19th Parliament · 1st Session
Mr. Deputy Speaker (Mt. C. F. Adermann) took the chair at 2.30 p.m., and read prayers.
– I desire to address a’ question to the Minister for Labour and National Service, and, by way of explanation, I point out that the Commonwealth Court of Conciliation and Arbitration is expected to deliver its judgment in the basic wage case to-morrow. Will the honorable gentleman try to make available to honorable members the full reasons that are given by the court for its decision more speedily than is normally the case? Has this Government, through the Minister himself, through the Attorney-General or through other means, made any submission to the court about what the quantum of the basic’ wage should be in the case that is about to be concluded? Has this Government put any views by counsel or by written submission about the temporary suspension of the authority of conciliation commissioners in regard to margins, pending the determination of the basic wage ?
– The matters which have been raised by the right honorable gentleman have been considered by the Government, and counsel has received certain instructions which relate to the points that he has mentioned. I do not feel competent to answer his questions in any detail at this stage, but I shall treat them as being on notice, and endeavour to give 1 1 i iti a complete reply.
– “Will copies of to-morrow’s judgment be made available to honorable members as speedily as possible?
– I shall see that they are made available as soon as we can secure
– In view of the worldwide shortage of scrap metal, and of thu importance of that commodity in connexion with defence, will the Minister for Supply investigate the recent report from New Guinea to the effect that considerable quantities of scrap metal are still lying in the islands to the north of Australia? If that report is correct, will the Government take steps to salvage-as much of that scrap metal as possible?
– I am obliged to the honorable member for Ryan for drawing my attention to that matter. As he has stated, scrap metal is vital to the steel industry, and enormous quantities of it, are used at the works of the Broken Hill Proprietary Company Limited, and elsewhore. I shall investigate the matter, and if my inquiries disclose that there are substantial quantities of scrap metal in the islands, and if it is possible to salvage them for use in the steel industry. I shall certainly ensure that the necessary action shall be taken.
– Is the Minister acting for the Minister for Commerce and Agriculture aware that, to-day, the Northern Leader published a report to the effect that the honorable gentleman said yesterday, during the debate on the dismissal of Mr. Cullen from the Australian Wheat Board, that Sir Clive Mcpherson had been dismissed by the Curtin Labour Government without any thanks or any expressions of appreciation of his work as the chairman of the board ? Is he further aware that Sir Clive McPherson retired voluntarily from the chairmanship of the Australian Wheat Board and, when asked by the government of the day whether he would continue in office, replied that he was not prepared to do so on account of private interests? Does the Minister know also that I attended a complimentary dinner tendered by the Victorian wheat-growers to Sir Clive McPherson on behalf of the Government and thanked him for the grand work ihe had done for the Government as chairman of the board ?
– I am glad to hear from the honorable member that he tendered a dinner to Sir Clive McPherson-
– I did not say that I had tendered the dinner. I said that I had attended it.
– -At any rate I am glad to hear that Sir Clive McPherson was thanked’ on behalf of the Government. Honorable members on this side of the House and friends of Sir Clive McPherson have always had the impression that he retired as voluntarily as would any liberal-minded person in a totalitarian country.
– I direct a question to the Postmaster-General concerning power increases which, I understand, Ira ve recently been approved of for a number of commercial broadcasting stations in two categories. The first category consists of stations whose managements have applied for power increases, and the second category consists of those on whose behalf such applications have not been made. Will the Minister state whether the licensees of stations in the second category will be required to raise their power output to the levels specified or whether the increases will be merely optional ?
– The Australian Broadcasting Control Board has given very close attention to the subject of power increases for both commercial and national broadcasting stations. Most commercial broadcasting stations share broadcasting channels. In other words, two stations often use the same frequency. For example, a commercial station at Goulburn may use the same frequency as a commercial station in “Western Australia. If one of those stations increased its power and the other did not do so, the programmes broadcast by the first station would overwhelm those of the other. For that reason, regard must be paid to the particular-circumstances of each case. The major consideration in the minds of myself and members of the Australian Broadcasting Control Board is the interests of the listeners. Therefore, when a power increase is necessary in order to provide listeners in certain districts with better reception, the stations concerned are instructed to increase their power if it is within their financial competence to do so. However, each case is considered on its merits.
– I direct the following questions to the Minister for Immigration : - (1) Has his attention been drawn to two reports that appeared recently in the press, the first of which alleged that Sir John Storey, the chairman of the Immigration Planning Council, has signed an agreement with foreign governments for the introduction of 50,000 migrants a year for the next ten years, whilst the second stated that the Prime Minister, in the course of his recent visit abroad, had made arrangements for the admission to Australia of an additional 50,000 foreign migrants during the next twelve months? Will the Minister state whether those reports are accurate? (2) Will the Minister also inform the House of the total number of migrants who came to this country up to the end of September, 1950, and furnish details of the numbers of British and nonBritish migrants? (3) Is the honorable gentleman able to provide precise information concerning the number of migrants expected in 1951 and the countries from which those migrants will be drawn ?
– I shall be grateful if the honorable member will place his second and third questions on the noticepaper and I shall obtain a reply for him as soon as possible. I am glad that he raised the matter to which he referred in his first question because it affords me an opportunity to clear up a misunderstanding which has apparently become wide-spread following the publication of the two reports to which he has referred, and which I have seen. These reports came apparently from Italian sources, and they suggested that Sir John Storey had arranged for 50,000 Italian migrants to come to Australia. In fact, I think that one newspaper report stated that a total of 500,000 migrants was expected, whilst another report stated that the Prime Minister had made arrangements for a similar number of Italian migrants to come to Australia. Both those reports are grossly inaccurate. Sir John Storey, who is chairman of the Immigration Planning Council, was abroad recently and took the opportunity to make inquiries about the availability of migrants from certain European countries.
– Did he sign an agreement?
– No. Commitments to take European migrants have not been entered into on behalf of Australia by Sir John Storey, the Prime Minister, or any one else. I understand that while the Prime Minister was passing through Rome on his recent visit abroad he had a few minutes conversation with the Italian Prime Minister and in the course of that conversation the subject of migration was mentioned briefly. I understand that the right honorable gentleman then informed the Italian Prime Minister that I would be taking up the matter with the Italian Government in due course.
– Hear, hear !
– Later this year it is expected that representatives of the Italian Government will visit Australia to discuss migration with us. Representatives of the Dutch Government will visit us later this week for that purpose, and perhaps representatives of other European governments will also discuss the matter with us later on. If we are to attain the target of 200,000 migrants a year we must look to European sources to supplement the number that we hope to receive from the United Kingdom.
I emphasize, however, that no commitments have been entered into yet, and I can assure honorable members that a balanced programme, which I think will be acceptable to the Australian people as a whole, will be concluded. Since the end of “World War II., when Italian migration was again resumed, less than 20,000 Italians, including men, women and children, have come to Australia, and those migrants were nominated by friends and relatives already in Australia.
– On the 4th May last I asked the Treasurer whether lie was aware that the Commonwealth Bank makes housing loans to its employees at an interest ‘ rate of only 2£ per cent., although it charges per cent, interest for housing loans made to the public. I also asked the right honorable gentleman on that occasion whether there was any reason why the Commonwealth Bank should not make advances to all home-seekers at 2-J per cent, interest instead of confining the benefit of the low rate of interest to employees of the bank. I pointed out that the benefits of home ownership might be brought within the reach of every section of the community. The Treasurer promised to provide an answer to my questions but up to date he has not done so. Will he now answer the questions so that people wishing to borrow money to purchase their own homes may know the Government’s policy inrespect of this important matter ?
– I regret that the honorable member has not previously received a reply to his questions. I shall have the matter inquired into and shall give him an expeditious reply.
– I ask the Minister for Works and Housing what amount of duty is remitted by the Government on a prefabricated house imported into this country; also, what amount of weekly rent will be charged by the Government for a prefabricated home which will cost £2,500?
– I cannot, of course, tell the honorable member off-hand the amount of duty that the Government has foregone on prefabricated houses being imported into this country, but I shall attempt to obtain the necessary figures from the Minister for Trade and Customs. Rental is a matter for the State governments because the majority of prefabricated houses are being imported by these governments and will be let under the Commonwealth and State Housing Agreement. The rental charged would come under the general conditions of rental that the States themselves impose on such houses. . I shall endeavour to see whether a reply with any degree of precision can possibly be given to the honorable gentleman’s question.
– I ask the Prime Minister whether he has given consideration to the effect of Australia’s participation in the Korean war upon the legislative ambit of this Parliament? In peace, its authority is strictly confined to matters that the High Court from time to time has decided are specifically vested in it under the Constitution, but in war its authority extends over all matters affecting the defence of the country. As Australia’s forces are now fighting, in Korea I desire to know whether the powers of the Parliament to-day extend over the wider field?
– The question that the right honorable member has raised does not admit of a very simple answer, nor indeed can the complete accuracy of any answer be vouched for. In a technical sense we are still in a state of war with one or two countries with whom we ceased to fight some time ago, because treaties of peace have not yet been executed in relation to those countries. We are also undoubtedly, in point of substantial fact, engaged in operations of war in Korea, although some distinction has been drawn in some quarters between an operation of war by Australia as a nation, and an operation of war by Australia as a member of the United Nations, acting on a decision of that organization. I should myself have thought that in all these circumstances something at least would come within the ambit of the defence power which would not come within that ambit in completely normal conditions of peace. However,
I think that all that can he said to the right honorable gentleman is that every individual proposal must he examined on its own merits. By that means it will be possible to determine whether any particular legislative proposal has a direct relationship to the defence of the country, having regard to any current commitments or any actual hostilities that may be on foot.
– Has the Prime Min ister any advice to give the House concerning the recent investigation by a special tribunal into claims by former prisoners of war for certain allowances related to the period of time that they spent in enemy hands ?
– I propose to lay the report of the committee which inquired into that matter on the table of the House to-morrow.
– Will the Prime Minister inform the House whether the report is correct that is current in the precincts of the Parliament that in addition to striking a levy upon wool and freezing certain funds of the wool-growers, the Government has approved of a scheme to establish a ceiling price on the sales in Australia?
– There is no truth in the rumour to which the honorable member has referred. There are many rumours circulating, some untrue and some, no doubt, true. I have even heard a rumour that the Labour party was going to squib in its opposition to the Com- munist Party Dissolution Bill.
– Is the Prime Minister in a position to give an unqualified assurance to the wool-growers of this country that if, and when, a satisfactory wool reserve prices scheme is devised to succeed the Joint Organization they will be consulted by a ballot before it or any other scheme is put into effect? I ask this question because up to the present no such assurance has been given by the Minister for Commerce and Agriculture, who is now absent in London.
– The honorable member for Riverina was good enough to indicate to me that he was concerned about this matter. I have, therefore, taken occasion to inform myself on the point from the department. The position is that before the Minister for Commerce and Agriculture departed for London he gave to the wool-growers’ organizations and to the industry generally, in the course of a conference at Canberra and in public statements, an unequivocal assurance that when a plan of reserve prices for wool had been devised, assuming that one were devised, the Government would conduct a referendum to ascertain the views of wool-growers unless there is obvious un animity among them in favour of such a. plan. The Government regards that undertaking as a definite commitment and the growers may be assured that no plan will be introduced without their consent. The qualification regarding obvious agreement with any such plan was designed to ensure that the Government would not incur the expense of conducting a referendum if it were clear that there was overwhelming support for it. It is hardly necessary to add that having given this assurance the Government would be particularly careful to ascertain the reaction among the growers to any proposed post-Joint Organization plan.
– In view of the fact that mint weed is spreading extensively in southern Queensland and in New South Wales and is regarded by agricultural authorities as one of the worst weeds in Australia and a serious menace to production on the black soil plains which could be just as bad as prickly pear was some years ago, will the Minister for National Development confer with the Commonwealth Scientific and Industrial Research Organization with a view to making provision in the Estimates for the eradication of this weed?
– The Commonwealth Scientific and Industrial Research Organization has been working on the mint weed problem since well before the war. The weed is most prevalent in the
Darling Downs, where the organization is carrying out most of its work on the matter. The weed is to be found between central Queensland and Inverell in New South Wales, and the Commonwealth Scientific and Industrial Research Organization is cooperating with both the Queensland and New South Wales authorities with a view to controlling it. I do not believe that it is necessary to provide any additional funds to cope with this problem which is well-known and the effect of which I do not think the honorable gentleman has over-stated. The work of eradication is continuing and will be actively pursued in conjunction with the State authorities concerned.
Mi-. GEORGE LAWSON.- Will the
Minister for Health inform the House whether it is true that he intended visiting America in order to deliver lectures to the authorities there on the health scheme which he has been responsible for introducing into Australia? Is it a fact that he has now cancelled his visit on the grounds that a federal election is imminent? If these are facts, does the Minister not think that before adopting such a course his first duty is to give a full and complete explanation of his health scheme te honorable members of this House and the people of Australia?
– I think that very much the same question as the honorable member has asked was directed to me yesterday. I refer him to the answer that i gave then
– I understand that the Government under its health and medical services scheme envisages setting up a departmental committee to review periodically the pharmaceutical formulary and the scheme generally. I am also informed that that committee has not yet been appointed, but that the Minister for Health is now consulting some outside committee on the subject. Will he indicate to the House the personnel of that outside committee? Will he also indicate to whom honorable members may direct questions on these matters seeing that ho seems incapable of giving any information about them to the House ?
– In reply to the honorable member’s question, the insulting nature of which is characteristic of him, I remind him that the present scheme is being carried out under the Pharmaceutical Benefits Act which was passed by the Government of which he was a member. That legislation provides for the appointment of a formulary committee which has no statutory authority to enable it to give advice or to perform any executive function at all. It is simply like a pole standing out in the wind. I have already promised that the scheme that the present Government intends to initiate will be satisfactory to the people generally and to those who provide medical services; that a committee composed of doctors and chemists and those associated with them in the scheme will be appointed; and that that committee will be empowered to perform real functions.
– Can the Prime Minister inform the House whether the gentleman named H. W. Arndt, who was recently appointed as a professor of economics at the University College, Canberra, took a very prominent part, both in university circles and in public, in opposing the Communist Party Dissolution .Bill ? Is this gentleman a prominent and dogmatic member of the Fabian Society and did he support the Chifley Socialist Government in its attempt to nationalize the trading banks? Did Sir Andrew McFadyean of the Royal Institute of International Affairs annex an appendix to a book by Mr. Arndt, which was published under the auspices of that institute dissociating himself from Mr. Arndt’s views ? Does the Prime Minister consider that people of known and biased views should be appointed to a faculty in which complete impartiality and freedom from political bias is absolutely essential? Will the Prime Minister ensure that the appointment is reviewed?
– I know nothing of this gentleman beyond what I read in the newspaper this morning, but I shall treat the question of the honorable member as being on the notice-paper.
– My question is directed to the Minister for the Interior. It was recently stated that Australia had concluded a fifteen-year agreement for the supply of beef to the United Kingdom. In view of that agreement, and of the fact that the beef industry is the main industry of the Northern Territory, will the Minister inform the House of the steps being taken to expedite the throwing open of additional land for settlement so that the industry may expand? When making land available will the Minister ensure that conditions of lease of the blocks are not such as will prevent experienced local men, who in many cases are exservicemen, from obtaining land because they are not able to guarantee the finance to cover the cost of all the improvement conditions of lease ?
– The throwing open of land for selection in the Northern Territory is being expedited. I can assure the honorable member that every consideration will be given to local people who desire to select and take up this land.
– In view of the statement made yesterday by the Minister for Labour and National Service about industrial unrest in the Newcastle district, which statement I understand has been supported by the Premier and the Attorney-General of New South Wales, what immediate action does the Minister propose to take to ensure that sinister influences are removed from this industrial area where they are operating adversely to the national interest?
– The honorable member mentioned that I had claimed that views expressed by me, as a consequence of the hold-ups on the coal-fields and shipping in Newcastle, were supported by the Premier and the Attorney-General of the State of New South Wales. I do not know the views of the Premier of New South Wales, but the opinions of the Attorney-General and of the Minister for Mines were those to which I referred yesterday. In n discussion with me those gentlemen endorsed my views and authorized me to make public the views that they held. Since I replied to a question asked in the House yesterday I have received a formal communication from the chairman of the Coal Industry Tribunal, Mr. Gallagher, which is at present under consideration by the Government. I assure the honorable member that with the co-operation of the Parliament in giving the necessary powers to deal with this matter effectively, the Government will proceed as promptly as possible.
– I desire to address a question to the Minister for Supply, and, by way of explanation, I point out that orders which were placed months ago for piping for municipal government water schemes and for primary producers,, particularly dairymen, in Tasmania, have not yet been fulfilled. Will the Minister co-operate with the Minister for Fuel, Shipping and Transport in an endeavour to arrange a shipment of steel supplies, including piping, to Tasmania from Newcastle, where 70,000 tons of steel products are awaiting shipment? Is it a fact that unless those supplies are removed soon, a quantity will be transferred to consumers in New South Wales and Victoria, where railways are available to haul the goods? I believe that those States which depend upon ships to bring them their supplies should not be penalized in that way.
– I regret to hear that there is a bottleneck in the supply of piping to Tasmania, although I realize that deliveries of steel have been delayed to other parts of the Commonwealth. The Treasurer has discussed the position in Queensland with me. The honorable member for Wilmot will understand that the Department of Supply does not control the distribution of piping, and can do nothing in a direct administrative way to assist in the matter. The question which he has asked also indicates that he understands that the real trouble arises from the fact that the steel has not been shipped from Newcastle. I shall confer with the Minister for Fuel, Shipping and Transport with a view to ascertaining whether any action can be taken to expedite supplies of steel, including piping, to Tasmania.
– I ask the Prime Minister whether, during the present session, the House will be given an opportunity to vote on the motion of the honorable member for Curtin which relates to the welfare of the Australian aborigines ? I further ask the right honorable gentleman whether, in the event of the House resolving that motion in the affirmative, the Government will carry out the important reforms envisaged in it.
– Without knowing a great deal more than we can know yet about the progress of other matters of urgent legislative importance, I cannot give any undertaking whether the item in question will be debated to a conclusion, ff it is, the Government will undoubtedly give the resolution all the attention that a government should give to. a resolution that is carried by this House.
– Can the Minister for National Development, who administers the Commonwealth Scientific and Industrial Research Organization, give the House any information about the results of experiments which have been carried out in this country in the last few months in artificial rain making by dropping dry ice from aeroplanes? Has vapourized silver iodide been used in any of the experiments to produce rain? Is the Commonwealth Scientific and Industrial Research Organization keeping closely in touch with authorities in the United States of America who are engaged in similar experiments? Does the Minister believe that the control of droughts by one of those methods is a possibility within the next few years?
– The Commonwealth Scientific and Industrial Research Organization, principally through its Radio Physics Division, has been actively engaged for many months on experiments in artificial rain making, and has achieved a great deal on the scientific side, because it ‘has been established, I believe with reasonable, certainty, that the dropping of dry ice into suitable types of clouds can, and usually does, produce rain. But the suitable type of cloud must be present. It is not yet established that silver iodide vapour has anything like the same effect as the dropping of dryice has, but the Commonwealth Scientific and Industrial Research Organization is certainly keeping in touch with experiments that are being undertaken in other countries in that kind of work. An experiment on a practical scale will be conducted in Tasmania in the near future, and it arises out of the fact that that State has experienced a very dry winter and spring. The experiment will be made under the auspices of a local technical body, and will have the benefit, I understand, of an aircraft that will be made available for the purpose by the Minister for Air. I believe that there is considerable significance in all that work, although it is yet far too early to say that droughts can be controlled by those means. I need not emphasize the importance to Australia of even a moderate degree of success with such experiments.
– Has the attention of the Minister for Health been directed to a press report to the effect that the free medicine scheme will greatly increase the costs of hospitals? The report states that the additional cost to the Tamworth Hospital is likely to be between £2,000 and £2,400 for the current year, and that that additional financial burden is seriously imperilling the hospital’s budget. Will the right honorable gentleman say whether the press statement to which I have referred is based upon accurate information? If it is not so ‘based, will he inform the House of the correct position?
– My attention was drawn to the statement which appeared, I think, in the Northern Daily Leader. It is obvious that that statement is hopelessly inaccurate, because the fact that drugs are supplied free of charge cannot make them dearer. The Chifley Government entered into an arrangement with the Government of New South Wales in which it was provided that a certain sum per in-patient and a certain sum per out-patient should be given to the hospitals in that State to enable them to provide drugs free of charge. I thought that such an arrangement was extraordinarily good, and I have continued it. The money is paid en Moe to the States, and if any difficulties have arisen, they are between the State concerned and the hospitals, and not between the Commonwealth and the State.
