Senate
18 November 1920

8th Parliament · 1st Session



The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.

page 6628

PRINTING COMMITTEE’S REPORT.

Senator Adamson presented the second report of the Printing Committee.

page 6628

PAPERS

The following papers were presented :

Northern Territory. - Ordinance No. 9 of 1920.- Supreme Court.

Public Service Act. - List of Permanent Officers of the Commonwealth Public Service as on 30th June, 1920.

page 6628

QUESTION

PUBLIC SERVICE

Paymentof Basic Wage

Senator GARDINER:
NEW SOUTH WALES

asked the Minister for Defence, upon notice -

  1. Is it a fact that in Sydney there are employees engaged in the Ordnance Stores who are receiving only £3 10s. 8d. per week?
  2. Is it a fact that there are others receiving only £3 13s. per week?
  3. Is the Minister aware whether the New South Wales Board of Trade have declared a basic wage of £4 5s. per week?
  4. Will the Minister pay all federal employees the State basic wage of £4 5s. pending the receipt of the report of the Federal Basic Wage Commission?
Senator PEARCE:
Minister for Defence · WESTERN AUSTRALIA · NAT

– The answers are - 1 and 2. Labourers, store assistants, and messengers, and employees engaged on work of a general nature receive l1s. 8d. per day, equal to 70s. per week, while some store assistants receive 12s. 2d. per day, equal to 73s. per week.

The rate of 70s. per week, equal to £182 per annum,is the basic wage for the Commonwealth, fixed by the Deputy President of the Arbitration Court, and operating from 26th April, 1920.

  1. Yes.
  2. No. The policy of the Government is to pay Commonwealth award rates in all cases where such an award applies to a particular calling, and in cases where there is no Commonwealth award local rates are paid. . It is not considered desirable to depart from this practice.

page 6629

QUESTION

DEFENCE FORCE

Inquiry into Enlistments from Permanent Forces.

Senator GARDINER:

asked the Minister for Defence, upon notice -

  1. Is it a fact that a Military Board of Inquiry is at present being held in New South Wales, also throughout the other States of the Commonwealth, to inquire as to why some men of the Permanent Military Forces did not volunteer for active service abroad?
  2. Is it a fact that a large percentage of men at present serving in the Permanent Forces of the Commonwealth did not volunteer unconditionally, but were absolutely compelled to do so by what is known in the service as a higher military authority?
  3. Will the Minister have inquiries made as to why men referred to in question No. 2 cannot also be asked to come forward voluntarily and give evidence on oath as to whether they did or did not volunteer unconditionally for active service abroad?
Senator PEARCE:
NAT

– The answers are -

  1. Yes. Instructions have been issued to District Commandants that non-commissioned officers and men of the Royal Australian Field Artillery, Royal Australian Garrison Artillery, and Royal Australian Engineers, who were eligible but did not volunteer for active service were not to be re-engaged or allowed to continue serving without re-engagement. The Commandant, 2nd Military District, has convened a Court of Inquiry to investigate all cases of men serving in these units alleged to have not volunteered for active service.
  2. A small number of men of the Permanent Forces did not volunteer for active service unconditionally - their reasons mainly being that they had large families depending upon them, or they were required to revert to a lower rank on enlistment for active service. No man was compelled by higher military authority to volunteer for active service unconditionally.
  3. There is nothing to prevent any man coming forward and giving any relevant evidence at a Court of Inquiry.

page 6629

QUESTION

SHIPPING

Pilfering on Wharfs.

Senator PAYNE:
TASMANIA

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Has his attention been directed to the leading article appearing in the issue of the Industrial Australian and Mining Standard, of the 11th instant, in which the writer says, “ We have been placed in possession of reliable information which indicates the existence of a huge criminal organization that not only embraces large numbersof waterfront workers, but seems also to involve many officers of the Customs Department”?
  2. If so, what action, if any, does the Government propose taking in the matter?
Senator RUSSELL:
Vice-President of the Executive Council · VICTORIA · NAT

– The answers are -

  1. Yes.
  2. It is proposed to hold an inquiry into the allegations.

page 6629

QUESTION

COMMONWEALTH STEAM-SHIPS

Balance-sheets.

Senator PRATTEN:
NEW SOUTH WALES · NAT

asked the Minister in charge of Shipping, upon notice -

  1. Up to what date were the last accounts of the Commonwealth shipping venture made up?
  2. When are the accounts up to 30th June last likely to be available?
Senator RUSSELL:
NAT

– The answers are -

  1. 30th June, 1919.
  2. It is anticipated that the balance-sheet for the year ended 30th June, 1920, will be received some time next month, or the beginning of the new year.

page 6629

QUESTION

WHEAT POOLS

Stocks in Hand - Payment of Advances in Bonds.

Senator PRATTEN:
NEW SOUTH WALES · NAT

asked the VicePresident of the Executive Council, upon notice -

  1. Can the Government give any approximate information as to the present actual (not book) stocks, and the financial position of the various Wheat “Pools”?
  2. When is it likely that these “ Pools “ will be cleaned up and final payments to scripholders made?
Senator RUSSELL:
NAT

– The answers are -

  1. The stocks of wheat on 8th November, 1920, as returned by the States, were: -

Victoria. - 1,945,000 bushels of wheat, and the equivalent of 208,000 bushels in the form of flour.

South Australia. - 8,222,000 bushels of wheat, and the equivalent of 173,000 bushels in the form of flour.

Western Australia. - 906,000 bushels of wheat, and the equivalent of 798,000 bushels in the form of flour.

This makes no provision for losses in South Australia, which are not yet accurately known. The financial position of the various Pools can only be declared by the States. The Australian Wheat Board makes oversea sales, and distributes the proceeds equitably among the States, which keep full accounts relating to the operations of the various seasons. The accounts of the Victorian Wheat Commission to 30th June, 1920, were published by that body in the press this week.

  1. This is not yet known.
Senator LYNCH:
WESTERN AUSTRALIA

askedthe VicePresident of the Executive Council, upon notice -

Whether, in view of the fact that farmers have to accept Government bonds in payment for their wheat as delivered, will the farmers have to bear the discount charges on such bonds before maturity, and long after the goods have been delivered?

Senator RUSSELL:

– If farmers sell their certificates they must accept their present value, and, therefore, bear the discount charges. It is unlikely that sufficient wheat will be delivered before 30th April, 1921, to realize the whole amount on 5s. per bushel which is to be advanced.

page 6630

QUESTION

ENTERTAINMENTS TAX

Exemption of Shakspeahian Drama

Senator DE LARGIE:
WESTERN AUSTRALIA

asked the Leader of the Government in the Senate, upon notice -

With view of encouraging the study of the works of Shakspeare and the education of the public, will the Government, when revising the entertainments tax, take into consideration the reduction, or abolition, of the tax so far as Shakspearian drama is concerned ?

Senator PEARCE:
NAT

-It is not proposed to reduce or abolish the entertainments tax in respect of entertainments of a partly educational character when they are conducted for profit. Under the existing law such entertainments are exempted from the entertainments tax when the entertainment is provided by a society, institution, or committee, and not conducted or established for profit.

page 6630

QUESTION

NAVY

Supplies of Fuel Oil

Senator BAKHAP:
TASMANIA

asked the Minister representing the Minister for the Navy, upon notice -

  1. Is the Naval Department at the present time paying over £9 per ton for some of its supplies of fuel oil for naval purposes from extra-Australian sources?
  2. If so, will the Government reconsider its present policy, and give to companies and organizations that are endeavouring to develop shale oil deposits within the Commonwealth definite orders for at least a portion of the fuel oil requirements of the Navy;
Senator PEARCE:
NAT

– The answers supplied by the Minister for the Navy are -

  1. Yes.
  2. When the local shale oil companies are in a position to supply liquid fuel to the Navy of suitable quality and in suitable quantities, the Government will purchase it, provided the price is satisfactory.

page 6630

NAVIGATION BILL

Bill reserved for the signification of

His Majesty’s pleasure.

page 6630

COMMONWEALTH BANK BILL

Second Reading

Senator PEARCE:
Minister for Defence · Western Australia · NAT

– In moving

That this Bill be now read a second time.

I do not propose to venture upon a disquisition on the very involved and attractive questions of currency and finance, because the object of this measure is not to interfere with the generally accepted principles underlying eitherof these questions, but is merely to transfer our note issue to the Commonwealth Bank. The Bill will come into operation upon proclamation. The only question to which I shall direct attention, apart from a sketch of the Bill itself, relates to the advantages which will flow from the adoption of the course that is now proposed. It may be assumed that the issue of Commonwealth notes has been abundantly justified. These . notes were undoubtedly a valuable weapon in the hands of the Commonwealth Government during the war, and were of immense advantage in assisting the various State Governments to finance their operations during that period. It is a matter for congratulation that, notwithstanding the adverse criticisms of the proposal to issue Commonwealth notes in the first instance, these notes had the full confidence of our people throughout the most trying time to which I have alluded, and are to-day worth their face value. I come now to the advantages of the course which is proposed. In the first place the Treasury is naturally centered in the Seat of Government of the Commonwealth for the time being, which is Melbourne. Properly speaking, it has no branches throughout the Commonwealth. Upon the other hand, the Commonwealth Bank is not only established in Melbourne, but it has branches in all our capital cities and either branches or agencies throughout

Australia. It is, therefore, better able to keep in touch with the questions of finance and currency and with the requirements of each in their daily fluctuations than is the Treasury. The Commonwealth Bank is also more in touch with other banks than is the Treasury. The relationships of the Treasury with other banks are irregular and infrequent, occurring only at such ‘times as it is necessary to raise loans or to submit proposals affecting the credit of the Commonwealth, whereas the relations of the Commonwealth Bank with other -banks i? both intimate and constant. Whilst that is so, it is necessary that in transferring this very valuable agency to the Commonwealth Bank the Treasury should be kept in close touch with that Bank, and with its operations under this Bill. Consequently, we have provided for a liaison between the Treasury and the Bank by reason of the fact that either the Secretary to, or some other officer of, the Treasury, will be a member of the proposed Board of Directors. During the war the circulation of Commonwealth notes reached a figure which few of us contemplated when the Bill authorizing the issue of those notes was first submitted for . our consideration. Honorable senators may be interested to know that the highest point reached by our note issue was £59,000,000. This amount has since been reduced, and the latest figures supplied to me show that to-day it stands at £54,672,965. As against these notes we have a gold reserve of £23,312,954 or 43.03 per cent.

Senator Keating:

– What was the percentage of the gold reserve .when our note issue was at its maximum?

Senator PEARCE:

– I have not the figures setting out the amount of gold which was then held, but I do not think that our gold reserve fell at any time below 40 per cent. To-day, the question is being very much debated as to whether a gold reserve is essential in connexion with a note issue, and whether it should be the only basis of a reserve. Many authorities might be quoted, to show that in addition to the gold basis, we might take as a basis the negotiable paper representing the actual transactions pf trade - in other words, the production of a country. That is a principle which is generally accepted and which is at the back of the American reserve. But whether or not we believe a gold reserve is the only essential, it must be recognised from the figures which I have quoted, and ::n the light of the experience of all other countries, that notwithstanding the large issue of notes in Australia to-day, we have a substantial and effective gold reserve at the back of them. I shall not, therefore, discuss further the attractive questions of finance and currency beyond saying that this Ball in no way alters- the principle under which our Commonwealth notes have previously been issued, but merely provides for the transfer to the Commonwealth Bank of the existing machinery in connexion with those notes.

Division 2 of the measure provides for the establishment of a Note Issue Department as a branch of the Commonwealth Bank. This Department will be managed by a Board of Directors, composed of the Governor of the Bank and three other directors who will be appointed by the Governor-General, one of whom, as I have already remarked, will be an officer of the Commonwealth Treasury. These three directors will be appointed for terms of three, four, and five years respectively, and will be eligible for reappointment. Re-appointment or fresh appointments will be for a term of five years. The adoption of that course is necessary to preserve the continuity of the Board, and to insure that we shall always have upon that Board directors with previous experience. The Governor-General may appoint a person to act during, the illness or absence of a Director. Three members of the Board will form a quorum. The Governor of the Bank will be ex officio Chairman of Directors and will have a deliberative and a casting vote. The ‘ remuneration and travelling allowances of Directors will be fixed by the Governor-General. Upon a date to be fixed by proclamation, all the assets and liabilities of the Treasurer under the Australian Notes Act 1910- 1914 will be transferred to the Note Issue Department of the Bank, the transfer being made at the values shown in the books of the Treasury. The Board of Directors will be authorized to issue, reissue, and cancel Australian notes, and such notes will not be liable to tax under the Bank Notes Tax Act 1910. That is the Act which practically prevents any other body from issuing notes in Australia. The notes may be issued in the following denominations, namely, 5s., 10s., £1, £5, £10, or any multiple of £10. Honorable senators will notice that power is taken there to issue 5s.notes. The notes will be issued by the Board from the Commonwealth Bank. They will be legal tender throughout the Commonwealth and the Territories under its control, and will bear the promise of the Treasurer to redeem them in gold or silver coin, as the case may be, on demand at the head office of the Commonwealth Bank. Upon the commencement of the measure, Australian notes payable at the Commonwealth Treasury at the Seat of Government will also be payable at the head office of the Commonwealth Bank. Notes issued after the Bill comes into operation will bear the signatures of the Secretary to the Treasury, orsuch officer of the Treasury as the Treasurer directs, and of the Chairman of the Board or such officer of the Note Issue Department as the Board directs.

The moneys derived from the issue of Australian notes, or acquired on the transfer of the note issue from the Treasury, will be disposed of as follows : -The Board must hold in gold coin or bullion a reserve of not less than one-quarter of the notes issued, and it may invest the remainder on deposit with any bank, in securities of the United Kingdom, of the Commonwealth, or of a State, or in trade bills with a currency of not more than 120 day’s. Then, and this is the answer to Senator Crawford’s question, it is provided that the profits derived from the issue of the notes shall be expended in the working expenses of the Note Issue Department, and in the payment of a commission, at a rate to be approved by the Governor-General, to the Bank for the purposes of its general business, and the balance be paid to the Treasury. At the end of each month an officer appointed by the Board will prepare a statement showing the number and amounts of notes issued and not redeemed, and the amount of gold coin held by the Department. This statement will be countersigned by the Governor and forwarded to the Treasurer for publication in the Gazette. Every bank must keep a record of all bank notes issued or re-issued by the bank and not redeemed at the close of business on Monday of each week, and must forward a copy of this record to the Treasurer annually. Every bank must send a weekly return to the Chairman of Directors at Sydney, showing the value of

Australian notes held by the bank. I notice that the Leader of the Opposition smiles at the reference to Sydney. At last, Sydney has become recognised in some of our legislation. The Commonwealth Bank will pay for, or give credit for, notes required for its ordinary business upon the same terms and conditions as those applicable to any other bank. So far as that provision is concerned, it puts all the banks on an equality. In time of emergency the Governor-General may authorize the transfer of the control and responsibility for the whole or part of the note issue from the Commonwealth Bank to the Treasurer, and when the emergency has passed he may authorize the re-transfer of the issue to the Bank. Honorable senators will agree that that is a very necessary provision. We may have again to pass through a crisis such as that which we have recently experienced, and the Executive Government of the Commonwealth, in the interests of the safety of the Commonwealth, may have to reassume control over the note issue in order to deal with that emergency.

Senator Foster:

– The Minister stated just now that the notes may be exchanged for gold at the Commonwealth Treasury, or at the head office of the Bank, on demand. Does that mean that gold will come into use again ?

Senator PEARCE:

– I am inclined to think that it will not do so for some years to come. There are more ways of killing a pig than choking him with butter.

Senator Foster:

– I thought the Minister particularly stressed the point that the notes were to be redeemed in gold.

Senator PEARCE:

– No ; that provision is in the Act at the present time, but there is, of course, a limit to its operation

Senator Fairbairn:

– The promise is on every note.

Senator PEARCE:

– Yes, but the experience of the past has shown that, if the Australian public are satisfied that the gold is there, or that they can get the value of the note, they would just as soon take the note as gold.

There are a number of provisions in regard to offences, but these are the same as are in the present Act. The definition of “ Commonwealth security “ is limited to Australian notes, and does not include Treasurybills and coupons for interest on

Treasury-bills. The penalty for making copies of Australian notes is to be £100 fine, or imprisonment for one year, or both. Under the present law the penalty is only a fine of £100. Provision is also made for the confiscation of illicit forms and the issue of search-warrants, and the duty is imposed on officers of marking counterfeit or fraudulent notes.

