4th Parliament · 1st Session
The President took the chair at 2.39 p.m., and read prayers.
asked theMinister representing the Minister of Home Affairs, upon notice -
– The answers to the honorable senator’s questions are -
asked the Minister representing the Postmaster-General, upon notice -
If the members of the Senate will’ be provided with the Report of the Postal Commission before the delivery of the Budget speech?
– It was announced in another place yesterday that the Report was in the hands of the Government Printer, and provided he could get the work done, it would be available for members by the 28th inst.
asked the Vice-Presi dent of the Executive Council, upon notice -
Is it the intention of the Government to submit proposals to Parliament for the levying of export duties on any rural or agricultural products?
– My colleague the Minister of Trade and Customs advises me that no decision has yet been arrived at on the subject referred to.
Senator MILLEN (for Senator St.
Ledger) asked the Minister representing the Minister of Trade and Customs, upon notice -
Prior to Federation what Australian Colonies, if any, were bound by treaty to admit foreign vessels to their coasting trade?
Were any treaties in existence then between the Imperial Government and the Governments of other countries under which foreign and British ships were affected as to rights of trading and management and control of their respective ships whilst trading to the Colonies or on the Australian coast?
If so, what was the general effect of such treaties as to the rights of such ships trading -
From oversea to any Australian port? and
Engaging in the Australian coast trade?
asked the Minister of Defence, upon notice -
– The answers to the honorable senator’s questions are -
– I beg to lay upon the table, by command -
Estimates of Revenue and Expenditure for the year ending 30th June, 191 1.
The Budget, 1910-11. - Papers prepared by the Hon. Andrew Fisher for the information of honorable members, on the occasion of opening the Budget of 1910-11,
In accordance with previous practice,I move -
That the papers be printed.
At various times the wish has been expressed that an opportunity should be afforded to discuss the Budget in the Senate. Complaints have been made that honorable senators were compelled to wait until the Estimates came before us in the ordinary way, ‘ and that thereby no proper means were afforded to refer either to the policy of the Government, as outlined in the Budget speech, or to the administration of the Departments. The production of the papers which I have laid upon the table, and the motion which I now submit, afford to honorable senators an opportunity to discuss the financial policy of the Government; and in the past sufficient latitude has been granted to satisfy the most earnest desires of the critics of the Ministry. It is a wise practice to afford the representatives of the people an opportunity of knowing what the intentions of the Government are with respect to revenue and taxation. Up to the present different estimates have been made of the revenue and expenditure of the Commonwealth. It has been stated that the Commonwealth is undertaking too many obligations, and that without a curtailment of expenditure in some directions and increased taxation in others, or a limitation of Commonwealth liberality towards the Slates, it will be impossible to carry out the services indicated in the Government policy. I am very happy to say, however, that I listened to the Treasurer while he was delivering his Budget speech to-day, and that his deliverance was full of hope for the future and of satisfaction for the past and present so far as the Government are concerned. I believe that, with judicious administration, the very best interests of the Commonwealth will be served through the expenditure of the revenue that is to be raised. I desire, as briefly as I can, to run through some of the items, and I hope that when the Budget papers are circulated my honorable friends will go into the subject thoroughly and be able to test for themselves the accuracy of our estimates of revenue and expenditure. The estimate of revenue from Customs and Excise for the financial year 1910-11 is, in round figures, £11,700,000. The estimate of revenue from posts, telegraphs, and telephones is £3,856,000. The estimate of revenue from the land tax is, of course, a question on which there may be some discussion, but I would ask honorable senators to restrain themselves until the measure comes before us. There will then be a full opportunity to discuss the proposed method of raising the tax and the amount to be raised. The Treasurer has estimated that from this source of taxation we shall obtain, during this year, £1,000,000. That is a very moderate sum. It has been variously estimated by those who are opposing the imposition of a progressive land tax, that the revenue from it will be from £2,000,000 to £3,000,000 per annum. The Treasurer has taken into consideration all the data at his disposal.
– The honorable senator would set the matter at rest by giving the basis of the Government estimate.
– I will give the honorable senator my own basis of estimate if that will satisfy him, but I have not asked the Treasurer for his basis. Some time ago, in conjunction with the secretary to Ministers in the Senate, I took the trouble to work out the actual number of estates in Victoria valued at over £5,000, in both cities and country districts. Taking the valuations for district council or shire assessments, and adding a fair percentage for undervaluations - because Mr. Watt, the State Treasurer, and other financial authorities in Victoria, came to the conclusion long ago that the undervaluations in this State amount to more than 50 per cent. - we estimated that, on the basis of taxation proposed by the Government, there would be raised in the State of Victoria for the first year or two a little over £200,000. We also found that Victoria represented about one-fifth of the value of the whole of the land of Australia in this respect. Taking a due proportion of the estates valued at over £5,000 in the other States as well as in Victoria, it was estimated that the tax would realize £1,028, 000. Of course, if that basis of estimate is not good enough for the Leader of the Opposition, I cannot help it. “ I may add that in Victoria there is a very large number of estates over £5,000 in value.But we ascertained in this investigation that there were only three or four estates over £150,000 in value; whilst in New South Wales there are over 103 estates valued at more than £150,000, and that some of them extend to over £1,000,000 in value. Consequently, I think that the basis adopted for this estimate of mine is a very fair one. If the Treasurer is agreeably disappointed in respect of his moderation, and if ultimately £1,500,000 or £2,000,000 should be raised from this tax, I do not think that the majority of the members of the Senate or of another place will complain. It will not be supposed that the Treasurer will not be able to expend an extra £500,000, or even an extra £1,000,000, to the advantage of the people of the whole of Australia, Every one must admit that it is nearly time that the people holding these very large estates should be asked to meet the cost of the assurance of the property of. Australia, which is established for their protection. The next item of anticipated revenue is £ 150,000, expected to be derived from the coinage of our own silver during the financial year. Honorable senators will remember that when the Commonwealth took over the Departments of the Public Service, now under our control, it assumed obligations in regard to pension rights of officers of the transferred services, but all liabilities in this connexion which had accrued before the services were taken over by the Commonwealth had, of course, to be borne by the States, and during the current financial year the States will be required to make payments in respect of these pension rights of transferred officers, to the extent of £32,000. Then there is a transfer from pension funds of , £28,000. We expect to derive a revenue of £17,000 from Patents, £7,000 from Defence, £3,000 from Quarantine, and £4,500 from Trade Marks, Designs, and so forth. Revenue is expected also from a number of small items which may be classed as “miscellaneous, amounting in all to , £44,000. These figures give a total estimated revenue for the financial year 1910-11, of £16,842,000. It may be considered that this figure represents a very considerable increase upon the actual revenue derived last year, but if we deduct the sum of £1,000,000, which it is estimated will be derived from the proposed land taxation, it will be seen that the figure quoted represents an increase of only £320,000 in the revenue from all other sources. This will be regarded as a very moderate increase upon the revenue of the last financial year. I come now to the Estimates of probable expenditure, in order that honorable senators may have an opportunity of instituting comparisons between revenue and expenditure, and of satisfying themselves as to the reasonableness of the Treasurer’s estimates. Under the legislation we have just passed, dealing with the surplus revenue of the Commonwealth, and the payments to be made to the States, there will, during the current financial year, be paid to the States a sum of £5,267,000. This is one of the largest items of anticipated expenditure for the year. Last year there was borrowed from the Trust Fund, in order to supplement the revenue, a certain amount of money which must be included in the estimated expenditure for the current year, since the sum in question, amounting to £452,000, must be repaid to the Trust Fund.
– Is not that sum to be deducted from the payments to the States later on?
– That is so, but everything has to be accounted for, and if the amount is credited in one place, it is debited in another.
– Is the amount of £5,267,000, referred to, inclusive or exclusive of the £452,000 mentioned?
– The amount of £452, 000 has to be deducted from the larger amount mentioned. Then it is estimated that we shall require an expenditure in connexion with invalid and old-age pensions amounting to £2,070,000. Some honorable senators may think the increase in this vote too great, whilst others may consider that the vote will not be sufficient. For the benefit of those who take the view that the expenditure proposed will be too great, 1 would like to say that from the 15th December next, the Government hope to be able to pay the pension of 10s. a week to all women of the age of sixty years and over, who are otherwise qualified to receive pensions. We hope, also, to be able to do something in the direction of providing for invalid pensions. These proposals will account for the increase in the amount required during the financial year for the payment of invalid and oldage pensions. For the benefit of those who may consider that the proposed expenditure on this account is not sufficient, I may be allowed to point out that the payments in respect of women between the ages of sixty and sixty-five years, and invalids, are estimated for only seven months of the financial year, and in estimating the expenditure on this account for the next financial year provision will have to be made for the payment of these pensions over the whole twelve months. I have thought it well to make these explanations in order to satisfy both parties. Sugar bounties will require, it is estimated, an expenditure of £573,000. For general bounties £15,000 will be required, and it is estimated that the iron bonus will involve an’ expenditure of £42,000. The vote required for the Governor-General, which includes the cost of the upkeep of Government House, not only in Victoria, but in other States, is estimated at £24,000. The anticipated expenditure upon Parliament amounts to £181,000; on the External Affairs Department, £111,000, including nearly £14,000 for the upkeep of the High Commissioner’s Office. It is estimated that the expenditure which will be incurred in connexion with the Attorney-General’s Department will amount to £35,000 ; and for the Home Affairs Department £191,000. This estimate includes an exceptional expenditure for this year for the census, which is estimated at £100,000. If the work costs more we shall have to provide the money, and if itis found that it costs less there will be a saving to the community. It is estimated that the Treasury Department will, including a vote of £35,000 of additional expenditure for the administration of a Land Tax Department, involve an expenditure of £130,000. The Department of Trade and Customs is expected to require a vote of £392,000. I shall, perhaps, shock my peace-loving friends in the Senate by referring to the expenditure estimated in connexion with Defence, and I hope that the Minister of Defence will be able to say a word or two on the subject to satisfy honorable senators generally. The estimated expenditure in connexion with this Department is put down at £1,500,000. The Postmaster-General’s Department is expected to require a vote of £3,535,000, and for new works and buildings it is estimated that we shall require £2,324,000. These are the principal items of estimated expenditure for the current financial year. Expenditure will be incurred in connexion with a number of smaller services, which I need not particularly indicate at this stage. The figures will be found in the Budget papers, and, with the figures I have already given, they bring the total estimated expenditure of the Commonwealth for the current financial year up to £16,842,000. I have here particulars of the new works and buildings, but perhaps it will be sufficient if I mention only one or two of the more important works requiring considerable expenditure. We have heard a great deal about Dreadnoughts, river class torpedo boat destroyers, and so on, and in the new works and buildings vote there will be found an item of £850,000 towards the cost of the naval unit. For military stores £’200,000 is provided. Here is another item which I think will gladden the hearts of some of our Socialistic friends on the other side. A11 expenditure is proposed in connexion with uniforms in view of the compulsory training proposed in the Defence Bill. We heard something the other night about the necessity for uniforms for junior cadets, and it may interest honorable senators to learn that we have made provision in the new Works and Buildings Estimates for £50,000 for the purchase of cloth for the manufacture of uniforms. Whether the whole of this amount is to be spent in the purchase of cloth or some in the manufacture of uniforms will, no doubt, be explained by the Minister of Defence later on.
– Is there any -special provision for the Federal Capital on the Estimates of Expenditure.
– Yes, a sum of £45,000 is provided for the Federal Capital, and I may say also that a sum of £5,000 is set down for the Port Augusta to Kalgoorlie railway, which means, of course, an ultimate expenditure of probably £4,000,000. Honorable senators will have to consider in a very short time the advisableness of carrying out our obligations to the western State. The intention in placing £5,000 on the Estimates for new works and buildings for the current year is to recognise our obligations in that regard, and the money will probably be used for the purpose of getting together a staff able to advise the Government in the construction of the railway, I hope that honorable senators will give fair consideration to the figures I have stated. I shall now endeavour to give them some idea of the revenue derived last year and the increase shown upon the revenue for the previous year. The total revenue actually received for the financial year 1909-10 was £15,538,000,’ an increase on that of the previous year of £1,188,000. To that amount must be added the £452,000 which was taken from the Trust Funds, and which will bring the total up to ,£15,590,000. The total expenditure for last year was £7,498,000, an increase on that of the previous year of £1,077,000.
– That is, excluding the payments to the States?
– Yes. For the year 1908-9 the total receipts from Customs and Excise were £11,593,000, an increase on the amount collected during the previous year of £749,000. The postal revenue aggregated £3,730,000 - an amount £320,000 in excess of that for the year 1908-9. I do not think that there is any other matter of sufficient importance to warrant me in occupying the time of the Senate.
– Does the estimated expenditure exactly equal the estimated revenue ?
-Yes. Of course, as the result of administration during the whole year, a saving may be effected; whilst, on the other hand, there may be an expenditure in excess of what is anticipated. Our estimate of the amount which will be received from taxation may be exceeded, or it may not be realized. Some persons anticipate that we shall get a great deal more revenue from land taxation than we have estimated. I hope that we shall. The more we get, the more will it be an indication of the wealth and prosperity of Australia. If we do get an increased revenue from that source, I am sure that we shall be able to make good use of it in the interests of the general community. Seeing that during last year there was an increase in the amount collected from Customs and Excise duties of nearly £750,000, is there any reason why there should not be an increase in the receipts from that source during the current financial year?
– What increase does the Treasurer expect to receive from Customs and Excise?
– I have not the exact figures before me in that connexion.
– The figures which the Vice-President of the Executive Council quoted just now disclose a very nominal, increase.
– Exclusive of the amount which will be derived fromland taxation, the Treasurer anticipates that he will receive an increased revenue of £320,000 from all other sources. With respect to Customs and Excise receipts, it is generally admitted that we have experienced an era of great prosperity in Australia, and it is on account of the increased purchasing power of the people that those receipts increased so much during the last financial year. But there is another matter which must be taken into consideration. For nearly half the last financial year the administration of the Department of Trade and Customs was in the hands of a member of a Labour Government, with the result that persons who in the past have evaded their obligations were made to pay their proper contributions to the Customs. That accounts for some of the increased revenue from this source.
– The figures do not disclose any increase.
– During the last financial year, there was an increase in the Customs and Excise revenue of £748,000, and a portion of that was due to the more rigid administration enforced by the Minister of Trade and Customs, who compelled those who had previously evaded taxation to toe the scratch. We hope that in future every delinquent will be made to meet his obligations promptly, irrespective of whether or not he does so cheerfully. Consequently, I trust that at the end of the current financial year we shall find as great an increase in the Customs and Excise revenue - apart from the protective incidence of the Tariff- as was experienced last year. We hope that our population will increase, and that the prosperity of the country will go forward by leaps and bounds when the legislation of the Labour party begins to make itself felt. I hope that that prosperity will result in a larger revenue finding its way into the Federal Treasury. I trust that honorable senators will avail themselves of this opportunity of criticising fairly the Budget submitted by the Government, so that when the Appropriation Bill comes before us, towards the close of the session, it may be passed without much discussion.
Debate (on motion by Senator Millen) adjourned.
– In moving -
That this Bill be now read a second time,
I wish to say that I have no intention of making another second- reading speech upon it. I made such a speech when the Bill was originally presented to the Senate, but, unfortunately, it met with such opposition that it had to be withdrawn, and a new measure has now to be submitted. I do not blame any member of the Opposition or any other honorable senator for having taken a course of action which satisfied his own conscience in respect of that Bill. Honorable senators have a perfect right to do so.
– Then why blame them?
– I am not blaming them. I am commending them for their zeal in seizing every point that they can for the purpose of defeating measures in which they do not believe.
– It is only an animal which “ seizes.”
– I am quite satisfied that everything has been done decently and in order. But I ask honorable senators who have already made second-reading speeches upon this Bill, although they have a perfect right to make similar speeches again, to refrain from doing so. If they do exercise their undoubted right in this matter, I hope that it will be for the purpose of advancing new arguments, so that no objection can be urged to their course of action. It has been stated that it will cost the Commonwealth £10,200,000 to take over the Northern Territory. It will cost nothing of the kind. Included in that £10,200,000 is a public debt of £2,700,000, which amount has been expended by South Australia upon valuable works, all of which will be transferred to the Commonwealth under this Bill. If we get value for our money, that amount cannot be calculated against the Northern Territory. Then there is the Port Augusta railway, which is in as good a condition as is any railway in Australia.
– There is very little traffic upon it.
– I may tell the honorable senator that, at the present time, it is more than paying working expenses.
– The Port Augusta to Oodnadatta line.
– That is the line upon which trains are run once a fortnight.
– A train carrying a parliamentary party ran to Oodnadatta the other day, and the Premier” of Victoria, who was aboard it,’ stated in my hearing that he had never travelled on a better railway. That line cost £2,200,000. The work is there, and upon accepting the Territory the Commonwealth will get it. Then the transcontinental railway will cost £4,500,000. How can that sum be debited to .the Northern Territory? That money has not yet been expended, and when it has been the Commonwealth will have an asset equal to it. The only item which can fairly be debited to the Northern Territory is the £800,000 accrued deficit, and if we get the Territory for that sum we shall be getting a bargain. Even that £800,000 does not represent a legitimate deficit, because there is scarcely a work which has been undertaken by. any Government which has proved remunerative from the beginning. I could point to some works which did not prove remunerative until after the lapse of forty years.
-Colonel Sir Albert Gould. - How many years will elapse before the Northern Territory will pay its way?
– Not very many. I am about to make a statement which I can verify. It took forty years before the line began to pay working expenses; but in less than ten years it had wiped out the deficit, and is now returning a handsome profit. The other line is doing exactly the same thing.
– But then we shall have to wait forty year.-,.
– No. Honorable senators must realize that both the Pine Creek railway and the Port Augusta railway have passed the stage of paying only their expenses, and are beginning to contribute a little towards meeting the interest. I have not the slightest doubt that the accrued deficit will be wiped out by means of their services to the people of Australia. By interjections, I have been led to say more than I intended. I only desired to supplement with a few figures what I had stated on a previous occasion.
– Is the £800,000 in addition to the £10,000,000 ?
– No j that is included in the £10,200,000.
Debate (on motion by Senator Millen) adjourned.
In Committee (Consideration resumed from 6th September, vide page 2576) :
Amendment (by Senator Walker) again proposed -
That the following new clause be inserted : - “ 4A. The Governor-General shall authorize the appointment of a Board of Commissioners who shall be known as ‘ The Commissioners for the Commonwealth Note Circulation,’ to consist of the Treasurer (as Chairman) and two Commissioners not being members of the Commonwealth Parliament.”