– I pointed out to the Treasurer yesterday that the “War Service Homes insurance scheme shows a profit, although its premiums are 50 per cent, less than those charged by private fire insurance companies, and I asked the right honorable gentleman whether he was prepared to recommend to the Government the nationalization of those companies in order to prevent that form of exploitation. His answer was “ No “. I now ask him to inform me whether the Government proposes to take any action to reduce the excessive charges by private fire insurance companies if he is not prepared to nationalize them ?
– The matter of taking action to compel an insurance company to reduce its premiums is entirely in the hands of those persons who insure with it. If there are competitive rates of insurance, the public has the right and the opportunity under free enterprise to take its own action against a company which is said to charge excessive rates.
– In view of the development of jet aircraft for civil aviation purposes in the United Kingdom, the United States of America and Canada, will the Minister for Civil Aviation inform the House of the future prospects of that type of aircraft for commercial purposes in Australia? I am aware that certain types of jet aircraft are now being manufactured in Australia for the Royal Australian Air Force, but I should like to know whether any plans are being made to develop and manufacture larger types which may be used by commercial air-line operators and the Royal Australian Air Force for transport purposes? How many aerodromes in Australia are suitable at present for handling jet aircraft similar to the British Comet and the Canadian Jetliner? How many of the existing aerodromes that are unsuitable for those purposes may be satisfactorily converted to handle those aircraft?
– I believe, from my recent observations of the Comet, the Viscount, the Jetliner and other jet airliners, that it is inevitable that turbojet engines will replace the conventional reciprocating engines in other aircraft. It remains to be seen whether jet aircraft will be used in Australia. The British Overseas Airways Corporation, which is the greatest British airline company, has ordered many Comets, which seem to be suited for long international flights. Other jet aircraft would be suitable for longer internal routes. Jet aircraft can be made in Australia, but we have to .ask ourselves whether it would be economical to manufacture them here. The De Havilland company, which manufactures the Comet in Great Britain, has a factory in Sydney, but it is busily engaged iii making Vampire and other aircraft at the present time. As the Comet can fly to Australia in 40 hours’ flying time and as the resources of our aircraft factories will be fully engaged in making Canberra twin bombers and the new jet fighters, it seems unlikely that the Cometwill be manufactured here. All the major aerodromes of Australia are capable of handling jet aircraft, but the difficulty is, not in landing, but in controlling them, because of their greater speed compared with that of aircraft with the conventional engine. Aircraft with jet engines will take the place of aircraft with the conventional engine because of greater engine simplicity, and of higher speeds, and also because of a lesser reason, that they, are not so subject to fire as they operate on kerosene. The problem in bringing jet aircraft onto air fields in Australia will be associated with control. The Department of Civil Aviation has that matter in hand, ami will ensure that if jet airliners fly to Australia they will be handled expeditiously because they are not so efficient in the lower altitudes as they are in the higher altitudes, and must be quickly brought to the ground.
– I ask the Prime Minister whether it is a fact that approximately twenty temporary officers, whose services were used in various zones for the purposes of Commonwealth loan campaigns, have been co-opted in order to assist the recruiting campaign. Is it also a fact that discontent prevails among them because they have been asked to work at week-ends, including Sundays, without extra payment?
– It is true that a certain number of officials from the loans organization on the advertising side - I do not know the precise number - have being co-opted to assist in the recruiting campaign. It is also true that certain questions have been raised by the DirectorGeneral of Recruiting with me in relation to the possibility of some adjustment of pay for the officers concerned having regard to their extra duty. I do not know that the matter goes to the point of discontent. However, the questions are now before me and are awaiting my attention.
– I direct a question to the Minister acting for the Minister for Defence in connexion with the intensive publicity campaign that is now being conducted throughout Australia in order to encourage recruiting. Practically all of the publicity is being obtained through city and provincial newspapers, but I point out that there is another very valuable publicity medium in Sydney and in certain other cities known as the suburban free press. It appears that recruiting publicity is not being directed in any way through that medium. Will the Minister investigate this medium and direct that space in suburban free newspapers be used for recruiting campaign publicity wherever it would be beneficial to do so?
– A very active publicity campaign is being conducted for the purpose of stimulating recruiting. I was unaware that the free press mentioned by the honorable member was not being used in this campaign, but I shall have investigations made and ascertain whether such newspapers can be used profitably in the recruiting campaign.
– by leave - The right honorable member for Barton (Dr. Evatt) recently requested information on the
United Nations’ military and political plans for Korea and asked whether the Australian Government was a party to such plans. As honorable members will be aware, the General Assembly of the United Nations has just adopted a resolution proposed by eight countries, including Australia, defining United Nations objectives in Korea. A copy of this resolution, which was adopted by a vote of 47 to 5, with seven abstentions, is annexed. The General Assembly recommended -
At the same time the Assembly established a commission, to be known as the United Nations Commission for the Unification and Rehabilitation of Korea. This commission, of which Australia is a member, has the functions of the present United Nations Commission on Korea and, in addition, responsibility for -
The Economic and Social Council was also requested, in consultation with the specialized agencies, to suggest plans at an early date for relief and rehabilitation in Korea to the General Assembly. The commission has been asked to proceed to Korea as soon as possible. Until it arrives, an interim committee composed of the nations represented on the commission is to consult with and advise the United Nations Unified Command in the light of the recommendations which I have already summarized.
With the consent of the House I shall incorporate in Hansard, the text of the resolution. It is. is follows : -
Resolution on Korba Proposedby Australia, United Kingdom, Brazil, Cuba, Netherlands, Norway, Pakistan, Philippines - Adopted 7 October.
Having regard to its resolutions of 14 November 1947, of 12 December 1948, and 21 October 1949;
Having received and considered the report ofthe United. Nations Commission on Korea;
Mindful of the fact thatthe objectives set forth in the resolutions referred to have not been fully accomplished and, in particular, that the unification of Korea has not yet been achieved, and that an attempt has been made by an armed attack from North Korea to extinguish byforce the Government of the Republic of Korea;
Recalling its declaration of 12 December 1948 that there has been established a lawful Government of the Republic of Korea having effective control and jurisdiction over that part of Korea where the United Nations Temporary Commission on Korea was able to observe and consult and in which the great majority of people of Korea reside; that this Government is based on elections which were a valid expression of free will of the electorate of that part of Korea and which were observed by the temporary commission;
And that this is the only such Government in Korea;
Having in mind that United Nations armed forces are at present operating in Korea in accordance . with the recommendations of the Security Council of 27 June 1950, subsequent to its resolution of 25 June 1950,that members of the United Nations furnish such assistance to the Republic of Korea as may be necessary to repel the armed attack and to restore international peace and security in the area ;
Recalling that the essential objectiveof the resolutions of the General Assembly referred to wasthe establishment of a unified, independent and democratic Government of Korea.
Recommen ds -
Resolves that -
A Commission consisting of Australia,. Chile, Netherlands, Pakistan, Philippines, Turkey and Thailand, to be known as theUnited Nations Commission for the Unification and Rehabilitation of Korea, be established to-
The United Nations Commission for the Unification and Rehabilitation of Korea should proceed to Korea and begin to carry out itsfunctions as soon as possible.
The General Assembly, furthermore,
Mindful of the fact that at the end of present hostilities the task of rehabilitating the Korean economy will be of great magnitude,
Bequests the Economic and Social Council, in consultation with the Specialized Agencies, to develop plans for relief and rehabilitationon the termination of hostilities and to report to the General Assembly within three weeksof the adoption of this resolution by the General Assembly.
The Economic and Social Council to expeditethe study of long-term measures to promote the economic development and social progress of Korea, and meanwhile to draw attention of the authorities which decide requests for technical assistance to the urgent and special necessity of affording such assistance to Korea;
Expresses its appreciation of services rendered by members of the United Nations Commission on Korea in the’ performance of their important and difficult task;
Requests that the Secretary-General shall provide the Commission with adequate staff and facilities including technical advisers as required; and
Authorizes the Secretary-General to pay expenses and per diem of a representative and alternate from each of the states members of the Commission.
I lay on the table the following paper : -
Korea - United Nations’ Plans - Ministerial Statement. and move -
That the paper be printed.
Debate (on motion by Dr. Evatt) adjourned.
– I lay on the table the following paper : -
Tariff Board - Annual Report for year 1949-50 together with summary of recommendations.
The report is accompanied by an annexure which summarizes the recommendations made by the Tariff Board and sets out the action taken in respect thereof.
-Assistant having informed the .Rouse that Mr. Speaker would be absent for some time,
Motion (by Mr. Menzies) - by leave - agreed to -
That, during the absence of the Speaker, the honorable member for Flinders (Mr. Evan) be appointed Deputy Chairman of Committees of this House.
Bill returned from the Senate with a message intimating that the Senate still insists on its amendments to which the House has insisted on disagreeing, as indicated in the annexed schedule and for the reason shown therein.
Debate resumed from the 10th October (vide page 532), on motion by Mr. Fadden -
That the bill be now read a second time.
.- Over the last few years there have been many debates in this Parliament on the subject of banking, and there is not very much of a fresh nature that one can say about the matter. Last night the honorable member for Lyne (Mr. Eggins) said that the Labour party’s attitude to this bill had not been made clear. I think that he will amend that statement when the message that the House received from the Senate a few minutes ago is taken into consideration on a future occasion. He will realize then exactly what the Labour party considers to be right and exactly what it considers to be wrong about the bill. The provisions with which we most emphatically agree are contained in proposed new section 9a, in clause 7. Those are the provisions that will establish the authority of the Australian Government over the Commonwealth Bank and, incidentally, over the projected Commonwealth Bank Board. For 25 years in politics the anti-Labour parties have denied that the Treasurer should have authority over the Commonwealth Bank. Now they have turned round and admitted that the consistent attitude of the Labour party for possibly 40 years has been correct. Needless to say we strongly agree with the provision in the bill which proposes to establish, the authority of the Treasurer over the Commonwealth Bank. Had that authority been vested in the Treasurer during the depression, the fiduciary note issue and the other proposals advanced by the Labour Treasurer of that time, the late Mr. E. G. Theodore, could have become law without the concurrence of the Parliament. Of course, it was always possible for the whole Parliament to issue a direction to the Commonwealth Bank Board, but it was necessary for the government to have a majority in both Houses of the Parliament before it could issue any such direction, and the direction would have had to take the form of legislation. Fortunately the present measure will destroy the authority of the Senate in that regard. Under this proposal the power of the Executive will be greatly expanded, and the Commonwealth Bank and all the members of the proposed Commonwealth Bank Board can be compelled to alter its policy. I congratulate the Government upon its conversion to our point of view, and I commend that portion of the measure.
The portion of the bill to which we object has already been exhaustively discussed. I refer to clause 10, which proposes to repeal Part V. of the principal act and to substitute a provision whereby the proposed Commonwealth Bank Board shall consist of the Governor and the Deputy Governor of the bank, the Secretary to the Department of the Treasury, and seven other members, who shall be appointed by the GovernorGeneral. Of the seven other members, five are to be persons who are not officers of t]ie bank or of the Public Service of the Commonwealth. It is the view of the Australian Labour party that nonLabour parties in this country have always endeavoured to prevent the Commonwealth Bank from competing with private banks. In the course of the evidence that was tendered to the Royal Commission on Monetary and Banking Systems the then Governor of the Commonwealth Bank stated quite clearly that during his period of office it had been the settled policy of the board not to compete with private banking institutions. This matter touches a fairly fundamental plank of the Labour party’s policy on banking.
Although the Commonwealth Bank is not at the moment under control by a board, that institution has apparently been directed by the Governor, acting either on his own initiative or at the instigation of the Treasurer - I am not prepared to say who is responsible - to curtail its advances to home-builders. Until about one month ago the bank was advancing as much as 70 per cent, of the estimated cost of building a house. The bank’s officers have now been instructed that they must not advance more than 60 per cent, of the estimated cost. In support of that decision the absurd claim has been made that it is an antiinflationary device, as though the first step that we should take to curb inflation is to cut down expenditure on such an urgent social need as housing. The instruction will have precisely no effect in curbing inflation, because the private banks will continue to advance up to 60 per cent, of the estimated cost of a house and will be only too anxious to do so. All that will happen as a result of the altered policy of the Commonwealth Bank will be that home-seekers will be discouraged from borrowing from the Commonwealth Bank. In other words, they will be encouraged to g 1 to the private banks for accommodation. In Labour’s view such a policy represents a reversion to the outlook of the former Commonwealth Bank Board, whose members had an ultra-conservative conception of banking. We believe in the independence of the Commonwealth Bank. We did believe in the complete nationalization of all banks; but failing that, we believe that the Commonwealth Bank should not be under any private influence whatever, but should be free to implement its own policy in virile competition with the private banks. I emphasize that portion of the evidence given by a former Governor of the Commonwealth Bank, in which he stated -
The Commonwealth Bank, under the direction of the Commonwealth Bank Board, has not been permitted freely to compete with private banks.
I do not want to falsify my argument by appearing to mislead the House, and I point out that that statement was made in 1937 and referred to the operations of the Commonwealth Bank during an approximate period of ten years before 1937.
From Labour’s point of view, the fact that the Treasurer will be able, under this legislation, to override the bank board is a valuable safeguard when Labour is in office. However, it does not overcome our fear that when an important decision on financial policy is questioned, it will be possible for the Treasurer in a conservative administration to plead as an alibi that the Commonwealth Bank Board has made the decision. It might well happen that the decision in question has been made by the representatives of private interests on the board, who have overruled the objective and dispassionate views of the Commonwealth Bank and Treasury officials on the board. We are concerned because the membership of the board will not be restricted to civil servants, who are trained and accustomed to view all matters that come before them dispassionately, but will include five individuals who may have an axe to grind. We are suspicious of the proposal to appoint private individuals to the board. If I were asked for the reasons for my suspicion. I would admit at once that there is no rational ground for suggesting that because a person comes from private en ten: rise he will not necessarily have the welfare of the Commonwealth Bank at heart anc! desire it to compete successfully with the private banks. The real reason for my suspicion is that in the past the Commonwealth Bank, when it was subject to direction by a board of private individuals, did not compete freely with the private banks, and on that point I feel const. mined to accept the evidence given by a former Governor of that bank.
– Who was he?
– Out of courtesy to the House I have refrained from traversing the ground that was covered by a number of speakers, including myself, when the debate on the original measure took place. I propose now only to refer the right honorable gentleman to the report in Hansard of the speech that I made in the earlier debate.
Labour’s view of banking is that it should operate not with, but against, the trade cycle. That view has found support amongst many authorities on banking, and is in opposition to the accepted .practice of private bankers who tend to expand credit unduly when things are good and to follow policies that are unnecessarily restrictive when conditions are bad. In other words, the tendency of private bankers is to operate with the ordinary business cycle instead of against it. In the course of the speech that I made in the debate on the original measure I pointed out what happened in Sweden where, under strong national control by a board that was directed by the Treasury, an expansive credit policy to finance public works was pursued during the depression. If honorable members will refer to the bulletins of the International Labour Office and compare the respective statistics for Australia and Sweden they will appreciate the argument that I am putting to them. Although it is usually contended that Australia recovered quickly from the depression, and although our recovery was undoubtedly more rapid than that of some countries, the fact remains that it lagged a long way behind that of a number of countries, including Sweden. At the beginning of 1931 the number of unemployed in Sweden was comparable to that in Australia, and the population of the two countries is roughly equal. By 1935 unemployment in Sweden did not amount to half the total of unemployment in Australia. The Labour party believes that that condition was a result of the strong national credit policy that was followed in Sweden at that time. I do not wish to falsify that fact to the House. I recognize that a second factor operated in relation to Swedish recovery which did not operate in Australia. I refer to German re-armament under Hitler, some of the means for which were provided by the Swedish iron ore industry.. The sale of raw materials to Germany had a fairly strong effect upon the improvement in the unemployment situation in Sweden. Nevertheless, over and above that fact, there existed a wide and generous scheme of public works, such as hydro-electric projects, which took up the slack in employment very quickly and which were nationally financed through Sweden’s national bank.
– Is that bank controlled by a board ?
– I have already admitted that point in answer to another interjector, who was much quicker off the mark than the honorable member for Hume (Mr. Charles Anderson), who should try to be more original. I answered the former interjection in the affirmative and I also said that the Swedish Treasurer directed the board. The point upon which we desire, but have not yet received, an assurance from the Government, is our contention that the five outside individuals to be appointed to the proposed board should be people who believe in the Commonwealth Bank operating in competition with private -banks. We take that stand because we believe that the Commonwealth Bank, which -can operate in the national interest, cando much to compensate for the cyclical tendencies of private banking. In other words, when the private banks are pursuing a cautious policy during a slump, it is desirable to have a national bank operating, under directions from the Government, so as to expand credit, to finance projects that will reduce unemployment, and, generally speaking, to act as a regulator in the national economy. Now the Commonwealth Bank could at all times have acted as a regulator in the national economy. We do not believe that it did so to anything like the degree that it should have done it, because it was in fact vitiated by private influences that desired that private banking interests should attend to any financing of governmental projects and should underwrite the Loan Council operations. They also desired that those functions should not be within the ambit of people who believe that a national bank could be boldly and progressively used to finance national projects so as to mitigate unemployment. The whole of our suspicion of this bill is based upon our fears regarding the character of those five private persons who are to be appointed to the proposed board and concerning whom no satisfactory assurances have been given by the Government.
.- The honorable member for Fremantle (Mr. Beazley) has admitted quite freely that he and the Labour party are in favour of the nationalization of the banking system. That is one aspect of banking upon which members of the Labour party have kept remarkably silent recently.
– We passed a bill to nationalize banking. Surely that is enough admission.
– The honorable member for Fremantle quoted from the report of the Royal Commission on Monetary and Banking Systems certain portions that suited his argument, but he did not quote other portions which do not support his argument. I shall read to the House one extract from the report which the honorable member did not quote. It reads as follows : -
The view of the Commission … is that the most desirable banking system in the present circumstances of Australia is one which includes privately-owned trading banks. A strong central bank, publicly owned, and not dominated by the desire to make profit, will exercise the necessary control over the activities of the trading banks, and the organization of these banks on a profit-making basis will conduce to efficiency, while the area of choice .accorded to borrowers will be greater than if all banking were nationalized and brought under one control. We think that in this way the national interest will best be served.
– I did not quote the report. I simply quoted the evidence.
– The report definitely was in favour not of one completely nationalized banking system but of the Commonwealth Bank operating in virile competition with private banks.
– That is the Labour party’s policy.
– That is why we have included in this bill a clause providing that the Banking Act of 1947 shall be repealed. The Leader of the Opposition (Mr. Chifley) has said that by doing so we are simply kicking a dead horse. Whether the horse is dead or just sleeping, I consider that it deserves to be kicked. It is a great pity that there is no provision in our Constitution similar to the provisions in the constitutions of some other countries, notably Switzerland, whereby the people can demand a referendum on any bill. In Switzerland such a referendum can be demanded if 30,000 people sign the necessary petition. There is no doubt that had such a provision been in our Constitution last year very little difficulty would have been met in obtaining 300,000 signatures to such a petition.
As the honorable member for Fremantle has stated, this bill has already been widely and fully discussed, and I should not have risen to speak on it had it not been for certain remarks that the honorable member for Burke (Mr. Peters) made last night. When he was asked a question by the honorable member for Maranoa (Mr. Charles Russell) about the identity of the interests in the Commonwealth Bank Board that favoured looking after big city interests, he immediately mentioned the late Mr, Drummond. I desire to reply to this foul attack on the late Mr. Drummond, because until his death recently he was a constituent of raine, and I am certain that the people of the little country town in which he lived for 55 years would have laughed heartily if they had heard it said that he was a person who favoured hig city interests and vested interests. He was a man with very small interests himself, who had started off in a humble way in a small country shack at Berrigan. He left school a-t the age of eleven in order to earn a living for himself and his family, and at the age of 26 he moved to Lockhart and set up in business with his brother in a stock and station agency. He did an immense amount of work to develop the district of Lockhart and was one of its original pioneers. Later, he purchased a small farm just outside the town, where he grew wheat for many years, and. where he remained until the time of his death. He was a person who, in a district that is not blessed with a high rainfall, made a success of growing wheat, something that is very difficult to do in that area. As a result of his success, and of his ability, he was made a member of various boards. He first became a member of the compulsory wheat board, of which he became manager at a time when its affairs were not being conducted satisfactorily. He adjusted that position satisfactorily. He was later appointed to the soldier settlement board, and because of the ability that he had shown in that position he was appointed in 1924 to the Commonwealth Bank Board. He was one of two members of the board who had a knowledge of primary industries. Throughout his life he showed particular ability, and I consider that it is a great pity that there are not more people like him in this community. The honorable member for Burke said that Mr. Drummond did nothing towards improving the national welfare. The residents of the district in which he lived will testify to what he has done. It is a great pity that when a person has done his utmost by serving for seventeen years on a bank board, as this man did, he should be attacked and criticized by somebody who has not even bothered, apparently, to read his history and find out what he did.