Even from this somewhat rapid survey of the provisions of the Bill, honorable senators will recognise that it does not differ in any essential degree from the Act now on the statute-book. The only alterations made are such as are practically consequent on the transfer of the control of the notes from the Treasury to the .Commonwealth Bank. As that is the only principle involved, it does not seem to call for further comment from me.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Is a new department going to be created under this Bill ?

Senator PEARCE:

– I do not think it will require a new department. The Commonwealth Bank may have to increase some sections of its officers in order to carry out the note issue; but I presume that if there are in the Treasury officers who have been devoted solely to the note issue, they will simply be transferred to the Commonwealth Bank. For instance, we have a Commonwealth Note Printing Branch now. Obviously the Bank will not set up a separate printing branch, but will take over the administration of that now in existence. There will be no need for the Commonwealth to increase the number of officers employed in the service. There will simply be a transfer, I take it, from the Treasury to the Bank.

Senator Keating:

– You have a large staff now at the Treasury checking notes that are to be destroyed. Would they go over to the Bank ?

Senator PEARCE:

– Yes. Wherever any officer of the Treasury has been wholly employed in that work, I presume that he will be transferred to similar work in the Bank, because ‘he Ba-Ji is taking over the note issue fr jm the Treasury.

Senator GARDINER:
New South Wales

– After the lucid explanation of the purposes of the Bill by the Minister who is at present leading the Government in the Senate (Senator Pearce), and the patent fact that it is merely a Bill transferring the administration of the note issue to a new authority, or creating a new authority to manage it, no new principle being involved, I do not think the Bill lends itself to criticism. It is largely a machinery Bill for the purpose which has already been so clearly stated. But I do not think any one occupying my position could lose such an opportunity as this measure presents of emphasizing the success of the note issue during the last eight years.

Senator Reid:

– Hear, hear ! Do not forget that Queensland started it. Queensland set the example.

Senator GARDINER:

– Many good things come from Queensland. I do not know if I am peculiarly sensitive to criticism, but I do not forget the 1910 campaign, during which every member of the Labour party who favoured the Note Issue policy had to face the cry. raised by Sir Joseph Cook, who said that these notes would soon be known as “ Fisher’s flimsies.” The apt alliteration caught on, with the result that Labour candidates on every platform were always asked - “ What about Fisher’s flimsies?”

Senator de Largie:

– It was not always hostile criticism.

Senator GARDINER:

– It was hostile from a crowd who, at that time, were hostile to the policy of the Labour party, and who endeavoured to create the impression that the Labour party were out to destroy the credit of the country. So far from that being the case, the note issue, during the first six months of the war, enabled the Government to lay their hands on £16,000,000 worth of money, without which they could not have organized our Military Forces. AH this was done without in any way endangering the commercial interests of this country, and at a time when commerce was tottering, and no one knew what was ahead of us. No one will ever be able to estimate the full extent of the advantage derived by Australia from its note issue during that critical time. I take this opportunity, therefore, of referring with pride to the fact that the Labour party pioneered the note issue against the most hostile criticism that was ever hurled against the party, and I am glad to say that much of that criticism has since died down.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– It has been throttled.

Senator GARDINER:

– I will not say that, but, at all events; it is not so apparent now.

Senator PEARCE:

– Those who used to curse the project are now blessing it.

Senator GARDINER:

– Yes, because they realize what a blessing it has been to this country. The policy was opposed with extraordinary bitterness because it was an innovation fraught, as the Tory interests in this country no doubt believed, with great danger .to the’ community. But. of course, I am not questioning their sincerity. No doubt they believed what they were saying.

Senator FOSTER:

– They nave repented since then.

Senator GARDINER:

– They used to ask how could men who came from the mines and the workshops, men in hobnailed boots and wearing bowyangs, be expected to know anything about finance? All I can :av is that during that period of the war this scheme, projected by the Labour party, and which had been so bitterly assailed not ‘only by Tory politicians but by the Liberal press of the Commonwealth, was the greatest safeguard of our national interests. I take this opportunity of vindicating the attitude of the Labour party, and of reminding those of our opponents who may be just as short-sighted now in their opposition to many matters which we may have to advocate, that perhaps they are wrong again. Of course, our Tory opponents would not be Tory if they were otherwise constituted, and if they did not believe that everything advocated by the Labour party was dangerous. Therefore, I recall, with much satisfaction, the fact that the experience of the last ten years has vindicated the policy of the Labour party in regard to this particular matter, and has confounded our opponents. It has shown that the note issue in the hands of the people who are prepared to be governed under constitutional safeguards is, perhaps, the most sensible financial arrangement that could be made, and I again emphasize how useful and how helpful the Commonwealth note issue was to the Australian public in the earlier stages of the war.

Question resolved in the affirmative.

Bill read a second time.

In Committee :

Clauses 1 to 4 agreed to.

Clause 5 -

Section 8 of the principal Act is amended by inserting after the word “ not “ the words “ except as authorized by thiB Act.”

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Clause 3, which we have just passed, repeals the Australian Notes Act 1910-14, and this clause repeals section 8 of the principal Act. Am I right in assuming that this is the Australian NotesAct!

Senator PEARCE:
Minister for Defence · Western Australia · NAT

.- The principal Act referred to is the Commonwealth Bank Act 1911-14, and section 8 reads -

The Bank shall not issue bills or notes of the Bank for the payment of money payable to bearer on demand, and intended for circulation.

The simple effect of this amendment is to insert after the word ‘ ‘ not ‘ ‘ the words- “ except us authorized by this Act.”

Clause agreed to.

Clause 6 -

After section 16 of the principal Act the following section is inserted : - “ 16a. Where an officer of the Commonwealth Public Service becomes an officer of the Bank lis shall retain all his existing and accruing rights.”

Senator PRATTEN:
NEW SOUTH WALES · NAT

– It appears to me that we shall have a somewhat mixed service in the Note Issue Department of the Commonwealth Bank. Those officers from the Treasury who pass over to the Bank with the transfer of the Note Issue Department from the Treasury will be entitled to all their existing and accruing rights. I do not think there can be any objection to that, bus there may be other officers of the Bank not working under such existing or accruing rights. I do not quite see what their position will be, but we must face the fact that the Note Issue Department of the Commonwealth Bank will have a very mixed service of officers, because this clause almost makes it obligatory on the part of the bank to take over whatever officers the Treasury wishes to transfer.

Senator PEARCE:
Western AustraliaMinister for Defence · NAT

.- This clause does not make it obligatory for thu Bank to take over the officers which the Treasury wishes to transfer, but only provides that when they are taken over they shall retain their existing and accruing rights. When that is done there may be a difference of opinion concerning the rights of an officer who has been transferred from the Treasury, and one subsequently appointed by the Bank to the Note Issue Department. But that is an inequality which the Bank can remedy. I assume that the Commonwealth Bank will endeavour to harmonize the rights of the officers they may appoint with those of the officers who come over from the Treasury Department. I do not see how we can do it here.

Clause agreed to.

Clause- 7 -

After Part VI. of the principal Act, the following Part is inserted: - PART VIa. - Issue of Australian Noras. 60a. In this Part, unless the contrary intention appears, “ Constable “ includes any member of the Police Force of the Commonwealth or of a State or of part of the Common- - wealth : 60c. For the purposes of this Part there shall be a Note Issue Department of the Bank, which shall be kept distinct from all other departments of the Bank.

The CHAIRMAN (Senator Bakhap:
TASMANIA

– This clause is somewhat lengthy, and extends over a number of pages of the Bill. I am bound by the Standing Orders to put the clause as a whole; but if it is the desire of the Committee, perhaps we could deal with the different sections enumerated.

Senator Pearce:

– Perhaps it would be advisable to take the sections as numbered.

The CHAIRMAN:

– I shall go through the clause division by division, but if an amendment is moved in a portion of theclause, that will preclude any honorable senator from returning to the portion of the clause already dealt with.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– In clause 60a reference is made to the Police Force of the Commonwealth. So far as I have been able to follow parliamentary proceedings, it has been authoritatively’ stated that there is no Police Force in the Commonwealth at present, and that it is purely an Investigation Branch. I do not know whether this is anticipatory or not, but it does not seem to harmonize with what we have been informed in connexion with the Commonwealth Police .Force established some time ago.

Senator Pearce:

– There are. Commonwealth police in the Northern Territory and in other Territories under our control.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Then I understand the reference is to the Force only in our own Territory, and, looking at it from that angle, the matter is now clear. I should like the Minister to explain what is intended in section 60 c. Do the Government propose erecting a building in Melbourne distinct from the Commonwealth Bank iu order to print and issue notes, or is it intended to undertake this work in the premises at present occupied by the Commonwealth Bank ?

Senator PEARCE:
Minister for Defence [3.47]. - This provision does not necessarily mean that buildings are to be erected .anywhere. The Note Issue Department will be a separate branch of the Commonwealth Bank, and not associated in any way with its other operations. Its administration and accounts will be kept separate. 60d. (1 · Western Australia · NAT

The Note Issue Department shall be managed by a Board of Directors composed of the Governor of the Bank and three other Directors appointed by the Governor-General in accordance with this Part, of whom one shall be an officer of the Commonwealth Treasury. -

  1. The Governor shall be ex officio Chairman of Directors.
  2. Of the three persons first appointed as Directors in pursuance of this section, one person shall be appointed for a term of five years, one for a term of four years, and one for a term of three years.
  3. Thereafter each appointment of Director shall be for a term of five years.
  4. Every person who is appointed a Direc-tor shall on the expiration of his term of office be eligible for re-appointment.
  5. In case of the illness or absence of any Director, the Governor-General may appoint a person to act as a Director during the illness or absence.
  6. Three members of the Board of Directors shall form a quorum.
  7. At meetings of the Board of Directors thu Chairman shall have a deliberative vote, and, in the event of an equality of voting, a second or easting vote.
Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– This proposed new section- provides that the Note Issue Department shall be managed by a Board of Directors composed of the Governor and three other directors appointed by the GovernorGeneral, and that the Governor shall be ex officio chairman of directors. Does that mean the Governor of the Bank?

Senator Pearce:

– Yes.

Senator LYNCH:
“Western Australia

– We are now considering what I believe to be the most important clause in the Bill, as it relates to the control and management of this enterprise. Hereit is proposed to set out how the control is to be constituted, and the means of appointing and retiring the members of the Board. This is a measure to control one of our most important national enterprises, and, that being so, it is very necessary that those who are in control should hold such security of tenure as will raise them beyond any difficulties arising from political tendencies or experiments of the moment. It is proposed to appoint a Board of Management, but no provision is made for securing them in their positions other than, of course, as is vaguely expressed. We have other officers in the Commonwealth. Service holding positions that do not carry such responsibilities who are secure in their positions, and to such an extent that they cannot be removed except by resolution of both Houses of Parliament. Considering the value of the note issue to the industrial and commercial life of the Commonwealth, it is very important to secure these men in their positions so that there will be a fair reflex of the common sense of the community, and that they will not be the victims of any political party for the time being. All honorable senators are aware of the dangers of an over-issue and the appalling consequences that have followed in its train in other countries which have indulged in such pranks. While I do not think that anything of that character will happen here, there is always the possibility of history repeating itself, and, therefore the best safeguard is to appoint a Board that will be secure, and beyond the wiles and temporary whims, or even temporary insanities, of any political party, bar none.

Senator Crawford:

– There is no provision for their retirement by any authority.

Senator LYNCH:

– It is bald and vague, and under the terms of this provision it would be possible for the GovernorGeneral, who, of course, means the dominating political party of the hour, to remove such men until his tools were returned to power.

Senator Crawford:

– According to the Bill he cannot be removed by any authority.

Senator LYNCH:

– I want to provide that no member of the Board of Directors of the Note Issue Department shall be removed except on the authority of a resolution of both Houses of this Parliament. Many persons occupying far less responsible positions are safeguarded in that way under various Statutes. Men called upon to discharge duties so vital to the country’s prosperity should be securely entrenched in their positions. Their appointment should be a- reflex of the common sense of the nation, and they should not be subjected to removal at the whim of any political party. It is difficult to draft a suitable amendment to give effect to my desire, but if the Minister for Defence recognises my suggestion as worthy of adoption, he can postpone the further consideration of this proposed new section, and have the necessary amendment inserted later. Otherwise I shall test the feeling of the Committee on the question.

Senator PEARCE:
Western AustraliaMinister for Defence · NAT

– I hope that Senator Lynch will not press his suggested amendment. The Board of Directors of the Note Issue Department is to consist of four persons, one of whom is to be the Governor of the Commonwealth Bank, and another an officer of the Commonwealth Treasury. I remind the honorable senator that under the Commonwealth Bank Act the Governor of the Bank is appointed by the GovernorGeneral, and holds office during good behaviour for a period of seven years, and is eligible for re-appointment. If the Government removed him and he were able to prove that his behaviour had been good, he would probably have a substantial claim for damages. The point I wish to make is that it does not require a resolution of both Houses of this Parliament to remove the Governor of the Bank from office. Another of the members of this Board of Directors will be an officer of the Treasury. His appointment will be bv the GovernorGeneral, subject to good behaviour, and under the Public Service Act.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-brockman. - And he will, therefore, be very hard to get rid of.

Senator PEARCE:

– That is so, but if he should commit an offence it will be possible to get rid of him.

Senator Crawford:

– The members of this Board of Directors will not be under the Public Service Act.

Senator PEARCE:

– No, but if one of the members should cease to hold his office as an officer of the Treasury, he will also cease to hold his office as a member of this Board of Directors. There are to be only two other members of the Board, and in regard to them I direct the attention of Senator Lynch to the fact that the Governor of the Commonwealth Bank is to be ex officio Chairman of Directors, and he will have a deliberative and a casting vote, which will place him in relation to the Board in a position of very great power.

There might be a wave of political insanity which would place in power a Government prepared to play ducks and drakes with the note issue, but I think we should not contemplate that very extreme possibility, or, because of it, establish this Board of Directors on such hard and fast lines that its members may not be removed, even although the Government of the day might have very good reasons for replacing them. The possibility is very remote indeed that any Government will so far outrage public opinion in Australia as to remove these men from their positions without good reason and replace them with creatures of their own for the purpose of manipulating the note issue.

Senator Crawford:

– How could a Government do that when the Bill provides that the members of the Board of Directors shall hold office for a certain term of years ?

Senator PEARCE:

– I take it that the Governor-General, having the power of appointment, will also have the power to revoke an appointment.

Senator Lynch:

– That is the point.

Senator Crawford:

– I think it is very doubtful.

Senator PEARCE:

– The Government might, in such circumstances, lay themselves open to an action for damages.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– There is another point, and it is that whilst we might provide under this Bill that the Governor of the Bank, as a member of the Board of Directors, should not be removed from that position except upon a resolution carried by two-thirds of the members of both Houses of this Parliament, he might be removed from his position as Governor of the Bank under the Commonwealth Bank Act.

Senator PEARCE:

– That is so. I should say that such a provision as Senator Lynch suggests would be more essen tial to his appointment as Governor of the Bank than as a member of this Board of Directors. I think that we can all say, from our experience of the people of Australia, that the danger that Senator Lynch contemplates is very remote, and that any Government or political party that would outrage public decency in the way suggested by Senator Lynch would meet with a very short shrift.

Senator LYNCH:
Western Australia

– I must say that I have not been convinced by what the Minister for Defence has said. The wisdom of this Parliament has already recognised that certain public officials should be so safeguarded in their positions that they cannot be removed except upon a resolution of both Houses.

Senator Pearce:

– If such a Government as the honorable senator has contemplated captured Parliament, they could carry such a resolution.

Senator LYNCH:

– Without any disrespect to a Justice of the High Court, in my view a member of the High Court Bench does notoccupy anything like so exaltedand responsible a position as that of one of the directors of the Note Issue Department. They will have the handling of the whole note issue of the community, and will control, so to speak, the financial nerve system of the nation. The four members of this directorate may, under this Bill, be appointed or removed at the . whim of the Government of the day, and that is what I object to.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– How would the honorable senator safeguard the position of the Governor of the Bank as a member of the Board of Directors? If he were removed from his position as Governor under the Commonwealth Bank Act he could no longer retain his seat on the Board of Directors of the Note Issue Department under this Bill.

Senator LYNCH:

– I am dealing with this Bill. The Governor of the Bank holds office during good behaviour, but under this Bill we are dealing with men who will have the control of a note issue to the extent, at the present time, of nearly £60,000,000. That is so vital to the nation that the Governor of the Bank, as a member of this Board of Directors, will occupy a far more responsible position than he does as controller of the ordinary business of the Bank.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– But if under the Commonwealth Bank Act, he is removed from his position as Governor of the Bank, he can no longer retain his position as a member of the Board of Directors under this Bill.

