clearly tended to fill such positions with good party stalwarts. [ am not decrying the value of expert advice to industry, either primary or secondary. I believe that most success can be obtained in any industry by the judicious blending of theoretical and practical knowledge. Expert knowledge of great value is already provided for th,-; primary producers, and should continue to be so provided by the State instrumentalities. Every State has its Department of Agriculture, which advises th* primary producers. That system has operated very efficiently, and we do not need a second system superimposed upon it by the Australian Government. That can only result in a repetition of what has happened in connexion with the employment service. The States have established very efficient employment services, but the Commonwealth has superimposed upon them a secondary service, thereby unnecessarily increasing the expenditure of public money, and adding to the vast army of public servants. There is one important difference between the State agricultural advisers and those who will be appointed under this proposal. The State experts satisfy themselves with considering any problem, experimenting in connexion with it, and finally publishing advice for the benefit of producers generally. There their job finishes. The farmer or producer can accept their advice, or not, as he thinks fit. Under the system proposed, I have a question to which I and the nation generally desire an answer. It is this: Just how far will the provision of finance depend upon the ready acceptance of the advice of these so-called experts? What power will be given to them? Is it not obvious that after these experts have been appointed the local bank manager will look to them for advice as to whether this or that applicant should receive assistance? And if an applicant has flouted the advice of these experts, will he not be refused assistance?

Another very distasteful feature of this proposal is that it leaves the way open for political advantage. I do not make wild statements unsupported by evidence. In my own electorate there exists a large farming area, which has been in course of development for the last twenty years. Many of the farmers in that area have taken advantage of the opportunity to obtain finance from the State Agricultural Bank. In the area there is a bank inspector, a stalwart party man, and it is a well-known fact that before any election is held, either in the Commonwealth or State sphere, the inspector goes around to the farmers who have received assistance from the bank saying. “ If you do not vote for us, look out”. I have not the slightest doubt that honorable members on both sides of the House could cite similar cases. This bill leaves the way wide open for political graft, and I have not the slightest doubt that advantage will be taken of it. The pity of it is that these men who indulge in graft are protected from the consequences of their actions by virtue of the fact that producers generally are afraid to make any public statements on the matter because of their fear of repercussions.

I turn now to an objection of another type, namely, that this bill is a readily recognizable step towards the establishment of a Communist state. It is one additional step to those that have already been taken. Communism makes no secret of the fact that it considers the nationalization of banking to be one of the major planks in its platform. In order to support that contention I propose to read briefly from a decree of the Russian Socialist of Federal Soviet Republic passed at the session of the General Executive Committee on the 14th December, 1917, and published in No. 35 of the Gazette of the Provisional Workers and Peasants Government of the 17th December, 1917. As I read, I ask honorable members to realize just how closely the measure before the House conforms to the principles set out in that decree. It reads -

In the interests of the proper organization of national economic life, of the resolute eradication of banking and speculation, and of the complete liberation of the workers, peasants, and the whole labouring population from exploitation by banking capital, and also with the object of establishing a single People’s Bank of the RussianRepublic

Mr Spender:

– It sounds like Labour’s arguments here.


– Yes, but listen to this -

With the object of establishing a single People’s Bank of the Russian Republic, a bank genuinely serving the interests of the people and the poorest classes, the Central Executive Committee hereby decrees -

Banking is declared a State monopoly.

All existing joint stock banks and bank ing houses are amalgamated with the State Bank.

The assets and liabilities of the liqui dated banks are taken over by the State Bank.

The method of amalgamation of joint stock banks with the State Bank shall be determined by a special decree.

The management of the business of joint stock banks is temporarily placed in the charge of the council of the State Bank.

The interests of small investors shall be fully safeguarded.