The statement that was made by the honora’ble member for Burke (Mr. Peters) to the effect that the banks caused the depression has been made many times on public platforms. One would expect to hear it made on the banks of the Yarra but not in this House. The honorable member said that the banks lent large amounts of money during the boom times of the 1.920’s and that as soon as the depression started they called in their overdrafts. As the figures show, they did not reduce the amount of their loans. In 1929 the total amount of money loaned by the banks was £257,000,000.’ In 1930> that amount rose to £280,000,000. Ixa. 1931 it was reduced to £261,000,000 and! it remained at that figure in 1932. But: in 1933 the amount rose to £279,000,000:. As Professor Copland has said, the causes of the depression are now well known. They were the acute fall in export prices in overseas markets and the sudden stoppage of overseas loans. The income of primary producers was cut in half by the fall in prices and their spending power was correspondingly reduced. Obviously, the banks did not cause the depression.
As the honorable member for Fremantle (Mi Beasley) admitted the bone of contention between the Government and the Opposition is whether the Commonwealth Bank should have hoard control or political control. I believe that it should be controlled by a board, ‘because I have had discussions with bank officers of the Commonwealth Bank who have no axe to grind and they have no doubt that the bank would ‘be conducted more efficiently by a bank board than it would he under political control. I believe in control by a bank board because I think that two heads are wiser than one and that ten heads are wiser than one. I believe, also, that the best financiers in the country are not politicians. It is only reasonable to expect that the best financiers and the best brains in the community would be in the non-politician group. How can a politician have the knowledge that comes to people who have spent a lifetime in the study of the arts of finance? Before most honorable members came into this House they had little to do with finance. It is fortunate that the Treasurer (Mr.
Fadden) was an accountant and has had considerable experience with figures and finance; but, generally speaking, most honorable members have no financial knowledge when they first enter this House. After their election, because they are working hard to retain their seats, there is little time for them to spend in the study of finance. Honorable members opposite seem to regard the last Treasurer, Mr. Chifley, as a man who had magnificent ability as a financier. Honorable members on this side of the House would be the last to admit that. But, in any case, he is only human. He is growing old and, in the event of his not being able to, take over the Treasury again, a new Treasurer might be the honorable member for Watson (Mr. Curtin), or the honorable member for East Sydney (Mr. Ward). For these reasons, I commend the establishment of the bank board to the House.
.- This is the second time that the Commonwealth Bank Bill 1950 has come before the House. If the remarks of the Treasurer (Mr. Fadden) on this occasion are any criterion, it would appear that the enthusiasm that honorable members opposite had for the arguments that they used formerly has faded away. Neither enthusiasm nor heat have been developed during this debate probably for very good reasons. When I started to consider this matter, I thought it was possible that the Treasurer would look for his soundest argument to the record of the operations of the Commonwealth Bank up to the present time. In trying to anticipate what he would say, I decided to examine the report of the Commonwealth Bank and, after having done so, it is obvious to me why the Treasurer chose to make a very brief statement on the bill on this occasion.
From the statement of profit and loss in the Report and Balance-sheet of the Commonwealth Bank of Australia and the Commonwealth Savings Bank of Australia as at the 30th June, 1950, I found that the aggregate net profit of the Commonwealth Bank, including the Note Issue Department and the Commonwealth Savings Bank, after making provision for contingencies was, in round figures, £7,618,000, from which it is apparent that the bank is in a very sound position. From the aggregate profit an amount of £5,322,000 was paid to the Commonwealth Treasury, of which £4,183,000 went to Consolidated Revenue and £1,139,000 to the National Debt Sinking Fund. Under amalgamation agreements, £619,752 was paid to certain States as their share of the profits of the Commonwealth Savings Bank. If I were one of the Treasurer’s supporters it would be difficult for me to suggest to him what criticism he might offer of the balance-sheet of the Commonwealth Bank. In the report which I have mentioned, I found a list of the benefits that accrued under the Commonwealth Bank scheme. The report says, under the heading of “ Central Banking Activities “-
In the administration of credit policy, the Central Bank has had the co-operation of the private bunks whose extensive contacts and valuable experience have enabled them to make an important contribution. The Centra! Bank is, of course, responsible for policy hut consultations with the private .banks have greatly assisted its formation in respect of both the amount and direction of bank credit.
Honorable members will recall that prior to the 10th December, 1949, it was indicated that the legislation which had been passed by the Chifley Government constituted a menace to the private banks. It is apparent from this report that that is not. true and that the private banks are giving the Commonwealth Bank their active co-operation, which indicates that it is now generally realized that there is an inter-dependence between the private banks and the Commonwealth Bank as at present constituted and administered. Therefore, the conclusion that one reaches is that the bank’s present administration is the best possible by any test, and that it should be continued. No valid reason has been offered by the Treasurer why the administration should be changed, and I remind honorable members that a full report on the activities of the bank under the existing administration is now before the House. In that report, under the heading of “ Trading Activities “ some remarkable information is given. Some very weighty arguments against changing the administration are made in that part of the report.
We read in the report the following paragraph :-
A substantial proportion of the recent increase of advance business reflects the assistance extended to home builders and to building societies. Over the year, the Bank has been (.-ailed upon to provide finance for home building purposes to an increasing extent because other lenders have withdrawn from this field or curtailed their operations.
I emphasize as very important the last part of that quotation. That shows that the object of private banking interests is to earn as much as possible for their banks and not to give the best service possible to the community. Under the existing administration of the Commonwealth Bank the best possible service to the community is being rendered. Under the heading of “ Co-operative Building Societies “ the report reads -
Further accommodation amounting to £8.910.000 was also approved for co-operative building societies during the year. This brings the total for the Inst six years to approximately £20,000,000.
No possible criticism of such banking activity is valid, and it must be admitted that the bank is an unmixed blessing to the community. Had such advantages not been made the economy of the country would have been seriously affected. I received a great surprise when I perused the section of .the report headed “ Rural Credits Department “. I believe that it is not generally known how the rural activities of the bank affect our community. The following extract on that subject should afford the greatest possible interest to members of the Australian Country party -
The principal function of this Department is the provision of advances to Government marketing boards and co-operative societies
As in previous years, one-half of the net profits of the Department has been placed in the Rural Credits Development Fund from which grants are made by the Bank for the promotion of primary production. Since the Rural Credits Department was established, the Bank has made grants totalling £525,fiS0 to organizations engaged in research connected with primary production. Of this amount £12,9.r>0 was made available in the past year for research into pasture improvement, animal health and production and fodder conservation.
Generally one does not consider work such as that when thinking about the activities of the Commonwealth Bank under its existing administration. In the light of this report it will be very difficult for the Treasurer to prove to an audience of the general public that it will be to the advantage of the country to change the administration of the commonwealth Bank as radically as is proposed in the legislation before the House. Another reason why the Treasurer perhaps did not wish to speak at great length on this matter is that we are undoubtedly living in a world that changes very quickly. Before the 10th December, 1949, forces of fear had been developed in relation to nationalization. Those forces have now become completely insignificant because they have been displaced by the force of another fear which is of greater intensity. In comparison with the fear of nationalization which existed before the 10th December, 1949, any fear of nationalization which could be whipped up now would be insignificant because of the presence of a greater fear. A few years ago I attended a lecture during which the lecturer informed his audience that society was founded upon seven basic fears. Amongst those fears were the economic fear and the spiritual fearBoth those fears are relevant to the debateat present taking place in this House. Trior to the 10th December, 1949, the fear of nationalization, as far as there could besuch a fear, was quite natural within thenarrow compass of individual experience.. The trading banks at that time most illogically developed their arguments upon, a material basis as a counter to thematerial basis associated with nationalization. This is most important in view of what has happened since the 10th December, 1949. I have before me a copy of A Personal Message to Customers and Shareholders, which was issued by the Bank of New South Wales and which deals with bank nationalization. The first paragraph of that “ message “ reads -
In September, 1947, … we said in a “ personal message “ to our customs and shareholders that the issue was “ whether we are to be at liberty to bank where we wish and do what we like with our money or whether we are to be dragooned into a government monopoly bank which will have a stranglehold on all our financial affairs.
That message loses much of its force, when we remember’ all that has happened since nationalization was an issue. The people have been disillusioned. The character of the hank which was the subject of so much propaganda prior to the 10th December,, 1949, has not been altered at all under the provisions of the bill now before honorable members. I aver that the character of the bank is not likely to be altered. When discussing this bill on a previous occasion I indicated that I thought that there was a possibility that the character of the bank might be altered, but I have since changed my mind because of what has been said and done by the Prime Minister in relation to banking and the national economy, Recently the Prime Minister advocated national planning because circumstances -have forced him to that point of view. He now holds the view that there is not the slightest doubt that a certain amount of national planning is essential for the protection and promotion of our economy. That is one of the reasons why I say that wie character of the bank will’ not be altered. National planning cannot take place unless it is controlled by the Commonwealth Bank as it exists at present. No one to-day can do as he wishes with his money and all honorable members on the Government side realize it. A man cannot invest where he will, nor will he be permitted to do so by the financial institutions, including the private banks.
– ‘Why not?
– Because if he is to be allowed to invest at his own will our economy will be adversely affected. Moreover the necessary approval would not be given by the Commonwealth Bank. I doubt whether even the private banks, in trying to protect their own general interests, would allow people to invest in certain industries which might be claimed to be industries not producing the basic requirements of this country.
The spiritual fear to which I have referred is the fear that this country might become totalitarian. That, also, has substantially subsided. That fear was most pronounced during the last general election campaign when the people were continually reminded of conditions in Germany, Italy and Russia under totalitarian regimes, and they believed that inherent in the nationalization of banking was the possibility that Australia would follow the totalitarian pattern. They envisaged the possibility that the State would become their master instead of their servant, and that is contrary to the philosophy of the great majority of Australians. However, the people have since learned that in that respect they took a shortsighted view, and the Government parties also have learned a similar lesson. Those parties now realize that just as it was necessary to have a planned national economy in wartime it is equally necessary to plan our economy in peace-time in order to ensure that the basic materials required for the promotion of our economy shall be provided. That can be done only by restricting luxury industries which are mainly responsible for shortages and rising prices. I emphasize that it is now generally recognized that these evils can be controlled only by a balanced, benevolent dictatorship over the nation’s monetary and financial system. That was precisely the purpose of the legislation that this measure seeks to amend.
I repeat that the Government concurs with Labour’s view that .there must be a degree of national planning, and that even the private banking institutions are prepared to co-operate in a scheme of national planning which can be promoted only so long as the Commonwealth Bank retains its present character. However, considerable turmoil has arisen because age-old ideas and customs have now been thrown into the melting-pot in a world in which the conflict between opposing philosophies has become acute. The new can be affected by the old and the old must yield to changed methods of production and the conditions that have arisen as the aftermath of war. That turmoil has pin-pointed itself in the fear of communism. All parties will experience great difficulty in submitting to the people ways and means by which that fear can be removed. I believe that that fear is much more pronounced within the Government parties than it is within the Labour party because the Government parties have been obliged to revolutionize their thought with relation to national planning. For that reason Government supporters would find it difficult to explain their change of outlook should legislation of this kind, which, after all, retains the ‘Commonwealth Bank in its present form, he (made an issue at a general election.
I have not the slightest doubt that the private banking institutions have been most surprised that the ‘Government has not sought to effect a greater degree of change under this measure. I, personally, am astonished at the mildness of the changes now proposed. Having regard to ‘the heated argument that was aroused during the last general election campaign on the issue of banking, I am astonished that the only revolutionary change proposed to be made under this bill is the repeal of a provision which in any event the High Court has held to be invalid. That is the only real change that the Government now proposes to effect. In view of the promises that the present Government parties made to the people prior to December last, I have no doubt that certain people, upon hearing the Treasurer’s outline of this measure, were annoyed at its mildness. All f the reforms that Labour implemented are to be retained with the exception that the Commonwealth Bank is to be placed under the control of a board instead of a Governor only. At the same time, in some respects the Government proposes to go even further than Labour did. For instance, this bill empowers the bank to increase its capital resources. “Whilst that is a necessary provision, the fact remains that it extends a principle that was first implemented by Labour. Wot so long ago the Banking Act 1945 was considered to contain some very strong provisions. It gave to the Commonwealth Bank general jurisdiction over the advances policy of the private banks and to determine whether bank interest rates should be reduced or increased. That important provision also is to be retained. The Banking Act 1945 empowered the Commonwealth Bank to determine the rates of interest that the private banks themselves shall pay on their reserves and also regulated their surplus investable funds, to be deposited with the Central Bank. Those radical provisions are to be retained, but the present Government parties were opposed to them during the last general election campaign.
The most important provision of the bill with respect to the Commonwealth
Bank is to place that institution under the control of a board. That means that the administrative machinery of the bank will be substantially altered. The importance of that provision is emphasized when we remember that the Commonwealth Bank regulates the advances policy of the private banks. Control by the proposed board can also have the effect of changing the policy of the Commonwealth Bank itself. At present, the Governor administers the Commonwealth Bank as a central bank, a trading bank and a savings bank. “What was the purpose of the Chifley Government when it placed the bank under the control of a Governor only and gave to it the powers that it now possesses? That Government sought to ensure that, ultimately, the control of the bank should remain in the hands of the Parliament. It achieved that purpose by providing that in the event of a dispute arising between the Governor of the Bank and the Treasurer of the day the views of the latter shall prevail. The Opposition opposes the proposal contained in this bill to place the bank under the control of a board of ten members. Should this measure become law the views of the present Governor of the bank, who is to be appointed chairman of the proposed board, may be overridden in the first, instance not by the Treasurer of the day but by a majority of the members of the board. If their opposition has the sanction of the Government of the day, the dispute will not be reported to the Parliament. I consider that the present form of administration of the Commonwealth Bank is a tribute to the genius of those who devised it. The Governor has the benefit of the assistance of an advisory council, consisting of financial experts, when he is considering matters of policy, yet the Parliament has the final voice in determining the policy of the bank. The Government is opposed to that system of control, and wishes to re-establish the bank board. As I have shown, such a change may deprive the Parliament of the authority to resolve a dispute between the chairman and members of the board. For the reasons that I have adduced, I believe that the Government would be unwise to alter the present form of control, of the Commonwealth Bank. If the Government will heed our warnings against the reestablishment of the board, the bill will have a speedy passage through this House. Opposition members will not resist the provision for the repeal of the Banking Act 1947, which, for all practical purposes, has been invalidated by the decision of the Privy Council. The Government has nothing to gain by reestablishing the board. Honorable members have received the latest report of the Commonwealth Bank, and the absence of criticism indicates that the administration of that great institution during the last financial year was completely satisfactory. The re-establishment of the board might produce a radical change of banking policy that could seriously affect the national economy. Let us retain the present system of control that has proved, in practice, to be completely satisfactory.
.- This debate has already covered a wide field, but perhaps I may be permitted to direct the attention of honorable members to the circumstances in which the Commonwealth Bank was established. It was my privilege to be a senior Minister in the Fisher Labour Government that founded the institution in 1912. We have heard a great deal in this and other debates, about the present objective of the Labour party. Of course, it stands notoriously for the nationalization of all banks. To that policy, it is wedded. Perhaps it will give Opposition members a rude shock to learn that those who were the standard-bearers of Labour in the past, and were responsible for the establishment of the Commonwealth Bank, held very different views. As the AttorneyGeneral in the Fisher Government, I was responsible for the official drafting of the original Commonwealth Bank Bill. My distinguished and lamented friend, Andrew Fisher, in his speech on that measure, directed the attention of the public of Australia to the aims and objects of that institution. A summary of his words will bear repeating. He said that the bank had been established to carry on the business of banking; that it was not to displace private hanks, but was to compete with them.
Its functions were to receive money on deposit; to advance moneys on sound security; to buy and sell exchange; and to act as the Government’s, bankers, to handle its securities and to float its loans. The Savings Bank Department was to receive the savings of the people, pay the highest rate of interest for the use of their money and lend it on sound security at the lowest rate compatible with sound business methods. Mr. Fisher then said -
There must be absolute security for all investment, and we propose to meet public requirements at the lowest rates of interest. Our chief aim is not to make profits but to unsure safety and security to depositors, and as the Commonwealth will honour all the obligations of the bank, it must, therefore, be as safe as any bank can be. The whole resources of the Commonwealth arc behind the bank, both in its trading and in’ its savings bank activities; but it is to make its own headway.
Clearly, then, the Commonwealth Bank was established to compete with the private trading banks and not to displace them. In those days, the Labour party had an ample majority in the Senate and in the House of Representatives. The Senate was literally a new Jerusalem for us. We could enter it and he received with outstretched hands. Now we slink in to that chamber, and are regarded as emissaries of the evil one.
The Commonwealth Bank began in a humble way. After one year’s operations, its total resources were £5,000,000. The hands of all men were directed against it. No limitations or hindrances of any kind were placed upon the private banks. The Commonwealth Bank was to succeed on ite merits, if it had any, and was to commend itself to the public by the way in which it conducted its business. Briefly, it was to carry on the business of banking on business lines, that is to say, in the same way as the private banks were conducted. We appointed as the Governor of the bank a man who ha.d earned a great reputation in the service of the Bank of New South Wales. Sir Denison Miller was a man of vision and of courage. We gave him a free hand. I assure the House that neither I nor any other member of the Fisher Government interfered with his administration in any way. He made a success of the Commonwealth Bank by carrying on the business of banking for the Government in exactly the same way as the Bank of New South Wales conducted its ‘business for its shareholders. The Commonwealth Bank won wide recognition. It lent money at current rates of interest, on sound security. Its business was conducted on sound lines. Its aim, I repeat, was not to displace the private banks, but to compete with them.
Two years later, when World War I. began, the Commonwealth Bank proved its worth by .financing £250,000,000 worth of Commonwealth loans, and Commonwealth pools involving £437,000,000. It gathered strength with every passing day, and proved itself worthy of the high expectations of its founders. It inspired confidence in savings banks’ depositors. This bank, which had resources of only £5,000,000 after twelve months’ operations, now possesses resources amounting to £919,000,000, whilst the Commonwealth Savings Bank has- deposits totalling £445,000,000. Never has an institution proved itself more worthy of support. It flourished without a board ; it flourished under a board. It was equally successful whether it was controlled by a board or by a governor. One factor, however, remained constant; throughout its history that whether with or without a board the bank was absolutely free from political control.
I listened attentively to the honorable member for Fremantle (Mr. Beazley), whose objection to the bill, so far as I could gather from his somewhat discursive remarks, was to the personnel of the proposed board. He regards them as suspect, of having interests of their own to serve; that they are the tools and pawns of the great financial interests; that they have great possessions and, therefore, are quite unworthy to control this great Common wealth national bank. In my view, that argument falls to the ground, because, so far as I have been able to understand, the speeches of Opposition members, they proposed that a board should be appointed that would be under the thumb of the executive and a caucus of the Australian Labour party. Would not that have been a political board? It could not be said for a moment that the Labour Government appointed men to the board because of their knowledge of banking. It did nothing of the sort, lt appointed men who could be relied upon to serve the interests of the Labour party.
Under the Commonwealth Bank, as established by Andrew Fisher and as carried on by successive governments, this country has made amazing progress. It was a cloud no bigger than a man’s hand at the beginning, but now it covers the whole heavens. No country has made greater progress since the foundation of the hank than has Australia. Its wealth, trade, and industry have made great strides. The number of its people has greatly increased, and their living conditions have been correspondingly improved. I hope that they will always retain those qualities that have made Australia what it is to-day. In peace and in war, the people of this country have shown that they are fit to control their own affairs. We have inherited a great estate. Upon us there rests a great responsibility. We must show ourselves equal to our opportunities. They are great. We cannot sleep at our posts. The world has its eyes on Australia. The East is awake and its millions, jostling themselves for want of elbow room, are thirsting for a foothold in this empty land of ours. There are only 2.6 people to the square mile in Australia, but there are 367 people to the square mile in Japan, Does anybody think for a moment that this can go on? People talk about nationalizing the private banks. They are more concerned with the undermining and destruction of the system that has permitted us to achieve the fullest measure of self-government that the “world has ever known !
All this turns on the Commonwealth Bank. The objection to the bill, as 1 understand it, is that the proposed board is not to the liking of members of the Opposition. Members of the board will be suspect. The Opposition says that their sympathies will lean towards the bloated capitalist. Well, I am not a bloated capitalist and I say, as the man who was officially responsible for the original measure that established the Commonwealth Bank, that this institution has justified itself abundantly, with a board, without a board, but always free from political control. I am not going to fight a life and death battle about a board, but I am going to fight a life and death battle about the basic principles upon which the bank was founded. The bank must be free from political control and beyond all suspicion of political control. It was established to develop the resources of the country by pouring out credit when credit is needed and restricting credit when the free flow of credit would threaten the stability of our economic and industrial structure.
