Senate
31 July 1924

9th Parliament · 2nd Session



The Deputy President (Senator Newland) took the chair at 3 p.m., and read prayers.

page 2629

PERMANENT MILITARY

page 2629

QUESTION

FORCES

Superannuation Payments

Senator GARDINER:
NEW SOUTH WALES

– Speaking on the adjournment last night, I asked whether it was the intention of l5ie Government to introduce this session a measure to provide adequate pensions for certain officers of the Permanent Military Forces, non-commissioned officers, warrant officers, and others who have been retired on allowances which are altogether too small to support them. Has the Minister representing the Minister for Defence the information for which I asked?

Senator WILSON:
Honorary Minister · SOUTH AUSTRALIA · NAT

– The Minister for Defence has supplied the following answer : -

The question of the extension of the provisions of the Superannuation Act so as to provide adequate pensions for the officers and men of the Permanent Forces is receiving the earnest consideration of the Government. A scheme has been drawn up by the Defence Department, and has been submitted to the Superannuation Board for their consideration. It has now been referred to the actuaries for their report, and the Government has decided that it shall be dealt with as an urgent matter. It. is hoped that the necessary legislation will be introduced this session.

page 2629

PAPERS

The following papers were presented : -

Munition Supply Board - Second Report, from 1st July, 1922, to 30th June, 1023, together with Reports on Commonwealth Government Factories for year ended 30th June, 1023.

Northern Territory - Ordinance No. 16 of 1024 - Gaming.

page 2629

COMPENSATION CLAIM: WAR PENSIONS

Cases ob J. P. Dunk and W. W. Paine.

Senator WILSON:
Honorary- Minister · South Australia · NAT

(By leave.) - On the 16th July, Senator Gardiner drew attention to the case of J. P. Dunk, ex-munition worker, and I undertook to have inquiries made into it. I have been furnished by the Treasurer with the following precis on the matter : -

Dunk sailed for England in June, 1917, per s.s. Beltana. He alleged that during the voyage ho met with an accident. The Commonwealth legal advisers in London admitted liability, and as a result ho was paid 30s. weekly under the provisions of the Seamen’s Compensation Act, less an amount of 15s. weekly which he drew in respect of an old-age pension. This continued from the date of the accident until September, 1920, when he accepted a lump sum of £120 in full payment of the Commonwealth’s liabilities in respect of his injuries.

His old-age pension has been paid from 30th April, 1914, when he must have been at least Co years of age, i.e., the age of eligibility for pension. He would thus be at least 08 when applying for employment as a munition worker1. In spite of this, he gave his age as 54.

He has always been paid the maximum pension, excepting when payment was stopped to adjust overpayments made owing to misrepresentation - i.e., payment as munition worker exceeding the statutory limit of income under the Invalid and Old-age Pensions Act, and again for six months after conviction on a charge of stealing by finding.

At first Dunk refused to accept the £120, as he understood the old-age pension would be reduced to approximately 5s. weekly. On the case being explained to him, he begged to be allowed to accept the amount. In spite of this, he has twice applied to the courts on the grounds that the compensation was inadequate. In both cases judgment was given against him.

Although the history of the case points throughout to deliberate misrepresentation, Dunk has received generous treatment, both in regard to compensation and his old-age pension, and there seems to be no reason to warrant any further consideration being extended to him.

On fae same date Senator Grant drew attention to the case of ex-Lieutenant W. W. Paine. I understand that a full reply has been forwarded by the Treasurer direct to Senator Grant. Other claims for war pensions mentioned on the same date by Senators Gardiner and Lynch are receiving consideration, and I hope shortly to be able to supply to the Senate the details concerning them.

page 2629

QUESTION

UNEMPLOYMENT IN KALGOORLIE

Senator GRAHAM:
WESTERN AUSTRALIA

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

  1. Is he aware whether the Western Australian Government has allocated the sum of £7,000 to alleviate distress caused by the closing down of the Ivanhoe MineT
  2. If such assistance has been provided, and realizing the sacrifice made by the gold-mining industry during the war,, will the Federal Government also assist in relieving this distress ?
Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

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

  1. I have no official information.
  2. The Commonwealth Government has already considered the question of providing work for the miners thrown out of employment by the closing down of the Ivanhoe Mine, but it is regretted that Commonwealth works in Western Australia offer very little prospect of suitable employment for these men.

page 2630

QUESTION

WIRELESS BROADCASTING

Senator NEEDHAM:
WESTERN AUSTRALIA

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

  1. What are- the regulations governing wireless broadcasting?
  2. Are the regulations being observed?
  3. Are there any firms, organizations, or associations in Australia securing preferential treatment in connexion with .wireless broadcasting? .
Senator CRAWFORD:
Honorary Minister · QUEENSLAND · NAT

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

  1. The regulations governing wireless broadcasting are contained in Statutory Rule 1Q1’, dated 17th July, 1924.
  2. Yes, so far as the department is aware.
  3. No.

page 2630

QUESTION

BAB AUL : WHITE RESIDENTS

Income Tax Payments

Senator NEEDHAM:

asked the Minister for Home and Territories, upon notice -

  1. What is. the number of white residents, in Rabaul, New Guinea?
  2. How many of them are paying tax on incomes derived either from personal’ exertion or business- concerns? ‘ Senator PEARCE. - The answers to the honorable senator’s questions are: -
  3. The total white population of the whole Territory is 1,288, of whom about 250 are resident in Rabaul.
  4. The information will be obtained from the Administrator.

page 2630

QUESTION

POSTAL INSTITUTE, PERTH

Senator NEEDHAM:

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

  1. Has. the Postmaster-General promised to place on the Estimates a sum of £3,000 for the purposes 0/./ a. Postal Institute, in the. GeneralPost Office, Perth? .
  2. If so, has. such sum been, placed on the Estimates, for the- year 1924-25 ?
Senator CRAWFORD:
NAT

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

  1. There is no official record of any promise given by the Postmaster-General to nrovi’de £3,000 on. the Estimates for the Postal Institute at Perth.
  2. Although it was the intention of the department to make some provision for this purpose, it lias, unfortunately, been found impracticable to do- so.

page 2630

QUESTION

NEW GUINEA

Leased TRADING Stations.

Senator GRANT:
NEW SOUTH WALES · ALP

asked the Minister . for Home and Territories, upon notice -

  1. Is lie aware whether the payments (amounting to about 20 per cent, on the gross receipts) to- the Government by returned men, who have leased trading stations from the Expropriation Board, at Kaevieng, are causing grave discontent ?
  2. Will he take the necessary steps to set these charges aside, and thus free industry from such an impost?’
Senator PEARCE:
NAT

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

  1. No. The amount of ‘business tax is 1$ per cent, on gross annual earnings. Persons paying business tax are exempted from income tax, which is also at the rate of 1$ per cent. The fee for the issue of a trading licence, is. £2 per annum.
  2. See answer to No. 1.

page 2630

QUESTION

TARIFF BOARD

Duty on STRAWPAPER.

Senator GRANT:
NEW SOUTH WALES · ALP

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

  1. When did Mr. Herbert Brooks leave for England ?
  2. Did he resign his position on the Tariff Board ?
  3. Who brought before the Minister the question of removing strawpaper from the minor article list?
  4. Was the request referred’ to the Tariff Board?
  5. If so, who comprised the board meeting which considered the matter? fi. What was their recommendation?
  6. Which : members of the Tariff Board considered the request of R. G. Nail Limited (dated 6th February, 1924’),, to- have- strawpaper restored to the minor article list (item 404) ?
Senator WILSON:
NAT

– The information is being prepared.

Senator GREENE:
NEW SOUTH WALES · NAT

– I rise to order. Among the questions on notice answered to-day there is one by Senate- Arrant, which, unless I am. very much) mistaken, relates to what ‘is at present the subject of a Supreme Court writ in New South Wales. I understood the Minister to say that information would be obtained in regard to it.

Senator GRANT:
NEW SOUTH WALES · ALP

– What question is that?

Senator GREENE:
NEW SOUTH WALES · NAT

– The one relating to Mr. Herbert Brooks and the Tariff Board. I happened to see a statement concerning this matter in the press the other day, and I merely mention it so that the Minister may, in the circumstances, take what action he considers necessary.

Senator Wilson:

– I shall bring the matter under the noticeof the responsible Minister.

page 2631

QUESTION

CANBERRA CITY LEASES

Senator GRANT:
NEW SOUTH WALES · ALP

asked the Minister for Home and Territories, upon notice -

When was it decided to postpone the sale of the leases of building sites at Canberra till 25th October, 1924?

Senator PEARCE:
NAT

– This decision was reached on the 22nd July, 1924, and was announced in the press on the 26th July, 1924.

page 2631

QUESTION

AIRSHIP SERVICE TO BRIT AIN

Senator FINDLEY:
VICTORIA

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

What information, if any, does the Government possess respecting a statement in a cablegram which appeared in the press recently to the effect that two big airships of the Zeppelin type are being built by Vickers for the EnglandAustralia and the Australia-India services, and that the first-named journey will be covered in ten days?

Senator PEARCE:
WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

– Apart from the notification in the press,the Government has no information regarding this matter.

page 2631

DEFENCE EQUIPMENT BILL

Bill received from House ofRepresentatives.

Motion (by Senator Wilson) proposed -

That the bill be now read a first time.

The DEPUTY PRESIDENT (Senator Newland). - This is not a billwhich can be discussed on the motion for thefirst reading.

Question resolved in the affirmative.

Bill read a first time.

page 2631

POST AND TELEGRAPHRATES “ BILL

Bill received from House ofRepresentatives, and (on motion by Senator Crawford) read a first time.

page 2631

COMMONWEALTH BANK BILL

In committee (Consideration resumed from 30th July, vide page 2590) :

Clause 7 -

Sections eleven to fifteen, both inclusive, of the principal act are repealed, and the following sections inserted in their stead: - “11. - (1) The bank shall be managed by a board of directors composed of the Governor and seven other directors. “ (2.) Subject tothis act. the seven other directors shallconsist of -

The Secretary to the Treasury;

two persons who are or have been associated with manufacturing industries or commerce;

two persons who are or have been associated with agricultural, pastoral, or other primary industries; and

two persons who have a knowledge of currency and are declared by the Governor-General to have been chosen because of that knowledge. “12.- (1.) The Governor and a Deputy Governor shall be appointed by the GovernorGeneral, and shall hold office for a period not exceeding seven years, and shall be eligible for re-appointment. “ (2.) In the making of the appointments of the directors specified in paragraphs (b) and (c) of sub-section (2.) of the last preceding section, due consideration shall, as far as possible, be given to the fair representationof the geographical divisions of the Commonwealth. “ (3.) The directors specified in paragraphs (b), (c) and(d) of sub-section(2.) ofthe last preceding sectionshall be appointed by the Governor-General. “ (4.) Of the six directors first appointed in pursuance of paragraphs (b), (c) and(d) of that sub-section, one shall be appointed for a term of seven years, one for a term of six years, one for a term of five years, one for a term of four years, one for a term of three years, and one for a term of two years. “ (5.) Thereafter each director shall ‘be appointed for a term of seven years. “ (6.) Each person who is appointeda director shall, upon the expiration of the term for which he was appointed, be eligible for reappointment. “7.) In the event of the office of one of the directors specified in paragraphs (6), (c) and (d) of sub-section (2.) of the last preceding section becoming vacant otherwise than by effluxion of time, the Governor-General may appoint a director to that office for the remainder of the term for which his predecessor in that office was appointed. ‘ 12a.- (1.) The Governor shall be the chief executive officer of the bank. “ (2.) The Deputy Governor shall perform such duties as are directed by the board. “ (3.) The Governor and the Deputy Governor shall severally devote the whole of their time to the duties of their office. “12b. - (1.) In each principal city of the Commonwealth specified by the GovernorGeneral, by notice published in the Gazette, there shall be a local board of advice. “ (2.) A local board shall be appointed by the Governor-General, and shall consist of three members, at least one of whom shall, if practicable, be a director. “ (3.) The members of a local board shall, subject to this act, hold office for two years, and be eligible for re-appointment. “ (4.) Each local board shall have power to examine the affairs of the bank in the district specified in respect of it by the GovernorGeneral, by notice published in the Gazette. “ (5.) Each local board shall submit to the board of directors, at least once a month, a report in writing concerning the affairs of the bank . in the district in which it exercises its powers.

Upon which. Senator GREENE had moved by way of amendment -

That the word “ seven “, sub-section (1), of proposed new section 11, be left out. with a view to insert in lieu thereof the word “ five “.

Senator GARDINER:
New South Wales

– Honorable senators will remember that towards the close of the discussion of this clause last night, Senator Drake-Brockman seemed to convey the impression that I had made some comments in favour of the nationalization of the private banks. The nationalization of banking has been on the Labour party’s platform for a number of years, but if Senator Drake-Brockman cares to carefully peruse my remarks, he will find that I made it quite clear that, in my opinion, the Commonwealth Bank should make its way in fair competition with the private banks. It should be able to do that, because it has the credit and resources of the Commonwealth behind it. Only by more efficient, management and more effective trading operations could the Commonwealth Bank take over the bulk of the banking business in Australia.

Senator Thompson:

– That is what we usually find in connexion with government enterprises!

Senator GARDINER:

– Yes. As Senator Thompson states, that is what we usually find in connexion with government enterprises. It is delightful, in this instance at least, to find Senator Thompson in accord with my views. Although I did not say the things attributed to me by Senator Drake-Brockman, it would appear from that honorable senator’s comments that I should have said so. When the Commonwealth Bank Bill was before the Senate twelve years ago, I was opposed to the Government’s proposal - although it was the proposal of a Labour Government - of control by one man. There was . considerable diversity of opinion at the time. The idea in the minds of the members of the old Liberal party was that there should be a directorate of five; some favoured a board of three, but the Government’s majority was sufficient to enable them to provide that the bank should be controlled by ou« man. In perusing the records, I find that I voted against the management being placed in the hands of one man, and also against the board of five, but t supported a directorate of three. On this occasion my action will be somewhat modified, because I shall vote to leave out the word “seven,” which is being proposed with the intention of inserting “ five,” but if the opportunity is given me I shall move to insert the word “three.” Personally, I am quite prepared to admit that the Government’s proposal of 1911, which placed the control of the bank under one man, has been justified, although I am not prepared to say that the bank has done all that we expected it to do. The bank has carried out its work efficiently, and has been a much greater success than its opponents anticipated. It has shown us what can be done by the Commonwealth engaging in banking. There is another aspect of the Government’s proposals that the amendment desires to change. It is that the directorate snail be composed of men representative of diverse interests. That is one of the worst provisions of the bill.

The TEMPORARY CHAIRMAN (Senator Kingsmill:
WESTERN AUSTRALIA

– I do not think the honorable senator will be in order in referring to that matter at present. The amendment proposes to leave out the word “ seven “ with a view to insert in lieu thereof another word.

Senator GARDINER:

– As I am allowed only a quarter of an hour in which to make my speech, it is rather discouraging at the beginning of an argument to be reminded that that argument has no bearing on the amendment, when the amendment certainly has a bearing on the whole clause, which provides for t’he appointment of seven directors possessing certain qualifications. The amendment proposes to amend the clause in the direction of reducing the number of directors to be appointed. If the number is reduced the representation of interests provided for by the clause cannot be effected.

The TEMPORARY CHAIRMAN:

– So long as the honorable senator connects his remarks with the amendment in that way, he will be quite in order.

Senator GARDINER:

– When you, Mr. Temporary Chairman, have been a member of this committee sufficiently long to understand me - and I realize that it must be a lengthy process - I think you will find that I am never out of order in debate. It is very easy for any one who is not acquainted with my methods of reasoning to become possessed of a mistaken idea regarding the trend of my argument, and to rule me out of order before I reach the point I have in view. I was en- deavouring to show that the amendment, by aiming at a reduction in the number of directors to be appointed to the board, also has a bearing upon a later provision that those directors must possess commercial, manufacturing, pastoral, agricultural, and currency experience That, to my mind, is the very worst feature of the bill. A strong argument in favour of leaving out the word “ seven “ is that the lesser of two evils is to be preferred, and it would certainly be better to appoint five directors than it would be to appoint seven, in addition to the governor of the bank.

Senator PEARCE:
NAT

– This so-called evil will not be cured by reducing the number of directors to be appointed. That matter can be dealt with in another part of the clause.

Senator GARDINER:

– The evil will be minimized if we reduce the number of directors, as the Government then will not be able to give representation to as many interests as at present it proposes shall have representation. Whatever the number may be, the positions should be given to those who, by reason of their character, capacity, and attainments, are best fitted to fill them. Senator DrakeBrockman, I think, said that he favoured appointing sixteen directors, one to retire annually, in order to prevent a sudden change being made in the policy of the bank, and to guard against political influence being used. The clause itself leaves the way open for the use of political influence, because it provides that the appointments shall be made by the Governor-General. He will act on the advice of the Executive Council, the members of which hold political appointments. Nothing would be gained by appointing a large directorate with the object of tying the hands of a future Labour Government. If I held office in a Labour Government that had a majority in both Houses, and a directorate which was appointed by the present Government was doing its duty well, I would allow it to continue without interference and unhampered in any way. But if such a directorate were preventing the development of the bank in the direction desired by the people, a simple way of dealing with the matter would be to introduce an amending bill. If the present Government, which cannot be said to represent the people, possesses the power to introduce an amending banking bill, how much greater would be the power of a government that did re>present the people, to reduce the number of directors to what it considered was right and proper. To show that action is possible against a board of this description. I would refer honorable senators to what occurred in New South Wales some time ago. In that state the railways are managed by a board of commissioners. A Liberal Government with Sir Joseph Carruthers as Premier, becoming dissatisfied, introduced a bill to dispense with the services of one of the commissioners. The bill also contained a provision which took from that officer his right of appeal to the courts. I feel quite certain that the Labour party would not follow such a wicked precedent as that. I mention the matter merely to illustrate what can be done when the occasion warrants it. I have not from that day to this learned the reason for the action taken by the New South Wales Government. Strangely enough”,, the gentleman concerned did not appealagainst that action. A reason may be found in the fact that shortly afterwards the same Government, appointed him to another position in the public life of the state. Continuity of policy may be detrimental to banking, which is a. peculiar, business that requires to be directed by men who are highly trained and have a widen outlook combined with a quick perception. They must not merely follow the traditional lines laid down by centuries of safe banking, but they must be able to foresee^ an impending danger and be prepared to meet it. Therefore, I can see no virtue in appointing a board which, because of its solidity and strength, would follow set lines and provide/ a continuity of policy. On the other hand, very great disadvantages would attach to the appointment of a large number of directors. The officer changed with the management of the bank could carry out his duties much more efficiently if he knew that his policy would be approved. I realize that it is not wise, in connexion with government institutions,, in their infancy, to place too much power in the hands of one man. I think that the appointment of three directors would provide a happy medium. Those three should be the Governor of the bank, the Deputy Governor, and the secretary to the Treasury. That would be an excellent directorate for the- Commonwealth Bank, because the Governor and the Deputy-Governor would bring to the board a full knowledge of financial proposals without others interested being aware of what was contemplated. The Secretary to the Treasury would be well posted in matters of policy. He would inform the Treasurer and, through the Treasurer, the Government of the day, of what the bank was doing.

Senator GREENE:
NEW SOUTH WALES · NAT

– I should like to say a word or two in reply to some remarks directed against the proposal which I have submitted. Of course, it will be admitted on all hands that the change which the Government is making in the control of the bank is- a fundamental one. The Government proposes that control shall be taken from the Governor of that institution and placed in the hands of a board.. I have already indicated in the course of. the debate on this measure, that I arm in sympathy with the broad principles, of that proposal, but I am very doubtful whether the class of. directorate which the Government intends to set up is likely to be the most desirable in the interests of. the bank. The main consideration’ in connexion with the board is not that the men comprising it should be drawn from the various states of Australia; not that they should have been connected with certain industries or branches of commerce,, but that they should be fully qualified to sit, and able to sit, on the directorate of the bank. By this I mean that the directors should be on the spot from day to day, and from hour to hour, if their services were required.

Senator FOLL:
QUEENSLAND

– Is the directorate of any bank a vailable to that extent 1

Senator GREENE:
NEW SOUTH WALES · NAT

– Yes, surely. Take, for instance, the Bank of New South Wales.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– If the honorable senator’s ideas were adopted, thedirectorate would be drawn from, the city of Sydney.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not suggesting that.

Senator DRAKE-BROCKMAN:

– It is obvious that if they were to be available from day to day, and from hour to hour, they would have to be drawn from Sydney.

Senator GREENE:
NEW SOUTH WALES · NAT

– What I am contending is that if the board is to control the affairs of the bank, if it is not to be. merely an ornamental appendage of the bank, its members must be on the spot,, and available at all times. That, I think, is obvious and requires no argument. I ask Senator Drake-Brockman if the board were drawn from the various states - that is to say, suppose one man was in Cairns, another in Fremantle another in Adelaide, and another in Melbourne. and perhaps two in Sydney - how long would it take to get it together?

Senator PEARCE:

– That objection ismet by the provision for an executive within the board to deal with matters) that arise frequently for decision.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is where I disagree with the Minister. If we are to] have the benefit of control by the board1,’ surely we do not want control by an executive. v ‘

Senator Findley:

– According to the bill, the executive would have to take its instructions from the board.

Senator GREENE:
NEW SOUTH WALES · NAT

– That ia so,’ but the main thing is to get men fully qualified for the position and able, whenever required, to devote the whole of their time and attention to the work which they will have to perform.

Senator H Hays:

– In other states there may be men with higher qualifications, but if the board is to be available at all times, their services may not be forthcoming.

Senator GREENE:
NEW SOUTH WALES · NAT

– That may be so. The head office of the bank need not necessarily be in New South Wales. - . ‘Senator Drake-Brockman. - It is, in fact, in Sydney.

Senator GREENE:
NEW SOUTH WALES · NAT

– It is now, but it does not follow that it will remain there.

Senator Drake-Brockman:

– If the directorate were -in Canberra, the objection would still hold good.

The TEMPORARY CHAIRMAN (Senator Kingsmill:

– Order! I shall be glad if the honorable senator will connect his remarks with the amendment before the Chair.- , Senator GREENE. - I am endeavouring to do that by arguing that if we strike -out the word “ seven “ and insert the word “five” we shall get a board of perfectly competent men, able to do the work which Parliament will expect them to do.” If the directors are .scattered all over Australia, as is contemplated by this clause, the intention of the Government will, to a great extent, be nullified, for we shall leave the affairs of the bank in the hands *of the small executive which must necessarily dominate the meetings of the board when they are held from time to time. If members of the directorate are to be drawn from the various states, and if a member of the board living in, say, Perth or Fremantle, is required to visit the head office of the bank, be it in Melbourne or Sydney, more than once a month, the Government will be paying him £50 for every time he sits for a couple of hours at a meeting of the board.

Senator Pearce:

– Not for two hours only.

Senator GREENE:
NEW SOUTH WALES · NAT

– Ordinarily, a meeting of a board does not last very long.

Senator DRAKE-BROCKMAN:

– It de- pends upon, the business under discussion. We may assume that business which required the attendance of -a director living in Perth would necessarily deal with policy.

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not agree with my honorable . friend at all. The directorate will not be required to discuss only questions of policy. It should be constantly in touch with the whole of the financial operations of Australia, and able to use immediately the resources of the bank to the best advantage and in the interests of the people of Australia. The Government, as indicated in the speech delivered by the Treasurer in another place, proposes to transform the Commonwealth Bank and the Notes Board into a central bank, a bank of banks, a bank of issue, deposit, discount, exchange, and reserve. On page 5 ©f the Treasurer’s printed speech, we find the statement that it is not proposed that the bank shall enter into competition: with the’ other banks at all; that it shall sheer off that class of business and devote its attention and resources entirely to the business of central banking. That is what is contem.pllated, and to do that I .say that the bank must be controlled by a board that will really function. Ifc must not be a board to be called together only once in a while to’ discuss abstract questions of policy. It must meet weekly, and by functioning constantly, effectively control the affairs of the bank in the way best calculated to perform the highly important duties expected of it. The bank must be so con- tf trolled, if it is to be successful along the lines which the Government is proposing, although, personally, owing to the manner in which the bill is drawn, I very much doubt that it can. Nevertheless, let us give it a reasonable chance. The only way to do that is to have a compact board of thoroughly competent men, chosen for no other reason than their competency and integrity. A board is needed which can function constantly from day to day, and even from hour to hour, in times of crisis.

Senator Pearce:

– The board could do that whether five or seven appointments were made in addition to the governor.

Senator GREENE:
NEW SOUTH WALES · NAT

– I agree with Senator Drake-Brockman that there are dangers about this bank, but they are inseparable from a bank constituted -as this one is. The institution rests entirely on a political basis, and therefore dangers are inevitable.

Senator Drake-Brockman:

– The dangers may be minimized.

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not see that the appointment of a large board will minimize them. Senator Gardiner has properly pointed out that if the bank does not function in the way that the people desire it to function they will, through Parliament, be able to alter its constitution. There is no safeguard against that, nor can there be. If five men are appointed instead of seven, as proposed in the clause, the appointments may be made so as to spread over a period of seven years, just as easily as seven appointments may be made to spread over such a period. I must confess that I do not see any reason for the appointment of what I may call the currency directors. They will not serve any useful purpose. It would be much better to omit that provision altogether, and so leave only five appointments to be made.