Consider how closely the Government’s measure follows the principles laid down in that interesting document. It matters not one whit that government members say that they are not in any way actuated by Communist principles, that they hate the Communists just as much as we do. Whether they intend it or not, the fact remains that this measure definitely provides for the implementation of one of the main planks of the Communist platform. When the time comes, it will not matter whether the Government intended it or not; the fact will remain that the Government has done what the Communists wanted it todo. The Communists realize that before this main step is taken there are certain necessary preliminaries to prepare the ground for the adoption of the major plank in their platform. In order to show that these steps have already been taken in Australia, I propose to quote briefly from a document issued by the Communist party in Australia after the last elections for the direction of their secret party men. The document reads -

Every party member must now consider what he can do personally for the party in the immediate future, remembering that we want not so much a revolutionary situation as a pre-revolutionary situation. The pot must be kept simmering, but it must not actually boil until Stalin gives the word to Communist parties all over the world.

Then follows a long list of instructions, and from the whole foul brew I quote the following: -

Keep production low. Ban overtime; keep up the small stoppages; go slow and don’t let the boss intimidate you; organize regulation strikes; exploit key positions to cut down all production by small sectional strikes. Our party’s commanding position in the coal and transport industries enables us to use strangulation tactics on all dependent industries.

Mr Abbott:

– Who wrote that? Was it written by Hollo way?


– Possibly. But listen to this -

We have been helped-

Helped, mark you! - by the excellent drought.

What rotten mind conceived that statement ? -

Capitalists and bourgeois farmers have already lost large numbers of stock through lack of coal and transport.

Has that step been achieved yet? Of course it has. It is one of the preliminary steps towards the pre-revolutionary situation. Now the Government is taking on the role of the Communists and imposing on the nation one of the main planks of the Communist party’s platform, namely, the nationalization of banking. The next step is the infiltration of key men into the Parliament itself. Honorable members opposite have said frequently, and almost with pride, that only one Communist has managed to secure election to an Australian Parliament. But the Communists will not enter parliaments as Communists. They will assume another guise altogether, and it will not be that of members of the Liberal party or the Australian Country party. When that step has been achieved, the whole machinery for the implementation of their doctrine will be available to them as the result of the passing of this measure.

I referred earlier to the temper of the people, particularly that vast mass of people who normally are inarticulate. For many years past, they have watched the steady encroachment on their rights. They have been forced to do without the necessaries of life and materials required for their re-establishment. They have seen the steady development of industrial anarchy without any real attempt on the part of this Government to counter it. They have been forced to stand idly by while their liberties have been stolen from them. They have done this, not without complaint certainly, but with a certain degree of resignation. To-day, that mass has been stirred to the very depths by this proposal. Its temper has been roused. This bill is all that is necessary to break their toleration, and I believe that it is of the utmost importance that government supporters, or at least those who have retained some sense of balance and responsibility, should pause and consider whether they should proceed with this measure, which must divide the country seriously. At present, we need a united front to enable the country to recover from the war and to continue its development. It must be obvious that instead of fostering a united front, this proposal will seriously divide the entire country, and as a result, it will bring a bout the state of affairs that the Government claims to be attempting to avoid by tlie introduction of this bill.


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

Vice-President of the Executive Council · Gwydir · ALP

– In the course of this debate I have heard from honorable members opposite some of the most extraordinary statements that could possibly fall from the lips of men. What the honorable member for Capricornia (Mr. Davidson) had to say was relevant to the bill, but some of the amazing utterances of his colleagues were absolute rubbish and will be treated by the people of this country as such. The low standard to which some members of the Opposition have reduced this debate reflects little, credit on them. Obviously, the entire forces of reaction have been brought to bear against this bill. The most eminent men in the ranks of the Opposition have spoken on this measure as they have never spoken before; but with rare exceptions, the one thing that has characterized the speeches of honorable members opposite is their obvious lack of sincerity.

