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Senate
14 December 1911

4^th Parliament · 2^nd Session

QUESTION
- NORTHERN TERRITORY
QUESTION
- STATE TAX ON STEAMER TICKETS
QUESTION
- GOVERNMENTOF PAPUA
SUPPLY BILL (No. 4)
COMMONWEALTH BANK BILL
ADJOURNMENT

The President took the chair at 3 p.m., and read prayers.

page 4415

QUESTION

NORTHERN TERRITORY

Senator STEWART:
QUEENSLAND

asked the Minister representing the Minister of External Affairs, upon notice -

What is the estimated area of land immediately available for settlement in the Northern Territory suitable for -
1. Agricultural settlement?
2. Grazing settlement - small areas?
3. Pastoral settlement - large areas?
Has anything been done to obtain settlers for those lands; and, if so, with what result?
If nothing has been done with that view, what action does the Government intend to take, and when?

Senator McGREGOR:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– The answers to the honorable senator’s questions are -

The information is being prepared. 2 and 3. My colleague, the Minister of External Affairs, intends to indicate the proposals of the Government in regard to the Northern Territory in the course of a day or two, when the matters referred to in these questions will be dealt with.

Senator Millen:

– Does the Minister mean by “in the course of a day or two “ before Parliament is prorogued?

Senator McGREGOR:

– That I cannot say.

page 4415

QUESTION

STATE TAX ON STEAMER TICKETS

Senator ST LEDGER:
QUEENSLAND

asked the Minister representing the Attorney-General, upon notice -

Has the Attorney-General’s attention been called to the following paragraph appearing in the Argus of to-day(13th inst.) : - “ Mr. Dacey (Treasurer of the State of New South Wales) explained, in regard to the proposed tax on steamer passenger tickets, that it had now been decided not to make any charge on tickets from one port in New South Wales to another within the State ; but a tax of Sixpence first saloon, and Threepence second saloon, would be made on tickets of passengers proceeding to ports outside the State, but within the Commonwealth”?
If not, will the Attorney-General take steps to ascertain the accuracy of the reported statement, with a view of considering whether such a taxation proposal is now within the powers of the State jurisdiction?

Senator McGREGOR:
ALP

– The answers to the honorable senator’s questions are -

Yes.
It is beyond doubt that such a tax would be unconstitutional. The Attorney-General will ask the Prime Minister to draw the State Premier’s attention to this fact.

Senator St Ledger:

– Hear, hear !

page 4415

QUESTION

GOVERNMENTOF PAPUA

Senator STEWART:

asked the Minister representing the Minister of External Affairs, upon notice -

Is it the intention of the Government to make provision for the exercise, by the white adult residents of Papua, of the principles and privileges of elective representation on the Papuan Council ; and, if so, when ?
Does the Government intend to establish trial by jury in Papua in cases affecting the white residents; and, if so, when?

Senator McGREGOR:
ALP

– The answers to the honorable senator’s questions are -

Proposals have been made for amending the Papua Act 1905 in the direction indicated. They will be considered during the recess.
Trial by jury of white residents charged with capital offences exists already. The extension of the system to white persons charged with other offences has been suggested, but it is considered that the time has not yet come to make the change.

page 4415

SUPPLY BILL (No. 4)

Assent reported.

page 4415

COMMONWEALTH BANK BILL

Debate resumed from 13th December (vide page 4250), on motion by Senator

McGregor -

That this Bill be now read a second time.

– But there was no banking proposal submitted in connexion with either of those elections, as you know.

Senn tor MILLEN. - I am saying that there never was a Savings Bank proposal submitted, at any election.

Senator Rae:

– While this may be a big handicap for the first year or so, it may be but a bagatelle in a very little time.

Senator MILLEN:

– That is quite correct, but I am speaking of the earlier years of the operations of the bank. This bank will start with the handicap that from the moment its doors are open it will be faced with the necessity of paying £35,000 a year in interest, whilst other banks, starting with the capital of shareholders, have no interest charge to meet, and are not required to pay dividends on capital until the money to pay them has been earned.

Senator Blakey:

– It is recognised that in the case of all banks starting in country districts they must expect to conduct their business for the first year at a loss.

Senator MILLEN:

– I do not deny that.

I admit that it is quite fair to assume that any bank or big financial business must expect for the first year or two to carry on its operations at a loss. But I still point out that, where shareholders find the capital, that loss is not added to by a payment required to meet interest on capital, and, in the case of this bank, any loss upon the working of the institution for the first year or so will be added to by the interest charge of ^35,000 a year, assuming that the 000,000 will be borrowed at a rate of 3J per cent.

Senator Rae:

– The bank will not require the whole of the ,£1,000,000 at once.

Senator MILLEN:

– Let me tell the honorable senator that a great many people regret that this bank is not being provided with a larger capital.

Senator Guthrie:

– Banks do not want all their capital at once.

Senator MILLEN:

– If this bank is going to proceed with business on a capital of less than ^1,000,000, what a pitiful creation it is going to be. If it is to be anything like a substantal institution, it will require more than ;£i, 000,000 of capital within a few months of its establishment.

Senator Long:

– How many banks are there in Australia at the present time whose capital exceeds that proposed for this bank?

Senator MILLEN:

– I suppose that there is hardly a bank in Australia that is not in a position to control a greater amount of capital than this bank will have for the next ten or twenty years.

Senator Long:

-People would not ask for coin if they had confidence in their bank.

Senator -MILLEN. - Senator Rae may build up an imaginary bank on a basis of confidence, but that is not enough for a man who says to a banker, “ I lent you £1,000 three months ago, and want it back,” if the banker says, “ We cannot pay it to you.”

Senator St Ledger:

– Is this to be a bank of confidence?

Senator MILLEN:

– Confidence consists in a belief that when you present your demand it will be honored. The moment it is seen that such demands may not be honoured - and no one can say that such things will not happen again - there comes a run on the bank. I invite Senator Rae to show me wherever such a crisis has occurred and has not affected the position of the best constituted bank in the world. Does any one doubt the solvency of the Government of England? Yet what is the position of consols to-day? They are going round at something like a discount of 25 per cent.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– Is there not a reason for that?

Senator MILLEN:

– Of course there is a reason for it. There is a reason for everything. There is even a reason for Senator

J. Russell being here. It is not a question of confidence in the Government there.

Senator MILLEN:

– The landlord is the State Government, and, in view of the character of our land laws, the State Government is in a satisfactory position to make advances.

Senator Stewart:

– It is a very extreme step for a State Government to foreclose.

Senator MILLEN:

– Decrying Australia?

Senator FRASER:

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

Senator St Ledger:

– The real- reason for the failure of the Queensland National Bank was that it was too closely connected with the Government.

Senator LYNCH:

– I am arguing against the principle advanced by honorable senators opposite, who contend for the superiority of private management as such. We find that the fortunes of the people of

Queensland were largely bound up with those of the Queensland National Bank. It was an ideal example of how a banking institution, which was of first-class importance to the welfare of a community, could be managed by private persons. Let me quote this passage from a report concerning the bank, drawn up in 1896 -

Since the formation of the bank the amount paid in dividends is £1,195,959 17s- rod., so* that those of the original shareholders who stillretain their shares have received £10 15s. 4d. per share of £8 paid. Our estimate of the bank’s position is that the liabilities exceed the assets by £2,435,423, that is to say, the whole of the paid-up capital, amounting to £899,552, the amount to credit of profit and loss account £46,955, the contingency account £160,544, the interest suspense account £75,562 (amounting in all to £1,182,613), have been lost, and there is still a deficit of £1,252,810. In addition to this, we find that since the reconstruction of the bank in 1893 the sum of £747,872 has been written off as bad. Add, as above, £2,435,423, and the total loss amounts to £3,183,295.

Senator Millen:

– How could that loss have been avoided by any other management?

Senator LYNCH:

– The Government of Queensland had £2,360,000 in the bank at the time of the suspension, and the report stated that -

Pending the completion of fresh arrangements we certainly think that the Government should be represented on the board.

But the Government was not previously represented on the board, and it is because the Queensland Government did not insist on adequate representation that they could not dictate the policy of the bank as they, ought to have been able to do at this time of crisis. That is a sample of private banking management in one part of Australia. I will give another instance of the beauties of private management. In the case of the Commercial Bank of Australia, £2,000,000 out of £12,000,000 liability had been converted into preference shares. What did that mean? It meant that this £2,000,000 had been converted into bank capital for the time being, so that the bank had the advantage of trading upon the money of depositors that ought to have been at call. We find, also, that the Australian Joint Stock Bank had £4,500.000 of deposits to pay off in 1906. New South Wales senators are sufficiently conversant with the affairs of that bank to know how they turned out. Every State in the Commonwealth can supply equally unfortunate examples of banking mismanagement.. There is a good case in Tasmania. The Van Diemen’s Land Bank was privately managed. I will quote an extract from the report of a meeting of shareholders called to wind up the institution. The meeting

Was held in August, 1901. The last directors’ report contained the passage -

The directors recommend that from ?18,714 to credit of profit and loss, ?11,671 be appropriated to the payment of a dividend for the half-year at the rate of 9 per cent, per annum and the dividend tax thereon ; that ?2,000 be added to the reserve fund (making it ,?40,000), and that the balance, ?5,042, be carried forward to the credit of next account.

The bank continued paying dividends until it had almost reached the point of insolvency. It paid ?[i 1,000 in dividends when it was quite beyond hope. The amount of deposits was ?[808,000, and the liability was no less than ?292,000. This is what occurred at the shareholders’ meeting

A Shareholder. - “ I have lost everything ; it is my all.”

Mr. Burgess (Chairman). “ I can only hope not all ; not alone for you, sorry as I am for your loss, I am more so, sir, for the widows and orphans. You are a man. You can go to work.”

The Shareholder. - “ I’m too old. I can’t begin again.”