SenatorREID (Queensland) [3.42].- The speech by Senator Greene is, to my mind, a strong argument in favour of seven appointments rather than five. On first glancing at the bill I thought that the Government was proposing too large a board, but I have taken the opportunity to ascertain the size of the directorates of various banking companies which are equally as important as we hope the Commonwealth Bank will be. My investigations have convinced me that a board of eight directors, inclusive of the governor, is small enough. The directors of the private banking companies have been re-appointed from time to time, and I have no doubt their experience has proved the wisdom of large directorates. Most of the banks that I have in mind have larger boards than that proposed by the Government for the Commonwealth Bank. It has been remarked frequently during this debate that the bank management has not used all the powers conferred upon it by the original act, and I believe that if a progressive directorate were obtained, steps would be taken to see that the bank exercised all its powers and also fulfilled the purpose of a central bank. The commercial world has been agitated for some time by the resistance which the Notes Issue Board has offered to the requests by private financial institutions that it should issue additional notes. Probably if that board had not been so small numerically, and if its members had had wider experience of the commercial world, they would not have adopted their present attitude. It appears to me that the matter of the issuing of notes may pass away to-day and return to-morrow. A directorate of eight would be in a much better position to give expression to the wishes of the commercial community in regard to the issue of notes than would be a smaller directorate, for the larger number of men would undoubtedly be in touch with wider interests than would the smaller number. As to the qualifications of the directors, I agree with the majority of honorable senators who have addressed themselves to this aspect of the subject, that we need men who are well acquainted with financial matters. A gentleman may be well informed in his own particular line of business, and yet know very little about the intricacies of finance. It is essential that the board of directors of the Commonwealth Bank shall be composed of financial experts. If gentlemen can be found who possess the desired industrial, manufacturing, agricultural, or pastoral knowledge, in addition to extensive financial experience, it would certainly be wise to appoint them, but the first requirement in these directors should be a thorough knowledge of finance. So far as I have been able to gather, the private banking institutions have not selected their directors or managers on account of their knowledge of agricultural, pastoral, or other industries, but on account of their financial ability.

Senator Foll:

– They have all had long banking experience.

SenatorREID. - That is so. The wisdom of appointing such men has been proved by the success of the private banks, especially since the financial collapse of 1893. One of the main reasons for that unfortunate happening was that the private banks in those’ days had authority to issue, for their own use, an unlimited number of notes. So many notes were issued that when large numbers of them were produced simultaneously for payment in gold the banks were unable to honour them. In those days I know that I could only get 15s. for 20s. notes. Some banks were offering 17s. 6d. In Queensland the Government ultimately guaranteed payment in full. We are not likely to have a repetition of that experience, for to-day the banks have practically to buy their notes, and care is taken to ensure that there are substantial reserve funds to meet any demands that may be made. If the board of directors of the Commonwealth Bank is to have power to issue notes, it is essential that it should be composed of men who have a thorough knowledge of the commercial necessities of Australia, and particularly the seasonal requirements, for after all, Australia’s financial needs are largely governed by seasonal conditions. It would be wise to have the larger board, also, in order that difficulty may not be experienced in obtaining a quorum. If the committee agrees to the Government proposal to have at least one director m each of the capital cities of Australia, it will be almost essential to have a largo directorate, for it will not be practicable for, say, the director in Brisbane, or Perth, or even Adelaide, to get to the bank’s head-quarters frequently to attend , board meetings. For* the reasons given I favour the clause as it stands, and shall vote against the amendment.

Senator FINDLEY:
Victoria

– I give notice that I intend to move a further amendment that the number of directors be three. If I had my way, I should have the bank managed as it has been since its inception, by one man. The institution has won the approbation of the people of the Commonwealth. It has passed through a war period never previously experienced in Australia. Any justification for strengthening its management would have been demonstrated during that period, but it passed successfully through that time of difficulty, under the control of one man. Therefor, I fail to see the necessity for making any alteration at this stage in respect to it management.

Senator Ii Hays:

– The functions of the bank will be widely extended when this bill becomes law.

Senator FINDLEY:

– Additional duties can now be undertaken by the bank more easily than they could have been in the earlier years of its existence; I could understand a proposal to strengthen its management if it had proved a failure or if any fault could be found with its administration, but the bank has proved itself, and no fault has been found with its conduct. How can seven directors, who meet monthly, strengthen the institution We do not know what the special qualifications of the directors will be, except that two of them, if the bill is passed in its present form, will be associated with agricultural or pastoral industries, and. two others will have a knowledge of currency. I am afraid that the directors who possess these qualifications will spend their time discussing currency and other matters without doing anything to bring about the substantial progress of the bank. Many prominent men are offered positions as directors of companies, because the promoters of those companies realize that their services will be of value to the concerns with which they become associated. But ornamental directors will not be required for the control of the Commonwealth Bank. We shall not get the best men to devote the greater part of their time to the bank unless the directors meet more frequently than once a month. It would not pay any person engaged in a big way of business to neglect his private affairs to attend even monthly meetings of a board. The directors appointed might have an unconscious bias against government institutions. They might not approach their duties with absolutely unprejudiced minds. If directors are to be appointed, we should pay substantial salaries to get the best men, and we should requisition their services weekly, or, as Senator Greene suggests, have them always available at a moment’s notice. The Victorian railways are managed by three commissioners, who are appointed for four years. Can any one compare the work which they perform with that which is to be undertaken by the directors of the Commonwealth Bank? The Victorian Railways Commissioners, who control railways which cost £63,000,000, and cover 4,300 miles of line, employ nearly 27,000 persons. The gross earnings of the railways under their control is £10,750,000 a year.

Senator Pearce:

– The Labour partyis waiting on the Victorian Minister for Railways to-day, to ask that the number of commissioners be increased to four.

Senator FINDLEY:

– That is in order to give the employees a voice in the management of the service.

Senator H Hays:

– A moment ago the honorable senator was arguing that merit should be the only consideration in the appointment of directors.

Senator FINDLEY:

– Would the honorable senator say that among 27,000 employees there is not likely to be one with qualifications that would fit him to be a commissioner of railways? Most railway commissioners have risen from the ranks. The latest case in proof of that lis the appointmentof Mr. Miscamble, who rose from the ranks to the position of a commissioner of railways in Victoria, and has just been appointed to a similar position in Tasmania. As Senator Greene has put up an excellent case in favour of his amendment to reduce the number of directors to five, there is every reason to believe that the committee will agree to amend the clause in that direction, but I am hopeful, that at a later stage, they will go still further, and support my amendment to reduce the number to three. I think also, that the period of appointment should be limited to three years. If the directors knew that their appointment would depend upon their capacity, they would endeavour, during a short term of appointment, to do their very best to justify their reappointment.

Senator Pearce:

– Very reluctantly I rise to a point of order to draw attention to the fact that the period of appointment is not the question before the Chair.

The TEMPORARY CHAIRMAN (Senator Kingsmill:

– The honorable senator is straying outside the scope of the amendment.

Senator FINDLEY:

– I did not think I was out of order in making passing reference to the period of appointment. I should like to know what object the Government have in view in proposing that two of the members of the proposed board shall be, or have been, associated with manufacturing industries or commerce, and that two shall be, or have been, associated with agricultural, pastoral, or other primary industries. Is it to placate a certain section of the community,, irrespective of whether the persons are . qualified to fill the positions to which they are to be appointed ? We all know that certain influences, which are not in the best interests of the Commonwealth, are being exercised to-day, particularly in relation to freetrade, and to which I, as a protectionist, object. Are persons to be appointed to the board simply because they are associated with particular industries?

The TEMPORARY CHAIRMAN (Senator Kingsmill:

– The honorable senator has exhausted his time.

Question - That the word proposed to be left out (Senator Greene’s amendment) be left out - put. The committee divided.

AYES: 12

NOES: 13

Majority . . . . ‘ 1

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator FINDLEY:
Victoria

.I intimated to the committee at an earlier stage that in the event of Senator Greene’s amendment being defeated I would move to substitute for the word “ seven “ the word “ three,” so that the committee would provide for the bank being managed by a board of directors comprised of the governor and three other directors.

The TEMPORARY CHAIRMAN (Senator Kingsmill:

– The committee having decided that the word “seven” shall stand, the honorable senator cannot now move such an amendment.

Senator GREENE:
NEW SOUTH WALES · NAT

– I move -

That all the words after “ Treasury “ in sub-section 2 of proposed new section 11 be left out.

If these words are left out, I shall then move to insert other words. I have already indicated my intention to prevent, if possible, members of the board from being selected from persons following any particular avocation or calling. The Government should be left perfectly free to make a selection from whatever section they think most desirable, in order to secure the services of men best fitted to control this institution.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I do not wish to labour the question, because up to the present progress has been very slow. Senator Greene has already fully explained his reason for submitting this amendment, and I have stated why, in the opinion of the Government, it should be opposed. The vote on this amendment will not be regarded as vital. The Government, however, think that consideration ought to be given to the qualifications specified in the clause. I do not wish to be discourteous to honorable senators, but I do not think there is any necessity to repeat what I have already said in discussing this provision.

Senator GRANT:
NEW SOUTH WALES · ALP

– I intend to support the amendment moved by Senator Greene, and if it is carried I hope the Government will not overlook the fact that it is customary, in many instances, to give employees in institutions such as this representation upon the board of management. I trust the Government will give consideration to the desirability of selecting one, if not two, of the bank’s employees to act upon the board.

Question - That the words proposed to be left out (Senator Greene’s amendment) be left out - put. The committee divided.

AYES: 12

NOES: 10

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to..

Senator GREENE:
NEW SOUTH WALES · NAT

– I move-

That after the word: “ Treasury “ in sub section 2 of proposed new section 11, the following words be inserted: - “ (b) six other persons who are orhave been actively engaged in agriculture, commerce, finance, or industry.”

Senator Pearce:

– I agree to accept that amendment.

Senator GREENE:
NEW SOUTH WALES · NAT

– All I want to ensure is that men of experience shall be appointed, without providing that two shall be taken from one section, two from another, and two from another. I am. particularly antagonistic to the appointment of two currency directors. The elimination of the reference to currency directors in this portion of the clause will put that matter right. I do not know any field from which men of experience may be drawn that is not covered by my amendment.

Senator GARDINER:
New South Wales

– I suggest that a blank be left in the clause, and that it be filled by the Government at its leisure with something less objectionable than the proposal contained in the amendment.

Senator LYNCH:
Western Australia

– The original provision having been rejected I shall vote for the amendment, although it does not coincide with my views of the form that the clause should take. I have given notice of an amendment to provide that one of the directors shall be skilled in currency and shall also be a wage-earner by occupation.

Senator Pearce:

– Is not a wage-earner actively engaged in industry?

Senator LYNCH:

– The person appointed, because he has a knowledge of currency, may not be a wage-earner in an industry. According to my reading of history no section of any community has suffered so much as the wage-earner from the irregular or bad control of the currency. That great American jurist, Daniel Webster, once said that nothing has fertilized the rich men’s fields so much with the sweat and tears of the poor man than the inflation of the currency. The poor man is always the last to receive the reward of his labours when markets are rising and prices are soaring. When he reaches the peak and begins to descend he is faced with inconstant employment, idleness, and poverty as the result of the disorganization of industry.

If we provide for the agricultural, pastoral, commercial and financial interests, why should we not provide for that section of the community that stands to lose most by the mismanagement of the currency? I, therefore, intimate that I intend to move the addition of those words to the amendment proposed by Senator Greene.

The TEMPORARY CHAIRMAN:

(Senator McDougall). - I point out to the honorable senator that if the amendment is carried he will be at liberty to move the addition of other words.

Senator FINDLEY:
Victoria

– I was under the impression that Senator Greene had something more definite in view when he secured the deletion of paragraphs b, c, and d. There is very little difference between the amendment and the original proposal.

Senator GREENE:
NEW SOUTH WALES · NAT

– There is a very material difference.

Senator FINDLEY:

– There is not a great deal of difference. If I followed the honorable senator correctly, his view is that, in the selection of the gentlemen who are to be appointed as directors of the Commonwealth Bank, the field of choice should not be restricted.

Senator GREENE:
NEW SOUTH WALES · NAT

– I agree with that.

Senator FINDLEY:

– By this amendment the honorable senator proposes to restrict the field. Applications should be invited, and the government of the day should be the best judges of who are most fitted to fill the positions.

Senator Drake-Brockman:

– The amendment might prevent the appointment of a bookmaker.

Senator FINDLEY:

– It would exclude a lawyer, because such a profession is not mentioned. Apparently, Senator Greene has a very poor opinion of those who are engaged in the legal profession, because he practically says that they do not possess the qualifications necessary to fit them for appointment to the directorate. The amendment shuts out the medical profession, and, therefore, would even exclude from appointment the Commonwealth Treasurer, who is a medical man. Why have a restricted choice? Why not have the field wide and open ? That there is little or no difference between this proposal and the original provision was shown by the readiness of Senator Pearce to accept it.

Senator Pearce:

– We want to get on with the business.

Senator FINDLEY:

– So do we. We want the bank to make progress. That will not be possible if the best men are not charged with its management.

Senator KINGSMILL:
Western Australia

– I support the amendment because it approaches most nearly to the board desired by Senator Findley. It offers an absolutely wide field. It does not affect lawyers in any way. The French have a phrase by which they refer to a certain class of persons as chevaliers d’industrie - knights of industry. I think that the lawyers might come within that definition, although it is not particularly applied to them. However, I leave honorable senators to look up the meaning of the phrase for themselves. Without being unduly strained, I think the definition can be taken to include lawyers. I believe in having the field of choice as wide and as unrestricted as possible. Prior to the leaving out of certain words, the field was restricted. I believe that an occupational restriction is as bad as the geographical restriction which is proposed later in the clause, and each merits equal condemnation. The amendment, to my mind, is an admirable one, which covers every class in the community/ Those who are not engaged in finance or commerce are, at all events, engaged in industry of some kind or other. I believe that the Leader of the Senate is thankful to Senator Greene for having moved the amendment.

Senator GARDINER:
New South Wales

– Before any divisions took place on the clause, I protested against the restriction of the selection to any interest. The fact that Senator Lynch intends to propose that wage-earners shall have representation on the board is an example of how wide we are getting in our view of what is required. The Government would secure the more speedy passage . of the measure if it did not accept amendments that in any way narrow its opportunities for making appointments. That i« the effect that this amendment will have. Senator Findley deserves to be congratulated for having pointed out that it will close the door against the appointment of lawyers. Possibly, many other people who are not mentioned also will be shut out, because they do not come within the scope of the amendment. The suggestion that a blank be left in the clause is a most reasonable one. Senator Greene, doubtless, was surprised to find that the number of honorable senators supporting him was sufficiently large to enable a blank to be left in the clause. I can only conclude that the form of. the amendment is due to the haste with which it was drafted, on account of Senator Greene’s natural excitement at having won such a victory over the Government.

Senator GREENE:
NEW SOUTH WALES · NAT

– It was not a victory over the Government.

Senator GARDINER:

– I have no doubt that the fact that the Treasurer will be debarred from appointment will give a good deal of satisfaction to Senator Greene.

Senator GREENE:
NEW SOUTH WALES · NAT

– It is not without its compensations. We will put it that way.

Senator GARDINER:

– I do not mind how it is put so long as I keep in touch with the honorable senator’s sympathies. Why should a man’s occupation have any bearing upon appointments of this kind? The Government should take responsibility for the appointments, and reserve to itself the right of free selection. For this reason I do. not favour any restriction. The matter should be left entirely in the hands of the government that will make the appointments. Otherwise we can imagine what may occur at a meeting of the Cabinet. One Minister might suggest a certain man for appointment to the board, and another Minister might ask what sectional interests he represented. An inquiry might disclose that the person nominated was shut out by the definition. The Government would be well advised to allow the clause to pass with the blank created, and fill it in at their leisure. In that way the business of the Senate would be expedited. I do not know how many amendments the Minister has to move, but I think there are at least 40 or 50, and in addition to others which have been circulated by honorable senators, we get unofficial amendments,’ that suggest themselves suddenly to us, but which may be far-reaching and very important. The committee, therefore, should pass the clause with the blank created in it. If necessary, it could be recommitted. The Minister, in the meantime, might see the advantage of the Government having a free hand with regard to the proposed appointments. Personally, I have not had time to consider the amendment, but so far as I am able to judge, it is opposed to my idea of how the appointments should be made. In my opinion, men should be selected because of their fitness for the position, irrespective of every other consideration. Using the illustration employed by Senator Lynch, I may be permitted to suggest that Senator Greene’s amendment panders to the agricultural or commercial interests of the country. Why should any sectional interests have this special concession ?

Senator Drake-Brockman:

– The honorable senator is broadening in his views.

Senator GARDINER:

– The breadth of an outlook that is disinclined to inelude in our legislation any narrowing sentiment is a, breadth that I reached at a very early age in my public career. I have never yet recognized sectional interests, and I never shall. Why not pass the clause as amended, and leave the Government free to appoint men best suited for the work they will be called upon to perform? If we restrict the appointments in the manner suggested, we shall be including in our legislation a pernicious principle to which I am strongly opposed. If men, because of their knowledge of finance, are to be appointed, I have inmind the possibility of a man whom I regard as an interesting personage being ineligible for appointment. I refer to J. W. Scott, the author of an interesting pamphlet known as The Circulating Sovereign. I do not know whether he would be considered an authority in financial matters, but I should say that he is.

Senator Duncan:

– Equal to most of them, at any rate.

Senator GARDINER:

– Superior, in my opinion, to most of them. I do not think it is likely that the Government could appoint any man with a greater knowledge of currency and the circulation of money than the gentleman to whom I refer; but I suppose that if a man of his character were available the Government, being restricted by this definition, could not appoint him. I do not intend to vote for the inclusion of any such provision in the bill. The objection raised by Senator Lynch appeals to me as a representative of the working classes, but I suggest that in these matters we do not want to consider sectional interests at all. If, however, sectional interests are to be represented, I can think of quite a number of amendments that appeal to me as most desirable. The Minister, if he accepts this amendment, instead of expediting the passage of the bill will go a long way in the direction of inviting from honorable senators on this side amendments representing sectional interests that are really worth consideration, and which, if submitted, would necessitate honorable senators supporting the Government voting in the division against those interests. Senator Greene’s amendment, in my opinion, has not received sufficient consideration.

Senator GREENE:
NEW SOUTH WALES · NAT

– I drew it up some days ago in anticipation of being able to carry the amendment which has just been accepted by the committee.

Senator GARDINER:

– The only qualification which the Government should seek in a man for a position on the board is his fitness for the job. If the amendment now before the committee is accepted, it will have to go before another place, and possibly the Treasurer himself will be shut out from appointment by this limitation.

Senator Duncan:

– No, because he is engaged in financial transactions.

Senator GARDINER:

– I suggest that a man who, like the Treasurer, has been bungling the finances of this country for the last eighteen months, might very well be shut out from appointment to any bank board. I hope that the Government will not accept the amendment. If they do, I am satisfied that I shall be able to submit a number of similar amendments.

Question - That the words proposed to be inserted be so inserted (Senator Greene’s amendment) - put. The Committee divided.

AYES: 16

NOES: 8

Majority … … 8

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Senator LYNCH:
Western Australia

– I move -

That after the word “ industry “ in paragraph (6) of proposed new section 11 as amended, the words “ including one who shall have a knowledge of currency and be a wageearner by occupation “ be added.

I shall not repeat the reasons that I gave previously why there should be on the board a person with a knowledge of currency, who will represent the section of the community that will lose most heavily if the currency is not regulated in a sensible and sound way. I move the amendment for the reasons that I then gave.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I invite the committee to reject the amendment. If a wage-earner can. be found who has a knowledge of currency, and is suitable for appointment as a director of the bank, he may be appointed under the definition, “ experienced in industry.” Nobody is more experienced in an industry than the men who are working in it.

Senator Lynch:

– That definition is too vague for me.

Senator GARDINER:
New South Wales

– I am rather glad to find that Senator Pearce is so open-minded and candid. He willingly accepted an amendment by Senator Greene which will result in the appointment of a pastoralist, but he is unwilling to accept an amendment by another of his colleagues which, if agreed to, will ensure the appointment of a wage-earner.

Senator Drake-Brockman:

– Wageearners are covered by the definition already in the clause.

Senator GARDINER:

– Although Senator Lynch represents the same class of the community as Senator DrakeBrockman, he does not think that provision has been made for the appointment of a wage-earner. The arguments that I used against the appointment of a representative of the pastoral interests apply with equal force against the appointment of a representative of the wage-earners. But I am chiefly concerned at the moment in revealing the attitude of mind of Senator Pearce. A few moments ago he willingly accepted an amendment which cleared the’ way for the appointment to the board of a representative of the class he represents, but he now draws a marked distinction between pastoralists and wage-earners. The wage-earners of this country outnumber the pastoralists by millions, and it is just as likely that there are, proportionately, as many wage-earners as pastoralists in the community with qualifications which would justify their appointment to- the board. But the Minister is willing to overlook hundreds of thousands of wage-earners, and appoint a representative of the few pastoralists. Our object should be to provide for the appointment of the best men obtainable, irrespective of sectional interests. Senator Pearce’s reasons for rejecting the amendment may satisfy his supporters, but they do not satisfy me. I suppose that he has a sufficient number of followers behind him to cause the amendment to be defeated. His refusal to accept it is in accord with previous actions of the Government’ of which he is a member. He and the Government have frequently drawn invidious distinctions between sections of the community, and this is an additional illustration of the length to which they are prepared to go in that respect. We have no right to draw distinctions between different classes of the community in dealing with legislation. The application of that principle to the appointment of a board of directors for the Commonwealth Bank is particularly objectionable.

Senator Elliott:

– That is a very good doctrine. I am surprised to hear Senator Gardiner enunciating it.

Senator GARDINER:

– And I am surprised that the honorable senator is in his place in the committee to hear me enunciating it ! The representation of sectional interests in legislation like this is altogether undesirable. But, seeing that the Government has agreed to the representation of the pastoral interests, it could hardly be expected that I would sit down quietly wheal it absolutely refused to give any consideration to the wage-earning community. The one thing that keeps the Government together, and the one bond which unites the National and Country parties, is antipathy and opposition to the working class. The Government, and the National and Country parties which support it, fear the wage-earners and the wage-earners’ representatives. J am rather surprised that Senator Lynch has not shown more knowledge of the inner workings of his party than to introduce an amendment like this.

Senator Lynch:

– I did not raise the party issue..

Senator GARDINER:

– Then I would like to know what issue the honorable senator did raise. He must realize by now that the wage-earners can expect very little sympathy from the . party to which he belongs, and the other party which supports the Government.

Senator Foll:

– The brothers will now all sing “The Red Flag.” .Senator GARDINER.- And I have no doubt that if they did they would be expressing more loyalty to it than Senator Foil is capable of expressing in respect of anything.

Senator Foll:

– I thank the honorable senator for that remark. It is just what I might have expected from him.

Senator GARDINER:

– The honorable senator had a right to anticipate something like it for making his foolish interjection. I cannot sing “The Red Flag,” for Providence has not endowed me with the capacity to sing two lines, or even two notes, musically. But if I cannot sing, I can stand true to my convictions and principles. Senator Foil has shown that he cannot be true to any principle for 20 minutes at a time. His best friends do not know how he will vote on anything. I do not think that he knows himself until the whip is cracked and he is dragged behind the Government.

page 2643

THE TEMPORARY CHAIRMAN

(Senator McDougall). - I ask the honorable senator not to be drawn away from the subject before the chair by irrelevant interjections.

Senator GARDINER:

– If you, sir, will protect me from irrelevant interjections, I shall try to confine myself to the measure under discussion. Senator’ Lynch moved his amendment in order to make sure that a representative of the wage-earners should be appointed to the board of directors if one with sufficient qualifications could be found, but Senator Pearce will not agree to it. He says, in effect, “We will accept a representative of the pastoralists, but not of the wageearners.” I am, therefore^ compelled, against my principles, to ask the committee to divide on the amendment, for it is necessary to show the country just how far honorable senators opposite will go in their desire to represent sectional interests, and, at the- same time, to demonstrate their opposition to anything that is calculated to assist the wage-earners.

Senator Thompson:

– We are not against the wage-earners. We contend that they are covered by the use of the word “ industry.” We are quite consistent in our attitude.

Senator GARDINER:

- Senator Lynch does not think the position is sufficiently clear, and therefore he has moved this amendment.

Senator Lynch:

– Hear, hear !

Senator Thompson:

– I cannot help what Senator Lynch thinks.

Senator GARDINER:

– Honorable senators who know Senator Lynch well will realize that if he has a doubt about the right of a wage-earner to be appointed to the board under the clause as it stands, there is a good deal of room for doubt. No member of the committee is keener than he to mark a distinction, and to anticipate possible trouble. His zeal in noticing distinctions of this kind has frequently brought me into conflict with him, and for that reason I appreciate fully his motive in moving the amendment. He feels that unless his amendment is included in the clause there is a danger that the largest section of our community will be overlooked when the directors of the bank are appointed.

Senator Thompson:

– Is it not the trouble that he has, in this case, usurped the functions of the Leader of the Opposition 1

Senator GARDINER:

– I do not think so. I made it quite clear previously that I objected to the representation of sectional interests on the proposed board of directors, but in view of the attitude of the Government on the matter, I am forced to support the amendment. I may as well inform the committee that in my opinion the workers are immeasurably better informed on financial matters generally than are the pastoralists, and are as well qualified as are the pastoralists to act as directors of the bank. When an opportunity is afforded by an honorable senator opposite to let the Government and the people outside see, by a division in the Senate, that the accepted opinion of pastoralists and financiers might not be that of wage-earners, I am prepared to be as inconsistent as possible by supporting that honorable senator in having a division taken on those lines.

Senator KINGSMILL:
Western Australia

– The honorable senator who leads the Opposition is somewhat labouring under a misapprehension in regard to the amendment. The proposal is to have a wage-earner with currency experience appointed . Senator Greene’s amendment referred to persons experienced in agriculture, commerce, finance, or industry, but they were not specifically to be employers. Wage-earners qualified by their experience in agriculture, commerce, finance or industry were to be just as open to selection as their employers. Therefore, wage-earners are already fully qualified for appointment to the board of directors of the Commonwealth Bank; but as I think it will be somewhat difficult to find a wageearner with a sufficient knowledge of currency to enable him on account of that knowledge to occupy a seat on this board, I shall oppose Senator Lynch’s amendment. The field is left open to every one. That being so I do not think we should be in the position of the American who said he wanted the whole world “ and then some.” Senator Lynch’s amendment is the “ then some.” I do not believe in overpainting the picture or in gilding refined gold.