We have heard a lot from the Opposition about the opinion of electors throughout the length and breadth of Australia in regard to this bill. I am the representative in this chamber of what may be regarded as an average rural electorate. It does not include an industrial area of any consequence. I have watched closely the reactions of the people in my electorate to this banking proposal. I have been some considerable time in politics, and I know quite well how petitions can be inspired. Many of them are signed under duress. When a customer goes into a private bank he is asked to sign a petition against the nationalization of the banks. I have received letters from my constituents saying that they have signed petitions just to oblige a local bank manager or a “stooge” paid by the private banks to go from door to door collecting signatures. Then, of course, we have had the old social credit technique: Members on this side of the chamber have received printed circular letters saying that unless they take certain action something will be done at the next elections. This technique was aptly described by the Leader of the Opposition (Mr. Menzies) in a book that has already been quoted in the course of this debate. Obviously the right honorable member deeply resents this form of specious propaganda.

I have had personal experience of pressure politics “. I have received from individuals letters that I know were inspired by the banks, because I have a personal knowledge of the senders, and am familiar with their style. I know when an article has been prepared in the office of a private bank. In fact, I have received a number of letters in the same handwriting. Although, as I have said, the opinions of the Leader of the Opposition on pressure politics have already been quoted to the House, they are worth repeating. The right honorable gentleman said -

In recent years a great many people calling themselves democrats, have discovered and practised the art of what is called “ pressure politics “, the “ pressure “ taking the form of hundreds, and in some cases that I can remember thousands, of stereotyped letters signed and sent to members of parliament, on some particular topic, by their constituents, the usual ending being that “ if you do not act in accordance with this view, I will do all I can to have you defeated at the next election “. -

This kind of pressure, much attempted a few years ago, for example, by the Douglas Credit people, really represents an endeavour to exploit the instinct of fear. The hope is that the member of parliament will be sufficiently spineless to abandon his own reasoned convictions for fear of losing his seat in parliament.

We may go further in this examination. It is notorious that many electors believe that the function of their member of parliament is to ascertain, if he can, what a majority of his electors desire, and then plump for it in parliament. A more stupid and humiliating conception of the function of a member of parliament can hardly be imagined. If you want mere phonograph records or sounding boards in parliament, then phonograph recordsor sounding boards you shall get - and statesmanship will die: and democracy will die with it!

The true function of a member of parliament is to serve his electors not only with his vote but with his intelligence. If some problem arises in parliament about which he has knowledge and to which he has devoted his best thought how absurd it would be - indeed how dangerous it would be - if he should allow his considered conclusion to be upset by a temporary clamour by thousands of people, most of whom in the nature of things could not have his sources of information, and have probably in any event not thought the problem out at all.

Nothing can be worse for democracy than to adopt the practice of permitting knowledge to he overthrown by ignorance. If I have honestly and thoughtfully arrived at a certainconclusion on a public question and -my electors disagree with me, my first duty is toendeavour to persuade them that my view is right. If I fail in this, my second duty will “be to accept the electoral consequences and not to run away from them.

Fear can never be a proper or useful ingredient in those mutual relations of respect and goodwill which ought to exist between the elector and the elected.

Those are not my words, but they are my opinions. Those are wise words from the pen of a wise man. I think the electors throughout Australia appreciate his sentiments. From the time that the Prime Minister announced the decision of the Cabinet to submit to the Parliamentary Labour party and subsequently to the Parliament this legislation we have been bombarded with petitions. I have lived a lifetime in my electorate and I have checked the names of some of the signatories on petitions ostensibly from that electorate against the electoral rolls, and I have not been able to find them on those rolls. I have also asked men in the districts concerned whether they know the people supposed to have signed the petitions. They say they do not. Yet, the people who signed them are alleged to live in the Gwydir electorate. I have also received spurious wires of a threatening character. Some have raised the denominational issue. They are the most disgusting I have ever received. Some of them came from small townships in my electorate. Yet I found that the senders were not known in those localities. I will not be intimidated by such specious propaganda. I have grown old in politics and I have always been honest in my political convictions.