Casting our minds back to the unfortunate occurrences with which Australia has been familiar in connexion with banking in the past, I maintain that we have every reason to turn towards a new system, arid that we are justified in the conclusion, from the experience of other lands, that the establishment of this Commonwealth Bank will assist to ward off similar experiences in Australia in the future. In regard to public banks, Senator Walker, in his speech last night, covered a great amount of ground. He alluded to several important foreign banks. The German Bank, is to all intents and purposes, a State Bank, because the directorate, as well as the Governor, is appointed by the Kaiser.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir Albert Gould. - It is not a one-man bank in regard to management.

Senator LYNCH:

– But” the appointment of the management lies entirely with the Government. The Kaiser would not appoint a manager except on the advice of his Executive.

Senator Millen:

– Did he tell the honorable senator so?

Senator LYNCH:

– We know that the Kaiser is, to some extent, responsible to the Reichstag. We know also that the Bank of France is largely under the control of the Government. That bank rendered great service to the French nation in a time of storm and crisis. In 1870 it was allowed to issue notes to an unlimited amount. And all those notes were ultimately paid off at their face value.

Senator St Ledger:

– The trouble with the Bank of .France in 1870 was to keep the people from robbing it.

Senator Millen:

– That was when the Labour party got the upper hand.

Senator LYNCH:

– According to the Dictionary of Political Economy -

The Bank of Germany is even more distinctly than the Bank of France “a State bank.” The distribution of the profits is as follows : - 3^ per cent, to the shareholders, then 20 per cent, to reserve till it reaches ?3,000,000; of the surplus, three-fourths to the State and onefourth to the shareholders. The 3i per cent., if need be, may be made up from reserve. Under this arrangement the shareholders received in 1900 ?6.57,000, being a dividend of 10. g per cent., and the State ?1,041,205, in addition to the note tax of ?125,000. The German Emperor appoints the President and Council of Directory whose office is for life, on the recommendation of the Federal Council, and the Government, through the Chancellor of the Exchequer, exercises complete power of control. As with the Bank of France, the rates of interest are uniform throughout.

We- have heard something about the banks that were established in the United States of America about the middle of the last century. But it is scarcely fair to judge of the working of a system from times that were unusually troublous. Whilst in the Southern States liabilities were openly repudiated, at the same time banks established by some of the States were carried to a very successful issue, and have had a long career. A history of the Bank of Carolina will be found in Horace Whites’ work, Money and Banking. The original capital of the bank was 444,000 dollars, which was afterwards raised to 1,196,000 dollars. On page 379 Mr. White says -

It passed safely through ‘the war, and maintained its high character during that trying period. It preserved its capital intact, paid all its obligations to the State, to private depositors and to note-holders. In 1870, one year before the expiration of its charter the Legislature put it into liquidation. Its history is exceptional in the fact that for nearly sixty years it was conducted with prudence, honesty, and pecuniary profit, and without the spur to private enterprise. The Legislature founded the bank out of its own funds and securities in order to meet the financial disorders of the period 1812.

Senator St Ledger:

– It is the exception which proves the rule.

Senator LYNCH:

– The case of the Indiana Bank is also referred to.

– In 1907, Sir John Forrest attended a Premiers’ Conference in Brisbane, and in him we had a very respectable sample of a good stickler for State rights. I believe that he was the underground engineer who brought about the Fusion. When he attended the Brisbane Conference as Acting Prime Minister, he made some remarks about this very matter. Referring to the statement made on the previous day by the Premier of New South Wales, that, “ owing to the Savings Banks the States were in a far better position than the Commonwealth to raise money,” Sir John Forrest, as reported r.n page 200, said -

It has been urged on the Government several times - and I have had it in my own mind in the interest of the people of Australia, although I have not done anything yet, nor do I know that the Government are going to do anything - but it is within our power to have a Post-office Savings Bank for all Australia.

The Hon. G. Swinburne : It was mentioned Yesterday.

The Right Hon. Sir John Forrest : I have not read the report, but I say it is quite competent for us to establish such an institution, and what a splendid institution it would be for the people of Australia.

That is the view of Sir John Forrest, who spoke on that occasion as the leader of the honorable senators on the left of the Chair, and in the responsible position of Acting Prime Minister, when he said that the proposal embodied in this measure would be a splendid thing for the whole of Australia. I say “Amen” to the sentiment expressed by him. I should like this Bill to contain a provision enabling the .State Governments to utilize the savings which are collected by the Commonwealth Bank. I recognise that the obtaining of money for developmental purposes in the States is allimportant to them, and I should like a guarantee to be given to the State Governments that they could fall back upon the receipts of the Commonwealth Savings Bank. We know that the rate of interest even in the Savings Banks is largely controlled by influences beyond Australia, and that even’ if the Savings Banks were cut off as a source of supply to the State Governments, the latter would be left with liberty to go on to the money market and borrow at a rate in proportion to the security which they could offer; but I should like the State Governments to be assured a fair share of that which will come to the Commonwealth under the operation of the Bill. I look forward to the establishment of a Commonwealth Bank, which finally, I believe, will be the only institution found throughout our areas. It is not economical to have several State Banks existing side by side, as it means a duplication of work. In New South Wales there is a proposal to amalgamate the two Savings Banks. When we attempt to ‘enter a field which has been occupied by private enterprise in every State, we should not be met withsneers from the Opposition, or with ridicule from any honorable senator. I am anxious to make the bank a success, to utilize the credit of the people of Australia in their own interests, and to secure a reduction of the rate of interest which will lead to a kind of independence and prosperity in our industries, great and small, throughout the Commonwealth. I consider that as a means towards that end nothing more effectual can be done than to establish a Commonwealth Bank. We have no reason to fear from the experience of the past that it will .be a failure. Rather have we every reason to fear that, unless stringent precautions are taken, the management of private banks will in the future land us in the same unhappy position as we were in early in the nineties. I hope that this proposal will be favorably entertained by the Senate, and that we shall have one further plank of the Labour party realized - one more promise fulfilled in the long list which we submitted to the people of the Commonwealth when this Parliament was created. The next session will see effect given to the balance of our promises and proposals, and I believe that we shall’ stand before the people as the only party which gave pledges and had the courage and the manhood to fulfil them..

Sitting suspended from 6.30 to 8 p.m.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD (New South Wales) % [8.0].- During the remarks of Senator *Lynch I challenged some of the assertions which he made in regard to the position occupied by the Bank of England. Before entering into details he was good enough to give us a definition of the functions which are discharged by a bank. He seems to be under the impression! that such an institution may be created by a certain number of individuals banding themselves together to borrow money for the purpose of lending it out at a higher rate of interest. He went further and suggested that there was nothing very difficult in the management of a banking institution. That seems to be his whole idea of the entire system of banking. He certainly declared, amongst other things, that the people who deposit their money with banks do so because of the confidence which they feel in the ability of those institutions to repay their deposits when called upon to do so, and, probably, this is to a great extent correct. But if the proposed Commonwealth Bank be started upon these lines alone we shall soon see a scene of chaos. The Bill assumes that a Commonwealth Bank will1 be established with the aid of capital, which is to be borrowed. When once the loan has been redeemed the Government will have acquitted themselves of all responsibility in this matter, because they do not undertake to guarantee the solvency of the institution to the general public. Indeed, the Bill is particularly cautious in that respect, inasmuch as an early portion of it sets out that no person shall be entitled to sue the Commonwealth in respect of any money which may be due by the bank. Clause 33 is very definite upon this matter. It reads -

The Commonwealth shall be responsible for the payment of all moneys due by the bank. Provided that nothing in this section shall authorize any creditor or other person claiming against the bank to sue the Commonwealth in respect of his .debt or claim.

That clause takes away from the public any power to recover moneys by legal process which may be due to it by the bank.

Senator Gardiner:

– No. It provides that a creditor must sue the bank authorities, and not the Commonwealth authorities.

Senator Vardon:

– What is the good of the Government accepting responsibility if that responsibility cannot be enforced by law?

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT COULD. - Any claimant must first of all obtain a judgment against the bank. But, even then, where does the liability of the Government come in?

Senator McGregor:

– Under the clause which the honorable senator has read.

Senator Lt Colonel Sir ALBERT GOULD:

– But it will still be within the power of Parliament to say, “ We will not vote you any money to meet that judgment.” Personally, I think that it would be better to provide that when once a judgment has been obtained against the bank it must be satisfied by the Government. During this debate a good deal has been said in regard to the proposed capital of the bank. This is to be £1,000,000 - a very small sum for an institution which aims at becoming a National bank. We have been told that it will be a bank in which other banks may place their reserves, if they so desire, for safe custody. But is it probable that any private bank in the Commonwealth - and especially banks with a much larger capital and resources - will use this bank as its banker? Some time ago an honorable member stated by way of interjection that there were no banks in the Commonwealth which have a larger capital than that which the proposed bank will have. If honorable members will take the trouble to turn to page 867 of Vol. IV. of Knibbs’ Year-Book, they will there find the names of all the banks which are doing business in the Commonwealth. There are twenty-one in all, and of these the Bank of Australasia has a paid-up capital of £1,600,000, iri addition to which its reserves amount to £1,727,471. In other words, it has iri capital and reserves a sum °f £3,300,000. The Union Bank of Australia has a paid-up capital of £1,500,000, and reserves amounting to £1,328,000, or, approximately, £3,000,000. The Bank of New South Wales has a paid-up capital of £2,621,000-

Senator Gardiner:

– But it has’ been in existence nearly 100 years.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD.- I know that. The Bank of New South Wales has a reserve fund of about £2,000,000. It has a total in paidup capital and reserves of £5,000,000, in addition to which there is a reserve liability of shareholders amounting to £3,000,000. That institution has £10,000,000 in gold and Commonwealth notes in its vaults which is available at any . moment that it may be required. The Commercial Banking Company of Sydney has a paid-up capital of £.1,500,000, with an equivalent amount in its reserves. The National Bank of Australasia has a paidup capital of £1,498,220, with a reserve of £238,000. The Commercial Bank of Australia Limited has a paid-up capital of £2,212,000, with a small reserve. The Bank of Victoria has a paid-up capital of £1,478,000, and £248,000 in its reserves.. I pass over all the banks which have a paid-up capital of less than £1,000,000 sterling, and come to the Bank of New Zealand, which has a paidup capital of £2,000,000, and a reserve of £864,000. It will be seen, therefore, that there are seven banks doing business in Australia which occupy an immensely stronger position than that which the proposed Commonwealth Bank will occupy. The total amount of their paid-up capital and reserves is £30,000,000.