– Last night I mentioned that I understood that the Prime Minister had ex-! pressed himself in favour of the appointment of a Board of Commissioners. I had the pleasure of seeing him to-day, and he told me that some mistake had arisen.What he did say was that he was in favour of Commissioners being appointed when the consolidation of the State debts was undertaken. I read the other statement in a newspaper, and naturally imagined that it was correct. I told Mr. Fisher that I would express my regret to the Senate that I had unintentionally made a statement which was not in accord with the facts. I desire to state why I favour the appointment of Commissioners in conjunction with the Treasurer. The note circulation is a matter of such great importance that a thorough check should be placed on all the transactions. We know that the Treasurer will shortly visit South Africa, and that soon after his return to Australia he will have to leave to attend the Coronation of George V. in London. The importance of this departure in our note system is so great that it is very desirable, I think, that the control of the note issue should be in the hands of Commissioners. The expense need not be very great. It will be for the Government, if they adopt my proposal, to bring in a measure defining the duties of the Commissioners and fixing their emoluments. I understand the Government intend, during the next two or three years, to introduce a Bill for the establishment of a Commonwealth Bank. No doubt, when the bank is established, the duties of the Commissioners might be handed over to the bank authorities. I hold in my hand a calculation which will show how very important it is to have proper supervision over the necessary outlay, and the great responsibility of investing the moneys, and afterwards, if need be, realizing on the investments. Suppose that the Government start with an issue of £4,000,000. They will probably recognise the fact that in certain seasons of the year the circulation will be much more active than at other times. Therefore, I take it that they ought to provide for the probability of the circulation rising to £5,000,000. It is intended, I understand, to issue 10s. notes. The trouble and expense in regard to such notes will be just as great as in regard to £10 notes. If the Government go in for an issue of ,£5,000,000, the bankers will tell them that the smaller the note is, as a rule, the larger is the circulation. But the issue of a 10s. note will be a new departure. I do not think that the proportionate amount of these notes in circulation will for some years be as large as they ultimately will be. I have made some calculations with the assistance of a gentleman who has practical knowledge. We believe that if the Government provide for the possible circulation of £5,000,000 worth of notes the following proportions would be fair, namely, 2,000,000 10s. notes; 2,500,000 £1 notes ; 200,000 £5 notes ; and 50,000 £10 notes. These forms of notes would number 4,750,000. In Australia the banks have to pay 9s. per hundred forms, but that includes a Customs duty of 27
– I point out to the honorable senator that clause 9 deals with the amount of coin in reserve.
– I ask permission to refer to the matter now in order to save time afterwards. Supposing the coin reserve to be 33$ per cent., the figures would work out approximately as follows : - The coin in hand would require to be £1,333,000 against a note issue of £4,000,000. If the circulation were increased by £1,000,000 the coin in hand would be £2,333,000, less_ to be invested £666,000, leaving £1,667,000 coin in hand against a note issue of £5,000,000. If £500,000 were withdrawn, the circulation would decrease, so that then the coin in hand would be reduced to £1,167,000 against a note issue of £4,500,000. If the Treasurer realized on investments £333,000, the total of coin in reserve would be brought up to £1,500,000 against a note issue of £4,500,000, or a reserve of 33 J per cent. This is a matter as to which it is very desirable that the Commonwealth should obtain competent and responsible men to take charge. I understand that the Government are opposed to my suggestion, but I am in hopes that their experience will show them that, unless they make very much more liberal arrangements for converting the notes into gold, it will be desirable that the reserve should be more than 25 per cent.
– As to the principal point in Senator Walker’s amendment, I should like to say that I think Commissioners ought to be appointed for carrying out the intentions of this Bill. Such Commissioners should not be absolutely under the control of the Commonwealth Treasurer. There should be some second authority, constituted by Statute, whom the Treasurer ought to consult before carrying out some of the purposes of the measure. This Bill contemplates two things - a reserve of gold and the issue of notes. In order to fortify the reserve of gold power is to be given to issue Treasury-bills.. Those are very important elements in the Bill. In times of stress the power of issuing Treasury-bills would be one of extreme importance. Remarks are continually being made in Parliament, and on the platform, about the success of the Queensland example, but the Queensland Act, which provided for the issue of Treasury-bills, provided also for the constitution, if not of Commissioners, at all events of an authority to undertake such responsibilities as are suggested by Senator Walker. I will read the section -
Treasury Bills hereby authorized to be issued shall immediately vest in and become the property of the President of the Legislative Council, the Speaker of the Legislative Assembly, and the Colonial Treasurer as trustees, and shall be deposited for safe keeping in such place under such regulations and in the charge of such officer or person as the Governor in Council shall direct. The Treasury Bills so deposited shall not be sold or otherwise disposed of without express authority of the Governor in writing, accompanied by a certificate signed by the Under-Secretary of the Colonial Treasurer and countersigned by the Auditor-General, certifying that the proceeds of the Treasury Bills to be sold are absolutely required to meet payments lawfully chargeable for the retirement of notes issued under the authority of the Treasury Notes Act of 1893.
– Does that certificate go in before the bills are floated? If so, it seems rather a dangerous thing.
– I think it is a safeguard.
– It is a public notification of the fact that there is a run on the Treasury.
– No, there are trustees who advise the Treasurer, and the authority for their issue has to be countersigned by the Auditor-General. The intention was that the responsibility of saying whether Treasury-bills should or should not be issued was not to be left to the Colonial Treasurer. The section goes on to provide - and immediately upon such authority being given such part of the Treasury-bills so deposited as will realize the sum required as certified in the manner aforesaid shall be delivered to the Colonial Treasurer, and the same shall thereupon immediately vest in him, and shall be sold or otherwise disposed of by.him and the proceeds applied by him to meet ..the. payments aforesaid.
I am not saying, that “it is necessary that the Commonwealth Commissioners should he bound as the Queensland Commissioners are. Senator Millen has made a very powerful objection from that point of view, namely, that to notify the Colonial Treasurer through trustees might give a shock to credit. But the ‘duty of deciding whether Treasury-bills shall or shall not be issued in order to keep the gold reserve strong, must be decided by some one. The Treasurer may recklessly issue, or recklessly refuse to issue, Treasury-bills at a time when the credit of the notes or of the Commonwealth might be in jeopardy. The grave responsibility of deciding that matter should be shared by trustees having some power of administration. I admit that when the responsibility of issuing Treasury-bills occurred in the United States of America, .no such fetters were put upon the issue. The matter had to be decided between the Secretary of the Treasury and the President. The Secretary often suggested the issue of the Treasury-bills, and the President often refused, and exercised his veto. A great deal of conflict arose over the matter. But the point is whether authority to issue Treasury-bills should be given to the Treasurer in a large and wide fashion. There ought to be some body under this Bill to see to it that the issue of Treasury-bills is wisely and carefully guarded.
– We have not appointed Commissioners in regard to the’ gold and silver currency.
– In the United States, the issue of Treasury-bills was frequently a matter of fierce contention between the Secretary and the President.
– What we are dealing with are Treasury-bills of a different kind.
– No, we are dealing with the same kind of Treasurybills, issued to sustain a paper currency. Over and over again the United States Government had to go into the London market in order to bring gold back to keep it in reserve in the Treasury.
– How did they raise the gold in London?
– By the issue of Treasury-bills.
– Then the credit of the country was good enough.
– The “credit of the country’” is one of the most Mesopotamianic phrases ever uttered.
– Pity the sorrows of poor Hansard when such words are used !
– The fact is that in America there was a fight, ranging over twenty years, as to who should decide whether Treasury-bills should or should not be floated.
– What has all this to do with the appointment of Commissioners ?
– I am giving reasons to show that the amendment suggested by Senator Walker has something to recommend it. The issue of Treasury-bills is not a matter to be played with. If the Government choose to disregard the experience of the United States, we can, of course, do no more. But when this amendment is disposed of I shall bring the question up again in connexion with the clause dealing explicitly with Treasury-bills, and shall propose that the flotation of them shall not be left to the unrestricted judgment of the Treasurer. I quite agree with Senator Millen that it might not be expedient to Rave the matter brought before a Parliament in order to show publicly that it was necessary to fortify the gold issue, but still some limitation should be placed upon the issue.
– -It appears to me that it would be hardly necessary to appoint Commissioners, and that, moreover, if the Treasurer is to have the assistance of two Commissioners, to be appointed by himself, he might as well take the management and the responsibility by himself.
– The Commissioners should be appointed by the GovernorGeneral in Council.
– Who is the GovernorGeneral in Council? For all practical purposes, he is the Treasurer, who is usually the Prime Minister. I look upon this Bill, authorizing the issue of notes as part of the currency, as preliminary to the establishment by-and-by of a National Bank to be run by the Commonwealth Government. When such a bank is founded, it will be totally unnecessary to have Commissioners, because the bank will naturally take over the management and control of the note issue.
– Such a bank may not be established for years to come.
– I hope that it will be established in the very near future. Indeed, I hope to see such a bank established before the close of this Parliament. At present we look upon the Treasurer as being fitted to manage - with the assistance of his permanent officer - some £16,000,000 or £17,000,000 per annum. We regard him as competent to look after the financial affairs of the whole Commonwealth. Why, then, should we cavil at the handling by him of six or seven million pounds of a note issue. The lines on which the note issue is to be managed are laid down hard and fast in the Bill. Where, then, is the necessity for Commissioners? If the Treasurer can be safely intrusted with the financial affairs of the Commonwealth, involving between £16,000,000 and £17,000,000 annually, what room is there to cavil at his being asked to manage this note issue, when the details of the management are cut and dried by the provisions of this Bill? If we appointed Commissioners for this purpose, we should probably have to pay them handsome salaries of, perhaps, ,£2,000 a year each.
– I remind the honorable senator that for a position of high trust of the kind the cheapest man is very often the dearest, and the worst, man we could get. I remind the Committee that we have the advantage of the supervision of the Auditor-General. I am sure that every one has full confidence in that officer. All Commonwealth accounts are subject to his supervision, and, in the circumstances, the substitution of Commissioners for the Treasurer would provide no additional safeguard.
– The central idea in the mind of Senator Walker in submitting his amendment is to place beyond political control the operations contemplated under this Bill. He wishes to place the note issue beyond all the possible effects of any exigencies which may arise, and which might compel a Treasurer to do something which at present we do not contemplate. But to do that, a very much wider amendment would, I think, be necessary. If honorable senators will look through the Bill as we have it, and not as it was originally introduced, they will see how strictly limited are the functions intrusted to the Treasurer under it. They will be equally limited if performed by Commissioners. Senator Walker has referred to the tremendous- amount of work involved in the preparation and issuing of the notes; but it is merely routine clerical work, and if three men called Commissioners could supervise an army of clerks .in the signing and preparation of notes, I should imagine that the Treasury officials could do the same. Clause 17 provides that -
The moneys raised by the sale or disposal of any Treasury Bills shall be applied towards the redemption of Australian Notes.
It would not matter whether the moneys were raised by the Treasurer or by Commissioners, since they would have to be appropriated for the purpose set out in the Bill. If honorable senators will look at clause 9, they will find that it provides that the Treasurer shall hold in gold coin a certain reserve.
– Who is to check the Treasurer ?
– Who would check the Commissioners?
– One would be a check upon the other.
– That implies that we require -three Commissioners, in order that two may watch the third. I do not think that Senator Walker contemplates that there will be any necessity to watch the Treasurer of the day because he might be suspected of personal peculation.
– No, but there might be peculation by subordinates.
– Exactly ; but the Treasurer and Treasury officials would be as competent to watch subordinates as would be three Commissioners. Take again the matter of destruction of Treasurybills to which Senator Walker re; f erred. It is provided in the Bill that they shall be burnt in the presence of the Secretary to the Treasury and the AuditorGeneral. It seems to me that the presence of these two officials at the cremation of cancelled Treasury-bills would be as great a safeguard as would be provided by the presence of one or three Commissioners. I think the only argument in support of the proposal, that has any substance in it, is that used by Senator St. Ledger when he suggested that sound judgment would require to be displayed in deciding whether or not Treasury-bills ought to be issued. I take it that if a time arises when we shall have to consider the issue of Treasury-bills we shall be dangerously near a crisis, and centainly the best judgment we can command ought then to be at our disposal. But is there any reason to suppose that the Treasury officials would be any less competent to arrive at a wise decision on such a question than would be three Commissioners ? I remind honorable senators that there would be no danger at all in the premature issue of Treasury-bills.
– It might weaken the market.
– No; the worst that could happen as the result of a premature issue of Treasury-bills would be that the Treasury would be penalized to the extent of the interest that would be lost in that way. I should not refer to that as a danger.
– Should the Treasurer be the sole judge?
– Well, is the Treasurer the sole judge under this Bill ?
– He would be responsible to Parliament, 1 admit.
– Quite irrespective of the Treasurer or party in power at any particular time, I am unable to conceive that, when the integrity of the currency was at stake, the Treasurer of the day would take any reckless action. I presume that he would do as other Treasurers have done in somewhat similar circumstances, not merely consult those officials, but call to his counsel the best financial experts in the country. In so important a matter I take it he would he guided by their advice. The real danger, as it seems to me, is not that we are giving the Treasurer too much power under this Bill, but that we are giving him too little. This arises from the fact that we are limiting him to the payment of 4 per cent, on loans. I have said that when it becomes necessary to issue Treasury-bills we shall have arrived at a time of crisis, or a crisis will be very near at hand, and we know that within the last few years some of the States now forming the Commonwealth have been unable to raise money on Treasurybills at 4 per cent.
– Four per cent, pai.
– Exactly ; but I think it is contemplated in this Bill that the Treasury-bills provided for shall be issued at par.
– Not necessarily.
– That is so, but I think we had better honestly recognise the fact that it would be better to pay a higher rate of interest at par than a lower rate at a discount. If we admit the principle of selling short-dated Treasury-bills by private arrangement, I think we should take care that they are not sold below their face value.
– We could provide for that in the Bill.
– I do not know that we shall have an opportunity to put anything into this or any other Bill, since the logic of numbers is against anything of the kind. The substitution of Commissioners for the Treasurer would not overcome the difficulty to which I have referred. And so long as the operations of the Treasurer are limited as they are under the Bill, I see no advantage in the amendment. On the other hand, if Senator Walker’s proposal were extended, and it were possible to put the whole business entirely beyond political control and vest it in Commissioners, I should be disposed to assist the honorable senator. As the amendment goes too far for the purposes of this Bill, and does not go far enough for the purpose I have in view, I think its acceptance would provide no substantial benefit.
-Colonel Sir ALBERT GOULD (New South Wales) [3.56].- Senator Millen has to some extent misunderstood the position as it was put by Senator Walker. There is no provision made for the destruction of cancelled Australian notes. Senator Walker has contended that it would be an advantage if Commissioners were appointed to supervise not only the cancellation and destruction of Treasurybills, but also the cancellation and destruction of Commonwealth notes. We know that Treasury-bills will be issued only in very exceptional circmustances, and when they are redeemed they must be destroyed by burning in the way described in the Bill.
– I- recognise that I was in error in my references to that matter.
-Colonel Sir ALBERT GOULD. - The Australian notes will after a time be coming in regularly for cancellation and destruction. I know that the experience of every bank is that their notes are coming in day after day, and they are obliged week after week to arrange for the cancellation and destruction of mutilated and dirty notes.
– What about clause
^ Senator Lt. -Colonel Sir ALBERT GOULD. - I see that it provides that the Treasurer may be authorized from time to time to issue, re-issue, and cancel Australian notes.
– What is the cancellation of the notes but the destruction of the notes?
-Colonel Sir ALBERT GOULD. - I recognise that it will be a duty devolving upon the authorities very frequently, but there is no provision in the Bill that Australian notes shall be cancelled and destroyed, and there would be a great advantage in having some definite authority to supervise the cancellation and destruction of notes as well as of Treasurybills. There are to be 10s. notes, but Australian notes may be issued for £ro and multiples of £10 up to £100. And it is as necessary to safeguard the cancellation and destruction of the notes as it is to safeguard the cancellation and destruction of Treasury-bills. I may be told that this will be provided for by regulation, but Senator Walker contends that it would be very much better to provide for it in the Bill itself. It will be absolutely necessary - as has been pointed out by Senator Walker - to keep a register, not merely of all the notes which are issued, but of each note which is returned. The number of each note will have to be entered in that register, in which it will have to be shown when it was issued and to whom. Then, when notes are being cancelled the entire register will have to be gone through again in order that the numbers of such notes may be recorded in it. It will not be merely a matter of issuing 1,000 Commonwealth notes and of getting them back in a bunch for cancellation purposes. They will probably be returned with other notes which have been issued from time to time. So that the Government are in reality assuming an enormous responsibility. Of course, private banks have to assume exactly the same responsibility. Butthe Treasury officials will find that the performance of all these duties will add materially to the work which already devolves upon them. 1 would further point out that the work is of such a character that it ought to be performed by persons who have some knowledge of it. The Treasury officials are already required to discharge a great many duties, and under this Bill additional duties will be thrust upon them. That fact will speedily be realized when once this scheme is in full swing. The Treasurer of the day may be a very clever financier, or he may have had very little experience of finance. In the latter case he will have to be guided solely by the advice of his officers. In these circumstances, would it not be much better to appoint a Board of Commissioners, with the Treasurer as chairman, to divide with him the responsibility of supervising the working of this scheme? It is contemplated that the whole of the Trust Fund to be created under the Bill shall be available for the redemption of the Commonwealth notes. But we all know that, from time to time, Commonwealth Treasurers have dipped their hands into Trust Funds in order to enable them to meet special emergencies, relying upon Parliament to indemnify their action by subsequent legislation. If the Trust Fund which it is proposed to establish be vested in trustees, no such thing can happen, and thus everything will be placed on a much firmer foundation. We must always remember that it is not intended that the fund shall be set aside for some Government purpose, but that it shall be created to protect private individuals in respect of money which may become due to them from time to time.
– Is there any probability of that being done?
– There was a good deal of counterfeiting practised in America at the time of the Civil War.
– No doubt. If the Commonwealth note system is to be a success, the people ought to be assured that sufficient gold is always available to meet those notes. I think that the proposal of Senator Walker is well worthy of consideration. If we decide to vest the Trust Fund in a Board of Commissioners it is probable that we shall have to define their primary duties in subsequent legislation. But if the amendment be carried there will be ample time within which to specify those duties before the Bill becomes operative. The measure is to be brought into force by proclamation, and I think that six months must elapse after the issue of that proclamation within which period all State notes must be redeemed. During that interval it would be easy to submit a measure specifying the duties of the Commissioners. I strongly commend the proposal of Senator Walker to the Committee.
Question - That the new clause proposed to be inserted be so inserted - put. The Committee divided.
Majority … … 11
Question so resolved in the negative.
Proposed new clause negatived.
Clause 5 agreed to.
Clause 6 -
Australian notes may be issued in any of the following denominations, namely, Ten shillings, One pound, Five pounds, Ten pounds, or any multiple of Ten pounds, and shall -
be issued from and bear date at the Commonwealth Treasury ;
be a legal tender throughout the Commonwealth and throughout all Territories under the control of the Commonwealth ; and
be payable in gold coin on demand at the Commonwealth Treasury at the Seat of Government.
– I move -
That at the end of paragraph c of subclause1 the following words be inserted : - “ and (a) at the Capital City of each State, and at such other places as may be proclaimed by the Governor-General in the Government Gazette.”
This is a very important amendment, and one whichI hope honorable senators will support.I cannot see why in the matter at the conversionof Commonwealth notes one State should possess an advantage over any other. So tar as I can judge, the general opinion of the public is that the notes ought to be convertible in each capital.It is well known that the greater facilities you provide for getting gold the less anxious are people to convert their notes, because they know that the gold is available. I cannot see any reason why we should be at such a great disadvantage as we shall be with regard to the conversion of notes as compared with our present position under the arrangements made by the private banks. In Queensland, at present, a man can get gold for his notes in Brisbane. At six different places he can exchange old notes for new notes; and at four places he can get notes for gold. Compare the existing facilities in Queensland with those which will exist under this measure. At present, banks at Normanton, Cairns, Townsville, and Rockhampton can, if need be, give gold for notes. At six places, including Bundaberg and Mackay, banks can exchange old notes for new notes. No such provision is made in the Bill. Possibly, under a regulation the Commonwealth Government may grant those facilities; but the Senate, which represents the States, should see that in the meantime no State is placed at a disadvantage in comparison with another State. I shall press the amendment.
– I have every sympathy with a proposal which is moved by Senator Walker, but he lost sight of the fact that there is no provision in the Queensland Act that such and such a thing shall be done at the places he mentioned. He knows that it is done under an arrangement which was made afterwards by the Government for the convenience of the public.