Senator LYNCH:

– Under my proposal, immediately upon the passing of a resolution of both Houses of this Parliament to that effect, he would be removed from his position as a director of the Note Issue Department, but he would not cease to be Governor of the Commonwealth Bank.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– But I want the honorable senator to take it the other way, and realize that if he is removed from his position as Governor of the Bank under the Commonwealth Bank Act, he must cease to be a director of the Note Issue Department under this Bill.

Senator LYNCH:

– All that I am concerned with at present is that the national welfare should be conserved by safeguarding the position of the members of the Board of Directors of the Note Issue Department in the way I have proposed. I move -

That the following words be added to subclause (5) of the proposed new section 60d: - “ And no Director appointed under this sub-section shall be removed from office during the currency of the term of its appointment except by a resolution passed by both Houses of the Federal Parliament.”

Senator FAIRBAIRN:
Victoria

– Usually I am in agreement with my honorable friend Senator Lynch, but upon the present occasion I regret that I must differ from him. The object which he has in. view is to strengthen the position which will be occupied by these most important officials, of whom there will be five altogether, including, the Governor of the Commonwealth Bank, who will be ex officio a member of the Board of Directors. That officer will be a director of the Note Issue Department for life. The Government will have no power to depose him when they dispense with his services as Governor of the Commonwealth Bank.

Senator Earle:

– Of course he will be appointed for a different period from that for which the other directors will be appointed.

Senator FAIRBAIRN:

– He will be a member of the Board of Directors of the Note Issue Department so long as he occupies the position of Governor of the Commonwealth Bank. Another member of the Board will be the Secretary of the Treasury. He will occupy a similar position in. that he will always be a member of the Board.

Senator Crawford:

– An officer of the Commonwealth Treasury will be, but not necessarily the Secretary to the Treasury.

Senator FAIRBAIRN:

– Exactly. There are to be three other directors upon the Board, one of whom will be appointed for three years, another for four years, and the third for five years. Senator Lynch is of opinion that these directors should be appointed for life.

Senator Lynch:

– No.

Senator FAIRBAIRN:

– Then I fail to see the object of his amendment. Under the clause there will be no power to dismiss the director who is appointed for a term of three years, except the Government choose to do an illegal act, for which he would have the right to sue them for damages.We cannot contemplate the Government doing a thing of that sort. Should a wave of hysterical feeling come over the country, and the Government desire to substitute other men for the directors who are in officer would we be safer if those men could be dismissed only by a resolution of this Parliament? Certainly not. In my view, the amendment would not strengthen the Bill at all. The usual term for which a director is appointed is three years.

Senator Crawford:

– Does not every company reserve to its shareholders the power to remove a director?

Senator FAIRBAIRN:

– A company has power to do that. But, under this Bill, the Government will have no power whatever. These directors will be entrenched in an almost impregnable position.

Senator Crawford:

– Should not the whole of them hold office, like the Governor of the Commonwealth Bank, during good behaviour ?

Senator FAIRBAIRN:

– Yes. But, as they will be men of high standing, they may be trusted to behave themselves during the terms for which they are appointed. Naturally, they will be desirous of securing re-appointment, just as honorable senators are desirous of securing re-election. Upon reflection, Senator Lynch must see that the adoption of his amendment would rather weaken than strengthen the position which these responsible directors would occupy.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– I think that we shallget into a very anomalous position if we are not exceedingly careful. The Bill provides that the Governor of the Commonwealth Bank shall be ex officio Chairman of Directorsof the Note Issue Department. Let us ‘suppose that the period for which the Governor of the Commonwealth Bank has been appointed is drawing to a close, and that for good and sufficient reasons the Government desire toappoint some other person in his stead. If he cannot be removed from the Board of Directors of the Note Issue Department, which will be established under this Bill, it will be very difficult to remove him from his position as Governor of the Commonwealth Bank. On the other hand, if he is to hold the position of Chairman of the Board of Directors of the Note Issue Department only by virtue of his office as Governor of the Commonwealth Bank, what position will arise when he is removed from his governorship?

Senator CRAWFORD:
QUEENSLAND · NAT; UAP from 1931

– Under this Bill he will not be appointed for any term.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– But he is appointed for a specific term under the Act which provides for the establishment of the Commonwealth Bank ? Where, then, is the wisdom of inserting in this Bill a provision that his services as Chairman of the Board of Directors of the Note Issue Department shall be retained only during the pleasure of this Parliament?

Senator Crawford:

– Why not make all the appointments subject to good behaviour ?

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– The difficulty is not that he cannot be removed under this Bill, but rather thatit contains no provision for his removal. Suppose, for the sake of argument, that any one or two of these directors became insane.

Senator Earle:

– In that case they would be ill.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– They would be extremely ill, I think. There are many things, such as bankruptcy, for which it may be necessary to remove a directorof this Note Issue Department. I think that the clause needs an addition to it which will provide that directors may be removed incertain circumstances.

Senator GARDINER:
New South Wales

. - I think that I understand the motive which actuated Senator Lynch in submitting his amendment. But he seems to have missed one point, namely, that there is no means of shackling a Parliament. The Government of the day can use their Executive powers only by the good-will of that branch of the Legislature which makes and unmakes Ministries. I am disinclined to endeavour to impose the will of this Parliament upon future Parliaments, because I know that if it suits those succeeding Parliaments to follow our example, they will do so,but not otherwise. In New South Wales a case somewhat similar to that for which Senator Lynch desires to make provision, arose some years ago. The Railways Commissioners of that State were, by Act of Parliament, intrusted with the conduct of a great industrial enterprise. So far as legislation could provide, they were absolutely free from political control. Then a strong Premier came into office, inthe person of Sir Joseph Carruthers, and Mr. Oliver, one of the Railways Commissioners, came into conflict with him. The result was that the New South Wales Parliament passed an Act removing Mr. Oliver from his office before the term for which he had been appointed had expired, and included in that measure a provision which prevented him taking his case to the Law Courts. That Act is upon the statute-book of New South Wales to-day. In dealing with all these matters, we have to recollect that this Parliament is the supreme authority in Australia. I do not complain of what Senator Lynch is attempting, but I would point out to him thatas soon as Parliament attempts to limit what may be done in the case of the directors who are to constitute the Board of the Note Issue Department, it will weaken, rather than strengthen, their position. After all, everything must be subject to common-sense. If there were no statutory provision for the removal of a director, his mental or physical defects would constitute a sufficient authority for his removal.. I am satisfied that, as soon as we attempt to limit the conditions under which these officers may be removed, we shall create unnecessary difficulties. Believing that, I think it will be better for us to retain the Bill in its present form.

Amendment, by leave, temporarily withdrawn.

Senator CRAWFORD:
Queensland

. -I move-

That after the words “ Governor-General,” in sub-clause 1, the words “during good behaviour and “be inserted.

The effect of ‘my amendment would be that the three Directors to whom reference has been made will hold office upon exactly the same terms as does the Governor of the Commonwealth Bank, namely, during good behaviour.

Senator PEARCE:
Western AustraliaMinister for Defence · NAT

– The Government will accept the amendment because, as the honorable senator has pointed out, its adoption will place the other Directors in precisely a similar position to that occupied by the Governor of the Commonwealth Bank; and the opinion has been expressed by the Crown Law advisers that these appointments will then be fixed ones, subject, of course, to good behaviour.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Whilst recognising that the adoption of the amendment will improve the clause, I am not altogether satisfied with the provision as it will then stand. When the Governor of the Commonwealth Bank was first appointed, and he was endowed with autocratic powers, the Commonwealth Bank was a very small institution. To-day it has grown, owing to being a governmental and Commonwealth Bank, into an affair of great magnitude and supreme importance, but still the Governor of the Bank has the autocratic powers that were given him when it was first established. As a representative of the States and a member of the Senate, I should like to see some amendment made in the Commonwealth Bank Act, whereby the present Governor of the

Bank should not continue to have these autocratic powers, and the Bank itself should be governed by directors, and not by one man. , We are unable to do that under this Bill, although the Bill continues the autocratic powers of the Governor of the Bank, and, in fact, very greatly enlarges them. The clause we are discussing provides that there shall be four directors - one from the Treasury, already in the Public Service, the Governor of’ the Bank, who is ex officio chairman, and two other persons, and that the chairman shall have a casting vote. Therefore, proposed new sections 60g, 60h, and 60i, the most important provisions in connexion with the duties of the directors, will be carried out practically at the will of the Governor of the Commonwealth Bank, unless the whole of the other three directors are opposed to the course which he wishes to take. We have had one or two examples in Sydney - I wish to speak now from a sense of public duty-

Senator Drake-Brockman:

– There are to be only four directors altogether, not five.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I know, but unless every one of the other three directors is opposed to the course which the Governor of the Commonwealth Bank proposes to adopt, his will will prevail.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– Under certain conditions.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– If the four directors are present, and the Governor of the Commonwealth Bank has a casting vote, he can practically control the greatly enlarged functions that will be given to him under proposed new sections 60g, 60h, and 60i, unless the whole of the other three directors are against him. Of course, if only three are present his casting vote will not prevail. As a representative of the States I wish to point out what the duties of this Board of Directors will be, and how we in this Chamber are now legislating away the rights of Parliament. The Board of Directors can issue 5s. notes without further reference to Parliament. Is not that so?

Senator Pearce:

– Certainly, that is so.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– The Board of Directors can invest the surplus of the Bank note issue in the securities set out on page 4 of the Bill, including trading bills with a currency of not more than 120 days. The surplus of the Bank note issue is at present very largely invested in State securities. In fact, it has gone to benefit and help the States. At present nearly £38,000,000 is invested from the note issue, out of which about £9,000,000 is in Commonwealth inscribed stock and Treasury-bills, £7,500,000 has been advanced to New South Wales on the security of New South Wales Treasurybills, and large sums have been advanced to Victoria, Queensland, South Australia, and Western Australia. In fact, the bulk of the £38,000,000 is practically lent to the States. Under this Bill the four directors, or even two directors, including the Governor of the Commonwealth Bank, will be able to call in this money if they so desire without any control whatever by Parliament. They will be able to invest the money in developing, say, the commercial side of the Commonwealth Bank. I have no objection to that as a matter of principle,, but obviously any development of the commercial side of the Commonwealth Bank can only be made at the expense of the present private banks doing business within our borders, and any such development of the commercial side of the Commonwealth Bank must, so far as the investment of the present surplus of the note issue is concerned, be at the expense of the States, and can only be effected by recalling the money that . has been lent to the States. Further powers are given to this directorate of four. I have mentioned the issuing, of 5s. notes, and the discounting of trading bills with a currency of not more than 120 days. The directorate can also pay away a commission, at a rate to be approved by the Government, to the Bank for the purposes of its general business.

Senator Crawford:

– The rate of commission has to be approved by the GovernorGeneral, which means the GovernorGeneral in Council.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I mentioned that point. There does not seem to be, among the great responsibilities with which we are clothing this Board of Directors, any control whatsoever by the Government or by Parliament, except in the one clause of which Senator Crawford has just reminded me. As representatives of the States, are we justified in practically abrogating our parliamentary rights so far as the State finances are concerned ?

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– Are you absolutely opposed to the Bill as it stands?

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I am dealing with the powers with which the directors will be clothed. This is practically the vital clause of the Bill, as it deals with the directors, how they are to be appointed, and how they will be able to control the millions of money for which they will be responsible. I should have preferred a directorate of five, and I should have preferred the clause by which a casting vote is given to the Governor of the Bank omitted.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– Then you might have a deadlock.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Not with a directorate of five. The Committee must remember that this is not business connected exclusively with the development of the Commonwealth Bank. It is the business of the note issue, which covers many other ramifications than the ordinary banking of the day. I do not know why this Bill was devised, or why the note issue is being passed over to the Commonwealth Bank, but, if we do it, I should like to see introduced into the Bill a few phrases such as “ subject to the approval of the GovernorGeneral,” or “ subject to the approval of Parliament,” whereby we should be able, as parliamentary representatives of the people to protect ourselves in connexion with the very responsible matters that we are giving away.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– You can do that in connexion with any Bill.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– But, if we pass this Bill as it stands, we practically pass over to the Board the control of the note issue, at least for the term for which we appoint the directors. If they are of good behaviour they can practically do anything they like in connexion with the advances we have already made to the States. They can issue 5s. notes.

Senator Pearce:

– All these loans to the States are for definite terms.

Senator Drake-Brockman:

– Most of the terms are about up.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Will the Minister state whether the Board of Directors power to issue further paper money is limited? Can they issue notes to any number ?

Senator Pearce:

– Subject to the provision as to the reserve.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Therefore, if we pass this Bill as it stands, they can issue another £10,000,000 worth of notes, always provided that they have 2,500,000 sovereigns in reserve to cover them ?

Senator Pearce:

– A gold reserve of one quarter.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– We are, therefore, as a Parliament, giving away to four directors the practical control of the whole of the paper money of Australia, with all its economic results. If we are going to do that, let us at least do it with our eyes open, but I, for one, am not prepared to do it.

Senator PEARCE:
Minister for Defence · Western Australia · NAT

Senator Pratten is unduly alarmed. He assumes that the Governor of the Bank may exercise his power to aggrandize the Bank by means of the note issue.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– He went further, and said that the Governor of the Bank had complete power unless the other three directors were opposed to him.

Senator PEARCE:

– Let us assume that the Governor of the Commonwealth Bank is on .the Board of Directors to represent the Commonwealth Bank, and that he will look, not at the public interests, but at the interests of .the Bank. There is also the representative of the Treasury, who can fairly be assumed to be a representative of Government interests, and likely to look upon himself as such. There are to be two other directors appointed by the Governor-General. They can fairly be said to be representatives of the public interests, and to be likely to look upon themselves as appointed for that purpose. If the Governor of the Bank were so foolish as to endeavour to use the note issue to aggrandize his Bank, obviously he would arouse at once the solid opposition of the other three directors. Nothing can be surer. The very source and manner of their appointment would guarantee that, and the Governor of the Bank would, therefore, be powerless, to do what Senator Pratten assumes that he is going to do. Of the amounts derived from the note issue, roughly, £9,000,000 has. been invested with the Commonwealth, £5,400,000 with various banks, and £23,400^000 with the

States. Every one of those investments has been for a fixed and definite term, and the power of the Board over them will commence to operate only when those terms expire, and when the Commonwealth, or the States, or the banks endeavour to arrange an extension, or to make some re-arrangement. It is an alarmist view to assume that, if the Commonwealth, or the States, or any of the banks with whom those funds have been invested, came forward with a good proposition for the further investment of the money, the Governor of the Bank would take up the attitude of refusing to make any such arrangement, not on the ground that the proposal put forward was not good business, but because he proposed to use that particular investment for the benefit of the Commonwealth Bank, and that, if he did take up that attitude, the other three directors would acquiesce. The other directors would be poor creatures if they submitted to that sort of dictation from the Governor of the Bank. I cannot think that they would do so. In order to justify their existence, they would ‘say, “We have been appointed by the Government to look after the public interests, and not merely to look after the interests of the Commonwealth Bank. Our duty is to see that the note issue is used in the public interests.”

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– The interests of the Commonwealth Bank would be the interests of the public.

Senator PEARCE:

– Not necessarily. I can conceive of circumstances in which the interests of the Commonwealth Bank might not necessarily be the interests of a State. For instance, a State might have funds invested, it might be in a difficult position, and it might be in ‘the interests of the Commonwealth Bank to recall the investment, whereas it would be certainly in the interests of the State to further control the investments for a term. But the Governor of the Bank will not be the final arbiter, - as is suggested, because there will be three other directors whose interests will not be the advancement of the Commonwealth Bank as opposed to the conservation of the public interest. This, I think, is sufficient answer to Senator Pratten.

Senator FAIRBAIRN:
Victoria

Senator Pratten seems to ‘be afraid that this power to issue notes will be exercised by the ‘Commonwealth Bank at the expense of the general public. First of all he mentions the authority to issue a 5s. note; I understand this power is already vested in the Treasurer, and, perhaps, it is felt that the Board would be better able to decide whether the issue of 5s. notes would be in the interest of the Commonwealth. Some people have a great objection to a 5s. note, but we never know what we may haveto do.

Senator Crawford:

– Silver may become dear again.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– But at present the authority of the Treasurer to issue notes is subject to the will of Parliament, and by this Bill we are legislating this power away from Parliament.

