18th Parliament · 1st Session
Mr. Speaker (Hon. J. S. Rosevear) took the chair at 10.30 a.m., and read prayers.
Nationalization : Petitions - Officers’ Retiring Allowances - Speech by Mr. E. J. Ward, M.P. - American and Canadian Opinions.
Mr. ADERMANN presented a petition from certain electors of the division of Maranoa in relation to banting in Australia.
Petition received and read.
– I move -
That the petition be received.
I present a petition in relation to banking in Australia from certain electors of the division of Richmond. The petition is respectfully worded and concludes with a prayer. It prays that the Government should desist from its announced intention to nationalize the banking system until the people of Australia have been given an opportunity to express their approval or otherwise at a referendum. In view of certain criticism which has been levelled at the signatories of other petitions which I have presented in relation to banking, the signatures on which, it was suggested, were obtained by some form of duress exercised by bank managers and others, I desire to say that the people whose signatures appear on the petition are known to me personally.
– There are only ten signatures on the petition.
– I have already presented petitions containing about 27,000 signatures, and I take the greatest exception to this attempt by a Minister to belittle the rights of citizens to put “their case before this House.
– There are still only about ten signatures on the petition.
– The persons who have signed the petitions which I have presented are men and women of good standing, who would not be susceptible to any pressure. They have, of their own free will, signed this petition and asked me as their Parliamentary representative to present it to the Parliament. They realize that that is their only means of expressing their view on this matter and of informing the Parliament and the Government of something which they believe to be inimical to certain of their rights. They consider that they are likely to be divested of certain privileges to which they are entitled. Therefore, they ask that, before any steps have been taken in the direction of nationalizing the banking system, they, in common with other people in Australia, shall be given the opportunity of registering their opinion by way of a referendum.
Question resolved in the affirmative.
Petition received and read.
– Last week a retired bank officer informed me that, in addition to his superannuation retiring allowance, the private bank which formerly employed him pays him, without obligation, a supplementary amount of £100 per annum. Will this payment be continued when the Banking Bill now before the House becomes law?
– Yes. A payment of the character mentioned by the honorable member made as an act of grace by a particular private bank, will be continued. Under the Banking Bill individuals receiving such payments shall be entitled to receive them as a legal right from the Commonwealth Bank.
– I should like to direct a question to either the Minister for Transport or the Minister for Information. I have received from a friend in Sydney a pamphlet that was purchased in the Domain for 9d. It is entitled Shall the People or the Banks Rule? It is alleged to be a speech delivered by “The Hon. E. J. Ward, Minister for Transport and External Affairs”. It is stamped “With the compliments of the Potts Point Branch, Australian Communist party “. As the matter contained in the booklet is not a speech delivered by the Minister, but a compounding of two speeches delivered by that honorable gentleman in this House in 1945 on the Banking Bill 1945 and the
Commonwealth Bank Bill 1945, I should like to know whether there is any likelihood of the honorable gentleman ever becoming Minister for External Affairs; whether there is some connexion between him and the Australian Communist party; or whether it is the opinion of the Communist party that his chances of ever becoming Minister for External Affairs and his views on banking are only worth 9d.?
– In the first instance, I cannot understand the honorable member’s objection to the compounding of two speeches. If it is the booklet that I believe it to be, it was published by the East Sydney Federal Electorate Labour Council, and is a reproduction of the speeches that were delivered by me in this House on the 1945 banking legislation. I do not know bow I came to be wrongly described. Probably that can only be explained by those responsible for the publication. I can assure the honorable member for Barker, if he needs any further assurance, that I have never been a member of, or associated with, any party other than the Australian Labour party since I was sixteen years of age. I am unable to predict to what position my party, at some future date may appoint me, but T can assure the honorable member there is no possible chance of me ever becoming associated with the misfits of the Australian Country party.
– In view of the adverse public reaction in the United States of America and Canada to the Government’s banking proposals and its socialization policy, and the consequent damage to Australia’s prestige in the eyes of the peoples of those countries, will the Minister for Information arrange, through his representatives overseas, for the fullest details of the Victorian election results to be publicized so that Americans and Canadians may see that a great number of Australians are strongly opposed to socialism?
– As a matter of strict historical fact the indices of the various countries compiled by the newspapers showing the trends of share values indicate an increase in every instance since the Government announced its intention to nationalize banking in Australia. In the “United States of America, for instance, Australia’s prestige was never higher. That is largely because we have the most soundly based economy in the world. Prices are under better control in Australia than in America and conditions are better in Australia than in the United Kingdom or any continental country. For all those advantages the Australian people are grateful. They have a good Labour Government, which can sowell manage Australian affairs as to win the admiration of the world. What happened in Victoria on Saturday was just a transitory affair, and it has had no adverse influence on Australia’s standing in the United States of America,, the United Kingdom, or any other country. As the Government proceeds with its legislation so will our prestige continue to increase.
– Has the attention of the Minister for Post-war Reconstruction been directed to a paragraph in Standard Weekly, the official organ of the Australian Labour party in New South Wales, of the 7th November, which reads -
Ex-servicemen are now learning pearl and deep-sea fishing by correspondence.
Normally, fishing training under the scheme is given at the Fisheries School, Cronulla, New South Wales.
Is there any significance in the fact that that paragraph appears on page 8 of Standard Weekly, which is devoted to the amusement section of that newspaper? Is this course being taken by exservicemen under the Government’s rehabilitation scheme ? Since pearl fishing involves deep-sea. diving, will the Minister say how it is possible to teach it by correspondence? Can he state the nature of the instruction in pearl fishing that is given by correspondence, how many exservicemen are being instructed, and whether a diploma or certificate is issued upon completion of the course?
– The honorable member waxes very facetious over what he alleges is being done in regard to the rehabilitation of ex-service men and women. He knows, I believe,, that the scheme for the rehabilitation and reconstruction training of ex-servicemen in this country is the envy of other countries, and that more than 300,000 ex-service men and women are being given training in the occupations which they desire to follow. In connexion with the fishing industry, a training course is conducted at Cronulla on behalf of ex-servicemen, and I have no doubt that that can be supplemented by correspondence. Individuals who do not desire to take up a full-time course can learn much by way of correspondence. If the honorable member would take a little more interest in exservicemen generally, he would know that they and their organizations have expressed the highest satisfaction with the reconstruction training scheme in this country.
Speech by Mr. Vishinsky.
– Has the attention of the Prime Minister been directed to the publication in Tribune, the official organ of the Australian Communist party, of the full text of a speech by Mr. Vishinsky at the United Nations? Commenting on its own cable, Tribune said, “Mr. Vishinsky showed himself to be very well informed about Australian conditions “. Is the Prime Minister aware that Mr. Vishinsky revealed a very detailed knowledge of political occurrences in Australia? Is not sufficient evidence disclosed in his speech to prove that the Soviet foreign office is receiving detailed reports from Australia? Does the Government know who is supplying these reports? What steps are being taken by the Government to prevent such leakages as might easily lead to treasonable espionage? Have any steps been taken to check the movements of Mr. Lewis and Mr. Thornton while abroad ?
– I do not read the Tribune and consequently I have not seen the article in that journal to which the honorable member has referred. As to ascertaining the trend of political events in Australia, I should say that any person who cares to sit in this chamber listening to the debates would get a fair idea of political trends. It is not difficult to obtain information of that kind. I have no knowledge of any leakages of information which the Government would regard as serious, or likely to lead to treasonable actions. The Commonwealth Investigation Service watches over that matter. As acting ministerial head of the department, I know that it keeps a close watch on information leaving Australia which might be regarded as beneficial to a potential enemy and which therefore should not be disclosed. I have nothing to add to what has been said recently regarding Mr. Lewis and Mr. Thornton and as I am not a reader of the Tribune I shall arrange for some one to look into the matter raised in that journal.
– Has the attention of the Minister for Commerce and Agriculture been drawn to a statement by Australia’s representative on the Council of the United Nations Food and Agricultural Organization, Mr. Bulcock, that Australia fears that there will be not enough shipping to lift the cereals available for export in the coming year. In view of the fact that there has been evidence of ships leaving Australia without full cargoes of foodstuffs, can the Minister inform the House what action has been taken to ensure that adequate shipping shall be available to transport our grain overseas?
– I have seen in the press some statements attributed to Mr. Bulcock. I can assure the honorable gentleman, however, that adequate steps are being taken to ensure that, to the degree that it is physically possible, ships will be available to transport Australian wheat overseas. There has been no instance in the past of Australian surplus produce not securing shipment.
Stevedoring Industry Commission - SS. “ Corio “.
– Can the Minister for Labour and National Service inform the House how long the present task to which Judge Kirby has been assigned will take ? Is the Minister in the position to indicate the probable date onwhich the Stevedoring Industry Commission will commence to function?
– It was originally intended that the Stevedoring Industry Commission Act should be proclaimed about the same time as the amended Commonwealth Conciliation and Arbitration Act. However, circumstances arose in which it was desirable to secure the services of a highly competent and reputable person to join with Dr. Frank Graham and the Belgian representative to consider matters referred to them by the United Nations Assembly. Judge Kirby was deemed to be a suitable representative of Australia because he seemed to have the best knowledge of affairs associated with the Indonesian and Dutch trouble, because he had been for some time engaged upon a previous inquiry of the kind, and because of his qualifications and temperament. I understand that negotiations are still going on between the three gentlemen mentioned, and it is proposed that they shall meet either on neutral ground or on board a neutral ship. I hope that their consultations will be concluded about the end of the month, but I can say nothing definite about that. As soon as Judge Kirby returns, and can take up bis work again, the Stevedoring Industry Act will be proclaimed.
– Can the Minister for Labour and NationalService say whether it is a fact that the freighter Corio has been immobilized for the past eight months because of an inter-union dispute between the Marine Engineers Institute and the Seamen’s Union? Did the Government appoint Judge Kelly to arbitrate in the dispute, and is it true that both the unions concerned agreed to abide by his decision? Has the Seamen’s Union now refused to accept the decision of the arbitrator, and declared the vessel black? Can the Minister say what has been the cost to the owners of the ship and to the taxpayers as the result of this long hold-up, and what action does the Government propose to take to enforce the decision of the arbitrator which both parties agreed to accept?
– I know the facts which led up to the present position, but unless I have calculations made I cannot tell the honorable member what has been the cost to the owners of the ship or to the community, or what loss of pay has been suffered by the unionists. After the dispute had been in progressfor some time we succeeded in getting the cargo out of the ship. Later, Judge Kelly volunteered to take over the case if both parties would agree to accept his decision. There was a hearing, and when he gave his decision it appeared that everything would be satisfactory. What the position is now I am not sure, but I shall inquire.
” Wyatt Earp “ Expedition.
– In view of the great significance of the Australian Antarctic expedition, will the Minister for the Navy say whether it is proposed to give an official farewell to the members of the expedition on board L.S.T. before it leaves Hobart, and those on board Wyatt Earp before it leaves Fremantle?
- L.S.T. is due to leave Melbourne at about noon to-day for Fremantle, and. some days later will leave Fremantle for Herd Island. Wyatt Earp will leave Melbourne for Hobart about the second week in December, and will then sail for the Antarctica. No arrangements have been made for an official farewell, except that I, in company with some other members of the Parliament, will go to Melbourne on behalf of the Government to farewell members of the expedition on board L.S.T. Later, when Wyatt Earp leaves Adelaide, Melbourne and Hobart, representatives of the Government will farewell the ship’s complement at each of the ports.
– I refer to the surren der of butterand meat rationing coupons which can be sent free of charge from any post office bo certain organizations, and also to the statement of the Director of Rationing reported in the press last night that more than 1,031,000 lb. of butter could be made available to Great Britain if every Victorian forfeited theextra week’s ration of butter which would accrue in the next three weeks. I ask the, Minister- for Commerce- and Agriculture whether food thus made available is being- sent, to Great Britain- in addition, to, ordinary food’ exports? Many thousands of coupons have been surrendered for that purpose. Can the Minister give an .assurance that that extra food will be sent to. Great Britain as the result, of’ the surrender of further coupons, under this scheme?
– It is most desirable that as many people as possible should surrender food’ rationing- coupons for the purpose mentioned by the. honorable member. The honorable gentleman will appreciate that the surrender of such coupons means that the consumption in Australia of the commodities involved will be. correspondingly reduced. The quq.nt.ity thus saved will automatically become available for export to. Great Br.ifca.in.
Mi;-.. WHITE- -There is a big- doubt about that; som.e of: it. is-, going; on. to- the. black- market
-.- There can be no doubt in, the matter.
– Numerous exservicemen who have failed, to make the grade in business after their discharge from the services, now find that if they were permitted to collect their war gratuity, in whole or in part, they could surmount their difficulties and rehabilitate themselves. Will; the. Treasurer, consider altering the -conditions governing the payment of war,- gratuity to ex-service personnel to. permit the. gratuity, to.- be made available on, grounds of hardship through. business aCtivity in addition, to har.dsh.ip. owing, to sickness.?.
Mk CHIFLEY.- I have already inrdicated that the War Gratuity; Act was-, framed entirely upon, the* advice of theWar. Gratuity Committee- appointed! to inquire- into- the matter: Since’ thai? legislation, was passed; war gratuity boards have been appointed for.- the> purpose, of administering it: On, previous occasions, I indicated to the honorablemember for Balaclava’, the> honorable member- for- Franklin, and’ other members of- the Opposition ashwell as, some- of, my own colleagues, that when the Central War Gratuity Board had had an opportunity to pass judgment on what might be considered to be desirable amendments to the act, I would take the opportunity to request members of the original War Gratuity Committee who are still available to meet and consider such matters. A communication has been sent by me to the Chairman of the Central War Gratuity Board asking that suggestions which it might be advisable tq consider should be forwarded. When these come in from the various bodies associated with the board I hope to call’ t-he Parliamentary committee together to examine them
– I have received a number of letters relating to the rationing of power kerosene. One of them, from the Mount Marshall Road, Health and” Vermin Board:. read’s as follows :: -
It- is- said the ration will be arrived at by taking’ the sales- for– one, month and multiplying by twelve, or vice- versa the. sales for a ye.ar. divided by twelve. Both methods hold an element of danger and are not in- the best interests of the farmers.
Vor instance), the sales’ in. one particular month may. be: in- a- slack period, of the- year,, and to. multiply by twelve, would fall far short of” the fuel required for the year. Oh. the other hand, to take* yearly.- sales- and divide by twelve to obtain- a monthly.- ration, would, not allow, for the- months when, alii tractors, ace. flat, out, audi an, immediate shortage, would come about..
If it b.e the Government’s, intention further- to, ration, power kerosene- will, the: Minister- representing, the Minister for. Supply and, Shipping confer- with hiscolleague with. a. view to ensuring that, in any rationing scheme arrived at,, dueregard; will, be paid to the- necessary requirements of. primary producers in, respect, of power, kerosene: in both slackand. busy periods ?’
– I can at once give the- honorable member “air. assurance- that in. any.- rationing scheme operated by the Government: adequate- attention-! will be paid: to tha requirements; of “primary producers.. As- the- honorable, member’s! question*, involves some, detailed examination I shalL refer it to. the? Minister, forSupply and Shipping for his attention;
– Is it a fact that one of the Australian delegates to Unesco Conference at Mexico City has taken his life? Is it a fact that the delegate concerned was an ex-serviceman with a distinguished war record who sustained severe head injuries in World War I.? Is it a fact that the delegate concerned was the subject of questions in this House suggesting that he was possibly a traitor because he was probably a Communist? Is there evidence that mental distress occasioned by these questions led to his action in taking his own life? Is there any means by which people impugned for political purposes in this House, and distressed by the subsequent sadistic publicity given in the press, may have a. statement in their own defence read in this House by the Clerk, so that abuse of privilege by question or statement, will not go unremedied ?
– - What about the charge against the honorable member for the Northern Territory?
– Order !
– I understand that it is true that one of the Australian delegates to the conference of Unesco at Mexico City has taken his life. I understand, that it is also true that he was an ex-serviceman who suffered severe injuries in World War I. and continued to suffer considerably as a result of those injuries up to the time of his death. I understand that it is true, too, that he was very much concerned by questions asked about him in this House.
– Is there evidence of that?
– T understand that he held a position with the New South Wales Education Department, or some other State department. Naturally, such questions must have aroused in him some anxiety as to his future in the Public Service. In regard to the last portion of the honorable member’s question, I have said on previous occasions that unless the Parliament itself is prepared to take some action to prevent attacks being made on citizens under the cover of parliamentary privilege, there is nothing that the Government can do about the matter. I have always regretted this practice - I am not referring now to the particular case in question, but to the attacks that have been made on quite a number of occasions. It is deplorable that a man should say things in this House that he is not prepared to say on the street corner or somewhere else outside the Parliament. My association with the Parliament has been comparatively short; but I have never yet found it necessary to say anything in this House that I have not been prepared to say outside it. However, I repeat that the matter is one for determination by the Parliament itself.
– I ask the Minister for Commerce and Agriculture whether negotiations are in progress for the purchase of 4-bushel wheat bags from the Far East. If so, what stage have the negotiations reached, with whom are they being conducted and at what price is it proposed to market the bags?
– I know of no negotiations between representatives of the Australian Government and anybody in the Far East for the purchase of 4- bushel wheat bags. I think it would be a great mistake to purchase them. Their capacity is from 240 to 250 lb. of wheat, and to ask the farmers, the railway employees and the wharf lumpers to handle them would probably cause industrial unrest. In the end the result would be unsatisfactory.
– I direct the attention of the Minister for Works and Housing to what I regard as a racket in the provision of homes. My private secretary has been trying for some time to obtain a. home for herself. In Launceston last, week she was approached by a man who said that he would rent her a home if she paid him £15 for the key. Is there any means of preventing that racket? Many people cannot afford to pay exorbitant sums for keys. If there should be any method of preventing it I should like it to be strictly ‘applied.
– I suggest that the honorable member -give me the name and other particulars of the case so that I can have it taken up immediately by the Deputy Rent Controller in Tasmania. This practice has been prevalent in Australia. We have endeavoured to stamp it out, and we have succeeded in heavy fines being imposed on some offenders. If I can obtain the particulars of this case I shall certainly follow it up.
– I direct a question to the Prime Minister which, like a question asked earlier by the honorable member for Fremantle, is directed against abusive remarks which have been made in this House about ex-servicemen. It has been prompted by a number of letters that I have received from exservicemen’s organizations and also by letters which have appeared in the daily press following the attack made by the honorable member for Lang on the honorable member for the Northern Territory. In view of the resentment being expressed by members of the 8th Division organization and other exservicemen’s associations at slurs which have been cast by members of this Parliament on former prisoners of war, will the Prime Minister endeavour to curb such expressions of opinion by members of his own party and, if they make such charges, will he ensure at least that a decent apology is made?
– I have made it quite clear that I have a very strong dislike of the sort of exchanges that take place in regard to these matters in this House at times. I propose to make some examination of this matter, and I have already discussed it with the representatives of one or two parties. I do not propose to say more about it at this moment.
– I refer the Minister for Air to a press report published yesterday which reads as follows : -
Britain’s most dynamic private airline operator, Dr. Graham Humby, flew into Melbourne to-day to ask the Director-General of Civil Aviation (Air Marshal Williams) and the Minister (Mr. Drakeford) to lift restrictions limiting unscheduled operations here and between British countries.
He wants amendment of the regulations forbidding an unscheduled airline to By goods or people between any two points more than once a month. “ Why can’t we have the same freedom that tramp shipping enjoys?” Dr. Humby asked to-day.
Will the Minister explain why it is necessary that this restriction should continue, in view of Australia’s great need of migrants who can be brought here by air, the scarcity of shipping, and the acute shortage of so many commodities that can be imported by aircraft?
– I have not seen the paragraph referred to by the honorable member, but as he is acquainted with air operations and has some knowledge of civil aviation, I remind him that if unscheduled services were permitted to operate freely in competition with existing services, which have to operate to definite schedules, it would be impossible for the latter to carry on. In the United States of America the’ authorities are experiencing very great difficulty with unscheduled services. The Australian regulations have been designed to prevent services conducted on a “ tramp “ basis from doing serious damage to regular services. Believing that the honorable member wants civil aviation in Australia to progress, I suggest to him that a study of the regulations will convince him that they are in the interests of civil aviation.
– by leave - Last Tuesday, the honorable member for the Northern Territory (Mr. Blain) asked me to confer with the Minister for Supply and Shipping (Senator Ashley) with a view to having all materials for disposal at the 13-Mile Camp sold to residents of the Northern Territory for the re-building of their homes. I conferred with my colleague, and have now been furnished with the following information from the Chairman of the Commonwealth Disposals Commission : -
Local tenders are being called for each building in the 13-Mile Camp and no buildings have been sold from this camp for removal from the Territory.
Residents of the Northern Territory are invariably given every opportunity to secure their requirements of buildings and building materials, and no case can be recalled of a resident being unable to have his requirements met provided he is prepared to pay a fair price and the building selected is for sale. Where more than one person is interested in the same building competitive offers are invited,
– Has the Minister representing the Postmaster-General seen the report that delegates to the Federal Conference of the Commonwealth Postmasters’ Association criticized the slow progress of the PostmasterGeneral’s Department’s threeyear plan for rehabilitating postal services ? Is it a fact, as stated at the conference, that the PostmasterGenrral’s Department hadbeenable to expend only about £600,000 from an allocation of £5,000,000 for rehabilitation work in the last twelve months ? Ifso, willthe Minister, in. view of the urgency for improved postal services, particularly in country districts, have the position investigated, take appropriate action and advise the House of the result?
Mr.CALWELL - I did not see the reporttowhich the honorable memberreferred, but there isnothingto add to the positionas indicated inthe recent Budget debate. The Parliament ‘has appropriated large sums of money for the rehabilitation of postal services and the provision of new services,but the progress of the work is delayed andretarded by an inadequate supply ofmaterials, and lack ofman-power. No onecan obtain materials out of theair, or provide Australiaat this particular juncture with the hundredsofthousands of workers whom we require in allbranches of industry. Oureconomyhas expanded probably 50 years as the resultof World War II. ; that as tosay,we are 50 years ahead of what wewould have beenhad therebeen nowar. It is anextraordianary thing that out of the evil of warhascome so much good to this country;but the development of our economy has made demands in all directionsfor more materialsand man-power,and postal services must take their place in the scheme of things with housing, hospital building, factory building, and many other requirements. Everything cannot be done for the Postal Department, to the neglect of the needs of the rest of the community, but everything that can be done is being done.
– Why not introduce a 30-hour working week ? That would help.
– If the honorable member for Richmond had learned to work even a 40-hour week, he would have done better for himself and Australia. If the Postmaster-General can supply to the honorable member for Maranoa any additional information, I am sure that he will be glad to do so, but ill-informed criticism, whether expressed at a conference of employees of the Postal Department oar anywhere else, does not help the situation.
Motion (by Mr. Lemmon) agreed to -
That leave be given to bring in a bill for an act to amend the War Service Homes Act 1918-1946, as amended by theCommonwealth Public Service Act1947 and the WarService Homes Act 1947.
In committee: Consideration resumed from the 12th November (vide page 1993).
Clauses 9 to 25 -by leave - further considered together.
Mr.HARRISON (Wentworth) . [11.19]. - Last night, the honorable memberfor Eden-Monaro (Mr. (Fraser) delivered a mostextraordinary speech. We are accustomedto hear the honorable member make in this chamber statements that he considers to be of a moderate character, but when the test is applied to him, he runs away ‘from those utterances. Shortly before the adjournment last evening, he attacked thehonorable memberfor New England (Mr. Abbott,), describing him as a “most unreliable member “ Even at that juncture, “I considered that IShouldmake a brief statement to prove that the honorable member for Eden-Monarohimself is most un- reliable.His criticism of the honorable member for NewEngland seemed to one to resemble Satan reproving sin. I recall that during the debate on the Yoizuki incident-
The CHAIRMAN (Mr. Clark).Order! . The honorable member is not entitled to refer to the Yoizuki incident. It has no reference to clause 9 to 25 of the Banking Bill. I ask him to confine his remarks to the clauses under consideration.
– I understood that in the course of debate in this chamber it was competent for an honorable member to answer allegations made by another honorable member. .
– Order ! The honorable member must direct his remarks to the bill.
– I shall make no further comment about the Yoizuki incident, other than to say that the honorable member for Eden-Monaro, repeatedly outside this chamber when addressing his constituents, gives the impression that he is most moderate and even opposed to the Government; but when the matter which he happened to be discussing is put to a vote in the House, as occurred with the Yoizuki incident, the honorable member simply walks out of the chamber. That illustration gives some idea of his unreliability, and his criticism of the honorable member for New England may be discounted.
– Order !
– I come to the remarks of the honorable member for EdenMonaro on the Banking Bill. He referred to the State Savings Bank of New South Wales closing its doors, and endeavoured to create the impression that the , bet;ate Government of New South Wales had not been responsible for the occurrence. Honorable members should see this incident in its proper perspective. What were the circumstances? The honorable member for Reid (Mr. Lang), who, at the time, was Premier of New South Wales, sought to adopt a similar technique to that which the Chifley Government is now employing. In other words, he endeavoured to socialize the State of New South Wales. But the people of the State rose in great numbers, and took action to protect not only their personal liberty, but also their financial interests. What was the ultimate result? Was their action in protecting their liberties and their economic position justified? Of course it was! Subsequently, no less a person than the Governor of New South Wales was obliged to toss the then Premier out of office. The people of New South Wales then had cause to fear for their financial and economic liberties, as the people of Australia to-day have cause to fear the socialist trend of the Chifley Government. The honorable member for Eden-Monaro said that the Government would proceed with the bill in order that the conditions of the financial and economic depression of the early ‘thirties should not recur. I remind him that all the circumstances responsible for the sufferings of the people at that time were created by no less a person than the then Prime Minister. He agreed to the Premiers plan, and thus brought down on the people all the misery that was associated with it. The language that he used was “so that similar conditions shall not recur “. That is precisely what was said by honorable members opposite during the consideration of the 1945 legislation, namely, that all the powers then taken were for the purpose of preventing a similar set of circumstances from arising during another depression period. The Prime Minister then said that the powers taken were sufficient to prevent a recurrence of similar conditions. Therefore, what sense is there in the statement of honorable members opposite that the additional powers now proposed to be taken are needed for the same purpose?
I shall now deal with an observation by the ubiquitous Minister for Information (Mr. Calwell). We are repeatedly delighted by the spectacle of that honorable gentleman attacking with great fury and destroying an imaginary opponent. This is what he said in 1945, as reported in Hansard of the 27th June, at page 3720-
We are not abolishing the private banking institutions; we are not nationalizing them.
Honorable members can visualize him emphasizing that remark by smacking his thigh or thumping the table, in his characteristic Yarra bank style. He went on to say -
For this legislation we had for our guidance the Reserve Bank ofNew Zealand Amendment Act 1930.
Now, he comes out as a champion for the socialization of banking. Let us consider the views of Mr. Nash on the socialization of banking. That gentleman made tin’s statement in 1941 -
It seems to me that private banking is infinitely better than the State running the banks, and particularly in respect of the business of deciding whether Bill Jones or Tom Johnson will have an overdraft, particularly when such matters could he made the subject of approach through a Minister.
The Minister has claimed that the 1945 act was patterned on the Reserve Bank of New Zealand. He has now gone a step f urther, and has said in effect “ I dissociate myself entirely from the New Zealand legislation”. The view of Mr. Nash is that the private trading bank structure is infinitely better than the socialization which the honorable gentleman, having “ changed his coat “, now adopts.
The honorable member for EdenMonaro has claimed that the object of clause 11 is to preserve the secrecy that is associated with banking practice. Surely he is not sincere! Obviously he has not read the clause. That is not astonishing, knowing as we do that honorable members opposite have admitted, through the honorable member for Robertson (Mr. “Williams), that they had no knowledge of the details of the bill until its introduction. I draw the attention of the honorable member for Eden-Monaro to the fact that the bill does not contain any penalty clauses which would ensure the observance of secrecy. The clause is quite clear in its language. It reads -
It shall be the duty of the Commonwealth Bank-
to provide, in accordance with the conditions appropriate in the normal and proper conduct of banking business, adequate banking facilities for any State or person requiring them;
Mr. Falstein interjecting,
The CHAIRMAN (Mr. Clark).Order !
– If the honorable member for Watson does not cease interjecting, I shall name him.
– I rise to order. What the honorable member is saying is identical in every word with what the honorable member for Fawkner said last night, and the Standing Orders preclude wearisome repetition.
– Order ! The honorable member must not seek to avail himself of the privileges of the committee so as to interrupt debate. If he continues to interrupt the debate I shall name him. He is becoming a nuisance.
– The contention of the honorable member for Eden-Monaro that this clause will preserve the secrecy of customers’ account? will not stand examination. Surely he was in the chamber when the honorable member for Swan (Mr. Hamilton) raised the point that the bank accounts of individuals in the Commonwealth Bank, including even those of members of the armed forces, were tampered with at the instance of the Government. Even the Prime Minister (Mr. Chifley) acknowledged that a direction was given to the Commonwealth Bank to take action against the accounts of ex-servicemen without their knowledge. Yet in the face of that the honorable member still contends that secrecy will be preserved. The illustration I have given of the Government tampering with accounts of ex-servicemen in the Commonwealth Bank could be multiplied one-thousandfold. This clause itself will legalize the practice of divulging information concerning customers’ accounts to the Commissioner of Taxation and Government departments.
Clause 11 of the bill reads -
It shall be the duty of the Commonwealth Bank-
to conduct its business without discrimination except onsuch grounds as are appropriate in the normal and proper conduct of banking business.
I have just supplied instances which show that information regarding accounts has been divulged, and money in individuals’ bank accounts has been removed at the behest of the Department of Defence.
Clause 11 also provides -
It shall be the duty of the Commonwealth Bank- -
to observe, except ais otherwise required by law, the practices and usages customary among bankers and, in particular, not to divulge any information relating to. or to the affairs of, a customer of the Commonwealth Hank except in circumstances in which it is. in accordance with law7 or the practices and usages customary among bankers, necessary or proper for the Commonwealth Bank to divulge that information.
If the Commonwealth Bank finds it “ necessary or proper “ to divulge information there is nothing in the bill to prevent it doing so. What are the circumstances which are to justify it in revealing confidential particulars of customers’ affairs? All that is required is a request from the Commissioner of Taxation, the Treasury, or some other Commonwealth department. That will be the “ proper “ procedure for the Commonwealth Bank to observe before it reveals information.