I need say little more about the bill. I have reminded honorable members of the circumstances in which the Commonwealth Bank was established. It was established by a Labour government, not to displace private banks, but to compete with them and to be run on business lines by trained bankers. Only trained bankers had control of it for the first 25 or 30 years of its existence, and they conducted it on sound business lines. I commend those facts to the attention of my friend’s of the Opposition who sneer about businessmen and affect to believe that a man engaged in business is an enemy of the country. Men are very much alike in whatever position in life they may be found. If we took off their clothes, we could not distinguish Rockefeller, the richest man in the world, from Stan Moran, of the Wharflabourers’ Union, either by looking at them or by analysing their objectives in life. We all want something for ourselves, and to suggest that one section of the community is imbued with altruistic motives whilst others are out merely to grab what they can, is silly.
Civilization to-day is a complex and delicate structure and it can be thrown out of gear very easily. All sections of society are inter-dependent. Honorable members pass their time in this House in what some thoughtless people consider to be non-productive labour. Of course, we know very well bow valuable we are to society, but there are people outside the Parliament who have their doubts about us. Only a few days ago an honorable member, speaking on this bill, said that the Commonwealth Bank had not been necessary and that everything it had done could have been done by the Treasury. Of course the work of the Commonwealth Bank could have been done by the Treasury ! Everything could be done by anybody! I could make my own clothes and cook my own food. But how should I look when I had made my own clothes and fare when I had cooked my own food? Civilization has reached its present position because there has been a distribution of tasks. One man does one job, and by that means he is enabled to produce much more wealth than if he spread his energies over the whole field of human endeavour. So, in the business of banking we must have trained bankers - not good politicians, not friends of the Government, but men who understand banking. I say to honorable members opposite that the Commonwealth Bank is what it is to-day because it was conducted, during the first 25 or 30 years of its existence at any rate, by trained bankers who had learned their business in the private banks of this country.
This bill provides for control of the Commonwealth Bank by bankers. It is true that it proposes to establish a board. But can any honorable member tell me of a bank or any other business undertaking in Australia that has not its board of directors? I am a member of a board. I should not like to say that I am. technically fitted to direct the business of such a highly specialized organization as Amalgamated Wireless (Australasia) Limited, but as a director I am called upon to exercise my intelligence, my judgment and my vision. Every company in Australia is controlled in the same way. The Opposition’s objection to a board falls to the ground., It does not object to a board provided the members of it are men who will dance to the Opposition’s tune. I do not object to the establishment of a board, but it must consist of men of intelligence and judgment, men who have at least a workable knowledge of business and who are not handicapped by powerful interests that conflict with those of the community. I have always -been a supporter of the Commonwealth Bank. I believe in the bank, but I am opposed to the nationalization of banking. I believe that we shall do best for the community by carrying on the financial business of the country in the future, as we have clone in the past, through the agencies of government and of private enterprise. I believe in private enterprise - I believe in competition. But because we are a civilized people, competition must be subject to wise restraints. It must not be allowed to develop into something akin to industrial or commercial suicide. Subject to that reservation the rule of the survival of the fittest is a safe rule to apply. I hope th at the House will accept the bill, and allow the Commonwealth Bank to function efficiently in the interests of the people of Australia.
.- Wo have heard a very interesting history of the Commonwealth Bank delivered by the right honorable member for Bradfield (Mr. Hughes), but nothing that he had to say could be of much advantage to the supporters of this bill. Members of the Opposition were amazed by the introduction of this second measure in this House before the first had been disposed of by the Senate. The Government’s action in this respect was without precedent in the history of the Australian Parliament. The bill, I am told, represents the second barrel of the weapon that the Government is holding at the head of the Opposition with the object of forcing a double dissolution of this Parliament. Stripped of all the humbug and the political hysteria with which it has been surrounded, it appears as the most important measure in the Government’s legislative programme. I have no illusions on that score, even though its second introduction was not accompanied by such a fanfare of trumpets as marked its first presentation to the House early this year. It was the first bill introduced in the Parliament after the general election. I said then that it had been presented with indecent haste at a time when the people of Australia were looking forward to getting some value from the Government that they had elected. We believe that it was introduced in order to repay a debt that the Government owed to its masters, the private bankers who were responsible for that magnificent handout that enabled the anti-Labour parties to gain power.
Let us consider briefly’ the value of this great prize to the Government’s sup porters. The profit and loss accounts of the Commonwealth Bank and the Commonwealth Savings Bank for 1949-50 show that the aggregate net profit for the year of the Commonwealth Bank, including the Note Issue Department, and the Commonwealth Savings Bank, after making provision for contingencies, was, in round figures, £7,618,000. That represented a decrease of £65j000 from the aggregate net profit of £7,6S3,000 recorded in the previous year. Of the aggregate profit, £5,322,000 was paid to the Commonwealth Treasury, £4,183,000 being paid to Consolidated Revenue and £1,139,000 to the National Debt Sinking Fund. Those results accrued from the operations of the banks notwithstanding the fact that credits had been restricted. This restriction upon the issue of credits to municipal councils, co-operative home building societies and numerous other organizations accounted for the reduction of the total profit by £65,000. Those bodies were virtually thrown overboard and told to seek financial aid elsewhere. We agree with the right honorable member for Bradfield that the bank has functioned successfully. At the present time the bank is controlled by a governor with the assistance of a deputy governor and a small body of experts who include Mr. G. P. N! Watt, the .Secretary to the Treasury, Dr. Roland Wilson, the Commonwealth. Statistician and Economic Adviser to the Commonwealth Treasury, Professor L. G. Melville, the Economic Adviser to the Commonwealth Bank, and Mr. A. N. Armstrong, who is the general manager of the Industrial Finance Department of the bank. Under the control of those gentlemen the operations of the bank have been most successful. We ask ourselves, therefore, why the present Government proposes to alter the existing system of control and hand the bank over to a board. Undoubtedly, the real reason is that the anti-Labour forces are endeavouring to prevent Labour from ever again obtaining control of the destinies of this nation. We object particularly to the proposal of the Government to remove the control of the bank from the elected representatives of the country. The whole atmosphere surrounding the introduction of this measure reeks with suspicion. We know, for instance, that the bill was almost destroyed in its infancy, when a conference of bank officers, who were also Libera] supporters, attacked the proposal. Some members of the Government who were present at the conference persuaded them to withdraw their opposition to the measure by assuring them that it was merely a confidence trick, and that its real purpose went much further than appeared on the face of it. The Government representatives also assured the bank officers that they would stultify the competitive activities of the bank, and would eventually make it once more a servant of the private banks.
Let us remind ourselves of the history of the bank and of the intense interest which Labour has always taken in that institution. In the first place, the bank was established by a Labour Administration in 1911 with a very small capital. The anti-Labour forces raised tremendous opposition to the establishment of the bank, and Sir Joseph Cook, who spoke for the big private banking interests of that time, said -
The people ask for bread .and the Labour Party gives them bricks and banks, and does nothing to increase their welfare.
Sir Joseph Cook then endeavoured to invoke fear, which is always a handy weapon with which to stampede the people, by saying -
The public will be chary about transferring its deposits to the Commonwealth Savings Bank.
That criticism reminds us of the statement made recently by Mr. T. B. Heffer, general manager of the Bank of New South Wales, who was referring to the measure originally introduced some months ago, when he said -
There are provisions in the bill that may do incalculable harm, not only to the banking system, but to the whole economic life of the country.
Another sample of the bitterness of the criticism of the proposal to establish the Commonwealth Bank is supplied by an extract from a leading article that appeared in the Melbourne Argus in 1911, in the course of which that newspaper stated -
The whole scheme is conceived in idiocy. It constitutes a malicious use of public fundsto compete with private activities - activities that enjoy the full confidence of the public.
There is not the slightest justification for it, and its failure from its inception is such a matter of certainty that the whole proposition will be abandoned after a few months of inglorious experiment.
Those gloomy forecasts have certainly not been fulfilled. To-day the people have, in the Commonwealth Bank, an asset that is worth more than £900,000,000. It is making an annual profit of more than £7,000,000.
We all are familiar with the magnificent assistance that was rendered to Australia by the Commonwealth Bank during World War I., but the assistance rendered to the country by that bank during World War II. was even more remarkable. To illustrate my contention I shall quote from the speech made by the former Treasurer and present Leader of the Opposition (Mr. Chifley), who has an unrivalled knowledge of the bank’s operations, during the debate on the original measure. The right honorable gentleman then said -
The Commonwealth Bank has controlled interest rates and has prevented primary producers and other persons- from being robbed. It has provided short-dated treasury-bills at very low rates of interest ranging from I per cent, down to, I think, a half of 1 per cent, at present. Whenever the Government required temporary advances to carry on the administration of the country it did not have to go to the private banks and pay, a.s it did when Sir Earle Page was Treasurer, interest of 54 per cent, on three-month treasury-bills.
Does anybody suggest that private banks did not make reasonable profits during the war? Does anybody suggest that they have not had all their bad debts paid off and advances repaid that, in other circumstances, would not have been paid, perhaps, for twenty years?
At the peak period of borrowing, the Australian Government owed the Commonwealth Bank £343.000,000 on treasury-bills. That sum had been advanced by the Commonwealth Bank at low rates of interest to carry on the war and the business of this country. The private banks would have made millions of pounds profit if they had supplied that money. During the period when I was Treasurer the debt “of £343,000,000 was reduced to £195,000,000.
During and since the war. the Commonwealth Bank assisted the Treasury to float loans. Not one penny was subscribed by a private bank, because the Labour Government would not allow private banks to contribute to a national loan. It is true, of course, that small savings banks subscribed. The war was financed at a low rate of interest. Not one penny was borrowed from the private banks and no interest was paid to them.
In the course of the same debate the right honorable member for Barton (Dr. Evatt) said -
Let me mention a word about what the Commonwealth Bank did in connexion with advances in respect of primary products between September, 1939, and September, 1945, that is, the six years of the second world war. Thu Commonwealth Bank then made advances totalling no less than £812,000,000 under the various financial arrangements covering such primary products as wheat, ment, butter and cheese, eggs, apples and pears, barley, rabbit ski us, peas and products like tea. and coffee and wool and sheepskins. That shows the magnitude of the achievements o£ the Commonwealth Bank during the war years.
From the remarks made by honorable members opposite one would imagine that the operations of the Commonwealth Bank had been a failure. Indeed, some supporters of the Government suggest that that is the reason for the proposal to transfer the control of the Commonwealth Bank to a board. I think I have refuted criticisms of the bank’s operations while it was controlled by a governor, and I do not propose to labour that point. Labour believes in control by a governor, not only because that form of control is more efficient than control by a board, but also because a governor is amenable to control by the government of the elected representatives of the people. The right honorable member for Cowper (Sir Earle Page) said in the course of the remarks that he made yesterday that every argument for and against the system of board control had already been used. That may lie so, but I remind honorable members that the right honorable gentleman was responsible in the first place for transferring control of the Commonwealth Bank to a board. Undoubtedly, his reason for introducing that change was to enable hi3 friends, the private bankers, who are notoriously supporters of the anti-Labour parties, to make substantial profits out of the country’s banking transactions. Undoubtedly, the former Commonwealth Bank Board operated in the interest of bankers and private business. We recall the frustration by that board of the attempts made by the Scullin Government to obtain the small sum of £18,000,000 to relieve the destitution from which so many of our people were suffering during the depression. We all are aware of the remark passed by the chairman of the former bank board, the late Sir Robert Gibson, after a conference with members of the Scullin Labour Government. Sir Robert Gibson said -
I whipped them; I lashed them; I beat them into submission. 1 remind the House that Sir Robert Gibson accomplished that feat at a time when 750,000 people were unemployed and on the verge of starvation. That is something which. Labour has not forgotten, and the action of the Commonwealth Bank Board on that occasion supplies one of the reasons why Labour is determined to oppose the reintroduction of a board to control the Commonwealth Bank. In the course of the debate some honorable members opposite have attempted to acquit the former Commonwealth Bank Board “ of ‘blame for the part that it played in accentuating the depression by suggesting that the banks had nothing to do with the onset of the depression in this country. Of course, that is wholly false, and although I could cite the remarks of scores of authorities to rebut that absurd claim, I content myself with quoting ‘Sir Herbert Holden, one of the most eminent bank authorities in Great Britain, who said -
Who brought about the depression? Every body knows that the depression was caused by ihe bankers the world over in following their time-old policy of calling up overdrafts and advances.
The bankers are the friends of this Government, which, as we all know, does not forget its friends. I conclude my remarks by reminding honorable members that within a few weeks of the present Government attaining office it allowed the price of steel to be raised, and by that action alone poured an additional £2,000,000 into the coffers of Broken Hill Proprietary Company Limited. Another example of the Government’s solicitude for its friends was supplied by the sale of the Hotel .Ainslie in Canberra to big business interests for a fraction of its value. A few days ago we heard the honorable member for Melbourne (Mr. Calwell) expose the racket that is going on in the importation of timber-
-Order! Those matters have nothing to do with the bill.
– Members of the Opposition consider that by introducing this bill the Government is endeavouring to make one more present to its supporters. It proposes to hand over to the financial interests of this country the control of a magnificent structure that has been erected and nurtured by Labour in the interests of the ordinary people of this country.
– The bill proposes to repeal the Banking Act 1947-1948 and to amend .the Commonwealth Bank Act 1945-1948. A lengthy debate took place on the matter during the last sessional period, and every aspect of the measure has already been canvassed. The Government has found it necessary to introduce this measure, which is identical with the measure that we discussed during the last sessional period, because the passage of that measure was delayed for an interminable period in the Senate. The arguments that have been adduced during the debate on this measure are nothing more than a re-hash of the views that were expressed during the debate on the original measure. In fact, the debate has become so wearisome, even to members of the Opposition, that the honorable member for Fremantle (Mr. Beazley), who spoke this afternoon, said that he did not propose to repeat them, and he was obviously experiencing difficulty in thinking of new things to say. However, some members of the Opposition, who have found themselves pushed for something fresh to say, have” professed, like the honorable member for Darebin (Mr. Andrews), to find some great merit in the Rural Credits Department of the Commonwealth Bank. The honorable member for Darebin eulogized that department of the bank, and, as a member of the Australian Country party, I thank him for the unsolicited testimonial that he furnished for the present Minister for Health (Sir Earle Page), who was responsible for introducing the legislation under which it was established. What the honorable member probably did not realize was that one of the express purposes of the present Minister for. Health in introducing that legislation was to relieve co-operative factories from the necessity for going cap in hand to the Commonwealth Treasurer seeking political patronage to enable them to obtain what should be a normal banking service for primary producers, who are prepared to pool their rural produce in order to obtain the benefit of co-operative marketing. It is good to discover that amidst those on the opposite side of the House who described Government members as Jeremiahs crying in the wilderness there is one who, perhaps unintentionally, was willing to pay a compliment to some one on this side of the House. I recall that during the course of the debate one honorable member opposite referred to Jeremiahs on this side of the House. When he said that, my mind went back to days when I had, perhaps, more time than I have at present to study Holy Writ. I remember that Jeremiah, who was a very notable prophet of his day, bought a piece of land at a time when the national finances of his country were in difficulties. If that was good enough for such a highly respectable gentleman to do in such circumstances then surely there is no justification for the wail from the Opposition that we who happen to have bought a piece of land are, by virtue of that fact, to be counted among those dreadful persons known as capitalists who must be exterminated. A study of history, both sacred and secular, would be of help to honorable members opposite even in relation to banking legislation. 1 intend to review briefly some of the reasons advanced by the Labour party for its opposition to this legislation. The first and most consistently reiterated reason, which was specifically stated by the Leader of the Opposition (Mr. Chifley), is that this legislation proposes to amend a Labour Government’s enactment. None of us likes to see his beautiful Venetian vases, as it were, cracked by others. I had the experience, while I was a Minister of the Crown in the State sphere, of seeing things that I had done which I considered valuable being undone by a succeeding Ministry. I had to bow to the will of the majority that had elected the persons who effected the changes, but I exercised my right, as a member of the State Opposition, to say that I considered the changes unwise. I also took the view that if the new party that became the government had specifically stated at the general election that it proposed to do certain things if it were returned to office, then I was obliged, having made my position clear, to abide by the wishes of the electors. But what is the standpoint taken by the Leader of the Opposition? Why is this legislation being opposed by the Opposition here and in another place? The simple reason is that this legislation is upsetting Labour party policy. That policy has been discredited, as the votes of the electors showed last year. Yet the Labour party has attempted consistently to cover the basic ground of its opposition by all kinds of arguments, some of which, perhaps, are perfectly sincere. I heard the honorable member for Burke (Mr. Peters) last night make an almost tearful address in a voice that vibrated with emotion, during which he referred to the economic depression. There is not the slightest doubt that he said what he believed to be perfectly true, but I believe not only that his premises were incorrect, but also that his argument would not have been sound even had those premises been correct.
The Leader of the Opposition has said, in virtually as many words, that the people of Australia made a mistake and the Opposition intends to save them from the result of that mistake. I hope that the people will take the lesson to heart and make a true assessment of the view held ‘by the Leader of the Opposition and his followers about their intelligence. While the Labour party was in office it failed to carry out many of its obligations to this country and the first and most important reason for its opposition to this legislation is that it cannot accept the verdict of the umpire. It reflects no credit upon the Labour party that it is now holding up the business of this country and wasting the time of Ministers who should be getting to handgrips with the country’s problems. It is playing at politics at a time when the international house is literally burning, and when our own may catch fire at any moment. It says that it does not believe in a board to control the Commonwealth Bank. It has already been pointed out that during its period of office it brought into existence 167 boards, and since I have not heard that statement denied it is apparently correct. I assume, therefore, that members of the Labour party are authorities on boards, and are perhaps suffering from twinges of conscience about having established so many. But their arguments are specious. They say that they do not believe in the appointment of a board, and then say, both by implication and explicitly, that they do believe in one-man control. In other words a party that is pledged to uphold democracy brushes aside one of the things essential to democracy, which is that there should not be dictators of any kind in any section of the community.
Honorable members opposite also say that Dr. Coombs is a very good man. The history of the world is strewn with the records of very good men who became drunk with power. I shall not indulge in a criticism of Dr. Coombs because I have no doubt that he is a very able gentleman. But there is something in the exercise of untrammelled, or almost untrammelled, power which sooner or later destroys the person who exercises it. History provides innumerable instances of men having started off doing constructive work and having ended as the curse of humanity. There is no greater instance of that than Napoleon Bonaparte who, in his early days, showed an extreme capacity for creative work and planning, and ended by being for many years the most destructive man that the world had produced up to that time. Therefore, a statement that Dr. Coombs or any one else is a very good man cuts no ice with me.
I believe that the principle of having a board to control the bank is just as sound as the principle of having a board to control a private company. No body of shareholders would be prepared to hand unlimited powers to one man, because it is human nature to deteriorate with the passage of time, not only in a moral but also in a physical and mental sense, and that can lead to a complete decay of moral sense. When men reach the age of about 50 years they very often have a tendency to become neurotic and mentally unstable. When such a condition appears it is not always easy to pin it down and thus justify the removal of a person from office. I know how difficult it was in certain cases to bring into action the machinery to remove a man who suffered from the peculiar maladies that sometimes affect men after they have passed the age of 50 years. Without labouring the arguments that have been thrashed out before, I submit that the re- introduction of the board system is perfectly sound. The retention of a man who is virtually a dictator is fraught with danger both to that’ man and to the institution he controls. The argument that the economic depression was due to the existence of a former bank board has been advanced energetically by honorable members opposite. That is silly. The fact is that Australia, in common with every other nation at that time, faced an unparalleled situation that rocked the whole of the theories of human government and brought into play forces which the economists of the past had not properly assessed and which bankers had never had to face before. It is idle to attempt to pin the responsibility for the depression on any one body of men in this small population of ours. The causes of the depression were far-reaching and international. The plain fact of the matter is that gradually we all learned something more by reason of a new experience. It is just as silly to blame the former bank board for the depression as it would be for me to say that the board was so infallible that it did not make mistakes. Of course it made mistakes. Humanity learns from its mistakes or it would never learn at all. But what the board did, and what governments attempted to do and very largely succeeded in doing, was to achieve an understanding of some of the forces that had caused the depression.