Senator FAIRBAIRN:

– The Board will practically take the place of the Treasurer to-day in regard to matters connected with the note issue. It is debatable whether the issue of 5s. notes will be good for the Commonwealth or not, and my opinion is that the Board will be better able to decide this question than the Commonwealth Treasurer. I do not think we are giving away much there. What can the Board do? They may issue notes provided they retain 25 per cent. in gold backing, and they may deposit the proceeds of the issue with any bank. If members of the Board werecor- rupt, they could make an arrangement with a bank with regard to 25 per cent. of the issue, but under Senator Crawford’s amendment they would be adjudged as not of good behaviour and dismissed. It is necessary to give the Board this power, because the note issue must expand when the wheat crop comes along, and it can only expand through the private banks against sales of wheat. This is a perfectly legitimate and safe transaction, and it is the only way in which we can finance the wheat crop.

Senator Lynch:

– We could not shift the crop otherwise.

Senator FAIRBAIRN:

– That is so. The Board must have the power to deposit these notes with the local banks to get cash for the wheat.

Senator Crawford:

– The Board would not be able to issue notes beyond the demand, because they would not circulate.

Senator FAIRBAIRN:

– They could only issue notes beyond the demand if they made some corrupt agreement, and then, of course, they would be sacked.

The Board may further invest the proceeds of the note issue in securities of the United Kingdom, or of the Commonwealth, or of a State, or in trade bills with a currency of not more than 120 days. I am not quite sure about the latter power, which, I think, is not possessed by the Treasurer under the existing arrangement. At present the Commonwealth Bank trades on its capital, which is an advanceby theGovernment of £1,000,000, and deposits in the Savings Bank Department. On this capital the Bank is allowed to buy trade bills and make advances, but I do not think it is wise - although there may be some satisfactory explanation - to authorize the Bank to issue notes and invest the proceeds in the purchase of short-dated trade bills. Otherwise, I think the Bill is quite unobjectionable. I have dealt with the whole of my arguments on this clause, because we are practically having a second-reading debate.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– That is because this clause is the crux of the Bill.

Senator FAIRBAIRN:

– I agree with the honorable senator. I do not see that this power to buy short-dated trade bills with the proceeds of the note issue required at all. It has not been done in the past.

Senator PEARCE (Western Australia-

Minister for Defence) [4.41]. - When I was speaking on the second reading, I said that there had been some controversy over the question of a gold basis for a note issue, and that it was now admitted that, in addition to a gold reserve, the. volume of a country’s trade, as represented by negotiable paper, was also regarded as a security for a note issue. This is a recognition of that principle, which has been adopted by the United States Reserve Bank. For the information of honorable senators, I quote the following remarks by Senator Robert L. Owen, who pioneered the Federal Reserve Bank Bill through the Senate -

The centralidea of the system is elastic currency issued against commercial paper and gold, expanding and contracting according to the needs of commerce.

The reserve note is the most powerfully fortified note in the world. There is no probability of any want of confidence arising with regard to this note, and it was intended that there should be none.

Under the reserve system a financial panic is impossible. People will not hoard currency, nor hoard gold when they know that they can get currency or get gold when required. This was’ an important object of those who prepared the Reserve Act.

America no longer believes a financial panic possible, and, therefore, the business men, being perfectly assured as to the stability of credits, do not hesitate to enter manufacturing and commercial enterprises from which they would be deterred under old conditions of unstable credit.

The system has expanded the use of acceptances and of cheques and drafts, has stimulated industry, provided enlarged employment of labour, increased output, and greatly enhanced the financial prestige of American banks.

That principle is expressed in the clause referred to by the honorable senator as giving the Board power to purchase shortdated bills.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– And it may have a big effect on the exchange position.

Senator PEARCE:

– Yes. I think we are following a perfectly safe guide by adopting the Reserve Bank legislation of the United States, which has stood a most severe test.

Senator Crawford:

– How long has it been in existence?

Senator PEARCE:

– That law was passed just before war broke out, and in view of the fact that it stood the test of the war, I think Senator Fairbairn should be prepared to accept it. It is always dangerous t’o agree to amendments as we go along. Since Senator Crawford submitted his amendment, I have had the clause under review, and the Crown Law authorities have furnished me with another draft, which I think will better express what Senator Crawford desires. I suggest that the honorable senator withdraw the amendment now before the Chair.

Amendment, by leave, withdrawn.

Amendment (by Senator Crawford) proposed -

That after the word “ appointed “ second occurring, in sub-clause 3, the words “ and shall hold office during good behaviour” be inserted.

Senator LYNCH:
Western Australia

– This means, in effect, that the Bill as brought down was” not perfect, and needs amendment. The proposal now is that the Board of Directors shall be appointed subject to good behaviour. Good behaviour in the opinion of whom? Necessarily, this means the dominant political party of the hour. I do not want the financial position of this country to be at the mercy of any political party. I want the broad line of national policy, i,i finance especially, to be safeguarded to the utmost by providing for a resolution of both Houses of this Parliament. Contemporary opinion of to-day may be reflected in another Chamber, but because, of the constitution of the Senate the contemporary opinion of the hour may besomething altogether different from the opinion of this Chamber. Somebody must sit in judgment on the Board of Directors to decide if they are of good behaviour. Senator Pratten has clearly pointed out that there is absolutely no limit tothe amount by which the note issue may be expanded under the terms of this Bill so long as the Directors maintain a gold reserve of 25 per cent. We have to realize that in this country there is an active element, which has unlimited faith in the ability of the printing press to enrich the community; and I want to prevent that element from launching any wild-cat scheme of finance. The only remedy then is to bring it within the power of Parliament for the time being, but this Parliament docs not express the wish of the country, because the Senate, owing to its nature and constitution, does not re-echo current opinion.

Senator de Largie:

– That is not so.

Senator LYNCH:

– The honorable senator is elected for a period of six years, and opinions reflected in another place are not reflected here. We have the opinion of Parliament, not of the hour, but of the previous hour, or previous term. The only safeguard that can be applied in the present instance is. to have the Board of Directors under the authority and thumb of Parliament, and no other. The seriousness of the position has not reached us yet, as currency is continually being tampered . with by more or less irresponsible political parties, who are always willing to test the printing press to its utmost in an endeavour to enrich themselves or the country, and no more foolish expedient was ever adopted. The results that followed such attempts in the United . States of America and in France are well remembered. This Bill provides that so long as the members of the Board are content to assume that there is one sovereign available for every £4 worth of notes in circulation the issue can continue.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– France did not do that.

Senator LYNCH:

– Russia is doing it to-day, and while the tendency exists to test the printing process to its fullest extent, it will naturally bring about most disastrous results. If the Committee is content toplace this power under the control of the political party of the hour it can do so, but we should place it under the control of Parliament. If honorable senators desire the political party of the hour to control this Board, they can do so by voting for the amendment ; but if it is desired to remove the Board from political influence and control, as are Judges of the High Court - who, in my opinion, are occupying minor positions compared with these - they should place it under the control of Parliament. These four men will have important duties to perform ;I do not know of any higher responsibility. Their work will call for the utmost business sagacity, and cover a very wide range. It is the duty of the Committee to consider this provision very carefully, as the clause we are now dealing with covers their appointment. Judges of the Supreme Court and members of the Inter-State Commission can only be removed from office on the authority of Parliament, but these men can be removed if they are not of good behaviour. But by whom? The Government.

Senator DE LARGIE:
Western Australia

Senator Lynch seems to be under the impression that this Senate does not re-echo current public opinion, because only one-half of its members are elected at the same time as are members of the House of Representatives. But I hold that we could not reasonably provide for the members of both Houses to be elected for the same period. Therefore, when we take into consideration the fact that the Senate is an elective House, and that one-half of its members go to the country at the same time as the members of another place, and are elected upon the same basis - although with more extensive electorates - this Senate is more representative than the House of Representatives can ever be. It undoubtedly re-echoes the opinion of the whole of the community more accurately than the other House can possibly do.

Senator Crawford:

– The other House would have to agree to any amendment we made before it became effective.

Senator DE LARGIE:

– That may be so. There is no Upper Chamber in the world which responds to the public will so readily as the Senate of Australia, which is elected on an adult franchise of the whole people. Senator Lynch also seems to be under the impression that the last word has been said on the matter of currency and gold as a standard of value. We are far from that stage, and any one who considers the position of exchange must admit that the present basis is far from satisfactory. About ten years ago there were men in Australia - as Senator Gardiner properly pointed out - who were bitterly opposed to the establishment of the Commonwealth Bank, the operations of which we are now extending. The conservative mind of the time was strongly opposed to its establishment. Does Senator Lynch mean to say that the world is going to stand still and that the present inconsistent and most unworkable system of exchange is likely to continue for ever? I do not believe it is. I, in common with other honorable senators, have read of better systems of currency than one based upon gold which results in fluctuating exchanges, and I am surprised that Senator Lynch does not think that our basis should be on something more valuable. Why should we not base it on wheat, meat, wool, and butter, instead of on gold values ?

Senator Lynch:

– Why not take one step at a time?

Senator DE LARGIE:

– The honorable senator is anxious to prevent us from moving in any way; and it is ridiculous to ask this Senate to hamper posterity, as has been suggested. It has been shown during the war and since that gold is a most erratic basis on which to operate.

Senator Lynch:

– If it is based on wheat, how would we pay our debts to America?

Senator DE LARGIE:

– I am not aware that we would suffer if we were in debt to America, and had to pay her in wheat, because America has undoubtedly been paying at least$2 per bushel for it during the war when we have been selling it at a lower price. On Senator Lynch’s own showing we would increase our wealth by 50 per cent.

Senator Lynch:

– It must be based on some commodity with which we could pay all nations.

Senator Russell:

– We have had American prices for Australian wheat.

Senator DE LARGIE:

– After holding sufficient for home consumption it is a pity we could not send all our wheat to America and get American prices for it. If Senator Lynch takes a comprehensive view he must admit that we pay our debts with wheat and such other commodities, but it is to be regretted that the price fluctuates as it does. The provisions of the Bill are reasonable, and if there was any attempt to make them more water-tight by preventing future Parliaments from legislating according to the will of the people it would be futile and foolish. We cannot assume that the whole of the wisdom rests with this generation. Future generations will draw upon the lessons of the late war in matters of currency and finance, just as we have drawn much knowledge from the war finance experience of the French and American Republics

Amendment agreed to.

Amendment (by Senator Crawford) agreed to -

That after the word “years” in sub-clause 4 the words “ subject to good behaviour “ be inserted.

Amendment (by Senator Lynch) again moved (page 6638), and negatived.

Senator PEARCE:
Western AustraliaMinister for Defence · NAT

Senator Crawford has drawn my attention to the fact that there is no definition of “ absence,” and it is possible that it might mean absence from a meeting. I am therefore moving an amendment to make the provision similar to that in the Commonwealth Bank Act in regard to the Governor and Deputy Governor. I move -

That after the word “ absence “ in subclause 6 the following words be inserted : - “ from the Commonwealth or absence from duty on leave.”

The provision would then read -

In case of the illness or absence from the Commonwealth or absence from duty on leave of any Director, the Governor-General may appoint a person to act as a Director during the illness or absence.

Amendment agreed to.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I move -

That sub-clause 8 be left out.

I have already mentioned my objection to the Commonwealth Bank being run by oneman. There have been several in stances in my own State in connexion with which I have wished, in common with the public generally, that the responsibilities of those who govern the Commonwealth Bank had been divided. The sub-clause to which I take exception will, in certain circumstances, again make an autocrat of the Governor of the Commonwealth Bank. I submit my amendment because I do not think that it is good for the Governor of the Bank the community, or this Parliament, to continue an autocracy in connexion with the many most-important duties which this Bill will leave in the control of the Commonwealth Bank.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

– How would the honorable senator overcome the difficulty of a deadlock?

Senator PRATTEN:
NEW SOUTH WALES · NAT

– There has been a considerable amount of dissatisfaction in Sydney in connexion with the appointment by the Commonwealth Bank of Messrs. Kirkpatrick and Company as architects for the erection of War Service Homes there. Only the other day I saw in a public newspaper that the Municipal Council of Hunter’sHill, one of the suburbs of Sydney, had proceeded against the builder of a War Service Home, and had obtained a conviction against him for “ jerrybuilding.’’ I understand that the architects who should have looked after this home, and prevented the “ jerrybuilding,” was the firm of Kirkpatrick and Company, who were appointed by the Commonwealth Bank to supervise its construction. There has been a good deal of dissatisfaction amongst architects in Sydney because of the monopoly of much of the war service architectural business by this firm to the prejudice of architects who are returned soldiers. All this has emanated from the Commonwealth Bank, of which the autocrat and Governor is Sir Denison Miller, K.C.M.G.

Senator Duncan:

– And brother-in-law of Kirkpatrick.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I also understand that he is a brother-in-law of Kirkpatrick.. Another matter in connexion with the administration of the Commonwealth Bank in Sydney hasbeen much in the public eye recently in connexion with the resumption of certain properties in Moore-street for the purpose of making a way through from that street to Macquariestreet. Connected with this proposal there has been, as adviser to the City Council, this same firm of architects - Kirkpatrick and Company. I believe I am correct in saying that there has been a tremendous amount of controversy and ill-feeling aroused in the City Council over this matter and that by a bare majority the Labour section of the City Council at one time insisted upon going through with this resumption on plans and estimates of this firm of Kirkpatrick and Company; and it was stated, I understand, in the City Council that the financing of the scheme would be done by the Commonwealth Bank. I do not think that Sir Denison Miller or any one else should have this kind of responsibility solely on his own shoulders, and I submit my amendment in order to avoid creating under this Bill an almost similar position to that created under the Commonwealth Bank Bill. I have previously pointed out that, unless three of the four directors of the Note Issue Department are opposed to anything proposed being done, the Governor of the Commonwealth Bank, by virtue of the casting vote given him under the proposed sub-clause to which I object, could, with one other director, carry out any or all of the provisions of this Act in spite of the most strenuous objections of the other two directors, including, it might be, the representative of the Treasury. By the adoption of my amendment I admit that deadlocks will ‘be possible, but I think it preferable to have deadlocks and leave things in statu quo than to break new ground on the casting vote of the Chairman of Directors, who is, at the same time, the autocratic ruler of the Commonwealth Bank. Should important departures be proposed in connexion with the control of the tens of millions of money by this Board of Directors, Parliament should not put it into the hands of the Governor of the Commonwealth Bank by a casting vote to carry any proposal though one-half of the directorate might be against it.

Senator PEARCE:
Western AustraliaMinister for Defence · NAT

– I do not propose to follow Senator Pratten in the interesting reminiscences of Sydney municipal politics which he has given us, except so far as to say that I am informed that, with regard to the soldier’s home which has been condemned by the Hunter’s Hill Municipal Council, the only interesting fact about it is that Mr. Kirkpatrick has not yet passed it ; and so the decision of the council is no reflection upon him as an architect.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Was he not there to see the materials going into the building?

Senator Duncan:

– I could mention dozens of other cases in which he allowed second-class material to be used where new material was specified.

Senator PEARCE:

– I did not hear of the other cases. I am dealing with the case I did hear of. The next interesting statement to which Senator Pratten referred was that Kirkpatrick is Sir Denison Miller’s brother-in-law. I am informed that that is incorrect, and that he is no relation of Sir Denison Miller. Senator Pratten’s next point was that the Commonwealth Bank is in some way connected with the Moore-street resumption scheme; but I am informed that the fact is that the Bank has not entered into any such obligation.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I did not say that it had. I wish to make myself clear as to what I did say.. I said that it was stated in the Sydney City Council that if the scheme could be put through, the Commonwealth Bank would finance it.

Senator PEARCE:

– The honorable senator created the impression in my mind that the Commonwealth Bank had undertaken to finance the scheme. That is incorrect. Brushing all that on one side, the point at issue is whether the Governor of the Commonwealth Bank should have a casting vote on the Board of Directors of the Note Issue Department. The Board is to consist of four members, and the casting vote of the chairman can only operate where the Board is equally divided in opinion. The honorable senator suggested that, where the members of the Board vote two and two on a proposal, the question should pass in the negative. All that the proposed sub-clause provides is that where the Board is divided equally upon any question,, the two members, of whom one is the Governor of the Commonwealth

Bank, shall have the benefit of the doubt, and shall decide the question. Is that too rauch power to give to the side of which the Governor of the Commonwealth Bank is a member? Senator Pratten has assumed that the check must always be upon the side of which the Governor of the Commonwealth Bank is one. But it may be that the Governor of the Commonwealth Bank will act as a check on proposals put forward by two other members of the Board of Directors. .We must consider that it may possibly be the Governor of - the Bank who will be resisting an innovation ; and taking into consideration the status of any gentleman who will, for the time being, be presiding over the most important bank in Australia, it is not too much to propose that where the Board of Directors are equally divided, the question at issue shall be decided by the casting vote of the chairman being given on the side of which he is a member.