This clause is directly connected with the statement made by the Prime Minister that “ production and agricultural experts “ are to advise the Commonwealth Bank as to the policy which it should follow in making advances. Let us consider that statement. The bank is supposed to conduct its business without discrimination. Are honorable members so naive as to believe that when instructions are given by the “ production and agricultural experts “ that advances should not be made in particular cases that the bank is likely to exercise any independent judgment? Will not the bank say to the particular applicant: “You shall have the advance, provided you take the advice of our production and agricultural experts. If you do not we shall discriminate against you.” Why does the Government propose to appoint those “ experts “ ? If they are to function in a purely advisory capacity they will be merely carrying out the duty at present discharged by certain of the Commonwealth Bank’s officials, and there would be no need to appoint them. The whole purpose of appointing these advisers is to enable the Government, through the Commonwealth Bank, to discriminate between customers; indeed, that is evident throughout the entire clause.
Honorable members know that a scheme is to be introduced by the Government to provide for the nationalization of medical services. It is quite obvious that if a small -pharmacist has occasion to apply to the national bank for accommodation, the bank, or one of its advisers, will first of all want to know w nether the pharmacist is co-operating in the national medical scheme. If he is not then his chances of receiving accommodation will be practically negligible. This will be done through the agency of “ experts “ to be appointed by the Government to advise the bank on the issue of or the extension of credit to certain industries. Is that “ discrimination “ ? Of course it is. Instances like that can be multiplied a thousandfold. One can imagine what is likely to happen to Australian National Airways Proprietary Limited, the company which the Government has sought to destroy, first by referendum, and then by legislation, if it has occasion to apply to the monopoly bank for accommodation. The Government would regard that as a heaven-sent opportunity to drive out of business an airline which it has already made two attempts to destroy, and would doubtless seize the opportunity to impose such terms and conditions as would make it impossible for that company to continue to function. Is that “discrimination “ ? Of course it is, because the Commonwealth Bank, at the behest of the Government, will be discriminating against one airline in favour of another. The whole bill reeks with discrimination, and it should never have been introduced. Not only does it attempt to discriminate between industries-
– Order ! The honorable member’s time has expired.
– Much criticism has been directed against clause 11 by the honorable member for Wentworth (Mr. Harrison) and by the honorable member for Fawkner (Mr. Holt), who spoke last, night. I remind the committee, how- ever, that it is now discussing Part IV. of the bill, which includes clauses 9 to 25. Allegations have been made that when the Commonwealth Bank is the only bank operating in this country it will discriminate against particular customers. A clear distinction must be drawn between legitimate discrimination, which involves the careful selection of industries and individuals to which advances should be made, and unfair discrimination against firms and individuals. What is “ discrimination “ ? It implies a careful scrutiny and selection amongst industries and individuals who apply for advances. Not to admit that banking practice is founded upon that principle would be to ignore reality, and to assert the contrary would be to suggest that every application for an advance should be granted. Obviously that would be quite unsound; in the very nature of things, all applications for advances ought not to be granted. I pointed, out in the course of my secondreading speech, that some one in the banking system must decide at any particular time the scale of advances which should be made. If times are prosperous it is obvious that advances should not be made too freely. However, if conditions are depressed, it is necessary that advances should be made on a more liberal scale. One of the most serious criticisms made of private banks by the Royal Commission on Monetary and Banking Systems in 1936 was that private banks did the wrong thing in good as well as in bad times. When Australia was enjoying a boom the private banks advanced far too much money, and in the depression they restricted advances and curtailed industry, when their policy should have been the very reverse.
– That is contrary to the facts.
– The honorable member for Fawkner interjects that my statement is contrary to the facts, but my statement is substantiated by the report of the royal commission. During my second-reading speech I quoted passages from that report, and I am not going to repeat them now. To any one who takes the trouble to read that report it is perfectly obvious that members of the royal commission - indeed, all the members of the royal commission - agreed that the private trading banks were censurable because they adopted a policy which was tooliberal in boom times and followed a reactionary policy during times of depression. The honorable member for Wakefield (Mr. McBride) interjected at the time that what I said was not true, and that the royal commission did not make the findings which I quoted. I shall read from paragraph 181 of the report of the Royal Commission on Monetary and Banking Systems -
Advances, which had reached their highest point of £269,000,000 in the fourth quarter of 1929, fell in the second quarter of 1930 to £260,000,000, and there was no significant change in the holding of government securities.
Again, in paragraph 184j the commission reported -
The downward trend of advances continued, and there was a sharp fall from £260,000,000 to £239,000,000. Holdings of long-term government securities fell by nearly £3,000,000 from 12.4 million pounds to 9.7 million pounds.
There is no doubt about the matter at all; it is as plain as a pike-staff in sentence after sentence of that report that in both sets of circumstances the wrong policy was followed. In times of boom the private banks advanced money too liberally - they induced, people to engage in enterprises which had no hope of making profits in normal times - and, later, during the depression, they withdrew credits previously granted to individuals and industry. My point is that at any given time in the history of a community those who control the financial affairs of the Commonwealth must say what is the proper amount of advances that ought to be made during a certain following period. Obviously, it is impossible for all applications for advances to be granted at any time. 1 make the point that there always has to be a careful selection of the industries to which .advances will be granted, and of the individuals in those industries to whom advances will be made. All that clause 11 does is to say that the ordinary practices and usages of banking will apply in the conduct of the Commonwealth Bank. Notwithstanding the degree to which honorable members opposite may try to water down the provisions of clause 11, an obligation which is not imposed on the private trading banks is imposed on the Commonwealth Bank. There is no obligation at all on the part of private trading banks not to discriminate. As I pointed out in my second-reading speech, they do, in fact, discriminate in many instances. Many directors of private trading banks are themselves interested in certain industries. When it comes to laying down a policy in relation to certain industries, obviously those who direct the policies of the private trading banks are biased in regard to making advances to the particular industries in which they are interested. Those who decide what the trend of banking and financial policy shall be, taking into account economic circumstances at the time, ought not to be individuals who are interested in the making of profits, because there are times when correct policy is to liberalize advances in directions where profits cannot be made immediately. It is well known that when the private trading banks have withdrawn advances that have been made to industries and individuals, advances have been withdrawn, not from the least efficient firms in the industry, but from the firms which have the smallest amount of indebtedness to the banking institutions. Let us consider the position of two trading firms in a certain industry, one of which owes a large sum of money to the banking institutions. It is an old firm which is not run very efficiently. The other firm, which is in the hands of young, enterprising men, is not greatly indebted to the private trading banks. What would a bank do should it be a question of deciding whether to make an advance to one or the other of those two firms? Having already invested large sums in the less efficient firm the bank would lose its money if it did not make further advances to that firm. Its own profits would be affected if, instead of assisting the less efficient firm, it did the right thing and helped the more enterprising firm.
– The Minister has a wonderful imagination.
– If the honorable member for Wakefield (Mr. McBride) has studied this subject at all he will know that what I have said is a wellknown practice in managerial circles the world over. In circumstances such as those that I have mentioned the firm that gets an advance is not the enterprising efficient firm that wants to expand its operations, but the one which has the greater indebtedness to the bank. The private trading banks are always looking to their own profits, and, accordingly, they make many serious errors in relation to individuals and industries to which advances are made. It is, therefore, obvious that decisions as to the scale on which advances will be made at any time, and as to the individuals or firms to which advances shall be made, ought not to be in the hands of people concerned with making profits.
– Apparently the decision should be left in the hands of people who know nothing about the matters they are to decide.
– The honorable member for Wakefield is supporting the case of those who brought this country to a low level in periods of adversity, and inflicted upon hundreds of thousands of people in this country untold hardships which they need not have suffered. That was the result of unsound judgment on the part of private banks interested in profits. I do not blame the directors of those banks, but it is obvious to any one who studies this matter with an unbiased mind that the decisions in these matters ought not to be made by individuals who are interested in making profits. That is one reason why I am such a strong supporter of this legislation. I submit that clause 11 places an obligation on the Commonwealth Bank which has never been placed on the private trading banks, because, obviously, it could not legally be placed on them. Paragraph c of clause 11 imposes on the Commonwealth Bank the obligation - to observe . . . the practices and usages customary among bankers, and, in particular, not to divulge any information relating to, or to the affairs of, a customer of the CommonwealthBank -
There are certain exceptions, as the paragraph continues - except in circumstances in which it is, in accordance with law or the practices and usages .customary among bankers, necessary or proper for the Commonwealth Bank to divulge that information.
– What is the penalty for any breach of that provision?
– I shall develop ray argument in my own way.
– Were it not that the Minister is in charge of the bill, his time under the Standing Orders would have expired, but in the circumstances he is entitled to continue.
– I rise to order. Does your ruling imply. Mr. Chairman, that a succession of Ministers can assume charge of a bill ? This is the bill of the Prime Minister, who introduced it.
– I will not press the point.
– We have just listened to a most confusing speech by the Minister for Post-war Reconstruction (Mr. Dedman). Not only did he confuse members of the Opposition and members of his own party, but he also confused himself. He set out to show how the banks contracted advances during the depression, but all he succeeded in showing was that deposits had fallen during that period. Last night, the honorable member for Eden-Monaro (Mr. Eraser) was at great pains to impress on honorable members that no discrimination would be exercised by the Commonwealth Bank when it became a monopoly. This morning, however, the Minister for Post- war Reconstruction has been at equal pains to inform us that there will be discrimination. This attitude is characteristic of the Minister. We remember that the Prime Minister gave an assurance that no employees of the private banks would lose their employment as bank officials as a result of the nationalization of banking, but the Minister for Post-war Reconstruction was able to assure us that the banking services of the country could be carried on with 5,000 fewer employees.
The honorable member for EdenMonaro said that no case of discrimination by the Commonwealth Bank had ever been established. Well, I can cite such a case. After the Mortgage Bank Department was established in 1943, a constituent of mine applied to it for an advance to enable him to buy a farm. He had been following the discussions which took place during the consideration of the bill in this Parliament, and lie believed that the Mortgage Bank Department of the Commonwealth Bank would give him the assistance he needed. For the previous ten years he had been renting for £3 an acre a farm of 95 acres in a very good district. He had a wife and nine children. He had saved up £2,000, and his stock and implements were free of debt. He applied to the bank for an advance of £2,500 to enable him to complete the purchase of the farm at £45 an acre. The farm was part of an estate in trust, and it had to be sold for cash, so that the money might be distributed amongst the beneficiaries. Despite the fact that the applicant was of very good type and was supporting nine young Australians, the Mortgage Bank Department refused to advance him the amount of £2,500 for which he applied. He had been paying about £270 a year in rent, but if lie had been able to purchase the farm his yearly interest bill on the advance would be only £90 a year. He wrote to me pointing out that the action of the bank had placed him in a very awkward position, and that he had understood that the setting up of the Mortgage Bank Department was for the purpose of assisting men like him. It is not. suggested that money should be advanced to men who have not proved themselves, but in this case the applicant was a man of excellent reputation. I wrote to the then Treasurer (Mr. Chifley), who is to-day Prime Minister. I stated the case as it had been presented to me, and expressed the opinion that the Mortgage Bank Department existed for the purpose of assisting with temporary advances men like the one on whose behalf I was writing. Be it said to the credit of the Treasurer that he made representations to the Commonwealth Bank on the man’s behalf, and that the necessary advance was made to enable him to purchase the farm. However, it should not be necessary for an applicant to come to his member of Parliament, and explain his financial position, in order that representations might be made through the Commonwealth Treasurer for an advance from the Commonwealth Bank, when he waa on all grounds entitled to receive the advance in any case. Nevertheless, that is the kind of thing which we might expect to happen under a government banking monopoly. The Minister for Post-war Reconstruction said that there must be discrimination against certain industries.
– That is a distortion of what I said. I said that there would have, to be careful selection; I did not say discrimination.
– All right, careful selection. The Minister then cited a. case in which a bank had advanced money to an inefficient industry, and was then compelled to advance more money to enable this inefficient industry to carry on. That has not been my experience of the way in which trading banks conduct their business. They do not advance money to inefficient industries. They are careful to choose efficient industries, and honest and trustworthy men, who have demonstrated their ability to make good.
– And they have turned down hundreds of such men.
– The interjection of the honorable member for Hume (Mr. Fuller) is interesting, having regard to clause 4 of the amending provision of 1943 which instituted the Mortgage Bank Department of the Commonwealth Hank. It is is follows: -
– And rightly so, too.
– Now we have an admission from the honorable member. A few minutes ago, he was complaining because the banks exercised their rights, but apparently what is wrong for a trading bank to do is entirely right for the Commonwealth Bank to do. Government supporters have had much to say about the depression, and the part played during that time by the trading banks. If the same circumstances existed to-day as during the depression there might be some justification for the introduction of this bill, but an entirely different set of circumstances exists to-day. The Banking Act of 1945 gave to the Commonwealth Bank all necessary control over the trading banks, as has been admitted by the Prime Minister himself, and by the Minister for Post-war Reconstruction. Therefore, honorable members opposite have merely been attempting to delude the public by citing the depression as a. reason why the Commonwealth Bank should be given more extensive powers than it enjoys under the Banking Act of 1945. The real reason is that divulged by the Minister for Post-war Reconstruction that there must be discrimination; and, when only the one bank is in existence, that discrimination can be exercised, and the person against whom it is exercised has absolutely no redress. Paragraph c of clause .11 provides that the Commonwealth Bank shall observe the customary practices and usages of hankers -
In particular, not to divulge any information relating to, or to the affairs of, a customer of the Commonwealth Bank except in circumstances in which it is. in accordance with law or the practices and usages customary among bankers, necessary or proper for the Commonwealth Bank to divulge that information.
As has been pointed out. by the honorable member for Fawkner (Mr. Holt), should an official of the Commonwealth Bank divulge such information, which we are assured will be kept secret, no penalty is provided. We are told that this bill offers to the public everything; as a matter of fact it deludes the public. The Minister for Works and Housing (Mr. Lemmon) in a booklet which he has made available to honorable members with his compliments, dealing with trading banks in relation to housing, states -
Incidental expenses involved in acquiring a home are kept at the minimum by trading hank methods, e.g., as a general rule, no valuation or mortgage fees are charged. Bank managers ure usually expert in valuing and experienced in real estate and building finance Their advice is freely available to all persons seeking guidance.
The bill contains no provision which assures clients of the Commonwealth Bank that there will not be any mortgage, or valuation fees charged to them in their dealings with the bank. The Minister for Post-war Reconstruction says that no customer of the trading banks will be compelled to bank with the Commonwealth Bank. What magnanimity! In effect, the Minister says to the people, “ You can continue to keep your money in a jam tin, or_ under the floor boards. It does not matter should your money be in a place “ where moth and rust doth corrupt, and where thieves break through and steal ‘ “. The alternative thus offered will be to bank with the Commonwealth Bank, and in that case many people will suffer the discrimination which the Minister for Post-war Reconstruction (Mr. Dedman) has assured us to be inevitable.
– If the honorable member for Wentworth (Mr. Harrison) is silly enough to think that he can deceive anybody with the utter farrago of nonsense which he put to the committee this morning, he is to be pitied as an example of arrested mental development. Last night I commented on the fact that the case against this clause was vested in tie hands of the honorable member for New England (Mr. Abbott) and the honorable member for Balaclava (Mr. White). I suggested that that was pathetic enough; but the Opposition this morning has turned from pathos to bathos in the views presented by the honorable member for Wentworth. However, it is important that the three points made last night by the honorable member for Balaclava, which I endeavoured to rebut, and which have again been asserted by the honorable member for Wentworth, should be placed beyond doubt. The first of them was that the failure of the Government Savings Bank of New South Wales was due to some deficiency in the bank itself. The facts with regard to the failure of that bank are these: First, the bank was solvent and there was no reason why it should have been necessary for it to close its doors; secondly, the run upon that bank was deliberately engineered by those who engaged in false statements that the money and deposits of the people in that bank would be stolen if they allowed them to remain there; and, thirdly, the bank was still solvent, and there would have been no necessity for it whatever to close if it had received the necessary support and backing from the central banking institution at that time. However, that support was withheld from that solvent bank because the central bank at that time was under the complete control of politically appointed bank directors. The Commissioner of the New South Wales Savings Bank called upon Sir Thomas Bavin, who was then the leader of the antiLabour forces in New South Wales, and told him that statements which he and others were making to the effect that deposits in the State Savings Bank would be stolen were false and were having a most injurious effect. That commissioner pleaded with Sir Thomas Bavin in the interests of hundreds of thousands of depositors in the bank to make it plain to the people that there was no possibility, or danger, of that happening. .Sir Thomas Bavin deliberately refused to correct the misstatements that he had made, although he was given the plainest warning from the Commissioner of the State Savings Bank of the disastrous consequences that would follow. The honorable member for Reid (Mr. Lang) informs me that at that time Sir Thomas Bavin was Premier of New South Wales. Therefore, his responsibility in respect of the statements he then made was rendered still more grave.
The second statement made by the honorable member for Wentworth this morning was even more ludicrous. He attempted to assert that the responsibility for the deflation experienced during the last depression rested at the door of the Scullin Government. Although the Scullin Government was in office it did not have a majority in the Senate; and it did not control the Commonwealth Bank Board. The position could not have been made clearer than it was made in a letter addressed at that time by the Chairman of the
Commonwealth Bank Board, Sir Robert Gibson, to the then Treasurer, Mr. Theodore, in which he insisted that the Government must take measures deliberately designed to cause deflation before it would give any measure of assistance from the Commonwealth Bank. That is the reason why the misery of our people in those days was accentuated, and why it is so necessary through this legislation to ensure that similar conditions shall not arise again.
The third point made by the honorable member for Wentworth relates to the powers taken by the Parliament under the Banking Act of 1945. He says that we are arguing that these powers are now necessary to prevent a recurrence of the depression conditions, and that that is exactly what we said when the Government presented its banking legislation to the Parliament in 1945. That, of course, is true. The fact is that, the 1945 legislation having been challenged and doubts having arisen as to the validity of the whole of the Banking Act of 1945, the Government is now justified in bringing this legislation before the Parliament in order to ensure that the purpose for which we stated the 1945 legislation was introduced and so emphatically endorsed by the people of Australia shall, indeed, be realized..
It was, indeed, a pleasure to hear the honorable member for Corangamite (Mr. McDonald) after being obliged to listen to the honorable member for Wentworth, because the former, as he always does, presented his case clearly, logically and fairly. One has cause to sympathize sometimes with a person of the ability of the honorable member having to sit on the back bench and hear a case presented in the name of the Opposition by the honorable member for Wentworth which he knows he could present so much better himself. With his typical fairness the honorable member for Corangamite made a statement a few moments ago for which he will probably receive some measure of rebuke from his own party. His fairness is a clear reason why he has not been elevated to a position to which his great talents entitle him. The honorable member said -
If the same circumstances occurred again as prevailed during the depression then there would be justification for the measure which the Government now proposes.
– He did not say that.
– Those were his words. I wrote them down as he uttered them. The honorable member indicated clearly that if the same circumstances prevailed now as during the depression there would be justification for this legislation.
– Tell us what the honorable member for Corangamite said about the 1945 legislation.
– What reason does he give for not supporting the nationalization of the banks now ? In his own words, it i3 because he believes that the necessary powers were taken under the legislation of 1945. So the honorable gentleman justifies all the powers taken two years ago, powers which were so viciously and bitterly opposed by the party to which he belongs. In two sentences he has made a splendid case for the legislation now presented by the Government and that case is not in any way undermined by the illustration he attempted to give of discrimination practised by the Commonwealth Bank. In the first place, it is notable that, in citing his illustration, he did not give any names or details which would enable his allegations to be checked or investigated, as ought to be done -were he to make such a serious charge as one of discrimination against a citizen by the Commonwealth Bank. The second point of his story was that when he made representations to the then Treasurer who is now the Prime Minister (Mr. Chifley), and when he in turn placed the facts before the authorities of the Commonwealth Bank, the matter was reviewed and the accommodation sought was granted. The honorable member did not assert, and I am certain he would not assert, that he attempted to use political influence on behalf of his constituent at that time, nor would he assert that at his instigation the Treasurer at that time attempted to use political influence on behalf of his constituent. All that his statement boils down to is that when the matter was placed before the senior officers of the Commonwealth Bank and reviewed on its merits the necessary accommodation was forthcoming. Obviously, no discrimination of any kind was practised against his constituent. Although, as I said last night, no proof can be produced of discrimination by the Commonwealth Bank against individual customers, there is a good deal of concrete evidence of discrimination practised by the private trading banks. The minutes of evidence of the Royal Commission on Monetary and Banking Systems, record the evidence of the late Mr. Edward Whewal Holden, M.L.C., who was not a Labour man. Mr. Holden was, I think, prominently connected with General Motors-Holden’s Limited and had a good deal of knowledge of private banking. Mr. Holden was asked by the present honorable member for New England (Mr. Abbott)-
Bo you think that your small industries here stiffer from having to obtain finance from head offices in other States-
The head offices of the private banks was clearly indicated from the context - that the banks in those States do not desire to start industries here to compete with industries in other States?
To which Mr. Holden replied -
I think they do suffer in that way.
There is very clear evidence of discrimination practised by the private trading banks against, first, small industries, and, secondly, against small industries established in the less populous States. These are the banks and that is the form of discrimination which every honorable member opposite is endeavouring to uphold by seeking the defeat of this measure.
.- The Minister for Post-war Reconstruction (Mr. Dedman) made several remarks in regard to discrimination which in substance amounted to an indication that the honorable gentleman believes it to be proper that discrimination should be practised from time to time. I agree with the honorable gentleman in the sense that I think that the application of every applicant for a loan from any bank, whether it be a State or a private trading bank, must be treated with discrimination. I point out, however that the situation will become vastly different after the passing of this legislation because there is not yet in force any legislation which compels a customer to trade with one bank and with one bank only.
At present if a customer of a bank believes that discrimination is being exercised against him by that bank he may take his business to another bank. If this bill be passed only one bank will be in existence.
The second point made by the Minister for Post-war Reconstruction was in regard to advances made by private banks during the depression. The honorable gentleman sought to prove that advances had materially diminished between the boom, years and those of the financial and economic depression. Authoritative financial figures show very definitely that the fall in advances was extremely small. In 1928, which could be regarded as a boom year, deposits in the trading banks amounted to £275,000,000 and advances to £236,000,000. In other words advances represented 81.12 per cent, of deposits. In the following year - and in each instance I have taken figures for the month of March - deposits amounted to £287,000,000 and advances to £289,000,000. In December, 1929, the month referred to by the Minister, advances amounted to £269,000,000, or S3. 31 per cent, of the deposits. In the first year of the financial and economic depression deposits fell to £272,000,000 and advances dropped from £269,000,000 to £264,000,000, the percentage of advances to deposits thus’ increasing to 97 per cent. I do not imagine that the Minister, who is probably more knowledgeable in respect of financial matters than, a great many other honorable members opposite, would hold the opinion that the banks can make advances up to any amount they desire, irrespective of the level of deposits. I know that to some members of the Government the sky is the limit. They believe that a bank can advance any amount at all; but the fact remains that all banks have a fixed ratio of advances to deposits and that ratio is never exceeded, except by very small amounts.
– Does that relate to fixed deposits or to all deposits?
– To all deposits, and in addition, to shareholders’ funds. During the depression, some banks exceeded the fixed ratios, and advanced up to 107 per cent, of deposits and shareholders’ funds.
It is quite clear, therefore, that instead of banks contracting advances dur,ing the depression, they actually increased them on a percentage basis. When one turns to the State banks, however, one finds that during that period of adversity they adopted a vastly different policy. I have before me the figures for the State Savings Bank of Victoria. In 1930, advances by that bank totalled 4,964, and amounted to £3,907,000. By 1931, when the depression was at its worst, the number of advances had been reduced to 926 and their total value to £658,000. In other words, that bank reduced its advances by a substantial percentage during the depression period, whereas, as I have shown, the trading banks, on a percentage basis at least, increased their advances by quite an appreciable amount. The argument, therefore, that State-controlled institutions are more generous than the trading banks in times of economic distress falls to the ground.
The Minister made two other points to which I shall refer. The honorable gentleman again mentioned the profit motive, and said that because the private banks operated for profit they were not competent agencies to control credit. But what the Minister conveniently forgot is that under the 1945 banking legislation, the Commonwealth Bank, or the Treasurer to be more accurate, has complete control over the amounts of advances, and the general credit policy of the trading banks. I shall read the relevant section in the Banking Act of 1945 to prove my contention. It is section 27, which states, in sub-section 1 -
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.
So, the present situation is that quite apart from the measure now before the committee, the Commonwealth Bank, or, as I have said, the Treasurer, has power to control the amounts of advances, and to prescribe the directions in which the advances shall be made. The Minister then went on to talk about the amount of credit that the trading banks have given in the past, and might be expected to give in the future. Again he overlooked the fact that no trading bank can make advances regardless of its actual deposits. The amounts advanced depend entirely on the decision of the Treasurer, because section 20 of the Banking Act of 1945 states - (1.) Each bank shall, not later than the twenty-eighth day in each month, lodge in the Special Account established by it under this Division such amount (if any) as the Commonwealth Bank, by notice in writing, directs.
In other words, if the Treasurer wants to expand credit in this country all that he has to do is to release the large deposits that are being held in “ cold store “ by the Commonwealth Bank in a special account. That will at once enable the trading banks to expand their advances. On the other hand, should the Treasurer wish to restrict the credit available in the community, he has only to increase the amounts in the special account, and thereby take away from the banks the power to issue credit. So, in reply to all this talk about the power possessed by the trading banks to influence, in any way, the general financial policy of this country, I say that honorable members opposite either conveniently forget the existing situation, or they seek to put wrong ideas into the minds of the people. This portion of the bill is entirely unnecessary and I hope that it will be rejected.
– As the Minister for Transport (Mr. Ward) was permitted to speak during this debate of an argument that he had had with some one outside of the Parliament altogether, I assume that I can reply to anything that has been said in the course of this debate. First, whilst all this talk of the depression, and of the High Court refusing to the Australian Government the right to insist that the banking business of municipal authorities shall be handled by the Commonwealth Bank, may be an excuse for this legislation, it is not a reason, and there is a considerable difference between an excuse and a reason. What is the true reason for this legislation? It is clear that it is the first move in the Government’s plan to implement its policy of the socialization of industry, production, distribution, and exchange. The bill has been brought forward at this period in our history because it is a most opportune time for Labour. All the references to the depression and to what the High Court has done in regard to our banking legislation are merely “ red herrings “. The main issue is dear. The Government has chosen the present time for the introduction of this measure because Labour’s representation in the Senate and in the House of Representatives is greater now than at any time in the history of the Labour party. The Attorney-General (Dr. Evatt) is of course conveniently overseas. I need say no more about that. Obviously, the Prime Minister (Mr. Chifley) hopes that the results of this year’s census will justify an increase of the membership of the Federal Parliament. That was revealed when the Leader of the Opposition (Mr. Menzies) said that had members of this legislature to face the electors now, Labour would have no chance of success, and the honorable member for Watson (Mr. Falstein), by interjection, said that what the Leader of the Opposition did not know was that Government members would be able to choose their own battleground. By redistribution of seats or the creation of new seats Government members hope to be able to choose their own battleground.
– Order! The honorable member may not deal with redistribution of seats, and must confine himself to the clauses of the bill before the committee.
– The nationalization of banking is only a side issue in the Government’s socialistic programme. The freedom of the people in this community will not last long under this socialist Government. Much has been said about the rank-and-file, the ordinary men and women. The Prime Minister was unable to find a name to describe them. I call them the “ cart-horses of progress “. Generation after generation, they quietly do the things that make or mar the nation. The Prime Minister tried to imply that the rank-and-file support this legislation, but they do not. The rank-and-file are the backbone of democracy. They have built the United States of America and maintained its freedom. Abraham Lincoln, who could be described as the founder of democracy, was one of them. He was bred and bom and lived his early life in the backwoods of Kentucky. Until he was twelve, his copybook was the back of a shovel and his pencil a lump of charcoal. He only had three books before he was 21 years of age. The great wars are fought by the rank-and-file, not the people in high or low places. The rankandfile of Victoria last Saturday, by an overwhelming majority, ousted the Cain Labour Government, and voted against nationalization of banking.
The Minister for Post-war Reconstruction (Mr. Dedman) made a couple of statements that did not meet with my approval or, I am sure, the approval of the people. He 9aid that choice as to who should enter or remain in business should not be left to those who conducted banking for private profit. But the alternative is that the choice must be dictated by government policy. Whatever selection in that regard the private trading banks may have exercised - and I think it would be small - has proved of great worth to Australia. Every day we are told by Government supporters that Australia was never in a better economic position. They claim credit for Australia’s prosperity. They even claim to have won the war. Australia is prosperous, because of the energy and initiative of the people. Under this bill, the people will be harnessed and not able to display enterprise. The Minister for Post-war Reconstruction said something about more enterprising firms perhaps being able to get more finance from the proposed socialized banking. But under socialism there will be no enterprise, for nationalization of banking is but the first step in Labour’s programme to socialize all industry. Australia has been developed into one of the finest nations in the world in but a few years and to some degree this has been encouraged by the trading banks and their application of a sound - financial policy. History tells us that we should continue to develop Australia on the lines that we have been following.
The honorable member for EdenMonaro (Mr. Fraser) spoke most illogically last night. I doubt whether honorable members were able to follow his meaning. I take exception to what be said about two honorable members on this . side of the chamber. He ought to emulate
Ins Prime Minister, to whom I pay tribute, in the belief that credit should be given where credit is due, who said that malicious and derogatory statements do not get us anywhere. The honorable member made an unjustified attack on the honorable member for Balaclava (Mr. White) and the honorable member for New England (Mr. Abbott). He said that if the Opposition’s case against nationalization of banking rested on their arguments, it had fallen to a low ebb. Could there by any more ridiculous statement than that? Let us compare the honorable member for Eden-Monaro with the two honorable members whom he attacked.
The CHAIRMAN (Mr. Clark).Order! The honorable member must confine himself to the clauses before the Chair.
– I rise to order. Last night the honorable member for Eden-Monaro attacked the honorable member for New England (Mr. Abbott) and me without our having any opportunity of replying. Surely, the honorable member for Wimmera is entitled to say something in rebuttal of the remarks of the honorable member for EdenMonaro.