– Quite true.
– Last night I pointed out that we must assume that the banks will work in friendly relationship with the Government, and that when anybody wants to change notes the banks will accommodate him.
– They will not be under an obligation to do so.
– At present, the banks are not legally compellable to give gold for their notes, except at their head offices, yet it is done all over the place. Are we to assume that the Australian note will be treated differently from bank notes? 1 shall not assume anything of the kind. If the banks are not prepared to meet the convenience of the public, the Government will have power to make regulations, and, whether it is in friendly relationship with the banks or not, when experience has taught the Treasury what is required, whatever is in the best interests of the public will be done. I am sure that none of the difficulties which Senator Walker anticipates will arise. It is of no use for him to mention what is done in Queensland. That arrangement was made because it was in the interests of the public. It is not provided for in the Queensland Act, and consequently we have no right to insert a provision in this Bill. If the Government do not get the co-operation of the banks, we shall have power, by regulation, to do everything which is really necessary in the public interest. I hope that the amendment will not be pressed.
– I am surprised at the tenacity with which the Minister and his supporters cling to the idea that all the hewing of wood and the drawing of water are to be done by private institutions, whilst all the profits are to go to the Treasury.
– It will be done by arrangement.
– With the banks?
– Yes, or with anybody.
– If the honorable senator now says that he contemplates an arrangement between the Government and the banks, by which the latter will undertake to do this work, and will avoid the expense to which they would otherwise be subjected, I have nothing more to say on the point.
– Is it not done in Queensland ?
– It is clone in Queensland because the banks are paid by the Government. The Committee is not absurd enough to suppose that any private institution would incur the expense of carrying on the business of other people. The Government are now making the issue of notes the public business, and must be prepared to bear the cost which is incidental thereto. It is absurd to expect that private persons will incur that expense when the profits are to go, not to them, but to the Government. I made that statement here yesterday, and a leading journal to-day said that I was incorrect in my facts, inasmuch as the arrangement under which the Queensland Government practically paid the banks to issue the notes was a temporary one. I felt so satisfied that my Statement was correct that I, not knowing either the Treasurer or Prime Minister of Queensland, invited Senator St. Ledger to wire to the latter, and the reply was that the arrangement remains to-day unaltered, just as I stated yesterday. I trust that that fact will be borne in mind, at any rate here, if it is not taken notice of by my journalistic critics.
– It is an arrangement made outside of the Act.
– If the Minister means that the Government have in contemplation an arrangement by which they will make terms with the banks for the issue and handling of their notes, I candidly admit that the amendment is unnecessary and that my fear disappears. But this is the first intimation we have had that such an arrangement is contemplated. We have always been told that any selfrespecting bank ought to be prepared to cash the Commonwealth notes, and, on the contrary, that if any one should want notes for gold the banks will be prepared to supply him. It is really idle for any one to suppose that the banks would incur the cost of doing all the work. For what purpose ?
– For the sake of convenience.
– To whom?
– To the banks.
– It will be no convenience to the banks. Suppose that a branch bank requires to pay out £100 which to-day it is entitled to pay in gold. The Government want to throw upon the bank the obligation of keeping 100 sovereigns there and to send £100 to Melbourne for 100 notes, in order to have £200 with which to meet an obligation of £100 simply because the customer might want to be paid in either gold or notes. Why should a bank incur all that expense, and employ an army of clerks to keep a tally of the notes, if it is to get no profit? It might just as well issue a single sovereign over its counter as go to the trouble of sending a sovereign to Melbourne to get a note to take its place in the till. The only road to success will be for the Government to yield up a little of the profit, and increase the facilities for issuing, handling, and redeeming the notes. That will mean less profit to the Treasury, but it will make the notes more popular, because it will remove a difficulty which confronts the banks, unless, of course, the belated suggestion of the Minister is carried into effect. It was quite a revelation to me, and, I think, to the Committee, to learn that the Government have it in contemplation to make an arrangement with the banks. I shall be only too pleased if it is done. I am a sincere well-wisher of this proposal, and do not desire to see the notes placed upon the market in- circumstances which would tend to deprive them of that popularity which is essential to their success. The only way to make them generally acceptable will be to provide for their easy issue and conversion, but it will not make the issue of notes easy if we force the banks to incur a certain expenditure.
– If the honorable senator will refer to clause 12 he will see that he made a slight mistake in connexion with the keeping of a record.
– When we come to that clause I shall suggest to the Minister, if his interpretaton is correct,” as I now think it is, that it ought to be amended. I ask him to consider whether it is not desirable that the Treasury should bear the expense of handling and circulating the notes. We need not say anything harsh about the banks, but would any one of us undertake to do the work incidental to another man’s business when he was getting the profit?
– Of course we would.; “
– I know what my honorable friend, from his antecedents, means by that. If there is one man in this Senate who would not do -such a thing it is Senator Stewart; and if there is one who does not expect others to do such a thing it is he.
– Ah, but he is a good Christian !
– Of course he is, but he is a Scotch Christian; and I do not think that he would condemn the banks for not doing what he himself would decline to do. Neither the banks nor Senator Stewart would, for one moment, consent to incur expense in the handling of notes for the profit of the public Treasury. I suggest again to the Government that they ought to offer facilities to the banks to obtain and -convert these notes, which they could do by adopting the amendment of Senator Walker. They may, if they choose, defeat the amendment now, but I venture to say that, before many months are passed, they will be compelled to introduce such a system, or to carry out the suggestion of the Vice-President of the Executive Council by making an arrangement with the banks, which will mean either direct cash payments or offering them, as Queensland does, notes, to be paid for, a proportion in cash and the balance remaining on fixed deposit at a low rate of interest.
– One would think from the remarks of the Leader of the Opposition that the banks were going to be placed in an awfully unfortunate position under this Bill. He has been making a desperate plea for some advantage to be extended to them for retaining a reserve of gold in the different capitals, and facilitating the dissemination of Commonwealth notes. The honorable senator seeks to derive some advantage from the Government to compensate for the loss which he supposes will be incurred by the banks through the employ-^ ment of Commonwealth notes. The position, however, seems to be this. In the past the banks have been using their own notes, and paying to the State Governments 2 per cent-, upon their circulation. They have supplemented the use of notes by keeping supplies of gold at different centres. This Bill proposes to supply the banks with a quantity of notes free of cost, and minus the percentage which they have been paying to the States; the only difference being that the gold which the banks now hold in their vaults will be transferred to the custody of the Federal Government to be placed in its vaults. The statement has been made over and over again, that the banks hold from £1 up to £5 for every £i-note in circulation. Surely the mere change of the gold from the vaults of the banks, where it returns them no interest whatever, to the vaults of the Commonwealth, will make no difference to them.
– Would it cost a bank” in Perth nothing to ship its gold to Melbourne ?
– Responsible bank officials have said that they make nothing out of their note issue. I quite believe them. What, then, will they lose by giving up what they make nothing out of, and using a form of note which will cost them nothing?
– It is going to cost them something ; that is my argument.
– The banks will have to pay a sovereign for every £i-note they get.
– But we are told that at present they have a sovereign for every note they issue. The change of the gold reserve from the vaults of the banks to the vaults of the Commonwealth Treasury, simply means paying the cost of transfer from one place to another.
t- Gould. - That means a considerable expense.
– Let us look at the position. In the first place, the banks will be supplied with notes free of cost. In the second place, they will be relieved of the payment of 2 per cent, upon the circulating portion of their notes. In the third place, on their own acknowledgment, they will be relieved of a medium oi circulation which does not bring them In any profit, and will be supplied instead with a medium of circulation that will cost them nothing more than their- present note issues cost. Where, then, does the grievance come in ? In the United States the large circulation of $346,000,000 in greenbacks is only redeemable at two places, namely, Washington and San Francisco. But, according to Senator Millen and Senator Walker, we must have depots at convenient places throughout Australia for the accommodation of our small population. The assurance given by the representatives of the Government that the convenience of the banks will be met as far as possible should be quite enough to satisfy us that they will sustain no disadvantage through the adoption of this new currency.
– I am not at all surprised at the enthusiasm with which this Bill has been received by the supporters of the Government, if their attitude is revealed by such arguments as those which we have just heard from Senator Lynch. T have not said, as he seemed to suppose, that the banks are going to be inconvenienced. I do not think that they will be. They will not be inconvenienced, because they will not use Commonwealth notes under the circumstances in which they are to be issued.
– Then no harm will be done.
– I am glad of that interjection. The public convenience does not count in the honorable member’s mind. The success of this Bill does not count with him. I was arguing all through that to make this note issue a success, and to get the public to use the notes, it will be necessary for the Government to do something more than is now proposed to be done.
– Will the banks refuse to take Commonwealth notes from their customers?
– 1 do not suppose that they will. But how will the notes be brought into general circulation except through the medium of the banks?
– Does the honorable senator think that the banks will not touch the notes at all, but will circulate gold?
– The honorable senator spoke as though it would cost nothing for the banks to deposit gold with the Treasury in return for notes. But at present it costs a bank in Perth nothing to keep its gold there. It would, however, cost such a bank something to send its gold to Melbourne. The banks at present have gold in their vaults. It costs them nothing to keep it there. It earns nothing while it is there. This gold, being legal tender, the banks will naturally say, “We will not incur the cost of sending a sovereign to Melbourne and bringing a note here in exchange for it, but will use the sovereign we have in our vaults.” To the extent that the banks do that, Commonwealth notes will not get into circulation. That is the whole point that I am trying to impress upon the Committee, though, apparently, without any prospect of success as far as Senator Lynch is concerned. I have not been arguing for the convenience of the banks, because they will be neither convenienced nor inconvenienced. My whole point is that unless we relieve the banks from the obligation of cost which this Bill throws upon them they will not use Commonwealth notes, and, consequently, will not become the medium of circulating them to the public.
– The honorable senator’s argument means that the banks will not incur the cost of shifting gold, say, from Perth to Melbourne.
– It means that first of all, because the cost of shifting gold from one centre to another may not be light.
– Special rates are charged for the carriage of gold.
– All of us, when travelling on the train, have occasionally seen two gentlemen closely guarding a small iron-bound box containing a parcel of gold. The transfer of gold from one place to another almost invariably involves the cost of travelling of two bank officials. Why should the banks incur this cost of sending gold to Melbourne, -and taking Commonwealth notes back, when the circulation of the gold would suit their purposes just as well?
– How much does the honorable senator think it costs the banks to shift gold from place to place?
– I do not care what the percentage is. If it is only is. per £100, the principle is the same.
– If there were anything in the honorable senator’s argument, the banks would not be paying 2 per cent, note tax.
– Let me show what that means. The banks pay 2 per cent, upon the paper which they issue. I suppose that the cost of printing and issuing their bank notes is about per cent. The total cost is, therefore, 21 per cent. That practically means that the banks are obtaining money at call at 21 per cent. In other words, by the issue of paper money they are obtaining, at 2 *</inline> per cent., money which they are able to let out to their ‘customers at a much higher rate of interest. There is another point of view. According to the latest figures, the banks have in their vaults gold, bullion, and floating assets equal to 10s. in the
– It has been said from the other side that every note issued by the banks is supported by from five to seven sovereigns.
– That is perfectlycorrect, and if the honorable senator would interject less and think more he would know that both statements are consistent one with the other. It is quite true that to-day the banks have in their vaults coin and bullion to the extent of between £7 and £& for every £1 note they have issued.
– But they have other liabilities.
– Exactly, and that is the answer to Senator Lynch. I was referring not to the note issues alone, but to the total liabilities at call. I say that the banks have in reserve £7 to £1 of their note issues and 10s. to £1 of of all their liabilities at call. I am speaking entirely in the interests of this note issue, which I desire shall be a popular one. I do not think it will hurt the banks in the slightest degree, because they will not let it hurt them. They simply will not do the work which this Bill seeks to throw upon them. The result will be that whilst we shall circulate some of these notes we shall not circulate as many as we otherwise might, because the great channel through which we can reach the public with these notes is the banks, and rather than incur the expense which they would have to incur if they took up these notes the banks will prefer to pay sovereigns across their counters. The notes will in this way become still less popular because people will form the habit of using and looking for gold, and the Australian note issue, instead of becoming a popular currency, will be relegated to even a lower position than the note currency occupies in the Commonwealth to-day. I cannot too’ often repeat that the experience of Queensland shows that the banks there were confronted with exactly the same position as that with which the banks of Australia generally will be confronted when this Bill becomes an Act. They will have to incur all the expense of sending gold to a central depot in order to obtain paper money, and will probably be subjected to expense in other ways. The difficulty which the Government had to face in. Queensland was that the banks there said, “We are not animated by any ill-feeling’ towards the Government or its proposed issue. We do not desire to thwart it in any way, but you must not expect us to take money out of the pockets of our shareholders to help to circulate a public currency. That is the business of the people who have taken charge of it. The Government have assumed a monopoly of the issue of paper currency, and it is their duty to incur the expense incidental to the circulation of that currency.” The Queensland banks having taken up that attitude, the. State Government were compelled to propose an arrangement by which the banks were provided with cheap till money by paying one-third cash for the notes they received from the Treasurer and allowing the balance to remain at fixed deposit at 2 per cent. That arrangement had to be made before the banks would undertake the circulation of the Queensland Treasury Notes. The banks did not make a profit nut of that, but they would not undertake the circulation of the notes without some such arrangement to relieve them of the. expense which would otherwise fall upon, them. I resume my seat with the prediction that unless something of that kind is done by which we may relieve the banks, of the burden which would otherwise be thrown upon them, the proposed Australian note issue, while probably it will not be a failure, will be far from being the great success which we would have a right to anticipate it would be if launched under conditions having a greater regard for the convenience of the public.
.- I have listened very carefully to the Leader of the Opposition, but I take leave to differ from his statement that the banks will not see fit to negotiate Australian notes-
– Why should they worry about them?
– I think they will do so for the convenience of their customers.
– The customers will not care a hang if the banks give them gold.
– I differ from the honorable senator. I think the banks will negotiate the Australian notes because they will be inviting disaster to themselves if they do not.
– In what way?
– I may say that I regret very much that the Bill does not now contain the provision under which, if the banks refused to pay any amount up to ^25 in Commonwealth notes, they would be liable to a penalty of £5.
– They will be under no obligation now that that provision is not in the Bill.
– I regret that that is so; but it is quite possible for this Government, and the party supporting them, to bring forward an amendment of the law including such a provision if the banks refuse to circulate a certain quantity of Australian notes.
– Does the honorable senator consider it just to ask the banks to do the work of circulating the proposed currency at their own expense?
– Yes, decidedly. The honorable senator should not forget that the banks have very great privileges.
– What privileges?
– They have the great privilege of controlling the money volume of the country. They have the money market practically to themselves. It should not be necessary for me to remind honorable senators opposite of the privileges of the banks. “ People generally have no opportunity to enter the money market as their competitors.
– It is the people who form the banks.
– The banks are private institutions run by a few people. We propose to control the money volume of the country for the benefit of the whole of the people.
– There are thousands of shareholders in the different banks.
– The shareholders of a bank represent a very limited and privileged section of the people. Honorable senators opposite are aware that we have on our platform a proposal for the establishment of a Commonwealth Bank, and in due course such a bank will be established. I maintain that in all the circumstances the banks will evince a desire to help the Commonwealth Government in this matter. Indeed, I understand that they have agreed to some extent to do so. The persons interested in banking institutions are well aware that when, with the consent of the people, the Government have adopted a certain policy, it is of no use for those opposed to it to kick against the pricks. We know that when a Federal note issue was suggested the banks at once agreed to abolish the exchange on bank notes. I do not suppose they would have done so if no mention had been made of a Commonwealth note issue.
– It was done about three years ago.
– I think not. I know that not very long ago I had to pay exchange on Inter-State bank notes.
– The exchange is still charged in some instances.
– That may be so. But I have accepted the assurances we have had from the other side that the exchange hitherto charged has been abolished.
– Not on postal notes.
– No, I am referring to bank notes. The banks, of the country have had the currency in their hands. They have enjoyed many privileges, and I think it will be found that they will adopt a sensible course in dealing with this matter. The Chairman of Directors of the Queensland National Bank said only a few days ago -
There could be no question that a uniform issue throughout the Commonwealth was desirable whether by banks or by the Government. lt was a matter for congratulation that the Federal Government had decided to create a note issue on such a sound basis as the Queensland Treasury Notes Act, which had given such general satisfaction for the past seventeen yean in his State.
– Is it not fair to assume that when he referred to the Queensland Treasury note issue as having given satisfaction, he had in mind all the terms and conditions surrounding it?
– That may be so, but I do not think it affects the matter. We have been told in some quarters that the banks will welcome the Australian note issue. They will only be acting in the interests of themselves as well as of the public, by giving reasonable assistance to the Government in the circulation of the notes.
– Although it will cost them something to do so?
– Decidedly ; because if they will not do so it may be necessary for the Commonwealth Parliament to impose a penalty upon them for not doing so.
– Another threat.
– This is “the Commonwealth Bank again.
– I am saying nothing new when I state that this party is determined to establish a Commonwealth Bank in the interests of the whole of the people.
When honorable senators opposite suggest that the banks are not privileged, they should remember that the profits of the associated banks last year were as high as 131/3per cent.
– Profit is not a sign of privilege. Any man might make a highei profit in business, and the honorable senator would not say that he was privileged.
– I know that our honorable friends opposite are warm supporters of the banks, because those interested in banking institutions support the party which they adorn. I think it will be found that the banks will fall in with what is proposed in this Bill in their own interests as well as in the interests of the people. I shall vote against any attempt to alter the clause in the direction indicated, because I do not believe in spoiling this Bill in order to subsidize the banks.
– I wish to ask Senator Millen whether he suggests that the banks will refuse to accept a Commonwealth note from a customer?
– I did not suggest anything of the kind.
– I understood the honorable senator to say that the banks would not do any busniess with the proposed Australian notes.
– No. I said they would not be willing to incur the expense of sending gold to Melbourne in order to obtain notes to issue to their customers.
– Does the honorable senator believe that the Commonwealth Government will be foolish enough to send gold to Perth and other places remote from Melbourne for the convenience of the banks?
– It would not.be for the convenience of the banks, but for the convenience of the public.
– Senator demons inferred, and Senator Millen almost told us, that the banks would do something against this proposal.
– I did not say anything of the kind.
– think the honorable senator said something like that in the speech he made yesterday. It was suggested that the banks might easily defeat the note issue if they could attack the Government from six different places. But honorable senators need not think that the Government will carry gold from one place to another in the Commonwealth for the convenience of the banks, when they may expect an attack from any quarter according to honorable senators opposite.
– never said anything of the kind.
– think the honorable senator said something of the kind, and Senator Clemons inferred it. That is why I asked Senator Millen the question with which I opened this speech.
– ask permission to amend my amendment by leaving out the words after the word “State” so that it will read, “ and at the capital city of each State.”
Amendment, by leave, amended accordingly.
. -We are gradually learning the reasons why certain things are to be done under this Bill. Senator McDougall has just informed the Committee - although the Vice-President of the Executive Council was studiously silent upon the matter - that the Government are afraid of being attacked in six places at once.
– They are afraid of nothing.