Senator Sayers:

– From what has the honorable senator been quoting?

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD. - From the Statistical Register, 1 901- 10. These are the banks with which the Commonwealth Bank will come into competition. I do not intend to raise the question of whether or not the proposed Commonwealth Bank can be established constitutionally. I assume that the Government have satisfied themselves upon that point. But then the question arises, “ Although it may be constitutional to establish this institution, is there any necessity for its creation ? “ I know that the desire to establish a National bank has been a dream of the Labour party-. They hold the idea that they will be able to call into being an institution which will be valuable alike to the people and to the Commonwealth Government. But “ Is there any necessity for the establishment of this bank in Australia at the present time?” What are its possibilities as compared with other banks ? It will be the twenty-second bank in Australia, and it will have to fight its way just as any ordinary bank has to against the competition of other financial institutions. There is no royal road by means of which the Commonwealth Bank will be able to offer to its depositors higher rates of interest, than are paid by other banks, nor will there be any possibility of it lending money upon more favorable terms. To attempt to raise the interest to depositors, and at the same time to reduce the interest to borrowers, would be to court failure. Senator Walker, in his exhaustive and able address, quoted a statement of the dividends paid by the different banking institutions in Australia, and, according to the figures he gave, they ranged from £3 18s. id. to £1 8s. Ad. per cent. Those dividends were reckoned not merely on paid-up capital, but on paid-up capital plus reserves. I may be told that bank reserves are largely built up out of profits made from time to time. That is true, but they are also made up, to a great extent, by premiums paid on shares issued to shareholders. When a bank is paying good dividends, and is in a very prosperous condition, and it is considered necessary to increase the capital, it is very natural that a premium should be paid upon its shares. I take, for instance, the case of the Bank of New South Wales, whose shares are £20 paid up. But these shares on the open market bring anything from £43 to £46 each. That is to say, that the man who purchases shares in this bank gets a return of between 4 and 5 per cent, on his outlay, and very naturally, when the bank desires to increase its capital, it may justly ask for an increased price for its shares by way of premium. This premium is added to the reserves, and becomes a portion of the banking capital, from which the profits are made. We find that all these private banks are managed, not by some Pooh-bah, but by boards of directors. The shareholders have an opportunity to re-elect these men as they retire from the positions they have occupied, or to elect others to take their places. In every instance it will be found that the men who have been appointed as directors of our banks are men of experience in business. The directors of our leading banks are men whose word and business acumen can be trusted. Many people strive in vain to secure positions on the directorate of a bank, and though they may be highly estimable and worthy citizens, the bank shareholders have not sufficient confidence in their business capacity to intrust them with this particular class of work. I ask honorable senators whether they imagine for a moment that the shareholders of a bank take the trouble of appointing directors, and incur the expense of paying for their services, unless the services they render are regarded as of some value in the control and management of the affairs of the institution. It is perfectly true that the general manager of a bank is always a man of great experience and knowledge. He may have worked his way up from the lowest rung of the ladder, showing by his aptitude and ability his fitness to occupy the highest position in the bank. He has associated with him able subordinates, who are often competent to give very valuable advice. But in every case we find a board of directors having supreme control, and in a position to exercise their powers in such a manner as to make or mar the bank or its general manager. It is recognised as of great value to have in such positions men with a knowledge of business affairs, and men who know something of the standing and position of the people who may desire to do business with the bank. It is not always wellknown people who come to a bank for assistance. People who are just making their way in life go to a bank for accommodation, and it is well to have some one connected with the management who is able to express an opinion as to the honesty of a client and his ability to carry out what he proposes to do. There may be men of more means who are blunderers, and, in the interests of the success of a banking institution, it is necessary that those in authority should have some information concerning the people who come to it for assistance. If honorable senators take the trouble to inquire into the position of the whole of the banks which have been cited here in support of this proposal to establish a Commonwealth Bank, they will find that in every instance the president, governor, or general manager has associated with him a number of men who assist in the control and management of the bank. This is the practice of banks which have been in existence for centuries, and not merely of banks established yesterday or within comparatively recent times. I challenge “the “VicePresident of the Executive Council to mention an instance of a bank in any part of the world which is conducted exactly on the lines proposed for the management of the Commonwealth Bank. No such bank has been referred to during the debate. Certain banks may be called State Banks, because, to a certain extent, the State may have some control over them, but they are not State Banks such as the Commonwealth Bank will be. Senator Walker was at very great pains to give us the benefit of quotations from various authorities as to the position of different banks. I have taken the trouble to consult the Senate documents published by the United States Senate, and I propose to quote from one on banking currency systems, with particular reference to the Bank of England. A report is given of questions addressed to the Governor and directors of the Bank of England, with the answers given to those questions, and from this report I make the following quotations -

The bank was established in July, 1694. lt has exclusive privileges. The stock is fully paid p.

There are two half-yearly general courts for receiving half-yearly reports and for the declaration of a dividend. There is also an annual court for the election of governors and directors. The Government has no voice in the management of the bank, nor does it own any stock.

That is very definite.

The capital of the bank is provided by stockholders in the form of stock of the value of £100.

At the time this report was made, the stock was valued at £267. That increase in value was due to the fact that the bank distributes dividends amongst its shareholders ranging from 7 to 9 per cent. These dividends are regarded as entitling the holders of the stock to a considerable premium upon their shares. Of course, the bank has certain privileges granted by the Government, and it has the advantage of looking after the whole of the Government stock and transactions that may be necessary in connexion with Government financial matters. In the reply to another question, I find this statement made -

The supreme control of the affairs of the bank tests with the governor, deputy governor, and court of twenty-four directors, who are elected annually by the stockholders.

The directors, in addition to attending the weekly meetings of the court, serve on various committees appointed by that body.

It is customary for the governor and deputy governor at the close of their first year of office to be re-elected to the same positions for a further term.

The governor, whilst directing the general policy of the bank, and controlling and supervising the whole of its affairs, devotes his attention more especially to the business of the head office, whilst the deputy governor concerns himself more particularly with the business of the branches, and with the upkeep and maintenance of the bank’s premises.

The court of directors meets once a week: Subsidiary committees are held as required.

There is no actual inspection or supervision by the Government, but by the Act of Parliament the bank is required to furnish weekly statements of their position to the Chancellor of the Exchequer and to the Commissioners of Stamps and Taxes.

Then reasons are given for the changes which were made in 1844, and the statement is made -

The original proprietors’ capital in 1694 was £1,200,000, and has been increased at various times between 1694 and 1816, bringing the total up to £14,553,000, at which figure it still remains. The increase in capital has mostly been for the purpose of advancing moneys to the Government. In 1816, when the last increase in the bank’s capital took place, the Government debt due to the bank was £14,686,800. In 1834, the Government paid off a fourth of the outstanding debt by the issue of a certain sum of reduced 3 per cent, annuities, to the bank, bringing the outstanding debt of the Government down to the figure at which it at present stands.

Have the obligations . of the bank to the public or to the Government been changed from time to time?

No, not in any important particular.

Are you required by law to invest your capital, or any part of it, in any particular securities. If so, in what class and to what amount ?

A- No.

In the replies to these questions by the manager of the Bank of England, there is not a single word to justify the contention that the proposed Commonwealth Bank and the Bank of England are on the same footing. They differ from each other as much as any private banks will differ from the proposed Commonwealth Bank.

Senator McGregor:

– Who made any such claim?

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD. - I have heard it asserted over and over again that the Commonwealth Bank was going to stand in a similar position to that of the Bank of England. Senator Lynch contended that the Bank of England was a Government Bank. As a matter of fact, it cannot be so regarded in any sense, although the Government have, in times of crises, suspended the bank’s charter to enable a greater quantity of paper to be issued than would otherwise have been legal. That, however, is a power that has been very seldom used. Senator Lynch also alluded to the action of the Government in New South Wales during the great financial crisis. It is true that the Government did come to the assistance of the financial institutions, enabling them to make their notes legal tender for a certain period.

Senator Walker:

– Six months.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

– - That was done because the Government realized that it would be a very serious thing to have the banks toppling -over. There was a possibility of arresting the topple, and the Government did that, not by passing legislation which was to remain in operation for all time, but by providing that the banks might pay out paper instead of sovereigns until the public excitement subsided. That was quite right. The honorable senator argued, also, that there would be no run on a Government bank, because of the great resources behind the Commonwealth. We recognise that the Commonwealth Government have immense taxation powers. But when people fear that they are going to lose their money, they do not stop to reason. A man does not say, “ 1 know that there is no reason for me to excite myself, because the country is perfectly sound.” He wants his money there and then. Some of the Australian banks which had to go into liquidation nearly twenty years ago would have been able to weather the storm had it not been that depositors insisted upon sovereigns being handed over to them immediately. Some years ago there was a Tun on the Government Savings Bank in New South Wales. The more hotheaded among the people feared that the bank was going to fail. Some of them rushed with their money from the Savings Bank to the Commercial Bank and the Bank of New South Wales. Sir George Dibbs, however, as Treasurer of the State, said that the Savings Bank would not be allowed to repudiate a sixpence of what it owed to its depositors, and that stopped the run. Senator Lynch asserted, in reply to an interjection of mine, that one of the two Savings Banks in New South Wales is a Government institution, whilst the other is not. As a matter of fact, both are State banks, but neither is controlled entirely by one individual. Let us take the Post Office Savings Bank in the first instance. The last Statute passed by the New South Wales Parliament affecting the bank was enacted in 1904. That Act provided for the appointment of three Commissioners, one of whom was to be President. These gentlemen hold office during ability and good behaviour. The President has to devote the whole of his time to the duties of his office. The bank is not one of deposit and issue, as proposed by the Federal Government. It is, however, guaranteed by the Crown. The section with regard to that part reads -

The repayment of all deposits in the bank, whether made before or after the commencement of this Act, and the payment of interest thereon, shall be payable out of the funds of the Commissioners held under this Part, and is guaranteed by the Crown. Any liability arising from such guarantee shall be payable out of the Consolidated Revenue Fund.