– Have I the right to proceed?
– The honorable member’s only right is to refer to the clauses of the bill that are before the committee.
– The honorable member for Eden-Monaro said that if the Opposition relied on the honorable member for New England and the honorable member for Balaclava to interpret the bill it would make out a poor case. Australia depended upon the honorable member for Balaclava in the two world wars, and the honorable member for New England won the Military Cross in the first-
– Order ! The honorable member must return to the bill.
– If I am unable to answer the criticism by the honorable member for Eden-Monaro of the honorable member for New England and the honorable member for Balaclava, am i, under your ruling, sir, able to refer to what was said by the Minister for Transport (Mr. Ward), who, referring to the passage through the Parliament of the International Monetary Agreements Act, which is better known as “ Bretton Woods “, asked why we did not demand a referendum on that proposal ?
– The honorable member is not entitled to refer to referendums. The referendum issue was dealt with in the amendment to a previous clause moved by the Leader of the Opposition (Mr. Menzies). We have gone beyond that stage.
– Apparently, I am not able to refer to anything that may he unfavorable to the Government.
– Order J That statement is a reflection on the Chair, and the honorable member must withdraw it and apologize.
– Certainly ; I have no intention of casting any reflection on the Chair. I apologize.
– I rise to order. In the course of this debate, we are considering clauses 9 to 25, » considerable number of clauses, covering a wide range of subjects. If honorable members opposite make certain allegations that warrant a reply from this side, may not those allegations be replies to? Are we not entitled to answer specific charges?
– Honorable members on both sides are entitled to refer to the clauses under consideration and anything related to them. If honorable members on one side make statements, honorable gentlemen on the other side arc entitled to reply. I called the honorable member for Wimmera to order earlier because he referred to the taking of » referendum. That matter has already been dealt with, and the honorable gentleman is not entitled to make further references to it. He may only refer to clauses 9 to 25 and matters related to them.
– Do I understand that we will be allowed to reply to the arguments of the honorable member for EdenMonaro (Mr. Fraser), who made rathe* despicable personal attacks on honorable members ? I want to reply to his remarks.
– The Chair will be the judge when the arguments are raised. They must have relation to the bill.
– I shall refer to the clauses before the committee. The Prime Minister said in his second-reading speech that it would be hard to convince the average man that fewer banks would make for greater competition. Recently, in Victoria I spoke to a man who had just been in conversation with the manager of the local branch of the Commonwealth Bank. The manager said to him, “ This morning I went out and got some new business. If the banks are nationalized and we h a ve only one bank in this community, there will be little incentive for me to go out after business “.
– Order ! The honorable member’3 time has expired.
– I raise a point of procedure which it may be convenient for you to decide at this moment, Mr. Chairman. I understand that the committee is now dealing with clauses 9 to 25 inclusive. Normally honorable members would have an opportunity to speak twice on each clause. Does the present arrangement mean that each member may speak only twice on the whole group of clauses?
– Yes. The committee itself decided that clauses 9 to 25 should be taken as a whole. Honorable members can speak only twice on the clauses before the Chair.
– Should an amendment be moved, may honorable members speak on it without interfering with that right?
– Yes, provided that they speak on the amendment only. If an honorable member deals with clauses that are not affected by such an amendment, he will be considered to be exercising his right to speak generally on the group of clauses.
Sitting suspended from 12. h8 to 2.15 p.m.
.- Members of the Opposition have strongly criticized clause 11, which is one of the most important provisions in the bill. It reads -
It shall be the duty of the Commonwealth Bank -
Members of the Opposition iiia ve complained about the authority which the Commonwealth Bank will exercise under this clause. I remind them that in the past, people who required banking accommodation had to apply to private financial institutions for it, and that authority was used to the detriment of all sections of the people, particularly the primary producers. We have had bitter experience of that. The power to expand and contract credit is vital. If any private financial interests possess that power, they are able at any time to cut off the life-blood of the nation. This control must be exercised in the interests of the people by the institution which is responsible to the people. Obviously, this is the Parliament, through the public banking authority, the Commonwealth Bank. I put that to members of the Opposition in refutation of their contentions.
Experience has shown that this control, when exerted by private banking companies, has been detrimental to the best interests of the nation. Indications are to be seen that dangerous economic conditions are again developing. That is why the Government has introduced this bill. I am aware that the private banks are now offering to their customers almost unlimited financial accommodation. Indeed, the private banks are almost forcing advances on« their customers, urging them to expand their businesses. In my own electorate, primary producers like myself have properties under crown lease. We enjoy security of tenure for 40 years, provided we meet the annual interest and sinking fund payments. We know that we shall not be required, without warning, to repay our indebtedness in a lump sum. The own, which is the nation, will not implement a policy of evicting primary producers from their holdings. Of course, the object of the private banks is to make the maximum possible profits, In a boom period, they have plenty of money to lend. They even ask primary producers and others to transfer their mortgages from State instrumentalities to their own institutions. Men who heed this advice do not realize what they are really doing, because their mortgages are repayable on call. As the result of the present high prices of sheep and wheat, primary producers are able to get most generous financial accommodation. Obviously, the policy of expanding credit in -boom periods and contracting it in a financial and economic depression is inherent in the present private banking system. Their purpose is to increase their business, but immediately warnings of an economic crash are received, they contract their operations. The honorable member for Corangamite (Mr. McDonald) cited an instance where the Mortgage Bank Department of the Commonwealth Bank refused to provide an advance for a client. The honorable member, significantly, did not give any details of this application. Probably, the customer had been refused by the private banks before he approached the Commonwealth Bank. Indeed, I consider that the instance which the honorable member for Corangamite cited justifies the necessity for this bill, and the government control of credit.
The honorable member for Wimmera (Mr. Turnbull), in a plaintive voice, asked the reason for the introduction of this bill. In his almost virginal political innocence, he has listened to the stories of the representatives of the private banks. He stated that the Government had introduced the bill for the purpose of implementing its socialist programme. Of course, that is wrong. The honorable member claims that he has travelled extensively in his electorate, and sought the views of many farmers regarding this bill. He must be aware that they are in favour of it. For his information, however, I emphasize that the reason for the introduction of this legislation is to prevent a repetition of the appalling conditions which existed in his electorate and my own in 1930-32. The honorable member will be interested to hear a number of the resolutions which were passed at a conference of Victorian wheat and woolgrowers on the 3rd August, 1932. One of them read -
That this conference considers that the policy of the Premiers plan in securing reductions of interest has not been carried out by many financial institutions-
The Leader of the Opposition (Mr. Menzies) will be able to tell us something about that - and other mortgagees: and, therefore, that it has not achieved the desired result-
In other words, the private financial institutions did not reduce the interest burden on primary producers. The resolution continued -
Further, that as mortgagors are being compelled to renew their mortgages at increased rates -
That is to say, in 1931-32, private financial institutions were increasing their rates of interest, despite the Premiers plan which provided, among other things, for a. reduction of interest. Can anybody imagine the Commonwealth Bank, in such circumstances, increasing interest rates, and evicting primary producers from their properties? The remaining portion of the resolution was - further, that as mortgagors are being compelled to renew their mortgages at increased rates, a. further reduction is imperative and inevitable, and that steps bc taken to have the Premiere plan amended accordingly.
That a tribunal be set up to deal with evictions and lease cancellations.
According to the honorable member for Wimmera, primary producers who have received advances from the private banks, have lived in a paradise. He said, “ Look what we have achieved “.
– I stand by that.
– What did happen in the honorable member’s electorate was that primary producers urged that a tribunal be appointed to deal with evictions and lease cancellations. The next resolution adopted by the conference read -
That a complete revaluation of Mallee lands and a general writing down and funding of debts be urgently claimed, based upon the productive capacity of the land.
The conference also resolved -
That the Federal Bankruptcy Act lie amended to provide that a debtor, with the consent of two-thirds of his creditors, be allowed to carry on; and
That the executive outline a plan for a security of tenure for farmer mortgagors threatened by foreclosure and unemployment.
Mr.Turnbull. - What year was that?
– That was in 1932, the halcyon days referred to by the honorable member when the farmers were in paradise! I shall mention the number of evictions from farms which took place at that time. The conference further resolved - .
That this conference protests against the lowering of the exchange rate, and holds the view that until higher prices arc obtained for primary products the exchange rate should be increased.
This conference is of the opinion that the world-wide price of primary products is largely monetary in its origin, and therefore urges that the Lyons Ministry appoint a royal commission to inquire into Australia’s credit and currency policy.
That legislation be enacted to protect hirers under hire-purchase agreements, particularly as to the preservation of equity.
Another conference was held at Bendigo, and a conference was also held at Warracknabeal,in the electorate of the honorable member for Wimmera. At the conference held at Warracknabeal, Mr. S. Lockhart delivered the presidential address on the 24th March, 1933. According to the Warracknabeal Herald, in the course of that address lie made the following statement: -
The welfare of Australia is practically dependent upon the primary producers, yet day by day we see farmers going “broke” and thousands struggling - many joining the ranks of those who cannot pay. Values are disappearing, securities still depreciating, the ability to pay is becoming more and more restricted and taxation well past its limit. . . .
That gentleman is now chief president of the United Country party. The’ conditions of which he complained did not obtain for merely one year. In March,
Opposition members interjecting,
– Honorable members opposite do not like to hear this, but it is as well that these matters should be recalled. The Victorian Wheat and Wool Growers Association, at a conference held at Birchip on the 21st March, 1935, adopted the following resolution: -
Thatthis conference considers that the £ 12,000,000 offered to the wheat industry extending over a number of years is quite inade- quate to meet the position and that confer ence urges that a proper rehabilitationsheme should be adopted without delay to prevent wholesale eviction from farms.
The resolutions which I have read did not come from Labour supporters, but from members of the Country party. To-day members of the Opposition who represent country electorates are going around the country telling people what they are doing for the banks. Members of the Liberal party, which was formerly the United Australia party, and before that was known as the Nationalist party, are to-day working with members of the so-called Australian Country party. Both parlies are hand in hand with the banks. However, there will be a day of reckoning for members of the Australian Country party. Farmers realize more keenly than other sections of the community that, because of the present inflation in America, there must be another slump. That cannot be avoided under the operation of a system which permits independent private banks to lend almost unlimited sums of money to borrowers. In the past bankers have in boom times encouraged farmers to borrow in excess of their requirements. I know of a case which occurred in the boom period immediately before the last depression, when a private bank besought a man to buy more property. At the instigation of the bank he invested £10,000 in the purchase of additional land. He was not anxious to incur this added liability, but he was encouraged and urged to do so by the bank, which loaned him £5,000, telling him that the time had come for him to “ launch out “. In one year of the depression the total income from his property was not sufficient to meet his interest bill. The banks seized his property and he lost everything. Within two years of receiving the loan, that man, who is a friend of mine, was looking for a job. Members on this side of the chamber are determined to prevent a repetition of such happenings. We know that men who for years owned their own farms were turned off them by the banks during the depression and thrown on to the labour market, where they were competing for non-existent jobs. I repeat for the benefit of the honorable member for Wimmera that that is the reason why the Government has introduced this bill, and I emphasize that the resolutions which I have quoted are ones which were adopted by members of his own party. If necessary I can furnish details of the indebtedness of wheat and wool growers in this country. Each of those sections owed over £150,000,000. That occurred in the depression brought about by money lenders. To-day because of good government and stabilization of prices, farmers are paying off their mortgages, which from the point of view of the banks, is not a desirable state of affairs. When the farmers get out of debt the banks will go out of business. Therefore the banks say, “ We must encourage the farmers to go into debt now, because only in that way can we hope to make any real profits later “. They know that land is the best security, it cannot disappear overnight, and that is how the banks came to acquire assets to the total value of £500,000,000 during the depression. They exacted their tribute and threw men and their families out on to the road. Interest had to- be paid. But why were not interest rates reduced concurrently with the fall in the price of commodities? Obviously that would have been equality of sacrifice. Interest rates at that time were as high as 6 and 7 per cent., but when prices collapsed it was useless for primary producers to appeal to the banks. They had to go to the Government for help. Contrast that situation with the position to-day. If my property is under lien to the Government and my savings are deposited in the Commonwealth Bank, I feel secure. Under the system of control hy private banks even the Leader of the Opposition himself could not do anything to alleviate the hardships of another depression. He says, “If I go out and face the people in two or three years time what will happen “-
– Order ! The honorable member’s time has expired.
– I am sorry to interrupt these researches into ancient history and to interrupt the prolonged scream against the banks which seems to constitute the entire stock-in-trade of honorable members opposite. All I need to say about the wheat and wool growers of Wimmera and Wannon is that they gave a very definite answer to the Government’s proposals on Saturday last.
– That is the right honorable member’s stock-in-trade.
– My stock-in-trade is at least modern. I know that the Minister for Works and Housing (Mr. Lemmon) does not appreciate it, and if I were in his place I should not like it either. It is a much more modern fact than the statement which some gentleman made at Warracknabeal in 1933. So 1 cut across the remarks of honorable members opposite to bring them back to the bill. I propose to move an amendment to clause 13. The clause provides - (1.) Where the Treasurer is satisfied that the majority in number of the shares in an Australian private bank* are Australian shares, the Treasurer may, by notice published in the Gazette, declare that, upon a date specified in the notice, the shares in that bank which are Australian shares upon that date shall be vested in the Commonwealth Bank.
This is an important clause because it is the first of a series designed to enable the scheme of the bill to be carried out by the giving of notice which will have the effect of vesting the shares in the Commonwealth Bank. I direct the attention of the committee to this, and I do so with great .earnestness, because until the bill was introduced, there was no opportunity to consider these important, machinery provisions. Of course, my remark applies also to honorable members opposite. I move -
That, in clause 13, sub-clause (1.), after the word “ Gazette “ the following words be inserted: - “not earlier than one month after this Act comes into operation “.
This bill is to come into operation on the day it receives the Royal assent, that is the day on which His Excellency the Governor-General proclaims the Royal assent to the act. Unless a time factor is introduced into this clause the position is that within a matter of minutes of notice being given the shares in question will be vested in the Commonwealth Bank. Vesting occurs the moment notice is given, that is to say, the moment notification is published in the Gazette, and as honorable members are aware a special issue of the Gazette may be made at any time. When that notice has been given certain consequences follow. Sub-section 3 provides that the shares are to be vested in the Commonwealth Bank, and provision is made for compensation which can be worked out subsequently. Clause 17 provides - (1.) Upon the date specified in a notice under sub-section (1.) of section thirteen of this Act (or, if that notice has been amended under sub-section (2.) of that section, upon the date specified in that notice as go amended), the directors of the Australian private bank in relation to the shares in which the notice was given shall, by force of this Act, cease to hold office.
As the bill now stands, within a matter of minutes after proclamation of the Royal assent, notice may be given, and the shares of private banks will automatically become vested in the Commonwealth Bank. The directors of the present banks will go out of office, so that the control of those institutions passes immediately into the hands of the Commonwealth Bank. Clause IS provides - (1.) The Governor of the Commonwealth Bank may, with the approval of the Treasurer, appoint directors of an Australian private bank the directors of which have ceased to hold office under the last preceding section and may appoint one of the directors so appointed to be chairman of directors. (2.) The directors so appointed shall hold office notwithstanding any lack of qualification or any disqualification arising under any law, charter or other instrument.
What I emphasize is this - that, as a result of those provisions, read together - it does not necessarily follow that it will be done in such a way; that is what my amendment is designed to deal with - it will be possible for the Government, within, literally, a. few minutes, or, at the most, an hour or two hours after this legislation has received the Royal assent, to have completely obliterated the trading banks, to have substituted new directors, to have had the shares of the trading banks vested in the Commonwealth Bank; in which event, of course, two results would follow, one of which would be that those who are now in charge of the policy of the banks would have ceased to be in charge of them, and their successors would be in a position to say, “ This bank, under its new ownership, does not propose to test the validity of this law “, and tests of validity would have gone. That is one possibility. The other possibility is that, upon an application being made to the appropriate court - the High Court - it will be objected in relation to certain applications that I can think of, that it is too late; the thing has been done. From the point of view of the “ whole-hogging “ opponent of the banks, who cannot wait for one month to see them obliterated, that may be a good thing. But it would be a very wrong thing to do in a country in which, under the Constitution, the Parliament can act only within its powers, and the High Court exists to test whether those powers have been exceeded. In a federal country of our kind, in my view - and I am sure it is the view that is very widely held in Australia - it is essential that some reasonable opportunity should be given to the subjects of the Crown to test their position. It is for that reason that I have moved my amendment, which is a very modest, one, namely, that the notice to be published in the Gazette shall be published not earlier than one month after the act comes into operation, which would mean that, at any rate, those who have a. proper, legitimate concern in this matter would have a period of one month to take those steps, which seem to them or their advisers to be necessary in order to have the validity of this legislation properly tested in the one place in Australia in which it can be properly tested. I am not going to anticipate that the Government will refuse this amendment. I regret that the. Treasurer (Mr. Chifley) is not here to offer his view upon it. But I point this out to the committee, that, if this amendment is rejected-
– Which it will be.
– The Minister has now informed me “ which it will be “, so I need not make my sentence a conditional one. The amendment being rejected out of hand, as apparently it is by the Minister at the table, only one interpretation can be placed upon the matter, and that is that the Government does not desire anybody to have so much as four weeks in which to invoke the processes of the law. If that is the position of the Government, then I say to my friend the Minister at the table that the Government is making it clear to the people of Australia that, not only is it unwilling to allow them to have a vote on this matter, politically, but in addition is deliberately trying to prevent the High Court of Australia from doing anything about it judicially. What, then, becomes of all those indignant denials of the statement that has been made from this side of the committee >that this is a purely totalitarian affair? Honorable members opposite have worked themselves into a grand passion of indignation about that allegation. According to them, they are the last people who ought to be accused of a totalitarian outlook. I say that a government which first excludes the people from a voice, and then attempts to exclude the courts of the land from exercising their function of passing judgment upon the validity of an act, is plainly treating both courts and the people with contempt, and is sweeping the Constitution on one side. How the Prime Minister can say in one breath, “ I rely on our constitutional powers “, and in the next breath, “and I deny and frustrate the authority of the High Court, set up under the same Constitution, from sitting in. judgment on this matter “, and reconcile those two statements, I do not know. It is a most remarkable affair, that when an amendment has been moved to provide the shortest possible breathing space, so that people may exercise their most elementary rights, it should be swept aside in half a sentence by the Minister representing the Government, and the people as well as the members of this committee should be told, “You have no rights in this matter; no right to vote, no right to litigate “. I hope that this amendment, its purport, and the answer of the Government, will become extremely well known to the people of Australia during the next few days.
– I notice that the Leader of the Opposition (Mr. Menzies) has moved another amendment. He seems to be merely following the declared policy of the Opposition in regard to this legislation, which is to delay everything in connexion with it. The idea of the Opposition is to delay its operation to a date as near as possible to that of the next federal elections. I have argued right through the piece that members of the Opposition are looking to it as an instrument that will enable them to win the next federal elections. “We have to remember that, should they achieve their purpose and win those elections, the Banking Act of 1945 also will be eliminated. I chal lenge denial of that. The Government is justified in disregarding such amendments. The right honorable gentleman talks about “ frustrating the Constitution “. The Constitution is very clear on the point that this Parliament has full power in regard to banking legislation. This is banking legislation. Various moves have been made in this delaying action. Had we agreed to the proposal of the right honorable gentleman that a referendum should be taken, there would have been no guarantee that the matter would not still be challenged in the High Court if the people approved of this legislation.
– Order ! The honorable member is not entitled to refer to a referendum.
– I am satisfied that no matter what ground the Government might give or what leniency it might show, the Opposition is determined to take every step that it can take. Honorable members opposite have talked to-day about discrimination. The first statement on that aspect of the matter was that, if this legislation is carried, there will be discrimination against the man who requires to secure a loan from the Commonwealth Bank, and that consequently it will act to his detriment. It is also said that the Commonwealth Bank is too generous in the making of advances. In his second-reading speech the honorable member for “Wentworth (Mr. Harrison) said that in one instance the Commonwealth Bank advanced £200,000 after a private bank had refused the same applicant an advance of £100,000.
– I rise to order. Is the honorable member for Hindmarsh in order in referring to what was said during the second-reading debate? I was refused permission to do so-.
– The honorable member for Hindmarsh is entitled to refer to anything in relation to the clauses before the committee, or any amendment of those clauses.
– The clauses now before the committee deal with taking over the private banks. “When checked by the Chair the honorable member for “Wimmera (Mr. Turnbull) wanted to know what this legislation was for, and he went on to say that its object was to bring about socialism.
– That is the object.
– I have received from officers of trading banks a telegram stating that the following motion was carried at a meeting of over 600 officers of private trading banks held in the Adelaide Town Hall:-
This meeting of employees of private trading hanks in South Australia emphatically protests against the proposal to nationalize the trading banks. We consider the introduction of such a measure will ultimately lead to complete socialism and, therefore, the loss of our democratic freedom. We therefore call on the Government to submit the question to the Australian people by referendum.
– I rise to order. I was not permitted to refer to a referendum, and I submit that the honorable member for Hindmarsh should be treated in the same way.
– The point of order is upheld. The honorable member for Hindmarsh is not entitled to refer to the referendum proposal as that was dealt with in an earlier amendment.
– I understand, Mr. Chairman, that I am entitled to make passing reference to what has been done. My statement was that the honorable member for Wimmera wanted to know what this bill stood for, and I have read a telegram to show that the bank officers who earlier in the campaign contended that r hey would lose their positions if this legislation were passed have now changed their ground and are using other arguments. If there is to be any discrimination at all under this legislation it will be discrimination in favour of the people - to help them rather than to hinder them.
– It will be discrimination in the form of preference to unionists.
– The honorable member for Wakefield (Mr. McBride) -is the last person who should talk about preference to unionists. I do not know any other honorable member who fights so consistently for preference to the great vested interests of this country. He tries to belittle working men and unionists on every possible occasion, and at the same time he does his utmost to advance the interests of “ big business “ in this country. The honorable member should keep silent, and not make foolish interjections when some one else is speaking. I believe in preference to unionists, whereas he believes in preference to vested interests. As I have said, any discrimination which maybe shown under this legislation will be discrimination in favour of those most in’ need of assistance.
It has been said that the number of depositors with the private trading banks exceeds the number of persons with deposits in the Commonwealth Bank, and honorable members opposite have then contended that that shows that the p’eople prefer to trade with the private banks. I have here a table which has been prepared - . -
– Is the honorable member dealing with the clauses before the committee?
– Yes. I am dealing with a clause which relates to the acquisition of the private trading banks. The reason why the Commonwealth Bank lias not expanded to the degree that some of us desired has been because of the policy adopted by the bank when it was controlled by the Commonwealth Bank Board. I have here a table which shows that there are 224 ‘branches of trading banks in South Australia, including eighteen branches of State banking institutions. There are only twelve branches of the Commonwealth Bank in that State. The total number of branches of private trading banks in Australia is 2,300 compared with 39S branches of the ‘Com.monwea.lth Bank. If honorable members take the trouble to make a comparison on a percentage basis, they will find that the position is quite different from what they have stated.
I hope that the Government will not agree to any procrastination in connexion with this legislation. I shall be candid and say that the sooner this legislation is put into operation the sooner will the people of Australia realize that it is in their interests, and not to their detriment. After this legislation has been in operation for a clear twelve months, the people will realize that much of the argument now advanced against it is without foundation and is really a myth. What purpose does a bank serve in a community? A bank is established so that people who have excess money may place it with a bank so that they may draw cheques against their deposits. If the private banks had to work only on the actual cash deposited with them; if there were no other legal tender other than notes printed by the Government; and if they were prevented from using cheques, the position would be vastly different from what it is to-day. What the private banks are after is the right to continue to trade in credit. Honorable members opposite know that. We on this side say that if the private banks are taken over in accordance with the provisions of this legislation, and the right to trade in credit is placed in the hands of the representatives of the people, the community will benefit. The purpose of this legislation is not to establish socialism, as the honorable member for Wimmera has said, but to provide a guarantee in the form of insurance, so that in the event of a recession of the prices received for our products, farmers and others will not be placed in the difficult situation in which they have previously been placed. I do not throw stones at the trading banks - no one can say that I have done so - but my argument is that they must act in accordance with the principles of sound finance, which means that advances should not be greater than deposits. When honorable members opposite talk about the percentage of deposits with the trading banks, I remind them that what counts is the actual amounts of the deposits and advances at any given time. If, say, £200,000,000 is advanced by a banking institution which has deposits valued at £210,000,000, then should prices fall and deposits also, the amount of the advances made would be reduced.
Recently, the honorable member for Swan (Mr. Hamilton) tried to discredit the Commonwealth Bank because it asked a person who was converting his holdings in a war loan for the number of his banking account. As a matter of fact, I received one of those letters, because [ have a small investment in war loans’. The letter was from the State Savings Bank in Adelaide, and was in accordance with an arrangement made with savings banks and trading banks which held war loan script on behalf of investors. It is entirely false to suggest that such information is sent through the loan office or through the Treasury.
– The honorable member’s time has expired.
– I desire to speak on the amendment moved by the Leader of the Opposition (Mr. Menzies), but, before I do so, .1 want to reply to the statements of the honorable member for Hindmarsh ‘ (Mr. Thompson). He claimed that the trading banks had never conducted their business on a sound basis. He argued that the banks should not advance more than a fixed proportion of the total deposits they held. I remind the honorable member that the whole basis of the argument of Government supporters against the private banks is that they should have advanced more and more money during the depression, even as their deposits fell. The fact is, of course, that some of the trading banks advanced well over 100 per cent, of their deposits.
– The honorable member claimed that he intended to speak to the amendment before the committee. His speech so far has been on the clause, and will be regarded by the Chair as such. I mention it so that the honorable member may know where he stands.
– On a point of order. So that honorable members may know how to prepare their remarks, I should like you to explain the position. The Leader of the Opposition moved an amendment. Clauses 9 to 25 are also before the committee. May honorable members speak on those clauses, and also on the amendment, or must they confine their remarks to one or the other?
– The practice usually is to speak in committee to the clause and the amendment; but if honorable members speak to the clause in general terms, and also to the amendment, they will not be entitled to speak further to the amendment itself. If they wish to speak to the amendment, they must speak exclusively to the amendment.
– And that will preserve i Weir right to speak on the clauses.
– The honorable member for Hindmarsh said that if the Opposition were returned to power - and, in view of the happenings in Victoria on Saturday last, it should not be very long - it would repeal the Banking Act of 1945. I have never heard it said at meetings of the Opposition that the Banking Act of 1945 would be repealed.
– It has never been said.
– However, certain amendments will be made to the act in order to protect the rights of the people, rights which have been, destroyed by this Government. The honorable member also said that there would be no discrimination against clients under a government monopoly banking system. That, however, has not been the experience in other countries. In Argentina, where the banking system has been nationalized, the Government has, according to an article in the August number of the Readers Digest, cut off the credit of their political opponents. In particular, it has cut off the credit of the Opposition newspaper, La Critica. During rho hearings held by the Royal Commission on Monetary and Banking Systems, a Labour witness, when asked for his views on the nationalization of banking, said that he was bitterly opposed to it, because the political party in power would immediately cut off the credit of its opponents. That is what this Labour supporter believes a Labour government would do. Those who value freedom cannot but be fearful in the face of such a threat.
Reverting to the amendment of the Leader of the Opposition, I was very sorry that he, as a lawyer, did not refer to a notable precedent for what the Government now proposes to do. The action out of which the precedent arose was later the subject of court proceedings, and some of the gentlemen concerned were sentenced to punishment of various kinds. I refer to the happenings at Jerilderie, in the latter part of last century, when Mr. Edward Kelly, and his brothers-
– The honorable member must confine his remarks to the bill. Ned Kelly is not covered by this bill.
– I am calling attention to the illegality of the action of the Kelly brothers–
– Order ! The honorable member must resume his seat.
.- Clause 11, which lias been under discussion, stipulates that it is the duty of the Commonwealth Bank to observe all the rules of banking, except as otherwise required by law, and also to observe the usages and customs of bankers. ‘ In that respect, I merely desire to inquire whether that means that the Commonwealth Bank must continue the same policy carried out up to this time by the private trading banks. “We have heard much criticism of the practices and usages customary among bankers during this donate, and if ever anything has been cursed by speakers on the Government side of the chamber, it has been the dastardly customs and usages of the private trading banks. The Labour movement has never been satisfied with the practices and usages of the private banks. It has always been against what have been referred to as orthodox methods of finance. The Labour movement has based its entire case for banking reform upon the necessity for getting rid of many of the practices and usages customary among private banks. But clause 11(c) of the bill directs the Commonwealth Bank to carry out the old traditions of banking. If that is what the clause means, what is the purpose of the bill? Reservations in that clause defeat the avowed purposes of the bill. Further, the measure provides that the Commonwealth Bank shall conduct its business “without discrimination, except on such grounds as are appropriate in the normal and proper conduct of banking business “. I have read that provision over and over again, and I do not know what it means. Does it mean that there should be discrimination, or is that just another provision thrown in as bait for the lawyers ? If there are to be directions to the Commonwealth Bank, let them be specific, clear and to the point. There should be clear instructions that information regarding a customer’s account and his business shall not be divulged, that there shall be no discrimination, and that the Commonwealth Bank shall provide all the necessary facilities to do ‘its job. But clause 11 is clouded in legal jargon. Reading the clause carefully, we find that a negative follows every positive; and the sum total of the clause is that to the ordinary layman if is meaningless. It is just another example of how too many lawyers are going to spoil the Government’s brew.