– The honorable senator declared that they fear they may be shot at from six States simultaneously. We now know what has happened in the caucus, and on this occasion I think the word ought to be spelt “ corkus,” because I have noticed that honorable senators opposite are pretty well corked up, and are not allowed to take very much’ part in the discussion of this Bill. In the interests of the circulation of the proposed Commonwealth notes, the Government will be well advised if they accept Senator Walker’s amendment. It is the banks which will provide the 25 per cent. gold reserve. Why should they be called upon to do more? If, in exchanging its sovereigns for Commonwealth notes, a bank gets more of those notes than it can use, what must it do? Under this clause, it must send those notes to Melbourne, in order to get gold in exchange for them. I dare say that the banks will be very willing to convert Commonwealth notes into gold upon demand, but why should they be forced to send notes which they cannot use to Melbourne, in order to obtain gold for them, and vice versa? I maintain that the expense of running this note issue ought to be borne by the Commonwealth, seeing that it is the Commonwealth which will be doing the business. I have heard a great many covert threats regarding the establishment of a
Commonwealth Bank if our private banks do not exhibit a willingness to accept Commonwealth notes in exchange for gold.
– A Commonwealth Bank will be established, irrespective of whether or not this Bill passes.
– I am looking forward to the establishment of such an institution with very great interest, because sometimes, when I go to a bank for an overdraft, the manager will not grant it to me, and when he does he charges me interestupon it.
– I would remind the honorable senator that there is nothing in this clause relating to overdrafts.
– It was my honorable friend opposite who introduced the subject, and who stated that when a Commonwealth Bank has been established members of the Labour party will be able to get overdrafts, whilst members of the Opposition will not. But, as yet, we have not arrived at that happy position. Senator Walker is advising the Government well when he declares that they ought to give the public an opportunity of converting Commonwealth notes in the capital city of each State. I do not think that any difficulty will be experienced in making such an arrangement, and I am sure that if the note holders knew that they could convert Commonwealth notes easily, that would give them increased confidence in that form of currency. I think that the amendment should be accepted.
– The Vice-President of the Executive Council should advance some reason why the Government are resisting the demand that the proposed Commonwealth notes shall be convertible in each of the State capitals, thus throwing suspicion upon the soundness of their own scheme.
– Hear, hear !
– I resent the manner in which the Vice-President of the Executive Council has given utterance to his satirical interjection. It is characteristic of him that when he is in a difficulty he exhibits manners which always remind me of his possible ancestry. I would further point out that in the State capitals the Customs Department is in the habit of annually receiving millions of pounds in gold. Why cannot the Treasurer arrange that a certain proportion of that gold shall be held in each of those cities for the redemption of the notes, that is, an amount which will be sufficient to meet the average demand made there from month to month ?
The fact that the Ministry decline to adopt that course seems to me to evidence distrust in their own scheme. At present only one State in the Commonwealth enjoys the benefit of its own note issue.
– It is a good thing.
– Not an honorable senator upon this side of the chamber disputes that fact. It is a good thing within certain limitations. But why has the Queensland note issue been a success? Because at the time that issue was decided upon the banks occupied an extremely critical position, and the Government a no less critical one. Consequently it was to their mutual advantage that the State notes should be rapidly put into circulation.
– People were glad to get them.
– Yes, they were hungering for them, and the banks were not less anxious to get them. What is the objection urged against a similar arrangement being entered into for the redemption of Commonwealth notes on demand in the respective State capitals? I have already pointed out that there is always a large amount of gold at the command of the Treasurer in every State. In Queensland an immense quantity of gold is daily at his disposal at the ports of Brisbane, Rockhampton, and Townsville - three large centres. Why the Treasurer cannot frame regulations under which the resources of the Customs Department may be drawn upon up to a certain amount, and a small reserve of gold provided for the purpose of enabling his officers to meet the average demand made for the conversion of Commonwealth notes there from month to month, is to me a mystery. I need scarcely point out that every mystery by which a paper currency is surrounded tends to restrict its circulation. A similar proposal to that which is now under consideration was obstinately resisted in the other Chamber. But the more its merits are investigated the more does it commend itself to me.
– Then the other branch! of the Legislature opposed it ?
– Yes. It is the Opposition in this Parliament which is licking the Bill into sound financial shape.
– That is the financial gospel according to Senator St. Ledger.
– It is the financial gospel according to the common sense of the people. Why should we deprive the people of Queensland of the advantage which they now enjoy of being able to convert their State notes into gold at places outside of Brisbane?
– But the honorable senator read the statement which the Treasurer of Queensland made in his Budget.
– I know that the Queensland Treasurer would like to see this Bill withdrawn, in order that he may continue to derive the profit of £20,000 or £30,000 which he is now making by the circulation of State notes. The honorable senator has just enlightened the Committee by suggesting that members of the Opposition desire to have a fortification in each State from which they may fire at the Government when the latter are issuing Commonwealth notes. In other words he looks upon the banks as being hostile to the Government when he knows perfectly well that the people regard them as depots at which they will be able to convert Commonwealth notes into gold. If he really believes what he says, why not sweep the banks out of existence?
– The honorable senator would not sweep them out of existence.
– I say to the honorable senator, and to the Government, ‘ Do not use the banks at all as a medium of exchange if you do not wish to do so. “Use your Customs House in lieu of them.” Seeing that the Treasurer accepts gold through the Customs House, why should not the holder of a Commonwealth note be empowered to demand from him, through the same medium, gold in exchange for it? I have adduced this argument for the purpose of showing how hollow is the pretence of my honorable friends opposite. By his amendment, Senator Walker merely asks that Commonwealth notes shall be redeemable in gold in the various State capitals. My honorable friends on the other side are only damning the circulation of the notes when they refuse to provide for the payment of them in gold at the various capitals. They ought to carry out their proposal properly by considering the convenience’ of the people. The Government are taking gold at the respective capitals for the dues which are laid upon the people, but are unwilling to give the people a like convenience when the time comes to redeem a note. They propose to pay gold in only one- place. All this pretension about the amendment securing an advan tage to the banks is moonshine. It means nothing of the kind. “Nobody on earth except a philanthropist built on the lines of Senator Stewart will, as a rule, do something for nothing. You have to offer an inducement to people to do a thing. Some advantage must be given to the banks to induce them to circulate the notes. Now the banks have the power of retaliation, because people will still give to them under certain securities the custody and charge of their gold. The banks are powerful financial factors which cannot be disregarded. If my honorable friends put any undue restriction on the circulation of the notes and impose a charge on the banks the latter have an easy method of retaliation.
– Is that a threat ?
– Any one who is accustomed to finance knows that the banks have one means of retaliation which if necessary they can. increase. The use of cheques per head of the population is, I . believe, larger in Australia than in any other country.
– Paper money again.
– If the honorable senator will consult a legal dictionary he will find that a cheque is not paper money, and that there is a vast difference between a cheque and the paper money of a bank. The banks will encourage the use of cheques, especially by large associations. Pastoralists, graziers and large storekeepers in the country will be tempted to use marked cheques for circulation. When honorable senators recollect that the banks draw drafts one against another, and also against their customers, they will have two weapons in their hands if there is going to be a war with the Commonwealth. If they desire to promote the circulation of the notes let them remove as many restrictions as possible, and give fair inducements to the banks. If, however, they threaten the banks the latter have a weapon of retaliation which they will use if it pays them to- do so. Our bounden obligation is to see that the notes go amongst the people.
– The people will not want to convert the notes at all, and therefore we shall not need any agencies.
– At times people will go in hordes looking for gold, as the honorable senator must know from the history of the past. The natural tendency is for people, especially in times of excitement, to look for gold. Apart from that, our vast distances are such that at times gold is a medium of exchange which travellers like to have. Why should not the demand for gold be satisfied? Every time that that reasonable and natural demand is not satisfied it Wil throw discredit upon the paper currency. I ask the Minister to give some reasons why Queensland should be disadvantaged and to offer some reply to my arguments.
– After the very light and Chesterfieldian manner in which it was asked for, it is impossible for me to refuse the information which Senator St. Ledger desires. What grieves me very much is that senator after senator on the other side gets up, asks for information, and, after making a few remarks, clears out of the chamber. On several occasions I have given the information Senator St. Ledger has asked for. I think I shall have to amplify it for his benefit. In the first place, honorable senators on the other side are practically trying to put a limitation on the operation of the measure. If we were to insert the amendment, it would be only at the Treasury and the six State capitals that any business of this kind could be done.
– No, because under the Act the Government would have power, by regulation, to prescribe other places.
– It would be necessary to amend the Act before we could make an extension.
– The power to make regulations would still stand.
– I have already stated that in Queensland there are five or six places where new notes can be exchanged for defaced or unclean notes, and that in certain places notes can be exchanged for gold, but there is nothing in the Act to compel the banks to make such exchanges at any particular place. Is there any reason why our measure should be more circumscribed than that Act ? Suppose that we did enact this amendment. Kalgoorlie is nearly 400 miles from Perth, and I can assure honorable senators that the Treasury would confer a far greater benefit on the people of Western Australia if they established an exchanging depot in Kalgoorlie, rather than in Perth. Under this measure there will be nothing to prevent the Government from entering into an arrangement with the banks, in the same manner as the Queensland Government did. Derby is farther from Perth than Perth is from Melbourne, and, consequently, if the opera tion of the Bill is confined by an amendment to Perth, then the Government cannot make an arrangement, which otherwise they would be at liberty to make, by treating with the banks, or, as Senator St. Ledger suggested, through the Customs House, or the Post Office, or any private individual. Again, the amendment, if made, will confine the operations of the Government, so far as Queensland is concerned, to Brisbane, and so deprive other places of the privilege or advantage which they now possess. At some time, the Seat of Government will be shifted from Melbourne. In Victoria there are places situated a long distance from Melbourne which might require, and effectively appeal for, an arrangement to be made for their convenience. And when the permanent Seat of Government is established, what advantage will it be to the people of New England if they can only exchange notes at Sydney or the Federal Capital’? From all points of view, the Bill is so elastic in itself that whenever it is brought into operation it will permit the Government to make all the arrangements which have been suggested, and they will not be confined to the State capitals. I hope that honorable senators will resist any amendment which, if carried, would have the effect of making this legislation more rigid than it is.
.- I was very much surprised at the manner in which Senator McGregor distorted the amendment of Senator Walker. He says that if it is enacted it will exclude every other place in the Commonwealth, but has he not frequently told us that, by regulation, depots can be established?
– What more does the honorable senator want?
– We want a specific provision in the measure. If it were left to be dealt with by regulation, it would be a matter of uncertainty, but if a specific provision is made, a concession will be secured to each capital. One would imagine from the Minister’s remarks that we desire to impede the progress of the Bill, when, as a matter of fact, we wish to make the necessary provision to secure its smooth working. It is simply the’ convenience and the interests of the people as a whole that we desire to consult. We believe that that object will be achieved by extending the places for changing notes.
– As Senator Givens, often says, you will be cribbing, cabining, and confining them all the while.
– We shall do nothing of the kind, and the honorable senator deliberately distorts our arguments when he makes that statement.
– If I said the same thing to the honorable senator, I might be called to order.
– I apologize if the remark is offensive to the honorable senator, but when he repeats a misstatement, it looks as if he desires to distort our arguments. Honorable senators opposite, in pursuance of their apparent vendetta against wealth, are now running amok at the banks. But what are the banks ? They are simply institutions which exist for the convenience of the public. They are an enormous factor in our industrial concerns. Honorable senators opposite desire to have a shot at the banks because they seem to think that, in some way or other, they are doing something which is prejudicial to the interests of the country. But that is not the case. The banks are simply an aggregation of shareholders, some wealthy, and others oy no means well-to-do. Some of these shareholders are people who have put their life’s savings into bank shares, and depend upon the dividends for their living. Honorable senators who try to hurt these institutions will not hurt them per se ; they will simply hurt the thousands of people Who are doing business with the banks, who have overdrafts from them, and who are carrying on their commercial operations by reason of the financial conveniences extended to them. These conveniences are not given out of motives of philanthropy, but because it suits the banks. But, at the same time, they are a very great convenience.
– Is the honorable senator discussing the question before the Chair?
– Perhaps Senator McColl intends to connect his remarks with the question.
– I imagine that I am discussing the question, and replying to some of the very callow ideas that have been expressed as to what the banks are doing. When a blow is aimed at these institutions they are not crippled. We simply injure the thousands of persons who are connected with them by reason of their business transactions.
– I think that the honorable senator is now getting away from the point.
– We simply desire to improve this measure, and make it more popular and convenient. In the part of Victoria where I live, the men are paid their wages in gold. Thousands of pounds are paid every fortnight, all in gold. The men do not want paper. If it be desired to popularize a paper currency, and to make this Bill successful, it is necessary to make it more convenient to obtain gold for notes. I should like to see the amendment accepted by the Government. It would do no harm to the Bill, but, on the contrary, would make it much more popular.
– - It seems to me to be impossible for Senator McColl to rise in his place and address the Senate without, in a malicious way, making assertions which are utterly without foundation, and then immediately leaving the subject. Recently he appears to have been unable to speak except to secure the record of some baseless assertion in Hansard, without any attempt at proof ; nor does he afterwards show the manliness to withdraw statements shown to be unjustified. I consider it very unbecoming of a man in his position to take up that attitude.
– Is not that generally the honorable senator’s attitude?
– If Senator Millen will give me an instance of where I have so offended, I shall willingly withdraw what I have said. The question as to how many places shall be established at which Commonwealth notes can be converted into gold is simply one of public convenience. Whether we have one place, or six, or twenty places, has nothing to do with the principle of the Bill. It is a simple matter of business procedure.
– That is quite right.
– Some honorable senators opposite have conveved th° impression that every person who becomes possessed of a Commonwealth note will, merely to show his prejudice against it, travel along some railway line,- go to a post-office, and cash his note ; will then go to another place and demand a note foi his sovereign; then to a third, where he will demand a. sovereign for his note, and so forth. I do not believe that any such difficulties will occur. I am prepared to believe, until I hear something to the contrary, that the banks will give the Commonwealth note issue a fair trial.
– Even though it costs them something to do so.
– I never knew the banks to handle business except at a substantial profit
– That is the reason why they will not use notes under this Bill.
– I take it that the banks will use as many notes as they require to meet the convenience of their customers. Banks are not inclined, any more than is a private individual, to use an excessive quantity of. gold for ordinary purposes of exchange.
– When by the use of gold they can avoid expense to themselves, why should they obtain Commonwealth notes?
– Under the law as it exists to-day the banks have to keep a certain reserve of gold to meet their notes.
– There is no legal reserve at all either in New South Wales or in Victoria.
– Is not that provided for in the charters of the banks ?
– I do not know whether I am entitled to take a more optimistic view of this matter than any other honorable senator is, but I cannot imagine a person or a bank utilizing a larger number of notes than are required. I am prepared to leave it to the judgment of those charged with the responsibility ot adminstering this Bill to suit the convenience of the public in the matter of cashing Commonwealth notes. But when we compare the security behind these notes with the security behind the notes of private banks, 1 do not think that there will be any great demand for gold in exchange for them. My own opinion is that the only conversion that will take place in at least 95 per cent, of cases will be merely in relation to the exchange of worn-out or dirty notes for new and clean ones. To what extent are Queensland notes converted into gold?
– The answer is that the greater facilities you give for conversion the less conversion there will be.
– Suppose Senator Millen had £100 worth of Commonwealth notes in his possession. Would he want to convert those notes into gold ? It would be much more convenient for him to carry notes. I cannot conceive of anyordinary man wanting to convert notes if he knew that they were as good as sovereigns. The only persons who will ever want to convert will be the banks; and seeing that the banks must be practically the only medium for putting these notes into circulation we get back to the position, that the banks are not likely to show such a lack of judgment as to pay sovereignsfor more notes than they require for the conduct of their business. If they did it. would be a reflection upon the business capacity of those charged with management. But they are keen business men. Suppose that the note currency reached about £5,000,000. Can we suppose that bank managers will be so incapable of controlling their business that they will go to the Treasury and take out notes for £6,000,000, only to discover that they do not require £1,000,000?
– Why should they take out any ?
– If the banks were not prepared to take any of the notesit would show some defect in the Bill.
– It would show that it would cost the banks something to take out the notes.
– Suppose that the banks do decline to take out Commonwealth notes. That would not indicatethat there were not sufficient places for converting notes into gold ; it would mean that there was some other defect in the measure.
– Which would be removed by establishing departments.
– I believe that the Queensland experience shows that only about 12 per cent, of the notes are presented for conversion. I do not think that more than 5 per cent, of Commonwealth notes will be so presented. Will Senator Millen say that we ought to have agencies, in each State for their conversion? If there is to be an agency in Sydney, why should there not also be agencies in such large centres as Bendigo and Ballarat, where there is a large turnover?
– There is a great deal of difference in population and volume of business between Sydney and Ballarat.
– But the argument as to convenience is the same. Why should a convenience be given to a man in Sydney if it is to be denied to a man in Ballarat or Bendigo?
– If it is wrong, why give an advantage to a man in Melbourne as against a man in Perth ?
– I did not really believe that that was the difficulty. I have always given the honorable senator credit for being a bigger Australian than his interjection would indicate.
– That was the honorable senator’s difficulty.
– If it should be found that a gold reserve of 12 per cent, is sufficient, though I do not know what the intention of the Government in the matter may be, I say they would have no justification for going to the expense of establishing any other depot for the conversion of these notes than the one at the Seat of Government, which will not always be in Melbourne. I trust that it will be left to the Treasurer and the Government, with the advice of their officials, should there be a real demand for the conversion of these notes in Sydney, Brisbane, Hobart or elsewhere, to take action to establish depots in those places for the purpose. When honorable senators opposite speak of the establishment of six strongrooms as depots for the conversion of these notes in each of the States, they seem to me to assume that as soon as a man gets one of these notes he will desire to rush back to the Treasury to get gold for it. 1 trust that this matter will be left to the discretion of those who will have control of the note issue. I have no doubt that the Government will be found to be quite as business-like as any banking institution in their management of the note issue. If a real public demand arises for them I have no doubt the Government will be prepared to establish these depots wherever they are shown to be required. I intend to support the clause as it stands.
– I must express surprise at the quality of the logic .exhibited by the VicePresident of the Executive Council in speaking against the amendment. He said that as the Bill stands it will be competent for the Government under regulations to establish any depots which experience shows to be necessary, but that if we were to agree to the amendment proposed by Senator Walker it would limit the Government to the establishment of depots at the places named. If that be correct, let us see where we stand. The Bill provides that these notes shall be payable in gold on demand at the Commonwealth Treasury at the Seat of Government, and that . until the Federal Capital is established they will be payable at Melbourne. The Bill really provides that gold shall be paid for these notes at Melbourne.
– Every bank makes the same condition - its notes are payable at the head office of the bank.
– There is no parallel, for the reason that the banks, though legally under an obligation to pay gold for their notes only at their head offices, are, in order to insure the currency of their notes, willing to cash them at all their branches.
– The honorable senator infers that the banks will not be willing to cash Federal notes.
– The banks will not be willing to cash them.
– Why should they cash them?
– Does Senator Millen mean to infer that the banks will be willing to limit their own currency ?
– It is not their own currency. That is where the honorable senator makes a mistake. The Government are proposing to secure all the profit to be derived from substituting paper for gold.
– Do not the banks extend their business as they extend their paper ?
– This will not be their paper, it will be Government paper.
– The handling of the paper will be the business of the banks.
– By using paper as the Government propose to do, their desire is to spread capital and to use capital plus, credit.
– The honorable senator forgets that the banks utilize Queensland Treasury notes very freely.
– It is pitiful that it’ should be necessary for me to say for thethird time that they do so because they/ are paid to-do so.
– That was only at the’ commencement of the issue.
– The Queensland banks are being paid to do so now; I have already stated that I received a wire through Senator St. Ledger, from the Treasury officials in Brisbane, stating that the arrangement which I had described has not been altered, and still holds good. The Age has fallen into an error in this connexion, and Senator Findley blindly follows it. We have it from the Treasury officials at Brisbane that the arrangement . to which I referred has not been altered.