Senator LYNCH:
Western Australia

– I do not agree with Senator Kingsmill that a wage-earner could be selected just as readily as an employer from any of the activities mentioned in Senator Greene’s amendment. I cannot imagine a. wage-earner being chosen from one of the financial institutions of the Commonwealth or from commercial circles.

Senator Kingsmill:

– He could be chosen if he had sufficient experience.

Senator LYNCH:

– We all know that it is not intended to appoint a wage-earner from the general community, but now that the committee has decided to specify four staple industries as a field of selection, I am proposing a further subdivision. The section of the community that rightly deserves representation on the board of directors of the Commonwealth Bank is the wage-earning section, which history proves has suffered more than any other from the maladministration and the bad control of the currency of a country. I suppose that I have read as many books on currency in the Library as has any other honorable senator, and the one outstanding lesson I have extracted from those books is that in every community it is the wage-earning section that suffers from the bad management of the currency. Now that we are proposing to create the “ high command “ of the Commonwealth Bank we should introduce into it a representative of that element, which would suffer most from the bad management of the institution in the exercise of its control of the currency. Senator Gardiner went astray by introducing a reference to party politics. I believe that honorable senators on the ministerial side represent as many wage-earners as do honorable senators opposite. My object in submitting my amendment is to have on the board of directors of the Commonwealth Bank some one who will see that the interests of those who suffer most in any time of crisis are properly guarded when the critical hour comes.

Question - That the words proposed to be added be so added (Senator Lynch’s amendment) - put. The Committee divided.

AYES: 9

NOES: 0

Majority . . . . 7

AYES

NOES

Question so resolved in the negative. Amendment negatived.

Senator GRANT:
NEW SOUTH WALES · ALP

.- I moveThat, after the word “industry” in paragraph lb) of proposed new section 11 as amended, the words “ including one recommended by the bank employees “ be added.

My object is to give to the employees of the bank the right to recommend some person who in their opinion it is desirable to place on the board of directors. I take it, of course, that if my amendment is agreed to the Government will appointto the board of directors the person so nominated. My proposal is a departure in banking, but it is admitted that the whole of the banking experience of the Commonwealth has completely failed to grapple with the exchange position. It has also to be admitted that on more than one occasion some of the banks in this country would have failed had it not been for the support accorded them by the state governments, which shows conclusively that those in control were incapable of efficiently conducting financial operations. That cannot be denied by any one, because the records show quite clearly that owing to the inefficiency and incompetency of the banking fraternity depositors doing business with the banks in this city lost approximately £14,000,000.

Senator J B Hayes:

– And I suppose that would not have happened if, say, a messenger had been on the directorate.

Senator GRANT:
NEW SOUTH WALES · ALP

– At any rate, the calamity was not averted by the directors who were in charge of banking operations at that time. To a lesser extent, owing to the incompetence of bankers in the city of Sydney, the depositors lost approximately £5,000,000. Taking into consideration the whole of the facts in connexion with banking in Australia, it will be found that £30,000,000 has been lost by depositors. I do not know whether a somewhat similar financial crisis is in evidence at present, but we are quite certain that for a considerable time it has been difficult for those who desire to extend their businesses and to obtain accommodation from the banks to have their requirements met. This condition has been brought about, notwithstanding the fact that there is not an employee of any of the Australian banks on the directorates. If provision is made in the direction I indicate it may be’ said that the Commonwealth Bank will be .handicapped to some extent in competing with other banks, which, have the right to select their directors from persons who, in their opinion, are competent to do the work. It is not uncommon, however, in modern industrial concerns, for employees to have a voice in the management, and the appointment of one employee recommended, and in effect appointed by his ‘ fellow employees, would have a good effect,” inasmuch as it would be the means of rapidly, effectively and permanently overcoming any differences that might arise between the employees and the management. It is of great importance in a big financial institution such as the Commonwealth Bank, the operations of which we hope will extend, that the employees shall work in complete harmony with the management. As my amendment, if adopted, would have a beneficial effect in that direction, I trust it will have the support of a majority of the members of the committee.

Senator PEARCE:
Minister for “Home and Territories · Western Australia · NAT

– I trust the committee will not support the amendment moved by Senator Grant. The employees are not the owners of the bank.’ In common with all other taxpayers of the Commonwealth they are only part-owners, and, therefore, have no more right to be in a privileged position in regard to the management of the bank than any other section.

Senator Gardiner:

– Would that not also apply to agriculturists, pastoralists, and others to whom consideration is being given ?

Senator PEARCE:

– No particular section of the community owns the Commonwealth Bank.

Senator Gardiner:

– Why include sections ?

Senator PEARCE:

– No section is included, but persons experienced in these particular industries, which cover practically the whole of the Commonwealth, will be selected to act upon the board. In the cases mentioned by Senator Gardiner, the choice is left in the hands of the Government, which is responsible to a Parliament elected by the people. The proposal now under consideration deprives Parliament of that right and places the employees of the bank before the people of the Commonwealth, by giving them tho right to select a member of the board of the” bank which belongs to the whole of the people of Australia.^

Senator GARDINER:
New South Wales

– There may be something in the argument of the Minister (Senator Pearce), but if the employees of the bank were given the right to select a representative, they would not be more favorably situated than other sections. We would be merely giving them the same right . that the Government have agreed to give in regard to agriculturists, pastoralists, and financiers.

Senator Pearce:

– Those sections will not select their representatives.

Senator GARDINER:

– Perhaps not. If this amendment were amended to make it agree with the wording adopted in regard to the representation of other sections would the Minister accept it?

Senator Pearce:

– No, because the position is covered by the words “ experienced in finance:’ Men experienced in finance in the bank’s employ would be eligible.

Senator GARDINER:

– It is difficult of course for some of us to keep in touch with modern progress. We have passed the days of the stage-coach and railway trains, and now have to keep pace with flying machines. Senator Grant is one of those fortunate mortals who can keep in touch with democratic development in a most amazing way. Reference to job control would probably -be objectionable, but something should be said on behalf of the people who have to do the work. Therefore if we admit the fact, which I do, that the people who do the work should have a voice in the. conditions under which their duties have to be performed, the employees should be given representation on the board. I can see no” objection to the principle, which is a good one, but whether it would be wise to support it here, I do not know. It certainly doe3 not differ greatly from the proposal” submitted by Senator Lynch or that accepted by the Minister. Being satisfied that these short cuts are really the longest way round, I shall not take up the time of the committee, but if a division is called for I shall support the amendment.

Senator GRANT:
NEW SOUTH WALES · ALP

– It is merely suggested that we should give the employees of the Commonwealth Bank the right to nominate one member of the board. A representative of the employees, if elected, would have to sway the opinions of six other members before effect could be given to any proposal he submitted. If there is any one in the community who ought to be’ skilled in finance it is those engaged in the business of banking. The Government do not appear to have any objection to sections being represented - in fact they suggested that some of the directors should be selected from men engaged in certain industries - and the only difference between the proposal I have submitted and that originally made by the Government, is that those in the business I have mentioned would make the nomination. I do not know whether the Government intend that those engaged in agricultural or pastoral pursuits or associated with commerce or industry, shall make the nominations or whether that will be the duty of the Government. When these appointments are under consideration those engaged in the industries specified in the bill will find a means of advising the Government who, in their opinion, are best fitted forthe positions. The only difference between the appointments to be made by the Government and the one I suggest is of a technical character, and I trust the Government will see their way clear to accept this moderate instalment of an up-to-date method of conducting business.

Question - That the words proposed to be added (Senator Grant’s amendment) be so added - put. The committee divided.

AYES: 8

NOES: 14

Majority … … 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator FINDLEY:
Victoria

– I move -

That after the words “Deputy Governor” in sub-section (1) of proposed new section 12, the words “ and six directors “ be inserted.

If this amendment is agreed to I shall move a further amendment providing that the period of appointment shall be three instead of seven years. There is no justification for appointing the directors for the period stated in the bill. As I pointed out earlier, those entrusted with the management of big government undertakings are appointed for a much shorter period. The Railways Commissioners in Victoria are appointed for four years, and are eligible for reappointment. I understand that the governor and the deputy governor of the Bank of England - an old established institution - are appointed annually. Yet it is proposed to appoint to this institution for seven years gentlemen who will be new to the business they will be called upon to transact, in that they will not have been directly associated with the bank. The committee would do well to say that the period of their appointment shall be three years. The gentlemen who were appointed would then know that, unless they were fit for the position, and satisfied the Government of the day and the people of the Commonwealth that they were performing their duties in a thoroughly satisfactory manner, there would be no hope of their being reappointed. It would be an incentive to them to put forth their very best efforts in the conduct of the business of the bank. There would be no doubt that if they made good they would be re-appointed. What objection can there be to providing that the appointment shall be for three years? I do not think that many big institutions in Australia appoint their directors for so lengthy a period as that proposed in the bill. The directors of many financial and’ industrial concerns are appointed annually. It is proposed that the bank shall be completely transformed, and shall in future function in a manner entirely different from that in which it has been functioning since its establishment. Yet it is urged that the directors should be appointed for periods ranging up to seven years ! The shorter the period the better will be the result. The directors will be called together only twelve times annually. ‘ Their appointment, therefore, cannot be regarded very seriously. If it were a serious proposition, the Government would provide that meetings of the directors should be held weekly, on oftener if need be. Every honorable senator, I believe, is actuated by the desire to have the affairs of the bank entrusted, to the very best men available. We should not, therefore, make these appointments for such a long period that special legislation will be necessary to alter it if the system works unsatisfactorily. I know that the Government is wedded to the provisions of the bill, and that, in some directions, it is very hard to move it. But it has yielded to representations made by honorable senators opposite, and I am justified in asking that favorable, consideration be given to the amendment. The supporters of the Government; too, should not make up their minds hurriedly, and conclude that, because the Government has seen fit to include this provision in the bill, they must necessarily vote for it. I think that they should approach the matter with open minds. If they do, I believe there is a chance of the period of appointment being limited. Public opinion, I consider, is not in favour of the proposed change in the management of the bank. I believe it is opposed to the management of the bank by directors. This is the people’s bank, and it should be run in their interest. In view of the importance of the departure proposed in regard to the future management of the bank, the Government should seriously consider whether the period of seven years will prejudicially affect the interests of the people. If the amendment receives the consideration that it merits, I am hopeful that the number of honorable senators who will support it will be sufficiently large to carry it.

Senator PEARCE:
(Minister for Home and Territories · Western Australia · NAT

– I do not know whether the amendment has been seriously proposed. The governor- and the deputy governor of the Commonwealth Bank are, in reality, the manager and deputy manager of that institution. Does any one seriously consider that anybody who is worth while will be found willing to accept either of those positions for three years? The directors are dealt with in a subsequent clause, and I do not intend to waste the time of the committee by now referring to the period of their appointment. If men who are worthy of the salary that will attach to these positions are to be secured they must be offered appointment for a longer term than three years, and seven years is quite short enough.

Senator GARDINER:
New South Wales

– I take exception to the statement made by the Minister, in a thoughtless way, that the proposing of this amendment constituted- a waste of time.

Senator PEARCE:

– I did not say that. I said that I did not intend to waste the time of the committee.

Senator GARDINER:

– That somewhat alters, the aspect of the position, because I think the Minister wastes more time than any other honorable senator. Here a new departure is contemplated. What would happen if the appointments were made for a period of three years, with the right of renewal? If the Ministry was lucky in its (appointments, and they proved to be justified, a renewal of the engagements would be assured. If, on the other hand, judgment in regard to the appointments proved faulty, without this amendment it would be most difficult for any government to remove objectionable members from the board. The Minister has asked who would take the position under the conditions imposed by Senator Findley’s amendment. Without wishing to acclaim my own abilities, because I do not think I would come within the definition, I would accept a position on the directorate. We all know that any person so appointed would take very good care to discharge the duties of the office as satisfactorily as possible in order to ensure re-appointment. Senator Findley’s amendment suggests wisdom. Experience might well justify it, because we might have on the board a person who, although quite suitable from the point of view of ability, might be temperamentally unable to work with his fellow members to such an extent as to make good work by the directorate impossible. To my mind, as we are getting away from the old system, the Minister, instead of what appears to be a display of temper, might very well ‘give the amendment reasonable ‘consideration. The term mentioned is the :same as that fixed for a member of the House of Representatives, .and one half that of a member of this chamber.* We should remember that we are dealing with a bill that has come to us from .another place, where detailed discussion was not permitted and that, in this chamber, for the present, at all events, there is freedom of discussion. We should not permit of any curtailment of our right to discuss adequately all measures, especially those that have not received sufficient consideration in another place. The amendments which the Minister is submitting will have to go back to another place where, under existing conditions, there will not be sufficient time for proper consideration. Therefore, the views of honorable senators on this side of the committee should be adequately stated. I trust that the Minister will reconsider his decision* and accept the amendment. It would be most encouraging to honorable senators on this side if occasionally he would accept proposals made by us.

Senator KINGSMILL:
Western Australia

– I wish to give the amendment more consideration than I think it deserves. In the first place it alludes, I understand, to the whole of the directorate, including the Governor and the Deputy Governor. It is questionable whether that portion of the amendment which specifically refers to the directors is quite in order, but certainly that portion which seeks to shorten the term of the Governor and Deputy Governor is absolutely out of order. A young man who joins the Commonwealth Bank as a junior clerk should expect to be able to work up through the various stages to the deputy governorship or the governorship. If by an amendment of this sort we cut off the Governor and the Deputy Governor in their prime, we shall destroy incentive to effort on the part of the men in the lower branches of the bank’s service. A man who, after a lifetime of service, has proved his fitness for the position he occupies, should not be required to put himself up for reappointment at the end of three years. I do not think the honorable senator has considered this aspect of the case.

Senator Findley:

– I have seriously considered it. We appoint railways commissioners in Victoria for four years.

Senator KINGSMILL:

– But railways commissioners are usually appointed from outside the service.

Senator Findley:

– Not always.

Senator KINGSMILL:

– I admit that in most cases they are not, but in some cases certainly they are appointed from outside the service. I have given consideration to the amendment, and I regret that I cannot possibly support it, as it offends every aspect of propriety, with regard to the conduct of this bank.

Senator FINDLEY:
Victoria

.- Apparently Senator Kingsmill is not conversant with quite a number of appointments that are made in Victoria. Earlier in the day, and as a reason why the committee should agree to limit the period of appointment to the directorate for three years, I instanced the appointment of railways commissioners in this state and contrasted the work which they have to do with the work that the directors of the Commonwealth Bank will be called upon to perform. The railways commissioners in Victoria are appointed for a term of four years, and whilst it may be true, and no doubt is true, that sometimes we obtain the services of gentlemen from overseas, in the main the appointments are made from the Victorian railway service. In what way, may I ask Senator Kingsmill, will we destroy the incentive of any young man in the employ of the Commonwealth Bank if we limit the period of the appointments to three years? If a young man entered the service of the bank as a messenger, and eventually rose to a high and responsible position on the directorate, he would be appointed for a period of three years. We may be quite sure that during that period of three years he would endeavour to make good, so that there would be no doubt whatever about his reappointment.

Senator Kingsmill:

– My objection is that his position as a member of the board would be more precarious than was his position when he was at the bottom of the service.

Senator FINDLEY:

– In what way would it be more precarious? It is qui to true that at the inception of the bank the appointment of the Governor was for a term of seven years, but there were adequate reasons then for that course.

The bank had not materialized. It really had no existence. In my opinion, the hard work in connexion with the bank has already been done. The work which the directors will be called upon to perform in the future will not be so difficult as was that of the governor at the commencement, and certainly not so difficult as during the war period. The gentlemen to be appointed would hold their positions for three years, and would be eligible for re-appointment. According to Senator Kingsmill, gentlemen eligible for the positions would not be likely to accept appointment for a period of three years.

Senator Kingsmill:

– I did not say anything of the sort.

Senator FINDLEY:

– Is the honorable senator in favour of that portion of my amendment that refers to the members of the board?

Senator Kingsmill:

– I am in favour of giving consideration to the term of the other directors when we come to that portion of the clause.

Senator FINDLEY:

– The honorable senator would have us believe that gentlemen possessing all the qualifications for appointment to the board would not “jump” at the opportunity if my amendment were carried. The persons likely to receive the appointments are men engaged in business of some kind, and perhaps in a very large way. Certainly they will not be amongst the unemployed. Their time will be mainly taken up with the business about which they are most concerned. A position on the bank directorate will, in a measure, be a minor matter to them. Once a month they will come along to a meeting and draw £50 for each sitting. I cannot see how the proposed limitation will make any difference at all so far as they are concerned. If they were full-time directors, in receipt of substantial salaries, it might be a different proposition, but it is not seriously proposed that they shall devote the major portion of their time to the duties of the hank. I understand that, whilst Senator Kingsmill is against the proposal to limit the period to three years so far as the governor and deputy governor are concerned, he is disposed to favour this limitation in regard to the other directors. Why should they not be treated alike? We have shown a disposition to assist honorable senators supporting the Government in regard to other matters, and in return we now ask them to help us in the direction of limiting the period of appointment of the directors.

Question - That the words proposed to be inserted be so inserted (Senator Findley’s amendment) - put. The committee divided.

AYES: 8

NOES: 15

Majority … … 7

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator FINDLEY:
Victoria

.- In view of the decision that has just been recorded, I shall not move the further amendment of which I have given notice.

Senator DUNCAN:
New South Wales

– I move -

That the words “ In the making of the appointments of the directors” in sub-section 2 of proposed new section 12 be left out.

My purpose in doing so is to test the feeling of the committee on the proposal of the Government that in making these appointments “due consideration shall, as far as possible, be given to the fair representation of the geographical divisions of the Commonwealth.” I think that the committee, in agreeing to an amendment moved some time ago by Senator Greene, indicated that it did not desire the Government to give undue consideration to the representation of the various states, but rather desired that the best men available should be appointed to the board. The issue is clearly before the committee, and therefore I shall not labour the matter, particularly as the acceptance of my amendment will not really debar the Government from taking into consideration the representation of the various states on the board.

Senator PEARCE:
Minister for Home and Territories · “Western Australia · NAT

– The Government cannot accept the vote referred to by Senator Duncan as the decision of the committee, on its proposal that in making these appointments due consideration shall be given to the representation of the geographical divisions of the Commonwealth. Although it does not regard Senator Duncan’s amendment as vital,and is content toaccept the decision of the committee on the matter, it nevertheless asks that the words of the clause be retained, because it ‘believes that there are good reasons for retaining them.

Senator GRANT:
NEW SOUTH WALES · ALP

– The proposal of the Government to provide for the representation of certain localities in making appointments to the board of directors, is a recrudescence of a mischievous principle, formerly included in the electoral laws of various states, which resulted in territories and not people being represented in Parliament. I therefore oppose the adoption of the clause as drafted, and support the amendment. The committee has shown clearly that it desires the Government to appoint to the board the very best men obtainable, irrespective of the locality in which they may be temporarily residing. The Government also has indicated that it does not desire to be unduly hampered by restrictions in appointing the board. The proposal in this sub-clause seems, therefore, to be inconsistent with the general intentions of the Government. I suppose that the idea behind the subclause is that a man who lives in Kalgoorlie will not be so capable of representing the best interests of, say, Queensland and Australia generally, as one who lives in Cairns; but I do not agree with that view. Any intention to accept that principle should be abandoned and the Government should be left absolutely free and untrammelled to appoint the best men it can secure. Personally I have no objection to the Government appointing all the members of the board from one city, or town, or village, so long as it is satisfied that they are the best that can be secured.

Question - That the words proposed to be left out, be left out (Senator Duncan’s amendment) - put. The committee divided.

AYES: 13

NOES: 10

Majority . . 3

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Amendment (by Senator Duncan) agreed to -

That the remainder of the words in section (2) of proposed new section 12, be left out.

Senator FINDLEY:
Victoria

.- I move -

That the word “ seven “, sub-section (5) of proposed new section 12, be left out with a view to insert in lieu thereof the word “ four “.

It is proposed in the bill that after their first periods of appointment the directors shall be re-appointed for a term not exceeding seven years. The committee has already shown its reluctance to limit the period of first appointment to five years, but I think the period of re-appointment should be limited to four years. If four years is a sufficiently long term for the appointment of railways commissioners, it should be a sufficiently long term for a board of directors to be re-appointed after they have occupied the positions for the respective periods specified for their first appointment.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

.- In New South Wales and Victoria commissioners of savings banks hold their appointments subject to good behaviour. Once appointed, subject to good behaviour, they continue to act as commissioners until they resign or die. In their first period of appointment the board of directors of the Commonwealth Bank will be given a trial, and upon what they show they are capable of doing the Government will be safe in deciding whether they should be re-appointed for another term of seven years.

Question put. The committee divided.

AYES: 8

NOES: 14

Majority … … 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Progress reported.

Sittingsuspended from6.30 to 8p.m.

page 2652

QUESTION

NAVIGATION ACT

Exemption of British Ships from Coastal Provisions.

The order of the day having been read for the resumption of the debate on the following motion by Senator Ogden : -

That, in the opinion of the Senate, the operation of Part VI. of the Navigation Act is decidedly detrimental to the interests of the producers of Tasmania; and therefore Ministers should . provide relief by exercising the power conferred by section 286, which authorizes the Governor-General to exempt British ships from the coastal provisions of the act.

That this resolution be forwarded to the House of Representatives with a request for its concurrence therein.

Motion (by Senator H. Hays) proposed -

That the debate be now adjourned.

The DEPUTY PRESIDENT (Senator Newland). - The motion for the adjournment of the debate cannot be discussed.

Question - That the debate be adjourned - put. The Senate divided.

AYES: 15

NOES: 7

Majority . . 8

AYES

NOES

Question so resolved in the affirmative.

Debate adjourned.

page 2652

QUESTION

BUDGET, 1924-25

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I lay upon the table of the Senate, by command, Estimates of Receipts and Expenditureand Estimates of Expenditure for Additions, New Works and -Buildings, &c, for the year ending 30th June, 1925, and the budget 1924-25 papers, presented by the Treasurer (Dr. Earle Page) on the occasion of opening the budget of 1924-25. I move -

That the papers be printed.

I wish to give the Senate a few of the outstanding facts and figures in connexion with these papers, and to make a few general observations regarding the position of the finances of the Commonwealth.

The revenue of 1923-24 amounted to £65,077,810, which was £4,078,810 in excess of the budget estimate of £60,999,000. As regards the excess of £4,078,810, this has been principally affected by three items. The revenue from

Customs and excise was estimated at £29,650,000, but £35,750,784 was received, which constitutes a record. A considerable variation from the estimated revenue occurred in regard to income tax, which only yielded £11,057,555 instead of the estimate of £13,000,000. The reduced amount received under this head was due largely to the disturbance connected with the transfer of the assessment and collection of income tax to the state departments, the work of assessment being considerably in arrear at the close of the year, when there were on hand unexamined returns numbering 279,000. The amount of tax remaining to be assessed, however, cannot at present be ascertained. Apart from this, it would appear that the estimate of £13,000,000 was rather optimistic. The postal revenue for the year produced £104,000 in excess of the estimate - the estimate being £9,653,000, and the receipts £9,757,021.

Turning now to expenditure out of revenue for the past year, the actual expenditure amounted to £62,484,169. The budget estimate was £60,951,848, so that the expenditure exceeded the estimate by £1,532,321. This excess was caused by certain expenditure that was quite unavoidable. The figures relating to the excess of revenue over expenditure, 1923-24, are : -

The estimated expenditure of 1924-25 is £63,445,183, and may be set out under the following headings. For purposes of comparison, the actual expenditure of 1923-24 is also shown.

In addition to theestimated expenditure for 1924-25, £63,445,183, shown above, we shall have to pay £923,785 on account of interest on loans raised for the states. Including that amount, the total estimated expenditure for 1924-25 is £64,368,968. The most outstanding figure amongst those I have just quoted is the special defence provision of £1,000,000 in 1924-25. The Government has decided to initiate a programme of development upon which there will be required this year a sum of £1,000,000. The programme is marked out in stages, the first stage totalling five years, at the end of which period the Government expects that the defences of the country will have advanced to a definite point. Full details of this programme will be placed before senators when the Estimates are under consideration.

Under all heads, including repayment of interest on loans raised for the states and repayment of fruit advances, it is estimated that the total revenue for 1924-25 will be £64,395,000, as compared with £66,017,203, received in 1923-24. Details of these receipts are given in the budget-papers which have been circulated. The estimated expenditure of 1924-25 has been stated as £64,368,968, the estimated revenue is £64,395,000, so that the estimated surplus on the year’s transactions is £26,032.

In 1923-24, revenue moneys amounting to £4,915,755 were used for redemption of the public debt. After making this payment, the accumulated surplus at 30th June, 1924, amounted to £5,100,003/ It is proposed to deal with this surplus as follows : -

Honorable senators will no doubt expect some announcement with regard to the matter of a remission of income tax. The Government proposes to make such a remission, but this is rendered possible only because we are receiving a large revenue from the duties of Customs and excise. Much of these .imposts fall upon persons with small incomes and large families. On such persons income tax presses with severity, and the Government has decided to ask Parliament to grant them a substantial concession. The general income tax exemption will be increased from £200 to £300, and will diminish by £1 for every £3 by which the income exceeds £300. All persons in receipt of incomes up to £1,200, or 96 per cent, of the taxpayers, will benefit as a result of raising the exemption. These will still bear a large share of the burden of indirect taxation. As many as 260,000 will be relieved altogether of the payment of income, tax, and by reason of the higher exemption, 180,000 other taxpayers will pay reduced tax. The tax payable by individuals still subject to tax will be reduced by 10 per cent. This further concession will benefit 200,000 taxpayers, and must have an important influence on development in Australia. In view of the special circumstances of the gold mining industry, it has been decided to exempt from income tax the profit derived from gold mining, until the whole of the working capital invested has been returned to the owners. The remission of tax in these directions will amount to £2,000,000. In addition to the remis’sion of £2,000,000, the tax on lotteries is being discontinued, as part of the proposal to assist Tasmania. At the present time the Commonwealth receives about £111,000 from this source, which it is understood Tasmania will re-impose. Queensland will also benefit by this decision.