In that instance the Government have straightforwardly accepted the responsibility for the bank. The other bank is officially called the Savings Bank of New South Wales, but is generally known in Sydney as the Barrack-street Bank. The Act of Parliament governing that institution provides -

The Governor shall continue to be President of the Savings Bank, and the whole affairs and business thereof shall continue to be managed by the trustees, the number of whom shall not exceed eighteen, and of whom one shall be Vice-President. And all such trustees shall be appointed, and such Vice-President named by the Governor, with the advice of the Executive Council, and such appointments and nominations shall be notified in the Gazette.

It is also provided -

It shall be lawful for the trustees at a meeting convened solely for the purpose to nominate to the Governor, and for the Governor, with the advice aforesaid, to appoint some fit person to be managing trustee who unless already a trustee shall become an additional trustee and a member of the corporate body, but shall not vote on any question affecting his personal interests.

Provision is made that four trustees shall form a quorum. So that, in this instance, there is regulation not by one individual, but by eighteen trustees, four of whom must be present when any business is done. There is also a managing trustee, who occupies a position similar to that of a general manager in an ordinary bank. Then arises the question how far this bank is directed by the Government. The law provides -

It shall be lawful for the trustees to borrow, and for the Governor, with the advice aforesaid, to guarantee the repayment of any money, the loan of which it may at any time become necessary for the said trustees to negotiate in order to meet the demands of depositors. Provided that no such loans outstanding at any time so guaranteed shall exceed the sum of Fifty thousand pounds without the previous advice and consent of the Legislative Assembly.

So that Both of these Savings Banks exists under a State guarantee, and each is controlled by a number of experts permanently appointed. Their duties are far less onerous and responsible than will be those of the officer who will occupy the position of Governor of the Commonwealth Bank. He will have nobody to advise him, and be under nobody’s control. 1 doubt whether the Government of the day will be able to control him. He is to continue in office during good behaviour. I .do not know whether the Government would consider it to be “ good behaviour” if he did not accept their advice in any particular. Governments come and go. What this Government may do to-day a future Government may upset. This Government may possess all the imaginable virtues. But can they guarantee that their successors will be equally virtuous? It certainly would be disastrous if we allowed politicians to pull the strings through the Government of the day ; but, on the other hand, it may be mischievous to allow the Governor to be absolutely unchecked and uncontrolled. He will occupy a most trying position. He will have to direct the bank on strictly business lines, and to deal with all phases of banking that come before him from time to time. I presume that the bank is going to discount bills, to grant loans on ordinary mercantile securities, to issue letters of credit, and to arrange exchange business. Are not the Government rather overloading a single individual by expecting him to do so much? Take the system of management adopted in connexion with the Bank of France. The American authority from which I have before quoted says -

No charge has ever been made that the bank favoured or aided any political party. There is never any claim that politics enters in any degree into the management of the bank. Except for the renewal of the charter in 1897 no legislation affecting the bank has been enacted since 1857. There is no sentiment for any change in banking methods nor for any new legislation. It should be added that neither the Governor nor Deputy Governor is permitted to be a member of either body of Parliament.

Has the Government any interest in the ownership of the bank? Does it own any hares?

No; tha bank is a private establishment.

Then the capital is entirely private properly ?

Yes. All the shares are divided between 30,000 shareholders, of which about 10,000 have not more than one share.

How often do the shareholders meet?

Once a year; the last Thursday in January.

What do the shareholders do at this meeting?

They are told about the business of the bank during the year, and are called upon to elect or re-elect the regents or censors.

How many regents and censors are there?

There are fifteen regents and three censors. Five regents and three censors must be chosen from among the commercial and industrial classes, and three regents must be taken from among the general paying treasurers.

That shows that the Bank of France is entirely a .private institution. An apposite remark was quoted by Senator Walker from President Thiers, who cried, “Thank God that the Bank of France is not a political bank.” It is entirely independent of the Government. Then take the case of the Bank of Germany. The following information is given : -

By whom are the shares of the Reichsbank owned ? - It is all private ownership. The shares are held mostly in Germany and Holland, and distributed in small lots. The Government owns no shares.

Will you kindly describe the organization and management of the Reichsbank? - We have, so to speak, three boards : First, the Curatorium ; second, the Direktorium (president and directors) ; third, the Central Ausschuss

What is the law in regard to the division of your profits? - Shareholders receive 34 per cent, dividends and one-fourth of the excess, the Imperial Government receiving the other three-fourths. Upon that basis they received dividends of 8.22 per cent, in 1906, 9.89 per cent, in 1907, and 7.77 per cent, in 1908. Two-thirds of the total profits in 1907 went to the Government. The shareholders received $4,450,000. The Government received $8,627,000.

It is here shown that the Government receive a large sum out of the profits of the bank, and, no doubt, that materially assists the Chancellor of the Exchequer. At the same time, it should be borne in mind that the bank has certain privileges and rights which enable it to realize, not only a fair amount of dividend for itself, but also-, a fair amount of profit for the Government, in return for such concessions. Again,, take the Bank of Switzerland -

The National Bank has for its principal objects to regulate the money market of the country, and to facilitate payments and transfers of money. It undertakes without cost the serviceof exchequer of the Confederation so far as the latter will delegate it to the bank. It has a capital of 50,000,000 francs, in 100,000 shares, of 500 francs each. Two-fifths of this amount was subscribed by the cantons, one-fifth by the existing banks of issue, and two-fifths by the public.

Here, again, is a bank which is spoken of as one of the State banks of the world, but in which two-fifths of the capital is held by private individuals, who, of course, receive dividends on their investments, and one-fifth by other banks of issue -

How is the bank managed? - There is a bank council composed of forty members named for four years; fifteen are designated by the meeting of the shareholders, and twenty-five by thefederal council.

Not one of the banks which we have heard described as State institutions is conducted on the lines on which the Ministry propose to conduct the Commonwealth Bank. In every case, the bank has the advantage of the assistance of men drawn from the general public and stockholders, who have a natural interest in its solvency and efficient management. In the face of these facts, is it reasonable to ask the people of the Commonwealth to establish a Commonwealth Bank under the condition proposed? Have the Ministers had the advantage of consulting experts in the law of banking? These honorable gentlemen may be very skilful and able, but can one of them lay claim to be an expert on the subject with which the Bill deals? The only member of the Government who has indicated a scheme bymeans of which a substantial capital could be provided for the bank - the only Minister who has suggested a means whereby the co-operation of the States could be secured - is quietly set on one side, and not one word is heard from him. I ask if he sees eye to eye with his colleagues in regard to this measure?

Senator McGregor:

– He is quite satisfied.

Senator Lt Colonel Sir ALBERT GOULD:

– I venture to think that, could we get his opinion definitely and clearly with regard to his own proposal and that of the Government, we should find that he is not satisfied. This is not a subject for amateurs .to deal with. I do not deny the ability of Ministers to gain knowledge. But have they consulted the men who could guide them? I do not question the constitutionality of the Bill. If their idea is to establish a bank in competition with other banks, they have many difficulties to surmount and a great deal of business to build up. In Australia, we have twenty-one banks, but how many branches do they possess? According to Knibbs, there are, in Australia, 1,924 banking establishments. The number in each State is enumerated, showing that branches are distributed throughout the Commonwealth. If the Government hope to establish a National bank, they will have to overtake the business which is done by these branch banks. In nearly every case they will have to erect their own building and appoint their own officers. They will have to overtake all this country business before they can claim to have a truly National bank. If a bank has an office in Sydney or Melbourne, and nowhere else in Australia, what is to become of its exchange business ? It will have to establish branches, not only in the State capitals, but in the principal towns in Australia. There may be many small places where possibly it would not be worth while to establish a branch, because banking facilities are already provided. The Government talk of paying 3^ per cent, on a capital of j£i, 000,000, but they will find that for a considerable period the bank will make very little profit. When a commercial bank sees fit to establish a branch in a town it does not expect the branch to immediately return a profit. It realizes that it will have to wait for one, or two, or three years before the branch can become self-sustaining. So it must be with regard to the Commonwealth Bank. Its establishment will not convenience the public by one iota. We shall merely have another bank competing with the existing banks, and I presume that it will obtain a certain amount of business. We are told that it will have one big customer in the Government. If I were convinced that it was really necessary in the interests of this country to establish a bank, I should not object; but that has not yet been proved, nor has it been proved that there is any demand for the establishment of a bank of this kind.

Senator Ready:

– The public sent us here to do it.

Senator Lt Colonel Sir ALBERT GOULD:

– Was the honorable senator sent here to establish a bank on such insecure and unsatisfactory foundations? Was he sent here to establish a bank which would take up the business of the State Savings Banks ? I heard an honorable senator say, when he was talking about State privileges, that he is loyal to the Commonwealth, and that, if it is a question of being loyal to the Commonwealth or to the State, he will be loyal to the former all the time. I have yet to learn that loyalty to the Commonwealth means disloyalty to the States. How do honorable senators acquire their seats? They, secure their positions here by obtaining the confidence of the people that, if they are elected, they will, at any rate, take care that the State interests are not neglected or thrown on one side. Senator Millen claimed that the High Court is the protector of the rights of the States; but I go a step further, and say that it is the duty of every man who comes into this Parliament as the representative of a State to see that it receives fair play and justice; -and whenever any action is proposed, although it may be to the aggrandisement of the Commonwealth, or of honorable mern.bers of this Parliament, to ascertain if it will be fair to his State. When the Constitution was framed, it was distinctly provided that only matters of general concern should be undertaken by the Parliament of ; the Commonwealth, and that, except where they were expressly taken away, the rights and privileges of the States should be retained.