– Thev are nearly as fallible as the Age, according to their figures for the last twelve months.
– If by that statement the Vice-President of the Executive Council wishes it to be inferred that the
Queensland Treasury officials are not reliable, he is welcome to his opinion. I am prepared to accept their statement as correct, and they certainly know more about the matter than does any one here.
– I do not doubt their statement.
- Senator McGregor contends that if we specify certain places at which depots for the conversion of these notes shall be established, the Government will be prevented from establishing depots at other places. If that argument is correct, we ought to strike out the one place already provided for in the Bill.
– That does not follow at all.
– The position seems to me to be absolutely clear. Senator McGregor says that the Bill provides that gold shall be paid for these notes in Melbourne, and that, under the regulations, it will be possible for the Government to establish depots for their conversion anywhere else. Senator Walker suggests that a depot should be established at Sydney as well as at Melbourne, and Senator McGregor immediately says that if we provide that a depot shall be established at Sydney, the Government will be unable to establish one anywhere else. The thing is absurd. Whatever power the Government will have under regulations to establish depots for the conversion of these notes at places other than the Seat of Government will be retained if the amendment is agreed to. If Senator McGregor’s contention is correct, we should strike out this clause altogether, and leave the Government to act under regulations. I, perhaps, should apologize for having entered so freely into this debate, because I have to admit that the statement made by the Vice-President of the Executive Council some time ago, that the Government are considering the adoption of an arrangement with the banks such as I have suggested-
– They are not considering anything of the kind. They could not consider such an arrangement until the Bill is passed.
– It is rather awkward for the honorable senator that the Prime Minister should just have made a statement that the Government have already made an arrangement of the kind with one bank, and are in negotiation to effect similar arrangements with others. I suggest that Ministers should come to some under standing as to what they ought to say. On an historical occasion, Lord Melbourne, speaking of the Government, said that it did not matter so much what Ministers said so long as they all said the same thing. The present Government’ might take the philosophy of that story to heart.
– It shows, at all events, that we did not consider the matter in caucus.
– It does, and I am beginning to see the wisdom of the caucus, because once the caucus has spoken there is no divided tongue amongst Ministers. I should advise the caucus to take the Government more in hand. The Prime Minister says that an arrangement has already been made with one bank, and the VicePresident of the Executive Council tells us that the Government cannot make any arrangement until this Bill becomes law.
– We may have an understanding with a bank, but that is not an arrangement.
– The Prime Minister has said that an arrangement has been come to with one bank. I should like to refer now to the extreme agility displayed by Senator E. J. Russell in avoiding a difficulty by jumping over it. The honorable senator has been picturing a man rushing around the country with an Australian note and finding the banks unwilling to cash it.
– I did no such thing.
– The honorable senator drew a picture of a man running along a railway line with an Australian note and asking gold for it, and, having received a sovereign, going further on and asking for a note for it. How does he think that a man is going to get one of these notes, in the first instance?
– He must earn it.
– When a man has earned a £1 note, it will not suddenly spring up in front of him. There must be a channel through which it will pass from the Treasury to his hands.
– The honorable senator is dealing with a different clause altogether. It is not a question of an agency.
– The circulation of the proposed note issue will depend upon the facilities offered for the redemption of the notes and the multiplication of the places at which they can be redeemed.
– The honorable senatorshould not accuse me of running away from a question with which I refused to deal.
– It is idle to say what will happenif these notes are not in circulation. I am trying to emphasize the difficulty of getting them into circulation. If the notes are in general circulation, the difficulty suggested by the honorable senator will disappear.
– Then why all this trouble ?
– Because I wish to see this Australian note issue a success, and because its object should be to serve the public convenience, and not to enable the Government to make a few extra pounds.
– We have heard the argument advanced by the banks that the issue will reach £10,000,000 in a few years’ time, but, according to Senator Millen, there will be none of these notes in circulation.
– We might ignore reckless statements by a private member of the Senate but I remind Senator Findley that one who is clothed with the dignity and responsibility of a Minister of the Crown ought not to make them.
– The honorable senator’s remarks about the difficulty of circulating the notes are absolutely ridiculous.
– I have said that I wish the Australian note issue to be a success, and I do not believe it can be made a success unless facilities are afforded for getting the notes into circulation. I do not believe for a moment that the banks collectively are animated by any ill-feeling towards the proposed note issue or towards the Government, whatever the views of individuals connected with the banks may be. But I do say that it is unreasonable to expect that the banks, having sovereigns that are legal tender to meet all their liabilities, will, merely in order to help forward a Government note issue, go to the expense of transferring those sovereigns from remote parts of the Commonwealth to Melbourne to get notes for them which, when taken to the place from which the gold was sent, do only what might have been done with the sovereigns. The remedy for that will be the creation of depots in different places for the conversion of the notes. The Commonwealth Government, reaping the advantage of the note issue, might very well say to the people who would like to use the notes that, rather than throw upon them the expense of bringing their notes to Melbourne to obtain gold for them, they will, at least where there are mints established, provide gold for the redemption of the notes. Unless this course is adopted, though I do not say the note issue will be altogether a failure, the notes will not flow as freely as it is desirable they should, or so freely as to make any perceptible profit for the Government at all. Unless the Government increase the facilities for the conversion of thenotes, it will be far better for them not to interfere with the existing system.
.- In the speech which he has just now made, the Leader of the Opposition has entirely ignored all previous experience of a State note issue in the Commonwealth. The experience of Queensland is that the banks in the remote portion of that State invariably accept Government notes over the counter for gold.
– But three times this afternoon I have pointed out that the Queensland Government pay them to do that.
– They do nothing of the sort.
– The Queensland Government are paying them 2 per cent.
– That was done merely to assist the banks in a time of stress.
– It was done to get the Government notes into circulation, and the bonus is still operative.
– It was not done to get the Government notes into circulation. As a matter of fact, the private banks in Queensland wanted to press the Government notes upon the public. There are two reasons why the note issue of that State has been a success, and why the number of Government notes in circulation there exceeds that of the private banks in circulation in other States. The first reason is that the public have absolute confidence in the Queensland Government notes, and the second is that the banks find it advantageous to use them.
– Because they found it profitable to use them.
– And the banks will find it profitable to use Commonwealth notes, seeing that it is far easier for them to transfer notes from place to place than it is to transfer gold. What will they do to conserve their stock of gold at their head offices, and to keep an ample supply of till money at their various branches?
They will exchange their gold for Commonwealth notes, and, I venture to say, that the experience of Queensland in this connexion will be repeated. Instead of the banks boycotting the Commonwealth note issue they will use a much larger proportion of it than we anticipate, because they will find it safe, convenient and profitable to do so. Why all this rumpus about the necessity for establishing depots for the conversion of Commonwealth notes into gold in the various States ? As a matter of fact, there will be no necessity for a man to exchange those notes for gold unless he intends to leave the country, because the notes will be legal tender from one end of Australia to the other. Do men and women take large stocks of gold with them when they are leaving the country?
– A man does not take notes.
– He takes notes, but not bank notes. He usually gets a letter of credit or a draft upon a bank at the place to which he is going. Where, then, is the necessity for establishing depots in the different States for the conversion of Commonwealth notes into gold?
– What facilities are to be given for their conversion under this Bill ?
– Exactly the same facilities which are afforded in Queensland. There is one centre at which the notescan be presented and gold obtained for them.
– Why does the honorable senator ignore the fact that the Queensland Government offered the banks an inducement to take up their notes ?
– I have absolutely denied that. I have already told the honorable senator what was done. The Government of Queensland assisted the banks by giving them fixed deposits upon threefourths of the amount of the notes presented to them. They did so to tide them over the time of stress following on the financial crisis of 1893.
– They did so to get their own notes into circulation ?
– No. Have they adopted the same plan during recent years ?
– Yes, it is still in operation.
– It has only been continued because some of the banks have not yet recovered from that time of stress. As a matter of fact, one of those institutions collared deposits to the extent of £3,500,000 and turned them into inscribed interminable stock.
– That is the bank with which the Government propose to make an arrangement.
– We can make no arrangement until this Bill has been passed.
- Mr. Fisher said that the Government had already made an arrangement.
– I do not speak as one who knows what is at the back of the mind of the Government in regard to this Bill, but I understand that there is only one place at which a demand can be made for gold in exchange for Commonwealth notes, namely, at the Federal Treasury.
– What are the Government going to do with the gold which accumulates in these places?
– Does the honorable senator think that gold will accumulate in large piles so that we shall require to construct huge vaults to hold it ? As a matter of fact, there will be no necessity for the use of gold to any material extent when we have a Commonwealth note issue, because the public will have absolute confidence in our notes, and will be prepared to accept them in connexion with every transaction in dailylife from one end of Australia to the other. Unless we are faced with a panic similar to that of 1893, there will never be a similar demand made for gold again. Even if such a panic confronted us, I doubt whether the public, by reason of their confidence in the stability of the Commonwealth note issue, would ever make a similar demand for gold again. Consequently, a gold reserve of 25 per cent. is, to my mind, not merely ample, but excessive. The experience of Queensland has proved that a gold reserve of 12 per cent. is ample. Why, then, should we have millions of pounds lying idle when it can be turned to profitable use? No doubt it was necessary in the old days to hold a large gold reserve, because the public did not have the same confidence in our private banking institutions that they will have in a Commonwealth note issue. As a matter of fact, the establishment of depots in the State capitals, at which Commonwealth notes might be converted, might prove detrimental to the best interests of Australia; because, if ever a time came when the banks desired to discredit our note issue - when they wished to revenge themselves upon the Commonwealth - they would be able to secure a large quantity of those notes, and, by pre-arrangement, make a concerted demand for their redemption upon a given day. We wish to avoid the possibility of that. The Government are wise in adhering to the provisions of the Bill.
-Colonel Sir ALBERT GOULD (New South Wales) [6.10’J.- Senator Givens has pictured the possibility of the banks making a raid on the Commonwealth notes, and thus putting the Government of the day in an awkward position. He has put that picture before us with a view to persuading the Committee not to accept Senator Walker’s amendment.
– I pointed out previously that there is no necessity for that amendment.
-Colonel Sir ALBERT GOULD.- That is so. If the banks desired to put the Commonwealth Treasurer in an inconvenient position, they could accomplish their purpose just as well by sending Commonwealth notes to one centre as they could by sending them to several centres. They could collect 70 or 80 per cent, of the notes issued, and demand their redemption at one centre, when the Treasurer had only a gold reserve of about 25 per cent, with which to meet them. But I take it that, under this Bill, our principal object should be to inspire the people with confidence in a Commonwealth note issue. Under this clause, if the holder of a Commonwealth note happens to reside in Perth, he will know that he cannot obtain gold for it in that city.
– Will he not be able to buy anything that he may want with it? Senator Lt.-Colonel Sir ALBERT GOULD. - Yes. But at present, if he wishes to ship gold from Australia, he has not to send the notes of private banking institutions to Melbourne to convert them.
– Who ships gold but the banks?
.- There is a good deal of it shipped annually.
– Not in the form of coin.
.- Yes. If the honorable senator reads the newspapers, he will frequently see that so many thousand sovereigns have been despatched to China and elsewhere.
– A great deal of gold is shipped in the form of bullion.
.- Precisely. The Vice-President of the Executive Council, in urging the Committee not to accept the amendment of Senator Walker, entirely misconceived the position, inasmuch as he stated that the adoption of the amendment would have the effect of restricting the powers of the Government. The Bill proposes that Commonwealth notes shall be redeemable only in Melbourne, or wherever the Seat of Government may be. Senator Walker wishes to make them redeemable in the six States. Therefore, my reply to the Vice-President of the Executive Council is that the amendment would extend the powers of the Government. The honorable gentleman also said that the difficulty could be met by regulation. But we have no assurance that any such regulation will be framed. Further, if we declare in the Bill that Commonwealth notes shall be convertible in the State capitals, we shall render any such regulation unnecessary. The VicePresident of the Executive Council further argued that if the Government distributee! their gold reserves amongst six centres, they would weaken their position, because they might have a large amount of gold in Sydney or Melbourne, when the greatest demand was being made for it in Perth. But in this matter, as in all others, the law of averages will prevail. If a gold reserve of 25 per cent, is sufficient, the Treasurer will send the necessary proportion of that amount to the head offices in the different States, for the purpose of meeting the demands for the redemption of notes which are likely to be made there. But let us go a step further, and see how far the Government have power for this matter by regulation. If honorable senators will refer to clause 32, they will see that the power to make regulations is not taken in the form which he supposes. Clause 6 provides that Australian notes shall only be payable in gold coin on demand at the. Treasury at the Seat of Government, and when we turn to clause 32 we find that, strictly speaking, no power is given therein to select any other places at which gold coin may be demanded for notes. The provision reads -
The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for giving effect to this Act.
Under that clause the Government may, of course, fix upon places where, at their option, they may cash notes. But they will have no power to prescribe a place at which gold coin may be demanded for notes. In other words, the Government may provide by regulation that gold coin may be demanded for the notes at Perth, but should they, for any reason, see fit to decline to cash the notes when presented, the noteholder would have no remedy against the Commonwealth, and it would be necessary for him to come to the Treasury at Melbourne, where alone the notes are to be redeemable in gold coin.
– Why does the honorable senator want to place the Department at a disadvantage?
– I do not. I want to place the public in an advantageous position. It is not a question of inconveniencing the Government, but a question of conveniencing the people.
– The people will make the Government convenience them.
– I have no doubt that they will do so ultimately. But I want honorable senators to realize that the object of Senator Walker is to prescribe six places at which gold may be demanded for notes. In my opinion, the amendment would, if adopted, create in a rigid Bill an elasticity which could not possibly be created by regulation. It would have this advantage, that whatever places the Governor- General mightappoint would be places at which gold could be legally demanded for notes ; but under a regulation that claim could not be made. On the other hand, it would have this disadvantage, that the GovernorGeneral might not see fit to proclaim any place at which the notes would be redeemable in gold, that is, apart from the Seat of Government. The amendment would give to the Bill that elasticity which is necessary in order to maintain public confidence in every one of the notes issued by the Government.
Question - That the words proposed to be inserted be inserted. (Senator Walker’s amendment) - put. The Committee divided.
Majority … … 10
Question so resolved in the negative.
– I move -
That paragraph c be amended by the addition of the words “ and at such other places as the Governor-General in Council may from time totime appoint.”
I do not want to tie the Government down to making the capital of each State a centre for distribution. The amendment will carry out the idea which I had in my mind yesterday when I spoke of giving the Government an opportunity of appointing places where notes could be converted into gold by persons who were about to leave the Commonwealth. My proposition is exactly on all-fours with the one which Mr. Fisher made in the Legislative Assembly of Queensland, and the reasons which he then gave for his proposition apply to-day. It appears to me that under the Bill the Government could not by administrative order appoint any place other than the Seat of Government for cashing the notes, because under clause 32 the Governor- General in Council could only make regulations not inconsistent with the Act. Not long ago the validity of a regulation was impugned in the High Court. It was contended that under the Post and Telegraph Act the Department had the right to make a regulation to prohibit any one from issuing a telephone list; but in the High Court the regulation was declared to be ultra vires. I am not seeking to force upon the Government a compulsory provision, but am merely suggesting that they shouldtake the power to appoint certain places at which notes could be cashed. I think it was Senator McDougall who said that the Government were going to proclaim certain places. The Prime Minister in another place said that he did not promise that the Government would do so, but clause 6 provides that the notes shall only be payable in gold coin on demand at the Treasury at the Seat of Government, which, until a certain event happens, shall be deemed to be at Melbourne. In my opinion, that provision will make it impossible for the Government by regulation to proclaim Hobart, Perth, or Palmerston as a place where notes can be cashed for gold. The amendment is not calculated to embarrass them in any way. We have been told more than once that they have their eyes quite open to the whole question, and will take steps whenever it is necessary to appoint places where notes can be cashed. My amendment will give them a power which I do not think they possess at present to appoint such places. When I spoke before, I referred to the point which Mr. Fisher made in the Queensland Parliament when he contended that it was unreasonable to require those who desired to proceed to other parts of Australia to go to Brisbane to get their notes cashed. From time to time many persons travel northward, and, as we know, a large number travel from Thursday Island and Port Darwin to Singapore, Java, and other countries. Unless this amendment is made such persons will have to send to Melbourne, 1,500 or 2,000 miles distant, to get their notes cashed.
Sitting suspended from 6.30 to 7.4.5 p.m.
– Not only will the Government be unable, even if they desire to do so, to specify various places where notes may be cashed, but in many parts of Australia they will be accumulating gold themselves. It will be an expensive thing if, in order to meet the influx of notes into Melbourne, the Government themselves have to send their gold from Perth or Brisbane to the Seat of Government. For that reason, also, it would be convenient for the Government to cash the notes at various places in the Commonwealth. I base my most important argument, however, upon the point that the Bill contains no power for the Government to establish depots at which gold may be exchanged for notes.
Senator McGREGOR (South Australia - Vice-President of the Executive Council) £7.46]. - The Government feel very grateful to honorable senators opposite for the very keen interest they take, both in our welfare and in the convenience of the public. But we are satisfied that the measure secures all the power that is really required under this Bill. It is not the question of the compulsory exchange of gold for notes in the different centres of the Commonwealth that we need to consider. It is simply a ques tion of the convenience of the public. As the convenience of the public has been amply safeguarded in Queensland under a similar measure to this, we are satisfied that the same can be done with Australian notes when they come into circulation.
– Does the honorable senator know that Queensland notes are at a discount in Thursday Island?
– Australian notes will not be at a discount there, because Thursday Island and all other parts of the Commonwealth are included under this Bill. Again thanking the Opposition for their very cordial assistance, I must decline to accept the amendment.
– I hope that the Vice-President of the Executive Council will not act too hastily. I direct his attention to paragraph c of clause 6, which he desires to have passed verbatim. It provides that Australian notes may be issued in certain denominations, and then paragraph c says that they shall - be payable in gold coin on demand at the Commonwealth Treasury at the Seat of Government.
Sub-clause 2 reads -
Until the Parliament meets’ at the Seat of Government, the Seat of Government for the purposes of this section shall be deemed to be at Melbourne.
As clearly and as explicitly as possible, this clause says that Australian notes shall be payable in gold only at the Commonwealth Treasury at the Seat of Government.
– That is all that is compulsory, but the notes may be paid in gold anywhere else.
– How can the Government make a regulation that is inconsistent with this measure?
– In Victoria, the notes of the Bank of Victoria are only legally payable in Melbourne, but, nevertheless, a person can, if he likes, change them at Horsham.
– I am speaking of the responsibility of the Government for the payment of these notes. Inasmuch as clause 6 provides that the notes shall be payable at the Seat of Government, and inasmuch as the Seat of Government is strictly defined, how can the Government make a regulation providing that the notes shall be payable somewhere else?
– The honorable senator’s law is bad, and his logic is no good at all.
– This is not a question of law, but of common sense. The notes are redeemable at the Seat of Government. If any were presented anywhere else, and the Commonwealth Treasurer were in difficulties, he could say, “ Under the Act these notes are not payable anywhere but at the Seat of Government.”
– The Treasurer has that power, but to meet the convenience of the public he can make arrangement for the notes to be paid elsewhere..
– Cannot the Vice-President of the Executive Council see that he is tying up the Treasurer by this clause? If it were not for the work of the Opposition this Bill would be very much of a farce; and yet when we want to get that done which the Treasurer wants to have done the Vice-President of the Executive Council insists on handcuffing him. Suppose that when the Act comes into force some citizen of the Commonwealth chooses to say, “ You cannot pay gold for your notes anywhere except at the Seat of Government.” Suppose he went to the High Court for an injunction to restrain the Treasurer from paying gold for notes except at the Seat of Government. What position would the Government be in then?