The gross national debt at 30th June, 1924, consisted of :

The gross debt at the beginning of the year was £410,996,316, so that there was an increase of £4,603,783 in the nominal amount of the national debt during the year.

A sum of £9,041,670 was applied towards redemption of debt in 1923-24, and was provided as under: -

In this connexion, I think the year 1923- 24 may be regarded as the most notable in the history of the national debt for the following reasons: -

  1. A national debt sinking fund was established on a sound basis.
  2. The first practical steps were taken for preventing competition and clashing in in the loan operations of the Commonwealth and the states in Australia, and for the limitation of borrowing.
  3. Legislation was passed to prevent the issue of further tax-free loans by the Commonwealth or the states.
  4. War debt totalling £9,041,670 was redeemed out of revenue and sinking funds.
  5. The first war loan redemption and conversion operations, covering debt totalling £58,299,478, were successfully carried out in Australia.

As there are certain other matters that I wish to discuss, I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 2655

WAR PENSIONS APPROPRIATION BILL

Bill received from the House of Representatives, and (on motion by Senator Pearce) read a first time.

page 2655

COMMONWEALTH BANK BILL

In committee (Consideration resumed, vide page 2652) :

Clause 7.

Sections eleven to fifteen, both inclusive, of the principal act are repealed, and the following sections inserted in their stead : - “ 12a.- (1.) The Governor shall be the chief executive officer of the bank. “ (2.) The Deputy Governor shall perform such duties as are directed by the board. “ (3.) The Governor and the Deputy Governor shall severally devote the whole of their time to the duties of their office. “ 12B. - (1.) In each principal city of the Commonwealth specified by the GovernorGeneral, by notice published in the Gazette, there shall be a local board ofadvice. “ (2.) A localboard shall be appointed by the Governor-General, and shall consist of three members, at least one of whom shall, if practicable, be a director. “ (3.) The members of a local board shall, subject to this act, hold office for two years and be eligible for re-appointment. “ (4.) Each local board shall have power to examine the affairs of the bank in the district specified in respect of it by the GovernorGeneral, by notice published in the Gazette. “ (5.) Each local board shall submit to the board of directors, at least once a month, a report in writing concerning the affairsof the bank in the district in which it exercises its powers. “ 13. - (1.) The Governor and the Deputy Governor shall be entitled to remuneration by way of salary at such rates as are fixed by the Governor-General. “ (2.) Each director, other than the Governor, shall be entitled to remuneration by way of salary at the rate of Six hundred pounds per annum, or, if he is chairman of directors, One thousand pounds per annum, and each member of a local board shall be entitled to remuneration by way of salary at the rate of Two hundred pounds per annum. “ 14. Notwithstanding anything contained in this act, the Governor, the Deputy Governor, each director, and each member of a local board shall hold office only during good behaviour. “ 15. In ease of illness of the Governor, the Deputy Governor, or any director, or a member of a local board, or in case of his absence for a period exceeding two months, the Governor-General may appoint a person to act as deputy of the Governor, Deputy Governor, director, or member of a local board, as the case may be, during his illness or absence, and the deputy shall, while so acting, have all the powers and perform all the duties of the Governor, Deputy Governor, director, or member of a local board, as the case may be. “ 15a. Each director and each member of a local board shall, before entering upon his duties or exercising any power under this act, make before a justice of the peace or a commissioner for taking affidavits, or a commissioner for declarations, a declaration of fidelity and secrecy in the prescribed form. “ 15b. A person -who is -

Provided that a decision of the board which affects the Note Issue Department of the bank shall notbe effective unless the directors voting for it include two of the following directors, namely, the Governor, the director who is the Secretary to the Treasury, and the directors appointed in pursuance of paragraph (d) of sub-section (2) of section eleven of this act. “ 15e. - (1.) The board may appoint from among its members an executive committee of not less than three members to carry on the business of the bank between -the meetings of the board. “ (2.) The executive committee shall have such powers and duties as are conferred or imposed on it by the board, and shall be subject to such directions as are given by the Board.”.

Senator FINDLEY:
Victoria

.- I am not quite clear as to the real meaning of the proposed new section 12a, when read in conjunction with the proposed new section 15. The proposed new section 12a provides that the governor of the bank shall be the chief executive officer of the bank, and that the Deputy Governor shall perform such duties as are directed by the board. The proposed new section 15 gives the Governor-General power, in case of the illness of the Governor of the bank for a period extending over two months, to appoint a deputy who shall have all the powers and perform all the duties of the Governor. It does not appear to me that there will be power to constitute that deputy the chief executive officer of the bank, which is what the bill does in the case of the Governor. If I read the bill correctly, the management of the bank, in the event of the Governor being absent, through illness, for a period exceeding two months, will be placed in the hands of the directors, because the Deputy Governor will have to take his instructions from the board. Is it advisable that the management of the bank should be in the hands of the directors, seeing that four directors will constitute a quorum? Whilst the Deputy Governor may be able to exercise a voice at meetings of the board, it appears to me that he will not have a vote.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– I think that Senator Findley has misread the proposed new section 15. It provides that in the case of the illness of the Governor, the Deputy Governor, any director, or any member of a local board, or in the absence of any of those gentlemen for a period exceeding two months, the Governor-General may appoint - in the first-mentioned case not necessarily the Deputy Governor, as SenatorFindley imagines, but a person to act as a deputy of the Governor. Whilst so acting, he will have all the powers and perform all the duties of the Governor. He will thus be the chief executive officer of the bank.

Senator Findley:

– Will he have a vote at meetings of the board ?

Senator PEARCE:

– Yes, in the same way that the Governor will have whilst exercising his powers and performing his duties.

Senator GREENE:
NEW SOUTH WALES · NAT

.’ - I stated earlier that I thought there should be a board in London. I am still of that opinion. I, therefore, move -

That the following new section be inserted to follow proposed new section 12a - 12aa - (1) There shall be a board of advice in London, hereinafter called the London Board.

The London Board shall consist of three members, to be appointed by the Governor-General.

The members of the London Board shall; subject to this act, hold office for four years, and be eligible for re-appointment.

The duties and powers of the London Board shall be such as may be delegated to it from time to time by the board of the bank.

The amendment, I think, is selfexplanatory.

Senator Findley:

– Is it intended to provide the remuneration.

Senator GREENE:
NEW SOUTH WALES · NAT

-That will come later. I ask the Minister to give the amendment favorable consideration.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

Senator Greene intimated earlier in the debate that he proposed to submit this amendment, and I have had an opportunity of consulting with the Treasurer. The Government has no objection to the amendment. In view of the transactions that will take place between Australia and London it will probably be an advantage to have a board in London.

Senator GARDINER:
New South Wales

– I rise to take exception to this method of dealing with amendments. Senator Greene should have given the committee notice of his intention to submit this proposal. It is evident from the Minister’s remarks that he was fully aware of Senator Greene’s intention .

Senator GREENE:
NEW SOUTH WALES · NAT

– I mentioned the matter in the course of my remarks yesterday.

Senator GARDINER:

– The honorable senator mentioned so many things that I may be pardoned if I confess that I have not the capacity to remember all of them.

Senator Drake-Brockman:

– What about the amendments that have been moved from the honorable senator’s side without notice?

Senator GARDINER:

– It is true that I have submitted an amendment to a postponed clause. As that will be printed, honorable senators will have an opportunity of considering it. It appears from the Minister’s remarks that, because of future banking business likely to be transacted with London, the Ministry intends forthwith, at the instance of Senator Greene, to appoint a board in London, although it has not been made clear yet what will be the nature of the proposed board. To what extent will it control the Australian end of the branch bank operating in London ? The Minister should make an allowance for honorable senators who have not had an opportunity of considering this amendment. On the spur of the moment I am not prepared to vote for it. Why should we create a board in London? This is a far-reaching amendment, and with the suspicion which I always have in regard to matters that are not fair and above-board, I want further information. This appears to me to be part and parcel of, shall I say, a conspiracy on the part of certain honorable senators opposite, by which private banking institutions are by an amendment in this bill, to get notes issued on securities held in London. As Senator Greene played a leading part in that business, I am not prepared to accept blindfold any proposal which he may bring forward with regard to the creation of a board in London. The amendment which the honorable senator succeeded in forcing upon the Government by the votes of a few insurgent followers gives the Private banks all the advantage of notes issued, not on a gold basis, or upon Australian securities, but oil securities held by the private banks in London. Now the honorable senator wants to bring about the appointment of a London board. He tells us that he gave notice of his intention during his second-reading speech. If one cares to peruse his speech one will find that he practically foreshadowed the remodelling of the whole bill, so that whenever he submits an amendment in committee he is able to say that he gave us notice of it in his second-reading speech.

Senator GREENE:
NEW SOUTH WALES · NAT

– It was in committee yesterday that I indicated my intention to move this amendment.

Senator GARDINER:

– I remind the honorable senator that the Method usually adopted is to give notice and have a proposed amendment printed and circulated. Senator Duncan has done that. He has been waiting patiently for some weeks to have his amendments dealt with. The Minister also has about 40 amendments.

Senator Pearce:

– I have ten, and half of them have been dealt with already.

Senator GARDINER:

– I said, offhand, . that the Minister had about 40 amendments. He says that he has ten. I find that he has no less than 35 in the schedule alone.

Senator Pearce:

– That is part of the bill.

Senator GARDINER:

– I took the trouble to get the figures, because if there is one thing I am particular about it is that I should make no misstatement. I said that the Minister -had about 40 amendments. I now find that he has more than 40. Possibly, the Minister will say that his amendments are so trivial that he does not consider them amendments at all. But surely this proposal to appoint a board in London is a drastic amendment. I am anxious to help the Minister with his bill. Therefore, I suggest that the proposed new clause submitted by Senator Greene be postponed until it is in print, and honorable senators have the opportunity of studying its effect. If I cannot understand any proposal suddenly put forward, I endeavour to debate it until I do understand it. If, however, it is in print, and I have the opportunity of studying its effect upon a measure, I aim then in a position to judge whether it should pass without debate oi’ be debated at length. Senator Greene’s amendment is ‘ far-reaching in its importance, and it has been sprung suddenly on the committee. Is it proposed to have boards also in Sydney, Melbourne, Brisbane, Adelaide, Hobart, Perth, and Darwin ? SO . far as the volume of business is concerned, there will be infinitely more in Sydney or Melbourne than ever there is likely to be between London and Australia. Why, then, appoint a London board ? What is the meaning of the amendment? The outrageous proposal to issue notes against London securities held by the private banks, convinces me that there is something more than Australia in this proposal. There is in it the influence of the London money magnates: the men who direct the financial affairs of the world. No doubt, they will give advice’ to the manager of the London board, and I am satisfied that, whilst this Government remains in office, attention will bs paid to that advice. The manner in which the Minister accepted the amendment suggests that he and Senator Greene are carrying out instructions of which other honorable senators know nothing. This amendment is, in my opinion, part of a business that is being done behind the scenes, in the interests of private financial and trading institutions in London and elsewhere.

Senator LYNCH:
Western Australia

– I support the Leader of the Opposition (Senator Gardiner) in his request for time to consider this very important amendment. Unhappily, I. did not have Senator Greene’s good fortune, because when I submitted an amendment last evening I received a mild reprimand from the Minister in charge of the bill for not having given notice of it. This amendment is very important, and it requires time for the committee to properly digest it. Looked at superficially, it appears to be a praiseworthy effort on the part of Senator Greene to improve the management of the bank, so far as the London end of the business is concerned. But whilst it may be most laudable, we should consider carefully its probable effect upon the bank. The amendment means that the London end of the business is to be controlled by a board of advice appointed by the Governor-General, on the advice of the government of the day. Any vacancy that may occur on the board will be filled in the same way. Senator Gardiner has stated in no uncertain words that, when the Labour party is in occupation of the treasury bench, it will take good care that the controlling authority of the bank shall act in accordance with its wishes, and that any vacancies that may occur on the board in London or in Australia will be filled by gentlemen who will be prepared to give effect to its policy. That means nothing more nor less than political control of the bank. If the London board is politically controlled, it will not be of much value to the management of the bank in Australia. If a political element is introduced into the Commonwealth Bank management, it will sound the death-knell of the institution.

Senator Needham:

– It is there now.

Senator LYNCH:

– Then we should strike the trouble at its tap-root. We ought to have more information on Senator Greene’s proposal. From a hurried consideration of it, I think that it would permit of the London board being the instrument of the political party in power, for the time being, in Australia.

Senator PEARCE:

– The board is only to be an advisory body.

Senator LYNCH:

– Whether it be of an advisory or executive character, Senator Gardiner has made it clear that his party intends to have effect given to its desires when it is in the position to do so. In those circumstances, we should be most careful about agreeing to the amendment. If Senator Greene would consent to alter his amendment to provide that the proposed London board shall be appointed by the Governor-General on the recommendation of the board of directors in Australia, my objection to it would be removed. It is preferable to have a board appointed in accordance with the wishes of the Australian board than to have one appointed by a government which for the time being is in power.

Senator Pearce:

– The London board would not have executive- power.

Senator LYNCH:

– I hope that the Minister will listen to my remark’s, for evidently he is not doing so. “Whether the proposed London board be executive or advisory, Senator Gardiner has made it clear that, when his party occupies the treasury bench, it will take all possible steps to ensure that effect shall be given to its desires in regard to the policy of the bank.

Senator Gardiner:

– The honorable senator is overstating what I said in that respect. I voiced my views in plain and unmistakable language, and I shall repeat them presently.

Senator LYNCH:

– I am informing the committee of the impression that Senator Gardiner’s speech made on my mind. He left me in no doubt that, when his party came into power, it would see that the board which controlled the bank in London would give effect to his party’s policy. If that declaration is carried out, the board will, undoubtedly, have a political significance. In view of that likelihood, we should be very careful to consider the amendment thoroughly before we consent to it. We shall’ be dealing presently with the proposal of the Government to appoint local boards of advice. According to my reading of that proposal, local boards of advice may be appointed not only in the capital cities, but in such cities as Ballarat and Bendigo. It seems to me we shall be making the Commonwealth Bank not a bank of banks, but a bank of boards. I disagree with the proposal to appoint local boards.

Senator GREENE:
NEW SOUTH WALES · NAT

– I also think that they should not be appointed.

Senator LYNCH:

– If the proposed London board is to be appointed by the Governor-General, on the advice of the Government of the day, it is likely to be more of a nuisance than a help to the board of directors of the bank.

Senator Pearce:

– I have circulated an amendment to the clause dealing with the appointment of local boards, to provide that they shall be appointed by the Governor-General upon the recommendation of the board of directors.

Senator LYNCH:

– If Senator Greene will alter his amendment to provide that the London board shall be appointed by the Governor-General, upon the recom’mendation of the board of directors. I will support it.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am quite prepared, to do so.

Senator LYNCH:

– If that is done, the board of directors in Australia will have power to recommend the appointment of the proposed London board.

Senator GARDINER:
New South Wales

– I must reply to the remarks made by Senator Lynch concerning my statement of the intentions of the Labour party in regard to the board of directors of the bank. I said that it was quite apparent that political influence would control the bank for the time being, because the Governor-General, who will have the power to appoint directors, is the mouthpiece of the Government of the day. He will make the appointments on the advice of the Executive Council, and the Executive Council consists of the members of the Cabinet who are kept in office by a majority of the members in another place. I point out to Senator Lynch, however, that what I said was that if the board of directors that was appointed did good work it would not be interfered with when a Labour Government came into office, bub if it did evil it would certainly be removed. It cannot properly be inferred from that that the Labour party intends to interfere with the board if it manages the bank well, nor can it be truly said that I stated that the Labour party would bring political influence to .bear upon the management. The Labour party brought this bank into existence, and administered the act under which it was constituted for three of- the four years of its infancy, and I challenge our political opponents to give one instance of the Labour party having exercised political control over the management. We have never been guilty of it, nor shall we be, as long as the bank is run on proper lines. Senator Lynch endeavoured to lead the’ committee to believe otherwise. The position really is that this bank was created by a government elected by the people of Australia, that it operates in accordance with legislation passed by this Parliament, and that just as this Government is, by this bill, altering its constitution, so may any future government. I stated clearly that if the bank was not managed in the interests of the people who were responsible ‘or its establishment the Labour party, when it Came into power, would cake all the necessary steps to ensure that the interests of the people should take precedence over all other interests. It is time that the British interests which have dominated the institution for the last few years should give place to Australian interests. But I shall never permit any honorable senator, either intentionally or unintentionally, to misinterpret my remarks.

Senator Lynch:

– I did not deliberately misinterpret Senator Gardiner’s remarks.

Senator GARDINER:

– I make it quite clear, that it is not the intention of the Labour party to use political influence on the Commonwealth Bank so long as the management does its work properly. It is pure hypocrisy, however, to talk about shutting political influence out from the bank altogether, for the institution is the creation of Parliament. It has served a good purpose for the last twelve years, and if it is managed in such a way that it will be unhampered and uninterfered with by speculators and private banking institutions, it will render much better service in the next twelve years.

Senator GREENE:
NEW SOUTH WALES · NAT

– I ask leave to amend my amendment by inserting at the end of sub-section 2 of the proposed new section the words, “ upon the recommendation of the board of directors.” I think that will make the amendment acceptable to Senator Lynch.

Senator GARDINER:
New South Wales

– We are still in the position that we have not a fair copy of the amendment before us. I am only asking for reasonable consideration when I request that further debate on the amendment be postponed until a proper printed copy of it is in our hands. Our Standing Orders provide that we shall have a fair copy of every bill which we are asked to consider.

The TEMPORARY CHAIRMAN (Senator Payne:
TASMANIA

– -My reading of the Standing Orders is not that we shall have a printed copy of every amendment that is proposed, but that we shall have a fair copy of every bill that we are asked to. consider.

Senator GARDINER:

– But it is. proposed to make the amendment part of the bill.

The TEMPORARY CHAIRMAN.Is it the will of the committee that Senator Greene be given leave to amend his amendment ?

Senator Needham:

– I object.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– In that case I move -

That the amendment be amended by inserting at the end of sub-section 2 thereof the words, “ upon the recommendation of the board of directors.”

Senator FINDLEY:
“Victoria

.- In fairness to the committee, the further consideration of Senator Greene’s amendment should be postponed.

Senator Pearce:

– The honorable senator understands it.

Senator FINDLEY:

– The Minister knows all about it. Apparently he and Senator Greene are in full agreement as to it. They apparently are also familiar with the work which the proposed London board will be called upon to do. Possibly they had had a chat about it, because the amendment had no sooner been submitted by Senator Greene than it was accepted by the Minister. The Minister and Senator Greene may know its significance, but other senators do not. There is too much ambiguity about- the proposal. First of all, Senator Greene proposed the appointment of a London board, and now Senator Pearce suggests that the appointments to it be made by the Governor-General on the recommendation of the board of directors in Melbourne. Senator Greene has not told us what are to be the duties of the London board, how often it will meet, or what remuneration is to be paid to the members of it.

Senator GREENE:
NEW SOUTH WALES · NAT

– That will come later on.

Senator FINDLEY:

– If we affirm the principle that a London board shall be appointed we shall have no option but to vote for any remuneration suggested by Senator Greene. However, I will not vote to affirm the principle. On introducing the bill the Government declared that it had received most careful scrutiny, and that the advice of all whose advice was worth obtaining had been sought. In such circumstances one would naturally think that little or no improvement could be made to it, yet Senator Greene declared, on the second reading, that he would like to “shatter it to bits”- and to remould it in the way he desired. It is quite evident that the Government are prepared to accept important amendments submitted by him which really will have the effect of re-moulding the bill. “Why are the Government so ready to accept an amendment submitted from a certain quarter ?

Senator Pearce:

– Because of the virtue of it.

Senator FINDLEY:

– If this amendment is so good, why had not the Government already considered the advisability of appointing a board in London?

Senator Pearce:

– We are always open to reason.

Senator FINDLEY:

– Yes, when an amendment is submitted from the government side. The only reason the Government can advance for the acceptance of such amendments is that they realize that if they did not do so there might be a breakaway on the part of some of their supporters. In fairness to the committee, the further consideration of this amendment should be postponed. If, on further consideration Senator Greene can tell us how often the London board will meet, and what remuneration will be paid to its members, and” if he can give other information that may be helpful to us, he may for his proposal secure the support of honorable senators like myself.

Senator NEEDHAM:
Western_ Australia

– I hope that Senator Greene will ask for the postponement of the further consideration of his amendment. The complacency with which the Minister (Senator Pearce) accepts anything submitted by Senator Greene is most remarkable.

Senator GREENE:
NEW SOUTH WALES · NAT

– The honorable senator is quite wrong in making that statement.

Senator NEEDHAM:

– I am quite impersonal in the matter. I congratulate Senator Greene on his wonderful command over the Minister. His is the master mind that guides the Government. I have often said that Government supporters are like dumb-driven cattle, but now it strikes me that the Government: are being driven, not by dumb supporters, but by a commanding supporter. The bill requires each local board to submit to the board of directors at least once a month a report in writing concerning the affairs of the bank in the district in which it operates. How will it be possible to have a monthly statement in writing from a London board ? No provision is made in the bill for’ the remuneration to be paid to a local board or to fix the conditions under which each board will work. That is because the board of directors will be in close touch with each local board, and so will have immediate control over it. The board of directors cannot have that same control over a London board, because it will not be in close touch with it. Senator Lynch said that it would be dangerous to appoint a London board of advice, and that it would be unwise to take even one step at a time in that direction; but now that it is proposed to have the London board appointed on the recommendation of the board of directors here, he sees no further danger in the proposal, and would even be willing to take two steps at a time. I think that we ought to proceed very carefully in this matter. I fear the danger of political interference, although I trust this bank will never come within the ambit of political control or .influence. Honorable senators on both sides have taken the trouble to circulate their amendments to give the committee ample opportunity to thoroughly understand them. Senator Duncan, who has been waiting for two days to reach clause 8, has circulated an important amendment. I also have certain amendments to propose to that clause, and although they may not be as important as that of Senator Duncan, they have been in circulation for at least 48 hours. Senator Greene’s amendment, however, which is even more important than Senator Duncan’s or mine, has not been circulated. The least the honorable senator can do is to ask the permission of the committee to withdraw it temporarily until it has been circulated, so that honorable senators may have an opportunity to understand what it means.

Senator GARDINER:
New South Wales

– My recollection of the amendment as submitted and proposed to be amended is that a London board is to be appointed on the recommendation of the board of directors. When an important amendment is not printed and circulated it requires a high mental capacity to carry in one’s mind not only the amendment itself, but also any words pro-‘ posed to be added to it. I should like to know who will take the appointment on the recommendation of the board of directors, and to whom the board’s recommendation will be submitted.

Senator GRANT:
NEW SOUTH WALES · ALP

– I am opposed to the creation of a board to conduct the affairs of the Commonwealth Bank in London, where at present there are already a manager, Mr. C. A. B. Campion, an assistant manager, Mr. 0. A. Smith, and an acting manager at the Australia House branch. I was under the impression for a limited time that the Commonwealth Bank was to conduct the banking business of the people of the Commonwealth. At least that was the intention of those who advocated its establishment, and I dare say the idea of establishing a branch in London did not enter their minds. The intention was to have a branch of the bank established in every important centre of the Commonwealth, but although the bank has been in operation for twelve years this has not yet been done. “Until the management of the bank can be induced or forced to extend the operations of the institution to all the principal “towns of the Commonwealth, we should not entertain the idea of setting up a directorate in London, where the work is now being done, so far as I know, in an effective manner by the officers I have ‘already mentioned. Apparently there is a desire, in connexion with almost everything the Commonwealth Government undertakes, to create and maintain expensive boards of management to assist in eating up the profits earned by the various activities in which the Commonwealth is engaged. That is largely why an expensive board has been set up in connexion with the activities at Canberra. Although the Commonwealth Bank has not expanded its operations to the extent that it should have done, I do not anticipate that we shall have any more rapid development from the Australian or London boards than we have had in the past, unless an indication is conveyed by us to those bodies that it is their imperative duty to extend the business of the bank. At present there is one branch in Great Britain, but, apparently, it is the intention to create others. Until the bank has extended its operations to such centres as Goulburn, Bathurst, and hundreds of other towns of equal size and importance in Australia, we ought not to entertain the idea of creating a London board. I look forward to the time when a very much more up-to-date method of borrowing money and dealing with financial matters generally will be adopted, and I hope that before long a proposal similar to that which I advocated last night will be accepted. At present the Commonwealth Bank has only 16 branches in New South Wales, 9 in Victoria, 31 in Queensland, 5 in South Australia, 3 in Western Australia, 4 in Tasmania, and 1 in Rabaul. The number is altogether inadequate, and until such time as the bank can extend its business in the Commonwealth, I am opposed to the creation of a London board.

Senator NEEDHAM:
Western Australia

– If a London board is constituted, as I presume it will be, a member of that board should be a director of the bank. It is provided in sub-section 2 of proposed section 12b that -

A local board shall be appointed by the Governor-General, and shall consist of three members, at least one of whom shall, if practicable, be a director.

If we are to give authority to the board of directors to appoint a London board, should we not further amend the amendment submitted by Senator Greene to provide that one member of the London board shall be a director of the bank. Senator Greene moved that a London board of advice be appointed, and the Government immediately accepted the proposal. Even Senator Lynch, with his extensive knowledge, fire and impetuosity, was brought to heel by Senator Greene. The Leader of the Opposition (Senator Gardiner) has just informed me that he, too, is of the opinion that it is important that if the London end of the business is sufficient to warrant the appointment of a London board of advice, at least one member should be a director of the bank.

Question - That the words proposed to’ be inserted be so inserted (Senator Pearce’s amendment of the amendment) - put. The committee divided.