Senator Blakey:

– Did not the people give us the power to deal with banking?

Senator Lt Colonel Sir ALBERT GOULD:

– I do not suppose that it entered the mind of one member of the Federal Convention that a grant of this legislative power would lead to the establishment of a. Commonwealth Bank of this description. If it is established, of course, we wish to see it made a success. We do not desire to alienate six great customers in the States; but that is what the Government are deliberately seeking to do. The States made certain protests, and submitted certain representations, and when the Government are accused of paying no attention to the views of the States, they reply, in the words of a prominent Minister, “ We read their letter to you all.” The States have a real interest iri this project. It is not a matter which affects any private bank, but one which affects the States. Between ^£50,000, 000 and £60,000,000 are deposited in the State Savings Banks, and nearly the whole of the money has been expended in the development of the States. Suppose, for instance, that in New South Wales the people have deposited in the Savings Banks £25,000,000. The greater portion of that sum has been laid out in the improvement of the State.

Senator Givens:

– But this Bill does not propose to interfere with that.

Senator Rae:

– We are not going to confiscate it.

Senator Lt Colonel Sir ALBERT GOULD:

– No; because it cannot be confiscated. The Government propose to withdraw from the States the privileges which they have enjoyed of having branches of the Government Savings Banks established at the post-offices. When a man goes to a post-office with a pound or two at the end of the week or the month, and says, *’ I want to bank this money,” he does not raise a question as to whether it is a Commonwealth or a State Bank. It is a Government Savings Bank, and that is enough for him. He thinks that his money will be perfectly safe there. He may discontinue making any deposits with the local Savings Bank;

Senator McGregor:

– ‘How can he do that, when they will not take a deposit from him unless he gets a new book ? You think that the people are all fools.

Senator Lt Colonel Sir ALBERT GOULD:

– When a man goes there and says, “ I want a new pass-book,” and he is given one, he is quite satisfied.

Senator Blakey:

– Will not the ordinary depositor be allowed to choose for himself as between the State Savings Banks and the Commonwealth Savings Bank?

Senator Lt Colonel Sir ALBERT GOULD:

.- Exactly. But I say that, in the interests of the States, it is undesirable that undue competition should be raised in connexion with the small savings of the people.

Senator Givens:

– The State Savings Banks will only pay depositors interest upon their deposits up to a couple of hundred pounds, yet they are now making a fuss about this proposal.

Senator Lt Colonel Sir ALBERT GOULD:

.- In New South Wales a depositor receives interest upon the money deposited with the Savings Bank up to £200. and at the Post Office Savings Bank, upon deposits, up to £500. Now, I hold that when a man> has accumulated £200 or £500 he has attained the object for which Savings Banks are established. When he has £200 or £300 of his own why should he not invest it in some other form of industry?

Senator Rae:

– The honorable senator wishes to make the Savings Banks a gathering Form of institution to feed the larger banks.

Senator Lt Colonel Sir ALBERT GOULD:

Senator Lynch:

– What is the honorable senator talking about? Sir John Forrest favours it.

Senator SAYERS:

– Senator Lynch is a Very great supporter of Sir John Forrest, and I suppose that, therefore, he favours it.

– Is it in order for Senator Blakey to tell me to stick to the truth ?

Senator VARDON:

– Let the honorable senator wait until I get into office, and then he will see what I shall be prepared to do. I cannot promise the Minister any support whatever in that regard. If the Government desire to provide facilities to enable people to obtain cheap money from ordinary banks, why not take action in that direction ? Such. action would relieve many persons of their liability to pay exorbitant rates of interest. Some of them pay as much as 100 per cent.

Senator Rae:

– Are they paying as much as that?

Senator VARDON:

– Yes. I have seen cases reported in the press in which that rate of interest has been payable. So far as the proposed bank is concerned, it is like a chip in porridge - it will neither do much good nor much harm:. But I cannot understand why the Government have not adopted the suggestions of the great financial authority to be found within their ranks. In connection with the proposal to establish a National Postal Bank, that gentleman recommends that its capital should be represented by 12,000 shares of £1,000 each, of which at least 6,000 shares should be in the hands of the Commonwealth Government, while of the balance no State Government should hold more than 1,000 shares. Then I find this proposal -

That the Commonwealth and State Governments holding shares shall be jointly and severally liable in respect of all transactions of the bank.

This was to be a kind of co-operative business between the Commonwealth and the States. But there is nothing of that character in the Bill which we are now considering. Then it was provided -

That the Board of Management of the bank shall consist of a Comptroller-General, representing the Commonwealth, and one representative from each of the subscribing States.

Here was a board of management which was going to control the bank and the manager. Then there was this proposition -

That the Treasurer of the Commonwealth shall be entitled to attend all meetings and inspect all proceedings of the Board of Management.

Again -

That the General Post-office in each capital shall be the head office of the bank in that State, and that any post-office within the Commonwealth carrying on the business of a moneyorder office may be constituted a branch of the bank.

Then we were told -

That the regulations requisite for controlling the bank reserves shall be drawn up by the Board of Management of the bank and the Council of the Associated Banks of Australia, and approved by the Governor-General in Council.

Further, it was provided, with regard to a sinking fund -

That the trustees constituting the board shall be Chairman- The Comptroller-General of the National Postal Bank, the Chief Justice of the Commonwealth, the President of the Senate, the Speaker of the House of Representatives, the Auditor-General, and the Chairman of the Associated Banks.

Here we have elaborate provisions for the establishment of a bank and for safeguarding its management and operations. But none of these powers are contained in the Bill which is now under consideration. Clause 7 of the measure reads -

The bank shall, in addition to any other powers conferred by this Act, have power - (a) to carry on the general business of bank- ing;

to acquire and hold land on any tenure ;
to receive money on deposit, either for a fixed term or on current account ;
to make advances by way of loan, over draft, or otherwise ;
to discount bills and drafts;
to issue bills and drafts, and grant letters of credit;
to deal in exchanges, specie, bullion, gold dust, assayed gold, and precious metals;
to borrow money ; and
to do anything incidental to any of its powers.

– I find that the deposits more than equalled the withdrawals in every year during the last ten years, except two. Last year, the deposits were almost £600,000 more than the withdrawals. Of course, it was always desirable to have a reserve, but I think that a smaller one than £2,000,000 might have been kept at account current for the purpose. In 1893, which was the panic year, the withdrawals were greater than the deposits by £400,000. The total sum to the credit of depositors in Queensland is £[6,478,000- Of that sum, £[4>337,°°° is invested in Government securities. The balance, as I have explained, is held on a current account in ‘ the Queensland National Bank, which allows the Government 2 per cent, interest for it. We can all understand the objection of the Queensland Government to anything which is likely to deprive them of the use of any portion of the ,£2,000,000, and I suppose that the same thing applies to every State. In establishing a Savings Bank, we are undoubtedly doing something which may be prejudicial to the finances of the States ; but I am not concerned in particular about that. If the Commonwealth can do the business, it has just as much right as one or all of the States to do it, and get the use of this money.

Senator Sayers:

– Squeeze the States all you can.

Senator STEWART:

Senator McColl:

– Yes; America and Canada.

Senator McGREGOR:

– I do not believe that the security in Canada and the United States of America is as good as that in Australia. Any one who knows the financial history of America is aware that there have been great financial disturbances there, such as have never occurred in this country. I believe our security to be better than that of any other country in the world. That is what I think of Australia. At the present time the State Savings Banks do not invest all the money of their depositors in the States in which the money is deposited. Take South Australia, for instance. I know, on the best of authority, how the Savings Bank money of that State is invested. Bear in mind, the Savings Bank in South Australia is the most successful institution of the kind in this country. It is the Savings Bank that has the largest number of depositors per 1,000 of the population, and the highest amount of deposits per individual. At the present time the South Australian Savings Bank has over £[6,000,000 of deposits. Of that sum, £[96,829 is invested in Western Australian securities, .£96,925 in Victorian securities, and £[2,895 in Queensland securities. Is it supposed that any one in South Australia objects to the investment of that money outside the State? What will happen with deposits in the Commonwealth Savings Bank ? We may liken the Commonwealth and the six States composing it to a great water-conservation scheme. We have in these States what may be described as great financial reservoirs by means of which we are able to fertilize the whole country. Suppose that the Commonwealth undertook the whole of this work. If a financial drought occurred in any particular part of Australia, the Commonwealth, by means of its bank, would be able to direct a flow of capital to that portion where it was required. The institution would thus be for the benefit of the whole Commonwealth. Some honorable senators say that the States should be allowed to co-operate with us in the work. I can assure them that, as the Prime Minister has already stated, the Commonwealth Government is prepared to receive the co-operation of the States at present. The only reason why that is not provided for in the Bill is simply that we desire the States and the Commonwealth to come together in the near future, and to arrange conditions which will enable them to work amicably together. Every one, I believe, has faith in the stability of the Commonwealth. I do not wonder, however, that the Premiers of some States have objected to the establishment of the Commonwealth Savings Bank, because they have been under the mistaken idea that they will not be able to make so much money out of their own Savings Banks as they do at present. But nothing of the kind is likely to happen. There is, for instance, a Labour Premier in Western Australia who has joined his complaints to those of the other Labour Premiers. Then, the Honorable John Murray rushed to Sydney, had a consultation with the Labour Premier of New South Wales, and alarmed him and that weak individual, instead of coming to his fellow Labourites in the Commonwealth Government, took the advice of the Premier of Victoria. I can assure honorable senators, however, that when this Commonwealth Savings Bank is established, if any State Savings Bank in the near or distant future is disturbed or in any way put out of existence by this Commonwealth institution, it will be in the interests of the country, because the people would not allow anything else to happen. What would be the position then? Suppose that Mr. Scaddan had aland settlement scheme, and wanted £300,000 or £400,000. for the purpose of putting settlers on the land. Instead of going to the State Savings Bank, as he does now, he would come to the Commonwealth institution and get the money. He would be the security; he would be the borrower ; and it would be better for the depositors in the Savings Bank, the settlers on the land, and everybody else concerned. In ordinary circumstances, it will take some time for these conditions to come about. I am sure that when Labour Governments are established in all the States and come together with a Labour Government in the Commonwealth they will be able to make such arrangements with each other that the Savings Banks of the States will have nothing to dread in amalgamating or cooperating with the Savings Bank of the Commonwealth.