– If the citizen had the honorable senator to represent him legally he would lose his case.
– Will the VicePresident of the Executive Council address himself without flippancy to this point? I dr> not know whether it has been considered bv the Attorney-General. The Government cannot play fast-and-loose with an Act of Parliament. It is quite an arguable proposition in law, as any honorable senator must see, that an injunction might be granted against the Treasurer if he paid Australian notes anywhere but at the Seat of Government. It could be argued that if the Parliament thought it wise or expedient that the notes should be paid anywhere else Parliament could easily have so expressed its intention. Whenever counsel in construing an Act of Parliament endeavours to put various interpretations upon sections a Court of law invariably answers, “ If Parliament intended what you say, “it would have said so.” Accordingly the Court would probably lay it down as a rule of law that, inasmuch as Parliament could have provided otherwise, and did not, the notes must be paid at the Seat of
Government and nowhere else. Still more inclined would the Court be to say so if it ascertained - not by reference to Hansard, but in some other way - the position that the Government took up when the matter was mentioned. We are simply asking that the matter shall be made both clear and constitutional, but the Government, with a certain amount of mulish stupidity, refuse to accept any suggestion. We have already been trying for two or three hours to make this currency more available to the people. We have been trying to make the notes more easily redeemable in gold. We have been trying to give the Government a fuller discretion. We have been trying to introduce more elasticity into the Bill. But the Government refuse to accept any suggestions. The inference is that they do not want the measure to be elastic. It is merely a common sense proposition, apart from law altogether, that if in this Bill we declare that the notes shall be payable in gold only at the Seat of Government the Treasurer will be at the mercy of any citizen of the Commonwealth who may move for an injunction.
– The word “ only “ is not in the clause.
– That is a well-known maxim of law. If Parliament expressly states that these notes shall be redeemable in gold at only one place, it will be held by a Court of law to exclude their redemption at other places.
– Is there not something in the doctrine of implied power? I heard the honorable gentleman wax eloquent on that doctrine on another occasion.
– No implied power can override the words of a Statute.
– There is much in the doctrine of implied power. If the clause were .to read “ until the Parliament meets at the Seat of Government, such a place as Parliament may direct,” the Government could select one or more places for the payment of these notes; but when the clause expressly states that they are tq be payable at the Seat of Government, every other place is by implication cut out. It must be obvious that the amendment would meet exactly what the Government’ say they desire to do by regulation. We do not propose to prescribe any place outside the Seat of Government, and under the amendment the Government might appoint two, three, or more places at which the notes might be redeemed.
– But they would have to appoint some other place?
– No, the amendment does not mean that at all. It would give the Government power, if they thought it necessary, to appoint one or more places other than the Seat of Government at which the notes might be redeemed. The Bill provides that until Parliament meets at the Seat of Government the Seat of Government for the purpose of the clause shall be deemed to be at Melbourne. That is a definition of the place at which the notes are to be payable in gold which cuts out every other place. The Government profess to be desirous of extending facilities for the conversion of the notes. *
– The Government say that they will use their power to appoint other places if that is found to be necessary.
– Will Senator Guthrie agree to have that put in the Bill ?
– It is already provided for.
– We might take Senator Guthrie’s suggestion and put the amendment in this form, “or at such other places as may be deemed necessary.”
– That is the same as the amendment already submitted.
– I agree that both would mean the same thing, and as there is no doubt on the matter, I hope the amendment will be accepted.
.- When speaking on the second reading of the Bill, I explained that I approved of the measure as a whole, but objected to this clause, which in my opinion makes the proposal inelastic. I cannot understand why the Government are unwilling to accept the power we offer them to redeem these notes, not only at the Seat of Government of the Commonwealth, but at “ such other places as the Governor-General may appoint.” If it is not considered necessary to appoint other places, the GovernorGeneral will not appoint them ; but if after this Bill has become law it should be found necessary to appoint other places the Government will not be able to appoint them without some such amendment of this clause as has been suggested. I can re member a time in the history of the State from which I come when this difficulty was overcome by private enterprise. I mentioned the matter on the second reading. - 1 mentioned that many years ago the Bank of New South Wales, an institution still in existence, issued notes at Sydney bearing a statement that they would be redeemable in Sydney. They issued other notes of the same denomination at Brisbane, which were redeemable at Brisbane; and they also issued notes bearing the statement that they would be redeemable at Rockhampton, which were redeemable at that place. Senator Walker can bear me out in this.
– I was at Rockhampton on the day when notes were first issued there.
– The Government claim to be able to do these things better than private enterprise can do them; and they should now accept the power we offer them to increase the number of places at which the proposed Australian notes shall be redeemable in gold. We desire to make the note issue more successful.
– - An amendment at any price.
– I take Senator Pearce to mean that no amendment from this side, however good, will be accepted by the Government. I do not think the honorable senator can say that the amendment proposed upon this clause would not give the Government greater power than they ask for in .the Bill.
– If I wished to waste time, I could tell the honorable senator many reasons why the amendment would be of no use.
– It is the honorable senator’s place to give the Committee that information. He should say what is his objection to the amendment. We are asking the Government to do only what private enterprise has already done. If they will not accept the amendment they might make provision for the issue of. notes in each State redeemable in each State. There are many ways of overcoming the difficulty, and I am at a loss to understand why the Government will not accept the amendment. There would not have been one-fourth of the discussion we have had on this Bill if the Government had announced their intention to accept an amendment upon this clause. I say that we desire to make the proposed nott- issue more popular:.
– Let us pass this Bill that we may see a few of the notes. I think they will be popular enough.
– We think that means might be adopted t’o make them more popular than they are likely to be under this Bill. I know that when Senator Stewart was on this side he held that everything done by honorable senators on the other side was wrong. We admit that in this Bill the Government are doing what is right. I am personally sorry that a proposal to establish a Commonwealth note that will be legal tender throughout Australia was not earlier introduced, but now that it has been introduced, I see no reason why we should not take means to make it popular. Clause 32 provides that -
The Governor-General may make regulations not inconsistent with this Act ;
But, as the Bill stands, any regulation framed to enable any place other than the Seat of Government of the Commonwealth to be appointed a place for the redemption of these notes would be “ inconsistent with the Act.” That is why we propose an amendment which would give the Government power by regulation to appoint two, three, or half-a-dozen places in the Commonwealth as places at which gold might be obtained for these notes if it was required. I mentioned last night that during the banking crisis of 1892 people took sums of £100, £200, and ^300 out of the banks in gold. I saw that done at two banks in Charters Towers. The people who took out the money kept it for two or three days, and becoming frightened that they would be robbed of it, took it back to the bank and wanted the bank to receive it. The authorities of the bank said, “ No, you took your money out yesterday; you may want it again in a week’s time, and we cannot open a new account for you.” When the people found that the banks were not anxious to take back their gold, the panic was stopped. 7f the Government will accept the amendment proposed from this side, people in other Stales will know that it will not be necessary lor them to send their notes to Melbourne in order to have them exchanged for gol J. What makes a Bank of England note so popular is merely the fact that gold can be obtained for it anywhere. I have known men to’ receive a shilling more than its face value for a Bank of England note for £5. ‘ The reason was that it could be sent to friends at a distance at an expense of is., whilst a person requiring an order for’ £5 from the Government or a bank for the same purpose would have to pay 2s. 6d. for it. I hope the Government will accept the reasonable amendment proposed by Senator Chataway. I do not care whether or not they accept the words which have been suggested by Senator Chataway, so long as they consent to the insertion of a provision declaring in explicit terms that gold may be obtained for Commonwealth notes in other places than the Seat of Government. If they do not agree to the proposal now, I am satisfied that in the near future the Bill will have to be amended, in order to make it workable.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [8.16]. - I am sorry that the Government have adopted the attitude which they have taken up, not only ^ in regard to this amendment, but in regard to other amendments which were designed to improve the measure. A little time ago the Vice-President of the Executive Council was very sarcastic towards the Opposition. He thanked its members for their evident desire to assist the Government, and to make the Bill an acceptable one.
– Nothing seems to please the honorable senator.
– Nothing appears to please honorable senators opposite. The VicePresident of the Executive Council, while professing to be under such an obligation to the Opposition for their attempts to improve the measure, failed to recognise that the Opposition in another place so far improved it that he was able to present it to the Senate as a perfect Bill. Whatever he may say in regard to the Opposition in this Chamber, he and his colleagues cannot forget the eminent services which were rendered by the Opposition in another Chamber, whose members pointed out where the Bill fell short of being a popular and safe one.
– Then the Opposition affirmed that the Government had backed down.
.- I do not say that. The Government acted wisely in reconsidering their position when the logic was against them. They did the right thing in accepting the amendment which I have in my mind, because, after all, we must recognise that
Parliament has decided to establish a Commonwealth paper currency. That being so, we ought to render our best aid to make the Bill as perfect as possible. We have to recollect that there is something which stands far higher than does the success of a Government, namely, the reputation of the Commonwealth in respect of its legislation, and particularly of legislation which will affect every man and woman in the community. Every man and woman in Australia will, to some extent, be affected by the safeguards with which we surround this Bill. Therefore the Government may very well consider the advisableness of adopting the proposal which has been submitted by Senator Chataway. The Vice-President of the Executive Council has assumed that, under this Bill, the Ministry will possess a power which, to my mind, they will not possess. The regulations of which he spoke must be regulations not inconsistent with its objects. Now, one of the definite objects of the measure is to provide that at only one place in Australia shall Commonwealth notes be redeemable in gold. A regulation which provides that they shall be redeemable” at half-a-dozen other places will not have the force of law. Irrespective of whether or not such a regulation would confer a convenience on the public, it would be ultra vires of the power conferred upon the Government to frame regulations not inconsistent with the provisions of the measure.
– We do not wish to be compelled to redeem Commonwealth notes other than at the Seat of Government.
– The Vice-President of the Executive Council has interjected that the Government do not desire to be compelled to redeem’ these notes other than at the Seat of Government. So that, on his own showing, they would merely frame a regulation which they would break at any time thev thought fit to do so. They would be ;at liberty at any moment to refuse to be bound by such a regulation. If a financial panic occurred, they would be able to say, “ We do not care for the regulation. We do not intend to allow Commonwealth notes to be convertible at such-and-such a place.”
– Does the honorable senator think that any Government would refuse to recognise a regulation which had been laid before Parliament?
– GOULD. - They could repudiate it. The amendment provides that Commonwealth notes shall be redeemable in gold at the Seat of Government, and at such other places as the Governor-General may direct.
– Its adoption would have the effect of limiting toe powers of the Government.
– It would have the effect oi extending those powers. The GovernorGeneral would be under no obligation to proclaim any place at all as one at which Commonwealth notes might be exchanged for gold. But he would be empowered to proclaim any place where the need tor so doing existed as a place for the redemption of such notes. Of course, he could reserve to himself the power to withdraw that proclamation at any time.
– Not after it hadbeen laid before Parliament.
– Such a regulation might be repealed by a subsequent regulation-
– All regulations require the approval of Parliament.
– Any regulation framed under this Bill would have to be laid on the table of the Senate, and if not disapproved within a certain period it would have the force of law. If Parliament thought that the Governor-General was exercising his power too freely it could repeal any regulation which he might frame for the purpose of providing that Commonwealth notes should be redeemable at certain places. I say, therefore, that Senator Chataway’s proposal is one which makes for elasticity and against rigidity. I ask the VicePresident of the Executive Council to reconsider the position, notwithstanding that the amendment emanates from this detested side of the chamber. If he does so he will find that there is a great deal more in it than he imagines. Further, it cannot have any effect until it has been approved by the other Chamber. If in the interim circumstances arise which induce the Government to believe that it is desirable to go back upon it, they will be in a position to do so. But if they refuse to adopt the proposal now there -will be no possibility of inserting it in another place. The only way in -which the omission can then be remedied will be by the introduction of a fresh Bill which will have to be passed through all its stages. I urge the VicePresident of the Executive Council not to regard the amendment from the sarcastic stand-point from which he viewed it some time ago.It has been submitted - as all the other amendments emanating from this side of the chamber have been submitted - in perfect good faith, and its adoption, I am sure, would improve the Bill.
– I do not think that the amendment of Senator Chataway is intended to prevent financial panics. I believe that its adoption would improve the Bill, because the banks will undoubtedly use Commonwealth notes. They must use them, and I believe that they will be perfectly prepared to do so. I agree with Senator Gould that there is a danger of the Government making this currency a little bit too rigid. I hold that it should be so elastic that it will expand and contract according to the necessities of trade. We all know that at harvest time every bank is accustomed to send out to its branches a number of unsigned notes. Those notes are afterwards signed and issued as they are required. When they have served their purpose they automatically find their way back to the banks. Senator Guthrie. - Within a week. Senator VARDON.- Yes. The Commonwealth note issue, if it is to be a public convenience, must be equally elastic. During the harvest time a large number of these notes will be required, and subsequently they will be returned to the banks. The banks will then find themselves in possession of a surplus of notes, and in such circumstances it is only right that they should be permitted to return them to the Commonwealth Treasury to be again issued as the necessities of trade may require. This is all that I think the amendment would really accomplish. It seems to me to be quite inoffensive to the Government. It will empower them, if enacted, to proclaim additional centres at which notes can be redeemed in gold. If they do not think it necessary to take that step, they need not issue a proclamation. I am surprised that they think the measure so perfect that they cannot accept an amendment which is not moved in a hostile spirit, but is calculated to meet the public convenience and to popularize the notes. I feel bound to support the proposal because I believe it is a good one.
– Senator Guthrie has suggested that the amendment, if made, will make it compulsory for the Government to appoint other places.
– One other, at any. rate.
– The words of the amendment are “ and such other places as the Governor-General in Council may appoint.” If the word “ may “ means “ shall “ then I do not understand language. The Government might, or might not, appoint other places, but they would not be under art obligation to do so. Assuming that this power is not already taken in the Bill, and that a financial panic occurred in some part of Australia, if not in the whole of it, surely the Federal Government would take the earliest possible opportunity of rushing” gold into the centres where the panic prevailed, in order that Australian notes could immediately be cashed. If, however, the Government had not power, by regulation, to appoint new places where notes could he cashed at a time of panic and general depreciation of paper securities, what would be likely to happen? In some other part of Australia there would be men who had very large interests, and if the Seat of Government were depleted of gold, they might fear that their securities would suffer. It would take very little to induce such a man to go to the High Court and ask for an injunction. He might be unwise in taking that step, but it would not take very long for him to get a rule nisi, in order to prevent the Government from continuing their act pending a decision of the Court. On a point of law the Government would be prevented from doing the very thing which would stop the spread of the panic in, perhaps, Western Australia, or some other part of the Commonwealth. Unless this amendment is made, the Government will not be in a position to take the first step to allay a panic. The Vice-President of the Executive Council, instead of thanking us for the assistance which we offer, and then refusing to accept it, would be very much wiser if he would accept an amendment which would put the Bill on a much sounder footing, and enable the Government of the day to deal with a financial panic very much more effectively than it could otherwise do.
– Will the Vice-President of the Executive Council contend for a moment that under this clause the Treasurer could make the notes redeemable in gold at any place other than Melbourne? There can be only one answer to that question, and that is that until the Parliament repealed the law, the Treasurer could refuse to redeem a note in gold except at Melbourne.
– Quite right; that is exactly what it means.
– The honorable senator has admitted straight out that under the clause the Treasurer need not redeem the notes in gold except at Melbourne. Is that what the Government desire? The Minister has admitted that under the clause, as it stands, the Treasurer could refuse - and the Parliament could not interfere - to redeem a Treasury note in gold except at Melbourne?
– He could.
– Is that what the honorable senator desires ?
– Then what does the honorable senator desire?
– I have told the honorable senator a dozen times.
– If ever a man was in a corner the honorable senator is in one now. He has admitted explicitly that a note is not redeemable in gold except in Melbourne, and that the Parliament cannot control the Treasurer in the matter until it repeals the law. He has also acknowledged that that is not what the Government desire. The next question is - What do they desire?
– In the words of the High Commissioner, I will say, “ Yesno.” Will that please the honorable senator?
– Not on this point. We can have no “ yes-no” or “ noyes “ on matters of currency. The Government do not want the notes to be redeemable in gold except at one place, but they intend by regulation to make them redeemable at some other places.
– At as many places as may be convenient, but that will not be compulsory.
– Why is the honorable senator going back on his own words? It is worse than downright stubbornness for him to resist an amendment which, after his expressed admission, is only intended to enable the Government to carry out their declared intention. He must be like the little girl who, when she addressed herself to Dr. Fell, and he noticed her peculiar attitude and asked her what was wrong, said -
I do not like thee, Dr. Fell;
The reason why I cannot tell.
The Vice-President of the Executive Council is in a worse position than was the little girl, because he is in a position to tell, but will not.
– Perhaps it was because Dr. Fell talked too much.
– That is a nice way of escape. I think that we have given Senator McGregor such a pleasant Wednesday afternoon on this point that if he will not yield we can do no more. There is not a fraction of a grain of gold to a whole ton of him.
Senator Lt.Colonel CAMERON (Tasmania) [8.43]. - I desire, in a mild way, to point out to the Government that there is more in this amendment that would appear from the chaff and pleasantry which we have had to listen to for the last few minutes. It is a very large proposition to make a corner of Australia, which is far removed from the movements of trade and people, a place at which alone notes can be exchanged for gold. Surely it must be advisable to take power in the Bill to accommodate commercial people, because, naturally, the trade of the country is its life-blood.
– Oh, that has been explained long ago.
– I urge the honorable senator not to look upon the amendment as simply a trap for the unwary. If he will not accept it here, I hope that he will take it to the caucus and ask his masters for permission to alter the Bill. It is most essential that the Government should possess this power. Consideration should be given to the interests of those who trade in Australia either by sending goods away or by receiving them.
– The honorable senator need not raise silly bogies.
– The point may seem silly to the honorable senator, but it may present quite a different aspect to those immediately affected.
– When the honorable senator goes to London, does he take a portmanteau full of gold with him?
– If I were in Western Australia possibly I should like to get change for my notes in some place other than Melbourne. That is the simple proposition which I want to get into the Minister’s head.
Question - That the words proposed to be added be added - put. The Committee divided.
Majority … … 9
Question so resolved in the negative.
– I call attention to sub-clause 3, which relates to the signatures on Australian notes. It would bewell to leave out the words providing that the signatures may be made by engraving lithography or any mechanical process approved by the Treasurer.
That is a most dangerous provision, which adds vastly to the risk of forgery. It may be said that signatures are attached to notes by mechanical processes in other countries. I believe that that is so. But, nevertheless, I do not think that it is a safe proceeding. There ought to be two signatures to each note. They should be the signatures of persons appointed by the Government for that purpose, and a signature should not be engraved on stone and afterwards simply printed on the notes. I imagine that the notes will be printed on paper especially made for the purpose, and that precaution will make it moredifficult to forge the nobs themselves.But the signatures are more important than the paper.
– Under clause 21 the punishment for that kind of offence is heavy.
– A man who commits a forgery knows that he will be sent to prison if detected, but that does not prevent forgery being committed.
– The elimination of the words objected to by the honorable senator would not prevent forgery.
– Signatures might be photographed.
– But a photographed copy of a signature does not present the same appearance as a signature made with pen and ink.I am aware that Bank of England notes bear printed signatures. But a Bank of England note is never used a second time. A note may be paid over the counter and returned to the bank within five minutes, but it does not go out again. It is not proposed to follow that plan here. In the interest of safety the Government might consent to take out the words to which I have directed attention.
– I should like to know the meaning of the first two lines of sub-clause 3. They provide that -
Australian notes shall bear thereon the signatures of such officers as the Treasurer directs.