Senator DUNCAN:
New South Wales

– ‘I do not wish to associate myself in any way with anything in the nature of an attack upon the present Governor of the Commonwealth Bank. I do not believe that Senator Pratten had any such object in view in what he said. We, as senators from New South Wales, merely wish to mention, for the information of the Committee, rumours which are more or less current in Sydney with reference to certain transactions of the Bank, and particularly the relationship of the Bank to the firm of Kirkpatrick and Company. I recognise fully that the Government, in appointing Sir Denison Miller as Governor of the Commonwealth Bank, made probably one of the very wisest selections ever made in Australia in the appointment of a high public official. Sir Denison Miller has done admirable service. iHe has done more than any other person associated with the Bank to establish it firmly as the leading financial institution of Australia. Of course, the Bank has had phenomenal luck, if one may use the term. The war has made the Commonwealth Bank. It needed only some one with nous enough at the head of affairs to take advantage of the opportunities that arose to make the Bank the mighty institution that it is today. To Sir Denison Miller’s credit, be it said, he was wise enough to see and seize his opportunities. I should be very loath to join in anything like an attack upon him, or to in any way restrict the powers he enjoys. What I wish to point out is that the statement has been made broadcast and in the public press in Sydney that there has been something, at least, in the nature of preference given by the Governor of the Commonwealth Bank to the firm of Kirkpatrick and Company for the architectural work connected with the construction of War Service Homes undertaken by the Bank. It is true that this firm of architects was given a very big preference over every other firm of architects in Sydney. It is true that whilst other firms were endeavouring to secure a fair share of war service homes work, Messrs. Kirkpatrick and Company were having that work thrust upon them, without seeking it at all. So far as their supervision of certain war service homes was concerned, it has been definitely established against this firm that the work put into those homes was not up to specification. Where new timber was stipulated for, second-hand timber was used, and, as a matter of fact, some of these homes have been built partly out of material taken out of transports,’ where it had done service for perhaps two or three years.

Senator Earle:

– The buildings are none the worse for that.

Senator DUNCAN:

– The honorable senator would not like to have such timber put into his own home. If he had been upon some of the transports, as I have been, he would know that it was almost necessary to tie down the timber there to prevent it walking away.

Senator Reid:

– Is the honorable senator referring to second-class timber as well as second-hand timber ?

Senator DUNCAN:

– In very many cases, second-class timber was used.

Senator Pearce:

– After all, has this matter anything to do with the clause which we are now considering?

The CHAIRMAN (Senator Bakhap:

– I would remind the honorable senator that upon the specific amendment which has been moved the discussion must not cover too wide a range.

Senator DUNCAN:

– The statement made by my honorable friend Senator Pratten has been challenged.

Senator Pearce:

– Only in one particular. I am not defending Messrs. Kirkpatrick and Company.

Senator DUNCAN:

-I know of other cases in which the allegation has not been denied, either by the Commonwealth Bank or by Messrs. Kirkpatrick and Company.

Senator Reid:

– Is the honorable senator referring to second-hand timber or to second-class timber?

Senator DUNCAN:

– I am referring to second-hand timber, and also to secondclass timber, which has been used in some of our war service homes, contrary to the conditions embodied in the specifications. It is alleged - but I do not associate myself with the charge - that a certain relationship which exists between Mr. Kirkpatrick and the Governor of the Commonwealth Bank is sufficient to enable Messrs. Kirkpatrick and Company to get away with this work. The Minister for Defence (Senator Pearce) has denied that relationship.

Senator Reid:

– Perhaps some of the other rumours are just as well founded.

Senator DUNCAN:

– No. I know of instances in which Messrs. Kirkpatrick and Company were compelled to make good the damage which had been done.

Senator Foster:

– Is it not rumoured that Mr. Kirkpatrick is a son-in-law of Sir Denison Miller ?

Senator DUNCAN:

– It is rumoured that there is a relationship between Mr. Kirkpatrick and the Governor of the Commonwealth Bank, and the statement was made in Smith’s Weekly - a more or less reputable journal - that because of this fact Messrs. Kirkpatrick and Company were being given a preference. However, I do not associate myself with that charge. But I hold that it is unwise to place too much power in the hands of any one individual. I do not think that Sir Denison Miller desires to be clothed with the unlimited powers which he has hitherto wielded. Of course, the Government now propose to relieve him of some of those powers by appointing a Board of Management for the Note Issue Department. I do not approve of the Chairman of that Board being endowed with a casting as well as a deliberative vote. Upon all occasions when the voting of the members of the Board is equal, it would be better to do nothing rather than to take action in opposition to the will of half of them. It would be much better to hasten slowly than to take a step which may involve the Commonwealth in considerable trouble.

Question - That the sub-clause proposed to be left out be left out - put. The Committee divided.

AYES: 2

NOES: 14

Majority . . ‘ . . 12

AYES

NOES

Question so resolved in the negative.

Amendment negatived. 60h. - (1.) Australian notes may be issued in any of the following denominations, namely,

Five shillings, Ten shillings, One pound, Five pounds, Ten pounds or any multiple of Ten pounds, . . .

Senator PRATTEN:
NEW SOUTH WALES · NAT

.- I move-

That the words “ Five shillings “, in subclause 1, be left out.

The effect of my amendment would be to deprive the Board of Directors of the power to issue 5s. notes. Honorable senators will recollect that there was a good deal of controversy about twelve months ago, when it was mooted that the Government might possibly issue Commonwealth notes of this denomination.

Senator Earle:

– That was at a time when silver was worth about 5s. per ounce.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I do not think that 5s. notes should be issued without the subject being first discussed fully by this Parliament and in the absence of the approval of Parliament. I do not intend to traverse the economic arguments which have been used in regard to the issue of paper money. In another place a great deal was said in that connexion , and some observations upon the same subject have been made here this afternoon. So far as the statistics of the world go, they prove that our Commonwealth note issue, with the gold reserve that we have against it, occupies an eminently sound position.

Possibly there may be a temporary inflation of our paper currency in the near future, in order to enable us to finance the approaching wheat harvest. But the issue of 5s. notes would still further depreciate our currency and would constitute an innovation in respect of which Parliament has not expressed its opinion. I do not wish the Board of Directors of the Note Issue Department to have power to make any innovation in connexion with our paper currency. It is generally admitted that the greater the note issue, the larger will be the depreciation in that currency and the higher will be the cost of living.

Senator Duncan:

– The 5s. notes will have a silver backing.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– My honorable friend suggests that they will have a silver backing, and that they will, therefore, be subject to the greater fluctuations of the silver market. I do not intend to follow all the arguments which have been advanced in regard to the economic basis of gold. As a matter of fact, we really possess very little money, and the trade of the world is practically transacted upon credit. But undoubtedly the amount of paper money in circulation has a very intimate relation to the prices of commodities. I submit the amendment because 3 do not think that an innovation of the character proposed should be made without the consent of Parliament, and because I do not desire our paper currency to be further inflated and further depreciated.

Senator PEARCE:
Minister for Defence · Western Australia · NAT

– I do not think that any very important principle is involved here. It would be ridiculous to assert that there was, seeing that we have swallowed the camel in the guise of 10s. and £1,000 notes, and are asked to strain at the gnat of the 5s. note. I, therefore, do not propose to treat the argument on a very serious plane. It is very largely a matter of detail. A little while ago silver rose to a very high price, and at that time the Treasury, influenced by the scarcity and cost of silver, were about to issue 5s. notes. There was a great deal of talk when the 10s. note was introduced, but of all the notes it is the most handy and useful. I am inclined to think that the 5s. note will be very useful and handy also. It cannot be argued that if we take away the power to issue 5s. notes we shall take away or limit the power of the Board to issue paper currency. It will not matter what denomination the notes are. The only question is whether it is advisable to have 5s. notes.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Do not you think that. Parliament, and not a Board, should decide these matters?

Senator PEARCE:

– I do not think so. It is only a detail, and not a principle. Parliament says to the Board, “ Whatever quantity of notes you issue you must have a 25 per cent, reserve of gold.”

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Subject to that reserve, you have power to print as many notes as you like.

Senator PEARCE:

– Yes. If Parliament said, “ You can print as many 10s., or £1, or £5, or £1,000 notes as you like, but you cannot print any 5s. notes,” that would not be any check on the amount of paper money that the Board could issue. We can easily make up our mind on the question of whether the 5s. note is an advisable thing in itself, without going into involved questions of currency, or the danger of the powers given to the Board. My personal feeling, in view of the recent scarcity and high price of silver, which may occur again at any time, and in view of the fact that 5s. i3 a handy sum to carry about in the shape of a note, is that the Committee would be well advised to accept the clause as it stands.

Senator PRATTEN:
NEW SOUTH WALES · NAT

.- The issue of £1 and £1,000 notes will be governed to a great extent by the capacity of the banks and the public to absorb and use them in the first place, and, in the second place, by the percentage that the banks, by this law, will have to keep. But if we issue a note of another denomination the public will be able, by virtue of that new issue, to absorb a greater number of notes.

Senator de Largie:

– Surely that is a good thing, so long as it is safe?

Senator PRATTEN:
NEW SOUTH WALES · NAT

– It is not because we want to keep down the amount of paper money. That is the very object of my amendment. Suppose, for the sake of argument, that the maximum capacity of the public to absorb £1 notes is £20,000,000, and, in the case of 10s. notes, £10,000,000. Then a total of £30,000,000 worth of paper money is the maximum capacity of the public to absorb in those denominations. But if the Board print 5s. notes the public will be able to absorb probably another £5,000.000. My object is to restrict the power of the directors to force the public to absorb paper money, and to prevent, as far as possible, the circulation of any further paper money in Australia, and, so far as this Chamber can do it, to contract the note issue. If wo give the Board power to print and circulate 5s. notes we practically invite the Board to ask the public to absorb more paper money, and place in their hands the power to raise another £5,000,000 through the issue of further paper money.

Senator REID:
Queensland

.- I cannot follow the arguments of Senator Pratten, to whom I generally listen with great attention. His argument against the 5s. note will not bear examination. I do not see where the Board will obtain any power to force another £5,000,000 worth of paper money on the public. As the Minister for Defence (Senator Pearce) states, and as the Bill provides, the paper money must bo covered by a gold reserve. Therefore, the Board will not have the power to inflate the money market. All they will do is to give the public a handy medium of exchange, which will be very much more convenient, in many instances, than ‘carrying silver. The necessity for covering the paper money with a gold reserve will always prevent the over-inflation of the money market. I favour 5s. notes, if it is cheaperto issue them. Paper is much cheaper than silver, and the notes will be more convenient to the public. I prefer to carry paper rather than silver in my pocket. In many country places, especially in the bush, I know from long experience that paper money is of much more use than silver. The banks are not compelled to take the notes unless they want them. If they do take them, they have to hand over gold to the Commonwealth Bank. They will not hand over their gold simply for the sake of throwing a lot of loose paper money on to the market.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– There is no gold concerned in the issue of5s. notes.

Senator REID:

– Yes, the bankshave to hand over gold in order to get the notes.

Senator J D MILLEN:
TASMANIA · NAT; UAP from 1931

Senator Pratten said that the present 40 per cent. , of gold reserve could be reduced to 25 per cent. by the issue of further paper currency.

Senator REID:

– The capacity of the public to absorb notes is governed by their purchasing power. Being strongly in favour ofthe issue of 5s. notes, I shall vote for the clause.

Amendment negatived. 60i. - (1) Part of the moneys derived from the issue of Australian notes or acquired on the transfer of the Australian Note Issue from the Treasury, shall he held by the Board in gold coin for the purposes of the reserve provided for in section 60k of this Act, and the Board may invest the remainder or any part thereof -

  1. on deposit with any bank, or
  2. in securities of the United Kingdom, or of the Commonwealth, or of a State; or
  3. in Trade Bills with a currency of not more than one hundred and twenty days. . . . :
Senator LYNCH:
Western Australia

– This proposed new section provides the means for disposing of the proceeds of the Australian note issue. It circumscribes the power of the Board, so that other interests than those mentioned may be neglected. Why should the mercantile community be benefited by the Board of Directors becoming another competitor on the market for the purchase of their bills, when other interests are to have no such privilege? There are various rural interests which should be considered. Some provision should be inserted to give the directorate power to invest in approved rural securities, particularly agricultural and mining.

Senator Pearce:

– “ Trade bill “ would cover bills affecting stock, wheat, or butter.

Senator LYNCH:

– Quite so, but it would not cover debentures issued by a sound mine, or mortgages in rural areas.

Senator Pearce:

– Nor would it cover the mortgage on a city business.

Senator LYNCH:

– But immediately the produce of the farm or mine is represented in a commercial bill of lading, the Board can deal with it. Is power given in this Bill to the Directors to invest the proceeds of the Australian note issue in a mortgage or a farm, or in the debentures of a mine ?

Senator Pearce:

– No.

Senator LYNCH:

– That is my grievance. Immediately the produce of the farm or mine passes into commercial hands, and is covered by a commercial bill, then and then only will the directors have power to invest in it the proceeds of the Australian Note Issue. That provision gives an unqualified advantage to the commercial community over and above the country producers. There are plenty of mines, farms and timber propositions in the country that ask the public for increased capital by means of debenture issues, in order to carry on their operations. Whatever reliable security they have to offer is completely shut out by the terms of this Bill, but immediately their produce leaves’ their hands, and becomes the subject of a bill of lading, the Board could come forward and compete for the bills, with the result that their value would be enhanced by the presence in the market of another buyer.

Senator Earle:

– Is the honorable senator suggesting that the Board should invest in speculative concerns?

Senator LYNCH:

– I am not. I am merely drawing attention to the advantage which the commercial community will enjoy over and above the producing community.

Senator Earle:

– I do not think they will.

Senator LYNCH:

– If Senator Earle is content with that position, then let him support the proposed new section as it stands.

Senator Reid:

– I think the honorable senator is mistaken in his interpretation of the proposed new section.

Senator LYNCH:

-I want to make my position quite clear. As I understand the proposed new section, it will debar the Board from investing the proceeds of the note issue in any of the forms of investment that I have mentioned. If that is the sense of the Senate, well and good. It is a view which I am not going to subscribe to. It is a sound policy to encourage investments in rural industries, and I do not wish to see them shut out from the advantages of this Bill; but that is what we are doing.

Senator Reid:

– The producing interest will secure advantages by the purchase of trade bills.

Senator LYNCH:

– Of course it will when the goods are in the hands of the merchants. But while production is subject to the efforts of the unfortunate devil on the land, it will not come under the terms of this measure. If those engaged in these forms of investment are offering debentures to the general public, the Board will be debarred from investing one penny. Commercial bills are sound and safe. I have nothing to urge against them; but I protest against the policy of singling out one section of the community for special advantages and neglecting the other section. I move, therefore, that the following paragraph be added to sub-clause 1 : -

  1. in approved rural industries, particularly agricultural and mining.
Senator PEARCE:
Minister for Defence · Western Australia · NAT

– I am afraid Senator Lynch is rapidly acquiring the habit of calling for King Charles head, for we are told that unless the words “ approved rural industries, particularly agricultural and mining “ are inserted we are to assume that the Bill is hostile to those two great industries. But, after all, what is a trade bill? It represents a sale of, say, boots, steel, iron, as the product of some factory, or sugar, wheat, butter, as the produce of a farm. Senator Lynch evidently assumes that because we are making provision for the investment of the proceeds of the note issue in trade bills, which, of course, would affect the sale of boots, iron, and steel, we are going to shut out any advantage for the primary producer whose product is represented by sugar, wheat, butter, or some other form of production. It is obvious, surely, that both buyer and seller are advantaged by the acceptance of the Bill. And if this be true, does not Senator Lynch see that the rural industries are equally advantaged with other industries?

Senator Lynch:

– The Minister is arguing that the farmer is benefited through the merchant?

Senator PEARCE:

– The farmer, as the seller, and the merchant, as the buyer. Both are parties to the bill, and, therefore, both must reap an advantage by its acceptance. If Senator Lynch sees this, surely he will realize that this amendment is totally unnecessary.

Senator LYNCH:
Western Australia

– We are getting a new doctrine. According to the Minister’s statement, people engaged in rural pursuits, mining, timber-getting, wheat-growing, fruitgrowing, &c, are- going to be benefited through the merchant, that is to say, through the man who buys their produce.

Senator Pearce:

– Both are parties to the bill.