The Minister for Post-war Reconstruction (Mr. Dedman) talked about the
Terrible things that were done by people who were making profits. Why did the Minister, therefore, reject an amendment designed to stop the Commonwealth Bank from making profits? Why is the Government, in this measure, insisting that the Commonwealth Bank shall make a profit? Why does the Minister talk as he did of an institution that is making a profit of over £5,000,000 a year? He said that the bank should discriminate in the interests of those who are not out to make profit and against the interests of those whose object in life is to make profit. Let me tell the Minister and the committee what the Commonwealth Bank did to people in New South Wales who were not, out to make profit. In 1936, the Government of New South Wales passed a Co-operative Building Societies Act to enable people in the middle and lower ranges of income in that State to secure homes of their own. The proposed advances were listed, the highest amount being £900. In New South Wales at that time there was substantial unemployment, and work in the building trade had almost ceased completely. That measure was passed principally to give to those engaged in the building trade, and workers generally, a chance of employment. Under that act, ten co-operative building societies were established, and in order to finance their operations they approached what was supposed to be a workers’ institution, the Commonweath Bank, and asked the bank :o advance them sufficient money to enable them to put the scheme into operation; hut the bank told those co-operative building societies and the Government of New South Wales, which offered to guarantee the loan, that it was not interested, although, in addition, it was explained that the bank would hold the mortgages over the homes. When the whole scheme appeared doomed to failure, the Government of New South
Wales persuaded the Bank of New South Wales, a private trading bank, to give those co-operative societies a start, and that bank gave them an initial advance of £3,000,000. Today, those ten co-operative building societies have increased in number to 169 and are spread throughout the length and breadth of that State. The building industry was thus relieved, and just prior to the outbreak of the recent war those societies had constructed 50,000 homes for people living in New South Wales. In all, £30,000,000 was invested in home building by various banks and loan authorities, and the Government of New South Wales has not been called upon to pay out a penny piece because of its guarantee. Those homes were built for people on the lower ranges of income, and to-day that movement is one of the safest and soundest in the State. It was only when it became apparent that the scheme was an unqualified success that the Commonwealth Bank came in and helped after some one else had pioneered the road. Now, the scheme is one of the bank’s best investments, and has been instrumental in reducing the interest rate for home building to less than 4 per cent. Let me tell the Minister for Post-war Reconstruction and the committee that, if there had been only one monopoly bank in New South Wales at that time, those co-operative building societies would never have come into existence, those 50,000 homes would never have been built, the Commonwealth Bank would not have, what it has to-day, a security of £30,000,000, those cooperative building societies would not be providing work for people, and would not be enabling people on lower salaries to finance the building of their homes at a rate of interest less than 4 per cent. It is well to recall the action of the Commonwealth Bank in turning down not only those co-operative building societies but also the Government of New South Wales, because that Government under its law had promised that it would guarantee every penny that was advanced by any bank, or any financial institution, to those co-operative building societies which were non-profit making. The Commonwealth Bank refused to pioneer that movement. Then, we have many consumers’ co-operative societies which provide sustenance to men and women. When one of those societies which operates in a mining district approached the Commonwealth Bank and asked for an extension of credit on the security of Commonwealth bonds which it had deposited with the Commonwealth Bank, the bank refused to give such assistance. If the monopoly bank had been in existence those societies would not have been able to go to another bank to obtain accommodation to enable them to carry on the good services which they are rendering to the poor and to the working classes of the community. It may be sad; it may be even worse than that, but it is true. That is what the Minister has to answer when he glibly talks about those who do not want to make profits and discrimination against those who do. There is a case in point. The bill may be a very fine and good one. If it is, it should stand examination, and those who want to see it succeed should leave it open for improvement and not force it through, merely contenting themselves with talking about what is to happen. Some provision should be made for those who are not out for profit, and in order that the bill may not do a grave injustice, and that the Government may not live to regret it, the Government’s supporters should be given an opportunity to improve it where improvement seems highly desirable.
– I hope that the committee will not be led astray from the consideration of the very important amendment to clause 13 which has been moved by the Leader of the Opposition (Mr. Menzies). Clause 13 is one of the most important of the operative clauses of the bill. Under it the Government takes power by the service of a notice upon a private trading bank to acquire a majority of the shares of that bank so that it can assume control over it. I am quite certain that some members supporting the Government have not realized the implications of the speech made by the Leader of the Opposition, because if they have, I find it incredible that they should remain silent, refusing to voice some protest against the clause as it stands. Apparently members of the Government do not propose to answer the case made by the Opposition. The Leader of the Opposition has dealt with what is one of the most important clauses of the bill; he has moved an amendment to it and supported his amendment by reasons which should call for an immediate answer by the Government, but no answer has been forthcoming from the Prime Minister and Treasurer (Mr. Chifley) or from any other member of the Government. In fact, the only comment on the amendment was the interjection of the Vice-President of the Executive Council (Mr. Scully), who, in his usual manner, said, “ The amendment will not be accepted “.
What does the amendment involve? This clause gives to the Government power to acquire the shares of the trading banks, but it prescribes no period of notice of such intention. If it so desired the Government could serve a notice upon a private bank at the moment the bank closed its doors on one night and in the Gazelle of the following day specify that day as the date upon which the shares were to pass to the Commonwealth. If it did that it would, by a subsequent provision in the bill, have power immediately to appoint its own board of directors to replace the board which had functioned before the notice was served. It would then acquire control over the operations of the bank. As the Leader of the Opposition has emphasized, the effect of that would be that no opportunity would be given for any legal challenge of the validity of the legislation by the bank which was thus acquired. To that charge the Government has made no reply. The amendment specifies that there should be a minimum period of one month between the service of the notice and the acquisition of the shares. Having regard to the magnitude of the issues at stake and the widespread public interest in this matter, does any one suggest that one month is too lengthy a period during which notice can be given? Does any one suggest that one month is not an almost unreasonably short period ? The Government, however, refuses even that modest request. Why? If the Government’s attitude is that it does not want to tie itself down to a particular period of notice, but that it has every intention of giving a reasonable period of notice, let it say so. Members of the Government, however, have remained significantly silent.
– Could not an approach be made to the High Court just the same?
– I hope the honorable member will elaborate the point he is making in reply to the arguments we are advancing in support of the amendment. In exercising the power given to it under this measure the Government may give notice to a private bank and immediately act upon it, appoint its own board of directors with complete authority to control the operations of the bank, which may decide not to challenge the legislation. Where, then, does opportunity exist for the bank to challenge the legislation? [ hope that the honorable member for Robertson (Mr. Williams) will be able to satisfy honorable members on that point. I read, as the Leader of the Opposition was able to read, a great deal of significance into the omission of Ministers to reply to this point. If the Government intends to give reasonable notice, why does it not say so? If it does not intend to do so, it is clear that it is deliberately denying an opportunity to the banks to challenge the validity of this legislation.
The honorable member for Hindmarsh (Mr. Thompson) has told us that the constitutionality of this legislation is perfectly clear. He said that the Commonwealth has power to legislate with respect to banking and that this bill is legislation with respect to banking. However clear it may be to the honorable member, it is not so clear to the best constitutional legal advice that can be obtained in this country. On an issue of this kind there can be only one body to which a legal appeal may be made in the first instance, namely, the High Court of the Commonwealth of Australia. The Government’s omission to give any assurances on this matter completes the pattern of its intentions. In the first place, honorable members supporting the Government have admitted that although they knew the general principles of this bill, they had no knowledge of its details. Then, the Government denied repeated appeals for a referendum on this issue. Then, it rejected the verdict of the people of Victoria clearly given on this issue. It has refused the Parliament an opportunity to debate fully the principles of the bill. The final piece that completes the pattern of repression and restriction is the denial by the Government of an opportunity for the High Court to deal with the constitutional validity of the measure.
Mi-. Haylen. - By implication only.
– It is an implication. Will the honorable member for Parkes (Mr. Haylen) rise in this chamber and press the Government which he supports to give an assurance that this matter can be tested in the High Court? Will he press the Government to accept this amendment to give an assurance that there will be a reasonable period of notice before the acquisition will take place? If he is not prepared to do that, he will be merely lining himself up with the Government in this act of repression. It is all very well for the Prime Minister to speak in moving terms of his love for humanity, but to deny to the people of this country, who are to have this legislation imposed upon them, an opportunity to express their will on it, reveals little love for humanity. Every tyrant, dictator, or other repressive force in history has sought to salve his conscience by saying, “ I know what is good for the people “ ; but that is not the way of democracy in this or any other country. Unless the Government is prepared to give a categorical reply - and a satisfactory reply - to the case advanced by the Leader of the Opposition in support of his amendment, only one meaning can be read into the Government’s intentions by the members of this committee, and by the people outside of this chamber.
– I regret that I was out of the chamber when the Leader of the Opposition (Mr. Menzies) moved his amendment to clause 13, but the honorable member for Fawkner (Mr. Holt) has said that he has gone over the ground covered by the Leader of the Opposition. The Government does not propose to accept the amendment, as has been stated by the Vice-President of the Executive Council (Mr. Scully). The amendment, in effect, requires that a notice of acquisition of the shares in a private company shall not be issued earlier than one month after the act comes into operation. I do not see why notice of the acquisition of shares in a private bank should not be issued as soon as the act comes into operation. Obviously, what honorable members opposite want to do is to delay the enforcement of the provisions of this measure for as long as possible. They want to drag out proceedings in the hope that they will be able to prevent this legislation from becoming operative before the next federal elections, because they know in their hearts that should this measure become law at an earlier date the people will be so pleased with it that at the next elections they will have no hesitation in endorsing the action of this Government in introducing it. I point out that shares to which a notice of acquisition will apply will not be vested in the Commonwealth Bank upon the publication of the notice, but upon a date specified in the notice itself.
– lt could be the same date.
– That is true, but that is unlikely. Further, the effective date of vesting may be postponed by the Treasurer himself from time to time under sub-clause 2 of clause 13. Therefore, I do not see any merit in the proposed amendment. Should the need foi delaying the operation of clause 13 become apparent at any time, that situation could be met by the Treasurer himself by postponing the date upon which the actual vesting of the shares shall take effect.
– Does the Government intend to give to the banks an opportunity to test the validity of this legislation*
– I have explained the Government’s attitude, and I have said all that I propose to say on the matter at the moment. I turn now to the remarks made by the honorable member for Reid (Mr. Lang), who said that clause 11 used a lot of words but did not mean very much. As I pointed out earlier to-day, the provisions in clause 11 relating to the prohibition of discrimination by the Commonwealth Bank, and the divulgence of information other than in accordance’ with the law, have never operated in regard to the private trading banks. Whatever may be said about clause 11,. at least it. places upon the Commonwealth Bank an obligation that has neverbeen placed upon the private banks. The honorable member confused matters of policy with administrative methods and usages and practices in banking generally. As honorable members are aware,, in the event of a difference of opinion between the Government and the Commonwealth Bank, the Treasurer, under theexisting banking legislation, has power to instruct the banks in the policy that they shall adopt. That relates to general policy, such as the degree to which advances should be made at any given period, and so on.
– Will that affect individual accounts
– Not at all. It relates ..merely to matters of banking policy, and on such matters the government of the day. through the Treasurer, is supreme. If the bank sought to adopt a policy that was contrary to the wishes of the Government, the bank could be instructed to alter its policy accordingly.
– That can be done under the 1945 legislation.
– That is true. What I am endeavouring to show is that the honorable member for Reid is confusing matters of policy with matters of administrative detail and methods, usages, and banking practice.
– Are they not interrelated ?
– They can be; but they can be separated quite sufficiently for one to discuss them properly. Unless they can be separated, I do not think they can be discussed properly. What are the usages and practices adopted by banking institutions? As clause 13 reads, an obligation is placed upon the Commonwealth Bank to conduct its business without discrimination except on such grounds as are proper in the normal conduct of banking business.
– What would they be?
– Order ! The Minister must be heard in silence.
– The bank is also obliged to observe, except as otherwise required by law, the practices and usages customary amongst bankers. If honorable members will turn to the definitions clause of the bill, they will see that this is not confined to practices among bankers or the proper conduct of banking business observed in this country in the past, but throughout the world. Consequently, if administrative methods, usages and practices alter in other countries, there will be an obligation on the Commonwealth Bank to alter its methods and practices accordingly. The honorable member for Reid said that there should be some clear instruction in clause 11 that no information should be given, and that there should be no discrimination on the part of the Commonwealth Bank. I submit that that instruction is already clear in clause 11. The clause imposes an obligation, emphatically and categorically, on the Commonwealth Bank not to discriminate, and not to give information except in accordance with the law. That, has always been the practice of banking institutions. The Commonwealth Bank will not be required to depart from ordinary banking methods in its dealings with its customers. The provision in paragraph b of clause 11, that the bank shall “conduct its business without discrimination, except on such grounds as are .appropriate in the normal and proper conduct of banking business”, will enable it to refuse to do business with rogues and criminals. Ordinarily, all banks exercise the right of refusing to do business with people whom they regard as untrustworthy, and, surely, the Commonwealth Bank must be allowed the same latitude in that respect as the private trading banks. The exceptions in paragraph c of clause 11 to the rule that no information is to be divulged about a customer or bis affairs are that such information may be divulged only in accordance with the law of the land or the practice and usages customary among bankers. It has been pointed out by the courts that a contractual duty of secrecy is implied in the relations between the banker and his customer. That has always been the practice, and it will continue to be, regardless of what was written into this legislation on the subject. Writers on the law of banking classify exception under four heads - (a) where disclosure is under compulsion by law; (b) where there is a duty o the public to disclose; (c) where the interests of the bank require disclosure; *(d) where the disclosure is made with the expressed or implied consent of the customer. So there must be some exceptions to the rule of non-discrimination and of not divulging information to cover the cases that I have mentioned.
The honorable member for Reid criticized the activities of the Commonwealth Bank in relation to co-operative building societies in New South Wales. This legislation does not contain anything preventing co-operative building societies from carrying on their normal activities. The bill does not relate U> co-operative societies engaging in banking or building.
– But the administration of the legislation will affect them.
– Order! The honorable member for Robertson must cease interjecting.
– I was coming to that. It is true that the administration of the measure will affect such societies ; but, if their general policy is in line with that of the bank, that is if they ave granting advances freely, the Commonwealth Bank will certainly not discriminate against them. T do not think that, there, is very much between the honorable member for Reid and me on that matter. I think he is perfectly we’ll aware that the actions of the Commonwealth Bank, which he strongly criticized in this regard, were taken when the bank was under the control of a board.
– If the Minister and the honorable member for Reid are in agreement, it must be wrong.
– I do not propose to bc drawn aside by interjections. The honorable member for Reid has shown by his vote, and will show, I am sure, on the final vote, that he is in general agreement with the Government’s proposals. He is perfectly in order in drawing attention to some aspects of the bill which he thinks could be improved, but the bill does not deal with co-operative banking societies or building societies. Clause 11, of which he has spoken, imposes an obligation on the Commonwealth Bank not to discriminate against cooperative building societies and no discrimination will occur.
The honorable member for Flinders (Mr. Ryan) made out a very good case for this legislation. By inference he accepted my earlier statement that the private trading banks reduced advances in times of difficulty. His excuse was that they were limited in the advances that they could make by the ratio of advances to deposits and to cash. Those ratios have been taken into account at all times by them. That was mentioned in the report made in 1936 by the Royal Commission on Monetary and Banking Systems. The report also mentioned that the practices of the different banks in -that respect differed. If one bank has a more generous ratio of advances to deposits or cash than the others, they are liable to be criticized for lack of generosity. The honorable member for Flinders indeed justified this legislation, because it is perfectly obvious to every one that the Commonwealth Bank is the only bank supported by the whole wealth of the country and is, therefore, the only bank that, if it so desires, does not need to take into account the ratio of advances to deposits or cash. The very excuse offered by the honorable member on behalf of the private trading banks’ restriction of advances in the depression years completely justifies this legislation.
.- The Minister for Post-war Reconstruction (Mr. Dedman) floundered in a mass of Douglas Credit and the honorable member for Hindmarsh (Mr. Thompson) in a morass of a return to the Dark Ages. The Minister is prepared to issue notes ob lib., but the honorable member for Hindmarsh wants to abolish the cheque system. Their attitudes are as apart as the poles. Yet they have conspired with other members of the Labour party to bring down this bill. They bring it down with a great show of being careful of the “little” man and a great love of humanity, but by this legislation they will emasculate the Commonwealth Bank. It will cause a contraction of its activities.
– The right honorable gentleman ought to know.
– Of course 1 should know. Between 1924 and 1935, under the policy instituted by me, the assets of the bank increased from £100,000,000 to £500,000,000, the branches from 67 to 367, and tie employees from 1,200 to 6,000. The Labour party proposes to destroy the banks’ reputation and prestige. It began the process in 1945 by empowering the Treasurer to intervene in the policy of the bank. The Minister for Post-war Reconstruction showed clearly why the hill should be withdrawn, whereas our request is not for its withdrawal but for the people to have the opportunity of saying whether they approve of it at a referendum or a general election.
This bill will destroy the Commonwealth Bank. It will not lead to an expansion of the bank’s business, as the heading over Part IV. of the bill - “Expansion of Banking Business of Commonwealth Bank “ - suggests, but will cause contraction and bring about a condition in which the bank will lose power and will be unable to continue to perform the central banking functions that it has exercised during the last 23 years. It will be in a state of virtual impotence. At present, banking operations in- Australia, with the exception of those of the State banks, are under the control of this Parliament. However, if South Australia, “Western Australia and Victoria persist in challenging the validity of the banking laws of the Commonwealth - and they may be joined by the other States - they may set up their own trading bank systems outside the purview and control of this Parliament. If that is to be the first effect of this measure, it must automatically divide the power and prestige of the Commonwealth Bank by half. Ministers must know what they are doing, but I urge the simple-minded members of the Labour party who have been dragged behind them post-haste along the road to nationalization to examine the position and ascertain whether or not my statements are correct. Under the system established by the banking legislation of 1912, 1924 and 1945, we have a banking unit under Commonwealth control which covers the whole of Australia and satisfies the needs of the nation completely.
This system has been praised repeatedly and held up for the admiration of the rest of the world, not by partial men in this chamber, but by independent financial observers in other countries. The vaunted British nationalized system of banking, which the Prime Minister compared with the set-up proposed under this bill, is exactly the same as the system which existed in Australia before the enactment of the Banking Act of 1945. Under that system we had a governmentowned central bank, with a board of directors .composed of financial experts, and a series of trading hanks using the central bank as a great reservoir of credit. The system which the Labour Government in Great Britain has created, and which the Prime Minister has praised, is exactly like that which I established in 1924 and which operated throughout the depression and ‘the war and was wholeheartedly commended in the Commonwealth Bank’s history of its war activities. The Bank of England came under government ownership, like the Commonwealth Bank, a few months ago. lt is now primarily a central bank governed by a board of directors consisting of approved financial experts, and it functions in the closest unity, amity and cooperation with the private trading banks of Great Britain. Such a system consists of a central bank acting as a reservoir of credit to supply the current daily needs of the trading banks and also as a reservoir from which credit can be drawn to meet the demands of any sudden crash or business panic.
I have no objection to the creation of a competitive government trading bank operating on the same footing as the private trading banks, as Mr. Theodore intended. Under the system now in existence, the most ready co-operation between the various parts of the Australian banking unit has been built up. This was exemplified during the recent war, when the financial strain imposed on the nation was greater than ever before. There have been ample reserves in the Commonwealth Bank, created out of the bank’s own funds and backed by a substantial percentage of de posits lodged with it by the private banks. The Labour party’s suggestion that, under this system, the private trading banks have the last word in relation to credit expansion is too ridiculous forwords. The speeches which have been made by Ministers during the debate on this bill are similar to the speeches which they made in the debate on the banking legislation of 1945. If that legislation was as effective as the Labour party claims, the statements which they now make must be quite wrong.
Members of this Government are living in the past. They talk about the depression and the things that can be done by the private banks, yet they said in 3945 that the legislation then passed was the perfect means of giving the Government control over the private banks. The speech made by the Minister for Transport (Mr. Ward) was a facsimile of the speech which he made on the 1945’ bill. He used the same old illustrations, such as the story about the one-legged soldier. His statements were quite wrong, because the High Court judgment did not affect the status of the trading banks vis-a-vis the Commonwealth Bank in any way. The government-owned central .bank to-day is in control of the issue of credit and of interest rates. There is no question about that. The members of the Labour party are simply putting up straw bogeys, knocking them down and burning them. They shed false tears about the small men who, in fact, will be hit most severely by the effects of this destructive legislation. This new measure, which provides for the confiscation of the private banks, will inevitably lead to the establishment of a new banking system, entirely outside the jurisdiction of this Parliament, which will compete actively with the Commonwealth Bank. The High Court has held that the essence of State banking is the ownership of the bank by the State. The functions of such a bank can only .be fixed by the State Parliament and they can be as numerous as that Parliament determines. Therefore, the State Parliaments can set up central banks if they wish, and those banks can compete actively with the Commonwealth Bank. Three States are already challenging this Government’s banking legislation. The Premier of
South Australia, Mr. Playford, announced his intention on the 1st November. His lead was followed by the Premier of “Western Australia, Mr. MacLarty, on the 3rd November, and by the new Premier of Victoria, Mr. Hollway, on the 12th November.
They propose, should their challenge to the validity of this Government’s legislation fail, to create banking systems within their own States, which would be outside the control of this Parliament and which would compete with the Commonwealth Bank. Such banks would be able to operate successfully. They would be closer to the people than the Commonwealth Bank, and they would be able to exchange credit with one another. Furthermore, if the Australian Government tried to interfere with their operations, it would be hampered by section 92 of the Constitution relating to interference with free intercourse between the States. Australia has a. choice of three banking systems. The first is the existing system, which integrates the activities of the Commonwealth Bank and the trading banks, which have branches situated all over Australia. The second would be a nationalized Commonwealth Bank with centralized administration. The third would be a State banking system, the general activities of which throughout Australia might well be uncoordinated. I make a special appeal to citizens of the less populous State. The advantage to those States of the present banking system over the other systems is very great. The private banking system has been of extraordinary value to them, as the surplus funds of the eastern States in normal times have been used for their development. I shall refer to figures in order to support my statement. The figures are published in Australia’s Government Bunk, by L. C. Jauncey. As an example, I cite “Western Australia. Between 190S and 1926, advances to total deposits in that State were always over 100 per cent, and, in 1926 the figure rose to 132.91 per cent. In 1926, advances to deposits in Victoria and New South Wales were approximately 66 per cent. During the period .1908-26 the percentage for the whole of Australia ranged from 67 in 1915 to 88 in 1909. Those two figures were the extremes. One honorable member declared that advances to deposits should be on a £1 for £1 basis. The safe course is not to be so liberal as that, but because of the branch system an exception could be made with the less populous States. In 1930, the figure for Western Australia was 192.96 per cent., but for the whole of Australia it was 99.68 per cent. Those figures should convince honorable members opposite of the advantage to the primary producing and developing States of the present system of private banking. Those figures also give a complete lie to the assertion that the private banks did not use the whole of their resources. Indeed, they really passed beyond the danger point.
The second way in which the Commonwealth Bank’s power and influence will be reduced with the institution of monopoly banking control lies in the fact that big businesses, manufacturing and pastoral firms will tend to hold more of their assets in fluid cash reserves in order to lessen their dependence upon the Commonwealth Bank monopoly which, at any moment, might cause them acute financial trouble.
– Order ! The right honorable gentleman has exhausted his time.
.- The right honorable member for Cowper (Sir Earle Page), in his usual unscrupulous manner, totally misrepresented-
– I rise to order. I object to the use of the word “ unscrupulous “ in reference to myself. Everything that I said was accurate.
– I withdraw the word “unscrupulous”, and say that the right honorable gentleman totally misrepresented the Minister for Post-war Reconstruction (Mr. Dedman), and the honorable member for Hindmarsh (Mr. Thompson). His statement that the Minister advocated the printing of bank notes ad lib. is, to put it mildly, untrue. No honorable member on this side of the chamber, either in debate or on the public platform, ever advocated the printing of notes ad lib. I make this refutation of the right honorable gentleman’s statement lest people who are listening to the broadeast of these proceedings gain the wrong impression from his remarks. If bank notes were printed ad lib., they could not be used. The right honorable member is perfectly well aware of that fact. The honorable member for Hindmarsh merely stated that the private banks should not have the right to operate the cheque system. He did not advocate the abolition of the cheque system. He made his position perfectly clear, stating that the private banks should not be permitted to expand and contract credit by the operation of a cheque system. Throughout my political life, I have also advocated that.
The right honorable member for Cowper made a great song about the Commonwealth Bank already having adequate control of credit. The Commonwealth Bank did not have control of credit when he was Treasurer. It was not until the Labour Government took office that the Commonwealth Bank obtained a fairly tight control of the issue of credit. “When the right honorable gentleman was Treasurer, he made provision for the private banks to have what he called “ the right to draw on the Commonwealth Bank “.
– I did not do that. A Labour Prime Minister was responsible for that.
– Order! The fight honorable member for Cowper has finished his speech and I ask him not to interject.
– “When the right honorable gentleman was Treasurer, the associated banks had the right to draw notes from the Commonwealth Bank for the purpose of meeting the seasonal requirements, such as the marketing of both wheat and wool. The right honorable gentleman may shout as loudly as ha likes, but he cannot deny that. The associated banks could draw from the Commonwealth Bank notes for till-money if their own cash reserves were not sufficient to meet the cheques, drawn principally by primary producers, which were passing over their counters from day to day. The associated hanks had the right to draw notes from the Commonwealth Bank to an amount of £24,000,000. Interest was payable on any money which the private banks drew in this way. The associated banks financed the primary producers of Australia, whom the right honorable gentleman claims to represent in this Parliament, to an amount of £65,000,000, on which they drew interest, but they did not draw any notes from the Commonwealth Bank, and did not pay one penny in interest to that institution.
– I never heard of that.
– The right honorable gentleman is the only person who has not heard of it.
– It is not true.
– Order ! The right honorable gentleman has just completed his remarks, and now he is endeavouring, by interjection, to correct his speech, or add to it. If he interjects I shall name him. He is a complete disruptor of the debate when he resumes his seat after having addressed the chamber.
– Hansard will show that honorable members on this side of the chamber discussed this subject on dozens of occasions in budget debates, and our assertions were never denied. That is all 1 propose to say about the right honorable member for Cowper at the moment.
In order that the public, who have been listening to this debate, shall not misunderstand the attack by the honorable member for Reid (Mr. Lang) on the Commonwealth Bank, I place on record that the honorable member was attacking the Commonwealth Bank during a period when an anti-Labour government was in office. Yet the political parties in this chamber who oppose the Labour party cheered the honorable member as he made his points. One of the things which characterizes the honorable member’s speeches is the cheers from the Opposition. The Commonwealth Bank, of which he spoke, was hamstrung. Deprived of its original charter, it had been placed in the hands of the big capitalist interests in Australia, who were represented on the Commonwealth Bank Board. Under a complacent Commonwealth Treasurer, they adopted the policy that the Commonwealth Bank should refuse to compete with the nr1 rate banks for business. In other words, the Commonwealth Bank would not accept- the account of a customer who had an account with a private bank. The Commonwealth Bank was then a bankers’ bank - a sheet anchor for the private banks. I realize that the honorable member for Reid has a genuine grievance against the Commonwealth Bank. When he was Premier of New South Wales, the Commonwealth Bank Board of the day treated him shabbily. 1 propose to refer to that matter in a few moments. Before doing so, I desire to emphasize that his remarks about the Commonwealth Bank were an attack on an institution before it had been released from the shackles which had been placed upon it by the BrucePage Government. When this bill becomes law, the Commonwealth Bank will be the only bank in Australia, apart from certain State banks.
The honorable member for New England (Mr. Abbott) talked about deposits, and advances in relation to deposits. There may be in the books of the banks some relation between deposits and advances, but there is no relation at all between the banks’ cash holdings and either deposits or advances. That is one of the reasons why I have always advocated that the control of credit and banking should be a complete Commonwealth or State monopoly. If the private banks traded in their own goods, as ordinary business people do, and had lent their own money at interest, I should not have much quarrel with them. But the associated banks trade in other people’s credit, and in so doing they draw interest, although they do not give any service whatever to anybody. For example, let us consider the case of a primary producer whom the Australian Country party so ably misrepresents in this chamber. He might be a banana-grower, wool-grower or wheatgrower. He requires credit. Perhaps his property has been stricken by drought, and he has lost his stock or his crop. Then a good season is in prospect, and he requires cash. Supposing he has unencumbered deeds of property worth £10,000 but no liquid assets, and he wants to huy sheep or new machinery to cost £2,000. He goes to a banker for an advance, and the banker talks a lot of gibberish which neither the client, the banker nor any one else can understand. That is a fact, because bankers have created a language which no one understands, least of all themselves.
– Quite obviously, the honorable member does not.
– The honorable member should keep quiet. He does not know anything about these matters. He places his deeds to property worth £10,000 in the hands of the banker, and he receives in return an advance, and a cheque book which entitles him to write cheques against figures appearing in the ledgers of the bank. Some will say that he could draw cash for the £2,000. That is nonsense, and the honorable member for Gippsland (Mr. Bowden) shows his ignorance of the matter when he nods his head. The associated banks loan 17s. out of every £1 deposited with them on current account. They have only £18,000,000 to meet current demands of £120,000,000. A client writes a cheque on a bank, it goes over the counter of the bank in due course and it is cancelled. That is all that happens. Not 2 per cent, of the cheques written in this country are cashed. The only cheques cashed are for small amounts required for pocket money. Business men simply pay into the banks to the credit of their accounts the cheques which they receive. Figures are entered in the ledgers of the banks and credit and debit entries made. No one can deny that that is the way in which 97 per cent, of the financial exchanges of this country are made, and any one who contends the contrary does not know of what he is talking. In the hypothetical case which I have mentioned the primary producer receives an advance of £2,000 in return for the deeds of property worth £10,000, or, in the language of bankers, the latter amount is “ liquified “. He has deposited with them deeds of property worth £10,000, they have given him credit for £2,000, and they proceed to charge him interest as high as 6 per cent, for the privilege they have extended to him of allowing him to use some of his own wealth. That is exactly what happens between bankers and primary and secondary producers, and that is the reason why the Royal Commission on Monetary and Banking Systems said that the only real debt of the wheat farmers of this country was the enormous pyramid of debt erected over their farms by the associated banks. The right honorable member for Cowper speaks of what the private banks have done for this country. He was Treasurer for a long time and he did deal out some doles to primary producers. However, those doles were only sufficient to meet the interest payments which primary producers had to make to the banks. As soon as the farmers received those doles the banks “ clouted “ on them to pay the interest which they said was owed to them,
I cast my mind back to something which happened before most of the present members were elected to Parliament. In 1920 or 1921, during my first term as a member of this Parliament, an anti-Labour government gave farmers a guarantee of 5s. a bushel for their wheat. Of that sum an amount of 2s. 6d. was paid in cash and vouchers issued for the remaining 2s. 6d. I pointed out to the late Sir Joseph Cook, who was then Treasurer, that wheat created its own credit, but he said, “I do not know whence the money is to come “. As soon as the farmers received the vouchers they passed them into the banks, and the banks retained 2d. from every 2s. 6d. That is the history of the generous treatment accorded to wheat-farmers by the private banks. The honorable member for Gippsland says that he would support the same policy to-day. That government did exactly the same in regard to war gratuities paid to exservicemen of World War I., and the banks derived a handsome “ rake off “. Honorable members opposite are attacking all the vital clauses of the bill because they realize that as soon as the bill is enacted, the financial interests, who are their masters, will cease to exercise the power which they wield at present, with the result that the Opposition parties will be deprived of the huge contributions to party funds which they receive from those interests.