Question - That the Bill be now read a second time - put. The Senate divided.

AYES: 17

NOES: 7

Majority … … 10

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In Committee:

Clauses 1 to 3 agreed to.

Clause 4 -

In this Act, unless the contrary intentionappears - “ the Bank “ means the Commonwealth Bank of Australia established by this. Act, “the Governor” means the Governor of the Bank.

Senator WALKER:
New South Wales

– I move -

That before the words “’ Governor of the bank “ the words “ Chairman of the Board of” Directors “ be inserted.

I strongly object to the use of the title “Governor” in this clause. It is a spurious imitation of the title of the head of the Bank of England to give that title to the manager of the Commonwealth Bank. I believe that it ought to belong to the chairman of the board, though, of course, if there is no intention to have a board my amendment will be defeated. This designation is apt to be confused with the title of Governor of a State. I do not see why we should not allow the word “ Governor “ to belong to a Government official.

Senator Pearce:

– He will be a Government official.

Senator WALKER:

– There is a great difference between the Governor of a State and the Governor of a State Bank.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

Senator ST LEDGER:

– Is not the Vice-President of the Executive Council open to reason? Many of the Government supporters themselves view this clause with suspicion. Members of the Opposition have based their objections to the Bill upon the ground that it contains a dangerous and absolutely unprecedented form of management in that it commits the .whole of the control of this institution to the hands of one man. If it were not for the late stage of the session, and the absolute physical impossibility of continuing the fight, the Government would not get this clause through. The Opposition have been beaten bv physical weakness, and not by force. We were twitted at the conclusion of the debate on the second reading, because we did not further exhaust our physical powers in discussing the Bill. I feel that in the passing of this measure physical weakness will prevail over reason and the real desire of the majority of the Committee.

Question - That the words proposed to be inserted be inserted - put. The Committee divided.

AYES: 10

NOES: 12

Majority … … 2

The bank shall be a body corporate with perpetual succession and a common seal, and may hold land, and may sue and be sued in its corporate name.

AYES

NOES

Senator ST LEDGER:
Queensland

– I direct attention to the fact that in the next clause the bank is given power “ to acquire and hold land on any tenure.” I think that in order to make the Bill symmetrical the words “ on any tenure “ should be inserted after the word “ land “ in the clause now under discussion.

Senator McGregor:

– I see no necessity for the amendment suggested.

Clause agreed to.

Clauses 7 and 8 agreed to.

Clause9 - (1.) The capital of the bank shall be One million pounds, and shall be raised by the sale and issue of debentures in pursuance of this Act. (2.) The capital of the bank shall be availble for all the purposes of the bank.

Senator WALKER:
New South Wales

– In my speech on the second reading I said that I thought that instead of the bank issuing debentures to provide the capital the Government should put a certain sum of money into it as shareholders do in the case of a private bank, and let it be conducted on ordinary business principles.

Senator Givens:

– What would the honorable senator suggest as a fair capital to commence with?

Senator WALKER:

– I should suggest that the Government should put £250,000 into the bank at a time until the amount of £1,000,000 is reached, because the bank should not be called upon to pay interest on the full sum of £1,000,000 if it does not require it. To give effect to what I suggest I move -

That, after the word “be,” line 2, the words “ supplied by the Government of the Commonwealth,” be inserted.

The clause would then read “ The capital of the bank shall be £1,000,000, and shall be supplied by the Government of the Commonwealth.”

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– If the honorable senator will look at clause 10 he will see that it covers his proposal.

Senator WALKER:

– Not at all. This is going to be a loan, and I am proposing that the money should be actually paid over by the Government to the bank - that the Government should put the sum of £1,000,000 into the bank as an investment. I have already said that I do not object to the principle of a Commonwealth Bank, but I wish to see it placed on a thoroughly business footing. It would be better for the Governor of the bank to have the responsibility of paying his expenses out of the moneys of the bank. He might Be tempted to be extravagant if he Knew that the Federal Government would find funds if he were short. Let this institution be conducted on sound business principles. What would be thought of a private bank starting on a big credit? People would have no confidence in it.

Senator ST LEDGER:
Queensland

– Senator E. J. Russell has suggested that, under clause 10, the proposed capital of the bank might be provided out of the Consolidated Revenue. Nothing of the kind. Clause 10 makes provision merely to cover the expenses of the establishment of the institution.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– It provides for advances to the bank of money which may form the capital of the bank.

Senator ST LEDGER:

– If the Bill is to pass under that delusion, let it pass.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

– I think honorable senators need feel no alarm. Clause 9 provides that the bank may issue debentures to the amount of £1,000,000, and then clause 10 provides that the Treasurer may furnish the money necessary for the Starting of the bank. When the bank issues its debentures it will be able to refund advances made by the Treasurer. There may not be a large amount of capital required at first, and we know that it is not the practice of private banks to call up all their capital if it is not required. Those who would like this bank to be a success will hope that the whole of the amount of capital provided for will not be required.

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [12.28 a.m.]. - I do not think that the transposition of clauses 9 and 10 would help the VicePresident of the Executive Council in this matter in the slightest degree. The capital of the bank is to be £1,000,000, and under the Bill it is to be raised in a certain way.

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917

– But not all on one day.

Senator Lt Colonel Sir ALBERT GOULD:

.- That is so, but I point out that clause 10 does not provide that the Treasurer shall be required to find the capital required by the bank, and advance the money from the Consolidated Revenue, but to make advances to the bank to meet the expenses connected with its establishment.

Senator McGregor:

– Those advances will be repaid by the bank.

Senator Lt Colonel Sir ALBERT GOULD:

– Of course, we know that all money advanced to the bank is to be repaid ; but clause 10 makes provision only for advances to meet expenses incidental to the establishment of the bank.

Sitting suspended from 12.30 to 1.15 a.m. (Friday).

Senator Lt Colonel Sir ALBERT GOULD:

.- Clause 10 of the Bill enables the Treasurer to provide the money for the establishment of the bank and defray any expenses that may be necessary for carrying on its business. As I take it, the very object of the Bill is to avoid the necessity of devoting any portion of the Consolidated Revenue for this purpose. But the Government realized that it was necessary, to make provision to defray, prelimin ary expenses. For that purpose, clause gr with which we are dealing, comes to the assistance of the bank. All that I can say is that, if the clause be not amended, and if the Treasurer considered that he was justified in taking from the Consolidated Revenue £1,000,000, or any lesser sum, he would be seriously misreading the intention of the Bill. I feel quite sure that if Ministers refer this clause to their Law Officers, they will find that it does nol contemplate raising capital, but only the payment of preliminary expenses. It is quite clear, to my mind, that the only money that can be utilized as capital is that which will be raised by means of debentures. Senator Walker, however, would permit the Government to provide the capital out of the Consolidated Revenue. It would not be necessary to raise £1,000,000 straight away. I dare say that a fourth of that sum would be sufficient in the first instance. As the business of the bank increased, the capital would have to be added to.

Senator Vardon:

– The idea is that the Government shall go kite-flying to establish, the bank.

Senator Lt Colonel Sir ALBERT GOULD:

– I doubt whether that would be justifiable. Besides, a great many individuals who go kite-flying do not alwayssucceed in their object.

Senator McGregor:

– There is no kiteflying about this.

Senator Lt Colonel Sir ALBERT GOULD:

– The Government are going toraise money by means of a loan. I urge the Committee to accept the amendment,, and leave upon the Government the responsibility of raising the capital to enable the bank to be carried on. While we realize that the Government have resources behind them, we must also realize that if a person* goes to the bank for his money he will expect to get gold if he asks for it.. There ought always to be sufficient coin inthe vaults of the bank to meet all legiti-mate demands.

Senator WALKER:
New South Wales

– If the Government are going, to raise money for this bank by the sale of debentures, they will have two stocks on the market, namely, Government stock, pureand simple, and Commonwealth Bank stock. The bank stock would not go off so readily as would the Government’s own. stock, because the owners of bank debentures would have to exhaust the resources of the bank before they could come on the Government. I am anxious to see the bank established on a good basis. I have been a general manager of a bank myself, and can speak with knowledge as to the responsibility which a manager feels in regard to whether things are likely to go right or wrong.

Question - That the words proposed to be inserted be inserted - put. The Committee divided.

AYES: 7

NOES: 16

Majority … … 9

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clause 10 agreed to.

Clause 11 -

The Bank shall be managed by the Governor of the Bank.

Senator Lt.Colonel Sir ALBERT GOULD (New South Wales) [1.28 a.m.]. - Early in the evening, Senator Walker submitted an amendment on clause 4, and he has also given notice of an amendment on clause 11. His object in regard to clause 4 was to constitute a board of directors in addition to the general manager of the bank.

That the following words be added, “ and there shall also be a Board of Advice consisting of five members, with whom the Governor shall, from time to time, consult.”