Senator LYNCH:

– The clause as it stands provides that the - Board will only deal with the merchant.

Senator Pearce:

– No; with the trade bill.

Senator LYNCH:

– But the trade bill is the merchant’s property, when he buys the produce, which is no longer the property of the farmer.

Senator Pearce:

– But who gave it?

Senator LYNCH:

– The farmer, of course.

Senator Pearce:

– Then both are parties to the trade bill.

Senator LYNCH:

– We are told by the Minister that the farmer is to be benefited by some advantage given to the merchant by the acceptance of trade bills. That is a doctrine to which I am not going to subscribe. I believe the farmer can best be benefited by dealing direct with him, and not through the merchant who buys his products. There is a radical difference between the Minister’s view-point and mine, and that is why I have submitted my amendment. I do not want any “ wildcat’ ‘ scheme of finance to be entered upon ; but I am not going to allow the commercial community to reap all the advantages of this Bill while the rural producer is shut out in the cold, simply because it has occurred to somebody responsible for the drafting of this Bill that farming and mining pursuits, as an investment, are not quite so good as a trade bill. I flatly contest that suggestion. What would De the position of the commercial community but for our rural industries? And yet, until production takes some tangible form, the man engaged in any rural industry is to be left out in the cold, so far as this Bill is concerned. I object to that, and I ask the rural representatives here what they are doing to allow the proposed new section to pass in its present form. Why are we shutting out approved rural securities which the wiseheads in the financial world look upon as being just as good as commercial bills, and in connexion with which, by the way, vast fortunes are being built up by men shrewd enough to invest in them ? 1 am out to help the bottom dog - the man who produces something. In this Bill, the commercial community comes in on the ground floor, whereas the farmer is not even in the cellar ; but by means of my amendment I propose to put him on the ground floor, too.

Amendment negatived. 60k. (1) The Board shall hold in gold coin and bullion a reserve of an amount not less than one-fourth of the amount of Australian notes issued…..

Senator LYNCH:
Western Australia

– I have an impression that in the original Act there is provision that when the note issue reaches a certain point the gold reserve must be increased.

Senator Pearce:

– That is in the first Act, but subsequently an amendment was made. The provision in this Bill is exactly the same as in the Act.

Senator LYNCH:

– -Then it has my support. I may mention that during the financial stringency of the nineties, and when notes were issued by private banks - that was before Queensland showed the way by a Government note-issue scheme - the gold security held by some of the banks was as low as 2s. 6d. and 3s. 6d. in the £1. I mention this to show that under the present Bill the security is ample. There is another matter, however, upon which I should like some information. I believe some distinction is made between the number of notes that can be held by a bank and the number issued; and that if they were taken into account the 25 per cent, gold reserve problem might be materially affected. It was a grievance with the private banks that they were holding a large number of notes upon which interest was charged, although they were not in circulation. At times there is an appreciable number of notes on hand, and, although not in circulation, may be regarded as on issue.

Senator PEARCE:
Australia - Minister for Defence · Western · NAT

– A note is not regarded as such until it is issued. There may be millions of pounds’ worth of notes stored in the Treasury ready for issue, but they are not regarded as a part of the note issue. When once they are issued to a hank, they are calculated in the total amount in circulation.

Senator Lynch:

– Do you regard the notes on hand as being issued?

Senator PEARCE:

– Not until they are issued to the banks. The notes held by the Treasury in its ‘storerooms are not regarded as part of the note issue.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments ; Standing and Sessional Orders suspended, and report adopted.

Bill read a third time.

page 6654

LAND TAX BILL

Second Reading

Senator PEARCE:
Minister for Defence · Western Australia · NAT

– I move -

That this Bill be now read a second time.

This measure is a very simple one, containing only one amendment, which has the effect of obviating the necessity of reimposing annually the additional 20 per cent, on the rates provided in the Land Tax Act of 1914. The additional 20 per cent, was imposed in 1918, and again in the financial year of 1919-20; and in view of the financial position there is no prospect of any reduction being made in the immediate future. It seems somewhat farcical to introduce a Bill each year re-imposing the additional 20 per cent. ; and it has therefore been decided to make the additional tax permanent until such time as relief can be given and a measure introduced to repeal the 1918 Act. The passage of this Bill will therefore obviate the necessity of introducing a Bill every year.

Question resolved in the affirmative.

Bill read a second time, and reported without request; report adopted.

page 6654

COMMONWEALTH ELECTORAL (WAR-TIME) REPEAL BILL

Second Reading

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– I move -

That this Bill be now read a second time.

This is one of the shortest measures that has ever been before the Senate, as it consists of two brief clauses. Honorable senators are aware that during the period of the war it was necessary to .amend our electoral law to enable soldiers who had gone overseas to record their votes. The law was also amended to prevent naturalized persons of alien birth from recording their votes, and, perhaps, wewent a little too far in connexion with some naturalized subjects who originally came from enemy countries, or who were of alien parentage. In view of thechanged conditions, the Act which thisBill repeals is of little practical use, because, with the exception of 1,000 or 2,000, all the men who went overseashave returned to the Commonwealth, and there is now no further necessity to deprive certain persons of alien birth of the right 1 to vote.

Question resolved in the affirmative.

Bill read a second time, and reported without amendment; report adopted.

page 6654

ALIENS REGISTRATION BILL

In Committee (Consideration of House of Representatives’ amendments) :

Clause 6 -

Every alien resident …. shall . . . . register ….

Penalty: One hundred pounds, or imprisonment for six months.

House of Representatives’ Amendments. - Omit “ One hundred “ and insert “ Fifty “.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– The amendments made by theHouse of Representatives in this Bill refer principally to the penalties to be imposed under certain circumstances. When the measure left this Chamber, provision was made for imposing penaltiesof not less than £100 or six months’ imprisonment, but these have been reduced by the House of Representatives to £50 or three months’ imprisonment. It was alsoprovided that an alien child resident in Australia had to register on reaching the age of sixteen years, and on failing to do so could be imprisoned for a period of three months. The House of Representatives has reduced the penalty to one month, and made ‘the parent or guardian of the child responsible for the registration. During the war period, heavy penalties “were necessary, but now that we are legislating on a peace basis I think we can reduce them.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– What does the amendment in clause 8 mean.?

Senator RUSSELL:

– Under sub-clause 5 of clause 8 we provided that any person, not being the agent of the vessel or a person employed by him, who,, except in the execution of his duties as a public servant, boarded any oversea vessel before the registration of the aliens on board, should be guilty of an offence. After conference with the representatives of the shipping companies, that was found to be a rather drastic provision, and the House of Representatives has amended the clause by omitting the words “agent for” and inserting thewords”owner, agent or charterer of,” so that the owner, agent or charterer of a vessel may board it for the purpose of performing necessary shipping duties before a census has been taken of the aliens on board. The purpose of the amendment is to facilitate the working of a ship and to secure that it should not be held up unnecessarily.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– That is to say, that only an accredited agent or a ship-owner or charterer of a ship may board the vessel before the registration of aliens on board.

Senator RUSSELL:

– Yes, for the purpose of carrying out work in connexion with the vessel. The first amendment made by the House of Representatives is in connexion with the penalty where first stated in clause 6, and is to omit the words “one hundred,” with a view to insert the word ‘* fifty,” the purpose being to reduce the maximum penalty from £100 to £50. I move-

That the amendment be agreed to.

Motion agreed to.

Remaining amendments in clause 6 agreed to.

Clause8 -

  1. – Any person (not being the agent for the vessel or a person employed by him) who, except in the execution of his duties as a public servant, boards any oversea vessel in the Commonwealth at her first port of call, or communicates with any alien on board an oversea vessel at her first port of call in the Commonwealth, before the registration in accordance with this Act of all aliens on board has been completed, shall be guilty of an offence.

House of Representatives’ Amendment. -

Omit “agent for “ and insert “owner, agent or charterer of.”

Motion by Senator Russell proposed - That the amendment be agreed to.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I. raised a question on this amendment, which appears to me to greatly extend the power of a ship owner to deal with his own ship, pending the official completion of the registration of aliens on board. Under the clause, as passed by the Senate, only the agent for the vessel, or a person employed by him, might board the vessel before the registration of the aliens on board, but under the amendment the owner, agent or charterer of a vessel may do so. I understand that that is the position created by the amendment.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– Under the clause, as amended by the House of Representatives, the owner, agent or charterer of a vessel may board the vessel as soon as the vessel arrives at the wharf, and before aliens on board have been registered, but no one else, except it be a person in the. execution of his duties as a public servant, may do so until the certificate as to aliens on board has been delivered and checked.

Motion agreed to.

Amendments in clause 14 agreed to.

Resolutions reported; report adopted.

Sitting suspended from 6.30 to 8 p.m.

page 6655

NEED FOR INCREASED PRODUCTION

Proposed Industrial Inquiry

Debate resumed from 12th August (vide page 3461), on motion by Senator Lynch -

That, inasmuch as the financial needs of the Commonwealth arising out of the war require a substantial increase in our surplus wealth to enable it to meet its obligations, and as such increase can only follow on a corresponding increase in the output of commodities, and this in turn requires a free field having no artificial restraints or burdens; and that in order to insure that each industry shall be given the opportunity to yield its maximum by standing on its own base, and neither leaning upon or being leaned on by any other industry, the Senate is of opinion -

That, for the purpose of determining the true standing of conditions in the industrial field and removing, as far as the power of Parliament cando, any maladjustment whereby one or more industries stand to be systematically sweated for the direct gain of other opulent industries,the Government should, as a commencement, instruct the Inter-State Commission to inquire into and report upon the following seven industries, viz., the pastoral, metalliferous mining, wheatgrowing, coal-mining, shipping, textile manufacture, machinery manufacture (embracing only machinery used in agriculture and mining) in respect to -

the general result of operations extending over the last seven year period;

the earnings of capital in each industry viewed as a whole;

the scope there is (if any) in each industry for the further absorption of labour and capital, and to what extent men of small means can engage in each industry ;

the hours of labour and rates of pay per hour, per day, or per year, according to custom obtaining in each industry;

what wages an average employee could earn in a year in each industry - working to the standard “ a fair day’s work for a fair day’s pay”; (/) the amount of time lost in each year, and expressed in money, in each industry, through industrial unrest and the effect of same on that industry as well as sister industries;

nature of each industry as affect- ing the lives and health of the operatives.

That, as wheat-raising and metalliferous mining between them provide homes and livings of a kind for a vastly outstanding proportion “of our population, the Commission should commence its investigations of them, in order that any discovered grievances found crippling or retarding their progress may be thoroughly ventilated and effective remedies applied without further delay.

Senator DE LARGIE:
Western Australia

– The scope of this motion is quite sufficient to embrace practically the whole of our industrial activities. It is of such a nature as to afford those who desire to advance the interests of our primary industries, and to stem the evil of centralization, ample opportunity to devise a scheme with that object in view. But Senator Lynch has evidently forgotten that the Inter-State Commission from which at one time we expected such great results, is to-day practically a moribund body, so that the terms of paragraph 1 of his motion will require to be amended if his proposal is to be carried. To my mind the interests of the industrial life of Australia are so interdependent that it is impossible for the industries which are outlined in this motion to stand alone, as the honorable senator apparently thinks that they can.

His motion affirms that an investigation of the questions enumerated in it is necessary - in order to insure that each industry shall be given the opportunity to yield its maximum by standing on its own base, and neither leaning upon nor being leaned on by any other industry.

I do not think that we shall ever reach the stage which is there depicted, because all industries must depend more or less upon other industries. If we attempted to foster rural industries alone, our efforts would most certainly result in the annihilation of our city industries. The results which would flow from the adoption of such a policy would inevitably react upon our rural industries, and especially upon those which have to depend upon a big urban population to consume their commodities. The terms of the motion, therefore, are somewhat contradictory. If I were obliged to choose between rural and city industries 1 would undoubtedly say that the former must take precedence. But we need not view the question from that angle, because no country can afford to ignore its secondary industries. We all recognise that the manufacturing countries are the rich countries of the world. In saying that I have no desire to detract from the value of our primary industries. Nevertheless, it is a fact that few countries have grown opulent upon their primary industries alone, and still less upon the agricultural industry. Agriculture is unquestionably the most important industry of all, but, unfortunately, it is not one which will make a nation rich. It will, however, make a nation healthier than will other industries, especially the mining industry. Obviously, the latter affects the health of those who engage in it, whereas agriculture is the healthiest of all possible callings. But all sorts of industries are necessary to build up a truly great country. During the war period, when the farmers of other countries were really prosperous, our own farmers were receiving a lower price for their products than were the agriculturists in any other part of the world. At that very time the cry was raised by some short-sighted people, and especially by the Melbourne Age, thatin a wheat-exporting country our people were being called upon to pay an exorbitant price for bread. The Age published quite a number of articles upon this question, under the heading of “ The Great Paradox.” Yet, at that particular time, wheat was being sold to our own consumers at a cheaper rate than that at which it could be purchased in any other country in the world. We have been getting cheaper bread than is obtainable in any other country.

Senator Payne:

– That necessarily follows from the fact that we are so far distant from the war zone.

Senator DE LARGIE:

– That is so. But we did not part with all our wheat at the price at which our own people wanted to purchase it. Had we followed the advice of the Melbourne Age we should have sold it for less than its cost of production. The prices obtained for wheat in Australia have been only about half those which have ruled in other countries.

Senator Bakhap:

– The honorable senator is quite right. Within the past twelve months bread has been 2s. 6d. per loaf in Johannesburg.

Senator Payne:

– There is no reason why it should be that price here.

Senator DE LARGIE:

– I thank Senator Bakhap for the information which he has given me. I admitthat 2s. 6d. per loaf is an abnormal price for bread. But in Australia, we have been purchasing read at a lower rate than was necessary to enable the man upon the land to obtain an adequate remuneration for his labour. If Australia is noted for anything abroad it is the fact that we have adopted the eight-hours principle more generally than has any other country. as a matter of fact we claim to have been the pioneers of that movement. Yet we have paid high rates of wages to the artisans and mechanics in our cities. I am excluding the professional class and the rich nondescripts, who can well afford to pay a much higher price for bread than has ever been demanded in the Commonwealth. Our people, I repeat, have been supplied with the cheapest bread in the world and that very fact discloses an anomaly which ought not to exist. If we are to purchase bread at a cheaper price than that at which the farmer can produce it consistently with the maintenance of our standard of living, we can do so only by sweating white workers, or by the employment of black labour. I made a similar statement some years ago, and at the next election my opponents raised the cry that I was an advocate of the employment of black labour. That fact, however, did not cause me to withdraw one iota from my statement. It is unfair for our people to expect to receive the highest wages, and, at the same time, to purchase necessary commodities at cheap rates.

Senator Payne:

– The honorable senator’s remarks cannot apply to the present position of the wheat-farmer.

Senator DE LARGIE:

– The present position is a very small improvement upon that which obtained at the time of which I am speaking. The honorable senator has not considered this matter closely, otherwise he would not have made that interjection.

Senator Payne:

– I am referring to the price of wheat to-day as compared with its price a few years ago.

Senator DE LARGIE:

-I can assure the honorable senator that the average price of wheat for the Western Australian farmer for the six years dating from the commencement of the war was only 5s. 5d. per bushel.

Senator Payne:

– But I am speaking of the price for this year.

Senator DE LARGIE:

– We have not yet harvested this year’s crop. I am speaking of the war period, when the farmers of other nations were getting for their wheat double the price that was being obtained by the Australian farmer.

Senator Payne:

– It could not be helped.

Senator DE LARGIE:

– If we could not help it in the past, this motion indicates one direction in which we should try to do something in the future. An article in the North American Review, which states what the American farmer has been receiving, and how he looks upon even a much higher figure than ours as being too low a price, will perhaps show Senator Payne the question from the same angle as I view it from.

Senator Payne:

-i hope that the honorable senator does not think I am opposing anything in connexion with rural industries.

Senator DE LARGIE:

– I know the honorable senator has no such intention ; but if he were as familiar with these figures in connexion with wheat as I have made myself, he would see the question as I have seen it. The article is entitled “The Farmer’s Attitude,” and is written by United. States Senator

Arthur Capper, who seems to be very familiar with his subject. In one part he says -

It requires 41/2 bushels of wheat to make a barrel of flour. The producer of wheat received about $8.37 for the wheat; the miller gets $12.70 for the barrel of flour; the baker, $88.70; and the New York and Washington hotel gets $587 for the product of a barrel of flour, in the thin slices in which it is doled out.

These figures show that the enormous profit derived from bread goes to the middleman rather than to the producer.