I intend to say something with regard to the closing of the New South Wales Government Savings Bank. In the course of the present debate some honorable member said that we would steal the people’s savings, and some lunatic opposite said, “ So we would “. The fact of the matter is that there is no money in the savings banks. To steal their savings we would have to take a 10-ton lorry to the bank and steal the ledgers.
– Order ! The honorable member’s time has expired.
.- The honorable member for Werriwa (Mr. Lazzarini) seems to be inspired solely by personal animus against the trading banks. He has not said one word which could be connected with the clauses under discussion, but has indulged in a violent personal attack on members of the Opposition and on the banks, a tactic which has become a commonplace in this debate. Of course, we understand that honorable members opposite are pretty sore at the moment because the banking horse has not run nearly as good a race as they had hoped, and the result of the elections in Victoria has increased their spiteful and violent outpourings.
I propose to address myself to clause 11, sub-clauses b and c of which state -
It shall be the duty of the Commonwealth Bank -
To conduct its business without discrimination except on such grounds as are appropriate in the normal and proper conduct of banking business; and
To observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, not to divulge any information relating to, or to the affairs of, a customer of the Commonwealth Bank except in circumstances in which it is, in accordance with law, or the practices and usages customary among bankers, necessary or proper for the Commonwealth Bank to divulge that information.
First of all, I propose to examine the “ non-discrimination “ clause. This provides that there shall be no discrimination other than such as obtains in normal banking practice. What is “ normal banking practice” and the “normal discrimination “ which banks have exhibited in the past ? We all know that the banks have always shown discrimination in extending credit. They have extended help to the thrifty, the solid and the reliable. That has been their practice, and that is why they have done so much to build up this country. Surely it is not suggested that the Commonwealth Bank will not exercise similar discrimination? Of course, it will; otherwise it will rapidly find itself insolvent, and people will cease to bank with it. We can be sure that that is not the only discrimination that will be shown by the monopoly Commonwealth
Bank; because, whenever a government concerns itself with a great industry there must be a certain degree of discrimination along governmental and political lines. If we take cognizance of what has gone before, we can appreciate that that is what will happen. We had before us not long ago a bill dealing with conciliation and arbitration. Formerly, the judges, who had the last word in the matter, were quite beyond the reproach of having displayed discrimination against or favouritism towards either one side or the other. The Government replaced the judges with conciliation commissioners and, of course, appointed those gentlemen who favoured its party political system. No one will pretend that the operations and decisions of the conciliation commissioners will not reveal a very strong political bias in favour of the Government and party which set them up. The Commonwealth Bank will show exactly the same sort of discrimination. We know that when the matter becomes one of appointing directors and laying down policies in regard to loans, the Government will not hesitate to act in accordance with its own political beliefs. What is meant by “ discrimination normal in banking practice”? Does it mean what has been normal up to the present time from a financial point of view? Soon, there will be only one bank. We shall then be able to judge what is normal only by looking to what that bank does. This provision is perfectly meaningless. As the Commonwealth Bank will be the only bank operating, it will be able to determine what is normal. If the clause is to mean anything, it should provide that the bank shall conduct its business with only such discrimination as has always been considered necessary and has been given effect by the trading banks. Otherwise, the Commonwealth Bank will be free to show any discrimination it may wish to practise.
I refer now to the provision that the bank is not to divulge information about clients and so on, except as is customary among bankers. The committee knows very well that it is not customary among private bankers to divulge any information whatsoever. The Commonwealth Bank is the only bank in respect of which the divulging of information about clients has come to public notice. Therefore, it will be no protection to the people to provide that there shall be no leakage of information except such as is considered proper at the present time. A standard should be set which would relate to the future behaviour of the Commonwealth Bank, and that standard should be the normal behaviour of the trading banks in the past - a line of conduct which, as honorable members on this side of the chamber have shown during the present debate, the Commonwealth Bank has by no means consistently agreed, with or followed.
I merely draw the attention of the committee to these perfectly meaningless provisions. Others should be framed which will safeguard the people against discrimination on political and other grounds, leakage of information, and so on. From the point of view of providing any real safeguard, the provisions as they stand do not mean anything.
I listened this morning to a speech by the honorable member for EdenMonaro (Mr. Fraser). If any man in this Parliament qualifies for the title “Mr. Facing Both Ways” it is that honorable member. This morning, he made what might be described as a moderate speech. We know, of course, that on Thursdays the honorable member usually occupies his time in the production of a magazine, in which I have been very interested to read his opinions on banking. That magazine has a strongly Communist flavour, and is undisguisedly biased towards Labour in every respect. So much for his activities on Thursdays. On Sunday nights, this honorable member, who sets himself up to be so very moderate, addresses himself to the constituents of Eden-Monaro over the radio. We then find that he is even more moderate. He talks a lot about the benefits, which the workers particularly and the people generally will derive from this legislation. What utter humbug that is! If this legislation is to confer such a great benefit on the workers, and is to be so great a thing for the common man, why does the honorable member, and all other honorable members opposite, deny to them a. voice as to whether they shall have it or not? How can honorable members opposite claim to know better than the citizens of this country what is good for them? That is a most undemocratic and dictatorial attitude to adopt. They say to the people, “ We shall give you, not what you think you want - you do not know - but what we consider is best for you, and without consulting you ; whether you like it or not, we shall ram it down your throats “. That, truly, is where the honorable member stands, and I hope that . I have made it perfectly plain.
.- I want, first, to deal with some of the matters that have been mentioned by the right honorable member for Cowper (Sir Earle Page). Referring to honorable members on this side of the chamber in relation to the clauses under discussion, the right honorable gentleman made the amazing discovery that we are men of straw who “ had burnt ourselves out and were weeping on our shoulders “. In view of our ability to perform that feat of legerdemain, I am sure that in two years’ time we shall be able to convince the people that this is a very fine piece of legislation.
I shall nowrefer to the honorable member for Reid (Mr. Lang), who too has the technique of setting up men of straw merely for the purpose of bowling them over. Having completely destroyed his argument, he resumes his seat exhausted, and considers that he has made a contribution to the debate. He referred particularly to clause 11. In that very simply stated clause - its language would be simple in any document, but is particularly so in a banking measure - he finds all sorts of dangers, difficulties and misunderstandings. He confessed that he did not know what it was all about, that it was too complicated for him, and, indeed - on a note of grave concern - that the whole structure of the bill was threatened by it. It is essentially a machinery clause of the utmost simplicity. For his benefit, I shall give him a translation of it, possibly in words of two syllables or less. It reads -
It shall be theduty of the Commonwealth Bank-
to provide in accordance with the conditions appropriate in the normal and proper conduct of banking business, adequate banking facilities for any State or person requiring them;
The explanation and application of that provision is that the Commonwealth Bank will not be in a position different from that which now obtains in respect of all banks, including the private banks. The word “ discrimination “ comes in again in the honorable member’s remarks. It may be explained by paragraph b to which reference has already been made. The insertion in paragraph b of an exception to the rule of non-discrimination is necessary to ensure that the bank is not obliged to conduct a banking account for a proven rogue. A bank should not be obliged to allow an individual to open a cheque account if his possession of a cheque book would enable him to become a nuisance or a menace in the community. These things are merely machinery provisions. There is nothing dangerous in them. If, however, honorable members see a bogy in them, or if they discuss these clauses, not in a spirit of sincerity but merely in an endeavour to make a. case, their criticism is not worth much. The honorable member for Reid is in a. difficult position. He knows that he must vote for the bill, because otherwise he will never againbe elected to this Parliament; but, as the editor of a newspaper which is antiLabour in policy, he has to do something to please his masters who favour him with their advertisements, and so he has “a little each way”. Accordingly, he can not see in clause11 anything but dangers. That enables his editor to write something along the lines of his speech. We must not, however, be misled by his remarks about simple things. This is an important measure, and at this stage it should be given grave and earnest consideration. We should not allow it to become a matter for ridi- c ule, as the honorable member for Reid attempted to make it, or the subject of pretence. Clause 11 is simplicity itself, and there is nothing discriminatory about it apart from the exception stated, which follows ordinary every day banking practice.
The honorable member for Wimmera (Mr. Turnbull) took the liberty of indulging in discussion not closely related to the clauses before the committee. I propose to do the same, and only to relate my remarks to the clauses whenever I see (.hat von, Mr. Temporary Chairman, insist on my doing so. I ask for the same liberty to express myself as was extended to the honorable member for Wimmera. The honorable member referred to what Henry Wallace called the “common man “, but the honorable member spoke of “ cart-horse democracy “.
– I did not.
– Coming from a rural area it would perhaps be natural to him to think that way, as he is a conservative.
– The honorable member is deliberately misrepresenting what T »aid.
– It would at least be correct to say that the honorable member put the cart-horse before the political horse. He said that in relation to these clauses the Government had chosen its own battle ground, and that the honorable member for Watson (Mr. Falstein) had insisted that the Government should do so. But he himself ran away from every clause in the bill and talked in generalities. In the course of his remarks he said that the people, not the Government, won the war. I agree. That point has never been contested. The honorable member then went on to say that those who had pioneered Australia were not the early settlers, but the trading banks. I have never heard a sillier remark. It is, I am sure, enshrined in Hansard, which is always a faithful record of what is said in this chamber.
– Play the game!
– The honorable member has dealt with this clause in an evasive manner merely for propaganda purposes.
The .honorable member for Reid referred to profits of the Commonwealth Bank and asked why private trading banks also should not make profits. The simple answer to that question is that profits made for the people are quite different from, and more important to, the national economy than profits made for a few shareholders. The remarks of the honorable member for Reid that the profit motive was undesirable, even if it applied to a government bank, cannot be sustained. In the lending policies of the Commonwealth Bank, it is wise to decide that public hospitals should come before picture shows; baby clinics before cabarets; cottages before cafes; and the development of industry useful to the community before the satisfaction of some capitalists urge for a totally useless proposition which has the saving grace of netting a nice little over-all profit of 50 per cent., but otherwise not worth a thing to the country. I hope that the Commonwealth Bank will exercise discrimination in that direction. It will, of course, have to act through its governor, who will have to determine these things. The Prime Minister (Mr. Chifley) has said, many times, that there are some investments which, although they return no direct profits, must be made by a country if it is to survive. There should be cheap money for baby clinics and hospitals, and houses for the people, as well as for the development of both primary and secondary industries. That is how the Labour party envisages the proper functions of a bank.
Before dealing with the remarks of the right honorable member for Cowper (Sir Earle Page), I wish to refer to the honorable member for New England (Mr. Abbott). Obviously, there is a difference of opinion among members of the Opposition regarding the banking legislation passed by this Parliament in 1945. The honorable member for New England said that the Opposition did not intend to repeal that measure, although it might amend it, but the Leader of the Opposition (Mr. Menzies) was plain and specific on the matter. When speaking of that legislation in 1945, he turned in the direction of his masters, the bankers, who sat behind him in this House, and said that if the parties in opposition were returned to power they would have to consider carefully the implication of thai legislation and would restore the Commonwealth Bank Board. If that did not mean the destruction of the banking legislation of 1945, 1 should like to know what, it does mean.
– When Mr. Theodore was Treasurer he provided for a board to control the Commonwealth Bank.
-The rabble opposite continue to contradict one another. The honorable member for Wentworth (Mr. Harrison) said that it was not right to say that the banking legislation was introduced by the Prime Minister in a moment of pique, but that it had been planned for over 50 years, and was the settled policy of the Labour party. Two hours earlier, his leader had said that it was the result of pique ! The Leader of the Opposition had said that the Prime Minister was annoyed, and that, in a burst of anger, he had introduced this bill. The trouble with his deputy is that he is generally so noisy that on that occasion he did not hear what his leader said, and so, in his contribution to the debate, he told ns that this legislation had been planned for half a century. The Opposition cannot have it both ways.
I have been paid a great compliment by the honorable member for Fawkner (Mr. Holt), who said that I should rise in my place and advocate that time should be given to the banks to lodge their claims in the event of a Gazette being published which set a short time limit upon the taking over of the shares of the banks. There is no need for that. If the honorable member for Fawkner wants a clarification of the constitutional position - something which seems to disturb him - he should know that when two constitutional lawyers get together the result generally is to make confusion worst confounded. Perhaps the simple philosophy of a layman who knows nothing’ about law may be nearer to a solution. For that reason I thank him for the opportunity. From the bill itself, it i9 apparent that the Treasurer will have the time factor in his own hands. I am also sure that, in the issuing of the Gazette notice, the time factor will be considered. Those who say otherwise are merely putting up a hypothetical case, which I can rebuff with another hypothetical case. For that reason, the amendment has no strength in it. The Leader of the Opposition says, “Here is a clause which provides that on a certain date, if the Government thinks fit, a Gazette may be issued, which may say that the shares of the banks are to be taken over forthwith “. That is a hypothetical proposition - something that might happen. There are many other safeguards in the bill which make it unnecessary to impose the safeguards that the right honorable gentleman proposes. We have no fear of what might happen in the High Court, and it would appear that the Leader of the Opposition knows more than is reflected in the amendment. The Minister in charge of the bill reflected the attitude of honorable members on this side of the chamber when he said he would not accept th» amendment. It is a specious amendment, moved merely for the purpose of press propaganda. I believe that clause 11 is innocuous - that it is, indeed, merely a machinery clause.
– Order ! The honorable member has exhausted his time.
– The honorable member for Parkes (Mr. Haylen) has rambled on in his usual fashion like the bubbling brook; or. to change the simile, like the gossip writer of a weekly newspaper, who touches lightly here and there, and has a little stab at this one and that. I do not intend to pay much attention to the honorable member for Reid (Mr. Lang). The honorable member for Parkes sought in one sentence to disown the honorable member for Reid, and in the next to claim his vote. If there is any man in this Parliament who may claim credit for this legislation, it is the honorable member for Reid. I have no sympathy with his political philosophy, and I remember the “Lang plan” of 1932. I spent some time to-day re-reading that plan, and I find that the major part of it has been embodied in the speeches of honorable members opposite in support of the bill. Everything that the honorable member for Reid 9aid at that time honorable members opposite were proclaiming, “ Lang is right “, has been repeated by honorable members opposite in their speeches on the bill. If any one is entitled to claim the fathership of this bill - any one apart from certain interests outside the Parliament - it is the honorable member for Reid, who votes with the Government all the time - who has, in fact, never voted in any other way, except against motions for the application of the “gag”. He must now have the joy of seeing coming to fruition, after so many years, the old Lang plan with the Chifley brand upon it.
I wish now to refer to the speech made by the honorable member for Werriwa (Mr. Lazzarini), who was assistant Treasurer in the last Labour Government, and is also the author of a book on financial matters, which has been freely circulated among government supporters. In his speech, the honorable member cited the case of a man with assets valued at £10,000, but with no ready money, who applied to a private bank for an advance, and was turned down without receiving a penny. He suggested that when the trading banks had been abolished, and the Commonwealth Bank enjoys a. monopoly, those who seek to borrow money will be able to dispense with all the formalities in regard to security - that they will be able to get their advances without putting up any security at all. Let us note that this suggestion comes from a former assistant Treasurer in a Labour government. At the moment we are considering clause 11 of the bill, which states -
It shall be the fluty of the Commonwealth Ba uk il!) to observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, not to divulge any information relating to, or to the affairs of, a customer of the Commonwealth Bank except -in circumstances in which it is. in accordance with law or the practices and usages customary among bankers . . .
Thus, the Commonwealth Bank will follow the same banking practices - so it is said - as the private banks, and refuse to discriminate - so it is said. However, I should like to know how this will work out in practice, when the manager of a Commonwealth Bank branch is approached by organizations for au advance.
– Does the honorable member mean similar organizations?
– Let us take the case of the churches, for example. Let us assume that there are various church organizations which want to extend their schools, or build colleges, or erect churches. Generally, they have little cash with which to begin operations. There is only a piece of land, and the custom has been to approach the trading bank for an advance to enable them to proceed with the work. It has frequently happened that the entire co.sf of an undertaking has been advanced to a religious organization at the discretion - call it discrimination, if you like - of the manager of the private trading bank. He exercised his judgment as to the capacity of the organization to repay the advance in time, and, apart, from this estimated capacity, there was no security. The church building itself would not constitute worthwhile security to any commercial organization. What could the bank do with it even if it took the building over? That is how such business is done through the private banks, but the Commonwealth Bank, like a government department, would have to adhere to rules and regulations, because government institutions may not discriminate. If a bank manager, under the Government monopoly banking system, were ro discriminate, the cry would go up, “ Why did you make an advance to this church, and not to that? Why did you accede to the request of this political body, and not to the request of that one?” For that reason, government departments are bound by red tape, just as is the Taxation Branch and the Public Service Board. We know that if a. prospective candidate for a Public Service examination is one day over the prescribed age he is not allowed to sit. I have known of many such instances. A government servant cannot take the risk of being charged with having favoured one person more than another.
What is going to happen to all these organizations with respect to borrowing if no discrimination is to be exercised ? If there is discrimination, it will be exercised by the political partisans appointed by the Treasurer for the time being. Under this clause the Treasurer will be empowered, in the process of taking over the private banks, to appoint the boards of directors. In that process he has complete authority to instruct the Governor of the Commonwealth Bank as to who shall be appointed as the new directors. One of the most vital factors in the private banking system is that., very often, discretion is given to a branch bank manager to advance up to 100 per cent, without security other than his knowledge of the character of the applicant and his faith in the applicant. But no officer working under Public Service regulations will be able to exercise such discretion without risking the loss of his job on the ground that he exceeds his duties. Most honorable members know of the case recently of a highly placed public servant in Sydney who applied to the Commonwealth Bank for an advance to enable him to purchase a home; but, l«-cause the security he offered was a few points below the percentage prescribed under the regulations, he was refused the advance, although his character was well known and he had an impeccable record in respect of meeting his financial obligations. When he was turned down by the Commonwealth Bank, he applied for an advance of the same amount from the Bank of New South Wales, which gave him accommodation within a few hours. That is the difference between the operalion of a private bank and a government bank. Experiences of that kind are likely to be the lot of many people who apply to the Commonwealth Bank for advances in the future.
The Minister for Post-war Reconstruction (Mr. Dedman) said that the Commonwealth Bank will not be inhibited to the same degree as the private banks have been up to date in respect of the gross f* mounts which it may lend, because the Commonwealth Bank will have complete control of banking machinery, and, therefore, will be able to expand, or contract, credit as it thinks best. However, what the Minister failed to state was the percentage in relation to the security offered that will be advanced to individual applicants; and supporters of the Government who have spoken in this debate have not touched on that point. But that is the main point which concerns the. individual who, to-day, has an account with a trading bank - the artisan, electrician or plumber, who hopes to set up his own business and start in a modest way largely on the basis of his character and reputation. The great majority of our people are waiting for an answer from the the Government on that point, but Government members cannot answer it, because under a single governmentcontrolled bank, bank officers must adhere to regulations. Therefore, a young man who has not accumulated many assets will he prevented under the new set-up from making a start on his own account. This will not be so bad for the man who has plenty of assets, and has already acquired a fair share of this world’s goods. He will not be worried because he has all he wants; but the man who lias not yet had a chance to build his own business, or buy a farm, will be prejudiced under this measure.
The amendment moved by the Lender of the Opposition (Mr. Menzies) goes to the very heart of the Opposition’s protest against this legislation. We have made many protests in respect of this measure, but none is more serious than this amendment. There are a number of phases of this hill. First, the announcement by the Prime Minister (Mr. Chifley) that the Government proposed to nationalize private banks came as a complete surprise to not only the community at large, but also the majority of Cabinet Ministers and Government supporters. That is clear from the fact that within a day, or two, of that announcement, the Minister for Post-war Reconstruction stated that the proposal could mean that 5,000 fewer employees would lie required to conduct banking in this country than are now employed in that calling, whilst the PostmasterGeneral (Senator Cameron) stated that surplus employees could be absorbed into the Postal Department, and the Minister for Repatriation (Mr. Barnard) declared that insurance companies might well be the next organizations to be nationalized. Ministers made various statements which showed that they had no knowledge at all of the Government’s proposals as set out in the bill now before us. Only a very small coterie of Ministers could have bad any knowledge at all of what (he bill was to contain.
The measure is revolutionary. The Prime Minister claims that the Government has power under the Constitution to enact this legislation. That is arguable; but we do know that he has no electoral authority for this proposal, because the only vote which has so far been taken on this matter has been that of the people of Victoria at the elections held in that State last Saturday and the result of those elections shows clearly that the Government has no electoral authority for this legislation. Therefore, we must now examine the constitutional process involved. We pride ourselves that we function according to British parliamentary traditions, that is, we have an Executive which controls the Parliament, and a representative of the Crown controls the Executive to ensure that the Executive shall not infringe the law. There must be some instrument provided for the removal of the Executive from office should it act in breach of the Constitution and contrary to the law. That process was applied to the honorable member for Reid (Mr. Lang) when he was Premier of New South Wales. His government was removed from office by the State Governor on the ground that it was acting in breach of the law. Therefore, we come to this consideration: Under the measure as drawn, the Prime Minister proposes to sidetrack not only the electors but also the High Court. He proposes to sidestep the safeguards provided under the Constitution, and to prevent an appeal to the guardians of the Constitution, which is the High Court, which exists for the purpose of interpreting the Constitution and deciding whether the Government has power to proceed as it proposes. Under the bill as drawn the Government can, within 24 hours after the measure is passed, instal in every bank in Australia its own set of directors and give its own set of directions to employees of all banks, and the High Court cannot come into the picture at, all. That is the process which the Prime Minister proposes to follow. The only person who can prevent the Government from doing that is the representative in this country of His Majesty the King. I do not want to say much about that; but after the departure of the Duke of Gloucester from this country, the Prime Minister made a certain appointment to a certain office, and in view of later events, that appointment seems to me to indicate a very long-dated bit of thinking, because that appointee is the only person who can prevent the Government from implementing this measure by side-tracking the High Court. He is the person who was appointed- as successor to the Duke of Gloucester.
– Order! The honorable member’s time has expired.
.- 1 listened particularly to the comments made by honorable members opposite with respect to clause 11, and I was also very interested in the remarks of the honorable member for Reid (Mr. Lang) regarding the establishment of a government monopoly bank and the dangers associated with such action. After he had spoken I refreshed my mind concerning the contents of his well-known publication, Why I Fight, which he wrote in 1934. In the foreword to that book he states -
Enthroned in our society is a hierarchy of financial anarchists playing with a world of men and women for sheer personal gain, putting them to work under the whips of hunger, throwing them into idleness to keep them in discipline, massing them for war, dividing them in peace - and from every activity into which it deploys them drawing toll in gold, counted over and over in human tears and blood.
– Who wrote that?
– That was written by the Honorable J. T. Lang, at that time Leader of the Australian Labour party in New South Wales and Premier of tha t State. Up to page 242 of his book - and there are many more pages in it - he criticized extensively the dominating influence exercised over his Government by the private banks, and the discrimination shown against Labour administrations by anti-Labour appointees on the Commonwealth Bank Board.. Honorable members well know from his statements that the honorable member is opposed to a monopoly bank, but he is a pretty careful punter and is having a few “ bob “ each way on this issue. One would think that he would at least maintain a consistent attitude on this subject; but he has not done so. As a comparatively young Labour man I am as amazed as I am disgusted by his paltry approach to it and by the manner in which he has criticized this proposal. He stands condemned by his criticism of Labour’s financial policy on. the one hand and his assertion on the other that he will vote for the bill. At page 243 of his book, dealing with the subject of banking, he had this to say -
Our first step then must be the introduction of legislation in the Commonwealth Parliament, under the constitutional powers already existing, for the declaration of banking as a government monopoly. Already, the existing Commonwealth Bank Act gives the Commonwealth Bank power to acquire other banks; but the new measures must be mandatory, as recent history has proven that it is impossible to regulate credit whilst a private company has the right to trade in the same commodity, advancing or denying accommodation according to carefully conceived plans designed to checkmate any national policy that endangers the profit racket in which the private institutions have so successfully engaged. [n. other days, when the honorable member was a great advocate of Labour’s policy, he sponsored the very proposition which has been put forward by the Government, namely, that the function of banking in this country should be carried out by a government-controlled monopoly. It is sheer hypocrisy on the part of the honorable member to turn right back on his own writings and say that in establishing a monopoly bank, the Government is adopting a policy which will permit discrimination to be exercised against certain people or certain groups of people in the community. In his book lie went much farther’ than this Government is prepared to do and advocated what was virtually the confiscation of the assets of the shareholders of the private banks. And that was but a few years ago.
– Has the honorable member read his book on communism?
– I have, and I also found a very interesting reference to that subject in his book, Why I Fight.
An interesting statement was made by the honorable member for Richmond (Mr. Anthony) in regard to government appointments to various instrumentalities. The’ honorable member said that, if this measure be passed, the Government will appoint its own directors to carry on the business of the private banks and that they may discriminate against churches or other religious organizations. Why did not the honorable member tell the committee that the LiberalCountry party governments which he supported appointed to the Commonwealth Rank Board men who were selected solely because of their political affiliations, and who by the exercise of their power on that board were able to dominate and control the financial affairs of this country for many years ? One has only to look down the list of members of the Commonwealth Bank Board to see that control of the policy of the Commonwealth Bank was given to men who openly supported the political ideologies of honorable members opposite and were prepared to sell their integrity to further their own interests and those of the government which appointed them. Listening to honorable members opposite, one would think that one only has to ask a bank for an advance to secure such accommodation. That is not so. Even the most liberal banks to-day reject applications for advances which they consider to be likely to be unsound.. No doubt in many instances, applications for advances are rightly rejected. It is idle to say that any man can secure an advance from, a private bank to-day, though, no doubt, the private banks, in an attempt to curry favour with the people, have greatly relaxed the conditions upon which advances are made. It is only reasonable to expect that the Commonwealth Bank will adopt a sound business approach to this phase of its business. As Government spokesmen have said, the bank will deal with each case on its merits. There need be no fear that discrimination will be exercised against churches as the honorable member for Richmond would have us believe. Applications for advances by churches and religious organizations will receive the consideration and sympathy which they rightly deserve.
During this debate the same old criticisms have been levelled against this proposal as we have been accustomed to hearing down through the years. Merely because our railways and the postal service have been nationalized, does any one suggest that only a trade unionist may travel on a train or only a Labour supporter may post a letter? Honorable members opposite have endeavoured to create a fear complex in the minds of the people with regard to this proposal; but those who can read between the lines will know that they have merely been indulging in scaremongering of the lowest kind.
The honorable member for Richmond said that discrimination had been exercised by the Commonwealth Bank against young men who wished to buy a house or establish a business. Those who discriminate against such people to-day are the big trading companies who fear the opposition of the small man. Many of the directorates of the big trading companies are interlinked with the directorates of the private banks, which by their sheer domination of the financial affairs of this country have been able to force out of business small men who seek to compete against them. Real discrimination is exercised to-day by the private banks which dominate the industrial field because of their tremendous financial power. That is happening throughout the length and breadth of this country. Instances of these tactics on the part of the private banks and their wealthy customers is to be seen in connexion with the establishment of new newspapers and radio stations. Try to start a new newspaper in opposition to the Murdoch combine, Australian Associated Press Proprietary Limited, or the proprietors of that yellow “ rag “ called the Sydney Daily Telegraph I This bill is the answer to the domination of those influential concerns. It is the Government’s intention to give a. “ fair go “ to everybody in the industrial field, to the general worker in employment, to the man who wants to build a home or establish a business - all the things which go to make up a decent national economy. The approach of the Opposition to this measure has been based on scaremongering tactics of the kind they have repeatedly fallen back on since 1911. The old time-worn arguments are trotted out in this campaign. The forecasts of the dire happenings that would follow the passage of the Banking Bill of 1945 have again been featured in this debate. None of the things we were then told would happen having occurred, honorable members opposite are now basking in the sunshine of a gerrymandered election win. The people may well dismiss the arguments put forward by them. When this hill becomes law the Commonwealth Bank will be administered by a sound board directed by the Treasurer and the Government. It will give the people a “ fair go “, a privilege denied them by the Commonwealth Bank Board established by the right honorable member for Cowper (Sir Earle Page) and supported by honorable members opposite. T support the clause.
.- With characteristic technique, honorable members opposite have sought to draw a red herring across the trail in discussing what I consider to be the most important clause in this part of the bill. An unanswerable case has been put up by -the Opposition, but honorable members opposite have run away from the issue and are not prepared to engage in a debate relevant to the clause before the chair. If I am permitted to do so, I propose to discuss the amendment - a subject about which we have heard little or nothing from honorable members opposite. First, we listened to a dissertation from the honorable member for Werriwa (M>. Lazzarini) regarding the comparative merits of cheques versus cowry shells. That was his sole contribution to the debate on the amendment. Then the honorable member for Parkes (Mr. Haylen), who always speaks in headlines, contributed something which, like the flowers that bloom in the spring, had nothing whatever to do with the amendment or the clause before the committee. Then we heard the honorable member for Martin (Mr. Daly) quoting slabs from Why I Fight. He could have interested the committee more with a dissertation on “Why I use th. taxpayers’ money to joyride “.