People who know me ought to know that I would leave politics a thousand times rather than bow to such tactics. We all know that behind the propaganda are the Liberal party and the Australian Country party. I speak of my own electorate particularly, but I know that what happens there is duplicated all over Australia. Organizers on behalf of the Opposition parties are going through the electorate of Gwydir forming “ Freedom Leagues “, “ Voice of Freedom Organizations “ and other similarly named bodies. Meetings are called at local town halls and the next day I have telegrams delivered to me saying, in effect, “ Mass meeting largely attended demands you do this and that “. They are followed by petitions. I have told the people in the Gwydir’ electorate that I have notified the Prime Minister of every petition that I have received and. that I’ have been told by him that I may inform the petitioners that the petitions have been received by the Government. But, at a public function at Tamworth a couple of weeks ago, I told the people that protests about this legislation fell on deaf ears and that they could save themselves time and trouble by not worrying about signing petitions. I was quite honest with them when I said that it was a matter for my own decision whether I would present to the House petitions forwarded to me for presentation to it. There is nothing in the Constitution or in parliamentary practice to compel me to present a partisan petition from people represented by honorable members opposite. I do not blame the Opposition for organizing these protests, but there is no reason why I should help them. As an act of courtesy T have replied to nearly every letter sent to me on this subject, but I have not replied to the hundreds of circulars I have received.

The honorable member for Denison (Dr. Gaha) aptly referred to the way in which the Opposition parties have exploited ‘* isms “. The honorable member referred to “ Langism “. I expect that I know as much about “ Langism “ as does any one in New South Wales, because, for the whole time the honorable member for Reid (Mr. Lang) was Premier of New South Wales, I was a member of his Government. With justifiable pride, I say that during that time legislation was placed on the statute-book of New South Wales of which any nation could be proud. The Lang Government pioneered in this country some of the best pieces of social legislation ever passed. I remember vividly the tyranny of vested interests in those days, particularly the tyranny of the private banking institutions in New South Wales. T remember only too well how they set out, with the assistance of the anti-Labour government in the Commonwealth Parliament, to destroy the best government that New South Wales ever had. I was a little pained, and a little surprised at the speech delivered on this bill by the honorable member for Reid. Of course, a lot of water has passed under the bridge since he was Premier of New South Wales. 1 expected him to deliver a trenchant attack on vested interests and the private banks, because he and his Government were their victims. However, he attacked the Commonwealth Bank more than the private trading banks. He said that it was not so liberal as it should be. His old fire has gone. The old war-horse has not the kick that it used to have. The principles that meant so much to him when he was Premier of the State, and to the people who benefited from his acts, are forgotten by him. Many of those acts were either suspended or rendered ineffective by the Premiers plan. The Government of New South Wales was one of the few governments that refused to accept the Premiers plan. We all know that the Australian Government accepted it only under compulsion. As many honorable members on this side of the House have said, that Government was in office but not in power. I shall not recapitulate all the circumstances, but it is well known that the Scullin Government was opposed by a hostile Senate, and that any move which it made in the interests of the people was frustrated by the Senate. The Government of New South Wales also had many difficulties to overcome. I often look back with pride to the deeds of that Government. That was the first time in the history of Australian politics that any government had enacted such an impressive list of social legislation. It set an example to the rest of Australia. It introduced widows’ pensions, child endowment, workers’ compensation, Statecontrolled insurance, and many other reforms almost too numerous to mention. The opponents of that Government realized that when people of other States learned what was being achieved in New South Wales there would be a clamour throughout Australia for similar progressive measures. I am proud of the fact that I belong to a party which introduced child endowment in New South Wales and that I was also a member of this Parliament when the Commonwealth scheme of child endowment came into force. I give all credit to the present Opposition and to the honorable member for Fawkner (Mr. Holt), who introduced the child endowment legislation, which had my wholehearted support, but the Labour party was in office when the first endowment payments under the Commonwealth scheme were made. I recall clearly the efforts that were made to wreck the child endowment scheme in New South Wales. The honorable member for Reid also will have a vivid recollection of an instruction that was issued to various banks and business institutions to do what they could to discredit the scheme. I know that endowment cheques were returned to the beneficiaries in the town of Gunned ah and elsewhere in the electorate which I then represented in the State Parliament. The cheques could not be dishonoured because they had solid backing. It was part of an organized campaign to destroy the Labour government in New South Wales. I shall not deal further with those events.