I ask the House what is the real and underlying reason, apart from that already stated by the Leader of the Opposition, that the bill is being opposed so violently by the Labour party both here and elsewhere. The bill is intended to repeal the Banking Act 1947. The Leader of the Opposition has said that the Labour party is quite prepared to accept that provision because it recognizes that the courts decided against the validity of the Labour Government’s proposal to nationalize banking that was embodied in the 1947 legislation. But he added that the Labour party objects to the institution of a bank board. The Labour party is pledged to the socialization of the means of production, distribution, industry and exchange. The major factor in exchange is the banking system. The real reason why members of the Opposition are so violently opposing this proposal for a board, is not so much that they are opposed to the legislation as that they are determined to maintain their policy of socialization of the means of exchange. It has been very ably pointed out by Karl Marx and his high priest, the late lamented Lenin, that if one could obtain complete control of the banking system of a nation, control of the rest of the country would follow. He who controls the purse in its entirety controls all that the purse influences. If banking were placed under the control of one man it would be easier, if there were a change of government, for the socialistic policy of the Labour party to Be put into effect. The Labour party has retained that policy since, 1 think, 1921, as its foremost objective. Honorable members of the Opposition are entitled to believe in it, just as I am entitled to disbelieve in it. I regard as a pathetic belief the theory that by the establishment of a banking monopoly one can change the vicious nature of final, complete, and irrevocable monopoly. There are monopolies under the control of .the State, but they are controlled by the Constitution and the courts. Once a government monopoly of banking is brought under the control of one man who may be weak and liable to temptation, that man is given a chance to place a totalitarian grip on this country from which it may never break free except at the cost of bloodshed and revolution. I am not romancing. We live in a world in which these things are cruel reality. Honorable members of the Opposition, following their party line, are endeavouring to foist upon this country that nationalization of banking which Lenin so tersely stated to be the first and major step towards the complete socialization of a community.
It is possible that men who believe in capitalism may as a body do things which appear to be socialistic. I have done such tilings. I was responsible for the distribution of cree milk in the schools of New South Wales, hut that was because I believed that it would help to make capitalism work better. I would do anything that was in the public interest to make capitalism work better, but I am opposed to doing anything that would hand this country over to socialism. This measure is brought down to destroy the purpose and intention of socialists and I support it because it will make it more difficult for the socialists to gain control of this country if they again come to power.
The Government has a mandate from the people of Australia to repeal the act which the Labour party brought into being. That party, with its majority in another place, is attempting to thwart the will of the people and in so doing is trying to bring this country closer to communistic control. I have never said that the Labour party is a Communist party but I have said that its legislation and its socialist policy would bring Australia to communism or fascism, because the logical and natural end of a socialistic policy is the complete control of every means of production, distribution and exchange. There can be no individual freedom if that result is achieved. Therefore a measure that is intended to take the first major step named by the “ high priest “ of communism as the means to bring about communism, must be opposed. If the Labour party is not prepared to respect the will, the purpose and the intention of the electors it should go to them and let them decide whether they want to see the authorities that are opposed to socialism, communism and fascism returned as the Government or whether they want a government that will lead this country into the socialistic and communistic wilderness.
– I listened with a great deal of interest to the comments of the honorable member for New England (Mr. Drummond), particularly to his reference to the mandate of the Government to repeal sections of the act introduced as a bill by a Labour Government in 1945. I am becoming a little tired of these continual references by honorable members on the Government side of the House to the mandate that they have from the people.
They appear to be completely oblivious to the fact that every member of the Opposition in this House and in the Senate has a mandate from his electors to endeavour to put into operation the policy which he enunciated before the last general election. Honorable members of the Opposition are perfectly entitled to endeavour to persuade honorable members opposite by argument, and by the exercise of every constitutional right, that our attitude is correct and theirs is not. The Opposition is entitled to hope that some waverers, when convinced, may cross the chamber as has happened in the past and make possible the formation of a Government that will provide an alternative to that which at present occupies the treasury bench. Honorable members who refer to the Government’s mandate appear to object to the exercise of the undoubted constitutional rights of the Labour majority in the other place to hold in abeyance and to endeavour to amend the legislation of the Government of the day. How short is their memory ! How deceitful is their attitude! When between 1929 and 1932 a very similar balance of power existed between the Senate and this House, the Senate, which had been dominated by anti-Labour majorities, exercised every power at its command constitutionally to thwart the will of the government of that day so far as currency and monetary problems were concerned. That Senate acted in an evil manner to the detriment of a great mass of the people.
After listening to the dissertation of the honorable member for New England it is wise to look back down the corridors of time and consider the speeches of honorable members who support the present Government and their colleagues of those days who expressed holy horror when the Labour party established the Commonwealth Bank. One should then read their speeches on the 1947 Banking Act. This afternoon the right honorable member for Bradfield (Mr. Hughes) threw out his chest and said that in 1911 he appointed a dictator to take charge of the Commonwealth Bank and invested him with powers without limit, above and beyond the Parliament. Now the honorable member for New England has pointed out the dangers inherent in a dictatorship which he alleges was established in 1945. The one honorable member contradicts the other.
I am proud that whatever my future may be - whether I leave this Parliament as a victim of the old man with the scythe, by the will of the electors, or by retirement - while I have been in this Parliament I have seen members of the parties opposite who opposed Labour policy swallowing almost in their entirety, the principles postulated by the Labour movement. This bill accepts what the Labour Government incorporated in the 1945 Banking Act with regard to a disputation between the board and the Treasurer of the day. This bill names the Treasurer of the day as the final authority to exercise control without consulting his Cabinet. This is a principle that the Government would not have dreamt of agreeing to three or 30 years ago. Because the march of time and the propaganda work of the great Labour movement have changed public opinion so that the people realize that monetary policy is vital to their welfare, the Government has done the things that Labour recommended.
I have an extract from speeches that were made in the House of Commons in 1932 during the budget debate on monetary policy. The speeches are by the Honorable Sir Robert Horne, M.P., the Right Honorable L. S. Amery, M.P., and the Right Honorable “Winston Churchill, M.P. Sir, Robert Horne said -
These questions of currency always seem very remote from the ordinary life of the people who have not had to consider them for more than a hundred years and yet the question of currency-
And he might have added, “ banking “ - sits down at every table that is spread with a meal and every cottage or castle throughout the country. It very intimately concerns us in the House of Commons. Aristotle said long ago that money exists not by nature but by law. It is the law that gives it efficacy. It is the law that says what is legal tender. It is in this House that we make the law. We are the people who decide about our return to the gold standard. We were the people who gave authority for the amount of fiduciary issue that should be put out by the Bank of England. We are the people who only a few weeks ago gave authority for £15,000,000 to bc added to the fiduciary note issue. In fact we are, God help us, the people who have to manage this currency, under the advice and through the means of the Chancellor of the Exchequer using as his instrument the Bank of England.
Who was the Chancellor of the Exchequer? He was a gentleman appointed by the people of the United Kingdom. What was the instrument of the Bank of England? At that time the Bank of England was dominated by private interests, and was the protector of private interests. It certainly was a case of God help the people of the United Kingdom, as it will be a case of God help the people of Australia if private interests take control of the Commonwealth Bank. It was also a case of God help the people of the United Kingdom when the Chancellor of the Exchequer, on the advice of the Bank of England, returned to the gold standard. That caused deflation of the currency, and following deflation England and Australia suffered the pangs of starvation and unemployment.
The Australian Government intends to alter an act that was passed by a Labour government to vest control of the financial policy of Australia in impartial authorities. In place of that control the Government intends to set up a board, five of whose members are to be drawn from outside the Commonwealth Bank or the Commonwealth Public Service. That means t]i at five members are to be persons drawn from private industry. In 1932 when this country was dominated by an antiLabour government, the Commonwealth Bank did not have power to control the rate of exchange. The Bank of New South Wales, which is a private institution, was at that time directed by people interested in all phases of Australian secondary and primary industry. Those directors decided that it was essential, in the interests of the people, that the exchange rate should be altered. It must be remembered that members of the board of the Bank of New South Wales had a prior knowledge of what was going to happen and stood to benefit substantially from any alteration of the exchange rate. They were also in a position to give valuable information to their friends which enabled them also to gamble on the exchange rate. It is now proposed that persons from private walks of life shall be appointed to the Commonwealth Bank
Board, which is to be vested with advisory authority over exchange variations. It is also proposed that these persons, honorable though they may be, shall be put in the position of being able to obtain information when the Governor and Deputy Governor of the Bank intend to advise the Government that the exchange rate should be varied. It is well for honorable members to remember that during exchange manipulations great fortunes are made by the persons who know for certain what alterations are to take place.
Under those circumstances, and because of the facts outlined by many of my colleagues, I am entirely opposed to the clauses of the bill which propose an alteration of the present control. There is no dictator in charge of the Commonwealth Bank; the officer in control is a governor who has associated with him, as an advisory council, highly skilled and knowledgeable men who are familiar with all banking and currency problems. They are totally divorced from private or commercial interests and have had no previous association with such affairs. A highly competent economist is also a member of the Commonwealth Bank Ad visory Council.
It is wonderful to be able to stand in this chamber and survey the great achievements of the .Labour party. It is also enlightening to survey the past actions of governments of the same political colour as the present Government, and to recall their opposition to every move made by the Labour party to secure for the people a greater measure of control over their own financial affairs. The opposition of members of the present Government to the 1945 banking legislation is well remembered, and it is to the great credit of the Labour movement that it was responsible for the great reforms that have been made in the control of monetary policy.
Private financial concerns have been guilty of vicious propaganda against, and dirty victimization of, those who have fought for financial reform. I shall narrate a personal experience which can be easily verified. In 1934 I was a candidate for the Gippsland seat at the Australian general election. Plastered on all the hoardings, fences and trees in the electorate were placards bearing the words, “ Hands off the people’s savings “. They had been put there by the parties with which honorable members on the Government side are now associated. To-day those same parties have their own hands on the people’s savings by virtue of the final power being given to the Treasurer if a dispute occurs between the Government and the board.
I shall relate another story to honorable members. It is a story that I am reluctant to tell, but now that the debate on this bill has almost concluded I shall tell of the victimization that is practised by some of the private banks, and which is almost beyond human understanding. In 1934, I invited the present honorable member for Bendigo (Mr. Clarey) to visit the town in which I resided and deliver a lecture to the local branch of the Labour party on the banking policy of the Labour movement. The local press reporter, who was unable to be present, invited me to write a report of the address. It was a splendid lecture and I reported it for the local press. In the next issue of the newspaper a letter appeared from the local manager of the bank with which I had my account. I replied to that letter, and we conducted a very civil and courteous correspondence, although I admit that there were some pointed shafts in it. At that time I was a soldier settler and the country was in the throes of the depression. I received from my bank manager a notice informing me that I was overdrawn at the bank to the amount of £13 and some odd shillings and that repayment was required within a fortnight. My financial position was certainly shaky, and I make no apologies for that.
– The honorable member has told this tale before.- It may be read in Hansard.
– Nothing of the sort.
Honorable members interjecting,
– I appeal to you, Mr. Deputy Speaker, to ensure to me the opportunity to be heard in silence.
– Order ! The honorable member has the right to be heard iri silence.
– I fully realize that the words that I am uttering are unpalatable to honorable members of the Australian Country Party. I was overdrawn at the bank by the amount of about £13. After I had received the letter from the bank manager I replied saying that I supposed that thi9 was a practical example of the way in which private banks assisted the primary producers. I said that I would liquidate my debt of £13 when it suited me to do so. For three months I cashed my very limited cream cheque at the local store. At the end of that period my overdraft had to be reviewed. I said to the bank manager, “ well, what about that guaranteed overdraft?” He said, “That’s all right”. He was a very honest gentleman, and his bank was a branch of the Commercial Bank of Australia. I still bank with it, because there is no branch of the Commonwealth Bank in that town. He said, “That’s all right, I should like you to resume business “. That was an unfortunate incident. At about that time, he said, his wife had had twins and he had had a lot of worry. However, it is my belief that the manager of the bank had received instructions from his Melbourne head-quarters to hit at anybody who was overdrawn at the bank and who had shown his hand in the campaign to nationalize banking in Australia. When the campaign for the banks against the Labour party was in progress during the last general election I went to my bank to collect a few pounds. The officers did not hand any propaganda to me. I said to the local bank manager, who is a very fine gentleman, “ What about my propaganda ? “ He asked, “ What propaganda? “ I replied, “ You know all about it “. He then said, “ Here it is “, and gave it to me. It should be noted that although I had honoured my obligations for over thirteen years, the private banks tried to intimidate me because of my political views.
Anybody who believes that private enterprise in the banking field ha9 always played the game with its clients is labouring under a profound delusion.
During the last general election campaignthe banks had people out on the footpaths taking signatures of children and of people who were not entitled to vote, and sending those signatures togetherwith petitions of protest to honorablemembers. To say that the hanks will not deal harshly with their clients when it suits them to do so, is fantastic. I adoptthe same attitude as do other honorablemembers on this side of the House inregard to this legislation. We stand for the repeal of the 1947 Banking Act because we know that under the Constitution. - and we are constitutionalists - we cannot nationalize banking. We aredelighted that the Government and itssupporters now favour our 1945 bankinglegislation which they opposed when, weintroduced it. We are disappointed with those provisions of the bill that providefor the appointment of a board, and shall oppose them to the bitter end. I venture to say that we all will livelong enough to see a repetition of history when the parties which have opposed us so bitterly in relation to banking will eventually embrace the policy that we have put forward. They will then adopt a policy more in conformity with the importance of that which,; as Sir Robert Home said in the House of Commons, more vitally affects the people’s very breakfast table than does anything else.
Sitting suspended from 5.J/-5 to 8 p.m.
Declaration of Urgency.
– I declare that the Commonwealth. Bank Bill 1950 [No. 2 1 is an urgent hill.
Question put -
That the bill be considered an urgent bill.
The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)
Majority . . . . 16
Question so resolved in the affirmative.
Allotment of Time.
Motion (by Mr. Fadden) put -
That the time allotted in connexion with the billbe as follows: -
For the second reading, until9.15 p.m., this day.
For the committee stage, until 10.45 p.m., this day.
For the remaining stages, until 11 p.m., this day.
The House divided. (Mr. Deputy Speaker - Mr, C. F. Adermann.) .
Majority . . . . 17
Question so resolved in the affirmative.
.- When the Treasurer (Mr. Fadden) introduced a similar measure during the preceding period of the current session, he said that its subject-matter was so important that it should be discussed in an atmosphere divorced entirely from party politics. He said that finance was the life-blood of a nation. Whilst I applaud the right honorable gentleman for the attitude that he then adopted, I regret that successive speakers on the Government side of the chamber have not approached this debate in a similar manner. Those honorable members have uttered calumnies against Dr. Coombs, the present Governor of the Commonwealth Bank. In their endeavour to justify this measure they claim that Dr. Coombs, because of his progressive ideas, has failed to carry out the duties of his position and that he has not rendered service to the nation. I should have thought that the primary objective of Government supporters in this debate would have been to produce evidence that the Commonwealth Bank in its present form was not functioning in the interests of the nation; that -something had happened since 1945 when the administration of the bank was constituted on its present basis that had not been to the advantage of the community; or that it had been, or could be, proved that the bank had not functioned as it had been intended to function. But none of those things has been proved. No attempt has been made to show, because it cannot be shown, that anything is wrong with the present structure of the bank. For that reason, Opposition members declare positively that this bill does not justify its existence in this Parliament, and that no new facts can be presented to show that there is any justification for it. Other Opposition members have described the progress, development and glorious record of the Commonwealth Bank from 1911 to 1924, and since 1945, under the control of a governor. I emphasize those matters, and assert that no- arguments have been advanced to justify an alteration of the present form of control.
During the debate on this bill to-day, various members on both sides of the chamber have referred appreciatively to the work of the bank. In order to bring the facts up to date, I have abstracted from the latest report of the Commonwealth Bank some details of its record of achievement during the last financial year, but, actually, it is a record of the achievement of the bank since 1945. For the information of honorable members, and even at the risk of indulging in monotonous repetition, I shall read some of those details. The Mortgage Bank Department was established in January, 1946, and from that time to the 30th June last, 13,000 loans of an aggregate value of £14,500,000 were made. During the last financial year, 3,500 loans totalling £4,500,000 were made, compared with the magnificent figure of 3,100 loans, totalling £3,660,000 that were granted during the previous financial year. That department of the bank has a record of steady progress. In the co-operative building society section, advances to the value of £8,910,000 were made during the last financial year, and the total amount of the advances in that section since 1945 aggregates £29,000,000. That is another laudable phase of the Commonwealth Bank’s activities under the present system of administration, and is an indication that it is keeping abreast of the requirements of the nation. The Rural Credits Department had a turnover during the financial year 1949-50 of £252,000,000, compared with one of £217,000,000 in the previous year. Although the mere presentation of figures does not necessarily prove all matters, it proves conclusively in this instance that the people’s bank, under the benevolent and far-sighted administration of the governor, with the assistance of the Advisory Council, has progressed to an enviable degree.
In all sincerity, I submit two questions to Government supporters. First, is there any reason why the present system of control should be changed? Secondly, is there any justification for reversion to control by a board similar to that which not only failed to do its duty during a period of adverse economic conditions in Australia, but also really accentuated those conditions? I should think that members of the Australian Country party would be considerably interested in the progress that has been made by the Rural Credits Department. One half of the profits that are derived from its activities has been placed to the rural credits development fund, from which grants are made by the bank for the promotion of primary production. Since the establishment of that department, no less a sum than £509,000 has been granted to organizations that are conducting researches into primary production. The work of no other bank in Australia can possibly compare in that respect with the great work that is being done by the Commonwealth Bank. During the last .financial year, an amount of £12,950 was made available for researches into pasture improvement, animal health and production, and fodder conservation. The latest report of the Commonwealth Bank, from which I obtained those details of its activities, reveals a record of progress that is unequalled in the economic development of Australia. I emphasize that the principal development has occurred since 1945, under the reign of a governor who is cognizant with every move in the industrial, commercial and pastoral worlds. No argument can be adduced to prove that the present system of control shoul’d be altered.
I turn now to the Industrial Finance Department of the Commonwealth Bank, which is concerned with loans on overdraft, hire purchase, fixed loans or under.writings of public share issues. During the last financial year, that department advanced loans totalling £21,976,000, an increase on the excellent total of the previous financial year. In every phase of its development and of its organization, the people’s bank justifies its existence. I have no doubt that Government supporters will admit that those figures are accurate, and will claim that they are just as proud of the development of the Commonwealth Bank as I am. May [ ask, in response to their unspoken thought, why, if they are so proud of the development of the Commonwealth Bank, particularly during the last five years, they consider it to be necessary to alter the present form of control ?
The early history of the Commonwealth Bank has been recounted on a number of occasions during the debate on this bill, but I propose, because repetition is sometimes timely and advantageous, briefly to repeat the facts. The bank was established by an act of this Parliament in 1911. Its early history was one of vicissitudes, but, thanks to the yeomen work and foresight of the first Governor, Sir Denison Miller, the institution progressed in the face of opposition from the trading banks. I do not intend at this juncture to embark upon a diatribe against the trading banks, because I wish to devote the major part of my speech to the Commonwealth Bank itself. After it was established in 1911, it had to endure opposition not only inside but also outside this Parliament. However, it withstood that opposition, and before long the tiny infant became a lusty youth, and to-day is a fully fledged and strong adult. From 1911 to 1924 the bank was unhampered by the form of control that will be re-introduced if this bill becomes law.. World War I. occurred during that period, and because our memories are sometimes short, I shall refer briefly to some of the performances of the bank under the control of a governor who was similar in character to the present governor. The following passage appears in The Story of the Commonwealth Bank: -
Then, in 1914, came the war, and with it an amending act (24 of 1914), giving the bank power to raise its capital to £10,000,000. and to take over other banks and savings banks. The bank did not, at this period, make use of either of these powers, but the services it rendered to the people of the Commonwealth during the war was immense. Under the regime of the private banks the flotation expenses of a loan in London, which Australian governments had to pay, were £3 per cent.; but the Commonwealth Bank floated over £250,000,000 of loans for a charge of 5s. 7d. per cent., thus saving Australians some £6,000,000 in bank charges - and then the bank made a profit of 2s. per cent. It saved the Australian primary producer from stark ruin by financing pools of wheat, wool, meat, butter, cheese, rabbits, and suger to the total amount of £436,000,000; it found £2,000,000 for the purchase of the Commonwealth fleet of steamers, which again saved the primary producer from ruin through lack of transportation facilities to his market overseas; and it enabled Australia to transfer abroad, with the maximum of efficiency and the minimum of expense, £3,560,941 for the payment of her soldiers.
That, briefly, is the great record of the Commonwealth Bank under the administration of a governor from 1911 to 1924. Then the Parliament passed amending legislation which completely changed the form of control of the institution. The administration, instead of being exercised by a far-seeing and efficient governor, was vested in a board similar to that which the Government desires to appoint under this bill.
– The Government which introduced that legislation endeavoured to kill the Commonwealth Bank.