I wish now to deal with the amendment before the committee. The Leader of the Opposition (Mr. Menzies), who has moved the amendment, has rightly said that this is the most important clause in the bill, one that should be debated fully, and one on which there should be a clear expression of the Government’s opinion. But what do we find? Immediately the right honorable gentleman moved the amendment, which is designed i,o permit a reasonable breathing space before the shares of a bank can be acquired, so that the validity of this legislation may be tested in the courts of the land - a matter about which I shall have something to say at a later stage - a very senior Minister, the VicePresident of the Executive Council (Mr. Scully), who, I assume, speaks with some authority, rose and said that the Government would not accept the amendment. There we have an example of the Government’s technique. The Government says, in effect, “ We shall not accept an amendment to this bill, no matter how ii may be drafted, or what may be its purport “. Subsequently, because obviously the Vice-President of the Executive Council was unaware of the full implications, of the matter, and was not prepared to debate it, another senior Minister, the Minister for Post-war Reconstruction (Mr. Dedman), entered the chamber and took his place at the table. One would have thought that that honorable gentleman would have advanced some arguments to counter those offered by the Leader of the Opposition in moving his amendment; but, no, the Minister dealt with the amendment in one or two phrases. He claimed that the amendment had been moved in an endeavour to delay Bill passage of this legislation, and, therefore, to delay any action that the Government might propose to take when the measure becomes law. I remind honorable members that the amendment seeks only to provide that one month’s notice shall be given of the acquisition of shares in the private banks. If the period were six months, instead of only one month, there might have been something in what the Minister said; but the object of the amendment, as I have said, is merely to give breathing space to those whose interests are wrapped up in the banking organizations, so that they may test the validity of the bill in the courts. Therefore, to say that the amendment has been moved to delay the implementation of this legislation is absolute misrepresentation. The Minister went on to say that clause 13 empowered the Treasurer, if he so desired, to delay the service of the notice of acquisition. Let us examine that claim,- because we on this side of the chamber have some knowledge of what is in the mind of the Prime Minister (Mr. Chifley) in this regard. I remind the committee that the right honorable gentleman himself has said that once he has scrambled this egg no one will be able to unscramble it. Obviously, the right honorable gentleman’s intention, a.s revealed by his refusal to accept this amendment, is to scramble the egg immediately. If he does so, what will be the effect on the people generally? It is most important that we should clearly understand the meaning of this proposal.
Since the Victorian elections were held we have had some indication of the Government’s attitude towards the will of the people. Notwithstanding the fact that the citizens of one State of the Commonwealth have shown clearly what they think of this measure, the Government has maintained its opposition to the holding of a referendum. This power-drunk Administration believes that it knows better than the people what they wantNow we find that the Government proposes also to by-pass the courts of this country. We know full well that if certain action is taken under this clause - action already described by the Leader of the Opposition - there will be no opportunity whatever for appeals to be made to the High Court to test the validity of this bill. That of course is in complete accord with the Government’3 usual technique. In the past, we have beard responsible Ministers malign the courts of this country. Individuals occupying high positions in the government service, and in the Labour movement, have deliberately tried by word and action to destroy the courts of this country and to incite the people to disobey the rulings of the courts. A clear indication of the Government’s attitude to the courts was shown recently when it secured the passage through this Parliament of a measure which partly destroyed the authority of the Arbitration Court. This country is heading rapidly towards totalitarianism, and once that state has been achieved, like the nationalization egg, it will be difficult to unscramble. Clearly the Government proposes to scramble not only the private banks, but also the courts of justice, because this clause, if implemented, will deny them the right to appeal to the courts. I see no reason to believe that the Government will not take the action to which the Leader of the Opposition has referred. To be convinced of that, one has only to visit this legislature and see the technique that the Government employs. Already the “guillotine” has been applied to this bill. Honorable members are not being given an opportunity to discuss its vital provisions clause by clause.
I recall that on another occasion the Prime Minister said that only by his courtesy were members being permitted to discuss a censure motion that had been submitted by the Opposition. That is typical of the power-drunk attitude of the Government. It rides roughshod over the feelings of the people, the will of the people and the freedom of the people. It permits discussion of vital matters only by courtesy of its leader. It persists in its refusal to allow the people of this country to express their views on this measure by way of a referendum. It refuses people the right to test the validity of the legislation in the High Court. To use the Prime Minister’s words, the private banking institutions of Australia are to be “ scrambled “ and the people affected, are to be frustrated in their attempts to have the High Court decide whether the legislation that is being forced through this legislature is constitutional. That is the Communist’s technique. The purpose of the amendment is to ensure that people affected by this legislation shall retain their normal right of access to the court. The Government intends to ride rough shod over more than 1,500,000 customers and the shareholders of the private trading banks, 20,000 employees and the great mass of the people, all of whose welfare is wrapt up in this matter. The amendment is designed to allow them breathing space between the proclamation of the legislation and the acquisition of the shares in the private banks in which to decide what to do. Honorable members opposite have in their speeches ignored the peopled interests. The honorable member for Werriwa ‘ (Mr. Lazzarini) talked a tout cowry shell 9 versus money. The honorable member for Martin made a speech on “Why I Fight”. He would have been better employed had his subject been, “Why 1 wasted the taxpayers’ money on a joy-ride overseas “. I desire to make passing reference to clause 18, because all these clauses are interlocked. Sub-clause 2 provides -
The directors so appointed shall hold ollie,notwithstanding any lack of qualification or any disqualification arising under any low. charter or other instrument. “ Notwithstanding any lack of qualification “ ! The committee knows that defeated Labour politicians have been appointed to jobs for which they have utterly lacked qualifications.
– Order! The honorable member’s time has expired.
.- The honorable member for Wentworth (Mr. Harrison) can always be relied on to approach debates in this House like an alsatian dog with hydrophobia. Honorable members opposite want this legislation to be treated in a different manner from that in which legislation is normally treated only because they think the treatment of private financiers should be different from that of other sections of the community. It is amusing to hear them. One would imagine from their remarks that bankers were benevolent institutions, instead of just men trying to make profits. That belief is fostered in the minds of the people by all the propaganda of the banking interests and their representatives in this chamber. The purpose of this legislation is the merging of the private trading banks into one central hank that will be used to provide a banking and credit .service in the interests of the whole community, instead of a fewprofiteers. If there should be anything wrong with that proposition, Opposition members have not proved it. The Labour movement and the great mass of the people have waited too long for this legislation and no reason exists why they should wait even the extra month that the amendment would have them wait.
The Leader of the Opposition (Mr. Menzies) and his deputy, that great democrat and mental giant, the honorable member for Wentworth, try to further the vicious lying propaganda campaign of the opponents of this measure by creating the impression that if the amendment should be rejected, the bankers will have no opportunity of testing the legislation in the High Court. I warrant that the bankers do not share that view and that both the Leader of the Opposition and the honorable member for Wentworth are well aware of that fact. Their purpose is to implant in the minds of the mass of the people, many of whom are. incapable of working things out for themselves, that the Government is denying the private bankers recource to the processes of justice. With monotonous regularity, we have heard about the defeat of the Labour Government in Victoria as being rejection by the Victorian people of the proposal to nationalize banking. The victory of the Liberal party and the Country party in Victoria was a tactical victory. The Labour party committed a tactical blunder by insisting that the nationalization of banking was not the issue. I agree that technically it was not, because, as it was a federal matter, it was no concern of the State. But I think the Labour party would have done better to have said, “ All right, if you insist that banking is an issue, we accept the challenge”. Then our side of the story would have been told. Because we did not do that, we lost, the Victorian elections. Although the electors only heard one side of the story - an untruthful, mutilated and distorted side - the Labour party was still able to muster 495,000 votes. The people of Victoria did not vote against the nationalization of banking, aud the Leader of the Opposition and his supporters know that to lie so.
– What did they vote against, then?
– I shall tell the right honorable gentleman. Thousands of pounds were thrown into the fight by the financiers of Australia, and the press, which has always been recognized as the greatest enemy of the working classes of this and every other country, joined with them. It is interesting to note what Mr.
James H. Barry, editor of the San Francisco Star, once said about the Associated Press of America -
It is the damnedest, meanest monopoly on the face of the earth, the wet-nurse of all other monopolies. It lies by day, it lies by night, and it lies for the very lust of lying.
That is what happened in Victoria, and that is the influence which honorable members opposite are trying to bring into this discussion. I have often expressed my views as to the cause of the depression, and I make no apology for doing so. The depression was manufactured by the private banks of the world. The Leader of the Opposition said that the cause was the falling off of export and import trade and the reduction of commodity prices. That is quite true. I do not think that anybody would deny that statement. However, the right honorable gentleman did not say what caused the price reductions and the contraction of trade. If every government in the world had control of national credit, it would not be possible for such recessions to occur and cause world-wide depressions. In any case, whatever’ caused the depression, there cannot be the slightest doubt about the conduct of the private banks during the depression. An honorable member on this side of the chamber said last night that the private banks continued to make profits during the depression, and the honorable member for Richmond (Mr. Anthony) said that they did not. These are the dividends that were paid by the private banks of Australia during the depth of the depression -
The total for those five depression years was £10,800,025, an average of £2,180,005 per annum. Those profits were received by the shareholders of the private banks at a time when hundreds of thousands of Australians were in a state of virtual starvation.
– That is only what the banks paid in dividends.
– Yes. That total does not represent the full amount of the profits made by the banks in that period. This Government should be applauded for taking action to ensure that such things shall never happen again. That is the reason for this bill.
.- I have listened to the honorable member for Herbert (Mr. Edmonds) informing us that the people are eagerly awaiting the great treat that the Government intends to give them and, in fact, can scarcely wait for the extra month proposed in the amendment moved by the Leader of the Opposition (Mr. Menzies). The people’s opinion of ‘this bill was clearly illustrated by the result of the Victorian elections. The Government’s attitude reminds me of an old story which will bear repetition. It is the tale of the socialist who, at a public meeting, advocated strawberries and cream for everybody. A man at the back of the hall declared that he. did not like cream with strawberries.
– And the orator replied, “ You will have cream whether yon like it or not “.
– I thank the honorable member. That is the attitude of the Government on this measure. I am glad that honorable members opposite are so quick to realize the point of my remarks. This Government says to the people, “ We know what is best for you. We can tell you what you ought to have “, whereas the people should tell the Government what is best for them. I was very interested in the analysis of the Victorian elections made by the honorable member for Herbert. He said that, if supporters of this Government had gone to Victoria, the result might have been reversed. I am sorry that they did not, because I am convinced that, had they done so, we should have inflicted an even more crushing defeat on the Labour party than we did without their assistance. Many supporters of the Labour party in Victoria are not keen on the banking bill, but they remained loyal to their old allegiance and voted for Labour party candidates nevertheless. Those citizens should be given an opportunity to vote on the single issue of banking nationalization. I have no doubt about the outcome if they should be given such an opportunity.
The honorable member for Martin (Mr. Daly) spoke about political influence and pressure being exerted by the trading banks during the regime of the Lang Government in New South Wales. In that respect, he agreed with the view that has been expressed by the honorable member for Reid (Mr. Lang) in a book. But what would be the position under a monopoly banking system subject to government control? The Australian Government would be able to apply political pressure to any State government that did not comply with its demands. The honorable member for Parkes (Mr. Haylen) said that the meaning of clause 11 is extremely clear. That happens- to be the clause which has been debated most of all. I have listened to many arguments from honorable members opposite about this clause, and each one of them has interpreted it differently. Whenever we seek to obtain information about it, we are given a different answer. I want to find out what this vague clause means. Does it mean that every one who applies for a loan will be judged purely on his business capacity, assets and merits, because, as I understand it, that is the general practice among the private banks? However, the Minister for Postwar Reconstruction (Mr. Dedman) said that it would be a legitimate and careful discrimination, and his speech clearly showed that the normal practices carried out by the private banks would not be followed by a government monopoly bank. The Minister has committed the Government to the policy of the rejection of normal banking practice, as we know it to-day, particularly concerning the lending of money. There are only two courses. Is it to be careful and legitimate discrimination on the terms of the government of the day, so that the government, through its bank, will decide on what terms the people shall receive money? The Government will be in a position to decide exactly the purposes for which money will be advanced, and to what industries, primary and secondary.
The second course provides for the formulation of a standard schedule of loans which will be drawn up by the socialist bank, setting out the terms and conditions upon which advances will be made. If we had a standard method of allocating money, the schedule would provide that a loan of £200 for personal purposes would require a certain amount of security; a loan of £500 for home building would require other security; and a loan up to £1,000 for another specific purpose would require further security. The bank would have a. fixed schedule which could not be deviated from - a fixed form showing the standard securities required, and the standard loans to be granted without any other consideration entering into the transaction. However, these alternative methods exclude two fundamental principles which are practised in most parts of the world, or at any rate, in the successful parts, including the United Kingdom, the United States of America, Canada and South Africa. Under this bill, each application for a loan will not be judged entirely on the business ability or the assets of the customer, and the personal factor excluded. This factor is difficult to assess. It cannot be put on a rigid form, or made into a rigid rule. The personal factor includes a man’s character, integrity, goodwill and ability to succeed. All those matters are difficult to assess. The bank cannot make a rule of thumb, and assess them in so many points.
This bill will undoubtedly produce a tremendous amount of political pressure by the government of the day. For example, one government might adopt a policy completely different from that followed by its predecessor. The bill will mean either a clear-cut dictatorial government policy on the lending of money, because there will be no other banks, or a set of standard rules for loans to every one. A similar system applies in the Postal Department. We know that we must pay 2-id. for a postage stamp for a letter, and a surcharge of 3d. for sending it by au: Similar standard rules will be adopted by the monopoly bank. Will the Vice-President of the Executive Council (Mr. Scully) inform us what are the implications of clause 11 ? We should like a clear statement on it. So far, we have heard only contradictory statements from honorable members opposite. A Minister says one thing, and an honorable member tells us something else. I invite the Vice-President of the Executive Council to clarify the position.
.- We have listened this afternoon to some rather confusing contradictions on the part of certain members of the Opposition as to the attitude that they actually take towards State banking. The right honorable member for Cowper (‘Sir Earle Page) warned us that when the Commonwealth Bank’s powers have been expanded under this bill, there will be a direct encouragement to State governments to expand their own State banking institutions. I certainly hope that they will, because, like the Commonwealth Bank, the State banks will be conducted for a social purpose, and I can see nothing whatever to cause resentment to this Government in the expansion by State governments of their banking facilities. The right honorable gentleman then stated that such State banks would be outside the jurisdiction of this Parliament, and would come to arrangements among themselves and co-operate with one another. He expressed the view that mat practice would be outside the jurisdiction of this Parliament, and he specifically stated that section 92 of the Constitution, which guarantees freedom of interstate trade and commerce, would give to them that freedom. Of course, the one condition in the Constitution where State banking does come under the jurisdiction of this Parliament, arises when State banking extends beyond the limits of one State. Therefore, the assertion of the right honorable gentleman was contrary to the Constitution.
But more interesting than merely a petty point like that is the idea which the new Premier of Victoria, Mr. Hollway, has voiced, namely, that the State bank is a good thing. Having been told that a bank controlled by a government is a menace to liberty, we now find that State banks controlled by State governments are not a menace to liberty ; so that unless there is a specific danger in a Commonwealth government as such, every statement by the new Premier of Victoria and certain honorable members opposite about the virtues which their State hank will have, is a complete contradiction of their assertions that a Commonwealth government bank would be a menace to the freedom of the individual. The new Premier of Victoria has gone so far as to say that the new State bank, which he contemplates developing, will guarantee the freedom of the individual. Of course, I do not expect that contradiction in the Opposition’s argument to be resolved, because our opponents have shown, during this discussion, that in order to oppose various clauses of this bill, they will take up positions quite contrary to the general thesis which they advanced during the second-reading debate.
This afternoon, we had another chapter from “ encyclopaedia Harrisonana “ and, like most other chapters, it dealt with matters which were quite foreign to the bill, but had his most delightful technique of looking at a clause, misconstruing a word and then, by the method of phantasy, showing us how every item in the bill will be a menace to the freedom of individuals. He proceeded to say that the Prime Minister (Mr. Chifley) had defiantly stated that when he has scrambled the egg with this bill, it cannot be unscrambled. The Prime Minister is becoming famous, because statements made by other people are now being attributed to him. I am aware of a press report to the effect that the right honorable gentleman had used that phrase in caucus, but like most press reports of caucus meetings it was incorrect. The phrase was used originally by Mr. Anthony Eden. Addressing the Conservative party conference in Great Britain, he said that it would not be possible to reverse the nationalization of many British industries, because it would be impossible to unscramble the egg. By playing on the word “ scramble “ the honorable member was able to suggest that the courts were being “scrambled”. Then he addressed himself to the amendment proposed by the Leader of the Opposition (Mr. Menzies) that any notice given by the Treasurer should not operate until one month after it has been given, and suggested that by the employment of rapid processes the Government would be able to “ beat “ the courts, thus leaving any individual with a legitimate grievance without redress. Sub-clause 2 of clause 13 reads -
The Treasurer may, from time to time, by notice published in the Gazette, amend a notice under the last preceding sub-section (including such a notice as previously amended under this sub-section) by substituting a later date for the date specified in that notice (or in that notice as so amended).
Any one with any knowledge of administrative procedure realizes that the Treasurer must allow sufficient time for appeals to be lodged.
– Why does not the Government say so?
– The method employed by honorable members opposite in this debate of conjuring up difficulties in every clause of the bill is a useful process to delay the passage of the measure, which is the real purpose of members of the Opposition. Some honorable members opposite have uttered a paean of squalid triumph at the result of the Victorian elections, and are attempting to intimidate the Government by reminding it of that result. Of course, I have no doubt that members of the Australian Country party greeted the result most heartily. Their candidates received 165,000 votes, which gave them twenty seats - it requires only approximately 8,000 votes to elect a member of the Australian Country party. However, although 465,000 votes were cast for Australian Labour party candidates, that gave them only fifteen seats, because the Victorian electoral system is such that Labour candidates required approximately 31,000 votes to secure election. That is what an analysis of the so-called verdict of the people discloses. If one concentrates one’s attention on the number of seats won-
– Does not the same argument apply in relation to Labour’s majority in the Senate?
– I agree with the honorable member for Wentworth that the system adopted for the election of members of the Senate which resulted in only three senators of the Opposition parties being elected although 1,000,000 votes were cast for Opposition candidates, is quite contrary to any theory of democracy. However, I remind honorable members opposite that that system has obtained for the last 25 years, and that during the greater part of that time their parties had a majority in the Senate. The injustice of that system was highlighted when they held 35 seats against one seat held by Labour. Obviously that was the time for them to have amended the electoral system, because they had the numbers then, to do so.
– Apply that to the Victorian election results and your argument is complete.
– Throughout the entire history of Victorian State politics members of the Australian Labour party have never received a majority of the votes cast at an election. At the State election of 1945, which resulted in members of that party forming a government, they received only 38 per cent, of the total votes. When they lost the elections in 1947, they also received 37 per cent, of the votes. I think those figures, which cannot be refuted, expose the hollowness of the contention of honorable members opposite that the result of the elections should be accepted as an emphatic verdict against the present proposal of the Government. The spate of propaganda disseminated by the Opposition parties and the gerrymandering of the electorates turned the Victorian Government out of office. The attempts of honorable members opposite to intimidate the Government by a tiresome repetition of the result of the Victorian elections are doomed to failure. The honorable member for Swan (Mr. Hamilton), who is a member of the Australian Country party, probably finds the Victorian electoral system quite acceptable- He was elected to this Parliament by the votes of 17,000 people, notwithstanding that 35,000 people voted against him. He may, therefore, be regarded as a typical Australian Country party product.
The amendment moved by the Leader of the Opposition, which proposed that a referendum should be held, is an endeavour to thrust upon the Government something which is contrary to constitutional practice. A referendum is not a Gallup poll; it is specifically a means of amending the Constitution. The Constitution itself provides that referendums are to be held only for the purpose of making amendments to it. Referendums were never intended to be held for any other purpose.
– Order ! The honorable member is not entitled to refer to the amendment moved by the Leader of the Opposition that a referendum should be held because that amendment has been disposed of.
– I am sorry to have transgressed; but from the nature of the speeches made by honorable members opposite I imagined that I was in order in referring to the matter.
The remarks made by the Leader of the Opposition in moving his proposed amendment to sub-clause 2 of clause 13 have led the honorable member for Wentworth to refer to the attitude manifested by the Government towards the courts. That is a delicate subject with the Leader of the Opposition because during the present sitting very serious reflections were made on the judgments of the Commonwealth Court of Conciliation and Arbitration in the Forty-hour week case by a prominent -member of his party, who described certain portions of those judgments as “drivel”. Any discussion of the judiciary in this Parliament is to be deplored; but I believe that there are some matters which should be mentioned. For one thing, many of the constitutional decisions of the High Court cannot be regarded as decisions founded on pure law, because the Constitution does not admit of purely legal interpretation. One has only to recollect the conflicting nature of successive judgments given by that court in connexion with the exercise of the “ defence power “ by the Government. In one case the High Court ruled that the exercise of the “ defence power “ included the right to fix the price of bread, yet in another case it held that that power did not include the right to exercise control of arms factory lighting. Because of the vagueness of portions of the Constitution most decisions upon those sections must be founded in political philosophy rather than in a close application of legal principles. The United States of America, also has a federal constitution, which contains a number of vague statements of similar character to those embodied in the Australian Constitution. In consequence, the decisions of the Supreme Court of the United States of America are based mainly on the political philosophy of the justices of that court and not on pure law. I have no doubt of the sincerity of the members of the High Court of Australia, but because of the difficulties I have mentioned, the layman is in many respects equally qualified to decide many of the constitutional issues, such as the exorcise by the Government of the defence power, which come before that court. Honorable members opposite seize upon any criticism or adverse comment of a judgment of that court to allege that it is part of the policy of members of the Australian Labour party to discredit it. They contend that those comments are nothing less than an attack on justice itself, and that was one of the complaints made by the honorable member for Wentworth. However, neither he nor any of his colleagues have succeeded in demonstrating that the inclusion in the bill of section 13 will evade the operation of the Federal Court of Claims. That section refers to the notice to be given to shareholders of banks to dispose of their shares.
My purpose in rising was to draw attention to the fact that members of the Opposition have completely given away their case. Until the recent elections in Victoria, they consistently attacked the Government on the ground that the creation of a powerful government bank would constitute a threat to the customers of the present trading banks, but now they are telling us enthusiastically of the reported proposal of the recently elected Liberal governments of three States to create new State banks.
– Order ! The honorable member’s time has expired..
Sitting suspended from 0.56 to 8 p.m.
– I desire to take advantage of the short time at my disposal to deal with those clauses of the bill which have relation to the taxability of the acquisition of shares, or of the assets of the trading banks. This very technical matter has not been sufficiently explained by either the Treasurer (Mr. Chifley) or the Minister for Post-war Reconstruction (Mr. Dedman), who spoke after him in an endeavour to amplify it. It is obvious that the Treasurer and the Minister are at variance; consequently the matter requires clarification.
There are four methods, either expressed or implied, in the bill, for government acquisition of the trading hanks. The first method is that provided under clause 12, which seems to indicate that bank shares may be voluntarily acquired. The second method i3 under clause 13, which enables the compulsory acquisition by the Commonwealth Bank of Australia of shares in Australian trading banks. The third method is provided under clause 22, which enables the voluntary acquisition of the business of a private bank by negotiation or agreement. The fourth method is under clause 24, which provides for the compulsory taking over by the Commonwealth Bank of the business of a private bank. In other words, the four methods, shortly, are - (a) voluntary acquisition of shares; (b) compulsory acquisition of shares; (c) voluntary acquisition of business; and (d) compulsory acquisition of business. The tax liability varies in respect of each of those methods. Under the present tax law, there is no tax liability in respect of a profit on the sale of shares, irrespective of whether they are disposed of voluntarily or compulsorily. The only exception to this is in respect of a person who makes a business of dealing in shares. The bill has not affected that particular aspect of the tax law relating to the acquisition of bank shares. However, under the tax laws operating before the advent of clause 23 of the bill, heavy tax would have been payable on the acquisition of a banking business, whether compulsorily or voluntarily. That clause now alters the tax laws, and for the first time makes a discrimination between voluntary and compulsory acquisition of a banking business. As the Treasurer has said, if a bank’s business is acquired voluntarily, the bank is to be exempt from tax on the money handed over in pursuance of the agreement entered into. The shareholders also will receive a tax exemption on any dividend directly resulting from such a payment. However, according to the Treasurer, “ These concessions will not apply in the case of a compulsory acquisition “ - that is, under clause 24. Consequently, on the authority of the light honorable gentleman there is to be a grave tax discrimination, designed to facilitate the so-called voluntary submission of the banks to his will. In other words, he interprets clause 23 as conferring an important monetary advantage on banks that are prepared to co-operate with him, namely, by giving them and their shareholders tax exemptions with respect, to profits, dividends and distributions on a liquidation.
The Minister for Post-war Reconstruction has said that clause 23 merely places the shareholders of a bank acquired by agreement in approximately the same position as shareholders whose shares are acquired compulsorily. He omitted to mention that it also discriminates most unfairly against shareholders whose banking business is acquired compulsorily. As the Minister’s masterly understatement has somewhat obscured the true position, it might he as well to undertake a cursory examination of a few relevant sections of the Income Tax Assessment Act.
In short, section 36 of the act provides that where the assets of a business, including trading stock, are disposed of by sale or otherwise howsoever, the value of such trading stock shall be taken into account in ascertaining the assessable income, lt seems, from an examination of the income tax law, that a large proportion of the assets of trading banks would be included in the term ‘ trading stock”, for a bank deals in money and securities in a manner similar to that in which a merchant deals in goods. No doubt, some difficulty would arise in determining the funds which represent trading stock and those which represent fixed assets. But it is clear that some proportion of the funds of a bank would represent circulating or trading assets. Consequently, section 36 of the act would, at the very least, apply to a portion of the assets taken over by the Treasurer from the trading banks. The moneys derived therefrom, to that extent, would ordinarily have to be included in the assessable income of the trading banks, except that a variation is made by clause 23 of the bill, which gives an exemption in respect of voluntary acquisition only.
The provisions of section 44 of the Income Tax Assessment Act are also relevant, as dividends received by the shareholder from the bank compulsorily acquired, in respect of money received, inter aiia, from the sale of its trading stock, would also be taxable as would secret reserves that had not previously been subject to tax.
Again, there are many stringent provisions in section 47 of the Income Tax Assessment Act. That section deals with distributions to the shareholders of a company by a liquidator, in the course of a winding up, of income derived by it other than that which has been properly applied to replace a loss of paid-up capital. The tax act regards such a distribution as dividends paid to the shareholders by the company out of profits derived by it, if those profits had not been subject to tax. In other words, section 47 of the act taxes certain liquidation dividends that would not be subject to tax, but for that section, and will not be subject to a certain proportion of tax under clause 23 of this bill, if the subject banking business is voluntarily acquired.
It is quite conceivable that it would be necessary to wind .up a private bank, not because of its financial insecurity, but merely because of the operation of this bill ; as, indeed is envisaged under clause 23(1) (c). In such a case, many unforeseen tax results might transpire, and they could result in protracted litigation before the final liability was determined.
For instance, a part or all of the accumulated reserves of a trading bant might be deemed to be income within the meaning of section 47 of the Income Tax Assessment Act. If so, the shareholders in such a bank would be hit severely by tax on a liquidation subsequent to the compulsory acquisition of the assets of such abank by the Government.
I have not attempted an exhaustive survey of the Income Tax Assessment Act in relation to this matter. However, what I have already stated is sufficient to indicate these facts -
A general conclusion may be drawn that definite tax benefits are conferred by clause 23 on companies and shareholders who do not force the Treasurer to use his compulsory powers of acquisition of a banking business. In these circumstances,
I charge the Treasurer with the unworthy employment of duress in an endeavour to impose his will upon otherwise unwilling individuals. The taxation clause in this bill is an attractive bait designed to facilitate the so-called voluntary surrender to the Government of important property rights. Deliberate suppression of the basic and vital feature of clause 23 has been engineered in ministerial speeches. The general impression left in people’s minds is that the taxation clause of this bill merely overcomes an injustice, when the truth is that it introduces a gross and heavy taxation class discrimination which should not be tolerated in a democratic country.
– propose to deal mainly with clause 11 ; but first I shall quote from the secondreading speech of the Prime Minister (Mr. Chifley) when explaining the billAfter saying that the purpose of the bill was to empower the Commonwealth Bank to take over the banking business at present conducted in Australia by private banks, and making it clear that State banks and savings banks would not be affected, the right honorable gentleman went on to say -
It will be the responsibility of the Commonwealth Bank under this legislation -
) To provide, in accordance with the conditions of normal banking business, adequate banking facilities for any State or person requiring them ;
to conduct its business; without discrimination ;
to observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, to maintain strict secrecy within the law as to the affairs and dealings of its customers.
As Opposition speakers have said that clause 11 does not protect the customers of a bank, I draw attention to the judgment delivered in the case Tournier v. National Provincial and Union Bank of England, as reported in Law Reports, King’s Bench Division 1924, at page 461, in which Lord Justice Bankes said -
It is an implied term of the contract between a banker and his customer that the banker will not divulge to third persons, without the consent of the customer express or implied, cither the state of the customer’s account, or any of his transactions with the bank, or any information relating to the customer acquired through the keeping of his account, unless the banker is compelled to do so by order of a Court, or the circumstances give rise to a public duty of disclosure, or the protection of the banker’s own interests requires it.
Clause 11 gives exactly the same protection as that referred to by the learned Lord Justice, and it has been included in the bill for that purpose. At common law there is a duty on the part of a banker to preserve secrecy in relation to the accounts of his customers. Common law is, of course, the law that has evolved through the decision of judges down the centuries. It applies universally unless it has been expressly negatived by acts of parliament. This common law duty of secrecy has had certain exceptions imposed upon it by statute, as for instance, in cases of bankruptcy and lunacy. When a man becomes bankrupt bis estate vests in the official receiver, lt is only common sense that the official receiver, who for the time being becomes the legal owner of the bankrupt’s property, should be in a position to take charge of all parts of his estate, and accordingly, it is necessary that he should be able to determine what bank accounts the bankrupt has, and to take possession of any balances or information in relation to them. A similar situation exists in respect of a person who becomes insane. His estate vests similarly in a masterintimacy, or other officer, and it i9 necessary that that officer shall have the same facilities extended to him. From time to time circumstances arise which impose on a bank the public duty of disclosing the transactions of one of its customers. Such a case would arise where banking transactions showed that a bank customer in war-time was trading with the enemy. I well remember such a case in Adelaide during World War I. There is a further exception in favour of a. bank which seeks to recover moneys advanced to a customer. When a writ is taken out for the recovery of money owed under either a secured or an unsecured advance, the transactions between the bank and the customer are publicly disclosed in court. Apart from these particular exceptions and any others that may bc established - and these others can only be established by legislation which must come through this Parliament - the broad general position at common law remains that, apart from anything contained in this bill, secrecy must be preserved by the Commonwealth Bank regarding the transactions of the whole of its customers. The importance which the Government has attached to this principle is clearly shown by the fact that in section 50 of the Banking Act 1945, the necessary protection to bank customers was afforded. The Government did not wait until the introduction of this bill. It is provided in section 50, sub-section 1, that every bank shall furnish such information as the Commonwealth Bank may from time to time require, but sub-section 2 contains an express provision that the Commonwealth Bank may not require the private banks to furnish information in respect to the affairs of individual customers. This is a clear indication to the people that their private affairs will not be pried into except as is required by the law, or in accordance with tb( usages of banking. That has been the custom and practice of banking for many years past, and has been observed by both the private banks and the Commonwealth Bank.