Does that mean that more than one officer is to sign each note? Suppose that 4,000,000 notes are issued. The Treasurer may appoint twenty officers, each one of whom may sign a particular group of notes, or the clause may mean that two officers will have to sign the whole number of the notes.
– There will be two signatures on each note.
– I assume that, following the practice of the Australian banks, the idea will be to have two signatures attached to each note. But as the clause stands it seems to me that it would be possible for the Treasurer to appoint two officers, each one of whom would sign a separate number of notes. There is an ambiguity, and, unless an amendment be made, a difficulty may occur later on.
– I do not think that there is any ambiguity in the clause. The words “ the officers “ may mean that one officer may sign notes, but if it be necessary for the proper administration of this measure to appoint twenty officers to do the work, the Treasurer will have power to employ such a number. With respect to the suggestion of Senator Vardon, I cannot for the life of me see that there is a greater possibility of fraud from the signatures on the notes being lithographed or engraved. Indeed, I should think that there would be less danger. Any one individual can make a false signature, but to copy a lithographed or engraved signature would require the assistance of more than one. Moreover, the penaltiesare so heavy for offences against this measure that I do not think there need be any alarm.
– I think I know more about lithography than the honorable senator does.
– I do not doubt that.
Senator Lt.Colonel Sir ALBERT GOULD (New South Wales) [9.0].- I am surprised that the Vice-President of the Executive Council should think that it is safer to have on Australian notes lithographed than written signatures. What is a lithograph ? The process involves some one copying a signature, which is afterwards printed by a mechanical process. If one man can copy a signature in that way there are hundreds of others who can do so. It is easy to reproduce a signature mechanically, but it does not bear the appearance of the original signature.
– It is possible always to distinguish a mechanical signature.
– It would certainly always be the same; but no bank would accept the honorable senator’s cheques if they were signed with a mechanical signature. It would certainly make the proposed note issue safer if they did not bear a mechanical signature.
Clause agreed to.
Clause 7 -
In issuing Australian Notes the Treasurer may use the note forms of any State or of any bank, with such alterations as he thinks necessary, notwithstanding that such forms have printed or written upon them a date antecedent to the commencement of this Act.
.-I should like to ask the Government for an explanation of the inclusion of this clause in the Bill, when it can be shown that we have in Australia at the present time all the machinery required for the printing of the Australian notes. The New South Wales Government Printer has all the machinery required to print these notes. I take it that the Government will call for designs for the new notes, and during the time they are being prepared the paper can be imported. New Australian notes could then be printed, and there would be no necessity to use the note forms of the banks at all.
– Does the honorable senator say that the machinery is in existence in Australia to print the notes?
– Yes; the New South Wales Government Printer has the machinery, and some private printing firms also possess all the machinery necessary for the purpose. I have a bank note here which I exhibited last night, and which was printed by a Sydney firm. Senator Vardon will bear me out that the paper is as good as that used for any bank note, and the design and appearance of the note does credit to the firm that printed it.
– Was it printed by Sands and Company?
– No; it was printed by Websdale Shoosmith Limited. But there are other firms as well as the New South Wales Government Printing Office at which notes could be printed. I think this clause is unnecessary. We ought to have new notes for the proposed new issue, and should not confound them with the notes of the banks.
– I think that it is not necessary to have a long discussion on this clause. This measure will be put into force by proclamation, and the Government are aware that some time must elapse before they will be able to make their arrangements for printing their own notes. I hope that when the Government are in a position to print their own Australian notes, they will get the machinery for the purpose, and do the work themselves. But until that time arrives, it is necessary that bank notes already in circulation should be made use of. I remind Senator McDougall and, other honorable senators that some of the banks have a good deal of new paper in circulation, and there is no reason why that should not be made available for the proposed note issue for a short term, inorder to convenience the public and the Treasury, and to save expense to the banking institutions holding the paper. In the circumstances, I think it wise to make the provision made in this clause. Before the Government are in a position to print an Australian note, they must call for and adopt designs. It is possible that Parliament may claim to have something to say in connexion with the designs; if so, the matter could not be dealt with this session, and we would have to wait until next session at least for the adoption ofthe best design. It is wise, in all the circumstances, to make use of the existing bank note forms until such time as the bank paper is exhausted, or we are in a position to print our own notes.
– I think this clause proposes a wise and convenient arrangement. It will enable the Government temporarily to make use of notes of the banks until they have made arrangements for printing their own notes. I hope they will not be in too great a hurry to print their own notes, but will secure a special paper which it will be almost as difficult to forge as to forge a note. Then, in connexion with the design for the notes, I do hope that the Government will not sweat engravers by calling for competitive designs. Under that practice a number of men go to all sorts of trouble, and only one receives any reward for his labour. If designs are to be called for, every man supplying a design should get something for the labour he puts into it. The practice generally adopted is a form of sweating which I very much dislike. The Government may call for designs if they please, and pay the highest price for the design adopted; but they should give to others who send in designs some remuneration for their time and labour.
Clause agreed to.
Clause 8 agreed to.
Clause 9 -
The Treasurer shall hold in gold coin a reserve as follows : -
In ascertaining the amount of Australian Notes issued, the amount of Notes which have been redeemed shall not be included.
– In accordance with the notice I have given, I move -
That the word “ fourth,” line 3, be left out, with a view to insert in lieu thereof the word “third.”
I am afraid that the Government will not accept this amendment, but having given notice of it, I wish to say a few words in support of it. From time immemorial in Australia it has been the practice of the banks to consider that one-third of their note circulation should be represented by coin in their possession. Many banks have always endeavoured to hold in coin onethird of the amount represented by the whole of their liabilities, excepting those that are fixed. I think that, in the interests of the public, the gold reserved for the proposed notes should be one-third instead of one-fourth. That would strengthen the Government in their note issue. I shall not take up further time in discussing the amendment.
– I feel sure that Senator Walker must have learned long before this that the Government have given full consideration to the question of what would be an adequate gold reserve. They have definitely made up their minds that the provision made in the Bill gives a fair margin of safety. In the circumstances, I am sure the honorable senator cannot expect that we will accept the amendment he has moved.
– I move -
That the following new sub-clause be added : - (3) The Governor-General shall have power from time to time to appoint places forthe issue of notes in exchange for gold, and for the exchange of new notes for mutilated or unclean notes, and also at the discretion of the Governor-General other places merely for the issue of new notes in exchange for mutilated or unclean notes.
This, as Ministers are no doubt aware, is in accordance with the practice at present followed in Queensland. It is not proposed that at these places the Government shall give gold for notes, but that they shall be prepared to give notes for gold if they are asked to do so. I shall not take up time in recommending the amendment to the Committee. I will only say that it would give the Government a discretionary power it is desirable they should possess.
– The amendment does great credit to the Scotch persistency of Senator Walker. We have been discussing this proposal in another form all night.
– No. “What we have discussed is the appointment of places at which gold should be given for notes.
– It is carrying the thing a little bit too far to have the same kind of amendment moved upon every clause.
Clause agreed to.
Clause 10 agreed to.
– I move -
That the following new clause be inserted, to follow clause 10 : - “10A”. - (1) If the payee so demands, a bank when making any payment shall make the payment in Australian notes of the denomination of One pound.
Penalty : Five pounds.
Nothing in this section shall compel a bank to pay more than Twenty-five pounds in Australian notes in any one payment.”
I have never been able to discover the reason why the Government, in this Bill, dropped the original clause 11. It appears to me that without a provision of this kind some difficulty may be experienced in getting the Commonwealth notes into the currency. The banks will be under no obligation whatever to take them, and if we are to believe Senator Millen they will not take them. Personally, I am of opinion that they will not be particularly anxious to take them if left to their own devices. That is one reason why the new clause which I have submitted ought to be inserted in the Bill. The banks can decide - if they choose to do so - to conduct their business by means of a gold coinage. Of course the adoption of such an attitude might subject them to some disadvantage. But we ought not to shut our eyes to the fact that they do not look with special favour on this move on the part of the Government. They regard it as the first shock in a general engagement, the result of which may possibly be very disastrous to themselves. Of course, I am assured by Senators Gould and Walker, both of whom possess an intimate knowledge of our banking system, that our bankers look with favour upon a Commonwealth note issue. But I hardly think that that is so. They regard it as a first step in a movement which will detrimentally affect them.
– I said that we recognise the right of the Government to do what they propose to do, and that we are going to submit to it with the best possible grace.
– When the Greeks bring gifts I am always doubtful of their sincerity. I repeat, that the banks regard a Commonwealth note issue as the first step in a movement which will probably result in disaster to themselves. Consequently, they will do their best to block that movement, and one way of accomplishing their purpose will be by attempting to bring discredit upon that note issue. No doubt my honorable friends Senators Gould and Walker are trusting to the changes which may take place in political life. Possibly they expect to see another Government in power three years hence which will immediately sweep this measure from the statutebook just as the present Ministry swept the Naval Loan Bill from the statute-book. The banks have probably arrived at the conclusion that if they can prejudice the public mind against a Commonwealth note issue they will have done something to retard the advance of the movement in favour of the establishment of a National Bank. I think that the Bill ought to contain a provision under which the banks will be compelled to take a certain proportion of the Commonwealth note issue. We know perfectly well that under the Canadian system the Dominion banks are compelled to hold 40 per cent, of their reserves in Government notes. The result is that there is a very large circulation of Government notes in Canada and a correspondingly small gold circulation.
– Where does the gold go - to New York?
– The great bulk of the commerce of Canada is carried on by means of paper. No doubt, as Senator Gould suggests, New York is at hand, so that gold can be procured for the notes with comparative ease. But the fact remains that the Canadian currency is largely a paper one, and that the banks there are compelled to hold 40 per cent, of their reserves in Government notes. Even if our banks do take Commonwealth notes they will be under no obligation to circulate them. They will not be bound to give a single customer a bank note, even though he may ask for it. They will be at liberty to say, “ No, we prefer to pay you in gold,” and my experience is that the average Australian prefers gold to notes every day in the week. I think that he is foolish-
– Does the honorable senator prefer notes to- gold ?
– I. am quite prepared to take either gold or notes, or both - in fact, I am prepared to accept anything which has a good solid foundation upon which to rest. I would be quite willing to accept the honorable senator’s paper for a decent sum just as readily as I would take gold. I repeat that if the banks do take Commonwealth notes, they will be under no obligation to circulate them. They may buy 000,000 worth of those notes with gold. They may then lie low until ,£750,000 of that gold has been invested by the Government, when they may suddenly present their £1,000,000 worth of notes at the Federal Treasury for redemption. I do not say that they will do so, but the possibility will always be present, and we must never forget that this measure means war between the banks and the Commonwealth Government.’ That is the plain English of the position, though we may endeavour to conceal it. The banks know that we are after their business just as well as we know it ourselves, and they will exhaust every means of defeating us, politically and otherwise. They will avail themselves of every possible expedient. We need be under no misapprehension on that score. I would also point out that they will be able to return the notes which they take from the public, and for which they have no use, at once to the Treasury for redemption. My own opinion is that, in the absence of the clause which I have submitted, the Government will have no sure method of getting a circulation for their notes, or of keeping it. As a strong supporter of a paper currency, I think that the Ministry ought to attempt to make their own measure effective by compelling the banks to take a certain proportion of their own notes. I therefore move the insertion of the proposed new clause, and I trust that the Government will see their way to support it.
– I am rather sorry, that Senator Stewart has submitted this amendment. At least, one condition will be required to maintain this cudgel over the heads of our banking institutions. That condition is that the people must prefer Commonwealth notes to any other form of currency. Otherwise, Senator Stewart’s proposal would not be effective. Personally, I do not think it” is wise at the inception of this scheme to adopt any form of compulsion, especially when so many things have to be depended upon. For instance, the banks may refuse to take any Commonwealth notes, and in such circumstances the new clause could be made effective only by reason of a certain number of bank clients demanding Commonwealth notes upon all occasions. Senator Stewart cut the ground from under his own feet when he admitted that the average Australian prefers gold to notes. I think that the adoption of his proposal would lead to unnecessary friction, especially in view of the fact that its success would depend upon a large number of bank clients demanding Commonwealth notes in lieu of gold upon all occasions. If, as he says, a majority of Australians prefer gold to notes, I fear that it would be a mistake to resort to the proposed power of compulsion. In launching a scheme of this character, it is not wise to use any more compulsion than is absolutely necessary. We shall learn from experience* whether the Government can depend upon the reasonable co-operation of the banks in giving effect to the reform which is embodied in the Bill. If they do not exhibit that reasonable co-operation, the time will be close at hand when other means will have to be employed to exact it from them, and when they will also have to stand against the competition of a new rival ja the field of banking.
– Honorable senators, opposite have promised that already.
– But it may come earlier than honorable senators expect. I do not think that the adoption of the new clause would be productive of the results anticipated, and, therefore, I cannot support it.
– I trust that Senator Stewart will not persist in his proposal.
– Then the VicePresident of the Executive Council does not know Senator Stewart.
– I know that he is possessed of the sweet spirit of reasonableness sometimes. I do not say that the amendment, if incorporated in the Bill, would work any great harm. I might even admit that it would be beneficial, but I think that the anxiety to get this legislation placed on the statute-book ought to justify us in refusing to accept an amendment which would have a more far-reaching effect than this one would have. Senator Stewart ought to recognise the impossibility of getting such a provision agreed to elsewhere. Although we have no right to consider another place, yet when it means the speedy passage of a measure which we all earnestly desire should take effect as soon as possible, I am sure that,- after what Senator Lynch has said in connexion with the relationship of the banks to the Government at present and in the future, and any friction or unsatisfactory working of the note issue being a lever to bring about what is dearest to the heart of Senator Stewart and many of his friends, he will not persist with the amendment.
Senator . Lt.-Colonel Sir ALBERT GOULD (New South Wales) [9.32].- I am afraid that Senator Stewart rather misrepresented, of course not intentionally, the attitude which Senator Walker and I took on the note issue when speaking to him. I do not think that either of us welcomed this as a very desirable step, but we did say that the banks were prepared to accept the position. I also said that I did not believe that there was any intention on their part to treat the note issue other than fairly and equitably. I pointed out to the honorable senator that the probability was that the banks would not take more notes than they required, but, of course, there would always be the possibility of the banks boycotting or interfering with the note issue, although that was extremely improbable. Moreover, that is a thing which would not suit the banks from a business stand-point. They are not likely to adopt a plan of that kind. My statement, that the banks were perfectly willing to accept the position and not to offer any obstruction to the Government’s desire to have a note issue, is confirmed by a letter which was written by Mr. Hallamore, Chairman of the Associated Banks in Melbourne, in which he says -
While deprecating the course indicated by the Government, it was stated on behalf of the banks that if the Bill became law nothing would be done on their part to interfere with or impede the fair working of the measure.
Then, in regard to clause it, with which Senator Stewart is dealing, Mr. Hallamore pointed out the difficulty of having a double legal tender. The banks would have to keep a double amount of money to meet demands which might be made. One customer might ask for payment in bank notes, and another might demand gold.
– Senator Stewart’s amendment would not compel a bank to give a customer gold. The Australian notes would be legal tender, and the banks need have them only.
– Probably the honorable senator would like to compel the banks to pay up to £25 in notes, instead of in gold ?
– No, Senator Stewart’s amendment will suit me.
– When a. customer mentions that he wants to be paid in notes or gold, he is always convenienced by the bank. But when a man is going to pay a debt, he can please himself, unless it has been stipulated that it shall be paid in gold. Such a stipulation could be made, and, of course, it would be quite legal. So far as I can see, there is no necessity to insert this provision Moreover, it would be manifestly unfair to call upon the banks to hold £%o to meet a claim of £25, simply because a customer might want one thing or the other. Senator McGregor has pointed out that the ^provision was in the Bill as it was originally framed, but was unanimously eliminated in the other House, because it was recognised that it ‘was not fair in the circumstances to retain it. Of course, it is not to be expected, unless Ave can adduce some very strong reasons, that the other
House would reverse its unanimous decision. I think that Senator Stewart would be well advised if he withdrew the amendment, because he must realize, on reflection, that it is not reasonable or fair. He must also realize that to proceed with it will be very much like running his head against a brick wall, or kicking against the pricks.
– - I should like to know why Senator Stewart wishes to put a bank only under this obligation. If he is going to apply the provision to a bank, and wants to have the notes in circulation, why not extend the obligation which he is putting on the banks to every individual in the community ?
– Because every individual in the community does not deal in money.
– Suppose that I perform for a man services which are worth £25. According to this provision, I am bound to take. notes.
– No, the honorable senator can ask for notes.
– But why put the banks specially in that position?
– Because they deal in money.
– Every bank will be placed in the position of holding gold and notes to meet the requirements of its customers.
– Do they not do that now ?
– Under this provision, the banks will have to keep both the notes which they buy from the Treasury and their own gold.
– No, because the notes will be legal tender.
– It seems to me that for some special reason the banks are to be placed in a different position from the rest of the community. I cannot see what is the object of the second part of the proposal, unless it is to do away with the currency based on gold.
– Certainly ; I said so.
– I am glad to have from the honorable senator the admission that his object is, as far as possible,* to reduce the necessity of the Treasurer having a gold reserve of 25 or 30 per cent. I cannot see the reason for the distinction which he makes.
– As more than once some honorable senators have suggested that the banks were in strong opposition to the Bill, I desire to quote the last sentence from the letter written by the Chairman of the Associated Banks -
In conclusion, I would say that, while regretting that it is proposed to supersede a system which has worked satisfactorily for many years under the sanction of the various State Legis-latures,tthe banks offer their comments on the Government measure in the assurance that suggestions which they regard ‘as essential for the efficient working of the scheme will be received in the spirit in which they are tendered.
We have done what we thought to be our duty in suggesting certain amendments in the interests of the public. They have all been defeated, but our object has been to promote the interests of the public and not merely the interests of the banks.
– This is certainly an age of rapid discovery, but to-night Senator Stewart has opened up possibilities which have never yet been dreamed of in the minds of my nationalizing friends. We have always understood that the party which is pledged to nationalization intended that the State should take over the enterprise which was proposed to be nationalized, and, whilst appropriating the profits, incur the obligation of carrying it on. Senator Stewart has now put forward a new theory, and that is the nationalization of the profits, while leaving the individual to carry on the industry. That opens up marvellous possibilities. Suppose that we were to apply this amendment to the nationalization of shipping, and to say to the ship-owners, “ You shall do all the work and defray all the expenditure, but, as we have nationalized the industry, we shall take the profits.” That is exactly what Senator Stewart proposes to do with the note currency. He proposes that the banks shall, at their own expense, become the medium of conveying this currency to the people and do all the work essential to its distribution and collection, and that the State shall receive the profits. Let me put this simile to Senator Stewart. The banks are to be the medium of conveyance to the general public. Senator Stewart says to the banks, “ You shall carry these notes at your expense; you shall convey them -from the Treasury to the general public; you shall provide the cost of the vehicle which carries them J you shall maintain the horse which draws the vehicle, and you shall pay the driver. who drives the horse, whilst all the time the profit is to remain with the Treasury.” Let us apply that method to other lines of business. Suppose that the Commonwealth de sire to convey some material from one pari of Australia to another, and that the Government said to a carrying firm: “ We wish to transfer this material from Melbourne to Sydney; as you are an ordinary carrying firm, and have the necessary conveniences, we will pass a law compelling you to transfer it at your expense, although you will gain no advantage from so doing.” That is an exact parallel to what is proposed by the honorable senator.
– An exact parallel would be to compel private persons to carry our letters through the post at their expense.