AYES: 16

NOES: 8

Majority . . 8

AYES

NOES

Question so resolved in the affirmative.

Amendment of the amendment agreed to.

Question - That the proposed new section 12aa (Senator Greene’s amendment as amended) be agreed to - put. The committee divided.

AYES: 16

NOES: 8

Majority . . . .8

AYES

NOES

Question so resolved in the affirmative.

Amendment, as amended, agreed to.

Amendment (by Senator Pearce) proposed -

That after the words “Governor-General’’ in sub-section (2) of proposed new section 12b, the words “ upon the recommendation of the board of directors” be inserted.

Senator DUNCAN:
New South Wales

– When the definition clause was before the committee I proposed that the reference to the local boards should be left out. The matter was then deferred to this stage of the committee’s deliberations. I now desire to move -

That the proposed new section 12b be left out.

I have already given reasons for my belief that the appointment of local boards in each state will be detrimental to the objects aimed at by the bill, and will re act against the best interests of the Commonwealth and the well-being of the bank. Further consideration has convinced me that the principle of the establishment of local boards in every state, andperhaps in more than one centre in a state, is a most pernicious one which will yield results totally at variance with those anticipated by the Government.

The TEMPORARY CHAIRMAN (Senator McDougall:
NEW SOUTH WALES

– I point out to the honorable senator that, as the committee has before it an amendment moved by the Minister (Senator Pearce), it is not competent for him at this stage to move the amendment that he has submitted.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

.. - In order that the honorable senator may test the matter, I ask leave to temporarily withdraw my amendment; but, so that I may be safeguarded, I suggest that he move merely that sub-section 1 of the proposed new section be left out.

Amendment, by leave, withdrawn.

Amendment (by Senator Duncan) proposed -

That sub-section (1), proposed new section 12b, be left out.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– I was rather astonished to hear the Minister agree to this matter being tested before giving honorable senators some idea of the probable effect if sub-section 1 be left out.

Senator Pearce:

– I had previously dealt fully with the matter, and I did not want to waste further time. The appointment of local boards, it is anticipated, will provide us with the local atmosphere.

Senator FOLL:

– At one time I was in accord with the idea to wipe out this provision relating to the appointment of local boards; but on reflection I realized that, with the head office of the bank situated in a particular city, there was a possibility that other states would not have much chance to make their influence felt in the affairs of the bank. The state of Queensland is very greatly interested in the financial arrangements undertaken by the Commonwealth Bank on behalf of some of its industries. The bank plays a very important part in financing the great sugar industry, and the wool industry, in Queensland.

Senator Elliott:

– Have the other states so far had cause for complaint?

Senator FOLL:

– So far, the present arrangement has worked satisfactorily. But we are altering the- constitution of the bank, and propose to appoint a board of .directors which will be responsible for its management.

Senator Duncan:

– The local boards will have no power whatever.

Senator Pearce:

– They will have the power to give advice to the central board.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– A board representing a particular state would have to thoroughly investigate the position existing in that state, and the central board would be influenced to a certain extent by its point of view. There is, probably, not a private bank of any standing in Australia that has not established a board in every state.

Senator GREENE:
NEW SOUTH WALES · NAT

– The honorable senator is entirely wrong.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– Nevertheless, I am still of the opinion that every state should be able to bring its point of view before the central board. I shall bo very much surprised if the Victorian senators agree to the whole of the bank’s operations ,being controlled from a particular city. I cannot support the amendment.

Senator THOMPSON:
Queensland

– I am sorry to find myself differing from my colleague from Queensland, but I am totally opposed to the appointment of local boards of advice, because I do not think that their creation will be in the best interests of the Commonwealth Bank. I think that the committee would be well advised to leave out the whole of the proposed new section 12b. Australia has an extensive system of telegraphic and telephonic communication, and I cannot see any necessity for having boards of advice in the different states. It will merely afford an opportunity for a few wellintentioned individuals to become inquisitorial in connexion with the affairs of the bank. They will not prove useful to the governor or to the board of directors. I hope that the committee will support the amendment.

Senator LYNCH (“Western Australia) [9.401. - I support the remarks of Senator Thompson, believing that this proposal is very much in tie nature of an innovation. If the purpose is to secure local atmosphere, why can it not be obtained from the managers and their assistants in the different states? Officers holding such responsible positions would be likely to give much more reliable advice than could such boards as it is proposed to appoint. I believe that thoseboards will prove useless, inefficient, and. provocative of friction, which should not. exist in any branch of the Commonwealth. Bank.

Senator DRAKE-BROCKMAN:

– Why doso many big public companies adopt this practice ?

Senator LYNCH:

– Probably in orderto safeguard the interests of the local, shareholders.

Senator Drake-Brockman:

– Are not the honorable senator’s constituents in Western Australia shareholders in this institution ? Do they not want somebodyto safeguard their interests ?

Senator LYNCH:

– I do not admit that an exact parallel can be drawn between a private institution and the Commonwealth Bank. To do so one would need to charge the local executive officerswith inefficiency. The responsible officialswill regard the members of such boards as busy-bodies. The bill itself shows very clearly the quality of the advice that is likely to be tendered by these boards. The proposal is to pay the members £200- per annum. They will be expected to furnish a report every. month, and will be empowered to overhaul at will the affairs of the bank. That will interfere with the orderly progress of the bank’s affairs, in addition to causing confusion and annoyance to the officials. A responsible officer drawing, perhaps, £1,000 a year will not tolerate the interference of these men. I think we can very well continue along the lines hitherto followed. If it could be shown that the present practice did not work efficiently, there might be some excuse for superseding it with such a proposal as this. It has not been shown that the management of the bank in any city is inefficient. On the contrary, I think it will be admitted by all that the management throughout has been admirable.

Senator Pearce:

– The bank, so far, has not been carrying out the functions of a central bank. In future it will have to perform those functions.

Senator LYNCH:

– Banking knowledge of a superior order will, in consequence, be required of those charged with the management of the bank. It will not be possible to obtain expert advice for trie princely sum of £200 a year. I support Senator Duncan in the belief tb at it would be better for the time being to continue the present practice.

Senator PEARCE:
Minister for Home and Territories · “Western Australia · NAT

– I fear that some honorable senators may be labouring under a misapprehension in regard to this matter. It is, of course, expected that the board of directors will sit in Sydney. Honorable senators will notice that it is provided that one member of these local boards of advice shall, where practicable, be a director of the bank. This will be a central bank having intimate relations with other banks. Looking at the position not merely from the point of view of the Commonwealth Bank, but also” from the view-point of the other banks in Melbourne, would not it be an advantage to have on the Melbourne board of advice a member of the board of directors through whom the local board could make its representations? During the last twelve months the banks have had to make representations to the Notes Board, and I know it is a great advantage to be able to make those representations in the city in which they are operating.

Senator GREENE:
NEW SOUTH WALES · NAT

– Those banks are operating also in Sydney.

Senator PEARCE:

– Some of them are.

Senator GREENE:
NEW SOUTH WALES · NAT

– Practically all of them. with the exception of the Bank of Victoria.

Senator PEARCE:

– The banks in the different states all have their own problems. Senator Poll has pointed to the problems of the Queensland banks. Working in co-operation with the Commonwealth Bank as the central, bank, a local board of advice would be able to put its difficulties before the board of directors. Having on the local board of advice a member of the central board, it would be able to discuss its difficulties with the directors of private banks in Brisbane or Perth, as the case might be. If this is not done, the banks in distant states will only be able to place their views before the board by means of correspondence.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is not so.

Senator PEARCE:

– They will correspond with their branch banks in Melbourne or in Sydney.

Senator Thompson:

– But the committee has decided already against the geographical composition of the board of directors.

Senator PEARCE:

– That is true, but it is obvious that, as this is a Commonwealth bank, any Government that appoints the board will endeavour to make it Australian in character, having in view, of course, the calibre of the men to be appointed. In view of all the facts, I urge die committee not lightly to dispense with these boards of advice, and I particularly impress on members representing distant states the importance of this provision.

Senator REID:
Queensland

– The clause provides for the appointment of a local board in the principal cities of the states. Does this mean only each capital city? If not, other principal cities in the Commonwealth will probably demand the appointment of local boards. Queensland comprises three distinct divisions. The people of North and Central Queensland would certainly object to a local board at Brisbane as being representative of that state. Those divisions would make a demand for the appointment of local boards to represent their interests. No doubt there would be the same trouble in the other states.

Senator PEARCE:

– We are hoping that the bank is going to be a bank not for the present only, but that it will function as a central bank when Australia has a population of 50,000,000.

Senator REID:

– In that case I am afraid that the local boards will not help very much.

Senator GREENE:
NEW SOUTH WALES · NAT

– As a matter of fact, the establishment of the bank as a central bank will make local boards all the more unnecessary.

Senator REID:

– As I understand the proposal the central bank will be more or less a clearing house for the “other banks. It is not clear to me how local boards will be of any assistance. So far as I am aware there has been no complaint anywhere as to the management- of the branches of the Commonwealth Bank. The people have confidence in them. If there had been any evidence of failure to meet the requirements of the people, there might be some reason for the appointment of local boards in connexion with the Commonwealth Bank. I shall support the amendment.

Senator DUNCAN (New South Wales) [9.52J. - I should like to say a few words in reply to the objection raised by the Minister (Senator Pearce) in regard to my amendment. He said that if the principle of local boards were deleted from the bill, people in the distant states would only be able to place their representations before the board of directors in writing. I venture to say there will be very few cases arising in any state in which it will be necessary for representations to be made to the central board. In ordinary banking practice the board simply declares a policy. Very rarely does it interfere directly with the details of management. These are left to the general manager of the bank. Under the system I suggest, the general manager or deputy governor of the bank in each of the states will have the power to deal with all local problems. He will hear representations, and, if necessary, will present a full statement of the case, together with his recommendations to the board of directors for final decision. Is it to be inferred from the opposition to my amendment that the Ministry is afraid that the gentlemen in each of the states who will be responsible to the board of directors for the proper control and management of the bank, are not to be trusted? If that is not the inference to be drawn, then there is absolutely no necessity for the creation of a local board in any state or area. The duties enumerated as being the duties of the local boards are really the kind of duties that would be performed by an assistant general manager in any state. He will make a report once a month. Why should it be necessary to have in each state a board, one member of which shall be a member of the board of directors? We may get three local business men interested in all kinds of business in the state, and each with his own axe to grind,, and prepared to cut off the head’ of some other business man. ‘ Senator DRAKE-BROCKMAN - And the honorable senator wants all those gentlemen to be concentrated in Sydney, representing only Sydney interests.

Senator DUNCAN:

– No, I want the position to be so defined that no one will have a chance to get ahead of anybody else in his dealings with the bank. I consider the Government proposal to be one of the most, dangerous principles possible in connexion with any banking bill.*

Senator H HAYS:
Tasmania

– I intend to support the clause as it stands. Senator Duncan’s remarks only confirm me in the belief that it is the right step to take. The Senate is the states’ House. We are here as representatives of the states, and in my view the interests of the states should be conserved in this measure. Each state should have its board of advice.

Senator Thompson:

– But each important’ town wants a local board of advice. ‘

Senator H HAYS:

– I do not go that far. The state of which I am one of the representatives has been- overlooked very frequently, and I fear that if Senator Duncan’s amendment is agreed to, Tasmania and Western Australia will get very little representation on the board of directors. We have had experience of this in Tasmania, and I intend to see that the states get representation. A few years ago two banks that were doing business in Tasmania were taken over by other banks, with the result that the head office became located in Melbourne. Since then it has been more difficult for any one to do business with those banks. Every important transaction !has to be referred to Melbourne. We can imagine, from the experience of Tasmania, what will be the position of the distant states if they have not representation by means of local boards. Everything will have to be referred to Sydney. I do not stand for that. A local board of advice will be able to convey to the board of directors a better interpretation, at all events, of the general conditions surrounding any particular local problem. Very few financial transactions involving substantial sums will be decided with’ out reference to the head office. Who could be in a better position thar the members of a local board to submit such problems to the board of directors? Seeing that we have removed from the bill the clause which provided for the representation of the geographical divisions of the - Commonwealth^ i we ought now to provide that the various states shall be given every possible opportunity to place their- needs before the board.

Senator NEEDHAM:
Western Australia

Senator H. Hays spoke on behalf of the smallest state in the Commonwealth; I speak on behalf of the largest state, namely Western Australia. I cannot recall a single handicap that Western Australia has suffered in consequence of the present method of managing the Commonwealth Bank. I had some dealings with the Perth branch of the bank while I was a responsible officer in the Trades Hall in Perth for two years, and I found that any business that I submitted to it that needed consideration by the head office was promptly put before it.

Senator H Hays:

– But that was ordinary banking business.

Senator NEEDHAM:

– Then I suppose that the honorable senator, when he was speaking, had in mind extraordinary banking business. Such business would go to head-quarters irrespective of a local board of advice. Parliament should determine definitely the methods by which the bank shall be managed, and it should give the board of directors complete control of the institution.

Senator H Hays:

– The local boards would only be boards of advice.

Senator NEEDHAM:

– What would they have to advise upon?

Senator DRAKE-BROCKMAN:

– At any rate they would be able to send a monthly reminder to head-quarters that Western Australia is on the map.

Senator NEEDHAM:

– And I suppose that a month would then elapse before the head office acknowledged receipt of the communication, and a month later

Still it would intimate that consideration was being given to the matters put before it. In short, it would act very much as governments do.

Senator DRAKE-BROCKMAN:

– If the board of directors persistently ignored the advice of the local board, something would soon be said in this chamber about the matter.

Senator NEEDHAM:

– I am sorry that the honorable senator has reminded me that twelve months or so hence he will not be here to assist me to look after the interests of Western Australia. But Western Australia will be still represented here, and its interests will be well looked after.

Senator DRAKE-BROCKMAN:

– But the honorable senator only represents a section of the people of Western Australia.

Senator NEEDHAM:

– I represent a majority of the people.

Senator DRAKE-BROCKMAN:

– No; only a minority.

Senator NEEDHAM:

– If the honorable senator can secure re-election to this. Senate when the next appeal is made to the people I shall say, “ Good luck to him,” but whoever is here to represent Western Australia will see that its interests are considered. I support the amendment.

Question - That sub-section 1 of proposed new section 12b be left out (Senator Duncan’s amendment) - put. The committee’ divided.

Ayes … … … 14

Noes … … … 8

Majority … … 6

Question so resolved in the affirmative.

Amendment agreed to.

Amendment (by Senator Duncan) agreed to -

That the remainder of proposed new section 12b be left out.

Amendment (by Senator PEARCE agreed to - .

That the words “a local board,” in subsection 2 of proposed new section 13, be left out, and that the words “ the London board “ be inserted in lieu thereof.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not satisfied that the remuneration provided, in sub-section 2 of the proposed new section 13, for members of local boards would be adequate for members of the London board. Nor am I in a position to suggest what would be a fair remuneration to pay to them. A good deal would depend on what is customary in the circumstances. I suggest, therefore, that their remuneration should be such as may be determined by the board of directors.

Senator PEARCE:
NAT

– I was about to move in that direction.

Senator GREENE:
NEW SOUTH WALES · NAT

– I moveThat after the words “entitled to”, subsection 2 of proposed new section 13, the word “such” be inserted.

If the amendment is agreed to I shall then move to add words providing that the remuneration shall be as determined by the Governor-General, on* the recommendation of the board of directors.

Senator GARDINER:
New South Wales

.- Is it the intention of the Minister to accept this amendment ? After due consideration, the Government has introduced a bill that rightly enables Parliament to decide the remuneration which is to be paid to certain directors of the Commonwealth Bank. Now, however, that certain appointments are to be made, over which Parliament will have little or no control, a further suggestion has been made that the board of directors may fix whatever salaries they like for the London board. They may have an extraordinary idea of what salaries should be paid in London. I have heard it stated on good authority that the salary of £3,000 a year paid to the High Commissioner in London places him absolutely on the bread line. It is a leap in the dark to accept Senator Greene’s amendment without’ some idea of the remuneration that should be paid to the London board. Therefore, I propose to move an amendment that the salary of each member of the London board shall not exceed £1,500 a year. That will give a reasonably large margin for the board to work on. Will Senator Pearce accept my suggestion as readily as .he accepts one from Senator Greene ?

Senator Pearce:

– I am making a suggestion now that the remuneration be fixed by the Governor-General on the recommendation of the board of directors.

Amendment agreed to.

Senator GREENE:
NEW SOUTH WALES · NAT

.- I move-

That the words “by way of salary at the rate of £200 per annum”, sub-section 2 of pro- , posed new section 13, be left out with a view to insert in lieu thereof the words “as is fixed by the Governor-General on the recommendation of the board of directors.”

My amendment will prevent any possibility of the payment of an extraordinary remuneration such .as that suggested by Senator Gardiner. I do not think that the board of directors will recommend the payment” of an extraordinarily high fee.

Senator GRANT:
NEW SOUTH WALES · ALP

– It is provided earlier in the proposed section that the GovernorGeneral shall fix the salaries of the governor of the bank, and the deputy governor, .and we have every confidence that he will fix the salary of the governor considerably in excess of that which is now drawn by the acting governor. It is also provided that each member of the board of directors shall be paid £600 a year, and the chairman of directors £1,000 a year. A salary of £600 is not commensurate with the responsible position a. member of the board of directors of the Commonwealth Bank will occupy.

Senator Findley:

– It will represent £50 a sitting.

Senator GRANT:
NEW SOUTH WALES · ALP

– We have already passed the portion of the bill which fixes the remuneration of the board of directors, so that I am not permitted to discuss it fully, but I contend that if directors whose services are of value to the bank are appointed, they ought to be paid at a. higher rate than is provided in the proposed new section.

The TEMPORARY CHAIRMAN (Senator Payne:

– The honorable senator may not now discuss that portion of the proposed new section.

Senator GRANT:
NEW SOUTH WALES · ALP

– If it is wise to allow the Governor-General to fix the salary of the governor of the bank and the deputy-governor under the belief that he will give them a reasonable remuneration, and if it be also wise to fix in the bill the salary of each member of the board of directors, why should we not fix in the bill the salary to be paid to the members of the London board ? The Government must have some idea of what work will be performed in London, and of the number of times the members of the board will b© obliged to attend meetings of the board. I presume that these members will all reside in London and be available when required, and if they devote a large portion of their time to the business of the bank, the salary proposed in the bill will be totally inadequate. The board of directors may not pay the slightest attention to remarks made in

Parliament when a bill is going through, just as judges pay no attention to the intentions of Parliament in framing legislation, yet they may take into consideration the provision in the bill now sought to be amended, and as a consequence may fix the remuneration to be paid to the members of the London board at the ridiculously low rate of £200 a year.

Senator GREENE:
NEW SOUTH WALES · NAT

– The proposal is to leave that out.

Senator GRANT:
NEW SOUTH WALES · ALP

– I am aware of that, but at the same time it is not- proposed to insert another amount in its place. In order to give the London board of advice the! same salary as is proposed to be given to the directors in Australia, I propose to insert £600 in place of £200. But why the payment to the board of directors is fixed so low I do not know.

Senator McDougall:

– They will have practically nothing to do.

Senator GRANT:
NEW SOUTH WALES · ALP

– I cannot imagine the Government deliberately creating a board of directors, and proposing to pay each director £600 a year, unless the board will have something to do. If we are to extend the operations of the bank to London, where the cost of living is as high as it is in Melbourne or Sydney, I fail to see how we can do other than provide in the bill that the London board shall be paid at least what is proposed to be paid to gentlemen holding a similar position in the Commonwealth. If the committee decides not to insert in the sub-section the words which Senator Greene proposes in place of those to be omitted, I shall move an amendment to fix the payment to each member of the London board of advice at the rate which is payable to the directors in the Commonwealth, namely £600 per annum. It will be the most satisfactory arrangement.

Amendment agreed to.

Amendments (by Senator PEARCE’ agreed to -

That the words “a local board” in proposed new sections 14, 15, and 15a, be left out, and the words “ the London board “ be inserted in lieu thereof.

Senator GREENE:
NEW SOUTH WALES · NAT

– I propose to move. -

That after the word “ is,” line 1 of proposed new section 15b the words “ or has been within the twelve months immediately preceding “ be inserted.

The object of the amendment is abundantly evident. This proposed new section is designed to prevent certain per sons being appointed to the board of directors including directors of corporations already engaged in banking. I am suggesting that in addition’ to the persons already mentioned in the provision, those who within twelve months immediately preceding have been directors of a corporation the business of which is wholly or mainly that of banking should also be included .

Senator PEARCE:

– Why ?

Senator GREENE:
NEW SOUTH WALES · NAT

– To prevent persons resigning from existing boards, and joining the board of the Commonwealth Bank.

Senator Findley:

– What harm would that do?

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not think it is desirable in the interests of the Commonwealth Bank. A person in close touch with a board of directors of a big financial institution could immediately resign his position, and if selected join the directorate of the Commonwealth Bank. 1 do not think that is right. A reasonable time should elapse between the date of resignation and that on which he joined this board.

Senator Elliott:

– Would it affect the appointment of a governor or deputy. governor of the bank?

Senator GREENE:
NEW SOUTH WALES · NAT

– I doubt very much whether it would. My intention is to limit the amendment to directors of other corporations. I do not wish the amendment to be so worded that it will prevent an officer of- a corporation eventually becoming a member of the board if he so desires, but he should not be permitted to join the directorate of the Commonwealth Bank immediately after resigning a similar position on the- board of another financial institution.

Senator Hannan:

– If the honorable senator’s amendment were adopted it would exclude many men of ability who would be of service to the bank.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not particularly keen concerning the amendment, but it is doubtful if it is wise to appoint persons such as those mentioned immediately after they have resigned a similar position on the board of another financial institution.

Senator Crawford:

– Would it not be an advantage?

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not think it would. If a majority of the members of the committee are “opposed to the amendment I shall not press it.

Senator PEARCE:

– It would hamper the bank very much.

Senator GREENE:
NEW SOUTH WALES · NAT

– Very well, I shall not press the amendment, but we shall see what we shall see.

Senator DUNCAN:
New South Wales

.- I moveThat after the word “ banking “ in paragraph (6) of proposed new section 15b, the words “ or (c) of an age exceeding 65 years” be inserted.

The amendment is not submitted with any derogatory intention concerning those who have reached the age of 65 years. The Commonwealth Bank, as the Minister (Senator Pearce) has frequently pointed out, is branching out into new spheres of activity, and the directors are to be appointed for varying periods. If we appoint a person over the age of 65 years for a term of five, six, or seven years, his advanced age will prevent him from undertaking the work in the manner in which it could be handled by a younger man. We are hopeful that the directors to be appointed will be associated with the management of the bank for many years, and will be able to direct’ their attention to formulating and developing a policy for the carrying on of the bank’s operations for a long period. If that is so, comparatively young men should be appointed to the board. Notice of this amendment was given in another place, but owing to a time limit being imposed, the honorable member who intended to submit it was prevented from doing so.

Senator PEARCE:
Western’ AustraliaMinister for Home and Territories · NAT

– I trust the committee will not accept the amendment. At the time of his death. Sir Denison Miller was 62 years of age. Will any honorable senator say that if he had remained alive another three years he would have become inefficient? Most banking authorities are nearer 70 than 62 years of age.

Senator DUNCAN:
New South Wales

– I took this action only because of a promise that I made to an honorable member of another place. I ask leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Senator GRANT:
NEW SOUTH WALES · ALP

– Unless the Minister can show that there is provision in the bill to prevent a person who is a bankrupt from being appointed to the board, I shall move for the recommittal of the hU in order to provide against such a person being appointed.

Senator FINDLEY:
Victoria

. In the proposed new section 15d (1) it is provided that the board’ shall meet at least once a month, and at such other times as. the chairman directs. I think that it should read “ at such other times and place as the chairman directs.”

Senator PEARCE:

– I do not think that that is necessary.

Senator DUNCAN:
Now South Wales

.- I moveThat after the word “members,” in subsection 3 of the proposed new clause 15d, the words “ other than the governor “ be inserted.

The clause would then read -

The board shall in each year choose one of its members other than the Governor to be chairman of directors for the ensuing twelve months, and the member so chosen shall preside over meetings of the board.

The chief executive officer should not act as chairman of the board when his own actions are under review. In ordinary banking practice, and in company law, the chairman of the board, or the chairman of directors, is never the chief executive officer. It would be wise to make it quite clear that the board shall sit upon matters referred to it, or of which ‘ it desires to take cognizance, without the Governor of the bank acting as chairman. The amendment does not in any way alter the purpose of the clause, but makes it clear that the board, and not the chairman, is to be the controlling authority.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– The Government did not feel that it was necessary to make that provision in the bill. It preferred that th, matter should be left to the board. However, if the committee feels that the Governor should be definitely proscribed, the Government will raise no objection; but I think that the matter may safely be left to the board.

Senator NEEDHAM:
Western Australia

– We do not know what will be the effect of this amendment which the Minister complacently accepts. It is not usual for him to throw himself on the tender mercies of the committee. As Minister in charge of the bill, he should say whether he regards the amendment as good or bad. I am not prepared to vote for it until I understand more clearly what it means.

Senator McDOUGALL:
New South Wales

.- The effect of the amendment is that the governor of the bank may not in any circumstances be chairman of directors. I am opposed to that. I would prefer to make it mandatory that he should be chairman of directors, and have pride of place in everything. To enact that the man who will have the banking knowledge and the responsibility of controlling the institution shall not become chairman would be an outrage. The Minister is willing to leave the appointment of the chairman to the discretion of the directors. I shall not allow the amendment to pass without a division.

Senator ELLIOTT:
Victoria

– I support the amendment. The governor will be the chief executive officer of the bank, and if the board is to perform its functions, it must occupy a paramount position. It can never be independent if tho governor is its chairman. The chief executive officer will be expected to carry out the policy decided upon by the directors.

Senator Thompson:

– He should not have even a voice upon the board.