The honorable member for Denison in one of the best speeches that he has made in this Parliament, dealt with the numerous “ isms “ which have been mentioned in this debate. One of the most notable features of the debate has been the continual attack by honorable members opposite on socialism. They have tried to make the electors believe that socialism is something new in Australia. The honorable member for Wide Bay (Mr. Corser) spoke this afternoon in glowing terms of the Government of the United States of America. He said that that country was a model of private enterprise. For some years past, I have been a keen student of water conservation and irrigation, the reticulation of electricity to country districts, and methods of carrying to the heart of our rural areas all of the amenities that are enjoyed by residents of our cities and larger towns. In that very citadel of private enterprise described by the honorable member for Wide Bay there is an outstanding example of a successful socialistic enterprise - the Tennessee Valley Authority, which controls a huge water conservation scheme, as well as hydro-electric schemes which have been developed as the result of the construction of great dams. The whole of the Tennessee Valley has been transformed from a veritable desert to an oasis, a land of full and plenty. Throughout that valley people have all the amenities that are available in the larger towns of the United States of America. Electricity has been brought to their homes, and theyare able to enjoy the benefits of refrigeration and other luxuries of domestic life. Most important of all, they have water when they need it. The people there ask for more and more socialism.

Mr Blain:

– Does the honorable gentleman call that socialism?


– Only to-day I read an article in the Christian Science Monitor, one of the best-known journals published in America. The honorable member for the Northern Territory jibes at socialism, but that article, which is one of a series, reveals the fear of private financial interests in the United States of America that the people, having had their first practical illustration of the benefits of socialism, will ask for more. Consider what socialism has achieved in Australia! One of the finest examples is our Postmaster-General’s Department. Anybody who studies the history of the world’s postal services will learn that Australia has been in the vanguard, and now provides the cheapest and best postal facilities of all countries. Men who have recently returned from the United States of Americacompare Australian telegraphic charges and services very favorably with those provided by private enterprise in America. The State railways services and the Commonwealth railways service in Australia are socialistic, too. They are conducted for the benefit of the people. The honorable member for Indi (Mr. McEwen), who has been suspended from the service of the House as the result of an unfortunate occurrence earlier this evening, which we all regret, has an example of socialism in the electorate which he represents. Earlier this week, honorable members had an opportunity to see a motion picture issued by the Department of Information, illustrating the development of the dried fruits industry in the Murray Valley irrigation area. The late Alfred Deakin persuaded the Parliament of Victoria to undertake the socialization of that great Murray Valley enterprise. To-day, the whole of that region, including such centres as Mildura, Renmark, Waikerie and Berri, i3 an outstanding example of the benefits of socialism. That is the sort of socialism that we of the Labour party support. We do not advocate any of those spurious “ isms “ that are an insult to the intelligence of the average elector.

I refer now to the days of the depression. I remember that period only too well, because I then had a spell in the political wilderness for a few years after an election defeat. Such events implant memories more firmly in one’s mind than happier occurrences. We all remember when Guggenheim sent Sir Otto Niemeyer to Australia to tell the Australian people and Australian governments what they had to do. I shall read an extract from Bond or Free, which was written by the right honorable member for North Sydney (Mr. Hughes) on the occasion of the visit to Australia of Sir Otto Niemeyer -

If Sir Otto had represented the British Government, the position would have been different, but Sir Otto represents a private bank - he represents not the people of England, but great financial interests, and although, like most other countries, we are just now in trouble, we are not going to shape our policy as any bank or group of financiers no matter how powerful directs. So much he ought to be told plainly.