Senator Pearce:

– It would not be all profit.

SenatorDE LARGIE.- Nor is the 21/2 dollars all profit to the farmer. The article continues -

In my home State - Kansas - the farmers lost an average of 43 cents an acre on every acre of wheat they raised in 1919. The Secretary of the Kansas State Board of Agriculture,a recognised authority on farm production costs, gave that figure, after he had made a thorough investigationof the cost of producing wheat in 1919, on 2,040 Kansas farms; with a total area of 491,062 acres. The average production cost of the 1919 crop on these farms was $25.20 an acre, and the average return was $24.77 an acre. In 1919, Kansas produced 20 per cent. of the winter wheat, and 16 per cent. of all the wheat of the United States, so these figures maybe taken as generally representative of all our wheat-growing areas.

The wheat-growers and the farmers in all other branches of farming are perfectly aware that the Government during the war nursed every other industry at the expense of agriculture, and now that the war is over and the reign of the profiteer dominates they do not propose that this condition shall continue. Farmers were receiving $2.45 to $2.60 a bushel for wheat at the time the Government decided to encourage wheat production by adopting its guarantee of $2.20 a bushel for wheat. The $2.20 was the seaboard price under the guarantee, and the farmer received $1.80 to $ 2.04 a bushel under this $2.20 guarantee, not far from a, dollar less than when the Government cut the price to encourage production. And last year this great Government, through its grain corporation, made a profit of $23,000,000 out of the farmers’ wheat.

This shows that, although the wheat farmers in America were getting 2 dollars 20 cents. per bushel, or nearly double what the Australian farmer received, they considered themselves hardly dealt with. If that is so, what can we say of the case of the Western Australian farmers, who averaged during the war period, including last year’s figures, only 5s. 5d. per bushel for the wheat they produced ?

Senator Lynch:

– And had to wait years for that.

Senator DE LARGIE:

– Yes, they received it, in dribs and drabs, over a very extended period. If a similar state of affairs obtained in any other industry, such as mining, or a city industry like bootmaking, and the same amount of sweating and unfairness went on there, we should hear a howl from one end of the land to the other.

Senator Payne:

– What if a secondary industry produced so much goods that it could not dispose of them ? The trouble was that we could not get rid of our wheat crop.

Senator DE LARGIE:

– I shall not attempt to answer hypothetical questions. Other industries undoubtedly get a good living wage, and,’ that being so, we should try as far as lies in our power to give the same to the men who produce the food of the people.

A good deal of success had undoubtedly followed trade union efforts. Sometimes those efforts had been quite legal and constitutional, and a good deal of benefit has undoubtedly accrued to the workers from that method of improving their remuneration and working conditions. But the constitutional method of approaching the Arbitration Court has not been the only weapon used by working men to further their own interests. The one great industry which, up to the present, has not made a united effort by the wellknown means of trade unionism is that of farming. The man on the land has undoubtedly lagged behind, and has suffered in consequence, but a change is coming over the scene. It is, at all events, in Western Australia, where the cooperative system has caught on with the farmers. That, combined with the efforts of the Federal Government under Mr. Hughes, and the institution of the Pool system, will undoubtedly help the farmer considerably. The Pool system has already done so, and I hope the farmer will never be so short-sighted as to lose control of his wheat again, and allow it to be handled by middlemen, as was the case in Australia for so many years. If it ever became necessary for other than the usual constitutional and recognised means of improving the lot of working men to be adopted, such as direct action, no section of the community could put it into more powerful effect than the farmers.

Senator Duncan:

– This motion declares that it would he inimical to the farmers to do anything of the sort.

Senator DE LARGIE:

– Quite recently the whole community has. been practically stuck up, and its industrial activities paralyzed, by the direct action of the coal miners, the firemen and seamen, and the engineers, and in each case those responsible undoubtedly gained a great deal. If the farmers wanted to play the same game on the rest of the community, no section of workers could do it .so successfully. All they would need to do would be to keep their produce on their farms, and they could quickly bring the cities and towns of Australia to their terms without much trouble.

Senator Duncan:

– Does the honorable senator suggest that course of action to the farmers 1

Senator DE LARGIE:

– No, but if the other sections of the community are going to continue the selfish policy of feathering their own nests at the expense of every one else, the farmer would be a “darned” fool if he did not follow suit. It will undoubtedly come to that, because man is an imitative animal. If he sees that a particular policy is successful, he will adopt it to gain what he considers just. The farmers will be justified in saying, “If it is to be a goasyouplease, if the country is to be cut up into so many different bands of brigands, with each band taking advantage of the other, we shall join in that policy in order to improve our - own position.” They could scarcely be found fault with if they did so.

Senator R STORRIE GUTHRIE:
SOUTH AUSTRALIA · ALP; NAT from 1917

– They have already done so. Year after year they kept their produce on their farms until the price went up. At one time hay was forced up to £20 per ton.

Senator DE LARGIE:

– They sold their wheat at 5s. a bushel during the war period.

I wish to introduce just one more topic, in which we may perhaps find the kernelof a scheme for bringing this question to a successful issue. It is a very big subject - I am afraid much bigger than the Australian people can handle by themselves with success. Our possibilities of production in Australia are such that we have to look abroad for markets for our produce. The principal market of the world is Great Britain. We and Great

Britain are in a sort of Empire partnership so far -as business is concerned, but Australia has gained very little fram that partnership up to date. If the statesmen of the Old Country could be brought to look at this matter from a common-sense stand-point, they would see that -their interests are as much involved in it asare the interests of Australia. If we have an Empire fiscal policy, and an Empire immigration policy, working together,, with the Parliament of Australia and the Parliament of the Home Land operating, in conjunction to improve both countries,. I think it would be possible for us to make the whole thing a success. Recognition of the importance to the Empire of man power is a phase of the question that cannot be overlooked. This is one of the reasons why the statesmen of the Mother Country are not very keen upon encouraging the people to leave Great Britain and’ go abroad. But once they realize that emigration to Australia would not mean a loss of man power to the Empire, but merely the passing of men from one roomin a mansion to another, there would not be the same objection to emigration. If” the statesmen of the Mother Country also recognised that our trade interests wereidentical, and that if they could extend to us fiscal benefits without injury to their own interests, and give us something in return for that advantage which we havebeen extending to them for so many Tears our mutual interests would be well served.. It is well known that the seasons in the Argentine synchronize with those in .Australia. The Argentine producers place their wheat, meat, and wool on the British, market at the same time as we do. Great, Britain gained enormously during the war by being able to draw upon Australian production. It is true that the Argentine supplied a good deal of foodstuffs tothe Mother Country, but that was all. If Great Britain had not been able to pay handsomely for all that the Argentine produced, the Argentine would not have had a great deal of time for the Empire. Australia, on the other hand, in the hour of danger to the Empire, threw her man-, power into the scale, and made also available enormous quantities of foodstuffs.. Therefore if, by means of reciprocal legislation, we could put our products on theBritish market on equal terms with thosefrom the Argentine - I am speaking particularly with regard to freight-we should be able to extend our agricultural’. and pastoral industries enormously. Now that we are about to consider Tariff revision, the Government should endeavour to’ persuade the Imperial Government to look at the matter from this stand-point. I suggest that they get into communication with Senator E. D. Millen, and request him to “ sound “ the Imperial statesmen upon the matter. If by this means we can make the Empire self-supporting, it would be to our mutual advantage, and would make a solution of this very difficult problem possible.

Senator PEARCE:
Minister for Defence · Western Australia · NAT

– The motion submitted by Senator Lynch is almost a speech in itself, but the honorable senator in presenting it gave us a very interesting address. The one thing that remains in my memory is his reference to the increase of wages in the transport industry, as compared with wages in the mining and farming industries. Senator Lynch mentioned that wages in one industry had increased out of all proportion to remuneration in other industries. His argument showed that the labour question is closely interwoven in all industries, and that any undue increase in wages in one section actually affects rates of wages in another. If, for instance, in the production of a certain article, the hours of labour were shortened and wages increased, the cost of that particular article would naturally rise; and if labour in another industry was a great consumer of that particular article the cost of which had been considerably increased by the shorter hours and higher wages to which I have already alluded, the practical effect would be a reduction in wages to the industry which was a large user of the article mentioned. This shows that all these questions should be looked at from the view-point of the general effect of wages upon the community at large.

The motion itself practically calls for an inquiry along certain lines, and I ask honorable senators what would such an inquiry do? At the most, it could only collectand present facts. It could not rectify a state of affairs. It could collect statistics, collate information, and draw conclusions. But does it need a costly, cumbersome, and long-drawn out inquiry to obtain this evidence? The cost of the Tariff inquiry would be a mere circumstance to the cost of such an in quiry, as Senator Lynch, by the adoption of this motion, would have us undertake. Honorable senators must have seen those huge volumes which represent the result of the Tariff inquiry, and they must realize that if, in the terms of Senator Lynch’s motion, an inquiry were held into ail the various industries referred to, the resultwould be a staggering mountain of printed evidence, which very few people would read. It is altogether unnecessary to go to that trouble and expenditure. We are to-day collecting all the information which this motion, by the creation of other machinery, seeks to obtain. In our taxation, industrial, and census returns, we have practically all the evidence which the Commission, as outlined in Senator Lynch’s motion, would gather. But, of course, it is not collated. The lessons which Senator Lynch desires to bring out are not brought out. The available statistics are not used for that particular purpose, but they are available. There is scarcely any information which a Commission could collect that is not already in the archives of either the Commonwealth or State Governments. Senator Lynch, in the first paragraph of his motion, omitting the preamble, proposes that the Inter-State Commission should conduct this inquiry, but, as Senator de Largie has already pointed out, the Inter-State Commission is in a state of suspense, and until further legislation is passed it is difficult to say what its functions will be, and, indeed, if there will be any Inter-State Commission at all. Therefore, the Senate, at this juncture, would be stultifying itself if it passed this motion imposing on the Inter-State Commission the task of a huge inquiry Like this, and if, subsequently, the Senate decided that the Inter-State Commission should be constituted on entirely different lines totally unfitting it for such an inquiry.

Let us examine more closely the several paragraphs of Senator Lynch’s motion. But, first of all, I suggest that there is one paragraph which, although inserted by the honorable senator with the very best of intentions, is suggestive of the Bolsheviki. I refer to paragraph b, concerning the suggested inquiry into “ the earnings of capital in each industry viewed as a whole.” The “earnings of capital” is the favorite stock-in-trade of the Bolsheviki orator, and, at the same time, it is one of the most leading factors in determining the true apportionment of wages in relation to capital and profits. Is it not a fact that the earnings of capital in an industry may be small and yet the profits large? Is it not also a fact that the earnings of capital may be large and the profit in a particular industry very small? It is a fact, and yet, in the terms of this motion, information as to earnings of capital would be produced in such a way as to buttress and support the policy of those who would levy en masse on capital, and conclusions would be drawn from facts incorrectly stated. Inquiry on such lines would be most fallacious and injurious. It would be impossible, on the presentation of such figures, to draw correct conclusions. In paragraphs d and e the Inter-State Commission will be asked to inquire into the hours of labour, and rates of pay per hour, per day, or per year, according to the custom obtaining in such industry, and the wages which an average employee could earn in each year in each industry. The country is swarming with Commissions and Boards of Inquiry dealing with all these subjects. In every city, and in many municipalities, facts relating to these matters are being collated and published. The Government are of the opinion that all the facts and all the statistics are available, though there is something lacking in our use and presentation of them. In my early parliamentary days, I had more time than I have at present to visit our magnificent Library, and I can well remember that there used to be, and still is, a splendid collection of the publications of the United States Bureau of Statistics. It is not merely a publication of statistics, but an analysis of those statistics, which go to such an extent that one can take, say, a boot, and ascertain the relative cost of producing that article. Information can be obtained regarding the return on the capital invested, and the return to the wage earner and the distributor, much on the lines of the figures that Senator de Largie quoted in regard to wheat, and which, no doubt, were obtained from the same source. We have not advanced our statistical information to that extent.

I have been discussing this motion with members of the Government, and we have come to the conclusion that what Senator Lynch is endeavouring to obtain could be more readily secured, and at less cost, by an extension of our Statistical Branch, and by arranging for an analysis of the statistics we already have. An examination of them from many points of view would enable us to present to the public facts that would not only be informative, but useful. Foi instance, here is an instance: The amount of capital employed in a particular industry, and the manner in which it is employed. In the industrial system in every country there comes a period when there is overproduction, and consequently a fall in the rate of profit as compared with the capital invested, and a reduction in the return to the operatives, which may mean reduced employment. In another industry operating contemporaneously there may be a scarcity of labour, high wages, and extensive profits. It seems to me, and to the members of the Government, that it would be possible to have an examination continually proceeding if investors were to be supplied with facts which would enable them to decide when to transfer capital from one industry to another on lines that would promise the best prospects in regard to profits and continuity of operations. I say to Senator Lynch, and to the Senate, that whilst the Government cannot accept this motion in its present form, we will take the matter into consideration, and inquire whether in substance the information Senator Lynch seeks to obtain can be secured. We believe it can. We cannot support ‘ the motion as it stands, for the reasons I have given, and because we do not think it is justifiable, in view of the numerous Commissions and Boards that are at present making investigations. The Commission would have a tremendous scope, the inquiry would be cumbersome, and, above all, it would not be wise for the State to carry a motion to authorize the investigation until the Senate has first had an opportunity of expressing its opinion as to whether the Inter-State Commission should continue; and if it is to continue, of exactly what its powers shall be. Until that Bill has come before the Senate, I would suggest that Senator Lynch should not press his motion to a division, or that the Senate should stultify itself in any way.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I think the thanks of the Senate are due to Senator Lynch for placing a motion of this character before us. Like the Minister for Defence (Senator Pearce) I cannot follow the whole of its provisions, neither do I think that they are all necessary. But any discussion here is not redundant when it is in relation to primary industries, and particularly wheat and metal production. Any additional light that may be thrown upon these industries, or that will help in the slightest degree, will all be of benefit in the direction of increased production, which is so necessary.In considering the motion, it must not be forgotten that it has been on the noticepaper for three or four months, and conditions, in my opinion, have altered in the direction of making it even more necessary for accurate statistics to be placed before the people of Australia, and to enable them to get at the actual cost of the wheat that is grown to-day. I understand that Senator Lynch is not primarily concerned with the return on capital, say, in the coal mining industry, in shipping, or in textile manufactures; but Senator Lynch, and others, are anxious to ascertain how the high wages and short hours in the towns, compare with those prevailing in connexion with primary production. In New South Wales there has for spme time been a considerable controversy as to the real cost of labour incurred in producing a bushel of wheat. When wheat was 4s. per bushel, many producers said that it did not pay them to grow it; and, on the other hand, many large farmers said that they were making a good profit out of it at the same price. It is obvious to all of us that the conditions surrounding the production of: wheat vary according to the crop, the cost of labour,andthe locality in which it is grown. I understand that the real object of Senator Lynch in bringing the motion before the Senate is to obtain some: reliable data upon which payments to farmers may be based.

Senator Pearce:

– It does not stop there.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I admit that; and I am not entirely agreeing with the motion, but I am in accord with the gravamen and spirit behind it, because it is well that the Parliament and the people of the Commonwealth should have some idea of how the wages of city workers compare with those engaged in rural industries.For instance, some honorable senators who were on the River Murray last week saw interesting and important potential developments in connexion with irrigation. We found that the settlers who were helping to produce the primary wealth of Australia are working long hours, year in and year out; and we also learned that those who owned vineyards were often unable to take an annual holiday because of the close attention required to their holdings. It would be informative if we could, in the spirit of the motion, obtain some reliable data as to what that produce costs per day or per hour.

Senator Lynch:

– That has never yet been obtained.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– It has not.

I do not agree with the Minister for Defence when he says that statistics are available by which a collation can be made of the actual cost of labour involved in producing a. bushel of wheat, a case of fruit or a ton of copper. In New South Wales a claim by the Australian Workers Union has recently developed for £6 per week or £1 per day for agricultural labourers who assist in gathering the wheat harvest. The farmers say that they cannot afford to pay it - I believe they are right - and how helpful it would be in the settlement of the dispute that is now developing between that organization and the wheat-farmers of New South Wales if we knew what it actually cost farmers to produce their wheat before, they obtained any profit. That, I take it, is what Senator Lynch is anxious to ascertain. I believe that, so far as, primary and metalliferous products are concerned, it will be a long time before we get back to pre-war values. It seems, in looking around the world, that in view of the greatly increased cost of labour, of transport and production, it would be a fair generalization to say that at least during the next decade the primary products of Australia will probably be worth in the world’s market on an average 50 per cent, more than the average prevailing in the decade immediately preceding the war. That is to say, if I were asked to prophesy what the average price of wheat would be to the producers in Australia I should be inclined to say that it would be in the region of 6s. per bushel. If I were asked to estimate the average price of wool during the next decade on the same hypothesis I would be inclined to say that it may average ls. 3d. per lb. It is fair to assume that, during the next decade, prices are not likely to revert to the pre-war basis.