Senator ELLIOTT:

– I agree with the honorable senator. He will have . a considerable influence as a member of’ the board, but, as tho Government viewed the honorable senator’s amendment with some concern, I did not support it. The governor will have a voice on the board, but if he were chairman also he would have au overriding power. The amendment proposed” by Senator Duncan is necessary in the interests of the employees. The governor will decide matters of discipline, and if the employees are dissatisfied they will appeal to the board. If the governor is chairman of the board, the appeal will be from Caesar to Caesar. Such a procedure would be unjust.

Senator GREENE:
NEW SOUTH WALES · NAT

– The Government might well accept this amendment, because in the interests of the bank it is undesirable that the governor should also be chairman of directors. He will be the chief executive officer, and the duties of the directorate will include the oversight of the work of the governor. Serious conflict of opinion may arise between the governor and the board, and it may be necessary to give the governor certain definite instructions. Those instructions should be conveyed in writing to the’ governor by the chairman,- and it is not desirable that the chairman should sign directions from the board to himself as governor to adopt a certain course, of which he does not approve. Of course, such a situation may not arise once in ten years; but there may be circumstances in which definite instructions from the board to the governor will be necessary in the interests of the bank. Moreover, it is desirable that the employees should have a right to appeal within the jurisdiction of the bank itself, and if the governor is chairman of the board, the appeal will be from himself to himself, or, as Senator Elliott has said, from Caesar to Caesar. That would not be in the interests of the employees. In practice, the directors will probably realize the anomalous position in which the governor would be placed at times if he were chairman, and they will elect some other director to be chairman. Still, it would be safer to lay down a definite direction to that effect.

Senator GARDINER:
New South Wales

– The clause, as drafted, is preferable to the amendment. The directors will be appointed to control the business of the bank. They will have to consider matters of the gravest importance to, not only the bank, but also the Commonwealth. The Government has’, therefore, proposed a middle course in regard to the appointment of chairman. Senator Duncan proposes that the governor shall not be eligible for election as .chairman, even if the directors desire him to occupy that position. Senator McDougall has said that he would provide that the Governor of the bank should be chairman of directors of the board. I think that the present provision is a wise one, particularly as the occupant of the office may be changed periodically. In 99 cases out of 100, it would be more convenient for the Governor of the bank to be chairman of the board. He should be more conversant with the affairs of the bank than the other members of the board, and, being in the best position to realize the necessity for taking urgent action, he could promptly call the board together. The men appointed to these positions will have had their qualifications thoroughly investigated. If we can entrust to them the management of the affairs of the bank, surely we can entrust to them the task of electing the best man on the board as chairman. They will be in a much better position than we are to decide who is the best man. Honorable senators may have observed that, throughout the consideration of this bill, I have been reluctant, except in regard to any proposal touching a matter of principle, to depart from what has been carefully prepared by those who drafted the bill. They considered all the pros and cons before finally deciding upon the nature of the provisions that should be included in the measure. To my mind, it is always better to accept what is thus placed before us than to adopt the ideas of individual honorable senators who may propose amendments without having considered the manner in which they will affect the remainder of the provisions in the bill! Consider what resulted from the acceptance of an amendment earlier. Amendment after amendment was subsequently found to be necessary. The Minister (Senator Pearce) quite innocently told us that he had two sets of amendments, one in case he won, and another in case he did not.

Senator Pearce:

– I had to be prepared for any eventuality.

Senator GARDINER:

– I was pleased to see that the honorable senator was so well prepared.

Senator Elliott:

– This amendment will not involve anything of that nature.

Senator GARDINER:

– It will involve something much more serious. It provides that the man who is most conversant with the affairs of the bank is to be debarred from appointment as chairman of directors of the board, no matter what his fitness for the position may be. I do not take up that attitude. I think’ the Minister will be well advised, in view of his experience this evening, not to take a definite stand on any matter. I do not think that I could pledge my supporters, but I am prepared to promise the Minister my support in preserving intact any principle in the bill that is assailed by an insurgent honorable senator opposite, if he will exercise a little of that restraining influence which Ministers in charge of bills should exercise. If we could agree to a workable arrangement of that character, we would quickly obviate these unseemly exhibitions of insubordination in the face of the enemy. I offer that olive branch to the Minister to show how anxious I am to assist him to have the measure passed. I was hoping that he would report progress. As he has not seen fit to do so, I shall certainly participate in the debates for the remainder of the evening, no matter how frequently I may be called upon to give utterance to my views on these important matters. The Minister has invited us to express our opinions. My opinion is that it would be a very serious thing for the committee at this stage, and in its present condition, without knowing the character or the capacity of the man who will be the Governor of the Commonwealth Bank, to say definitely that he shall not be appointed chairman of directors of the board, even though the board itself is unanimously in favour of his appointment to that position. I admit that there may be occasions when an appeal will lie from the Governor of the bank to the chairman of directors of the board, but I contend that the man who is fitted to occupy the position of Governor of the bank would constitute a safe court of appeal. I think that most men can divorce themselves from the littleness of things. If an appeal were made from this gentleman in his capacity as Governor of the bank to himself as chairman of directors of the board, I do not think that any gross wrong would result. We frequently see appeals made from single judges to full courts, but no one contends that the judge whose decision is appealed against should be prevented from sitting on the full court.

Senator Elliott:

– They rarely do so. Sometimes it cannot be avoided.

Senator GARDINER:

– When it is unavoidable they sit on the appeal, because, otherwise, the court could not be constituted. No one would think of asserting that they would fail, to mete out justice on the appeal. The directors of the board will be the best judges of who should preside over their deliberations. The fact that this election will be held once a year constitutes an additional reason for allowing the board to select the man who is best fitted to occupy the position of chairman.

Senator THOMPSON:
Queensland

– The Government has created for itself an unfortunate position by transgressing the rules that usually operate in cases of this kind, and giving the general manager a vote on the board. I am afraid that Senator Duncan’s amendment will not improve matters. In effect, the Government has made the Governor of the bank a managing director. As I said on a previous occasion, it does not require much vision to foresee a clash between a virile chairman of directors and an equally virile governor. Having decided that the governor of the bank shall have a vote, and be a member of the board, to provide for the contingency which I feel sure will occur, it would be far better to leave matters as they are. If the governor became the managing director, and was made chairman of directors, it would prevent that clashing which I foresee is bound to happen. It is usual for a managing director to be chairman of a board. Otherwise there is bound to be clashing between men of outstanding ability. I could point to instances of leading concerns in Melbourne in support of my contention. I disapprove of the governor of the bank having a vote on the board, but, in the circumstances, I prefer that matters should remain as they are rather than support ‘Senator Duncan’s amendment.

Senator NEEDHAM:
Western Australia

– I hope Senator Duncan will reconsider his amendment, which will destroy the authority of the governor. In order to buttress his argument, the honorable senator pleads the case of the employees; and Senator Elliott, who followed, had something to say about appealing from Caesar to Caesar. This amendment has nothing whatever to do with the appeal board. I am surprised at Senator Duncan’s unexpected solicitude concerning the board of appeal. His amendment, if carried, will not prevent this appeal from Caesar to Caesar. It deals with the board of directors, not with the appeal board. His subsequent amendment in clause 8 will deal with the appeal board.

Senator Elliott:

– That amendment is not carried yet.

Senator NEEDHAM:

– No, and probably it will not be carried; but Senator Duncan must not try to secure the adoption of this amendment by appealing on behalf of the employees. I shall oppose it.

Amendment negatived.

Senator McDOUGALL:
New South Wales

.- I move-

That after the word “ deliberative,” subsection 4, of proposed new section 5, the word “ vote “ be inserted, and that the words “ a second or casting vote,” be left out, with a view to insert in lieu thereof the words “ the question shall pass in the negative.”

The proposed new sub-section will then read -

At meetings of the board the chairman shall have a deliberative vote, and, in the event of an equality of votes, the question shall pass in the negative.

My object is to do away with the pernicious practice of allowing one man on the board to have two votes. In this august chamber our Standing Orders provide that the President shall have a deliberative vote, but that, in the event of the voting being equal, the question shall pass in the negative. That is a very democratic principle, and is one which I desire to have incorporated in this proposed new sub-section. I have had experience in this matter. A wise New South Wales Labour Government some years ago appointed me to a board of directors. I thought that I was going to do important work on that body, but I found that I was able to do practically nothing, for the simple reason that in a quorum of four the chairman had a casting as well as a deliberative vote, and the result was that two men at a meeting were always able to out- vote the other two.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– I hope the committee will not accept the amendment. Senator McDougall, in support of his proposal drew attention to the fact that in this chamber when the voting is equal the question passes in the negative. There is very good reason for this provision. In this chamber there is an equality of representation for the states. That principle would be vitiated if the presiding officer had two votes. We may assume that the boards will appoint as their chairman a man who is an outstanding figure in the banking world. His views should therefore carry additional weight. For this reason it is thought wise that he should have a casting vote as well as a deliberative vote.

Senator GARDINER:
New South. Wales

– I am sorry that the Minister (Senator Pearce) has taken objection to the amendment. This chamber consists of 36 members, and therefore, a casting vote exercised by the President would not be nearly so important as a casting vote exercised by the chairman at a meeting of four persons. At all meeting’s there will be men whose thoughts on general questions run alike. Therefore, if we allow the chairman of a board of directors to have a casting as well as a deliberative vote, at meetings where only four are present, two will be able to carry the day for the simple reason that their thoughts run along parallel lines, and one of them will be the chairman. I value this provision of equal representation. Senator McDougall’s amendment commends itself to me on the grounds of fair play and justice, and I think it should be accepted by the Minister.

Senator NEEDHAM:
“Western Australia.

– I am surprised at the manner in which the Minister (Senator Pearce) replied to the arguments put forward by Senator McDougall in support of his amendment. Surely the principle that obtains in this Senate, the highest legislative authority in Australia, where questions involving the interests of the nation are decided, should also apply to meetings of bank directors. I hope the committee will accept the amendment. It is democratic in principle. It is the policy of the nation, and it should be the policy of the bank. “When the voting is equal the question should pass in the negative.

Senator FINDLEY:
Victoria

– I hope that the committee will give the amendment serious consideration. When only four members of the board are present, and important matters are under discussion, it may be found after a discussion extending over some hours that the meeting is equally divided. A deadlock will then occur, and because one director has a double voting strength he can force his view upon the other members of the board.

Senator Thompson:

– It is the regular thing for the chairman of directors of a board to have a deliberative and casting vote.

Senator FINDLEY:

– I have always opposed the principle of giving one man two votes, and though that may be the custom in certain institutions it is no reason why we should make it apply to the Commonwealth Bank directorate. We are not obliged to nor should we slavishly follow the procedure of other financial institutions. I am sure that if Senator Thompson was a member of a board of which four formed a quorum, and was present at a meeting with three of his fellow directors, he would not be pleased if, in a case of the board being equally divided on an important matter, the chair man, by exercising both a deliberative and a casting vote, forced his will upon the board. It would be in the best interests of the Commonwealth Bank to provide that where only four members of the board were present at the meeting, and the voting on a certain matter was equal the question should be resolved in the negative. That would leave it open for further consideration when a larger number of directors was present. I support the amendment.

Question - That the word “ vote “ proposed to be inserted be so inserted (Senator McDougall’s amendment) - put. The committee divided.

AYES: 8

NOES: 15

Majority … 7

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

.- I move -

That the words “ the’ directors voting for it include two of the following directors, namely, the Governor,the director who is the Secretary to the Treasury, and the directors appointed in pursuance of paragraph (d) of sub-section (2) of section eleven of this Act” at the end of sub-section (5) of proposed new section 15d be left out with a view to insert in lieu thereof the words “ six directors vote for it at a meeting at which all the directors are present or five directors vote for it at a meeting from which any of the directors are absent

This amendment is necessary in consequence of the alteration in the arrangements for issuing notes that has been made since the bill was drafted.

Senator GREENE:
NEW SOUTH WALES · NAT

– I shall be quite frank with the committee, and admit that not only are all questions which concern the currency of the highest importance, but that, in my opinion, they should not be left to the decision of a chance meeting of the board when just a bare quorum was present, but should be decided by a full meeting or at least an absolute majority of the board members. The Government might very well concede that point. In doing so they would not be going very much further than they propose to do, now that the directors with a knowledge of currency have been cut out.

Senator Pearce:

– They are not cut out altogether. We can still appoint two persons who possess a knowledge of currency.

Senator GREENE:
NEW SOUTH WALES · NAT

– They can be appointed, but they will not have the special powers the bill originally proposed to give to them..

Senator Thompson:

– Currency questions are so important that fairly good men should be appointed to deal with them.

Senator GREENE:
NEW SOUTH WALES · NAT

– I agree that they are matters of the highest importance. “I have not the time nor the inclination to indulge in a long dissertation on the question of currency, and I do not know that the Senate would be much wiser if I were so inclined. I think in the end there would be, on this matter, an equal balance of opinion in this chamber, just as there is outside. In fact, there isno greater diversity of opinion on any matter than there is on exchange questions. Everything hinges on the fact that to-day we are living under abnormal conditions. There is practically no gold basis for our currency. Living under extraordinary conditions, we must use . extraordinary means. It may be many a long day before we return to a gold currency. I fully anticipate that the directors who are appointed will have a wide divergence of opinion on this question, and I think it would be in the interests of the Commonwealth to provide that if there be an absolute majority of the board in favour of any course of action, one way or the other, in relation to currency matters, it should be sufficient to determine the question.

Senator Thompson:

– It is often difficult to get a full meeting of directors.

Senator GREENE:
NEW SOUTH WALES · NAT

– In that case, I am. suggesting that at least five directors must vote in. favour of a proposition before it can be carried. It was my intention to move that all the words after the word “ unless “ be left out, with a view to insert in lieu thereof the words “ an absolute majority of the full board vote in favour of it.” If a bare quorum of the board is in attendance, the proposition will be carried if the whole five are in favour of it. If there are six directors present, the proposition will be carried if five vote forit and one against it.

Senator Foll:

– How would the honorable senator define what is purely a currency question?

Senator GREENE:
NEW SOUTH WALES · NAT

– Currency questions relate to the note issue department of the bank. In the actual practice of the bank, the note issue department will be quite distinct from the banking business, just as the note issue branch of the Bank of England is quite distinct from the ordinary banking business. I ask the Government to accept my suggestion.

Senator LYNCH:
Western Australia

– A proposal has been submitted to adopt the best safeguard that can be conceived for the proper carrying out of that highest of duties, the regulating of the currency of the Commonwealth. The original proposal was to call in the aid of experts to handle the question, but Senator Greene thought it was wise to cast that proposal aside. Now, in the words of Kipling, he is returning with “ an humble and a contrite heart,” and to make up, in some measure, for the demolition in which he was engaged in connexion with this provision, he suggests the requirement of an absolute majority of the board of directors in place of the two experts to control currency. That is to say, he proposes to replace experts by ordinary banking men. I am afraid we are proceeding in a vicious circle. We commence to do certain things, we advance to a certain point, and then we begin to feel sorry for having made such an advance.

Senator GREENE:
NEW SOUTH WALES · NAT

– What is a currency expert ?

Senator LYNCH:

– I might reply to that question by quoting the words of a British Prime Minister, who once asked, “What is a pound note?” There are in Australia men who know more about currency than do ordinary banking men. I admit there are very few of them, but, at the same time, there are also very few of those who control the banks of Australia who understand the underlying principles of banking. They certainly know all about the ordinary routine of banking business, but there are not very many men who are really conversant with the principles which underlie modern banking. I_ am sorry that the Government did not get sufficient support for their proposal. Owing to its defeat, a very peculiar position has arisen. I do not know that it is due to a feeling on the part of Senator Greene that he was rather too successful in smashing the provision in the bill, that he is now engaged in an effort to secure the same result as, but for his success, would have been achieved. At any rate, we are faced with the serious problem of what is to be done to safeguard the currency of the country. Senator Greene’s only suggestion is to adopt an absolute majority of the board of directors.

Senator Thompson:

– That is a very wise suggestion.

Senator GREENE:
NEW SOUTH WALES · NAT

– Quite so; but the original proposal was wiser.

Senator Reid:

– That has gone now.

Senator LYNCH:

– Of course it has; but I hope there may be a chance of resurrecting it. We had a workable proposal to control the currency, but the committee saw fit, in various ways, to tinker with it. Now we have to acknowledge that it is a difficult question; and, after cutting out the experts,, the proposal is to call to our aid eight ordinary banking men, who need not be experts in currency, and leave them to settle these most important matters by a majority of five votes to throe. We are going too far. If there is any means of getting back to the original proposal to call experts to our aid, my advice is to do so. Senator Gardiner’ has wisely said that we are going too fast with this bill. On Senator’ Greene’s admission, this is a serious matter. His proposal to leave the’ determination of these important questions to five ordinary banking men is a confession that it is a most serious problem. We are now running in a circle. Every one now admits that currency questions are most important, yet Senator Greene will not have experts to decide them.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– There is nothing in the bill to prevent the appointment of experts.

Senator LYNCH:

– To put the bill into right shape, and make it a workable measure which will be a credit to this Parliament, let us, in the words of Charles Dickens, “Bite our nails” over it; let us try to re-insert the proposal of the Government to have two experts on currency matters on the board of directors. I would rather vote against the present proposal than rely on the haphazard expedient of .depending on the decision of five ordinary banking men, who may have no special qualifications in regard to currency, as to whether the currency in Australia should be inflated or deflated. We have been brought to this position by a haphazard judgment of this chamber. I shall require more information on the subject before supporting the amendment. I have, however, fulfilled my duty by calling attention to the position which has arisen.

Senator Thompson:

– Does not the honorable senator think- that the Government will be able to secure the services of men who can be regarded as experts in the matter of currency?

Senator LYNCH:

– If they could, why was not the original provision relating to the appointment of two members with a knowledge of currency retained?

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– Because it might have limited the selection.

Senator LYNCH:

– I am only hoping that, as a result of my efforts, some interest will be awakened, and that an endeavour will be made to arrive at a solution of what is indeed a most important and intricate problem. At present, I shall content myself by voting against the amendment in its present form , if only to show that more mature consideration is necessary before deciding that currency matters should be controlled by five ordinary banking men on a directorate of eight. I shall avail myself of the forms of the Senate to revert to the original proposition unless the position is righted, in the belief that it is the only safe way in which to deal with a most intricate problem.

Sitting suspended from 12.b a.m. until 1 a.m. (Friday).

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– I suggest to Senator Greene that the difference between his amendment and the Government’s proposal is not sufficient to warrant a conflict of opinion. The Government feels that currency is such a vitally important matter, that unanimity, or something closely approaching it, is desirable. I wish to quote from the Sydney Daily Telegraph, of the 29th July, an opinion regarding the amendment of which the Government gave notice, to allow the issue of notes against securities held in London. The concluding portion of the article in question reads: -

Mr. George J. Cohen, speaking on Friday at the annual meeting of the shareholders of the Commercial Banking Company, of Sydney, said that he viewed with apprehension the proposal that notes should be issued against securities in London, or that Bank of England notes should be made legal tender here. The adoption of either proposal, he said, would mean decided inflation, and would eventually lead to serious trouble.

I understand that Mr. Cohen is regarded as a very high banking authority. Whatever views we may hold, we must all admit that the matter of currency has to be handled with the very greatest caution and care. This country would not be alone in holding that view. The Bank of France is governed by twelve regents, or governors, and three censors. The censors are appointed by the general assembly of the bank, composed of 200 of the largest shareholders. Three of the regents mustbe government officials. The special mission of the censors is to supervise the whole of the bank’s transactions. They are entitled to examine all the records of the bank, but they have not the right to vote on any proposal. No action in relation to the issue of bank-notes can be taken unless unanimous approval is given to the proposal. In dealing with ordinary banking matters, the Bank of France allows a certain amount of freedom; but it deals with currency in quite a different way, saying that no action can be taken without the unanimous approval of the censors. The proposal in the bill does not go quite so far as that. I think that Senator Greene could very well agree to the provision in the bill, especially as at board meetings there may frequently be one or two absentees. We are in this respect treading on ground that is dangerous, largely unexplored and untried, and we de sire that unanimity shall prevail before any decision is arrived at. I ask Senator Greene and the committee to stand by the proposal of the Government.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am rather glad that the Minister (Senator Pearce) has referred to the report of the speech made by the chairman of directors of the Commercial Banking Company of Sydney, in relation to currency matters. I am sorry that he did not see fit to incorporate in Hansard the whole of that report, because he will, no doubt, have noticed that in it there is a very strong confirmation of a statement that I made at a previous stage of the bill, that the banks were not consulted by the Government in regard to this particular measure. That was stated by Mr. Cohen in the most deliberate terms. I agree that the issue of currency will be the most important function that the bank will be called upon to perform ‘. I agree, ‘ too, that in nine cases out of ten, all the directors will not be present at board meetings, particularly if they are drawn from centres that are far removed from the place of meeting. Frequently the Secretary to the Treasury will not find it convenient to be present. He will not, for instance, be able to attend every meeting of the board that is held in Sydney.

Senator PEARCE:

– He has to attend the meetings of the Notes Issue Board, and they frequently are held in Sydney.

Senator GREENE:
NEW SOUTH WALES · NAT

– It will be impossible for him always to . be present. Equally, it will be impossible for others always to be present. The Government has provided that in such a case five shall be the determining number. If the Government insists that six members of a full board must vote in favour of any proposal relating to currency, I shall not press the matter any further. I simply .state my opinion that an absolute majority of the full board would be sufficient ‘to decide any matter. I again ask Senator Lynch to tell me by what means he proposes to determine who is an expert on currency. I venture to say that he would determine it in the manner in which I should determine it. He confesses to having browsed deeply in the banking authorities that are to be found in the parliamentary library. I am astonished at the unflagging zeal and industry which he has displayed in the study of this very vexed question. I also have done something along the same lines. I should regard as an expert any man who agreed with my views on. currency. Equally, I should conclude that the man who did not agree with the opinions that I had formed was, if not an unmitigated fool, at all events a man who by no stretch of the imagination could be considered to be a real expert in currency. Broadly, it is by that standard that we decide who is an expert and who is not. Bankers are handling these matters from day to day. I could quote the opinions of bankers in Sydney who, in the banking world, are just as eminent as Mr. Cohen, and who hold views entirely contrary to those expressed by him. I hope that the Government will secure for this board men who are proficient in the particular duties that members of the board will be called upon to perform, and that their judgment will be sound, thus making for the prosperity of, not only the Commonwealth Bank, but also Australia generally. I do not press the amendment.

Senator GARDINER:
New South Wales

– Having listened to the remarks of Senator Greene, I. have come to the conclusion that when he moved the amendment he had the idea that every person would be eligible for appointment. My chief reason for rising is to say that I desire to live up to the best traditions of banking. If my memory serves me rightly, the 1st August - which is to-day - is. a bank holiday. .1 ask the Minister to state how far he- desires to proceed1, in order that we may expedite the business to that point. Senator Greene- regretted that the whole of the speech of a great banking authority in Sydney was not placed in Hansard. I do not want to take the trouble of putting it there, but if the Minister is’ determined! to give us an exhibition of brute force”,, and to use his> majority against us whenwe are> physically weak, I shall endeavour to- put- in Hansard as much useful’’ information as it is possible- to compile between now and Saturday night.. I should’, however, prefer to meet the> Minister- half way. If it is- his’, intention to use brute force, I do not mind’ shouldering, my share.. I. realize that I am not physically as fit as- I. was’ some years ago;- but we on this’ side- will be able to obtain, some steep, whilethe’ Minister will be under tine neces sity of remaining constantly in the chamber. I am not using a threat. In the most friendly spirit, I ask the Minister to state how far he desires to go. Let us endeavour to reach that stage as quickly as possible, and live up to the best traditions of banking by keeping 1st August as a holiday.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– The wish of the Government is that this bill should go through committee this week. We have already devoted about three weeks to the debate on the measure, and that, I think, is a very fair discussion.

Senator GARDINER:

– As far as I am concerned . the Minister can have the bill before we adjourn this afternoon.

Senator PEARCE:

– The desire of the Government is to get the bill through committee before the usual hour for adjournment this afternoon, and to take the third reading on Wednesday of next week. If the committee feels that this can be done, I am quite willing that the Senate should rise almost at once, but I remind honorable senators that there are still a number of amendments that will probably require a fair amount of discussion. Before we adjourn this morning we should, if possible, dispose of some of them. I am prepared to accept the assurance given by the Leader of the Opposition that he will place no obstacle in the. way of the bill passing through committee before the Senate adjourns this afternoon, but I should like to point out that if it is. not through committee to-day, we shall, have a delay of another day next week before we can take the- third reading.

Senator LYNCH:
Western Australia

– This amendment means, I suppose, that at an ordinary full meeting of directors,, six members of the- board must agree to any proposal made in regard to- the- note issue department, in order to make the decision effective, and that, where only six directors’ are present five directors must be in favour of any such motion to make it effective J

Senator PEARCE:

– Yes.

Senator LYNCH:

– That appears to be an. ample: safeguard.

Amendment agreed to;

Clause also; consequentially amended and, as amended, agreed to.

Senator DUNCAN:
New South Wales

– I move -

That the following new clause be inserted to follow clause 7 : - 7 (a) Section 16a of the principal act is amended by inserting after the word “Commonwealth” the words “or State “.

The section proposed to be amended reads - Where an officer of the Commonwealth Public Service becomes an officer of the bank he shall retain all his existing and accruing rights.

The principle for which I am contending is already incorporated in the Public Service Act. When that act was recently amended this provision was inserted at the request of the Government. In that case it was contemplated that there might arise occasions, not frequently perhaps,* when a state officer would be taken over, and it was desired that any officer so transferred should take with him his existing’ and accruing rights. The position of the bank is similar to the Public Service. At some future time it might be deemed desirable to take over officers of an existing state bank, or that the procedure already adopted in regard to two of the states should be extended and other state savings bank departments amalgamated with the Commonwealth savings bank department. If this amendment is made in the act, any officers taken over from a state savings bank will retain their existing and accruing rights. The amendment will safeguard their interests. It is possible, of course, that the necessity for this provision may never arise. In the meantime, it will not cost anything.