Mr. HUGHES (North Sydney) [S.23J. - The Leader of the Australian Country party (Mr. Fadden) pointed out that many of the clauses in this bill were highly technical, and that the whole subject was complicated. The clauses now under consideration by the committee provide means by which the private banks shall be taken over and the business of banking shall be carried on. Honorable members will notice that there are many provisions dealing with the powers of the Commonwealth Bank. The bank is to do certain things. It is to acquire the shares of the trading banks, and to conduct the business of banking. Here and there, there is mention of the Treasurer, but he is not a prominent figure in the business. Lt is the bank which is to do these things, and in clause 11 it is provided that the bank shall carry on the business of banking in accordance with the proper and normal practices of banking.
Now, what are these proper and normal practices? If we are to seek a rule of conduct to guide us we must, of course, look to the practice which has been observed by the private banks in this country, and all over the world. The Leader (if the Opposition (Mr. Menzies) dealt with this matter at some length. I have looked through the clauses of the bill, and 1 can find therein no guiding principle by which this new bank, or this old bank in a new guise, is to carry on its business unless it be that it shall carry on the business of banking in the manner in which the private banks have heretofore carried on their business. So, we are confronted with this position: This new order of things, this first hint or manifestation of the golden age, which has so far eluded us, is to be obtained by following in the footsteps of the private banks. I listened to the speeches of honorable members supporting the bill as well as I was able. I may have missed some of their junks of wisdom, but I gathered that there was a consensus of opinion among Government supporters that the private banks were carried on by a set of bowelless men who have no regard, and never had any regard, for the welfare of the individual members of the community. Now, however, all this is to be changed. That is the reason for introducing this new system. That is why the Government is consumed by a passionate desire to bring to every home, no matter how humble, those benefits and advantages so far withheld from them. The Government proposes, in the words of the honorable member for Martin (Mr. Daly), to give everybody a “fair go”. The inference is that, up to the present, the people have not had a “ fair go “. If any one, after looking through this bill, can find in it any suggestion of how the new bank will be different from the old banks, any suggestion that the new bank will do other than follow humbly and circumspectly in the footsteps of the private banks, I shall be grateful to hear of it. I can find no suggestion in the bill.
I listened to the Minister for Post-war Reconstruction (Mr. Dedman) to-day. He treated honorable members to a philosophical dissertation on the difference between policy and administration. He claimed that the honorable member for Reid (Mr. Lang) had confused twoentirely different things - -policy, which relates to those things that properly belonged to Caesar, and administration,, which falls properly into the hands of those upon whom devolves the management of banking. And the management of the bank, as I say, is to be carried on in the manner, and according to the principles, that govern the private banks of this and every other country. 1 believe that it will be generally admitted, apart from what the Leader of the Australian Country party has just said, that the Minister for Post-war Reconstruction is most versatile, although his manner of speech Ls dogmatic. He is very emphatic that the views he sets forth are those which, being stated, commend themselves to general acceptation. The Minister has, unfortunately, a past, which, happily for a great many other honorable members opposite, cannot be said of them. And the versatile Minister’s past on banking is not difficult to recall, for it is quite recent. He is now in favour of a government monopoly bank. In 1945, 1946, and in 1947 up till two or three months ago, this is what he believed in -
I consider the structure of the banking system ought to be a central bank, under which there should be the various banks that undertake trading activities, which is better fitted for this country than only one bank monopolizing the whole field.
That is a very definite and unambiguous statement, fie accused the honorable member for Reid of having fallen into error in confusing policy with administration! I shall return to that aspect ina moment. I now point out that, until a few weeks ago, the Minister for Postwar Reconstruction, who now says that he is 100 per cent, in favour of a monopoly, was a whole-hearted champion of competition, which he said is much better fitted for this country than one bank monopolizing the whole field. And, of course, we recall what the Prime Minister (Mr. Chifley), himself, said. He, too, was among those who believed that in the legislation of 1945 which provided for competition between the Commonwealth Bank and the private banks he had everything he wanted. Of course, times change, and men change with thorn. Then, there is our friend the Attorney-General (Dr. Evatt), who is now absent in a foreign country on matters of immense importance, who said that private enterprise would have far greater opportunities under the Chifley Government than ever before. 1 repeat that the Minister for Post-war Reconstruction, who told us in 1945 and 1946, and up till a few months ago, that he believed the present system was much more fitted to the circumstances of this country than one bank monopolizing the whole field, now says that the only hope for this country is that one bank should wipe out all others. 1 shall now deal with the difference between policy and administration. I showed that the distinction, as drawn in the bill, is metaphysical in its nature. Who is to decide what it policy and what, is administration? The bill sets out what the bank may do, and the lines upon which it shall lie conducted ; and there is vested in the management of the bank, at least technically, full control over its administration. However, as I said in my second-reading speech, although the Prime Minister remains behind the scenes, he is the man who determines’ what is policy and what is technically, full control. However, as I said in my second-reading speech, although the Prime Minister remains behind the scenes, he is the man who determines what is policy and what is administration. If he says to the Secretary of the Treasury, who is the chairman of the Advisory Board, “This is policy “. if will bo policy. Who i.3 to contradict him? Who is to restrain him? We on this side of the chamber cannot, and honorable members opposite dare not. That is the position.
The Prime Minister told us something about the manner in which the shares of the private banks are to be acquired. Some taxpayers are to be penalized and others are to be given tax concessions. That, in itself, constitutes a grave reflec tion upon the Government, because itproposes to offer a bribe to shareholders to come in quietly. The Leader of the Australian Country party has shown that the Government cannot, do that. I shall not say anything at all about those classes from, the constitutional point of view, but I agree with the Leader of the Australian Country party that they are null and void because they conflict with the Income Tax Assessment Act. Those clauses which give to the Government power to acquire these great and powerful interests, which have been in existence for over 100 years, reflect very little credit upon the Government. There is a bout this whole business something which can hardly be explained by a superficial examination of the position. There must be some powerful and impelling motive to account for the Government’s sudden change of front. What it, is we do not know; but we do know that it is quite untrue to say that the position of the Government to-day is such that it cannot control the credit and monetary interests of this country without nationalizing the private banks. We have the Prime Minister’s own word for it that the Government has all the power that is necessary.
– Order 1 The right honorable gentleman’s time has expired.
.- The committee is dealing with clauses 9 to 25, all of which are cognate clauses and refer to the taking over of the private banks.’ The right honorable member for North Sydney (Mr. Hughes), who basks in the sun which shines on those who instituted the Commonwealth Bank but to whom not very great credit is due in that respect, to-night objects strongly, as he must do, because of his present political affiliations, to the extension of the influence of the Commonwealth Bank. He takes exception particularly to clause 11, which provides that under the new order, when the Commonwealth Bank takes over the private banks, the proper and normal procedures of banking shall be followed. We have listened for a number of weeks now to the protestations of honorable members opposite that the conduct of the banking system of Australia under the control of private banks was such that it could not be improved upon. We can only interpret clause 11 to mean that the normal procedures of banking will be followed. Does the right honorable member for North Sydney now say that those procedures and precepts of the private banks should not be followed by the Commonwealth Bank in its dealings with its customers? Does he think that the Commonwealth Bank would be so foolishly administered that it would lend money to doubtful clients? Has a private bank ever done that ? Is there any reason why the Commonwealth Bank should not follow the precept normally adopted in banking and deal only with reliable clients, refusing those who are not reliable? The clause means nothing more or less than that.
The right honorable gentleman has referred to questions of policy and administration. Apparently he cannot discover the difference between the two. The difference between policy and procedure can best be summed up in this way: In future the Commonwealth Bank and, in the last resort, the Treasurer of the Commonwealth, will determine the economic policy of this country which has previously been determined by people whose only ambition has been to show profits for their shareholders. That is a matter of policy. The question of administration is well known to the right honorable gentleman. A bank can be made or strangled by administration. That is the important point with regard to administration. Up till the time that the BrucePage Government introduced the Commonwealth Bank Board no bank in this country, or for that matter in the world, had made such progress as had the Commonwealth Bank; but by a process of strangulation by administration the bank’s growth was arrested. Had the Commonwealth Bank Board not been constituted of representatives of the private banking institutions, I question whether we should have been debating this bill to-night, and whether there would have been a private bank left in Australia to nationalize. That is the fundamental difference between policy and administration. When this bill becomes law the Government and the people will determine the economic financial policy of Australia instead of that policy being dominated, as it has in the past, by the private banking interests. By wise administration the bank will function as an active part of the economic policy of the country, to profit the great bulk of the people and not a comparatively few shareholders.
I move on now to another matter which has been discussed very freely in this chamber, namely, the confidence that the people would have in the bank not to divulge any private information. In this bill, as in no other bill introduced into the Parliament of either the Commonwealth or a State, provision is made for the establishment of banks which will be bound by statute not to divulge information other than that required by other statutes. No such guarantee exists to-day. Can any honorable member opposite tell me that one private bank does not pass on to another, information relative to the affairs of its customers?
– Can any honorable member say that the private banks do not pass on to other private banks information relative to their doubtful clients ? Is there any law in this country, on the statute-books of either the Commonwealth or a State, which now prevents a private bank from “ tipping a wink “ to another as to the credibility or the financial standing of a potential customer? There is not. This is the first measure I know of in the history of Australia that seeks to bind a bank not to divulge information unless required to do so by another statute. Unless a bank officer is subpoenaed in a particular law case to give evidence, the bank will not be required to divulge information. Would any honorable member opposite say that if, in the administration of -justice, it became necessary to secure information regarding a particular person’s financial affairs, the law should not be able to call upon some one able to give valuable evidence simply because he is an officer of a bank? In war-time the banks are required to give evidence regarding the accounts of customers who are suspected of trading with the enemy. “Would any honorable member opposite refuse to any bank the right to give such evidence? A bank has a legal right to recover money from a debtor. “Would anybody say that the bank should have no right to divulge its debtor’s affairs to a .court which had to decide whether or not that customer was in debt to the bank? If a customer of a bank, whether the Commonwealth Bank or a private bank - in this case it would be the Commonwealth Bank - sought to exploit the public by falsely using the bank’s name as a guarantor, would any honorable member say that the bank should not divulge his true financial position ? Does any honorable member opposite say that such a person should not be denounced by the bank as a fakir?
– The honorable member is merely putting up aunt sallys only to knock them down again.
– The honorable member for Richmond (Mr. Anthony) is the easiest aunt sally in this chamber. I am summing up the statements made by the honorable member for New England (Mr. Abbott) about the gestapo, inquiries into depositors’ accounts and the like. All I am trying to tell the honorable member for Richmond - and, doubtless, he will miss the point, as he invariably does - is that this is the first time in the history of the Commonwealth that legislation, either Commonwealth or State, seeks to guarantee to the customer of a bank privacy in relation to his financial affairs except when he seeks to break the law or to exploit the public. No such guarantee is in existence to-day.
I want to deal now with another aspect of this proposal which has caused considerable criticism. Clause 23 proposes to extend preferential treatment to shareholders of the private banks who propose to comply with the law against those who propose to resist it. The Leader of the Opposition (Mr. Menzies) has described this proposal as constituting a choice for the shareholders between being murdered and committing suicide, but there are deeper implications than that. No matter what law this Parliament, or any other parliament may pass, there are some members of the community who will cheerfully obey it, and others who will resist it. Take, for instance, our taxation laws: There are in the community persons who, not being in receipt of social service payments of any kind, or likely to receive them at any future date, believe that they are justified in not paying the social services contribution. To this end, they may either underestimate their income, or refuse altogether to pay this legitimate impost. What do we do? Any individual who adopts that attitude is fined or penalized in some other way for having resisted the law. It would be a queer taxation law that put the resister of taxes on the same basis as the man who paid them voluntarily. Another example may be found in our customs laws. In an attempt to evade the payment of a duty, designed to bring the cost of an imported article into line with that of the Australian product, an importer may smuggle goods into the country. It would be a queer customs, law that gave to the man who obeyed it the same treatment as it provided for the man who disobeyed it. In the States there are laws prohibiting individuals from carrying firearms. In some countries the authorities have decreed that any one who fails to comply with an order for the surrender of firearms shall be shot; but in Australia we deal with such offenders more leniently.
– The Government has not gone that far yet.
– No, otherwise 1 should have been inclined to shoot the honorable member for Barker (Mr. Archie Cameron) first. The position is that the person who surrenders firearms voluntarily suffers no penalty other than the confiscation of the firearms, whereas a person who does not comply with the law voluntarily may be fined in addition. It would be a queer law that placed the gunman on the same footing as the lawabiding citizen. Summing the matter up, without all the technicalities regarding taxes, this provision is an inducement; it is a recognition that the people who obey this law - and it will become law immediately it is passed by the Parliament - should have more favorable treatment than those who intend to resist it. I commend the Prime Minister upon this provision, which, like all other laws, discriminates between those who obey and those who do not obey.
.- The honorable member for Dalley (Mr. Rosevear), having apparently been denied an opportunity to speak at an earlier stage of the proceedings, has treated the committee to a second-reading speech, but he lias very carefully avoided some of the outstanding points that have been dealt with by the committee earlier to-day. He lias sought, to confuse the minds of those who have sat in this committee during the afternoon by telling us the distinction between policy mid administration, and saying that, under this measure, the Government will have power to determine, in the interest? of the people, the economic mid credit policy of this country. That, of course, is a lot of fatuous nonsense, because the Government has had that, power since the 1945 legislation was passed. It required no additional legislation by this Parliament to give to the Australian. Government power to determine general economic and credit policy. When the honorable member talks about these things being done in the interests of the people. I refer him to the promi u res adopted in the course of the discussion of the clauses now before the committee because, as the Leader of the Opposition (Mr. Menzies) pointed out so clearly to-day, the interests of the people have been grossly ignored and smothered by the Government in its treatment of this debate. What has been the record of Hie Government since this measure was’ first announced? At that time, even members supporting the Government had not seen the clauses that are now before 1 lie committee; yet, 35 minutes hence the vote will be taken on them. The Prime Minister (Mr. Chifley) has not yet said une word in respect of this group of clauses. The Government has rejected nil requests that the people of this country, whose interests it claims to preserve so zealously, should have an opportunity to express an opinion on these issues. And now, having, by the use of the c guillotine “, denied the Parliament a full opportunity to discuss the details of the bill and resisted the right of the people to express their voice on this matter by way of a. referendum, we find that the Government is seeking to deny the banks an adequate opportunity to have the validity and legality of the legislation determined by the court.
There has been no effective answer to the case made out by the Leader of the Opposition when moving his amendment to clause 33, which, I remind honorable members, provides power to acquire the shares of the Australian trading banks upon the giving of notice in the Commonwealth Gazette. The shares are to vest, in the Commonwealth on a. date to he specified in the Commonwealth Gazelle; but there is no minimum provision as to the period of notice that is to be given. Notice could be given on one day,’ and the shares may, according to the date specified in the Commonwealth Gazette, vest in the Commonwealth <m the same day that notice is given. What has the Opposition done? We have moved an amendment providing that there shall be a. minimum period of one month between the date on which notice is given and the vesting of the shares. We have fixed that period for a very obvious reason. We believe that if the people are to be denied a vote on this matter, and discussion of the bill now before us is to be “ gagged “ and “ guillotined “, at least the courts of Australia should have an opportunity to determine the legality of this legislation. If no minimum period of notice be prescribed, the result could be this: Notice is given, and on the date that the notice expires, the shares vest in the Commonwealth. On the day that the shares vest in the Commonwealth, according to another provision in the measure, a new board of directors is appointed and the old board retires. We can readily imagine that the new directors appointed by the Government, will not proceed to test the legality of the legislation under which they have been appointed to their comfortable positions. So, we put it to the Government that there should be a minimum period of notice, but the Government has said, “No, there will not be any period of notice “. Now that we have the Prime Minister with us for the first time during the discussion of this provision, I say to him that he has an obligation to tell the people of this country where he and his Government stand on this issue. Does the Government intend to provide an opportunity for the banks to test the legality of this legislation, or is there some significance in its refusal to prescribe a minimum period of notice? We can only draw one inference from the right honorable gentleman’s silence, and from the failure of Ministers who have spoken earlier in this debate to give an assurance on this point.
– I may say to the honorable member for Fawkner that a letter on this subject, no doubt sent on behalf of the banks, was received by me some days ago. The letter asked for certain information about the matter. So the matter has been considered.
– The Prime Minister tells us that he has had a letter from the banks on this subject and that it has received consideration. The banks may know his answer, but we, the elected representatives of the people, do not, and we have a right to that information. We are not speaking as shareholders in any bank, or as spokesmen for the banks. We are speaking for the people who, if they do not hold any shares in the private banks, hold a big share in the welfare of thi* country, and they want to know what is to be done with the democratic institutions of the country.
– Well, they have not bad an answer yet.
– Neither has the committee had an answer. The attitude of the Government is in keeping with the contemptuous disregard it has shown for the parliamentary institution ever since this legislation was announced. Before the bill was brought down, few honorable members opposite knew it contained a provision that would give no period of notice before the banks were acquired. Although they knew nothing of this, they are prepared to give their support to the Government in applying that policy. That is one part of this group of clauses that has not been sufficiently dealt with.
Then we have the matter of the directors who are to be appointed. At the moment the shares are vested in the Commonwealth Bank new directors are to be appointed. The people are entitled to know whom they can expect to be appointed as directors of the financial institutions, in whose hands the most important responsibility of guiding the economy of industry and commerce is to be entrusted. We can only draw, in the absence of information from the Prime Minister, from our recent experiences in this regard. The Government has appointed to trade and diplomatic posts overseas men who, in almost every instance, have been supporters of, and closely linked with, the Government - partisans. When the Government recently appointed a group of nine conciliation commissioners, eight of them were men who were closely linked with its industrial and political policies.
– Order ! The honorable member is departing from the clauses before the committee. I ask him to confine himself to them.
– With respect, I say that I am entitled to discuss the appointment of directors to take control of the financial institutions. The committee has the right to know who are to be appointed. If we cannot get the names of the peopleto be appointed, let us have some indication of the ranks from which they are to be drawn. In the absence of that information, I am entitled to tell the committee that we can expect the same kind of appointment to these positions as we have had to other responsible positions in recent months. These directors are to be appointed, and the people will judge their competence to cope with the responsibilities of the intricate tasks that will be set before them.
Finally, I come to the point raised by the Leader of the Australian Country party (Mr. Fadden). That, too, has not, been answered by the Prime Minister, or any other Minister on behalf of the Government. The right honorable member for North Sydney (Mi-. Hughes) has emphasized the point that, under clause 23, whatever specious answer the Government may have made on this point, in the past, the cold fact remains that every shareholder has the bait of a tax concession offered to him to “go quietly”, whereas that concession will not be available to the shareholders not prepared to go quietly “ and pi ay in with the Government’s plans. I doubt whether there has ever been a provision in any statute, State or Federal, which showed a more cynical approach to the business of trying to corrupt the interests of shareholders or any section of the community than that. Those who fall in with the Government’s wishes will receive a concession, but those who do not, for whatever reason seems proper to them, are to be punished for intransigence by the Government that claims to be speaking on behalf of democracy. We have so often been denied in this debate any support on these issues from Government supporters, who claim to be representatives of the people, that I do not look for any support from them, even though they have had the clearest indication of what the people want. But I hope at least, that unless he is going to show himself so contemptuously disregarded of this institution as to ignore the case made out, the Prime Minister will answer the issues raised before the “ guillotine “ falls in a few minutes.
.- Prima facie, the amendment of the Leader of the Opposition (Mr. Menzies) appears quite innocuous; but the committee must realize that the few words that he seeks to have included in clauses 13 and 22, innocent as they seem to be, are a pretext to disguise the real intention of the Opposition, which is readily discernible if one reads into sub-clause 1 of clause 13 the words that are proposed to be inserted. The real purpose of the amendment is to give counsel for the private trading banks time to take action which will be inimical to the Australian people. The sub-clause reads -
Where the Treasurer is satisfied that the majority in number of the shares in an Australian private bank are Australian shares, the Treasurer may. by notice published in the Gazette -
At that point the Leader of the Opposition seeks the insertion of the words, “ not earlier than one month after this act comes into operation “. The subclause ends - declare that, upon a date specified in the notice, the shares in that bank which are Australian shares upon that date shall he vested in the Commonwealth Bank.
When the royal assent is given to this legislation, as it surely will be, on its passage through both Houses of the Parliament, the Treasurer may give notice in the Gazette, which will have the instant, effect of vesting in the Commonwealth Bank the shares of the trading banks held in Australia. If honorable gentlemen opposite were carrying a brief for the private banks - we do not know that they are not - the very thing that they would seek to do would be to hold up the vesting of the shares in the Commonwealth Bank so that the bankers’ counsel should be able to go to the High Court, get an injunction and thereby hold up for an indefinite period the operation of this legislation. Surely they are not so naive politically or legally as to think for a moment that under the guise of what appears, on the face of it, to be an innocent amendment - the honorable member for Wentworth (Mr. Harrison) has said, “ All we ask is a little time to consider our position “ - the banks do not want time. The moment this legislation receives the royal assent they will be before the High Court asking for an injunction. The last thing they want is that there should be vestment of the Australian shares of the private banks in the Commonwealth Bank upon the appearance of a notice in the Gazette in accordance with the terms of the subclause. Realizing that the banks have the legal right to challenge the validity of the legislation, the Treasurer has provided a proper safeguard. Sub-clause 2 of clause 13 provides -
The Treasurer may, from time to time, by notice published in the Gazette, amend a notice under the last preceding sub-section (including such a notice as previously amended under this sub-section) by substituting a later date for the date specified in that notice ( or in that notice as so amended ) .
Therefore there is ample protection for those banks which wish to proceed to the High Court with whatever challenge they like. Those which wish to negotiate will be permitted to continue negotiations and, in order to extend the safeguard, the Treasurer may in turn amend the notice given in the Gazette so as to allow a later time for the actual vestment of the shares in the Commonwealth Bank under the terms of sub-clause 1.
– Why does he not say now that he is willing to do that?
– It is not a case of saying whether he is willing to do it. The plain fact is that there could npt be any more explicit words than those in sub-clause 2 of clause 13. An amendment of clause 22 would be merely consequential upon the amendment proposed to clause 13. What the Opposition fears is the operation of clauses 17 and 18, which also are contingent upon the giving of notice as provided in clause 13. Clauses 17 and 18 will permit the Government, upon the publication of notice, to retire the directors of the private banks and appoint others in their place. The honorable member for Fawkner (Mr. Holt) wanted to know who would be the new directors. The Government is not under any obligation to inform him or anybody else of the names of the men likely to be selected as the new directors. Indeed, the very thing which the private banks would like to have to-day is the information which the honorable gentleman endeavoured to obtain on their behalf.
In speaking of the right of -challenge in the High Court, I mention certain facts of which the public should be made aware. The newspapers have reported that various State Premiers, including Mr, Playford, of South Australia, and the new Premier of Victoria, have said that they will take this legislation to the High Court. One would imagine from the confident terms in which these gentlemen speak, that they have only to take the legislation to the court and it will be found invalid. If that were the case, that in itself would be an extremely good reason for appointing a royal commission to examine the qualifications of the judges of the High Court and their fitness to determine matters of this nature, especially those which touch very closely upon political relationships.
– That, of course, is only the implication of the press reports.
– That is so. That is not an assertion on my own account. It is an implication which can be clearly read into the publicity which attends the statements made from day to day by the Premiers of the anti-Labour States, namely, South Australia, Victoria and
Western Australia. The terms of clauses 9 to 25 inclusive, which are now being discussed by the committee, are most reasonable having regard to the purposes for which they have been devised. They provide for the vestment of the shares of the private banks in the Commonwealth Bank upon the publication of notice in the Gazette, for the retirement of bank directors upon such publication, and for the appointment of other directors. Division IV. also provides for the taking over of the business of the private banks. These provisions are entirely reasonable and will unquestionably receive the endorsement of the committee.
– The honorable member for Watson (Mr. Falstein) has made very clear to the committee the objection which the Opposition and the people of Australia have to the clauses with which we are now dealing. As my time is limited, I shall state my point briefly. It has already been expressed in various ways during the discussion. Our objection would be eased only to a very slight degree by the acceptance of the amendment proposed by the Leader of the Opposition (Mr. Menzies). Clause 13 provides that “ the Treasurer may, by notice published in the Gazette, declare that, upon a date specified in the notice, the shares in that bank “ - which mean9 any bank - “ which are Australian shares upon that date shall be vested in the Commonwealth Bank “. That means, in short, that on the specified date the shares automatically become the property of the Commonwealth Bank. The amendment proposes to insert after the words “ published in the Gazette”, the following words: - “not earlier than one month after this act comes into operation “. The Opposition and the people of Australia desire that the acquisition of the banks’ shares shall be deferred for one mouth from the time when the Government secures the royal assent from the Governor-General whom it has appointed. At whatever time the Prime Minister may choose to secure the royal ‘ assent, the Government may immediately issue a proclamation in the Gazette declaring that the shares of the private banks become the property of the Commonwealth Bank, dismissing the present directors of the private banks in one fell swoop, and replacing them with other directors. That overrides the right of appeal to a court of law which is customary under British constitutional procedure. The Government has already withheld from the people the democratic right to express their will on this measure by means of a referendum. That refusal has been made twice in this Parliament, first in the House and secondly in this committee. Now it insists upon enacting a provision whereby the High Court can be flouted. This procedure for the acquisition of the banks’ shares smacks of the methods of Shylock. It may be put into effect in the dark of night, or at any other time when the Government may see fit to secure the assent of the Governor-General to this measure and issue a Commonwealth Gazette. At that time, the banks may become the property of the Commonwealth Bank and their directors may be dismissed. We object to that. The new directors appointed by the Government, of course, will not apply to the courts in protest against the acquisition of the banks’ shares. That is unfair. Democratic procedure is being by-passed by means that even Ned Kelly would not have dared to use. We are being subjected to a form of callous political piracy such as was never known on the high seas. The people should be allowed to exercise their democratic right to express an opinion on this measure, and the banks should be permitted to appeal to the courts. But this provision will prevent them from appealing.
– The honorable member is being silly.
– There is nothing silly about that statement. As soon as the royal assent is given, a proclamation may be published in the Gazette and immediately the directors of the banks may be removed from office, new directors may be appointed and the banks’ shares may be transferred to the Commonwealth Bank. That provision has been made. If honorable members opposite do not believe that it is just, they should vote for the amendment.
Pirates taking possession of a ship could not be more ruthless than this provision. Everything else pales into insignificance compared with this clause. If the private banks are abolished, there will remain, apart from the Commonwealth Bank, the State banking institutions, and the honorable member for Watson (Mr. Falstein) has already abused them. He claimed that the Premier of -South Australia, Mr. Playford, and probably the Premier of Western Australia, Mr. McLarty, and the Premier of Victoria, Mr. Hollway, will appeal to the High Court on the ground that this bill is invalid. I hope that those gentlemen will do so, and will not let our Australian democracy down. However, their appeal cannot be launched from the stand-point of the private banks and their employees, or the average citizen who has entrusted his savings to them. Large numbers of Australian citizens have always regarded the private banks as the custodians of their savings. The private banks will be destroyed if the Government is allowed to get its claws upon them. According to some statements, the amount of credit for which the private banks are responsible is approximately £1,000,000,000. Of course, that amount is represented by advances. The private banks do not hold it in reserve. The banking legislation of 1.945 was aimed to destroy the private banks, but that plan miscarried, because the people have entrusted an even greater volume of their business to them. Indeed, that increase of their activities is really responsible for the introduction of this bill. We have one hope left and that lies in a successful appeal to the High Court against the validity of this legislation.
Honorable members opposite declare that the Government is justified in attempting to get its claws on to the £1,000,000,000 of credit which the private banks have released. They ask, why should the private financial institutions have the right to control so much credit? Let honorable members opposite realize the true position. Whose money is it? It belongs to private individuals, who have entrusted it to the care of the private banks. The money does not belong to the nation, except to the degree that each individual is a part of the nation. This money was acquired by the depositors as the result of their individual efforts in trade, commerce and industry. Any statements that the Government has the right to steal these funds and distribute them as it pleases cannot be justified.
If the Government distributes any of the available credits now at the disposal of the private banks, what margin will bc retained as a. reserve against the onset of a financial and economic depression? The private banks have been assailed for ha ving made too liberal advances in boom periods. They have also been accused of having recalled loans and curtailed advances in periods of economic difficulty. I ask: What did the Commonwealth Bank and the Queensland Agricultural Bank do at that time, and what did the government of the day do during the economic depression of the early 1 930’s? It reduced salaries and wages and invalid and old-age pensions.
M.r. Emu onus. - Why ?
– Because it. had a majority in this House which enabled it to pass the necessary legislation to do so. Honorable members opposite claim that the government of the day took that action at the direction of a, London Jew, named Sir Otto Niemeyer. 1 remind him that the Minister for I inmigration (Mr. Calwell) is bringing to Australia, thousands of Jewish immigrants who will become private moneylenders and take the place of the private banks as private money-lenders.
– Order! I ask the honorable member to direct his remarks. to the clause.
– The humorous member for Hume (Mr. Culler) declared that the private banks had refused to grant financial accommodation to many applicants for loans. Cor his information, I point out that the Agricultural Bank of Queensland, which is a government institution, had applications for advances totalling £1,200,000, but, granted loans totalling only £450,000. Bow is the State of Queensland, which is one of the largest, most fertile and most promising States of the Commonwealth, to develop when it. is left with only that institution, and there are no private banks to assist primary producers? During the financial and economic depression, the private banks actually increased their advances.