Upon a review of the reasons for Sir Otto’s mission, one can hardly escape coming to the conclusion that his talk about our debts was only a smoke-screen.

Ho did not come here to help ns with our debt, but to induce us to make a radical change in our national policy. His impressive lecture upon our financial position was designed to stampede the people into the compound in which the interests he represents desire to intern them.

Compressed into a few words, Sir Otto wants us to scrap our policy of building up Australian industries and to confine ourselves to producing raw materials, and in order to do this, which he tells us is the only means of economic salvation, we must reduce our standard of living. We are to be “hewers of wood and drawers of water “.

What followed the visit of Sir Otto? We remember only too well the curse of the private control of banking, and the curse of having the control of the financial policy of the country removed from the elected representatives of the people in this Parliament. Governments come and go, and it will not always be a Labour government that will exercise the financial authority which will be conferred by this bill. Above all, the people are the masters of governments, and they should be the masters of the financial interests of Australia.

Honorable members will recall the circumstances which led to the formulation of the Premiers plan. A conference of Commonwealth and State Ministers decided upon the adoption of a policy for the restoration of economic stability. One feature of that policy was a public works programme. At the time, hundreds of thousands of persons were unemployed throughout the length and breadth of Australia. Conditions in every State were similar. Depression stalked the land. The conference of Commonwealth and State Ministers met under the chairmanship of the Prime Minister of the day, Mr. Scullin, or the Commonwealth Treasurer, Mr. Theodore, and agreed upon a certain policy. The representatives stated that if they could secure from the banks financial accommodation for a public works programme, they would be able to provide employment for the people. As every one knew, there were many important public works to be undertaken. What happened? The private banks, in conjunction with the Commonwealth Bank, which they controlled through their representatives on the Commonwealth Bank Board, decreed that the financial accommodation should not be made available. The political representatives of the Commonwealth and six States, at that conference, reflected every phase of political thought in Australia; but the bankers, including the Chairman of the Commonwealth

Bank Board, Sir Robert Gibson, sent them about their business. The honorable member for Eden-Monaro (Mr. Fraser) has given a graphic description of that event. At the time, he was employed as a journalist on one of the leading daily newspapers. He stated that he remembered Sir Robert Gibson coming away from the conference, and saying. “I held the whip over them”. Fancy placing that power in the hands of one man, as Chairman of the Commonwealth Bank Board, which was not responsible to any one! He was able to defy the people of Australia, through their elected representatives in the Parliament of the Commonwealth and the six States. Even after that great object lesson, honorable members opposite still endeavour to make the people of Australia believe that they should have to go cap in hand to the private banks, which are not responsible to any one, for the right to live.

During the financial and economic depression, I represented in the Parliament of New South Wales a country constituency. In that capacity, I realized what the power of the contraction of credit meant to tens of thousands of persons in my electorate, including wheatgrowers and graziers, large and small. I lived those years again when the honorable member for Wannon (Mr. McLeod) described so graphically last night his experiences as a primary producer during the financial and economic depression. In every town in my electorate, many peoplewere unemployed. Large numbers of them had been reared in the area - in the great north-west, the land of the free, the land of full and plenty. Many of these men bad been employed for years on large stations; but they had come to the towns where there were no jobs for them. They had to apply for the dole. I saw hundreds of them form a queue at the local police station or some small depot in the town, receive their dole ticket, and go to the nearest grocer’s shop for a small supply of the necessaries of life. The issue of food was barely enough to keep their wives and children alive. I listened with interest to the remarks of the honorable member for Fremantle (Mr. Beazley), who stated that hundreds of thousands of growing Australians were suffering from malnutrition in this land of full and plenty. I ask, is it not a reflection -upon the intelligence of the Australian people that they should tolerate these conditions? History has a nasty knack of repeating itself. A financial and economic depression will assuredly recur if we do not take precautions, through this legislation, to prevent it. In the bad years of the last depression, thousands of children were undernourished.