Senator Lynch:

– Will the state authorities reciprocate?

Senator DUNCAN:

– That I cannot say. Our’ object should be to get the best men available for the Commonwealth Bank. If we have this provision in the act, it will be some encouragement to experienced officers in the state banks to come over if -their services are required.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I cannot accept the amendment; and I must ask the committee to vote against it. We should be very careful not to do anything that might militate against the interests of state officers. The position is not quite the same as when we amended the Public Service Act. We were dealing then with transferred departments, and we had made provision in the

Constitution for state Officers joining the Commonwealth Service to bring with them their existing and accruing rights. The Commonwealth Bank does not present an analogous case. The only analogy is in respect of state savings banks. In the general banking business, I do not know of any case, except, perhaps, that of South Australia, where the principle would be applicable. I remind the committee that if a state bank officer were loaded with superannuation, pension, or leave rights, the Governor of the Commonwealth Bank would be very cautious about taking him into the service of the bank, because the bank would have to carry that liability; and as the Governor could obtain from private banking institutions experienced officers who were not so loaded, the probability is that he would look to them, and not to the state banks, for any men that might be needed. The agreement in regard to the Queensland state savings bank provided for the Queensland officers to come over to the service of the Commonwealth Bank with all their existing and accruing rights, and the probability is that if a similar arrangement were made with other state savings banks, the same privileges would be extended to the state officers concerned. In the circumstances, it would appear that the amendment would really be a bar to the employment of state bank officers in the Commonwealth Bank.

Senator GRANT:
NEW SOUTH WALES · ALP

Senator Duncan’s amendment is that when the Commonwealth Bank takes over state bank officers, the latter shall bring with them their existing and accruing rights. I do not doubt the accuracy of the Minister’s statement. Probably, in some cases, the provision sought to be incorporated in the act would operate against the appointment of such officers by the Commonwealth Bank That would be a matter for the Governor of the bank to decide. If he wanted an officer from a state banking department he would have to consider, if this amendment were agreed to, whether it would be profitable for the bank to employ that officer. In the past, there has been no desire on the part of the Commonwealth Bank to engage men from other banks. It prefers to train its own staff, but if the bank extends its operations, as we intend it shall, it may then be necessary to draw its officers from a wider area. Those who are directly concerned, however, favour the amendment. I presume that the men know their own business best. This being so, and notwithstanding the Minister’s statement, I intend to support the amendment.

Senator FINDLEY:
Victoria

– I cannot follow the Minister’s argument. He told us that when the Queensland savings bank business was taken over by the Commonwealth Bank the rights of the Queensland employees were preserved to them.

Senator Pearce:

– The employees were taken over en bloc.

Senator FINDLEY:

– Later on the Commonwealth Bank may take over the savings bank business of other states, but the board of directors may not feel disposed to enter into an obligation to honour all the existing and accruing rights of the employees concerned.

Senator Pearce:

– If an amalgamation were effected an agreement similar to the Queensland agreement would probably be made.

Senator FINDLEY:

– We should put it beyond doubt that the rights of any servants taken over in consequence of such an amalgamation would be preserved, and we should not worry ourselves too much about the desires of the Commonwealth Bank directors in the matter. It cannot be denied that the employees of the state savings banks would be the most valuable men that the Commonwealth Bank could engage to carry on the business it took over. Therefore, it is our duty to ensure that the rights of such employees shall be preserved.

Senator Lynch:

– Does not the question of cost merit consideration?

Senator FINDLEY:

– A little extra cost should not be allowed to weigh as against much better service.

Senator Pearce:

– Where two officers, with practically equal qualifications, one from a private bank and the other from a state savings bank, with cer- tain accruing rights, applied for a position in the Commonwealth Savings Bank, the directors of the Commonwealth Bank would naturally employ the man who had no accruing rights to worry about.

Senator FINDLEY:

– That is all the more reason why we should protect the man who, in consequence of long service with a state institution, possesses valuable rights.

Senator ELLIOTT:
Victoria

– Savings bank experience is altogether different from ordinary banking experience. If, as we hope, a considerable expansion will occur in the savings bank business, of the Commonwealth Bank it is inevitable that employees will transfer to it from the state savings banks. i

Senator Foll:

– Before much expansion can occur in the Commonwealth Savings Bank business the rate of interest payable to depositors will have to be increased at least to the rate paid by the state savings banks.

Senator ELLIOTT:

– I do not see any reason why the rate of interest should not be so increased.

Senator Foll:

– Neither do I.

Senator ELLIOTT:

– It will be unfortunate for state savings bank employees if, because they possess valuable rights in consequence of their employment in- the state savings banks, they are practically debarred from employment in rue Commonwealth Savings Bank. The rights of the Queensland savings bank employees were preserved by the terms of the agreement that was entered’ into, and I cannot see why the rights of an individual who transfers should not also be preserved.

Senator REID:

– An individual who voluntarily transferred would do so to benefit himself.

Senator ELLIOTT:

– That is so. but his savings bank experience would be valuable to the Commonwealth SaVings Bank. I support the amendment.

Senator LYNCH:
Western Australia

– The proposal made in the amendment seems to me to be comparable with the proverbial fifth wheel of a coach. When we analyze it we find that, after all, it resolves itself into a question of cost. I do not see why the Commonwealth Bank should be compelled to employ the most expensive men.

Senator Duncan:

– The best men obtainable should be employed.

Senator LYNCH:

– If the amendment were agreed to, it would not achieve the purpose that Senator Duncan has in mind, for the board of directors of the bank would not employ state savings bank officers with accruing rights if they could get other bank officers of equal qualifications who would not bring with them any such encumbrances.

Senator PAYNE:
Tasmania

– I could understand Senator Duncan desiring to amend the clause in this way if it were compulsory for the Commonwealth Bank to take over employees from the associated banks.

Senator Duncan:

– My amendment does not refer to the associated banks at all.

Senator PAYNE:

– Why should men who voluntarily enter the service of the Commonwealth Savings Bank retain all their accruing rights? I assume that they would not voluntarily enter the service of the bank unless it would improve their position to do so.

Senator GARDINER:
New South Wales

– The Minister in charge of the bill gave such logical reasons for not adopting the amendment that I felt inclined to support him, but having listened to one or two unofficial Ministers, I feel that I cannot do so. Senator Lynch spoke to the amendment from the high ground that the bank should employ the cheapest labour offering. I have never yet been convinced that the cheapest labour is the best labour. Senator Lynch says, in effect, that the cheapest labour that is offering should be engaged in preference to what I might call the union labour which would come to the bank with accruing rights. My view, naturally, is that we should employ the union labour. Senator Payne argued that, if the state savings bank employees voluntarily enter the Commonwealth savings bank service, they should not be entitled to their accruing rights, but I point out that those rights are the result of long service with the state institutions, and that long service must, of necessity, make the men highly qualified to do the savings bank work. Their experience would be very valuable to the Commonwealth savings bank, and, therefore, they should be entitled to retain their rights. Though Senator Pearce gave good reasons for opposing the amendment, I feel that I must vote for it because of the bad reasons given by unofficial Ministers.

Senator GREENE:
NEW SOUTH WALES · NAT

– There is something to be said for the contention of the Minister that, in odd cases where savings bank ‘ officers, by choice, enter the Commonwealth savings bank service, they should be prepared to sacrifice any rights they may have as state officers. But if, say, the Commonwealth Bank entered into an agreement to take over the savings bank business of Victoria, it would be practically compulsory for it to take over the Victorian officers. In that case it seems only fair that those officers who, in a measure, would be compulsorily taken over should have preserved to them all their state rights. It is likely that the board of directors of the Commonwealth Bank would be willing to take over a state savings bank business, but would not accept the obligations of the state savings bank in respect to its employees.

Senator PEARCE:

– In both cases where the Commonwealth Bank has taken over a state savings bank business, the accruing rights of the state employees have been preserved by the agreement entered into.

Senator GREENE:
NEW SOUTH WALES · NAT

– Yes, by the agreement, but that is just the point which is in doubt in my mind. Since in the agreements already made the governments of the day have insisted on the preservation of the rights of their officers, is it not also incumbent on us to see that it is done ?

Senator PEARCE:

– Is it not obvious that a state, in its own interests, in handing over its business, would hand over its obligations to its own officers?

Senator Sir Thomas Glasgow:

– A state government would not hand over its business unless that were done.

Senator GREENE:
NEW SOUTH WALES · NAT

– There is something in that contention ; but why not safeguard the Commonwealth by laying it down definitely that it is the will of this Parliament that it must be done, in the case of an agreement to take over a state savings bank? I feel that the rights of the state officers should be preserved.

Senator REID:
Queensland

– I do not see the necessity for Senator Duncan’s amendment. Individual officers who leave a state service to enter the service of the Commonwealth Bank do so to improve their positions. If officers of a state savings bank are transferred in a body to the service of the Commonwealth Bank, the state will protect them.

Senator PEARCE:

– And it will protect itself.

Senator REID:

– When the Queens-, land Government handed over to the Commonwealth Bank the state savings bank, it was liable to the officers of the bank who had contributed to a superannuation scheme. It could not break its contract with them, consequently it preserved their rights in the agreement which brought about the transfer. A precedent was thus established which will protect other states in future transfers, and the amendment, so far as it affects mass transfers of state officers to the service of the Commonwealth Bank, is rendered quite unnecessary. It would be a hardship to impose on the bank the restriction contained in the amendment in its application to individual officers.

Senator Elliott:

– In the Commonwealth Public Service the rights of individual transferred officers are preserved.

Senator REID:

– They are preserved under the Constitution. If the Commonwealth Bank wishes to secure the services of an officer of a state savings bank, all it- has to do is to offer him an increased salary, which will compensate him for the rights hemay be leaving behind him. It will complicate matters for the bank if it is to be obliged to take over individual officers with all sorts of accruing rights.

Senator ELLIOTT:
Victoria

– Unless the amendment is agreed to, the Commonwealth Bank will have no power to preserve the rights of a state officer whose services it is anxious to secure.

Senator Reid:

– The bank can increase his salary.

Senator ELLIOTT:

– That might upset the whole of the bank’s scheme of salaries. It would not be wise to have one officer paid more than other officers doing similar work. There seems to be nothing unreasonable in asking for a general provision which will enable the Governor of the Commonwealth Bank to offer to individual officers of State services similar privileges to those already secured for other officers by agreement with the states.

Question - That new clause 7 a proposed to be inserted be so inserted. (Senator Duncan’s amendment) - put. The committee divided.

AYES: 10

NOES: 14

Majority … … 4.

AYES

NOES

Question so resolved in the negative.

Proposed new clause negatived.

Clause 8 -

After section 16a of the Principal Act the following section is inserted : - “ 16b.- (1.) Where an officer of the Bank is affected in his employment by the action of any authority of the Bank other than the Board, the officer may, within the prescribed time, submit in writing an appeal to the Board. “ (2.) An appeal under this section shall state fully the action appealed against and the grounds of the appeal. “ (3.) The Board shall consider and determine any appeal made to it under this section and shall notify the appellant of its determination which shall be final and conclusive”.

Senator DUNCAN:
New South Wales

– I move -

That all the words after “ inserted,” line 2. be left out with a view to insert in lieu thereof the following new sections : - “16b., -(1.) An officer of the bank who -

wilfully disobeys or disregards any lawful order made or given by any person having authority to make or give the order; or

is negligent or careless in the discharge of his duties; or

is inefficient or incompetent; or

uses intoxicating liquors or drugs to excess ; or

is guilty of any disgraceful or improper conduct either in his official capacity or otherwise (including conviction for a criminal offence before any Commonwealth or State Court) ; or

commits any breach of the provisions of this act or any regulations thereunder; shall be guilty of an offence and shall be liable to such punishment as is determined upon under the provisions of this section. “ (2.) If the Governor or any officer prescribed as having power to dealwith minor offences has any reason to believe that an officer has committed a minor offence he may call upon the officer for an explanation as to the alleged offence and if on consideration of the explanation he is of opinion that the offence has been committed he may caution or reprimand the officer. “. (3.) Where there is reason to believe that an officer has committed an offence other than a minor offence punishable under the provisions of the preceding sub-section : -

The officer may be charged by the Governor or any other officer prescribed as having power to lay a charge and may if it is considered that the charged officer should not continue in the performance of his duty be suspended by the Governor or in emergent cases by any other officer having power as aforesaid.

Suspension may be effected prior to or at the time of or subsequent to the laying of the charge and may be removed at any time by the Governor pending the determination of the charge or in any case where the charge has not been sustained immediately upon a finding to that effect.

Upon a charge being laid against an officer, he shall forthwith be furnished with a copy of the charge and shall be directed to reply forthwith in writing stating whether he admits or denies the truth of the charge and giving any explanation he desires in regard thereto. If a reply is not made by the officer within seven days of his receipt of the charge the officer shall be deemed to deny the truth of the charge.

If the Governor after consideration of reports relating to the offence and charge and the reply and explanation, if any, of the officer charged and any further reports he may consider necessary if of opinion that the charge has been sustained he may -

fine the officer any sum not exceeding five pounds; or

reduce his salary; or

reduce him to a lower position and salary; or ‘

transfer him to some other position orlocality which transfer may be in addition to fine or reduction; or

recommend to the board the dismissal of the officer from the bank.

Provided that if the punishment so imposed or recommended by the Governor be other than a fine not exceeding Two pounds, the officer may appeal in such manner and within such time not being less than seven days as is prescribed against the decision of the Governor, and the appeal shall be heard by an appeal board constituted as hereinafter prescribed.

If no appeal is made by an officer against a recommendation that he be dismissed the board may dismiss the officer or impose any other punishment specified in the last preceding paragraph. “ (4) Appeal may be made on the ground of innocence of the charge or excessive severity of the punishment and the appeal board may confirm, annul or vary the decision appealed against by imposing any other punishment, specified in the last preceding sub-section, and its decision shall be final except that in any case where the appeal board considers the officer should be dismissed the case shall be referred by the chairman of the appeal board to theboard which may dismiss the officer from the bank or may impose any such other punishment as is prescribed in the preceding subsection. In the hearing of any appeal against the excessive severity of the punishment the appeal board shall take into consideration the previous record of the officer. “(5) An appeal board under this section shall comprise -

a permanent chairman who shall be an officer of the Commonwealth Service and shall have the qualifications of a stipendiary or police magistrate and shall be appointed to the office by the Board of Commissioners appointed under the Commonwealth Public Service Act 1922, and shall not while sitting as chairman of an appeal board be subject to direction by any person or authority under this act or under the Commonwealth Public Service Act 1922.

the officer who is the elected or ap pointed representative of the Commonwealth Bank branch of the United Bank Officers’ Association.

an officer of the bank (not being an officer concerned in the laying of the charge against the appellant) appointed by the Governor for the purpose of the particular appeal to be heard.

Any two members of an appeal board may by consent of the parties concerned exercise all the powers of the board for investigation and decision. “(6) In the case of illness absence or suspension of any officer who is the elected or appointed representative of the Commonwealth Bank branch of the United Bank Officers’ Association or if there is no such representative or where the board is of opinion that by reason of his being personally interested in or affected by any matter which is the subject of appeal under this section it is undesirable that the elected or appointed representative of the Commonwealth Bank branch of the United Bank Officers’ Association should act as a member of the appeal board the board may appoint another officer of the bank to act temporarily as a member of the appeal board in lieu of such elected or appointed representative. “(7) Every member of an appeal board shall before proceeding to perform the duties or exercise the powers of a member of an appeal board take an oath or make an affirmation in the form in the ‘Fifth Schedule to the Commonwealth Public Service Act 1922. “(8) Where an officer has been suspended under this section and -

the Governor after consideration of re ports relating to the offence and charge and the reply and explanation (if any) is of opinion that the charge against the officer has not been sustained; or

an appeal board finds that the charge against the officer is not proved, the Governor shall forthwith remove the suspension. “16c. (1) Any officer upon the hearing by an appeal board in relation to any charge against him shall be entitled to be represented by an agent, barrister, solicitor or attorney appointed for that purpose by the United Bank Officers’ Association who may examine witnesses and address the appeal board on his behalf. The Governor or the charging authority may likewise be represented at such hearing by an agent appointed by him. “(2) It shall be the duty of the appeal board to make a thorough investigation without regard to legal form and solemnities and to direct itself by the best evidence which it can procure or which is laid before it whether the evidence is such as the law would require or admit in other cases or not. “(3) If the appeal board is of opinion that the appellant officer had no reasonable grounds for appeal and that the appeal was frivolous or vexatious it may recommend to the board that the officer be required to pay such sum as the appeal board thinks fit but not exceeding the cost of the hearing and the board may order the appellant to pay such sum or such less amount as it thinks fit and the sum so ordered shall be recoverable in the manner prescribed for the recovery of fines for breaches of the act or regulations. “16d. (1) The chairman of any appeal board may at any time -

summon any person whose evidence appears to be material to the determination of any subject of inspection, inquiry, or investigation being conducted by the appeal board;

take evidence on oath; and

require the production of documents. “ (2.) Any officer who, without reasonable cause, neglects or fails to attend in obedience to the summons, or to be sworn, or to answer questions or produce documents relevant to the subject of the inspection, inquiry, or investigation, shall be guilty of an offence.

Penalty : Twenty pounds. “ (3.) Any person, not being an officer, who, after payment or tender of reasonable expenses, neglects or fails, without reasonable cause, to attend in obedience to the summons, or to be sworn, or to answer questions or produce documents relevant to the subject of the inspection, inquiry, or investigation, shall be guilty of an offence.

Penalty : Twenty pounds. “ (4.) Nothing in this section shall be construed as compelling a person to answer any question which would tend to criminate him. “16e. In any case where a charge against an officer is dealt with by an Appeal Board a copy of all documents intended to be used at the inquiry shall where practicable be fur- . nished to the officer at least seven days before the inquiry is held. “16f. - (1.) Wherever a vacancy occurs in any office and it is expedient to fill that vacancy by the transfer or promotion of any officer, the Governor may transfer or promote an officer to fill the vacancy, consideration being given first to the relative efficiency andin the event of equality of efficiency of two or more officers then to the relative seniority of the officers available for transfer or promotion to the vacancy. “ (2.) In this section ‘ efficiency ‘ means special qualifications and aptitude for the discharge of the office to be filled together with merit and good conduct. “ (3.) Any promotion made in pursuance of sub-section (1.) of this section shall be provisional and without increased salary pending confirmation and shall be notified in the prescribed manner and shall be subject to the right of appeal to the Appeal Board. “ (4.) Any appeal under this section’ shall be made in such manner and within such time as is prescribed and may be made by any officer who considers he is more entitled to the vacant office than the officer provisionally promoted on the ground of -

superior efficiency; or

equal efficiency and seniority. “ (5.) When an appeal under this section is upheld by the Appeal Board it shall provisionally promote the appellant officer to the vacant office and cancel the provisional promotion. “ (6.) When an appeal is disallowed in pursuance of this section or no appeal is lodged within the prescribed time the provisional promotion by whomsoever made shall be confirmed by the Board. “ 16g. The Governor may permit an officer’ to decline an offer of promotion involving transfer without prejudice to his right to future promotion or transfer.

My amendment proposes to set up an appeal board for the staff of the Commonwealth Bank. It has been drafted on legal advice and modelled almost entirely, with adaptations, upon the appeal board provisions in the Public Service Act. After years of consideration, and years of experience in dealing with Commonwealth public servants this Parliament found it absolutely necessary in order to maintain good order and discipline in the Public Service, and to give equitable and just treatment to the public servants, to set up an appeal board. There are, I believe, approximately 2,000 officers in the employ of the Commonwealth Bank. The service is a growing one, and, although other amendments have been suggested by the bank officials, it is generally admitted by the staff that this is the most important of all, as it provides a means by which any member of the staff suffering an injustice may appeal. It is felt by the members of the staff that they should have the right to appeal to some independent tribunal, similar to that provided for Commonwealth public servants working under the Commonwealth Public Service Act. It is true that the officers of the bank can, if they so desire, approach the Arbitration Court concerning their conditions, but the amendment which I am submitting, and which is modelled on provisions contained in the Public Service Act, provides more than could be obtained through the intervention of the Commonwealth Arbitration Court or any other similar tribunal in the settlement of their working conditions.

Senator Gardiner:

– Is it a similar provision to that contained in the Public Service Act?

Senator DUNCAN:

– Yes.

Senator Pearce:

– The first of the proposed new sections as circulated by the honorable senator, or anything similar to it, is not in the Public Service Act.

Senator DUNCAN:

– I am not moving that proposed section as printed and circulated.

Senator Pearce:

– Is the honorable senator withdrawing it?

Senator DUNCAN:

– If I had moved it, it would be necessary for me to withdraw it if I did not intend to proceed with it. But I have not and do not intend to move it. My amendment provides for the constitution of an appeal board on similar lines to the appeal board set up under the Public Service Act, and passed by the Senate not very long ago. If it is fair to grant an appeal board to the members of the Public Service generally, the staff of the Commonwealth Bank, which is regarded as being in effect a branch of the service, should also have an appeal board, particularly when the work performed is similar in many respects, and of equal importance to that undertaken in government departments. Is it fair that the officers of the Treasury Department, for instance, should have a board to which they can appeal when troubles arise, and that officers of the Commonwealth Bank should not have a similar tribunal before which their grievances can be ventilated? This matter was mooted in another place when the bill was under consideration, and if honorable senators will take the trouble to peruse Hansard they will see that the Treasurer’s only objection to the proposal was its nebulous character. On those grounds the Government were unable to accept it. The Treasurer further stated that if it were submitted in a better form the Government would not oppose it.

Senator Pearce:

– The Government never gave the slightest hint that they would accept an amendment in this form.

Senator DUNCAN:

– No; but the Treasurer stated in effect that they would accept the principle. Surely the form in which the amendment is submitted cannot be improved to any extent since it is similar to the provision embodied by the Government in the Commonwealth Public Service Act.

Senator Pearce:

– But it is not dealing with the same set of conditions.

Senator DUNCAN:

– No, but the principle is exactly the same. Slight amendments, of course, are necessary, but if the principle is fair we are justly entitled to ask that the consideration which has been given by Parliament to the Public Service should be conceded to officers of the Commonwealth Bank, who are also employees of the Government. The amendment is drafted in such a form that I am sure that if it were adopted it would work satisfactorily, and be in the interests of the staff of the Commonwealth Bank. It reads that in every contingency which may arise appeals can be made to a board, which shall consist of -

  1. A permanent chairman who shall be an officer of the Commonwealth Service and shall have the qualifications of a stipendiary or police magistrate and shall be appointed to the office by the Board of Commissioners appointed under the Commonwealth Public Service Act 1922 and shall not while sitting as chairman of an Appeal Board be subject to direction by any person or authority under this Act or under the Commonwealth Public Service Act 1922.
  2. The officer who is the elected or appointed representative of the Commonwealth Bank Branch of the United Bank Officers’ Association.
  3. An officer of the Bank (not being an officer concerned in the laying of the charge against the appellant) appointed by the Governor for the purpose of the particular appeal to be heard.

Any two members of an Appeal Board may by consent of the parties concerned exercise all the powers of the Board for investigation and decision.

It will be seen that provision has been made for three men to adjudicate upon all matters referred to them. The proposal I am submitting is perfectly fair, irrespective of the angle from which it may be viewed. The claim which the officers have submitted is just, and one which is recognized to the full, so far as other groups of employees in other departments are concerned. Unless the Government wish to be accused of gross partiality to one section of employees which comes under their jurisdiction, they should be prepared to accept the amendment. Perhaps it may be necessary to make minor amendments, in order to enable the proposal to be acceptable to the Government. The principle, however, is one which should be adopted.

Senator Hoare:

– If the Government are consistent they will accept it.

Senator DUNCAN:

– Yes. I hope the committee will accept the principle, and if amendments are necessary they can be made as the various portions of the amendment are under consideration. I wish the words in the present section to be left out, as they are grossly inadequate and do not, in any way, meet the position, particularly when compared with the provisions of the Public Service Act. I ask the committee to agree to strike out the words I have indicated, in order that we may provide some scheme which is more adequate and acceptable to the. bank, and conforms more closely to the principles of justice, which we are here to see carried out.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

Senator Duncan is entirely wrong in assuming that because certain of these provisions are in the Public Service Act they are therefore applicable to, and should be embodied in, the Commonwealth Bank Act. I remind the honorable senator that we have a somewhat similar analogy in the Commonwealth railway service, in respect of which we have no such provision as this, because it is recognized that the Commonwealth railway service is not a portion of the Public Service proper. There are conditions associated with the carrying out of , an undertaking such as a railway service which are not the same as those of an ordinary public department. I shall give some reasons why they are not applicable. I doubt if Senator Duncan has realized the effect of what he is proposing. If this amendment is carried in its present form, . we might as well abolish the board of directors and make the appeal board the supreme body. One of the most important functions of the Governor or the board is that of dealing with the staff. The amendment as drawn up would not give the board of directors or the Governor power to promote, transfer, or punish an officer if that officer should elect to appeal. Let us imagine the effect of appointing a board of directors and expecting them to make a success of the bank when they had not the power to promote, transfer, or punish an officer. What would happen ? Which is going to be the superior body: the board of management or the board of appeal? The appeal board is to be the final court, and, therefore, would be the superior authority. We spent the greater part of yesterday discussing the constitution of the board, and serious injunctions have been laid upon the Government concerning the necessity of searching the Commonwealth to secure the services of the best men. If this amendment is carried, the members of the board will be subservient to the members of the appeal board.. For the information of honorable senators I point out that the amendment provides that the appeal board shall comprise: -

  1. A permanent chairman, who shall be an officer of the Commonwealth Service, and shall have the qualifications of a stipendiary or police magistrate, and shall be appointed to the office by the Board of Commissioners ap- pointed under the Commonwealth P ublic Service Act 1922, and shall not while sitting as chairman of an, appealboard be subject to direction by any person or authority under this act or under the Commonwealth Public Service Act.