– They increased their rate of interest.
– No, they reduced their rate of interest. The private banks and the Commonwealth Bank charged the same rate of interest. During the recent election campaign in Victoria, the Labour party endeavoured to gull the people with the story that the private banks had been responsible for the financial and economic depression. Of course, the people did not -believe them. The Labour party in Queensland used to place the responsibility for the depression in that State, which also extended to Australia and, indeed, the whole world, on a former Premier, Mr. Moore. Now he has the consolation of knowing that the Labour party believes that the private banks were responsible for the depression.
Supporters of the bill declare that the private banks make excessive profits, and often refuse to make advances in legitimate cases. When the private banks have been absorbed by the Commonwealth Bank, and the policy of that institution is directed by the Commonwealth Treasurer, we shall find that the monopoly bank will not treat its customers with such consideration as the private banks have shown them. The Queensland Agricultural Bank has created a. record regarding the number of properties which it has taken over and the number of evictions which it has secured. State agricultural banking institutions have taken over more properties than has any private bank. Probably, it acted as it should have done, but the Labour party claims that when a private bank has taken over a farm or a home it has exceeded its rights. However, we learn that financial institutions controlled by governments have also taken over homes and farms, and we begin to appreciate the assistance which private banks have rendered at all times to their customers.
– Order ! The time for the consideration of clauses 9 to 25 has expired.
Question put -
That the words proposed to be inserted (Mr. Menzies’s amendment) be so inserted.
The committee divided. (The Chairman - Mr. j. j. Clark.)
Majority . . . . 12
Question so resolved in the negative.
Question put -
That clauses 9 to 25 be agreed to.
The committee divided. (The Chairman - Mr. j. j. Clark.)
Majority . . 12
Question so resolved in the affirmative.
Clauses 26 to 36 -by leave - considered together.
.- Part V. of the bill provides for the Federal Court of Claims, which is to be made up of “a Chief Judges and such other Judges as are appointed in pursuance of this act”. I rather gathered from the Prime Minister (Mr. Chifley) that there would be, at any rate, two other judges. So we are to have a court of three judges specially appointed as a Federal Court of Claims. Their qualifications are set out in clause 28. Each of them - must either be or have been a Judge of a federal Court or of the Supreme Court of a State or be a barrister or solicitor of the High Court or of the Supreme Court of a State of not less than five years’ standing.
Those qualifications are, in fact, identical with those stated in the Judiciary Act for appointment to the High Court of Australia. The salaries of the judges are stated, and are to be on the same basis of those of judges of the Arbitration Court. That means that the proposed act proposes to set up a special court, and that special court is to operate for the purposes of this act. If we look to see what those purposes are, we shall find them in clause 33, which reads - (1.) The Court shall have jurisdiction to hear and determine claims for compensation n.rising under this Act. (2.) The Governor-General may, under any other Act, make regulations conferring jurisdiction on the Court to hear and determine claims for compensation. . . .
This is a very remarkable provision, because this special court, to be selected and appointed by the Government after the passing of this bill, is to be appointed for life, is to be appointed at the usual judicial salaries, and is to deal first with claims for compensation under this act. [ thought it was common ground that if this proposed act is valid all claims under it must be made in the first few months, and must be determined in, at any rate, the first year or two years after the act comes into operation.
– And there may not be any claims.
– And there may not be any claims, because there may be agreement. Therefore, one would very naturally say, “ Why have a special court of three judges, appointed for life, to determine claims that must be determined within the next year or two years “ ?
The answer, of course, is to be found in sub-clause 2 of clause 33, which reads -
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. …
How do claims for compensation arise under any other act, and what happens to them now ? At the present time, if the Commonwealth takes over the property of “ John Jones “, the Commonwealth buys it under the Lands Acquisition Act. Under that act “ J ohn Jones “ has his claim for his money, and it is heard in appropriate cases by a Supreme Court justice or a High Court justice. In appropriate cases, there may be an appeal to the Full High Court. The ordinary proceedings of the courts have usually accommodated all claims for compensation in the history of the Commonwealth up to this moment. No case whatever has been suggested for the creation of a special court of three judges. Nobody, not even the Attorney-General or anybody acting for him, has come to this chamber and said, “ We are sorry, but claims for compensation against the Commonwealth are so numerous, and so vast, that we must set up a special court to hear them “. This is the first time a special court is to be set up; and as, quite plainly, it is not to be set up to hear the normal claims against the Commonwealth, it must be set up for two purposes - first, the hearing of claims under this act, all- of which will be disposed of within two years; and second, the hearing of claims for compensation, not under existing acts - because, as I have said, they are accommodated - but under future acts of Parliament, and therefore under future legislation which will involve the taking over of great amounts of private property. Therefore, this Part V. gives the whole show away. It indicates that, though bank nationalization is step number one, insurance nationalization will be step number two, and shipping or transport nationalization will be step number three; because I do not believe for one moment that any government which did not intend to take over other industries in future would appoint three judges for life to hear claims only under this proposed act; and nobody else believes it, either. So the Prime Minister, for once in his life, has taken us completely into his confidence. He has said, “I must have these judges appointed “. It is quite true - and I say this in order to he fair to the honorable member for Dalley (Mr. Rosevear) - that in clause 27 this provision is made -
The Chief Judgeand each other Judge of the Court -
shall be appointed by the GovernorGeneral ; and
shall not be removed except by the Governor-General, on an address from both Houses of the Parliament . . .
It is quite true that many years ago the High Court of Australia, in the Alexander case, decided that that meant a life appointment.
– There were two dissentients.
– It must be said that the honorable member for Dalley and the honorable member for Watson (Mr. Falstein), whose legal qualifications are not dissimilar, have offered the opinion that the decision of the High Court was wrong. All I can say is that it has stood for more than twenty years, perhaps for 25 years.
– The decision was made in 1918.
– That was 29 years ago. Any advance on 29 years? For 29 years that decision has stood. As the Prime Minister knows, when the Parliament passes another act and incorporates in it a provision which has been interpreted by the High Court in a certain direction, the Parliament is always treated as having adopted the interpretation of the court. And, therefore, this proposal - peace to those two honorable members - is a proposal for the life appointment of three persons, to be selected by the Government after this bill goes through, for the sole purpose, in the first place, of determining what this Government ought to pay to the trading banks of Australia. And when, with their life appointments, they settle down to their job and clean up these claims, if any, they will look around and say, “ That job is finished. What comes next?” This Government will either have to say, “ There is no business left for you to do. We must treat you as royal commis- tioners in the future “ - that is, if the Government decides to have a royal commission at all, about which there is some doubt - or “ We must pass further acts of Parliament to give you more work to do “. If any child in Australia had any idea that this banking scheme was the last move, this provision has removed all doubt on the matter. Of course, the nationalization of banks is not the last move. It is only the first move. It is a great and vital move, but it will be followed by other schemes for the taking over, first, of A, then of B, and C, and D, so that this court, consisting of men appointed for life, may at all times have before it claims for compensation against the Commonwealth. I do not know whether, on balance, I ought to be opposed to this part of the bill, or in favour of it. I am opposed to it, of course, because 1 am opposed to the bill root and branch; but if ever I felt like passing a vote of thanks to the Prime Minister for having included in a bill certain clauses which give the whole scheme away, I feel like passing that vote of thanks at this moment. We say that here is a provision which is both unnecessary and extravagant, but which is, above all things, revealing, because it tells us that from time to time in the future this Government is going to be so busy taking over the property and undertakings of citizens in Australia that it wants a whole-time court of three judges appointed to deal with the claims that will arise. For those reasons we on this side are against this part.
.-] have been immensely interested and amused by the dissertation of the right honorable gentleman who leads the Opposition (Mr. Menzies), and professes at all times to have such a wholesome admiration of the judiciary. To-night he was impelled to refer to another discussion that we had regarding the appointment for life of members of the judiciary. He drew a parallel between that previous discussion regarding the appointment for life of judges of the High Court and the proposed appointment for life of this particular panel of judges. I have been criticized because I have said publicly, as I have said in this chamber, with a full sense of the responsibility attaching to my position, that men should not be maintained on the High Court of Australia when they reach the stage of life at which they must suffer obvious incapacity. The right honorable gentleman Las glossed over the fact that the only people in Australia who have declared that the High Court justices have job= for life are members of the High Court Bench. That was a very important omission on the part of the right honorable gentleman. I have no fundamental objection to the High Court playing its part, as provided for in the Constitution of this country; but I have a fundamental objection to people in a state of senility due to old-age being continued in positions where they can frustrate the will of the people as expressed in a popular vote. That is my fundamental objection, ft is not to High Court judges as such. They have as much place in the Constitution as have members of this Parliament, but they have no right to declare themselves to have a job for life, regardless of whether they are physically and mentally capable of carrying out that job. After all, there can be no mistake in any one’s mind that the forces opposed to this legislation are not depending upon the popular vote of the people of Australia as to whether it is, or is not, desirable, because every statement made by those opposed to Labour in politics is designed to indicate to the people of Australia that, regardless of what the Government does, they can appeal to the High Court and get away with it. I draw the attention of honorable members to recent events because, as I have said, T have no objection to the High Court as a court. This bill proposes that there shall be a Federal Court of Claims. In what other way does the Opposition suggest that differences of opinion between the assessors of the Government and the assessors of the private banks should be decided ?
– How long will their job last?
– “When this legislation has been passed by the Parliament, as passed it will be, it becomes as much the law of the land as any other act on the statute-book.
– There is no appeal.
– That may be true so far as the taking over is concerned ; but we have heard stories of confiscation, misappropriation and so on. Even the revered Ned Kelly was referred to in connexion with the Government’s determination to take control of the economy of this country out of the hands of private citizens and put it in the hands of the National Parliament. If the bill were passed without making any provision for appeal against the valuation placed on the banks’ assets by the Government or its assessors, a cry would have gone up from the Opposition that the people were being despoiled of their goods, and that there was to be misappropriation of the banks’ assets. Now, because the Government has incorporated in the bill a provision for the setting up of a court to settle claims in respect of compensation, honorable members opposite still complain. They are very upset at times at any suggestion of an attack upon, the legal profession or the judiciary. The Government proposes to appoint three judges - and if honorable members opposite mean that they will probably be three crooks, let them say so.
– It is proposed to appoint them for life.
– I do not care whether it is for life or not. Honorable members opposite say that they are being appointed for life because the Government intends later on to nationalize other industries. No one knows better than does the Leader of the Opposition that, under the Constitution, this Parliament has no power to take over certain other industries that have been referred to. No one knows better than he does that more than 40 years ago the people of Australia decided by referendum to -adopt the federal Constitution which gives the federal Parliament power to control banking, but does not give power to take over certain other industries.
– What about insurance?
– I have heard from the other side of the chamber slighting references to the legal knowledge of honorable members on this side. Whether my legal knowledge is profound or not, I can debate this question with any honorable member on the other side, be he a lawyer or otherwise. I do not need a university degree or the letters K.C. after my name in order to expose to the people the arrant humbug they have listened to from the paid agents of the private banks in Australia. Even if the judges are appointed for life, it is not unknown that when a judge’s job is finished in one jurisdiction, he can be transferred to another. The fact that they are to be appointed on the same basis as High Court judges does not mean that they are to do the one job all their lives.
– They may be used to pack the High Court?
Mr.ROSEVEAR. - And I would not object to their doing that. I repeat, by way of emphasis, that I would not object to their doing that because, if ever there was a political decision given recently by the High Court it was given recently in the Banking Act case. If any proof of that were needed, it is to be found in the fact that every anti-Labour leader has been stating publicly that as soon as this legislation is proclaimed, it is intended, upon one pretext or another, to contest it in the High Court. This indicates that, in their opinion, the recent decision in the High Court was a political one, and that the court will be prepared again, in order to suit the convenience of the Opposition parties, to destroy legislation for which this Government is responsible. I have been frank in my expression of opinion about the High Court. I have said that no man in his seventies or eighties can have the capacity to decide vital issues affecting every man, woman and child in the country. That statement is, admittedly, debatable. There may be men of eighty or ninety years of age who are able to do their jobs properly but, as a general proposition, my argument stands. At any rate, I have never stated to the people, as have Opposition members in this Parliament and outside of it, that no matter how stupid may be the objections to a piece of legislation, I would move the High Court in the safe assurance that the court would uphold my objections. Nothing more damaging to the prestige of the High Court has been said than some of the statements of members of the Opposition, including the Leader of the Opposition himself, who has proclaimed that members of the High Court are beyond reproach. He is probably right. I conclude by reciting some lines which I read on a very old tombstone -
Here lies John and Thomas Benn.
Lawyers both, but honest men.
God works wonders now and then.
.- The Leader of the Opposition (Mr. Menzies). a former Prime Minister of this country and recognized by all as a man of probity and honour, has placed before the Parliament certain views in very strong language, querying the bona fides of the clause now before the committee. The Leader of the Opposition spoke across the table to the Prime Minister (Mr. Chifley), and the Prime Minister, who is responsible for this legislation, has not stood up in his place to reply. No former Prime Minister has ever thus ignored with contempt criticism of his own proposed legislation offered by the Leader of the Opposition. The people can judge for themselves why the Prime Minister feels unable to reply. They will have to decide why the Prime Minister walked out of this chamber, and allowed an honorable member who, on other occasions, fulfils the high and honorable duties of Speaker of the House, to act as his spokesman, and while thus acting, to attack and besmirch the highest court in the land. The speech to which we have just listened is the worst that I have heard during the fourteen years thatI have been a member of the Parliament. It is the most dangerous and most menacing speech that I have heard during that period in this chamber. It is menacing to the freedom of the people of this country, and to the principles of democracy which this country believes that it enjoys, when a man who is entitled to preside over this, the supreme legislature in this country, uses his opportunities in this chamber to say that the decisions of the High Court are political decisions.I can think of nothing more menacing to the continuance of free democracy in this country than to have the president of this chamber declaring that he and, in his opinion, the people of the country should not trust the High Court. We have a federal system of government. It is not a unitary form of government; it is not yet a dictatorship. The Constitution provides for the establishment of a High Court to define the relative spheres of legislative responsibility of the Commonwealth and the States, and establishes the High. Court in order to ensure that governments in this country shall never fall into conflict. History records wars that have occurred in countries in which varying authorities have not been able to resolve their differences. The Constitution established the High Court as the ultimate court of appeal for every citizen and for every interest in this country; yet the people of Australia have just been told by the honorable member for Dalley that they are not to trust the High Court. C say that I do not trust him ; I say that he is a dangerous man.
– I ask the honorable member to confine his remarks to the question before the Chair.
– I am replying to the references which have been made by the honorable member for Dalley, who has just resumed his seat.
– The honorable member is making a personal attack upon the honorable member for Dalley, which is entirely in breach of the Standing Orders; and the honorable member himself would be the first to claim protection if an attack were made upon him.
– I shall not claim protection. I did not enjoy protection when I was described, as I was described bv the honorable member for Dalley, as a paid agent of the private banks. I expected protection, but I did not get it. When the honorable member for Dalley declares that honorable members on this aide of the chamber, who enjoy the confidence of probably a couple of millions of people in this country, who have elected us to the Parliament, are the paid agents of the private banks, then I shall have no confidence in his impartiality in sitting under his chairmanship to-morrow.
– Why does not the honorable gentleman stay out?
– Nothing would suit the honorable member for Hume (Mr. Fuller) better than if all members of the Opposition stayed out of the chamber. 1 believe that Government supporters plan to drive us out. The speech delivered by the honorable member for Dalley is the worst that I have ever listened to. How are we to conduct ourselves as a deliberative assembly if we are to be so described by the man who is to preside impartially over our deliberations? He describes the utterances of some honorable members on this side of the chamber as “utter humbug”. That is the least criticism that I make of his speech. He said that if this bill did not provide for the establishment of a Federal Court of Claims honorable members on this side of the chamber would be the first to protest that the citizens of this country and the private banks were being deprived of their right to appeal for the protection of their rights. Does he not know the law of the land? Has he no knowledge of the Constitution ? Does he not know that the Constitution itself, reflected in a succession of statutes, establishes the right of every citizen and every corporate body in this country to have their rights considered by the High Court, ultimately, and that the Federal Court of Claims, so described in this measure, adds nothing to those rights hut deprives citizens of a right which, until this legislation was introduced, provided an unqualified opportunity to all citizens to approach the High Court, ultimately, and have their claims as to the justice of their conditions and treatment fully considered? That is utter humbug on the part of the honorable member for Dalley. It is a deliberate attempt on his part to mislead not the Parliament, because he knows that he cannot mislead any honorable member, but people who listen in to debates in this chamber into believing that the Government for which he speaks - the head of which will not speak himself - is defending their rights by providing for an appeal to a Court of Claims to be set up under this measure. Every citizen already has that right, and will enjoy it until this legislation is passed; but the moment this measure becomes law, then, for the first time in the history of the Commonwealth, important sections of the people will be stripped of the rights they have enjoyed since federation to take their claims to the High Court for consideration. I do not believe that the honorable member for Dalley is ignorant of that fact. I believe that he is misrepresenting the position. He attacked the High Court. He said that he would not condone a state of affairs in which the High Court could defy the will of the Australian people.
– Why should it be permitted to do so?
– The Vice-President of the Executive Council (Mr. Scully) asks why the High Court should be permitted to sit in judgment upon our rights. That is the utterance of people who, in this legislation, are defying the very will of the Australian people and, who studiously refrained a year ago from acquainting the people of their intention to impose this monstrosity upon them. Today, they defy the will of the people, as clearly expressed at the Victorian State elections last Saturday, by refusing to consult the people on this issue at a referendum. Yet the honorable member for Dalley talks about the High Court defying the will of the people. If ever there has been a group in this country who have revealed their intention to defy the will of the Australian people it is those who compose the Chifley Government and those who support it. This so-called Federal Court of Claims is to be set up to consider, not the validity of this legislation, but the individual claims of the banks as corporate bodies and their shareholders. They are to be given the opportunity to appeal to that court, [f this is fair legislation - and it embodies provision for settlement of claims by negotiation - why does it provide for bribery in respect of the settlement of claims by imposing taxation penalties upon those who do not amicably settle their claims to the satisfaction of the Government? If the Government believes that these claims are to be settled fairly, then there need be no expectation of any appeal by any of the citizens or corporate bodies concerned.
Therefore, the establishment of the Federal Court of Claims reveals the prior conviction in the mind of the Government that those whose property is to be expropriated will feel that they are not being justly treated and that there will be necessity to establish a tribunal to which they can appeal. It is clearly shown that even the Government itself does not believe that this legislation is founded upon the principles of elementary justice. It believes that the people will have to be provided with a court of appeal, and, therefore, takes the precaution early of ensuring that they shall not have an opportunity to appeal to the highest court in the land. The silence which has met our inquiries indicates that the Government in all probability has a plan, again for the first time in the history of this country, to prevent corporate bodies themselves from appealing to the High Court on the constitutional validity of this legislation. This proposal will destroy the federal system, if there is to be embodied in legislation provisions which can be so manipulated as to prevent citizens and corporate bodies from exercising their inherent right, written into our Constitution, to appeal to their own High Court. As has been pointed out, proclamations might be so timed thai the banks and their shareholders would be denied an opportunity to appeal to the High Court. This avoidance of acquainting the people of the intention of the Government, this refusal to take a referendum, this defiance of the will of the people as expressed in Victoria last Saturday, and this denial of access to the High Court are the foundation for autocracy, and the substance of a dictatorship !
– Order! The honorable member’s time has expired.
– Often the speeches of the honorable member for Indi (Mr. McEwen) might be characterized as arrant humbug, but bc has excelled himself to-night. He referred to the fundamental rights of every citizen to appeal to a court when he is aggrieved ; yet when the Government provides a court of appeal, as is done in this bill, the honorable member says that it is evidence that certain people are to be treated unfairly under this legislation. What would the honorable member have said had this measure contained no provision for a court of appeal? In this measure the Government is treating the people concerned very generously. If he claims that he is not being properly compensated, the court of appeal is available to him.
The honorable member personally attacked the honorable member for Dalley (Mr. Rosevear), who made an excellent contribution to this debate. The honorable member for Dalley should not require any more supporting evidence for his utterances than the speech of the honorable member for Indi. The honorable member for Dalley suggested that, in matters fundamental to Labour policy in this country, there might be a tendency on the part of the High Court to make unfavorable political decisions. The honorable member for Indi has endeavoured to imply that the only court favorable to the anti-Labour parties is the High Court. He says, in effect, that justice cannot be obtained from any other judicial authority in Australia. He complains that the banks are to be denied access to the High Court, and, therefore, they will be denied justice. Any person reasoning out this statement for himself must come to the conclusion that the honorable member for Indi has said, in effect, that the only court which the antiLabour parties can trust to do the things they want done is the High Court. That is the most damaging statement which I have ever heard against the High Court.
The honorable member for Indi took great exception to the honorable member for Dalley referring to members of the Opposition as the paid agents of the private banks. It may have been wrong in one sense to refer to them as such, but it cannot be denied that they are in a sense the employees of the private banks. The private banks and the financial interests are their real masters, who determine the policies that they are to pursue. For evidence of that, we have only to take our minds back to 1938, when the then Treasurer, Mr. R. G. Casey, who is now the president of the Liberal party, introduced into the Parliament a measure r,o amend the Commonwealth Bank Act. After the bill had been introduced, a secret meeting was held between the bankers and the then Treasurer, and the banks raised certain objections to the measure. The result was that the Government never proceeded with it beyond the second-reading stage. It would be interesting to hear honorable members opposite explain why that legislation was shelved. The honorable member for Indi “ protesteth too much, methinks “. 1 recall that he submitted a motion for the appointment of a royal commission to inquire into banking operations in this country, and that nobody was more critical of the operations of the private banks and financial institutions than was the honorable member.
– That is typical misrepresentation.
– Now, however, the honorable member has become the champion of the private banks. We have to look for some reason for this change of face. I have no hesitation in supporting every word said by the honorable member for Dalley in regard to this subject. The honorable member for Indi referred to the constitutional aspects of the bill. In my view, an alteration of the Constitution, which was framed nearly 50 years ago, is long overdue in order to meet, present-day conditions. So far, however, we have not been successful on many occasions in convincing the people of the need for bringing the Constitution up to date. For almost 50 years, however, the right of this Parliament to pass legislation in respect of finance and banking has never been questioned, notwithstanding the fact thai we have had in our midst, as representatives of the anti-Labour parties, many eminent legal authorities, including the present Chief Justice, Sir John Latham. Only now has this right been questioned. The Opposition parties knew that the nationalization of banking was a. part of the platform of the Labour party, but they took no heed of it, believing that the Labour party would never gain a majority which would be imbued with a genuine desire to implement that plank in the party’s platform. Honorable members opposite thought that the nationalization of banking was placed in the platform of the Labour party merely for the purpose of fooling the supporters of the movement. Suddenly, they have discovered that there is in charge of the affairs of this country a government prepared to take the essential steps to ensure that the financial and economic resources of this country shall be properly organized.
Any honorable member who appreciates the trend of world events to-day, but does not -assist the Government to take the steps necessary to prevent an economic collapse in this country, is unfaithful and traitorous to the confidence that has been placed in him by the people. There are many people who can be temporarily misled by anti-Labour propaganda and, as a result, the Labour party may, for a period, suffer reverses such as occurred in Victoria recently; but it is quite obvious that eventually, with Labour standing to its policy, there can be only one result, I say this to those individuals who believe that Labour can be permanently frustrated : There is much talk of a democracy. Many people believe that when they elect a majority to the Parliament, that majority can proceed, without hindrance, to implement the policy to which it is pledged; but there are many obstacles confronting Labour administrations even after they are elected to the Parliament. In the past few weeks, we have seen in this legislature a campaign of red-baiting on the part of the Opposition. Honorable members opposite have dealt at length with the alleged . growth of communism, the influence of communism, and how the Communists are white-anting the trade unions. I say to the Opposition - and it should be heeded also by those individuals in another place who may have to determine the issues connected with our financial legislation - that the greatest fillip that could be given to communism in this country is evidence that, regardless of the position in this Parliament, the forces of reaction outside are so strongly entrenched that no progress is possible by parliamentary action.
I believe that this is the real testing period, and I say to honorable members opposite, including their legal authorities, that there has never yet been any doubt expressed regarding the constitutional right of the Parliament to pass any legislation relating to finance or bank-
Mr. Ward. ing. It is only when honorable members opposite believe that the interest* of their political masters are being threatened that they suddenly decide that there may be some constitutional doubt about legislation that is to be passed by this Parliament. I warn the Opposition, and those elements of the community that support it, that no man can honestly remain in this Parliament as a Labour man claiming that the people of this country have a right to determine how they shall be governed, if he at the same time recognizes the right of reactionary forces entrenched outside this Parliament to prevent real progress being made. The prevention of the implementation of Labour policy, as I have said, would be the best way to give a fillip to the activities of certain organizations which for years have attempted to show that the Labour party, whilst espousing a progressive policy, cannot give effect to it through the parliamentary system as it exists to-day. We are now testing the parliamentary machine, and for the good of this country and of its people, it is to be hoped that certain individuals who occupy positions of power will not be foolish enough to stand in the path of progress, because if they do there will assuredly grow in this country an ever increasing volume of public opinion which will support the view that democratic government does not really exist in Australia. I hope for the sake of democracy that this contention will prove to be untrue; but time alone will tell. Therefore, I say to members of the Opposition that I fully understand tre reasons why they are putting up the arguments that they have advanced against this legislation. They have to do as their political masters tell them, and whether they object to an honorable member calling them the paid agents of the banks, or to my calling them the employees of the private banks, it is undeniable that the people who determine anti-Labour policy in this country are not those who sit m the Parliament as members of the anti-Labour parties, but the great financial interests that back the Opposition and call the tune.
The following paper was presented : -
Commonwealth Bank Act - Appointment - H. A. Butler.
House adjourned at 10.36 p.m.
The following answers to questions were circulated : -
g asked the Minister representing the Minister acting for the AttorneyGeneral, upon notice -
– The Minister acting for the Attorney-General has supplied the following information: -
Common wealth Arbitration Court: Judges.
y. - On the 22nd October, the honorable member for Reid (Mr. Lang) asked a question concerning the resignation of Mr. Justice Sugerman, I now inform the honorable member as follows . -
Mr. Justice Sugerman passed through Canberra on Saturday, 6th September, andin the course of discussion with the SolicitorGeneral about the draft new Conciliation and Arbitration Regulations intimated his intention of resigning during the forthcoming week, after the judgment in the 40-hour week case was delivered. It was not known until the judge visited Canberra that he had intended to resign his office, though his position had been the subject of press speculation for somelittle time previously.
Judgment in the 40-hour week case was delivered on Monday, the 8th September. On that day the judge’s resignation, dated the 7th September but to take effect as from midnight on the following day, was received. The resignation was accepted by the GovernorGeneral on that day.
The addresses of counsel before the Royal Commission on Land Sales Control concluded on the 15th August and the commissioner then announced that he would prepare his report and submit it to the Governor-General in due course.
It had been proposed to bring both the amending Conciliation and Arbitration Act 1947 and the Stevedoring Industry Act 1947 into operation on or about the day the full Arbitration Court gave its decision in the 40-hour week case. It was expected that the decision would be given towards the end of August and it was accordingly necessary for a chairman of the Stevedoring Industry Commission to be appointed and ready to take up duty as soon as the act was proclaimed. The chairman of the commission must be a judge of the Arbitration Court or a conciliation commissioner appointed under the Commonwealth Conciliation and Arbitration Act 1904-1946. It was decided, therefore, to fill the vacancy in the Arbitration Court created by the death last year of Mr. Justice O’Mara; by appointing an additional judge of the court, who could also be appointed as chairman of the commission. Judge Kirby was therefore appointed on the 26th August, in readiness to take up duty as chairman of the commission when the Stevedoring Industry Act was proclaimed. It was subsequently decided to defer the proclamation of the commencement of this act.
Mr. JusticeKirby completed his report as royal commissioner before he was sworn in as judge on the 10th September, 1947. The report as signed is dated the 15th September. During the intervening days, the voluminous report (122 pages) had been typed for presentation to the Governor-General.
The statement in the House by the honorable member for Reid on the 22nd October is incorrect in certain aspects. In particular, it is not correct to say that Mr. Justice Sugerman’s resignation was announced in the press on the 28th August. As explained above, Mr. Justice Kirby was not in fact appointed to the vacancy caused by Mr. Justice Sugerman’s resignation, but in anticipation of the proclamation of the Stevedoring Industry Act.
Commonwealth Bank: Transferred Accounts.
y. - On the31st October, the honorable member for Swan (Mr. Hamilton) asked a question regarding a report in the Sydney Daily Telegraph to the effect that the Commonwealth Bank had transferred two accounts from its Sydney office to a country branch without the permission of the depositors. I now inform the honorable member as follows : -
TheCommonwealth Bank advises that prior to the 1st August, 1947, thebank maintained agencies only at this particular country centre with accounts handled by the agencies being kept at the Sydney office of the bank.
Upon the opening of a branch of the Commonwealth Bank at the country centre on the 1st August, 1947, accounts of all depositors who had in the past consistently dealt with the agencies were, in accordance with established practice, automatically transferred to the new branch which afforded much greater facilities than are available at an agency.
If any depositor had indicated to the Commonwealth Bank a wish to continue an account with the Sydney office the bank would have arranged accordingly.
China: Proposed Award of Decorations.
y. - On the 12th November, the honorable member for Franklin (Mr. Falkinder) asked a question relating to the proposed award of a Chinese decoration to an Australian citizen in recognition of the part he had played in promoting Sino-Australian cultural understanding. The position with regard to the matter of honours is governed by the decision reached by the Commonwealth Government early last year that in future only operational awards to members of the services would be recommended for bestowal and that the Government would not recommend awards to civilians. In view of the decision not to make recommendations for the bestowal of honours on civilians, it is considered that an anomaly would be created if awards, other than for operational service during war-time, were conferred on Australian citizens by another government. Under the circumstances the Commonwealth Government would be unable to make a recommendation for the grant by His Majesty the King of permission for the acceptance of the award in the case mentioned by the honorable member.
Cite as: Australia, House of Representatives, Debates, 13 November 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19471113_reps_18_194/>.