During the period of which I speak, many of the old pioneers were dying, leaving their properties in the great north-west to their children. I recall that one night I stayed with some friends in a small north-west town. They were expecting me, and we were visited by a widowed mother and her son. They had a fine property in the district and the son was recognized as an excellent manager. The father had’ died two years previously. A private bank had granted an overdraft of £10,000 on the holding. By diligent trading and perseverance, the son had reduced the overdraft by £4,000, leaving a balance of £6,000. He sought my assistance, but, unfortunately, I was powerless to help him. He had received a peremptory note from the local manager of the private bank, who had advanced the overdraft and who was only too well aware of his worth, informing him that a notice had been received from the head office asking him to reduce his overdraft to £4,000 within a month. At that time the price of stock was falling. The mother was distraught with grief. The son said to me, “ If I must realize on my stock, nearly all of my cattle will have to go, as stock are now practically valueless because of the depression”. Ultimately, that mother and her son were ruined, solely because the control of the banking system was in the hands of private individuals instead of the nation. That was one of the reasons why the Government determined that there should not be a repetition of the starvation, the misery and the frustration of hope suffered by so many Australians who had battled hard to “make a crust”. Thai is why the Government is going ahead with its plan for the nationalization of banks.

We realize, of course, that we are powerless to prevent a depression; but we also realize that we can cushion its effects by permitting the people to control the banking system. We all remember very well the depression of a few years ago, when, although every railway siding shed and every silo in the great north-west of New South Wales was bulging with grain, Australian children could not get sufficient bread to eat. Do honorable members opposite call considerations of .that kind “ isms “ ? Do they regard those considerations as something to be flaunted before the people of Australia? What exactly are members of the Opposition seeking to accomplish now? They are endeavouring to instil in the mind of the people a fear complex, by telling them over and over again that the Government’s banking proposal is inimical to their welfare. No one appreciates the significance of those tactics better than honorable members opposite who represent country constitaencies. However, we shall find that a few years’ political experience will mellow a lot of those Australian Country party rebels. I remember the honorable member for Indi when he first entered the political life of the Commonwealth, some years ago. I admired him then, and. predicted that he would make his mark in the political life of the nation. However, I heard him state his present views regarding the nationalization of banking, and I could not help wondering at the change in his sentiments. As some on& has remarked, if a man is to be brought into line he has only to be included in a government. The honorable member for Gippsland (Mr. Bowden) was also, in hia time, a great rebel. Indeed, I heard of him before he entered this Parliament, when he was one of the rebels of a former Victorian Parliament. In those days, he was a great advocate of financial reform. The Minister for Commerce and Agriculture (Mr. Pollard) quoted from a militant booklet written by the honorable member for Gippsland, and it was certainly a most rebellious publication. At that time he threatened to tell the Australian Country party what it should do; and I believe that he did tell the members of that party some home truths at a conference held at that time. However, to-day we find the former wolf lying down with the lambs. Both the honorable gentlemen whom I have men tioned have fallen into line; they have forgotten the class which they represent, and apparently they think that the people of Australia are equally forgetful. Today, we are experiencing affluence; the public purse and private purses are bulging, and everything is lovely in the garden; but a depression will surely follow, whether it comes soon or late. Our commodities will not always command the high prices which they do at present. Then will come the day of reckoning, and honorable members who have proved recreant to their trust will have to answer to the electors.