– That is so. From 1924 to 1945 the Commonwealth Bank had a sorry record that was to the discredit of the board. Under the legislation enacted in 1924, control of the bank was vested in a board of eight members consisting of the Governor of the bank, the Secretary to the Treasury and six other persons representing agriculture, commerce, finance and industry. I do not question the personal integrity of any .of the appointed members, but their interests were deeply involved in the various fields of business activity that they represented on the board with the result that everything that could be done to stultify the Commonwealth Bank from 1924 to 1945 was done most efficiently and assiduously. Names have been mentioned during this debate. I do not want to refer to them merely in order to stigmatize them, but honesty compels me to point out that the economic interests of certain members of the board were at variance with the interests of a great majority of Australians. Some of the names that come readily to my mind are those of Sir Robert Gibson; Sir John Garvan, who represented insurance corporations; Mr. R. S. Drummond, who represented wheatgrowers; Sir Samuel Hordern, who had affiliations with retail business and insurance; Mr. J. Mackenzie Lees, who, paradoxically, represented associated banks; Mr. R. B. W. McComas, who represented the woolbuyers’ combine; and Sir Claude Reading, who represented the tobacco monopoly. There were others of the same ilk. All of them had been successful in business without doubt, but their conception of a sound national economy left out of account the welfare of a great majority of the Australian people.
From 1924 until the onset of the economic depression, the board was a mere cypher for all practical purposes and, when it had the opportunity to prove its worth during the depression, it failed miserably. No honorable member is likely to deny the charge that, when the Commonwealth Bank Board should have been on its mettle to prove its strength, it failed the people lamentably. Although in fairness one cannot blame the Commonwealth . Bank for the economic depression, at least it can he said that, had the Commonwealth Bank Board been fully cognizant of its responsibility to the community, thoroughly efficient, and well versed in world economic developments, it would have done much to protect the nation from the worst effects of the crisis. It failed to do so because it represented interests that were not those of a majority of the people.
Before stating the facts upon which I base that contention, I ask honorable members to recall what happened in 1929, when the first severe effects of the world depression fell on this Commonwealth. In that year, export prices fell by 20 per cent, and unemployment increased by 10 per cent. Those trends remained unchecked, and by 1930 export prices had fallen by 40 per cent, and unemployment had risen by 18.5 per cent. The combined deficits of the governments of Australia increased by 100 per cent, between 1928-29 and 1929-30 to £25,000,000. That was the time when the Commonwealth Bank should have stepped into the breach and expanded credit in order to diminish the effects of the slump. But instead, the people of Australia witnessed the sorry spectacle of the Commonwealth Bank Board, which had been established by an enactment of this Parliament as a body responsible to the Australian Government, flatly refusing to agree to an £18,000,000 fiduciary notes issue that was sought by the elected representatives of the people. I remind members of the Australian Country party that or.e-third of that amount was to have been set aside by the Treasurer of the day, Mr. E. G. Theodore, for the purpose of guaranteeing a price of 5s. a bushel for wheat. The rejection of the Government’s request by the board, headed by Sir Robert Gibson, meant that the farmers, left at the mercy of open market competition, were compelled to accept ls. 7d. a bushel for their wheat. Therefore, I am amazed to-day when primary producers who are benefiting from the effects of legislation enacted by Labour Governments of the last eight years express approval of this bill. Their own knowledge of history should make them realize that a board similar to that for which the bill provides caused the ruin of many primary producers between 1929 and 1939. How they can subscribe to the Government’s proposition passes my comprehension.
In February, 1931, the chairman of the Commonwealth Bank Board wrote to the Treasurer of the day in the following terms: -
With reference to your discussions with the directors of the Bank Board on the subject of the rehabilitation of the financial and industrial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation, and so avoid, if possible, the ultimate disaster which will eventually face the country, I am requested by my Board to convey to you a resolution of the Board as set forth hereunder: - “ Subject to adequate and equitable reductions in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the Governments of Australia in sustaining industry and restoring employment’”.
That is the sort of brigandage in which the proposed new Commonwealth Bank Board could engage if similar circumstances arose in this country again. It is a matter of great credit to the late Mr. Theodore that his reply to that letter placed the facts in their correct perspective. That reply established the supremacy of this Parliament over the Commonwealth Bank. Mr. Theodore wrote to Sir Robert Gibson in these terms: -
The Board now intimates to the Government that it will not provide financial accommodation to the Commonwealth or State Governments beyond a point which will be reached in a week or two. The attitude of the Board throughout the recent negotiations, and as disclosed in the letter now referred to, can only be regarded by the Commonwealth Government as an attempt on the part of the Bank to arrogate to itself a supremacy over the Government in the determination of the financial policy of the Commonwealth, a supremacy which, I am sure, was never contemplated by the framers of the Australian Constitution, and has never been sanctioned by the Australian people.
I shall not digress in order to discuss the activities of the trading banks. The purpose of my speech has been to demonstrate that, from 1911 to 1924, under the control of a governor, the Commonwealth Bank functioned successfully notwithstanding the great obstacles that it had to overcome, and that it was hamstrung when it was placed under the control of a board in 1924 with the result that it served merely as the handmaiden of the private banks when the fury of the eco nomic depression overwhelmed the nation in 1929. The former Commonwealth Bank Board, which was almost identical in composition with that which is proposed in the bill now before the House, failed utterly to discharge its duty to the people. Since 1945 the Commonwealth Bank, under the control of the Governor assisted by an advisory council, has served the nation well. No justification has been or can be produced for any alteration of the present system of control of the Commonwealth Bank. There can be only one reason for the Government’s proposal. As the honorable member for Philip (Mr. Fitzgerald) has said, the bill is the Government’s pay-off to its masters for their help at the last general election. There is more in the measure than meets the eye. When the Labour Government’s legislation of 1945 was under discussion in this House, the present PostmasterGeneral (Mr. Anthony) admitted that the operations of certain banks between 1924 and 1945 had hamstrung primary producers in the electorate that he represented.
-Order! The honorable member’s time has expired.
.- I have no great wish to address myself to the bill for a second time because, like many other honorable members, I believe that it has already been talked out and that the time has arrived for this House to reach a decision on this vexed problem. However, I want to avail myself of the opportunity to reply to some of the criticisms that have been levelled at the bill by members of the Opposition. As has been said on a number of occasions, the bill has two purposes, the first of which is to repeal the Banking Act 1947-1948. Strangely enough, members of the Opposition raise no objection to that purpose. The attitude of the Opposition in respect of that phase of the bill can only be described as an ignominious confession of failure, because it was responsible for the passage of that legislation. Indeed, the Leader of the Opposition (Mr. Chifley), who was the head of the previous Labour Administration and himself introduced the bill, has described it as a “ dead horse “. That is a very apt description of it, but it would be even more apt if we added the adjective “ putrid “. The second purpose of the bill is to amend the Banking Act 1945-1948, and the Opposition agrees with that purpose except that it objects most strongly to the provision to establish a board to control and manage the Commonwealth Bank. The Government proposes, in the interests of and for the everlasting good of the Australian people, to remove the bank from the control of a single individual, and its proposal has incurred the wrath of the Opposition. Of course, the attitude displayed by members of the Opposition towards this proposal is similar to that which has characterized their reception of all the legislation introduced by the present Government. They speak airily of accepting the verdict of the people at the last general election and of assisting the Government to implement the policy for which it has a mandate, but they find some pretext to justify their opposition to every measure that is introduced. I do not believe that the Australian people will be deceived by such confidence tricks, and I have no doubt that the House will resolve the question now before the Chair in the right way.
I shall refer now to certain observations that were made by the honorable member for Lalor (Mr. Pollard) in the course of a speech that he made this afternoon. I agree with the honorable member that it is the duty of His Majesty’s Opposition to oppose, and since the Australian Labour party is in opposition in this chamber, it is entitled to oppose legislation introduced by the Government. However, it is certainly not the duty of the Opposition to calumniate supporters of the Government or the primary producers of this country. The honorable member, who was Minister for Commerce and Agriculture in the last Government, calumniated the primary producers of this country when he mentioned the Nelungaloo wheat case. I shall find it difficult to relate the remarks that I propose to make to any particular phase of the bill under consideration, but I can assure the House that they will have a definite bearing on the financial policy of this country and on the capacity of the gentleman who at present controls the Commonwealth
Bank. If any individual can go to the Commonwealth Bank and obtain sound advice on his financial problems, as members of the Opposition insist, then it is extraordinary that that institution did not tender sound advice to the previous Government in the matter that gave rise to the litigation in the Nelungaloo case. In fact, if that giant of finance, Dr. Coombs, who is the Governor of the Commonwealth Bank, had tendered sound advice to the honorable member for Lalor when he was Minister for Commerce and Agriculture the Nelungaloo case would not have arisen and there would be no need for us to refer to it now. The litigation arose out of a violation of section 51 (xxxi.) of the Constitution, which provides that the Australian Government shall have power to acquire property on just terms. The High Court has interpreted the expression “ just terms “ to mean the value of the property at the time of its acquisition. Throughout federation, the Constitution has been observed by all administrations, both in the letter and in the spirit, with the exception of the Chifley Administration, which deliberately violated the provision that deals with acquisition on just terms. In the first year of office the Chifley Administration acquired the entire wheat crop of Australia, just as the previous Administration had acquired two preceding crops, but, unlike its predecessor, it did not acquire the wheat on just terms. In fact, it indulged in various subterfuges which no reputable government would have considered for a moment. For instance, it sold wheat at concessional prices in order to achieve purely party political purposes.
– What did the Privy Council say about that?
– I shall tell the honorable member in a moment. The wheat-growers of this country, who have developed virgin tracts into arable land, and have produced a substantial proportion of the real wealth of the country, challenged the right of the Government to engage in such nefarious practices. They took the only course of action open to them, and issued a writ out of the High Court claiming damages against the Government. The case was heard by Mr. Justice Williams, who expressed only a qualified approval of the action taken by the Government. In the course of his judgment, he said that since the litigation would undoubtedly be taken further, he would find in favour of the defendant. The primary producers of this country accepted the challenge and appealed to the Full Bench of the High Court. I was a responsible official of a primary producers’ organization in New South Wales at the time, and it was- my duty to keen myself informed of what was happening. I was quite satisfied with the decision to appeal because, although 1 do not know anything of the law, I felt confident that we would obtain justice from the appeal tribunal, which would be composed of five members of the High Court. In fact, I believed that a majority decision in our favour was inevitable and, indeed, inescapable. I considered, therefore, that from my own stand-point, and also from that of the Australian people, we were acting quite rightly in contesting the injustice of the Government’s treatment of the wheat-grower3. However, the Chifley Administration, and the former- Prime Minister and his Minister for Commerce and Agriculture, in particular, were most perturbed at our decision to appeal.
– Order ! I have been waiting for the honorable member to link his remarks with the bill.
– I hope to show shortly that if those who control the Commonwealth Bank at present possess the competence with which they are credited, all that happened in the
In the result, the High Court was equally divided and when that happens the appellant loses. The wheat producers of this country then took the only constitutional step open to them, and they did so, regardless of the fact that it involved them in the expenditure of many thousands of pounds. They applied to the Privy Council for leave to appeal against the decision of the High Court. The Government did not oppose that application, and the Privy Council granted them leave to appeal. A few weeks ago the Privy Council heard the appeal. Following the announcement of the court’s finding, it was blazoned across the world that we had lost the appeal, and members of the Opposition were most jubilant. Our failure was obviously a matter of great satisfaction to them. However, when the transcript arrived we found that the Privy Council had not decided- against us on the merits of our case but had felt constrained, under section 74 of the Constitution, to dismiss the appeal because we had not obtained a certificate from the High Court. The effect of their judgment was that we must now approach the High Court for a certificate that the matter is one that is fit to be taken to the Privy Council. Had the present Governor of the Commonwealth Bank, who is reputedly a giant in the world of finance, correctly advised the former Prime Minister of the position all this litigation would have been obviated and the wheat-growers would have been fairly treated.
It appears to me that members of the Opposition are under the misapprehension that the banking system was conceived in the brilliant minds of members of the Australian Labour party. That is not so, and I take the opportunity to tell those honorable members that the trading banking system of this country and of the British Empire was conceived in the minds of ordinary men and women and. was intended to serve the needs of ordinary men and women. Ever since men sought to earn more than was necessary for their immediate needs, they have aimed to employ their surplus earnings profitably. So it came about that the banking system was devised. At no stage of progress has that system been fixed or arbitrary; it has always been sufficiently flexible to meet the needs of men and women. Whenever the British Empire has been threatened with disaster through economic or military causes, our men and women have risen to the occasion and our banking system has been altered and improved in order to meet our needs. I know that honorable members opposite do not like to hear the truth, but it is conceivable that if they listen long enough to it it will do them an incalculable amount of good. That was the challenge that was sent out from time to time and was accepted. Nobody has changed a trading bank system more often or more sensibly than have the people of this country. In the beginning, there were private trading banks, and later, when there were hazardous forms of investment that could not reasonably be undertaken by institutions of that kind, the Australian people accepted the challenge and established in all the States what came to be called land settlement banks. It is to be presumed that those land settlement banks served a useful purpose. Later, it was considered necessary to establish a central reserve bank, and again the Aus- ‘ tralian people took the initiative and established the Commonwealth Bank. It is to be presumed that the Commonwealth Bank discharged its responsibilities as a central bank free from domination of the Labour party or any other political party. It was designed to serve the Australian people, and I hope that it did so without fear or favour.
Now we have reached another stage in our history, where the banking system requires a new alteration in two ways - the removal of the “ dead horse “ that was brought into existence by the previous Government, and which is supported ‘by honorable members opposite, and the improvement of the Commonwealth Bank, not by drastic alterations to the institution, but by simple modifications, including the inauguration of a bank board that will be truly representa- tive of the Australian people. Yet honorable members opposite take the strongest possible exception to that proposal. When a similar bill was before the House, on a previous occasion, they talked about their fears regarding who would be appointed to the board. I tried valiantly, with great respect to the honorable member for East Sydney (Mr. Ward), to set their fears at rest by telling them who these men were to be. I am prepared again to give that information. They will be honest and experienced men who have an intimate knowledge of industry, production, and the general financial arrangements of our people and of our country. It is a gratuitous insult to the entire Australian, population for the Labour party to suggest that it would be impossible to find in this great country five honest men able to meet the requirements of appointment to the proposed board. I can imagine 500 or 5,000 men or women who could apply themselves to the study of the banking system and serve this country well.
The honorable member for Lalor told us of some harrowing experiences with trading banks during the doleful days of the depression. It is becoming a practice of honorable members opposite to make impassioned references to their own personal experiences. With the indulgence of honorable members, I shall relate briefly my own first experience of that splendid institution, the Bank of New South Wales. Many years ago, I earned my livelihood - and that is perhaps startling information for the honorable member for Hindmarsh (Mr. Clyde Cameron) - shearing up and down- the Mumimbidgee Valley. After I had gained a competence, I bought some draught horses, I borrowed some draught horses, and I found some draught horses, if I may he permitted to use the last term. None of them had ever been in harness before. I yoked them to a wagon and went on the road. I was on the road for only a few weeks when my horses, like myself, were foot-sore and weary, and I had to go to the Bank of New South Wales, dig up the manager, bring him out to my team, lift up the hooves of my eleven draught horses, and let him see the state that they were in. He asked me what that all meant, and I told him that all it meant was that he had to stake me to enough money to shoe and feed my horses and to buy spare chains. He did so in a matter of minutes without reference to a “ Dr. Coombs “ or any similar bureaucrat and without sending a single communication to Sydney or anywhere else. That was my first experience with a trading bank and it was a singularly fortunate one, because it enabled me to continue to work for the next two years and allowed my horses to be adequately fed and shod. The Commonwealth Bank, which has been advertised so much in this House, could not, as a socialist institution, rise to -a supreme occasion such as that. My horses would have been worn to their hocks before an official such as Dr. Coombs is could have made up his mind to advance me enough money for my purpose. The incident that I have related is a classic example of the true functions of the banking system. Yet the Labour party believes that a bank is simply a place where the ill-gotten gains of some of the members of His Majesty’s Opposition can be deposited safely, and that it has no other purpose. That is not so. There are people in this country who, of necessity, have had ‘to sit with their heads in their hands wondering where they could obtain the wherewithal to pay their employees, to buy raw materials so as to keep their businesses in production, or to expand their activities through the purchase of new machinery and equipment. The only places that they could approach in such circumstances were human institutions like the trading banks, where they could expect sympathetic treatment. They could not have obtained such treat.ment from bureaucrats and the doctrinaire socialists. The bureaucrats would have had to shape their assistance to the political destiny of the Labour party before they could have made a move.
– Tell us about the horses.
– I wish that the honorable member for “Watson (Mr. Curtin) had a little horse sense. If he had, the general tone of the House would be improved.
– Order ! Honorable members are getting out of control.
– I listened in silence to the honorable member for Hoddle (Mr. Cremean), when he was addressing the House on this measure. I was interested in that part of his speech in which he criticized the Commonwealth Bank because at one period its Governor had refused to advance 5s. a bushel on Australian wheat when the export parity price of wheat was only ls. 7d. a bushel. The honorable member for Hoddle believes that it would have been perfectly good business for the Commonwealth Bank to advance 5s. against a commodity that was worth only ls. 7d. If that is good business - and who am I to contradict the honorable member for Hoddle? - then let me drawthat honorable member’s attention to the fact that to-day, when the export price of wheat is 20s. 6d. a bushel, the socialistic Commonwealth Bank has not the courage to advance more than 6s. a bushel for wheat. According to what the honorable member for Hoddle considers good business the Commonwealth Bank should, without a request being made at all, be advancing 52s. against wheat.
We hear all sorts of lamentations from honorable members opposite about what happened during the depression.
– What was the honorable member doing during She depression ?
– The honorable “ member for Hindmarsh has just entered the chamber. He should have been here earlier, improving his mind or at least giving himself the opportunity to improve it. I believe that the bill before the House will bring the Commonwealth Bank into line with democratic institutions. It is inconceivable to me that in a country so rich in men of experience an institution of the magnitude of the Commonwealth Bank should be handed, over to the control of one man who can dominate the lives of men, women and children without thought of the ultimate good of the country. That is what is happening to-day. The honorable member for Hoddle made reference to the millions and millions of pounds that the Commonwealth Bank was making available to our primary industries. Lord Bless my soul ! The value of primary production to-day would encourage anyinstitution todo thesame thing.
Mr. DEPUTYSPEAKER.Order ! The honorable gentleman’s timehas expired.
.- This bill is on a par with the action of antiLabour governments in the past.When the original measure to establish the Commonwealth Bank was introduced the anti-Labour forces in this country endeavoured in every way possible to prevent the establishment of the bank. We know thatthose anti-Labour forces, having gained control of theGovernment, appointed a Commonwealth Bank Board in 1924 to prevent the Commonwealth Bank from doing the work that it was established to do. They ensured that instead of the Commonwealth Bankworking in competition with the private banking institutions -there should be no active competition with the private banks, and thatthe Commonwealth Bankwould be used only as an adjunct to bolster the profit-making activities of the private banks. When the Minister forNational Development (Mr. Casey) was Treasurer in 1938 he introduceda bill that had the object of stranglingthe Commonwealth Bank altogether as a people’s bank by providing for the introduction of private capital into it, although that capital was not required. His object was eventually to hand the Commonwealth Bank over in its entirety to private enterprise. Now that an anti-Labour Government is in office again it is making asomewhatsimilar attempt and is endeavouring to foist another bank board upon the country.
– Order ! The time allotted for the debate on the motion for the second reading has expired.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 6. (Ordered to be considered together.)
.- I wish to discuss clause 3 which provides for the repeal of the Banking Act 1947. The previous government took that act to the High Court and the PrivyCouncil, thereby spending hundreds of thousands ofpounds. Therefore I should think that the less honorable members of the Opposition sayabout this clause the better it will befor them. The 1947act was introduced during aperiod when Labour showed an absolute disregard of public opinion. When the last Government’s banking bill was introduced the telegrams despatched to members of this Parliament blocked theCanberra telegraph office. Largely attended meetings were held all over the country. Letter and petitions were received byhonorable members in hundreds and thousands. Thepeople asked that they begiven an opportunity, ata referendum, to say whether they wanted bank nationalization or not. Whatdid thePrime Minister reply? He said, “ No. The people will not be allowed to express their opinion on this subject “. The right honorable gentleman was asked in this House on numerous occasions whether the Government would grant a referendum on the subject and his answer was invariably that it would not. The cost of the Government’s appeal to the High Court and to the Privy Council on this matter would have paid for at least two referendums. A referendum could have been held on this subject in conjunction with another question that was to be put to the people, therefore no additional cost would have been incurred. But the Government went to the High Court and then, against Labour’sprinciples it appealed to the Privy Council. Labour’s policy calls for the abolition of appeals to the Privy Council. Yet when itsuited its purpose to do so, it was so devoid of principle as to make an appeal, itself, to the Privy Council. That was Labour’s great attempt to achieve socialization.