– Exactly; it appears to me to be a monstrous proposition. As proof of its monstrosity, even this Government were compelled in the other branch of the Legislature absolutely to withdraw from the Bill the proposition which Senator Stewart asks us to insert. Although Senator McGregor has indicated that he still has a sneaking regard for this form of legislation, I cannot believe, in view of the decent haste with which the Government scuttled from this proposal in the original Bill, that they can ‘accept it now. For that reason I shall have to support Senator McGregor, for the first time in connexion with this Bill, in doing the right thing.
– I do not suppose that there will be very much profit in continuing the discussion. I find myself, as usual, a party of one. But the Government might very well scent danger when they find every member of the Opposition getting up and supporting their attitude with regard to ray amendment. Senator Millen is, no doubt, an ornament to the Senate. He is a very lucid speaker; but if he had taken up fiction he might have been more successful. His comparison of my amendment with some one who wished to impose all the expense of doing a certain thing upon one party, whilst another party took all the profit, is very far from the truth. I propose nothing of the kind. My amendment, if carried out, would have no such effect. The effect would simply be to compel the banks to use the Commonwealth currency.
– At their own expense !
– What expense?
– The expense of getting the notes.
– They would have to pay a sovereign for each £1 note, which they would then hand out to the public. Whatever profit they derived from the transaction would be their own.
– What profit?
– Does not a bank make a profit from lending out money? lt makes the same profit from lending a note as from lending a sovereign. The object of a bank is to make profit; the object of the Government, as far as I have been able to discover, is to establish a Commonwealthcurrency. While clause 11 was in the original Bill there was some hope that that object would be accomplished. But since the keystone has been taken out of the arch, nothing remains but for it to crumble to the ground. This Bill is a mere pretence, a piece of humbug, a sham, a fraud.
– What did the honorable senator expect?
– When I find the members of the Opposition supporting the Government I am pretty well certain that I am right in my contention.
– The honorable senator t;an imagine our feelings when we so often find him supporting the Opposition !
– I support them when 1 think they are right. They are not right very often; but they are right pretty nearly as often as the Government are. In any case, when we find that in another place and in the Senate the Opposition, with one voice, condemn the inclusion of this proposed clause, we who desire to see a Commonwealth currency established ought to look carefully into what effect the omission of it will have. My opinion is that without this clause the Commonwealth notes will not secure circulation; that the banks, while appearing to be very gentlemanly about it, and all that sort of thing, even if they do not become actively hostile, and do not adopt what Senator Givens calls the attitude of “passive resistance,” will not, at any rate, take the notes, or will only take as few of them as they possibly can. The object of the Government is to get these notes into circulation - is it not? If they do not expect to get the notes into circulation, why bring in the Bill at all ? Why waste the time of Parliament in discussing such a measure? If they want to achieve that end, they must insert this clause in the Bill. Are they going to depend on the good will of the banks? If so, they are going to depend on the good will of people with whom they are at war.
– A rotten stick, the honorable senator thinks?
– They are going to. depend upon a rotten stick. They will get no assistance from the banks. If I were a director of a banking company, I would give them no assistance. If I were the Government I would not expect to get any assistance from my business enemies ; for that is exactly the position of the present Government with respect to the banking corporations. Those corporations know perfectly well that if this Government continues in power - or rather if this party continues in power - for a number of years, the private banking companies will be swallowed up by the cormorant Commonwealth Bank, as they will call it. They know that perfectly well.
– They do not, indeed.
– They know that that is the object of the party to which I belong, and that they have the majority of the people behind them.
– I did not know that that was on the party’s platform.
– The honorable senator has not been reading the platform’ as assiduously as he ought to do. I have had to correct him on several occasions with regard to it. I would advise him to have another look at the Labour party’s programme, and he will find that the establishment of a National Bank is one of its proposals.
– That does not necessarily involve the swallowing up of every other bank.
– I think it does in the ultimate. It means the serious invasion of the business, and consequently of the profits, of every banking corporation in the Commonwealth.
– Of course, the honorable senator can easily make the Bill do that by a few such amendments as he is “now proposing.
– Yes, my amendment would make the Bill effective. That is the reason why the Opposition are opposed to it.
– No, because the honorable senator’s mode of ma;king the Bil! effective is unjust.
– Why is it unjust? Senator Millen says that there ought to be no compulsion, that the private banks ought not to be compelled-
– At their own expense, r<? cart gold and notes about the country in order to make profits for the Treasury.
– The policy of the present Government is to issue a paper currency .
– Let them shoulder the expense of circulating the currency.
– No one expects the banks to pay the expense. All that the Commonwealth does is to guarantee the currency.
– If the Government would undertake to convey the notes to the doors of the banks and exchange them for gold, the amendment would not oe so unjust, but as the banks will be compelled to send from all parts of Australia to get the notes, it is unjust.
– In any case, I stick to my opinion, and if the Commonwealth Government desire to see their notes brought into circulation, they will agree to the- amendment that I have proposed. I have no hope of carrying it. There seems to be a happy union of forces on this occasion. Still, I shall not withdraw the amendment if I can get any one to assist me in going to a division upon it.
Senator VARDON (South Australia^ [9.58]. - I am surprised that Senator Stewart has not seen fit to withdraw this amendment. I object to his putting any blame on the Opposition for the elimination of a similar provision from the Bill in another place. It was struck out at the instance of the Government. The Opposition could not possibly have taken it out.
– The honorable senator forgets the great powers of persuasion possessed by the Opposition.
– We in the Senate have exercised our powers of persuasion to the utmost, but have met with no consideration whatever. I believe that the Government themselves voluntarily had the clause struck out of the Bill.
– The Prime Minister moved that it be struck out.
– Then the Prime Minister, a very honorable and straightforward man, must have realized its injustice. I am surprised that Senator Stewart should endeavour to get a Government behind whom he sits to go back upon their own proposal. He seems to me to be breaking away from his own party. It was recognised by the Government that it would not be fair to force the banks in this manner to take Commonwealth notes. Personally, I believe that the banks will always be prepared to give the people notes whenever they want them. The banks cannot do without a paper currency. They are bound to have it. If their own paper currency is taxed out of existence they must take the Commonwealth paper currency. Personally, I am glad that the Government themselves saw the injustice of the clause, and had it struck out of the Bill, trusting to the honour of the banks to act fairly in this matter. -
– As one who supported the Bill on the second reading I take exception to the remarks of Senator Stewart, who says that without the clause he had proposed to reinsert the measure is a fraud, a delusion, and a snare. We have asked the Government to accept amendments which would improve the Bill. Senator Stewart opposed all those amendments and supported the Bill as it stands, and now he invites us to believe that without this amendment the Bill is a delusion and a fraud. The honorable senator ought to have voted with the Opposition in support of a provision which would have made the circulation of the notes easier. In view of the fact that the honorable senator has opposed amendments submitted from this side I object to his twitting the Opposition with having worked this business. The deletion of clause 11. of the Bill, as originally introduced, was proposed by the Prime Minister himself, the head of the party to which Senator Stewart belongs. I believe that it the proposed new clause were inserted by the Senate it would be rejected in another place. I hope the Committee will reject it as, in my opinion, it would be neither fair nor just.
– I should not have said anything on the proposed new clause were it not for the very disingenuous remarks with which Senator Millen tried to mislead the Committee. The honorable senator argued that the new clause if agreed to would compel the banks to keep a double supply of legal tender in order to meet their obligations. If honorable senators will give the subject a moment’s thought they will see that that is an entirely mistaken view, because a bank in any portion of the Commonwealth need keep but one form of legal tender with the exception of the small change required to cover odd shillings and pence in a bill. When this measure becomes law Australian notes will be legal tender, and it will be within the power of any bank to meet the whole of its obligations in that one form of legal tender. If a man presents a cheque at any bank for £50 or£100 the bank will be entitled to offer him payment in Australian notes, and he must accept them.
– But suppose the man wants gold. Will not the bank try to please its customer.
– Very likely, but it is not possible always to get gold. It is the experience of outside places in Queensland that it is sometimes very difficult to get gold there.
– Suppose a bank refused to pay gold when it was asked to do so.
– Nothing whatever could happen to it, because, under this law, Australian notes are made legal tender. Senator Sayers will admit that in some remote places in Queensland it is often very difficult to get gold, the Queensland Treasury notes being in such extensive circulationthere that the banks do not keep a large supply of gold at those places. There will be nothing to compel the banks to make payments in gold, and Senator Millen must, therefore, acknowledge that he was mistaken when he said that the acceptance of the amendment would compel the banks to keep a double supply of legal tender.
– I do not say that they would be compelled to keep gold, but I do say that they would desire to please their customers, and Senator Stewart has admitted the preference of the people for gold.
– I never heard Senator Stewart admit anything of the kind. I am satisfied that people prefer to carry notes rather than gold, so long as they are perfectly satisfied that the notes are worth their face value.No one taking part in a transaction involving the exchange of £500 would think of taking 500 sovereigns with him. He would take the £500 in notes, because they are more convenient and safer. The Committee need have no hesitation in accepting the amendment. It would be a safeguard in the Bill, so that if any bank or banks at any future time desired to throw a little discredit on the Commonwealth note issue, there would be a means of compelling them to treat the note issue fairly. That is all that Senator Stewart seeks to provide for, and on that ground the amendment should commend itself to the Government and the Committee.
Question - That the proposed new clause be inserted (Senator Stewart’s amendment) - put. The Committee divided.
Question so resolved in the negative.
Proposed new clause negatived.
Clause 1 1 -
On the last Wednesday of each month, an officer appointed for the purpose by the Treasurer shall prepare and sign a statement, showing at that date -
the number and amount of Australian Notes issued and not redeemed, and
the amount of gold coin held by the Treasurer for the purposes of this Act.
The statement shall be countersigned by the Treasurer and published in the Gazette.
– Iwishto direct the attention of the Government to what appears to be an inadvertent omission from this clause which proposes that a monthly statement shall be prepared, setting forth the number and the value of the notes not redeemed, and the amount of gold coin held by the Treasurer for the purposes of this. Act. lt further declares that the statement shall be countersigned by the Treasurer, and published in the Gazette. But when will it be published? It may be next year or the year after. It appears to me that the word “ forthwith “ has been inadvertently omitted.
– Would not the insertion of that word mean that the statement must be published on the instant?
– The clause ought to contain some indication that the statement will be published with reasonable despatch.
– I desire to move a prior amendment.
– Then I shall give way to my honorable friend.
– I move -
That the words an officer appointed for the purpose by the Treasurer “ be left out, with a view to insert in lieu thereof the words “ the Auditor-General.”
The Auditor-General is an officer who is independent of Parliament and of the Treasurer, and upon whose statement we can absolutely rely. It is extremely desirable that whoever may issue this statement shall be entirely independent of political influence.
– The Auditor-General will have to check it at the end of the year.
– The clause proposes that the statement shall be compiled by an officer appointed by the Treasurer, and who I presume will be responsible only to the Treasurer - an officer upon whom there will be no check. I think that honorable senators, even though they could not support the previous amendment which I submitted, ought to support this proposal. I contend that whoever may sign the proposed statement ought to be a responsible officer of the Commonwealth, and I think that the Auditor-General is the proper officer to select.
– I hope that honorable senators will not persist in this method of proceeding - I do not like to call it obstruction -but really they are attempting to make amendments in the Bill which are unnecessary. Probably we shall next witness them rising in their places upon clauses of a purely machinery character, and proposing that the Treasurer shall use a steel pen or a Waverley nib or red ink or green or black ink. Is the Commonwealth Treasurer to be always suspected of being either a fool or a rogue in that he cannot be trusted to undertake a simple work of this description? Under the amendment, the AuditorGeneral would be required to compile a monthly statement, notwithstanding that an officer appointed by the Treasurer, and whose time is not one-fourth as valuable, could perform the work just as efficiently. In reply to the contention of Senator Millen that the statement ought to be published forthwith, I would ask whether the Treasurer will not be responsible for the proper working and administration of the Commonwealth notes department? That being so, is it not reasonable to allow him a little discretion as to when this monthly state ment shall be published? Obviously, it will be published once a month, otherwise it would not be a monthly statement. Consequently, there is no need for the insertion of the word “ forthwith.”
Question - That the words proposed to be left out be left out - put. The Committee divided.
Majority … … 17
Question so resolved in the negative.
– I move -
That the word “ forthwith “ be inserted before the words “ published in the Gazette,” in subclause 2.
In spite of what the Vice-President of the Executive Council has said, it appears to me desirable that we should declare in the Bill that the statement which is to be prepared by an officer of the Treasury, and which is designed for the information of Parliament, shall be published with promptitude. The Queensland Act reads as I propose to make this clause read. In its present form the provision in the Bill is that a statement shall be published in the Gazette, but there is no direction as to when it shall be published. In a dozen Acts which I might specify a period is expressly stipulated within which certain things must be done. For instance, all regulations must be laid upon the table of both branches of the Legislature within a specified period. I submit that my amendment is entirely reasonable, and there is only one reason why the Government are disinclined to accept it, namely, that they do not desire to send the Bill back to the other Chamber. In its present form the clause merely says that the statement which is to be prepared by an officer of the Treasury shall appear in the Gazette. It may appear next year or the year afterwards.
Question - That the word proposed to be inserted be inserted - put. The Committee divided.
Majority … … 9
Question so resolved in the negative.
Clause agreed to.
Clauses 12 to 18 agreed to.
Clause 19 (Destruction of Bills when paid off).
– I do not propose to divide the Committee, but I take the liberty of suggesting to the Government that Australian notes, after being cancelled, should be burned. At an earlier hour I pointed out that the responsible officer should see that the notes are burned, because the cancellation marks can sometimes be taken off and the notes re-issued.
Clause agreed to.
Clause 20 agreed to.
Clause 21 (Forging or uttering Notes or Bills).
– Is it the intention of the Government to have any distinctive paper on which to print the Australian notes ? I believe that in other countries the practice is to have a distinctive paper, the manufacture of which is a close Government secret, because it form’s a double safeguard in the use of a State paper currency. If any person is found in possession of this distinctive paper, he is liable to a long term of imprisonment. I should like to know the Government’s intention in regard to the manufacture of paper, and to suggest that, if they have no fixed views on the subject, it might be worth while for them to ascertain what has been done elsewhere.
– The honorable senator will no doubt recollect that provision has been made for the use of the paper belonging to the banks until such time as the Government have made the necessary preparations and got designs for the new issue. The matter will be brought before the Treasurer, who, I am certain, will take every precaution which can be suggested by any honorable senator to obviate the possibility of the forgery of either Treasury-bills or Australian notes.
Clause agreed to.
Clauses 22 to 30 agreed to.
Clause 31 -
Every officer charged with the receipt or disbursement of public moneys, and every officer of any bank, shall stamp or write in plain letters the word “ counterfeit,” “ altered,” or “ worthless “ upon every counterfeit or fraudulent note issued in the form of an Australian Note which is presented to him at his place of business, and if he wrongfully writes or stamps those words on any genuine Australian Note he shall upon presentation redeem it at the face value thereof.
– I move -
That the following words be added : - “ Penalty : Ten pounds.”
It is proposed to impose upon an officer, if he fraudulently, wrongfully, incorrectly, or otherwise marks a note as “ counterfeit,” or “ altered,” or “ worthless,” the nominal penalty of redeeming the note at its face value. That places in the hands of officers a power which should not be granted, especially when we consider what we call upon individual members of the public to do. We have already imposed upon the public who may - unwittingly in many instances - commit breaches against the provisions of the Bill penalties which, of course, are maximum penalties by the Acts Interpretation Act. But in this clause we provide for the infliction of a nominal penalty upon certain officers. The persons who are affected by the clause are supposed to be much more upon the alert in relation to these documents than is any ordinary member of the public. If we are prepared to impose the penalties which we have imposed by previous clauses upon individual members of the public, we should at least impose upon those who may be regarded as being more than extraordinarily alert in regard to the negotiation of these documents something more than the ordinary responsibility of redeeming, at its face value, a note which they have branded as “ counterfeit “ or “altered,” or “worthless.”
(10.44]. - I hope that honorable senators will not support the amendment. There is no relationship between the defacing of an Australian note and what is referred to in this clause. A person who defaces a note deliberately does a thing which he has no right to do, and, consequently, he is under a penalty. But this clause deals with officers who are charged with the duty of distributing and receiving Australian notes or Treasury-bills, and the instruction to them is that if they find a note which is worthless or counterfeit they shall so mark it. It is quite possible for an officer to make a mistake when doing work of this description. If the slightest degree of carelessness can be attributed to an officer he cannot be said to do a criminal act, and the ends of justice will be met if the note is duly honoured. It would not be a fair thing to impose a penalty when an act of carelessness could be punished by dismissal or disrating.
– My honorable friend has totally misrepresented the position. The clause alludes to an officer “wrongfully” writing or stamping the words “ counterfeit,” or “altered,” or “worthless” on a note. It is all very well to say that a note might be declared worthless as the result of an accident. Many acts for which heavy penalties have been imposed under Commonwealth legislation might be done accidentally. Suppose that a person were to hand in a note of the face value of £10 or £50 and it were to be marked counterfeit or worthless. Would not the credit of such a person be affected by such an occurrence? Have we not a right to look for the same degree of alertness from officers discharging these duties as from the general public?
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [10.47].- The clause under discussion requires an officer to mark a note which he may believe to be worthless. Of course, an officer may make a mistake in discharging that duty. But surely we should not inflict a penalty in a case like that. We want the officers to be alert, but if we inflict a penalty an officer may say, even when he is doubtful, “ I shall not run this risk, and shall pass the note.” There would be no penalty for doing that. But we want to encourage officers to be careful not to pass doubtful notes. If a sovereign is tendered to a bank clerk and he thinks that it is counterfeit he declines to change it. It may turn out to be a good sovereign, but the bank clerk is not fined £10 for his mistake. If a person presents a cheque at a bank and the teller believes it to be a forgery he refuses to cash it. If the cheque turns out to be a good one the teller is not fined £10. If his employers consider that he has been careless they punish him by reduction, or in some other way. If a man honestly makes a mistake and the value of the note is afterwards paid that is all that can reasonably be asked.
Clause agreed to.
Clause 32 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Order of Business - Map of Northern Territory - Report on Tropical Institute.
Motion (by Senator McGregor) proposed -
That the Senate do now adjourn.
– I wish t0 inquire the order of business for to-morrow. I also wish to put another question regarding the map which I mentioned last evening, and to ask when it will be available. I may add that the map to which I refer was die original of the map now hanging in the Senate Chamber, but it would have an added value if presented, because it was the map sent to the Department of External Affairs by the South Australian Government.
– Some time ago I asked for the presentation of a report with regard to the Tropical Institute at Townsville. I now wish to ask for further information with regard to the matter.
– A copy of the report referred to by Senator St. Ledger has been forwarded to the Minister of External Affairs, and I understand that I shall shortly be in a position to lay a copy of it- upon the table of the Senate. I have been making inquiries concerning the map alluded to by
Senator Millen, but up to the present have not been able to obtain definite information. This morning a map was sent over from the Department of External Affairs. When it arrived it was found to be connected with the Western Australian railway, and was not the map which Senator Millen wants. I have caused further inquiries to be made, and I hope that the map will in due time be placed in the archives of the Senate. With respect to the order of business, to-morrow I shall move the third reading of the Australian Notes Bill. After that we shall deal with the Northern Territory Acceptance Bill, the Navigation Bill, and the Petherick Collection Bill. I hope, with the assistance of honorable senators, that there will be no necessity for unduly long sittings.
Question resolved in the affirmative.
Senate adjourned at 10.57 p.m.
Cite as: Australia, Senate, Debates, 7 September 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19100907_SENATE_4_56/>.