Senator Keating:

– Would the honorable senator say that of gold ?

Senator PRATTEN:
NEW SOUTH WALES · NAT

– Gold to-day is worth about £6 per ounce, or 50 per cent, more than its pre-war value.

Senator Keating:

– Will it maintain that price for a decade?

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I see no reason why it should not, because the great increase is largely due to the additional cost of production in consequence of higher wages. Tin, I believe, is in exactly the same position, and that is a metal to which I have given some study. The average pre-war value of tin was about £165 to £170 per ton, and, in my opinion, the average post-war value of tin will be 50 per cent, above that price for some years to come. I have heard Senator Lynch on several occasions rightly criticising the relative return to labour employed in a factory of any kind and that received by those employed in the labour of ploughing the land and sowing and reaping wheat. He has argued, and I think rightly, that less, wages per hour are obtained in the work of production from the land, taking it all round, than from the work of the artisan in city factories.

I wish to say a word or two with regard to the earnings of capital, and on this subject I am not altogether in agreement with the Minister for Defence. I think we need not fear to face this issue. It should be remembered that, in connexion with production, in which capital is engaged, from 75 per cent, up to 90 per cent, of the cost of the commodity produced is paid out in wages of some sort, and in some way, before the article reaches the public. We know what are the average earn ings of capital in the textile industry. Speaking from memory, I think that the average earnings of capital so employed was, during the war, somewhere about 29 per cent. The profits on the turnover were somewhere about 14 per cent, or 15 per cent. In coal mining, the average return for capital employed is not more than 10 per cent. I am not in possession of the latest shipping figures, but I think that they would show an extraordinary return from capital employed in outside shipping from war and post-war operations.

Senator Russell:

– Not on the Australian coast.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I am glad that Senator Russell made that interjection, because I believe that the only place in the world where the ship-owners’ profits have been limited has been on the. coast of Australia. In connexion with our Inter-State and Intra-State coastal trade, those profits have been limited because of the early action which the Government took to limit the powers, and, if honorable senators please, the avarice of the ship-owners.

Senator Russell:

– The vessels were run for two and a half years at pre-war rates without any increase.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I believe that is so. I. have before in this House suggested a scheme of co-operation between capital and labour which would give wages to capital -and wages to the worker, and provide for dividing the surplus profits, after the wages of capital and labour were paid, between capital and labour in the ratio pf the amount paid to both in the form of wages. I do not wish to enter upon the discussion of that scheme again to-night, but I should like to say that, until we have some definite statistics to show what it actually costs a farmer to produce his wheat, and the miner to produce copper, tin, zinc, or lead, our Courts in the arbitrament of wages in these industries will be unable to arrive at a decision that will be fair alike to capital and to labour.

What is’ going to happen in New South Wales will probably .be that the farmers and their families will strain every nerve to do their own harvesting and their own work, in order to avoid - I say it deliberately - the blackmail of the Australian “Workers Union, so far as the wages to be paid to harvesters are concerned.

Senator Lynch:

– That will go right through the piece.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I believe that it will. For three or four years the farmer may live on the smell of an oil rag, and work from dawn to sunset, just to keep body and soul together, and when he gets a punch, as I hope he is going to this year, some one comes along and tries to blackmail him.

Senator Lynch:

– Hear, hear! We want to bring that to an end.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– I believe it would be helpful if we could secure reasonably reliable statistics to show us the bad position in which the ordinary wheatfarmer has been, and is. I am glad that the Leader of the Government in the Senate has promised Senator Lynch that the Government will carry the work of collecting statistics a step or two further. I do not think that there are any statistics in existence at the present time which would enable Senator Lynch to achieve his object ; and I think it would be a good thing for the community to have some basis on which to estimate the costs and returns of the farmer. There was a good deal of controversy in New South Wales upon the subject before the war. Wheat was selling at one time at 3s. 6d. per bushel, and some who produced wheat at 2s. 6d. and at 3s. per bushel made a small profit, and barely secured wages for the labour they put into production. Since the war things have altered altogether; and I believe that the cost of production of a bushel of wheat to-day is in the region of 5s., as against 3s. or 3s. 6d. in pre-war days. I think it would be helpful to this Parliament, to the people, and to the workers if we could find out just what wheat costs to produce. There is likely to be a chronic condition of controversy between the people of the industrial areas, who want a cheap loaf, and the farmers, who want a fair return for the labour they put into production. There is no absolute data in existence today upon which the ordinary parliamentarian or the man in the street can form a reliable opinion as to what’ is a fair thing between them. Clearly if labour continues the tactics of seeking to obtain more than it should, without troubling about the returns derived by those engaged in rural production, the latter are likely to develop an impregnable position, since the farmer and his family will try to do the whole of their labour, and will not attempt to cultivate an area which would necessitate the employment of outside labour.

I support generally the ideas expressed inSenator Lynch’s motion. I am glad that the Minister has promised to carry the collection of statistics a step or so further towards supplying the information for which Senator Lynch is asking. I believe that it would be to the advantage of every one in the community if we could procure reliable data as to cost of primary production.

Senator LYNCH:
Western Australia

– I wish to say before this motion is finally disposed of, that an opportunity was afforded me to find out what its fate would be. I was informed by the Leader of the Government in the Senate that in the event of its consideration being postponed until next week it would be slaughtered with the innocents, and disposed of summarily without further consideration by the Senate. I can assure honorable senators that it was not my intention in tabling the motion to have it treated in that way. I desired that it should be discussed for what it is worth.

Senator Pearce:

– The honorable senator has not made a correct statement of what I said to him.

Senator LYNCH:

– What did the Minister say?

Senator Pearce:

– I said that I could not give the honorable senator any guarantee of a further discussion of the motion if it were postponed until next week, but that when we re-assembled after the recess, it could be further discussed. I said that it might be further discussed next week if there was time, but I could not give the honorable senator any guarantee that there would be time for its further discussion next week.

Senator LYNCH:

– The Minister also made the remark, “You know the fate of such motions in the closing week of a session.” Their fate is that they go by the board. I was not going to allow this motion to go by the board as other motions might do, although it is submitted, as the Minister said, in something in the form of a speech. When I had the alternative placed before une that it should be slaughtered with the innocents next week or be doomed to-night with only myself voting for it, I decided that I would prefer to have it doomed to-night.

Briefly in reply to what has been said about the motion, I may say that my object in submitting it was to direct attention to the growing tendency in Australia during recent years to a marked advantage being enjoyed by one set of industries over another, and to the absolute lack of information and data to pave the way for any effective remedy for this condition of things, and to secure that each set of industries shall stand on its own basis, with a fair field and no favour. I have observed what is happening in the industrial field, and it has appeared to me that there is a set of industries whose pro- ducts are consumed in the country that. has occupied a most favorable position, whilst there is another set of industries employing a vastly greater number of people, that must look to the outside world to buy its products, that has been in no such favoured position. As the Government have the power they will be wanting in their duty if they do not take the first step towards remedying that anomaly. I was returned to this Parliament as a supporter of the Government, and I intend to support them. But if they are going to deal with matters in the way that they have dealt with this motion I shall certainly proportion my support in the way that I think fit. In order to explain the result of the lopsided condition of things which obtains at present, may I be permitted to mention just what I found when I visited the State of Queensland recently? In the Atherton district - one of the richest districts in Australia - I learned that the dairying industry is languishing by reason of the fact that it cannot pay the wages which are .being paid in other industries below the Range, including the sugar industry. When I turn my gaze elsewhere I cannot fail to note that the coal mining industry is being coddled, whilst the agricultural industry is being pauperized by this insane policy which the Government decline to remedy. All I want is information. I am refused it by the Government.

Senator Pearce:

– That statement is not correct.

Senator LYNCH:

– It is correct, seeing that Ministers refuse to countenance my proposal for an inquiry into these matters. There is very little in this country which has not been inquired into. But when it comes to a question of inquiring into conditions which permit one set of industries to be coddled, and another set to be penalized, the Government refuse to take action. I am not wedded to the idea of referring the proposed inquiry to the Inter-State Commission.

Senator Pearce:

– The honorable senator’s motion is.

Senator LYNCH:

– Everything good has not originated with Governments. I have known Ministries to originate things which it would have been better had they never been originated. I have mentioned the condition which obtains in the dairying industry in Queensland. When I reached Sydney I went into a leading emporium there - I refer to Anthony Hordern’s. But I could not find a piece of butter which I could buy. there. I visited two other emporiums in that city, in which there was no butter for sale except in quarter pounds at 7id. each. Thus, whilst the dairying industry is languishing for want of labour to work it, people who want butter are unable to obtain it. Let me now point to the goldmining industry. Some of the miners in the Golden Mile are working to-day for the same wage that they received twenty years ago. But what are the coal miners earning? At Collie, in Western Australia, and in New South Wales, they occupy a vastly different position from that which they occupied twenty years ago.

Senator Bakhap:

– And they are continually threatening to strangle this country.

Senator LYNCH:

– Who has told us that? Have the Government? No. I am seeking to get the information through the authoritative source of a Royal Commission.

The Minister for Defence talked about this motion as a momentous proposal in the nature of a speech. In my judgment it does not err upon the side of an excessive use of words. The industries mentioned in it are merely supplying our own needs, and are not expanding. By reason of the favoured position -which some industries occupy an additional impost is cast upon other industries which have to compete with their products in the markets of the world.

The Minister has stated that an inquiry into the earnings of capital was suggestive of Bolshevism. That is a choice sample of special pleading. If ho wishes to learn the earnings of joint stock companies he has merely to read the Stock Exchange lists which are published in our newspapers every morning. He asked, “Do we want to know more about the scope there is in each industry for the further absorption of labour and capital, and to what extent men of small means can engage in each industry?” I say that we do. He also inquired, “Do we wish to know the hours of labour and rates of pay per hour obtaining in each industry?” I say that we do. We have never yet been told what are the average earnings of the wheatgrower in this country. Since our wheat producers constitute such a large portion of our population, it is high time that we heard -something about what they earn. The same remark applies to those who are engaged in the fruitgrowing and dairying industries.

Senator PRATTEN:
NEW SOUTH WALES · NAT

– How does “the wheat-grower compare with the coal miner ? That is what we want to know.

Senator LYNCH:

– The coal miner is one of the aristocrats of labour to-day. He bears down upon the Government, and, by virtue of the strategic position which he occupies, secures increase after increase in his wages, whilst the unfortunate wheat-grower, dairyman, or fruit-grower is unable to get any advance in his earnings.

Senator Russell:

– The wheat-growers have done pretty ‘ well. They have had an increase of more than 100 per cent.

Senator LYNCH:

– Has the wheatgrower to thank the Government for what he has obtained ? Is it not the world’s purchasers who buy his wheat? Did not the Prime Minister (Mr. Hughes) say that he would never consent to fixing the price of wheat at less than the world’s parity ?

Senator Russell:

– The farmer is. getting that to-day.

Senator LYNCH:

– He is getting it at long last. But it is ‘ the world’s competition which has awarded it to him. As a matter of fact, there are 250,000 wheat-growers in Australia to-day who have been computed to be receiving less than 6d. per hour, whilst the employees in other industries are earning 3s. and 4s. per hour. In these circumstances I affirm that one section of labour is being robbed. My desire is that a comparison should be instituted between the employees in our different industries. I have taken the first step towards remedying the evil of which I complain, irrespective of whether the Government .support me or not. The Minister for Defence exhibited “great tenderness in regard to Bolshevism. But he may go to any Stock Exchange list, and from it he ‘can learn exactly what reward capital is gaining in the coal mining industry, in banking operations, or in any other form of enterprise. So much for his special pleading. Broadly speaking, my object in submitting this motion is to ascertain what reward our rural industries have received in the past, and how capital invested’ in other industries is being rewarded. I desire to know how the mining industry, the wheat industry, the dairying .industry., and the fruit industry have fared. Is there anything wrong about that ? The Minister stated that an inquiry into these matters would be a most stupendous one. But, with all respect to him, my motion seeks information only in respect to seven industries - not in respect of all the industries of the Commonwealth. The result of its adaption would be to show us how advantages were flowing to one section of the community and flowing away from another section. My desire is to stop the present artificial drift. As the result of the starvation of our rural industries, population is steadily drifting -to our big cities. Consequently our urban populations have acquired an altogether undue portion of the legislative power of the Commonwealth to the disadvantage of the country districts. The leading cities of New South Wales, Queensland, ‘South Australia, and Victoria return to the other branch of this Parliament no less than twenty-four representatives out of a total of seventyfive. If that is -a creditable state of things I would like to be told about it. My aim is to ascertain why people are shunning the country and coming to our cities; but the Minister for Defence says that the Government are not prepared to make such inquiries.

Senator Pearce:

– I say that we are prepared to make inquiries, but we are not prepared to be bound by the terms of the honorable senator’s motion.

Senator LYNCH:

– I do not wish to bind the Government to any form of inquiry, but I do urge that same inquiry should be made in order that we may apply a cure to. these unquestionable evils. Need I repeat what I said in my opening speech upon this motion, that when I landed in Australia as a young man thirty-four years ago, I was advised by my best friends to go to the country. What is the position to-day?

Senator Pearce:

– If the honorable senator will give us his assurance that by the passing of this motion he will not hold the Government bound as to the form of the inquiry, I shall not ask for a division on it.

Senator LYNCH:

– Will the Government grant an inquiry?

Senator Pearce:

– The Government will take into consideration the form of inquiry with a view to collecting the information, but we cannot accept the motion in its present formas binding us to a particular form of inquiry..

Senator LYNCH:

– I am sorry if I misunderstood the Minister, but I am glad to think that the Government are going to take into -consideration the form of inquiry. I take it from the Minister’s interjection that the Government agree that an inquiry should be made, and intend to consider what form it shall take. I am delighted that some progress has been made in that way, and for reasons which I could further elaborate, but which, out of deference to the Senate, and in view of the recognition that the Government are vouchsafing to my proposal, I shall not detail, I am prepared to. let the matter stand, on the assurance that the Government have now given me.

The PRESIDENT (Senator the Hon T Givens:
QUEENSLAND

– Do I understand that the honorable senator wishes to withdraw the motion?

Senator LYNCH:

– Yes; on the assurance of the Government that they will take into consideration the form that the inquiry shall take, I ask leave to withdraw the motion.

Motion, by leave, withdrawn.

page 6667

APPROPRIATION BILL 1920-21

Bill received from House of Representatives.

Senator PEARCE:
Minister for Defence · Western Australia · NAT

.- I move, pursuant to contingent notice of motion -

Thatso much of the Standing and Sessional Orders be suspended as would prevent the Bill being passedthrough all its stages without delay.

I assure the Senate that I am not moving this motion with any idea of asking the Senate to push the Bill through either to-day or to-morrow. As we are endeavouring to close this part of the session next week, there will be ample time for the discussion of this Bill next week, but other Bills willbe coming up, and it may happen that in the later stages of next week we shall have to take advantage of this motion in order to get the Bill through. I propose today only to move the first reading, and will consent to an adjournment of the debate until to-morrow. I shall not even ask for the first reading to be concluded to-morrow, if it is the desire of honorable senators to continue the discussion next week. It is necessary, however, to move this motion at this stage in order that we may be able to pass the Bill later next week, when we are desirous of closing the sittings.

Senator KEATING:
Tasmania

– I hope it is distinctly understood that it is not the intention of the Minister to proceed to thepassing of the first reading to-night. This, I understand, is one of those measures on the first reading of which the debate may range at large. I trust, therefore, that the Minister will content himself with merely moving the first reading to-night, and allow the discussion to go over till tomorrow, and, possibly, next week.

Senator Pearce:

– That is my intention.

Question resolved in the affirmative.

Motion (by Senator Pearce) proposed -

That this Bill be now read a first time.

Debate (on motion by Senator Payne) adjourned.

page 6668

COMMONWEALTH BANK BILL

Message received from the House of Representatives that it had agreed to the amendments made by the Senate in the Bill.

Senate adjourned at 8.36 p.m.

Cite as: Australia, Senate, Debates, 18 November 1920, viewed 22 October 2017, <http://historichansard.net/senate/1920/19201118_senate_8_94/>.