The previous government decided that if it could gain control of the monetary system of this country it would gain very easily everything else that it wanted. I have heard the honorable member for Melbourne (Mr. Calwell) say that if one can gain control of the money of a country one can easily control the whole nation. The previous government’s action was in accordance with the planfor the socialization of industry, production, distribution and exchange which has been the Labour party’s policy since 1921. Now that Government has been defeated and its legislation has been rejected by the High Court and the Privy Council. This bill repeals that legislation. Honorable members of the Opposition say that their act is a dead horse. Before it died it kicked the Labour party to pieces because there is not the slightest doubt that when that party revealed its true attitude the people of Australia realized .thai socialization was much nearer than anyone expected. People had said, “ This cannot happen in this country. This is a free country”. But Labour introduced the Banking Act. In the past Australia has had grave threats from without. This was’ a threat from within. Thank goodness the people of Australia stood firmly against it.
What kind of advice must the Labour Government been given at the time by men who were supposed to be highly accomplished in legal matters ? The High Court and the Privy Council dismissed the Government’s case. The advice that was given by the Government’s legal men proved to bc absolutely wrong and the cost of the legal actions has been charged against the Australian taxpayer. Honorable members of the Opposition say that the act has been thrown out. It is one of the things that they would like to forget. It is one of the things that I am pleased to remind them of and 1 hope that every honorable member who speaks after me will remind them of it and tell that we must hold the freedom we have won so dearly and never allow any government to act against the will of the people by refusing to hold a referendum and by trying to give effect to one of the greatest scourges that has ever been presented to this Parliament.
.- The honorable member for Mallee (Mr. Turnbull) has two phobias. One concerns rabbits and the other concerns referendums. He is completely confused about the purpose for which the founders of the Commonwealth inserted the referendum provisions in the Constitution. Primarily, those referendum provisions were inserted to enable the people of the Commonwealth to determine from time to time whether they wished to alter the Constitution. I know of only one government in the history of federation that used a referendum for any purpose other than that of altering the Constitution. On that occasion the right honorable member, who then represented West Sydney (Mr. Hughes) caused a referendum to be held to determine whether conscription was acceptable during World War I. That right honorable member had two referendums held, not because he was required to do so, but because he thought he would win. However, the people voted in the opposite way to that in which he expected them to vote.
In regard to banking it would appear to the non-legal man that the Commonwealth Parliament has complete and absolute power under the Constitution. But if any citizen wishes to challenge the constitutionality of any enactment of this Parliament the High Court exists in order that he may do so. The framers of the Constitution could have embodied in. it referendum provisions covering every dispute that might arise but, in their wisdom, they decided that when matters came into dispute, citizens of the Commonwealth should have the right of appeal to the High Court and that they could appeal to the Privy Council if they were not satisfied with the decision of the High Court. Even lawyers who were not of the same political complexion as the honorable member for Mallee considered that the power resided in this Parliament to control banking. When the honorable member for Mallee criticized the legal advice that was given to the previous Government he talked arrant nonsense and would be wise to revert to his other phobia of rabbits and confine himself to it.
.- The very astute move by the Leader of the Opposition (Mr. Chifley) to have clauses 1 to 6 of this bill carried without debate was designed to hoodwink the Australian people. Honorable members have heard the Leader of the Opposition say repeatedly that bank nationalization is a dead horse. Honorable members of the Opposition know very well that so far as they are concerned bank nationalization is not a dead horse. The Labour party platform still has the nationalization of bank credit as one of its planks and until such time as the party repudiates that principle it is not a dead horse. I challenge any honorable member of the Opposition to repudiate it. The people of Australia must be aware that if ever those honorable members gain the opportunity to do so they will endeavour to enforce bank nationalization.
The Privy Council did not say that it was not possible within the Constitution for the Australian Parliament to nationalize banking. The Privy Council said that it doubted very much whether it was in a position to hear the appeal without the Australian Government having obtained the prescribed certificate from the High Court that would allow it to appeal. The Privy Council said that it doubted very much that it was not possible to nationalize banking under the Australian . Constitution. The people will not be hoodwinked by the platitudes that have been voiced by honorable members of the Opposition to the effect that bank nationalization is a dead horse. It is far from being a dead horse and those honorable members will endeavour to erect it if they get the opportunity to do so. Honorable members should not be fooled in that regard. Before I shall be convinced that nationalization of banking is a dead, horse a member of the Opposition such as the honorable member for Melbourne (Mr. Calwell), the honorable member for East Sydney (Mr. Ward), the honorable member for Bendigo (Mr. Clarey) or the Leader of the Opposition (Mr. Chifley) himself must stand up and tell the committee that the issue is dead. Let any honorable member opposite stand up in this chamber and say that he repudiates this plank of his party’s platform. I think that, in the light of the attempt of honorable members opposite to gloss over clauses 1 to 6, we should warn the people of Australia that the Opposition is adopting the same attitude towards the private banks as it is adopting towards the Communists, whom it would like to ban but has not the courage to ban. I use the word “ courage “ in place of the word that is commonly used in Australia to describe fortitude. Honorable members opposite do not possess it and are not sufficiently stout-hearted to stand up and express their views on bank nationalization.
Recently when a matter of great importance to the people of Australia was put to the vote honorable members on this side were astounded by the silence of the Opposition. I tell the honorable member for Melbourne that I am prepared, as are other members on this side of the House, to stand up and say what I think about the clauses now before the committee. I cannot say the same about honorable members of the Opposition. Before I shall accept their expressed wish to pass these clauses without debate as evidence of good faith, they will have to repudiate the platform of their party in relation to the nationalization of banting.
– The imagination of some people is amazing and the verbosity of others is astounding. When this bill was before the chamber on the last occasion I made it quite clear that the Opposition did not intend to oppose clauses 1 to 6 inclusive. To-day the time allotted for the discussion of this measure is brief, and I am astonished to find honorable members of the Govern.ment parties wasting the time that has been made available to the Opposition. Moreover, they are discussing irrelevant matters. We do not oppose clauses 1 to 6 inclusive, nor did we oppose them whenthe previous bill was before this chamber. For the information of the honorable member for Canning (Mr. Hamilton) and the honorable member for Mallee (Mr. Turnbull), I point out that during the recond-reading debate on the previous measure I said that the 194$ Banking Act was a dead horse because the High Court and the Privy Council had declared that act to be invalid. I said also that the only way in which the banks of this country could be nationalized was by an alteration of the Constitution. I hope that that is now perfectly clear to honorable members. The reason why the Opposition does not wish to debate that clause is that, according to the High Court and the privy Council, constitutionally the banks cannot be nationalized. If the honorable member think that the Labour party is departing from the policy it has laid down with regard to banking, I assure him that that is not so.
The reason why we did not want to engage in a debate is that it is not physically or constitutionally possible, because of the legal decisions, to carry out that part of the Labour party’s platform. Therefore, before any government at all could nationalize the banks it would have to approach the people and have the Constitution altered. I was under the impression that all this had been made perfectly clear before. The Oppositionwanted to use the limited time available to discuss the clauses in the bill which seemed relevant, and on which it feels very strongly. If honorable members on the Government side wish to indulge in a little propaganda about bank nationalization, they are merely wasting their time because the Labour party has not departed from its views in regard to banking, although it realizes that as a result of the decision of the courts, banks cannot be nationalized without altering the Commonwealth Constitution. Therefore, no matter what government may be in power it would have to go to the people before it could nationalize banking. It would have to take that action even though it might Iia vb a majority in both Houses. Power to nationalize the banks cannot be obtained except by a referendum of the people. Honorable members on the Government side have spoken about vast sums having been expended by Labour governments throughout the years in law suits before the Privy Council. Long before there was a Labour government, the Australian Government took many cases to the Privy Council. One of the charges that has been levelled at Labour is that it wished to abolish appeals to the Privy Council. Yet we are criticized because we take advantage of the system of appeal to the Privy Council.
The only reason why I suggested that the committee should deal with clauses 1 to 6 as a whole was that more time would then be available to discuss clauses 7 and 10. Our procedure will be to agree to clauses 1, 2, 3, 4, 5 and 6, so that we can debate the more important clauses. “We cannot subdivide clause 7 to-night because time does not permit that to be done. When the matter was before the chamber on a previous occasion the Treasurer agreed to deal with it in parts, but I do not ask him to do that to-night. Clauses 7 and 10 relate to the establishment of a Commonwealth Bank Board, which we oppose. I rose to make this explanation, so that the honorable member for Mallee and the honorable member for Canning will not be completely ignorant about what has happened in this chamber.
.- Attention should be directed to the definite statement just made by the Leader of the Opposition (Mr. Chifley). He said that he takes the view that before any further attempt is made to nationalize banking there must be a referendum to alter the Constitution. I hope that he will remember that statement in the future, if he should ever attain office again, because the Privy Council decision did not establish anything of the sort. Nor would it have been proper for the Privy Council so to decide. The Privy Council ruled that the Banking Act 1947 was ultra vires the power of the Parliament in view of the Constitution of the ‘ Commonwealth. Neither the Privy Council nor any one else can imagine what human ingenuity might later contrive. It is possible that through some method the present obstacle to bank nationalization may be overcome. One suggestion is that the Commonwealth Bank might be used to crush the trading banks out of existence by unfair competition. That would be a simple way of defeating the decision of the Privy Council. Therefore, it is very well that the Parliament should have on record and should understand fully the definite and emphatic statement of the Leader of the Opposition. Should he ever attempt in the future to circumvent the decision of the Privy Council without a referendum of the people of Australia, then I hope that the words he uttered to-night will be quoted to him.
.- The Labour party has always adopted ohe attitude towards bank boards. We hu ve never liked them, we do not want them, and we will not have them. This Government may be the government of the country, but we are the ring-masters. The Labour party opposed the establishment of a Commonwealth Bank Board in 1924, and the then Leader of the party, Mr. Charlton, said that if it should ever again control the government of Australia it would abolish the board. .”We did that as soon as we got control of both Houses of the Parliament. That control was obtained on the 1st July, 1944, and the board was abolished by the Banking Act 1945. Therefore, we did not waste much time in bringing down a proper banking act. We made the Commonwealth Bank once more a people’s bank and got rid of the board which had made it a bankers’ bank.
– I rise to a point of order, Mr. Temporary Chairman. Clause 7 deals with tie Commonwealth Bank Board. At present the committee is dealing with clauses 1 to 6. The honorable member for Melbourne (Mr. Calwell) is talking about the Commonwealth Bank Board, but there is no reference to that board prior to clause 7. I do not wish to waste the time of the committee, but I should like to have your ruling on this matter.
The DEPUTY CHAIRMAN (Mr. Ryan). - I am waiting for the honorable member to develop his argument. At present he is a little wide of the mark, but he may be coming round to the clauses under discussion.
– That was the attitude of our predecessors, when, using the name that we still use to-day, they established the Commonwealth Bank in the face of the most bitter and unrelenting opposition by the tory reactionaries in 1910. And the tories of 1950 are still preaching the same reactionary doctrines that their predecessors preached. They still want to grab control of the Commonwealth Bank through the medium of persons who are associated with the private banks.
The DEPUTY CHAIRMAN. - Order! The clauses before the Chair do not refer to the establishment of a board. I ask the honorable member to confine his remarks to the question.
– I am speaking about the establishment of the Commonwealth Bank by the Fisher Government in the face of bitter opposition by the tories of the day. We say that the bank must be maintained in its original form, otherwise it will become merely a creature of the . private banking institutions. The Labour party has always held that the Commonwealth Bank must be responsible for credit policy and that in the final analysis the Parliament through the Treasurer must shoulder that responsibility. Supporters of the present Government now accept that principle although in 1911 and 1945 they declared that the heavens would fall if the Treasurer of the day had the power to order the printing of notes or to carry out functions incidental to the determination of credit policy in respect of not only the volume but also the direction of the use of credit. So far as this measure is concerned, there is not much difference between the views of the Opposition and those of the Government, because members of the present Government parties have come a long way towards accepting Labour’s views. They have been converted almost to the point of complete submission. They now accept practically all that Labour has advocated in respect of banking. However, they still want a board, or some sort of intermediary authority, between the Treasurer of the day and the Governor of the bank. All I want to say is that they just cannot get that. In any event, it does not matter, perhaps, because the proposed board will be purely advisory and will not possess executive powers. The trading banks and those who supported the present Government parties at the last general election were led to believe that they were going to get something really worthwhile under this measure in return for the sacrifices that they made in helping to have the Government returned to office. Those interests and persons have been bitterly disappointed by this bill. It is not the sort of bill that they expected or that they paid for by the support that they gave to candidates of the present Government parties at the last general election.
– I rise to order, Mr. Temporary Chairman. The honorable member for Melbourne is dealing with the measure as a whole. I submit that he is not in order in doing so.
The DEPUTY CHAIRMAN”. - I ask the honorable member for Melbourne to confine his remarks to the question before the Chair. He is getting a little wide of the clauses now under consideration.
– Clause 3 of the measure repeals the Banking Act 1947. The Labour party is not worried about that provision. Let the Government repeal that act, because it is just so much junk on the statute-book as the result of the High Court and the Privy Council declaring it to be ultra vires the Constitution and, therefore, it is useless to let it remain on the statute-book. The Leader of the Opposition (Mr. Chifley), who was the last Prime Minister and will be the next Prime Minister, has said definitely that the Labour party is prepared to allow the Banking Act 1947 to be repealed. We do not advocate that measure any further because the present Government parties have gone so far along the road towards accepting Labour’s viewpoint that there is not rauch value in talking about the nationalization of banking now that the Banking Act 1945, which the court has not held to be unconstitutional, embodies what is to be the policy of this country in the future. Labour’s fight for the Banking Act 1947 was worth something in that it convinced the present Government parties that the Banking Act 1945 was a good one. Had we had the requisite qualities of intuition or divination to foresee the change of outlook that has taken place on the part of the present Government parties we should never have passed the Banking Act 1947. We passed that act because it seemed to us to be the only way in which we could save the act of 1945.
In the course of time, the Commonwealth Bank will be the only bank in Australia. By competition it will force the private banks out of existence, and, thus the private banking system will be nationalized without the necessity to pay compensation to the private -banks. The Government has chosen to have it in that way, and it will get it in that way.
– That is a threat?
– It is a promise. I have stated the facts. Nobody, surely, will object to fair competition. Supporters of the Government are always- talking about the necessity for free enterprise and plenty of healthy competition. Therefore, they will not be entitled to complain when the private banking institutions are confronted with plenty of competition from the Commonwealth Bank in the future. In the Banking Act 1945, Labour specifically provided that the Governor of theCommonwealth Bank should be directed to compete actively with the private banks. As the present Government has allowed that provision to remain it is committed to a policy of expropriation at the expense of the private, banks without the payment of compensation to those institutionsThat is what it will mean. For that fact I am thankful; and I am pleased” to have lived to see the day when theranks of the Phillistines have been convinced of the truth of what we say*
The DEPUTY CHAIRMAN. - Order ! The honorable member’s time has expired.
– I should not have spoken on the clauses now before the Chair had not the Leader of the Opposition (Mr. Chifley) reproved the honorable member for Mallee (Mr. Turnbull) and other Government supporters and said that they were victims of referendum phobia. After voicing that complaint, however, the right honorable gentleman declared that private banks could not be nationalized unless the people, by referendum, consented to an alteration of the Constitution that would enable the National Parliament to do so. I sincerely trust that before the Parliament is very much older the Constitution will be altered to provide for the initiative and referendum in order to place beyond all doubt the wishes of the people with respect to the socialization of the affairs of the community. In this debate members of the Opposition have sung soft and low on clause 3, which proposes to repeal the 3947 act, which provides for nationalization of banking. Naturally, no one wants to have a dead cat, which is beginning to smell, thrown on the lawn under- their noses. Therefore, one can understand the attitude that honorable members opposite and their colleagues in the Senate, who are in a majority in that chamber, have adopted towards this measure. It is clear that they do not want to have too much said about the nationalization of banking.
I recall having seen a letter that the Leader of the Opposition, when he was Prime Minister, wrote to the Chairman of the Association of the Northern and North-western Chambers of Commerce of New South Wales in which he said that there wa3 no intention on the part of his Government to nationalize banking. However, in spite of that promise his Government attempted to nationalize the banks. To-night, the right honorable gentleman said that the Parliament could not nationalize banking until the people at a referendum agreed to alter the Constitution to empower it to do so. One naturally asks whether he believes in his heart that that is so. We know that the judgment of the High Court on this matter does not mean that a government in the future may not, by enacting slightly different legislation, achieve the result that the right honorable gentleman’s Government sought to achieve in the face of the strongest opposition that I have ever known to be aroused on any issue during my long public life. A Labour government, perhaps ten or fifteen years’ hence, may attempt to nationalize banking. In that event can any honorable member say that the High Court, which will then be constituted differently from what it is to-day, may not hold that legislation to be valid? No real guarantee exists that a Labour government in the future may riot attempt to nationalize banking, which, as we know, is the first step towards the socialization of community life and organization as a whole. No guarantee exists that a Labour government in the future will not attempt to socialize other aspects of our community life. The Leader of the Opposition and his followers have given strong indications that such attempts will be made in the future. Yet he now reproves supporters of the Government for bringing forward facts which he would prefer that the people should forget completely, at least for the present. I am sure that the right honorable member for Barton (Dr Evatt), who is a distinguished member of the legal profession, will not deny that the High Court and the Privy Council, when considering matters that do not turn strictly on points of law, base their decisions upon the circumstances that exist at the particular time.
Without labouring this matter further, I protest against the attitude of the Opposition in delaying the passage of this measure in spite of the fact that it seeks to give effect to the promises that the present Government parties specifically made to the people at the last general election. I condemn the Opposition for holding up the bill in such a manner that it and other important legislation must be referred to the people. The Opposition has complained because supporters of the Government have had the temerity in this debate to remind the people of the fact that even if this legislation is passed it will not be a sufficient guarantee that a future government may not nationalize banking. I hope some day to see the initiative and referendum embodied in our Constitution. Only by an appropriate alteration of the Constitution can we ensure that a Labour government in the future, particularly should Labour succeed in completely abolishing the right of appeal to th’e Privy Council, will not be able to pass legislation that may be held b.y the High Court at the time to be valid. I urge the people to remember those facts, particularly in the days when Labour again raises these issues.
– It was not my intention to take part in this debate, but I am in a position in which many people have found themselves. They might not have intended to become involved in a fight, but once they were provoked they “ went in “ like good Australians and did their best. I realize that a Government supporter is about to take a point of order, so I shall “beat him to the gun “. The honorable member for Canning (Mr. Hamilton) makes so many extraordinary statements in this chamber that I suppose that we should ignore them ; but he likened my voice to that of the giant bullfrogs in the cane-fields of Queensland, and I cannot allow that remark to pass without comment. He should be gratified, because those giant frogs play havoc among the vermin in the cane-fields. Perhaps he should beware-
– I was paying the honorable member a compliment.
– I am often amazed tj hear the opinions that are expressed by honorable members opposite about the future policy of the Labour party with respect to banking, because the Leader of the Opposition (Mr. Chifley) has stated our position as honestly as it is possible for any man to declare it. The honorable member for Canning always seems to be in a turmoil about the platform of the Labour party. As a matter of fact, he knows nothing about the Labour party, oi about the workings of the Labour movement, but he once made an application to join the Communist party, and was rejected.
– I rise to order. I do not mind being blamed for many things, but I take exception to the statement by the honorable member for Herbert that I once made an application to join the Communist party, and I ask that it be withdrawn.
The DEPUTY CHAIRMAN (Mr. Ryan). - Order! I ask the honor able
Ki ember for Herbert to withdraw the words to which the honorable member for Canning has objected.
– In deference to the Chair, I withdraw those words. The honorable member for Canning frequently seems to be concerned about the policy of the Labour party with respect to banking. He brandishes the rule book of the Australian Labour party, and invariably opens it at the page on which the reference to socialization and nationalization appears. I am sure that no member of the Labour party has any apology to offer to any one in this chamber or in this country about the attitude of the party to socialization and nationalization. The honorable member for Canning need have no qualms about that.
The honorable member for New England (Mr. Drummond) took strong exception to the statement that was made by the Leader of the Opposition about the possibility of nationalizing banking in the future. The Labour party showed its h::.nd very clearly two years ago when it endeavoured to nationalize the banking system, but it was obvious that the decision of the Privy Council prevented it from giving effect to that objective.
Can we not accept the statement by the Leader of the Opposition that before a Labour government or any other government may nationalize the banking system, an alteration of the Constitution will be necessary? Before, the Constitution can be altered, a referendum must be held and the nationalization proposal must be supported by a -majority of the people in a majority of the States.
– The honorable member knows that that statement is not right.
– I say that it is right, and the majority of, if not all, the Opposition members say that it is right. The Leader of the Opposition made that statement with complete sincerity. I believe that Government supporters have raised that issue this evening because they seek a catchcry for party political propaganda purposes. The Labour party will be returned to office before long, but it will not endeavour to nationalize the banking system without obtaining the approval of the people by way of a referendum.