It may be urged, of course, from the other side, that this is rather like a proposal which was considered a little while ago. I protest most earnestly against the idea of running the bank with one man. It is not right to leave one man to determine every matter which arises, and to say that there shall be nobody whom he can consult.

Senator WALKER:
New South Wales

– As I do not intend to pro- ceed with my amendment to insert a new clause after clause 11, with regard to the appointment of a board of directors, I feel at liberty to say a few words about this amendment. If the Government do not ac cept it, they may be very sure that, when their successors come into office, this measure will have to be considerably modified, whereas, if the amendment be adopted, there is every chance that it will continue operative for a considerable time.

Question - That the words proposed to be added be added - put. The Committee divided.

AYES: 9

NOES: 14

Majority … … 5

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clauses 12 to 18 agreed to.

Clause 19 verbally amended and agreed to.

Clause 20 agreed to.

Clause 21 -

The Head Office of the Bank shall be situated in such place as the Governor thinks fit to appoint.

Amendment (by Senator Rae) proposed -

That after the word “ place “ the words “ within the Commonwealth “ be inserted.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 22 to 34 agreed to.

Clause 35 - (1.) The Governor may establish at the head office of the bank, and at such other places as he thinks fit, a department, branch, or agency for the receipt and repayment of deposits and the transaction generally of the business of a Savings Bank. (2.) Branches or agencies for Savings Bank business may be established at any place notwithstanding that the bank has no branch or agency for general banking business at that place. (3.) Separate accounts shall be kept by the bank in respect of the Savings Bank business of the bank, and for that purpose any receipts or expenditure of the bank referable to both ordinary business and Savings Bank business shall be allotted in such proportions as the Governor thinks fit.

Senator STEWART:
Queensland

– I move -

That the following new sub-clauses be added : - (4.) The money received under the authority of this portion of the Act shall be invested and dealt with in manner following, that is to say -

Two-thirds part thereof at the least shall be invested in the purchase of or by way of loan upon the security of Commonwealth or State Government. Debentures or Treasury Bills issued under the authority of any Government Loan Act or Act authorizing the issue of Treasury Bills. (5.) The annual account of all deposits received and paid under the authority of this Act and of all expenses incurred during the year, together with a statement of the total amount due to all depositors and of how that amount is invested or held, shall be laid before both Houses of Parliament in each year.”

I recommend the acceptance of the amendment to the Committee. It will be in the interests of the bank that the Savings Bank deposits should be dealt with in the same manner as other moneys in the possession of the bank.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

– The latter portion of Senator Stewart’s amendment is already provided for in connexion with the production of balance-sheets. But I wish to show that this amendment, although probably moved with the best of intentions, is the very thing about which the State Premiers are somewhat alarmed. At the present time, the funds of the Savings Banks in the different States are available to the Government in connexion with land settlement and development. What they fear is that a large amount of the savings of the people may be diverted from that purpose, and that they may not be able to obtain the use of that money to develop the State in which it has been raised. If the amendment be carried, two-thirds of the money raised in each of the States will be taken from the development of those States and used for the purchase of bonds in connexion with the States or the Commonwealth. I think that that, to some extent, is provided for with respect to the disposition of the profits of the commercial section of the bank, and to counteract the alarm that is felt by some of the StatePremiers we should not hamper the operations of the institution in the direction suggested by the amendment.-

Amendment negatived.

Senator Lt.Colonel Sir ALBERT GOULD (New South Wales) [2.1 a.m.]The greater portion of the debate on the motion for the second reading of this Bill related to the proposal to transact Savings Bank business in opposition to the State Savings Banks. The question having been fully discussed, I propose to content myself by asking honorable members to negative the clause as printed. By doing so we should give clear evidence of the view of the Committee, and a definite reply to the various State Governments who have urged objections against this part of the measure.

Question - That the clause stand as printed - put. The Committee divided.

AYES: 16

NOES: 7

Majority … …9

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 36 (Receipt of deposits).

Senator VARDON:
South Australia

– Under this clause it is provided that any sum not less than is may be deposited with the Savings Bank branch of this institution, and I should like to know whether an unlimited amount may be placed to the credit of any depositor, and whether there is any limit as to the amount on which interest shall be payable?

Clause agreed to.

Clauses 37 to 47 agreed to.

Clause 48 (Bank not responsible for fraudulent withdrawals).

Senator WALKER:
New South Wales

– I ask the Committee to negative this clause. I am surprised that such a provision should exist in the Western Australian State Act, for it practically offers . 1 premium to a man to obtain possession of a depositor’s pass-book, and so to get hold of his money. In all my banking experience I never heard of a bank evading its responsibility in respect of the cashing of a forged cheque, and I certainly think that we ought to negative this clause. We intend to protect our depositors from theft and forgery, and even if there is such a provision as this in State Savings Bank Acts, I think we should take up a higher ground, and vote against this proposal.

Senator PEARCE:
Western AustraliaMinister of Defence · ALP

– Some time ago we had before us a Bill containing a clause relating to cheques drawn on private banks, and I wish to compare the position that Senator Walker then took up in regard to the responsibility of a private banking company with the attitude that he adopts now in regard to the responsibility of the proposed Commonwealth Bank. There was in the Bills of Exchange Bill a clause providing that if a person so signed a cheque as to afford an opportunity for it to be altered, the private bank on which it was drawn should not be liable for any loss sustained as the result of that negligence. In this Bill, we provide that if a man carelessly leaves his deposit book where some one else may obtain possession of it, present it at the bank, and obtain money belonging to the depositor, the bank shall not be responsible for the loss so sustained. When the Bills of Exchange Bill was before the Senate, Senator Walker, in dealing with the clause to which I have referred, said -

We are asking merely that we should have this danger signal held up, so that persons may be convinced of the necessity for being very careful in the filling up of cheques. If a man is foolish enough to leave a blank before a certain amount in a cheque which permits of fraudulent alteration, the banker should not be responsible for the negligence.

– 1 am glad that the honorable senator was for once on the right side. There is not the slightest analogy between the two cases. This clause provides that where a person fraudulently represents himself to be a depositor, presents the depositor’s pass-book, and secures the withdrawal of money, the bank is not to be responsible to the depositor. We know that a very great many of the depositors in the Savings Banks are working girls and young men. A servant girl may, in the way referred to in this clause, lose the whole of her savings, made, perhaps, with a view to marr, age ; and the

Government propose that the bank shall not be liable to make good her loss. lt would be a very poor consolation to her to ask her why she was not more careful in looking after her pass-book. Except in the case of Western Australia, I do not suppose there is a Savings Bank Act in any State in Australia which contains such a provision as this. 1 point out to the Committee that while the loss to the Savings Bank would be comparatively insignificant, if it were responsible, the loss to a poor depositor might mean absolute ruin.

Senator LONG:
Tasmania

– Some honorable senators are unnecessarily alarmed as to the results which may follow to depositors if this clause be retained. I realize that it would be a very serious matter for a depositor to lose the results of, perhaps, many years’ savings ; but I point out that whilst such a thing might have happened a few years ago, it is difficult to imagine it happening under the practice adopted to-day by our Savings Banks. Something more would be required than to get a depositor’s book, and go to the bank with it. I speak of the practice at present followed in Tasmania, where a very desirable reform was introduced on the report of a skilled Victorian Savings Bank official. Before a depositor can draw money from the Savings Bank to-day, he has to tender with his pass-book a notice of withdrawal, and the signature attached to it can be compared at once with the signature of the depositor already in the possession of the bank. I am as anxious as any other honorable member of Ihe Senate that depositors should not lose their savings, and I think that the Government might accept the suggestions of Senators Gardiner and Rae, and make the clause a little more liberal than it is.

Senator GARDINER:
New South Wales

– I hope the Government will reconsider this clause. I have in mind a wholesale fraud committed on a Savings Bank a few years ago by an officer connected with a banking institution, as the result of which a number of unfortunate depositors lost their money. I direct attention to the fact that the depositor, who, under this clause, would be made the victim, would be without any means of protection, whilst the bank would be able to protect itself. If we pass this clause, it will offer some temptation to officials of the bank to be less alert and careful than they ought to be.

Senator McGREGOR:
Vice-President of the Executive Council · South Australia · ALP

– It is very amusing to notice the great interest which honorable senators opposite take in the poor depositors and the poor servant girls, for whom Senator St. Ledger has so much sympathy. It should not be forgotten that, unless in the case of very small amounts, every Savings Bank depositor must give notice of his intention to withdraw money from his account. In ordinary cases of withdrawals the depositor must hand in a withdrawal slip with his pass-book, and if he should lose his passbook he has only to send notice to the bank not to permit money to be withdrawn from his account until he has recovered it, and the book will be cancelled if it cannot be found. Senators Gardiner and Rae, in their eagerness to protect the poor depositor, overlooked the fact that he is able to protect himself. They have been rather injudicious in rushing to the assistance of those who are opposed to this Commonwealth Bank lock, stock, and barrel.

Senator Rae:

– I object to have it said that we are rushing to the assistance of any one but the depositors.

Senator McGREGOR:

– I point out to Senators Rae and Gardiner - because honorable senators opposite are already aware of the fact - that if this clause is not retained this will be the only bank that is not protected in this way. If honorable senators will refer to section 85 of the Bills of Exchange Act they will find a similar provision there, under which, if a forged cheque is presented to a bank, and the banker pays it in good faith, he is not held to be liable to make good the loss to the owner of the cheque. I repeat that no money can be withdrawn from this bank without a signed cheque and the presentation of the pass-book at the same time.

Senator GIVENS:
Queensland

– An examination of Senator McGregor’s two statements makes it appear that he has been trying to mislead the Committee. Clause 33 does not put the man dealing with the general bank in the same position as the man dealing with the Savings Bank branch. It provides that the Commonwealth shall stand behind the bank and be responsible for all its debts, but may not be sued. Under an earlier provision, the bank can sue and be sued ; but, if we pass this clause with regard to the Savings Bank, neither the bank nor the Commonwealth can be sued, because the bank will have obtained immunity.