I should also like to refer to the attitude adopted by the honorable member for Corangamite (Mr. McDonald). Personally, T have a great deal of respect for him. However, in the course of his speech this afternoon, he displayed a kind of frenzy,_ and he certainly put plenty cf fight into his speech. But at times Tike that we tend to forget ourselves. Re said, “ The power that controls the purse strings controls the people”. T emphasize that those are his words, not mine. I quite agree with him. Yet, the honorable member and his colleagues would withhold from the people the power which controls the purse strings, and confine it to private institutions, over which the people have no control. Those honorable gentlemen do not want that power to be entrusted to the people, or to their representatives. Why? Simply because the Government of this country happens to be a Labour one. That Government has, in the vernacular, the “ guts “ to fight vested interests. The Government, of which I have the honour to be a member, has no reason to thank the vested interests. We have fought them right through our political life. Indeed, it was the depressions brought about by those interests, and the oppression of the community which has characterized them; which brought the Australian Labour party into being. Since that party came into existence there has been a continuous political fight. That fight is on now. Members of the Australian Labour party will not shirk it, no matter what number of petitions is presented, or what power the Opposition parties bring to bear. We know that we are right, and I feel confident that, when the history of the nationalization of banking is written the action of the Australian Labour party will be enshrined in the hearts of the people of Australia.

Debate (on motion by Mr. Watkins) adjourned.

House adjourned at 10.58 p.m.

page 1748


The following answers to questions were circulated: -

Newspaper Offices : Inspections.

Coal: Production.

Food for Britain.

Clothes Rationing.

Mr White:

asked the Treasurer, upon notice -

  1. Will inquiries be made into complaints by residents of New Guinea that the Commonwealth Bank is refusing accommodation to planters who are unable to market their copra owing to a shipping shortage and scarcity of bags?
  2. Has the Commonwealth Bank a monopoly ofbanking in Rabaul, and, if so, is it because the Bank of New South Wales has been unable to obtain building materials from the Government saw-mill with which to replace its premises, which were destroyed during the war?
  3. Is it. a, fact that the Bank of New South Wales was not allowedto resume operations in any centre in New Guinea until six months after the Commonwealth Bank had resumed; if so,what was the reason for this discrimination?
  4. What action does the Government propose to assist the planters who are in financial difficulties as a result of causes outside their control, and who are unable to obtain even essential supplies?

Civil Aviation : Trans-Australia Airlines

Mr Rankin:

n asked the Minister for Civil Aviation, upon notice -

  1. What was the cost of the removable horse stalls tested recently in Trans-Australia Airlines’ Douglas type freighter for carriage of racehorses by air?
  2. What were the amounts and value of the petrol used in the test flights?
  3. Were any dollars involved; if so, what amount ?
Mr Drakeford:

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

  1. The removable stalls were made up in the commission’s own workshops, the materials used costing approximately £143.
  2. The test flights were of approximately half an hour’s duration, involving a petrol cost of approximately £3.
  3. The only dollar expenditure involved was that included in the cost of the small quantity of petrol consumed.


Mr Calwell:

l. - On the 28th October, the honorable member for Fawkner (Mr. Holt) asked a question concerning the receipt by a Liberal party candidate in the forthcoming Victorian elections of an official “ O.H.M.S.” envelope; bearing a postage stamp with “ O.S.” perforations, which contained a copy of the Labour party’s Speaker’s Notes for the campaign. The Postmaster-General has supplied the following information : -

The Postal Rules, which apply uniformly throughout the Commonwealth, provide that any person, who is authorized in writing by the Deputy Director, Posts and Telegraphs, may perforate postagestamps with approved letters, figures or a design, and that such stamps will be accepted in payment of an; postage fees or dues and telegraph fees.

The contents of any letter posted by a department or organization which has been authorized to use perforated postage stamps arc of no concern to the Postal Department, which is responsible for seeing that the correct postage is paid in each case and that the article is delivered to the addressee without unnecessary delay.

Cite as: Australia, House of Representatives, Debates, 5 November 1947, viewed 22 October 2017, <>.