The private bankers, with a knowledge of the attitude of the High Court and of the Privy Council, were not afraid of the Banking Act 1947. But they were afraid of the banking legislation of 1945, and nothing has been done since this Government took office to dispel their fears. Indeed, the Government has aggravated their anxiety because it has made additional funds available to enable the Commonwealth Bank to expand its general banking business. The private bankers fear that competition. They used the nationalization of banking as a weapon with which to destroy the Labour Government, so that the incoming antiLabour Government would be able to draw the fangs of the act of 1945. I warn Government supporters that the boys in the private banking sphere are not very happy at the moment about that legislation. Eventually, the Treasurer (Mr. Fadden), who is nobody’s fool, whatever we may think of him politically, will be obliged to allay those fears. The only way in which that can be done is to remove the present form of administration of the Commonwealth Bank, and substitute another system that is acceptable to the private banks. I have not the slightest doubt that that is the position.
Government supporters who constantly speak about “ those socialists “ have nationalization on the brain, in the same way as some people whom I can mention have rabbits and referendums on the brain. All this talk about nationalization is so much poppycock. Government supporters are well aware of the interpretation that the Labour party has placed upon the decision of the Privy Council in relation to the Banking Act 1947.
– We” are not aware of it.
– There are none so blind as those who will not see. The .Labour party interprets the decision of 7the Privy Council to mean that no government may nationalize the banking system of this country until a suitable alteration of the Constitution has been .made. Therefore, the approval of the people for the nationalization of the banking system must be obtained.
I repeat that I had not intended to take part in this debate, and I am sorry if my voice has annoyed the honorable member for Canning, but I suppose that I was born with it, just as some people are born with a low mentality. Indeed, I marvel that some people live so long and yet can be so silly.
.- This chamber and the country owe a deep debt of gratitude to the honorable member for Melbourne (Mr. Calwell) for having so effectively debunked the Leader of the Opposition (Mr. Chifley). It will be recalled that the right honorable gentleman said very speciously, “Well, we cannot nationalize the banks until we obtain the approval of the people at a referendum “.
– Hear, hear! I said that, too.
– Yet the honorable member for Melbourne explained very clearly to the committee that there were means of effecting nationalization without holding a referendum. In point of fact, he told ns, as honorable members will see if they refer to the Hansard proofs that will be issued to-morrow, that’ there were ways of getting round the Constitution. I am reminded of the remark that was made by a Minister in the Chifley Government - I think it was Senator
Armstrong - in a speech at Goulburn in 1947, that there were ingenious men in the Labour party who would find ways and means of getting round any decision of the High Court or of the Privy Council.
– I think that the honorable member for East Sydney (Mr. Ward) made that statement.
– I thought that it was Senator Armstrong, hut I may be wrong. The point that I make is that the honorable member for Melbourne has effectively debunked the Leader of the Opposition.
– The honorable member has misunderstood me.
– The Leader of the Opposition said, “We cannot nationalize without a referendum “, and the honorable member for Melbourne said, “ We are going to nationalize, anyway “.
– I did not say that at all. I said that the private banks could disappear as a result of competition that would be provided by the Commonwealth Bank.
– The honorable member said, in effect, “We shall find ways and means of using the Commonwealth Bank to bring about the complete and effective nationalization and totalitarianization of banking”. Clearly, the views of the Leader of the Opposition and those of the honorable member for Melbourne are contradictory. I think that the second view is the true Labour view. If Opposition members believe that a Labour Government cannot nationalize an industry without obtaining the approval of the people at a referendum, why do they not alter their platform so that they will be able to say, “ Our platform provides for nationalization, by referendum, of the banks and insurance companies “ ? But they do not say any such thing. They say, “ We are going to nationalize. We are ingenious men and we shall find a way of doing it”. As I looked at the Leader of the Opposition, as , I thought of the platform of the Labour party, and as I foresaw the kind of thing that the honorable member for Melbourne so clearly showed us later, I was irresistibly reminded of an old wolf pulling the sheepskin very assiduously round his shoulders.
.- Government supporters seem to be greatly disturbed because they learn once again that the Labour party still believes in the nationalization of banking. It is quite true that that objective is a part of our platform, and that we intend to leave it there. The Labour party hopes that one day the majority of the people will recognize that it will be advantageous for the country if the private banking institutions are nationalized. It is interesting to note that Government supporters have seized the opportunity that is afforded ‘by clause 3 to defend the private banking institutions, arguing as they do that the private banks have always acted in a manner beneficial to the community and that the public generally would be greatly disturbed if they thought that something might happen to eliminate those institutions. Government supporters were able, largely by misrepresentation and deception,, to induce many people- during the last election campaign to believe that their savings were in great danger. Every honorable member knew that such a pretence was sheer deception. The savings of the people are deposited principally in savings banks, which are controlled, not by the private banks, but by governments. In other words, their savings are already in the hands of government banking institutions. Yet members of the Liberal party and of the Australian Country party pretended that the policy of the Labour party constituted a real threat to the people’s savings. The Labour party wished to control the financial system because it regarded it as the nerve centre of our economic system. If the social structure is to be organized properly in the interests of the community, the private banks must ‘be nationalized. During the campaign initiated in 1947 to nationalize the private banks, members of the antiLabour parties were always very confident that the Labour party would not succeed in its plan. It is a strange fact that certain people moving about this country were able to anticipate the decision of the High Court in rela tion to the Banking Act weeks before it was actually given.. They were confident enough to bet that they knew what the High Court would do. A sorry state of affairs has been reached in this country when decisions of the High Court, which is regarded as the final arbiter in relation to questions affecting the constitutional powers of the Commonwealth, are known to certain individuals before they are delivered to the public by the court. Members of the Labour party are not unobservant, and we know that our opponents, the private financial institutions, are not dependent exclusively for their protection upon the pressure that they can exert in this Parliament. They have friends entrenched in many other places as well, and the real path of progress is barred by the various obstacles that they have been able to erect.
During the campaign that was waged over the nationalization of banking, members of the. present Government parties declared that one of the advantages of preventing the Labour Government from having its way would lie in the preservation of competition between the banking institutions. Now they take the opposite line and assert that- competition between the Commonwealth Bank and the private banks is a great evil. Do they imagine that the people of Australia will be gravely upset if the Commonwealth Bank goes into active competition with the private banks ? The people will not be concerned in the least. If competition of that sort means that citizens who want to purchase or build homes for themselves will be able to secure advances at lower rates of interest than would otherwise be charged, they will not care whether or not the private banks are embarrassed. Do members of the Australian Country party, who claim to represent the small primary producer although they let him down on every possible occasion, imagine that a farmer who obtains an advance from the Commonwealth Bank at a lower rate of interest than would be charged by a private bank will regard competition between the Commonwealth Bank and the private banks as an evil? Supporters of the Government should advance stronger arguments against active competition between banks if they hope to maintain the position that they now hold. Some of them have even talked about the need to preserve the liberty of the people. I cannot understand how the liberty of the people could be adversely affected if the privileged position of the private banking institutions was destroyed. The only liberty that was preserved for the people by the private banks during the depression was the liberty to starve. The banks exercised their great powers on that occasion to destroy employment with the result that many hundreds of thousands of Australians were forced on to the breadline. The royal commission appointed by an anti-Labour Government in 1935 to inquire into our monetary and banking systems, which included a majority of members hostile to the Labour party’s point of view, was compelled, after hearing evidence, to report that the private banks had been at least partly responsible for the great depression. It stated that the private banks had contracted credit at a time when they should have expanded credit in order to assist the nation to recover from’ the economic disaster.
We all know how harshly the private banks have dealt with many Australians. Surely members of the Australian Country party recall the case of at least one of their fellows, the late Mr. Wilkins, who was a member of the New South Wales Parliament ! Mr. Wilkins denounced private banking institutions in general because the one with which he had been doing business had endeavoured to impound his war pension in order to get its pound of flesh. Mr. Wilkins was a one-legged ex-serviceman. . Those facts are well known.
– I rise to order. What has this to do with the clauses that are under discussion?
The DEPUTY CHAIRMAN (Mr. Ryan). - The honorable member’s remarks refer to the general subject of banking and are in order.
– I knew that members of the Australian Country party would not like to be reminded of those facts. Clauses that will be brought forward for consideration later provide for the reestablishment of the Commonwealth Bank Board, but the board is also mentioned in the definition in clause 5, and, therefore, my comments’ about it are in order. We know that the “ guillotine “ will fall at 10.45 p.m. That is why I am taking this opportunity to make a final reference to the proposal. The bill provides that disputes between the Treasurer and the proposed board may be resolved, if and when they arise, by the Treasurer accepting responsibility for any decision that he enforces against the wishes of the board. But nobody imagines for a moment that the present Treasurer would find himself at loggerheads with the board, because the Government and the members of the board would be actuated by a common desire to carry out the policy determined for them by the private banking institutions. Only a few years ago the Commonwealth Bank Board that was presided over by Sir Robert Gibson stood on one side, heedless of the misery that was caused to the Australian community, and permitted the Government Savings Bank in New South Wales to close its doors.
The DEPUTY CHAIRMAN.- Order ! The honorable member’s time has expired.
.- Had there been any doubt about the wisdom of insisting upon a discussion of clauses 1 to 6, which the Leader of the Opposition (Mr. Chifley) wished to avoid, that doubt would have been completely dissipated by the ranting speech of the honorable member for East Sydney (Mr. Ward). It may be true that the Constitution would have to be amended before banking could be nationalized by an act of this Parliament, but the Labour party is not perturbed in the slightest degree about that obstacle to its plans. The Commonwealth Bank Act 1945 was intended to bring about nationalization by placing all banking operations in Australia completely under control. Only when that legislation was threatened did the present Leader of the Opposition, as the Prime Minister of the day, frame a bill for the special purpose of nationalizing banking. I direct attention to the so-called fair competition of which the honorable member for Melbourne (Mr. Calwell) spoke. Competition of that sort would soon establish an unchallenged monopoly for the Commonwealth Bank.
Let us recall how the former Labour Government sought to encourage what the honorable member for Melbourne calls fair competition. That Government began, under the powers conferred by the legislation of 1945, by notifying municipalities that they must transfer all their assets to the Commonwealth Bank within a limited period of time. That is fair competition as the Labour party understands the meaning of the phrase ! I believe that there is a great deal of sham about the Opposition’s declaration that it has no objection to the repeal of the Banking Act 1947. I admit that I was innocent enough to be deceived when I first heard that declaration, but my eyes were opened later when the Opposition employed the same technique in dealing with another important bill. It said then, in effect. “ We will help you to ban communism, provided that you do not touch the Communists “. It now promises, in - respect’ of this measure, “ We shall agree to the clause that provides for the repeal of the Banking Act 1947 because we have not the slightest intention of allowing the bill to become law “.
Under the Constitution, banking cannot be nationalized by means of a simple act of the Parliament. The Labour party has other methods of accomplishing the same purpose in readiness in the hope that, at some time in the future, it will have the opportunity to put them into effect. Tt is focussing attention on the proposal to re-establish the bank board in the hope that the people will forget about the provision in the bill for the repeal of the Banking Act 1947. The Labour party is mot afraid of boards, because it established 227 boards during the period in which it held office. In harping on the proposal to re-establish the Commonwealth Bank Board, members of the Opposition are trying to persuade the people that the Government intends that five members of the board will be selected by sending somebody to the nearest bridge to drag out five tramps from underneath the arches. The sham has been exposed by the use of the same technique in opposition to the bill that deals with the banning of the Communist party. The Opposition has no intention of allowing this bill to become law. That is why it has pretended to agree to the repeal of the 1947 legislation. I have brought these points to light so that honorable members and the people generally may appreciate something of the hollow mockery of the Labour party’s opposition to the Government’s plans.
.- I have listened to-night to honorable members in “ Hillbilly Corner “ speaking in true hillbilly fashion about the clauses that arp now before the committee.
– It is only a hillbilly bill.
– That is true. I have noticed particularly that those honorable gentlemen are chiefly concerned about the clauses that have no great significance. They have harped upon the provision for the repeal of the Banking Act 1D47. although, if they had any minds to think with, they would know that that legislation is as dead as the dodo.
– If the honorable member were not so dumb as he is, he would have understood what I said.
– I heard the honorable member’s speech, but it was so stupid that there ‘is no necessity for me to reply to it. The fact is that the Banking Act 1947 is dead, and therefore we are prepared to give it a decent burial. What governments of the future may do has nothing to do with the repeal of that act. The hillbillies in the Country party corner are worried about nationalization. I am not. I am a great advocate of the nationalization of banking, and I shall continue my advocacy irrespective of any legislation that may be enacted by this Government.
– ‘Say that on a public platform.
– I say it now, and I shall say it again in public whenever the opportunity to do so is available to me. I support the nationalization of banking, and I have not the slightest doubt that, in the not distant future, a majority of the citizens of Australia will do so, because they are slowly learning their lesson. The process of teaching them is slow and painful. If we examine the history of the sectional interests who have enjoyed power and privilege in this country we realize that they have consistently demanded their pound of flesh and in nearly every instance have obtained it. However, the people are gradually realizing that they have been grossly misled. All this talk of free and open competition is so much eye-wash and is intended to cover the depredations of the financial thieves in this community. Until now, the anti-Labour parties have been able to throw dust in the eyes of the people, but the people are now awakening to the real facts. They realize that those who control the wealth of the community control its destinies. Those who can expand or contract the credit of the nation decide the conditions of life of the majority of the people. As that fact has penetrated the minds of the people, they have realized that the Government of the country should control the finances of the country, and that until that occurs we shall not have a truly democratic system of government.
The present ‘Government has shown quite clearly that it is not prepared to govern the country in the interests of the great masses of the people. The introduction of this measure proves clearly that it is mainly concerned with the welfare of the interests that it represents. Otherwise, it would not be prepared to hand over the destinies of the country to the small band of financiers who hope to exercise the real control over the people of this country. I quite understand the reason why the Government is adopting this attitude. The two political parties which support the Government receive their instructions from the financial interests.
– The honorable member knows all about it!
– Yes. I also know ot the huge sum of money that was expended in the fight against Labour and against me during the last general election campaign. I know the sources of that money, and I know that the great bulk of it was provided by the banks. They even sent their employees to campaign against mc in the working time of the banks.
– Why ? I know that the banks provided the money and that they expended approximately £1,000,000 in the election campaign in order to defeat Labour so that they could continue to exercise control over the finances of the country. Members of the anti-Labour parties are merely the puppets of the financial institutions and do as they are told.
Whilst the bill appears on the face of it to be rather innocuous, it represents the first step in the destruction of the Commonwealth Bank. If the representatives in this Parliament of (the financial interests continue in office for any length of time the Commonwealth Bank will become a thing of the past. If that bank remains in existence it will function, not as the master, but as the servant of the private banking institutions. Honorable members opposite know that to be so because they receive their instructions from those institutions. Indeed, most of the honorable gentlemen opposite would not be members of the Parliament if it were not for the money that was provided by the financial institutions, which disseminated so much lying propaganda during the last election campaign. ,
– They are here only temporarily.
– Yes, only temporarily.
– They are guilty men.
– Yes, they are guilty men. They would like to be fascists and to follow the fascist idea, but they are not their own masters. They must do what those outside the House command them to do.
The DEPUTY CHAIRMAN (Mr. Ryan). - Order! The honorable member must return to discussion of the bill.
– I suggest that clauses 1 to 6, which are now before the committee, refer to every vital provision in the bill, and I thought that I was’ entitled to discuss any important provision of the measure.
In 1924 the anti-Labour Administration of that time decided to kill the Commonwealth Bank by subtle means, and it appointed a board to control the bank. That board was composed almost exclusively of representatives of the financial interests, and it did its utmost to strangle the Commonwealth Bank until 1941, when another anti-Labour Administration, which was concerned at the state of the national finances during the recent war, clipped its wings. The present antiLabour Government is endeavouring-
The DEPUTY CHAIRMAN. - Order I The honorable member’s time has expired.
– We have had to listen to a very dull debate all day and I am glad that discussion has now centered on these important clauses of the bill. I have always considered that throughout this debate sufficient emphasis has not been placed on clause 3. Whilst the Leader of the Opposition (Mr. Chifley) has informed honorable members on a number of occasions that the Banking Act 1947 is a dead horse, I think that the historical value of this clause is considerable. The discussion that has taken place in committee on clauses 1 to 6 has been most beneficial because of the frank admissions that have been made by members of the Opposition. Those admissions concerning the nationalization of banking prove that Labour has not experienced any change of heart. Indeed, members of the Labour party stand indelibly branded before the people of Australia as advocates of the complete nationalization of banking. The people of Australia can ho assured that Labour will not rest content with the nationalization of banking, and they ought to realize that all their activities will be nationalized if Labour has its way. I think that the Banking Act 1947 is so important that it should be reproduced on a scroll, with a representation of the present Leader of the Opposition riding his “ dead horse “, and that that scroll should be hung in all the town halls of Australia as a reminder to the people of what the right honorable gentleman attempted to do.
The honorable member for Melbourne (Mr. Calwell) stated that the 1947 legislation was introduced by Labour only because of the fate that befell the 1945 legislation, and I have always believed that to be true. The factis that Labour did not intend that the people of Australia should learn its true purpose until it was too late for them to do anything about it.
Emphasis has been placed in this debate on the subject of competition.
Neither the Leader of the Opposition nor any of his followers ever intended that there should be any semblance of fairness in the competition between the Commonwealth Bank and the trading banks. If the Commonwealth Bank had been intended to compete fairly with the trading banks the Government parties would not have objected, nor, for that matter, would the people of Australia have objected. The point is that the Government hoped to use the 1945 legislation so as to make it impossible for the trading banks to compete with the Commonwealth Bank. When the decision of the High Court in the litigation which challenged the validity of that legislation was announced, the former Prime Minister was seized with pique, and he made the now famous 42-word announcement that he intended to nationalize the trading banks. Incidentally, I regret very much that in the course of his remarks to-night the honorable member for East Sydney (Mr. Ward) should have aspersed the judiciary. Of course, I know that that is not the first occasion on which he has cast aspersions upon the judiciary, and I think that his conduct indicates the degree to which some members of the Labour party are prepared to go in their efforts to socialize the country. He referred to the safety of the people’s money in the savings banks, but I think that it must be apparent to every one that if Labour had its way, and banking was socialized, not only would the savings of the people be in danger but their homes and property would also be endangered. Therefore, I think that (he discussion that has taken place in committee has served a useful purpose, and that the Parliament and the people of Australia will derive more benefit from it than from the lengthy debate that took place on the bill in the House.
The DEPUTY CHAIRMAN (Mr. Ryan).- Order! The time allotted for the committee stage of the bill has expired.
Clauses 1 to 6 agreed to.
Question put -
That the remainder of the bill be agreed to and that the bill be reported without amendment.
The committee divided. (The Deputy Chairman - Mr. R. S. Ryan.)
Majority . . . . 18
Question so resolved in the affirmative.
Bill reported without amendment; report adopted.
Bill read a third time.
Motion (by Mr. Menzies)proposed-
That the House do now adjourn.
– Order ! I have been attempting to ascertain what the honorable member for Wide Bay (Mr. Bernard Corser) said. If he is referring to happenings in another place, he is out of order.
– In view of the determination of the Labour party executive, as expressed somewhere else, and its impertinent action-
– I rise to order ! Is not the honorable member for Wide Bay disobeying the ruling of the Chair? He is continuing to read from a document-
Honorable members interjecting,
– Order ! I cannot hear what the honorable member for Melbourne (Mr. Calwell) is saying.
– I contend that the honorable member for Wide Bay is guilty of disregarding your ruling, Mr. Deputy Speaker, in that he is continuing to read from the document with which he introduced the matter that relates to an event which, he said, had happened somewhere else. He is now talking about the federal executive of the Labour party. He has said that he desired to raise a matter of privilege. When a matter of privilege is raised the honorable member raising it must conclude his remarks with a motion.
-Order ! I ask the . honorable member forWide Bay whether he is referring to happenings in another place.
Honorable members interjecting,
– Order I Because of all this noise I am unable to hear the honorable member forWide Bay.
– It is my desire to answer yourquestion, Mr. Deputy Speaker. I desire, to urge that the Government obtain constitutional advice about the necessity of providing early procedure-
– Order! The honorable member is out of order.
Question resolved in the affirmative.
The following papers were pre sented : -
Commonwealth Public Service Act - Appointments - Department -
Attorney-General - G. E. S. Park.
Parliamentary Library - H. E. Field.
Tariff Board Act- Tariff Board - Annual
Report for year 1949-50, together with Summary of Recommendations.
House adjourned at 10.56 p.m.
The following answers to questions were circulated: -
y asked the Minister acting for the Minister for External Territories, upon notice -
– The answers to the honorable -member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 11 October 1950, viewed 22 October 2017, <http://historichansard.net/hofreps/1950/19501011_reps_19_209/>.