Senator McGregor:

– Section 85 of the Bills of Exchange Act covers the case.

Senator GIVENS:

Senator KEATING:
Tasmania

– Senator Lynch has drawn a picture of possible collusion if the clause were rejected. I ask him to look at the other side of the picture, and that is a possible collusion between an employe of a bank and somebody who wished to perpetrate a fraud on a depositor. A depositor’s passbook might fall into the hands of a person who was anxious or willing to defraud him of a portion of his savings, and he might very easily, through the assistance of a corrupt official of the bank, present the pass-book, and make a very successful imitation of the signature, a copy of which would appear in the pass-book, and by so doing enable the corrupt official to pay out to him the amount which is expressed in the cheque presented. I think that collusion of that character is just as likely to arise as collusion of the character to which Senator Lynch referred.With regard to the applicability of the section of the Bills of Exchange Act in relation to crossed cheques, I think that the little crossfiring must have distracted his attention from the contents of that section when I was reading it. It has relation only to the responsibility or non-responsibility of the banker on whom the crossed cheque is drawn for not carrying out the instruction of the drawer with regard to its destination. It has nothing to do with presenting to a person outside a crossed cheque, and that person, subsequently, paying it into his own account. It is not a case of a forgery or an alteration of an amount, but a case where a customer draws a cheque, and so carelessly crosses it that the crossing is not apparent, or has become so obliterated that its obliteration is not apparent. Then, if the banker pays in defiance of the crossing, or at any rate not in compliance with it, and he does that innocently and in good faith, which he must establish, there is no responsibility. The earlier part of the section provides that where a cheque is so crossed the banker must pay the cheque according to the crossing, and if he does not so pay it he is responsible. The only proviso is that if there is no appearance of crossing on the cheque at all, although it was crossed originally, the banker is not responsible, but still the customer has drawn the cheque against his account, and the bank debited his account with it, but if it failed to credit it in the quarter to which he wished it to be credited - but he did not take the proper precaution to direct the bank to credit it - the banker is not responsible. With regard to the possibilities of collusion, there are very many depositors who live at some distance from the Savings Bank. What is more easy for a depositor during the transit of his pass-book through the post to the Savings Bank for the purpose of being made up to lose it? What is more possible than for the pass-book to be stolen during transit? The depositor possibly would not miss the pass-book if he did not come back for ten days or a fortnight. During that period it would be quite possible that a person who had the pass-book could operate against the depositor’s account by collusion, and to a very large amount. I think that the Committee will be very well minded if they will negative the clause. If the Government want to have this protection let them introduce a Bill containing one clause of this character and -applying to all banks, including the Commonwealth Bank. I do not think it is fair, after the affirmation made by Parliament in regard to other banks, that the Commonwealth Bank should be singled out for this privilege.

The CHAIRMAN:

– Before putting the question I ask Senator Rae to withdraw the remark which he made before leaving the chamber and to apologize to the Chair. I have no doubt that he will do so.

Senator Rae:

– I withdraw the remark which I made in the heat of debate, and apologize to the Senate.

Senator O’KEEFE:
Tasmania

Payment can bc made only to the depositor ; personally and on his or her receipt, or to -the bearer of an order, in such form as shall be approved by the said Commissioners, and -signed by the depositor and witnessed if the depositor be a marksman or a minor, which order must be accompanied by the pass-book, But in case ‘any person presenting the pass-book shall unlawfully obtain any deposit or sum of money from the bank during the hours of business, the bank shall not be responsible for the Voss so sustained by such depositor, nor be liable <to make good the same.

I am absolutely certain that a similar regulation is to be found in connexion with every Savings Bank throughout the Commonwealth. Yet the clause under consideration has been attacked as . if it were an extraordinary provision.

Senator Keating:

– Does the Minister of Defence say that that’ regulation would prevent a depositor from successfully suing the bank?

Senator PEARCE:

– There is nothing in the clause about a depositor suing the bank. Probably the honorable senator has not read it. The clause read’s -

Where a person fraudulently represents himself to be a depositor and presents the depositor’s pass-book, and complies with the rules of the Bank, and thereby obtains any money belonging to the depositor deposited with the Bank by way. of Savings Bank deposit, the Bank shall not be responsible for the loss sustained.

Senator Barker:

– That regulation has been in’ force for thirty years. ‘’

Senator PEARCE:

– I have shown that the regulation which I have’ read is the ordinary Savings Bank rule. I appeal to the Committee to -give the Commonwealth, Bank the same opportunity to live that is extended to Savings Banks. The Government are fighting for this clause because they believe it to be a vital one, and even if they are defeated- upon it now they will subsequently endeavour to get it restored to the Bill.

Senator KEATING:
Tasmania

– I would not have risen but for the gratuitous assurance of the Minister of Defence that probably I had not read clause 48. I am quite aware that the regulation which the Minister has quoted bears a striking similarity to that clause. When he read that regulation, which Senator Barker says has been in existence for thirty’ years, I asked the Minister whether he thought it would successfully prevent a depositor from suing the bank. The Minister replied by declaring that clause 48 says nothing about a depositor suing the bank. I am quite aware of that, but I say that if we pass that clause we shall prevent a depositor from successfully suing the bank. The regulation which has been read ‘would not avail the bank, even if it did act upon it. But if the Bill be passed, and payment be made by the bank, that institution will be acting under the authority of a Statute.

Senator WALKER:
New South Wales

– I am rather surprised at the Minister taking up the attitude which he ha» adopted on this clause. We are now legislating for a bank which, we have been led to believe, is going to exhibit extremely high principles. I do not care if every Savings Bank in Australia is covered by the regulation which has been read by the Minister of Defence. I say that there is no general bank in the Commonwealth which has a Savings Bank attached to it. Why should we have one law for one set of depositors and another law for a different set? I hope that we shall arrive at a speedy decision upon this matter.

Question - That the clause stand as printed - put. The Committee divided.

12 12

AYES: 0

NOES: 0

AYES

NOES

The PRESIDENT:

– I find that the honorable senator’s name is not recorded in the division list as reported in the Journal of the Senate,* but under standing order 17$ it is provided that -

If complaint be made to the Senate that a. division has been inaccurately reported the President shall cause the Journals, if incorrect, tobe corrected.

I take it that Senator Barker was sitting, behind one of the pillars, and that his presence was not noted. Under this standing order, therefore, I shall cause the Journals to be corrected.

Question resolved in the affirmative.

Senate adjourned at 4.10 a.m. (Friday).

Question so resolved in the negative. Clause negatived. Clauses 49 to 64 agreed to. Title agreed to. Bill reported with amendments; report (adopted.

Bill read a third time.

page 4484

ADJOURNMENT

Personal Explanation. Motion (by Senator McGregor) proposed -

That the Senate do now adjourn. /Senator BARKER (Victoria) [4.8 a.m.]. -^-1 desire to call attention to the omission df my name from the division as recorded in the Journals of the Senate on the motion for the adjournment of the debate on the - Commonwealth Bank Bill, moved by Senator Gould, on the 13th instant, that is, yesterday evening. I .voted with the Ayes,” but my name is not recorded.

Cite as: Australia, Senate, Debates, 14 December 1911, viewed 22 October 2017, <http://historichansard.net/senate/1911/19111214_SENATE_4_63/>.

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Senate14 December 1911

QUESTION

NORTHERN TERRITORY

Senator STEWART:QUEENSLAND

Senator McGREGOR:Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

Senator Millen:

Senator McGREGOR:

QUESTION

STATE TAX ON STEAMER TICKETS

Senator ST LEDGER:QUEENSLAND

Senator McGREGOR:ALP

Senator St Ledger:

QUESTION

GOVERNMENTOF PAPUA

Senator STEWART:

Senator McGREGOR:ALP

SUPPLY BILL (No. 4)

COMMONWEALTH BANK BILL

Senator MILLEN:New South Wales

Senator de Largie:

Senator MILLEN:

Senator de Largie:

Senator MILLEN:

Senator de Largie:

Senator MILLEN:

Senator Blakey:

Senator MILLEN:

Senator Gardiner:

Senator MILLEN:

Senator Gardiner:

Senator MILLEN:

Senator Gardiner:

Senator MILLEN:

Senator Gardiner:

Senator MILLEN:

Senator Guthrie:

Senator MILLEN:

Senator O’Keefe:

Senator MILLEN:

Senator O’keefe:

Senator MILLEN:

Senator Sir Josiah Symon:

Senator MILLEN:

Senator McGregor:

Senator Guthrie:

Senator MILLEN:

Senator Sir Josiah Symon:

Senator MILLEN:

Senator Rae:

Senator MILLEN:

Senator Rae:

Senator MILLEN:

Senator Stewart:

Senator MILLEN:

Senator Rae:

Senator MILLEN:

Senator W RUSSELL:SOUTH AUSTRALIA · ALP

Senator MILLEN:

Senator Buzacott:

Senator MILLEN:

Senator Buzacott:

Senator MILLEN:

Senator Buzacott:

Senator MILLEN:

Senator Blakey:

Senator MILLEN:

Senator de Largie:

Senator MILLEN:

Senator Story:

Senator MILLEN:

Senator Long:

Senator MILLEN:

Senator McGregor:

Senator MILLEN:

Senator Rae:

Senator MILLEN:

Senator Guthrie:

Senator MILLEN:

Senator Story:

Senator MILLEN:

Senate
14 December 1911

Senator STEWART:
QUEENSLAND

Senator McGREGOR:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

Senator ST LEDGER:
QUEENSLAND

Senator McGREGOR:
ALP

Senator McGREGOR:
ALP

Senator MILLEN:
New South Wales

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator W RUSSELL:
SOUTH AUSTRALIA · ALP

Senator E J RUSSELL:
VICTORIA · ALP; NAT from 1917