A subordinate officer would have greater power in the matter of transferring an officer from the country to the city, or vice versa, than the Governor of the bank or the board would have. If an officer is punished for certain classes of offences, which I shall enumerate, the chairman of the appeal board, because he is a member of the. court of appeal, will have greater power than the Governor of the bank or the board of directors. If we look at some of the classes of offences set out in proposed section 16c, we find that they include: -

  1. wilfully disobeys or disregards any lawful order made or given by any person having authority to make or give the order; or
  2. is negligent or careless in the discharge of his duties; or
  3. is inefficient or incompetent; or
  4. uses intoxicating liquors or drugs to excess; or

I particularly invite the attention of honorable senators to the fact that, even the courts of the land would be inferior to this court of appeal, as will be seen from the following : -

  1. is guilty of any disgraceful or improper conduct either in his official capacity or otherwise (including conviction for a criminal offence before any Commonwealth or state court) ;

If an officer is punished or dismissed because he has been convicted for a criminal offence, hewill be able, under this amendment, to approach the appeal board, which can order his re-instatement notwithstanding the opinionsof the Governor or the board of directors. We had an example of a case of this kind in the Customs Department, where an officer was actually convicted of being in a conspiracy connected with the landing of goods on which duty had not been paid. He was convicted by the court, and the appeal board found him not guilty and ordered his reinstatement. Are we to perpetuate such possibilities in this measure? The list of offences continues: -

  1. commits any breach of the provisions of this act or any regulations thereunder . . . shall be guilty of an offence and shall be liable to such punishment as is determined under the provisions of this section. (2.) If the Governor or any officer prescribed as having power to deal with minor offences has any reason tobelieve that an officerhas committed a minor offence he may call upon the officer for an explanation as to the alleged offence and if on consideration of the explanation he is of opinion that the offence has been committed he may caution or reprimand the officer.

The amendment further provides that where there is reason to believe that an officer has committed an offence other than a minor offence he may be charged by the governor, and if it is considered that he should not continue in the performance of his duty he may be suspended by the governor. If the governor, after consideration, considers that the charge has been sustained, he may fine the officer, reduce his salary, reduce him to a lower position, transfer him, or recommend his dismissal to the board. There is a proviso that if the punishment imposed or recommended by the governor be other than a fine not exceeding £2 the officer may appeal against the decision, and the appeal shall be heard by an appeal board. Sub-section 4 of Senator Duncan’s proposed new section 16c provides - (4.) Appeal may be made on the ground of innocence of the charge or excessive severity of the punishment and the appeal board may confirm, annul or vary the decision appealed against by imposing any other punishment specified in the last preceding sub-section and -its decision shall be final except that in any case where the appeal board considers the officer should be dismissed the case shall be referred by the chairman of the appeal board to the board which may dismiss the officer from the bank or may impose any such other punishment as is prescribed inthepreceding sub-section.

The appeal board, it is proposed, shall be constituted of a permanent chairman who shall be an officer of the Commonwealth Service, having the qualifications of a stipendiary or police magistrate, a representative of the Commonwealth Bank branch of the United Bank Officers Association, and a representative of the Government. I point out that such a board would be superior to the governor, to the board of directors, and to’ the Commonwealth or state court that found the man guilty. Sub-section 8 provides - that where an officer has been suspended and the governor, after consideration of the reports relating to the offence and charge, and the reply thereto, is of opinion that the charge has not been sustained, or an appeal board finds that the charge has not been proved, the governor shall forthwith remove the suspension. Senator Duncan’s proposed new section 16d empowers the officer charged, and the governor, to be represented at the hearing of an appeal. Under the proposed new section 16e any document in the bank may be called for by the appeal board, and must be produced.

Senator GREENE:
NEW SOUTH WALES · NAT

– They would be only those documents that were relevant to the case.

Senator PEARCE:

– Another provision to which I direct the attention of the committee is that contained in the proposed new section 16G, under which officers may appeal against promotions or transfers. If the appeal board is opposed to a transfer it cannot be made. The Commonwealth Bank has branches established all over the Commonwealth. The governor is acquainted with his staff and knows the peculiarities of the various branches. He may decide that “ Smith “, now stationed in Sydney, shall go to Broken Hill. “Smith” may object to that transfer, and appeal against it. The appeal will be heard, not by banking authorities, but by a gentleman possessing the qualifications of a police magistrate, an officer elected by the Commonwealth Bank branch of the United Bank Officers Association, and an officerappointed by the Governor. The Governor is not to be trusted to decide these matters, but some of his officers are to have the right to decide whether “ Smith-“ shall be- transferred from Sydney to Broken Hill. If the appeal board says that he shall not go to Broken Hill, all the powers conferred upon the board of directors will not enable it to shift the officer.

Senator Duncan:

– The honorable senator did not use that argument in connexion with the Public Service Board. The Prime Minister, notwithstanding all the powers that he possesses, cannot shift an officer.

Senator PEARCE:

– This case is not parallel with that of the Public Service. It is recognized that the Commonwealth railway service is not a part of the Public Service.

Senator Duncan:

– It has a much better appeal board.

Senator PEARCE:

– The Commonwealth Bank officials have the same right of appeal as is possessed by the Commonwealth railway service; they can appeal to the Arbitration Court. Senator Duncan says that he wants an independent court of appeal. The board of directors will be an independent board of appeal. Promotions, transfers, dismissals, and fines for offences will be made by the Governor. An officer may appeal to the board of directors, which will have nothing to do with the case, and will approach its consideration without prejudice. It will hear the case of the officer and the case of the governor, and decide whether the officer has right on his side, or’ whether the Governor has properly exercised his discretion. That is a privilege that is not possessed by any other bank officer in Australia.

Senator GREENE:
NEW SOUTH WALES · NAT

– The officer has not the right to appear before the board.

Senator PEARCE:

– That is so. If that right were conferred upon officers, what chance would a man situated in Perth have of appearing before the board in Sydney? The officers in every part of the Commonwealth will be placed on an equal footing by being enabled to present their cases in writing.

Senator Findley:

– Could not power be given to a deputy to hear such cases?

Senator PEARCE:

– The provision for the appointment of local boards of advice has been taken from the bill.. Had it remained in the bill, those boards could have heard the cases that occurred in the various states. I have indicated what in my opinion are the weaknesses of the amendment. It would not be possible to run a bank under such conditions. The amendment would strip the Governor and the board of directors of all authority. The’ greatest blot in it is the proposal to allow this appeal board to review a case in which a man may have been convicted of forgery or theft. Even if the High Court decided that the mat was guilty the Governor could not dismiss him if the appeal board said that he should not. Can we stand for such a proposal? Senator Duncan’s amendment would require to be considerably amended before I could ask the committee to accept it. It must be rejected if the bank is to function properly.

Senator GARDINER:
New South Wales

– I am quite sure that Senator Pearce is wrong. Whenever one hears Senator Pearce making such absurd, outrageous and extravagant statements one can immediately conclude that he is endeavouring to mislead honorable senators. This is a wellconsidered amendment. The idea that any appeal board would uphold a man convicted of a crime is so absurd that it is worthy only of Senator Pearce’s imagination.

Senator DRAKE-BROCKMAN:

– It actually happened in one case in the Public Service.

Senator GARDINER:

– I have not the slightest doubt that there may have been an exceptional case in the Public Service. Senator Drake-Brockman is prepared at all times to echo any absurd statement that is made by Senator Pearce, and to* buttress it by a further absurd statement. Believing that this is a well-considered amendment, proposed by an honorable senator who desires to see a just court of appeal established for- remedying wrongs that even the board of directors would not countenance, I intend to vote for it. A long experience of Senator Pearce convinces me that when he makes extravagant statements he has no case, and he is merely endeavouring to bluff the committee into voting with him.

Senator NEEDHAM:
Western Australia

– The matter resolves itself into a question of whether the Government is in favour of a board of appeal. I have circulated an amendment on lines somewhat similar to that of

Senator Duncan, but not quite so comprehensive. My idea was to leave out clause 8 and substitute a new clause providing for a board of appeal. I have given way to Senator Duncan in order to test the feeling of the committee. Let us admit, at the outset, that there is, perhaps, a great deal of verbiage in this amendment; but notwithstanding that let us ascertain whether the Government favours the granting of an appeal board to the employees of the Commonwealth Bank. Senator Pearce has referred to a lot of imaginary things. He has stated in effect that even though an employee of the bank had been convicted of murder, but had not been hanged, he would have the right of appeal to such a board. No one in the wildest stretch of imagination would make such a suggestion. Under the Public Service Act every public servant has the right of appeal to an appeal board, and why should not the officers of the Commonwealth Bank be given that right ? In Senator Pearce’s statement I recognize an echo of a circular letter that was sent out by the Deputy Governor of the bank to the officers of the bank. It is quite evident that the deputy governor is opposed not only to an appeal board, but to the organization of the employees of the bank. He is not in favour of these men combining to protect their interests and their rights. The time has long gone by in Australia when any man would dare to say that employees should not combine to protect their rights and their interests. What does Mr. Kell say ? He sent out the following circular letter -

Bank Officers’ Association.

Circulars headed “ Commonwealth Bank branch of the United Bank Officers’ Association “ dated 12th and 19th insts., and signed “ Sydney Smith, Secretary,” have been brought under my notice. As reference is made therein to an interview which Mr. Sydney Smith and Mr. King, the vice-President of the Association, had with myself, and Mr. Hullo, and the circulars arc couched in somewhat extravagant language, I feel it incumbent upon me to state that the views and opinions attributed to me in the circulars are entirely misleading and highly imaginative. My own opinion is that the officer of the Commonwealth Bank of Australia would be very much better served by an internal guild of their own on a wide interstate basis of organization, and which would work harmoniously with the bank, and have nothing but our own officers’ interests at heart. Under such a scheme no feeling of antagonism between the staff and the bank would arise, and the staff would be in a posi tion to bring forward their views on matters of general principle from time to time, and would not become embroiled in outside matters in which they are not in any way concerned. In several of the large English banks such guilds have been found to work for the substantial benefit of the staff, and without any friction whatever with the management. I would ask every member of ‘ the staff to seriously consider such a proposal before definitely, and perhaps unwisely, committing himself or herself to any other course of action.

Analyse that letter, and what does it mean? It means a boss’s union, and the boss, at this juncture, is Mr. Kell. I shall not support any such threat as that.

Senator Drake-Brockman:

-There is no threat in it at all.

Senator NEEDHAM:

Senator DrakeBrockman may find other words to de scribe the circular. How would he like to be in the position of these bank officers with Mr. Kell as their employer for the time-being and be required to organize only along the lines suggested by Mr. Kell?

Senator Drake-Brockman:

– He has only advised them to do that.

Senator NEEDHAM:

– If Senator Drake- Brockman had had as much experience in the industrial world as I have had, he would know that what I am saying is correct. The men should have the same right to organize in their own way as any other employees.

Senator Drake-Brockman:

– They have that right under the law now. No one is attempting to take it away from them.

Senator NEEDHAM:

– The Minister says that they can appeal to the board. That merely means an appeal to the Governor. If an officer of the Home and Territories Department appealed to the Cabinet against the Minister’s decision, the Minister, as a member of the Cabinet, would see that his order was obeyed. The same principle applies to employees of the bank in regard to the existing provisions for appeal.

Senator LYNCH:
Western Australia

– I have been wondering as I listened to the debate in committee, as well as during the second reading of the bill, when we will decide that the members of this branch of the Public Service shall not be required to be kept in cotton wool. I want to know, in their own interests, why honorable senators are seeking further privileges for them that are not enjoyed by the common or garden variety of citizen.

Senator Hoare:

– They are not asking for extra privileges.

Senator LYNCH:

-What is the good of the honorable senator talking like that ? Here is a body of men, employed by a state instrumentality, for- whom special privileges are now being demanded.

Senator Hoare:

– And the honorable senator wants to deny them the right of appeal.

Senator LYNCH:

– I want this institution to be managed on. sane, fair and sound business lines. If there is mismanagement, there is danger that it may run upon the rocks. Why this attempt to extend to employees of the bank privileges which no one would dare to claim for other employees? By what right should one section of citizens, simply because they happen to be employed by a semi-public institution, be placed on a better plane than other citizens of the Commonwealth?

Senator GRANT:
NEW SOUTH WALES · ALP

– Why not?

Senator LYNCH:

– What is wrong with the service of the bank ? Nothing has yet been proved. Behind all this talk there is the suggestion that because they are employees of the bank perforce they must be subject to some injustice or grievance not suffered by other employees. Let us look at the position squarely. I am sick of all this effort on the part of certain public men in this country to extend to the Public Service such onerous conditions which, in the long run, must be paid for by the patient taxpayer. It is about time some one said a word or two. for that unfortunate fellow. What is the reason for this constant desire to foster and pamper one class alone ? I refuse to admit -that it is our duty to do this. The essence of a free democracy is that no advantage shall be given to any section of the community. Senator Needham said something about a circular that had been issued by Mr. Kell, the acting Governor of the bank, and objected to that gentleman outlining the kind of organization which, in his opinion, should be constituted. What is wrong with that circular? Senator Needham himself was a member of an organization in Western Australia established and maintained for years on exactly the same lines as that approved of by Mr. Kell. It is so existing to-day. This amendment is only part of an effort that has been made for a long time by certain public men to place public servants on a higher plane than other citizens of the Commonwealth. I took a prominent part in putting the Public Service on a very fair level, and incorporating in the act provisions whereby any grievances might be remedied in a fair and square manner. I do not want members of the Public Service to be placed in front of other men, no more than I desire that they shall be unfairly treated. The taxpayers have to stand behind the bank. This means financial responsibility. Employees of the bank are in an infinitely better position than many other people. There is no manifest grievance which does not find an echo in this Parliament. This chamber, and the same may be said of another place, has been used in the past for the purpose of ventilating grievances of the employees in this and all other public and semi-public institutions. . Do we hear of similar efforts on behalf of employees in private banks ? No, for the simple reason that no votes are involved. It is about time we took a definite stand in this matter if the Public Service of this country is not going to prove an insoluble problem and menace to the effort to deal out even-handed justice all round. This is plain talk. If I could find language to make it plainer I would employ it. I say that under this bill the employees of the Commonwealth Bank are placed in an infinitely superior position to employees in any other institution. I challenge contradiction of that statement. First there is an Appeal Board, then the Arbitration Court is open to them. On top of that there is. this Parliament as a last court of appeal with public opinion ready to do the fair thing. What better means could they employ for the settlement of their grievances? Fair play is bonny play. Why should we make pets of these people simply because they are employees of the bank? Do we not realize that the taxpayers will have to foot the bill if this bank is not a success ? I want to put in a word for the taxpayer - for the man who goes out into the interior and bears a much heavier burden of citizenship than can be said of employees in any of these semipublic institutions. I freely admit that in the Public Service there are men who are underpaid and badly treated, but, as a whole, they are maintained on a fairly high level of equity and justice. and I want to be assured that they are giving 20s. worth of work for the money they receive. That is the stand I take, and I am satisfied that in this matter I shall have the approval even of the men themselves because of their strong sense of justice. Do these men want pampering ? If they do, I will not help them. On the contrary, as my votes and action in this chamber- prove, I shall be their friend in any well-grounded grievance. Honorable senators will be negligent of their duty if they argue that privileges which cannot be given to all shall be extended to a certain favoured few. That is my policy, and here I stand to defend it. The employees of the Commonwealth Bank, speaking broadly, have nothing to complain of. If they have any grievance a regular means is available for them to have it remedied. They may appeal to the established tribunals of the country, the doors of which are open to them. Every man should be equal before the law. I do not believe in any man appearing in a better light before the law, and that, I fear, is the essence of the effort that is being made from time to time by some honorable senators. I see nothing- wrong with the bill. The employees of the bank are getting a fair Heal. I do not believe that those who will be responsible for the management will be so callous as to steel their hearts against any appeal by the employees for justice. If they do, even they can be dealt with. Rather do I think that these men will have just as generous instincts and fine qualities of human nature as the average men have. I do not believe that tyrants will be appointed to the board, but that the appointees will be men who will grace their positions with dignity, and will feel a duty imposed upon them to discharge their responsibilities creditably to themselves and to the bank. If we find that unsuitable men are appointed, we shall soon find means to get rid of them, or at least to curb their inclination to act unjustly. An unjust man cannot reign long in a public position in this country. Public opinion will soon work its will on perpetrators of injustice. “We need a new conception of our boasted belief in equality of treatment for all sections of the people. If I had my way there would be no pets in the community, because pets can only be supported at the expense of somebody else. I am quite satisfied with the clause as it stands, in the absence of a better one. The adoption of Senator Duncan’s (amendment would result in the constitution of a board which would supersede our law courts. It would take the staff management from the responsible hands of the board, and place it in irresponsible hands. What business in the world could stand that and prosper? The Leader of the Opposition may be able to see- some other, meaning in it, but I fail to understand English if that will not be the effect of adopting it. We are coming to a most dangerous pass in even considering a proposal to constitute a board which’ will usurp the functions of our law courts. It is high time that we gave evidence of the possession of a keener sense of justice and fair play. Senator Duncan says that the Public Service already has an appeal board.

Senator Elliott:

– And I do not think Senator Lynch protested against the constitution of that board.

Senator LYNCH:

– If I had had an opportunity I should have protested against its appointment, especially if I had known what its actual results would be. Now we know something of them.

Senator Duncan:

– As a matter of fact, I believe the honorable senator supported its appointment.

Senator LYNCH:

– The fact that we have made one mistake is no excuse for making another.

Senator Duncan:

– The appointment of the Public Service Appeal Board has not had the serious results that Senator Lynch predicts will follow the appointment of such a board as that which my amendment contemplates.

Senator LYNCH:

– I oppose the amendment, for, in my opinion, our law courts should stand supreme. The bank management, being held responsible, should be untrammelled, and the bank given a chance to succeed for the benefit of the people of this country, including the employees of the bank themselves.

The TEMPORARY CHAIRMAN (Senator McDougall:

– The honorable senator’s time has expired.

Senator FINDLEY:
Victoria

– Notwithstanding the unjustifiable outburst of Senator Lynch against the appointment of an appeal board for the employees of the Commonwealth Bank, I hope the sense of fairness of the committee will be dominant. I heartily support the amendment. If it be true, as has been stated, that all sorts of obstacles have been placed in the way of the Commonwealth Bank employees joining the United Bank Officers Association, it is high time that they were afforded some measure of protection.

Senator Duncan:

– They have been victimized.

Senator FINDLEY:

– I know that some time ago, when they desired to join the Bank Officers Association, the men who took a prominent part” in the movement were in some case victimized and intimidated and in others dismissed. I hope that Senator Lynch, even at this period in his career, will not stand for the victimization of men who advocate the cause of unionism. If he does so, he has changed vastly from the man he- was a few years ago. He knows that in the years gone by employers of labour in this and other states ‘vigorously advocated freedom of contract as against unionism, and only through the consistent and persistent agitation of the workers has unionism won public recognition. To-day even governments which are opposed to the Labour party’s policy recognize the value of unionistic principles, and, in consequence, we have our factories acts, wages boards, and arbitration courts. So far, the Commonwealth Bank employees have been denied access to the Arbitration Court, or the appointment of a wages board, and I am informed that its responsible officers have shown unrelenting hostility to every organized effort of the employees to better their conditions of employment and rates of pay. One result of that is that the employees of the associated banks enjoy much better conditions than do the Commonwealth Bank employees. For instance, the employees of the associated banks are paid time and a half for all hours worked in excess of 40 weekly, but the Commonwealth Bank employees are required at times to work as many as 60 and even 65 hours a week: and are paid no overtime. The employees of the associated banks are granted 2s. 6d. tea money when they have to work late, but the Commonwealth Bank employees not only receive no such consideration, but are also required to work on Saturday afternoons, and frequently at night, without consideration. The general secretary of the Bank Officers Association is able to interview the general managers of the associated banks whenever he has any matter of importance to put before them, but he is not able to obtain an interview with the Governor of the Commonwealth Bank. I think the committee will say that the Commonwealth Bank employees should have working conditions and remuneration at least the equal of those enjoyed by the employees of the associated banks. Senator Pearce said that the associated banks were probably jealous of the chief officer of the Commonwealth Bank because he had the title of governor. Apparently, the Governor of the Commonwealth Bank is himself proud of his title. We know that - . - . . . Man, proud man I “Drest in a little brief authority “ sometimes plays “fantastic tricks,” and wc should prevent the Governor of the bank from doing so at the expense of the bank’s employees. No hindrances should be placed in the way of their linking up with the Bank Officers Association and approaching the Arbitration Court, and they should be given a proper appeal board to investigate their grievances. Prior to the Queensland Savings Bank employees coming under the control of the Commonwealth Bank ‘.they had the right to an appeal board, but that right has now been abrogated. Why should they be deprived of it? Not one substantial argument has been advanced against the appointment of an appeal board for the Commonwealth Bank employees. In my opinion, the fact that ‘ in the past employees of the bank have been intimidated, victimized, and in many ways treated unfairly, to say nothing of the marked differentiation between their rates of pay and conditions of work and those of the private bank employees, is a substantial reason for the appointment of such a board. The Public Service has an appeal board, and although Senator Lynch spoke so vehemently against it just now, I think, when he reflects calmly on the matter, he will be sorry for what he said.

Senator Lynch:

– The bank employees are provided with a method of appeal.

Senator FINDLEY:

– But what kind of an appeal is it? How and to whom must it be made? Even Senator Lynch will agree that the employees should have some means of voicing their grievances. If we affirm the principle of the right to an appeal we can, I believe, agree upon its exact nature. The clause as drafted only permits an appeal to the board of directors, and sitting on that board will be the Governor of the bank, who is its chief executive officer. Naturally, when the employees’ appeal is submitted in writing - as it must be - the Governor will reply to it, and it is only reasonable to assume that, being present in person to discuss the matter, he will be able to impress his fellow board members much more than will the written document presented by the employees. As the matter now stands, if the employees feel that they have a grievance and approach the board for a remedy, the board will say, “You have the right to appeal and a prescribed method of making it. Put your complaint in writing and it will receive consideration.” That would not be a proper kind of appeal. If an executive officer can put his case personally before the board of directors, why should not a man with a grievance also have the opportunity to appear in person before the board ? In the Public Service would we allow the chairman of the Public Service Board to tell a dissatisfied public servant that in order to exercise the right of appeal allowed to him under the act he must submit his appeal in writing to the board, and that the board will determine it? That would really be an appeal from Caesar unto Caesar. There are numbers of men in the Commonwealth Bank with serious grievances, and those who have endeavoured to get their grievances adjusted have been victimized; they have been intimidated, and even, in some cases, dismissed. If that condition of affairs is allowed to continue it will be impossible to obtain a contented or efficient service. To secure good service, the men must be treated as they deserve to> be treated, and as we hoped they would be treated, when the bank was established. The committee has now the opportunity to do what is right. The men have not had justice done to them. They would not be asking for an appeal board merely for the sake of having one created. They want it because they are justly entitled to it, and because, up to the present, they have not received the consideration which they deserve. I ask the committee to affirm the principle that the officers of the Commonwealth Bank shall have an appeal board, and that it shall not be an appeal from Caesar unto Caesar. If such a board cannot be secured- on the lines proposed by Senator Duncan, it should certainly not be on the lines of the appeal board for which provision is made in the bill.

Senator GREENE:
NEW SOUTH WALES · NAT

– While I have a good deal of sympathy with the object which Senator Duncan has set out to attain, I am not prepared to go the length he has suggested. He has rather spoilt his very laudable effort to get something done for the employees of the Commonwealth Bank by going far beyond what is even necessary or desirable. I was the minister concerned in the case cited by Senator Pearce. A public servant who had been convicted of stealing, and had been found in possession of uncustomed goods, which undoubtedly had been looted from a vessel, took the case to the Public Service Appeal Board, and they restored him to his position. I could do nothing but remove him from the work upon which he was employed to other work.

Senator PEARCE:
NAT

– As the result of that case we took away in the bill of 1922 that power which the appeal board possessed. Senator Duncan now .proposes to restore it.

Senator Needham:

– Is Senator Greene in favour of having an appeal board ?

Senator GREENE:
NEW SOUTH WALES · NAT

– I am in favour of going further than the bill proposes, but I am not in favour of going as far as Senator Duncan proposes.

Senator Duncan:

– The honorable senator’s objection can be met. If the proposal in the bill is struck out we can confer as to what should take its place.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not in favour of going outside the bank in the creation of an appeal board. I think that the officers of the bank should have the right to put up their cases through an officer of their own association. I understand that the associated banks are giving to an officer of the Bank Officers Association the right to appear before general managers or high bank officials to argue the cases of officers of the banks who feel themselves aggrieved.

Senator Needham:

– Would the honor - a’ble senator suggest that such an officer should have the right to appear before the board of directors of the Commonwealth Bank?

Senator GREENE:
NEW SOUTH WALES · NAT

– No. It would not be desirable to take these cases to the board of directors. It is not the function of the board to inquire into grievances of this kind. In any case I do not think we should burden the directors with such matters.

Senator Needham:

– What kind of an appeal board does the honorable senator favour ?

Senator GREENE:
NEW SOUTH WALES · NAT

– I have not thought out any particular kind of appeal board.

Senator Hannan:

– Would the honorable senator favour the appointment of a board consisting of a nominee of the Government, a nominee of the bank, and a nominee of the employees ?

Senator GREENE:
NEW SOUTH WALES · NAT

– I do not think that the Government should appear in the matter. The Commonwealth Bank is not a government institution in the ordinary sense. The Minister should take the opportunity to think over the position between now and when the Senate meets again. He might bring in a provision to give officers an opportunity to put up their cases when they feel aggrieved in regard to certain penalties. I do not think that the board should be burdened with appeals with regard to transfer from one branch of the bank to another. I have some very vivid recollections in my own somewhat limited banking experience of cases where men were absolutely victimized by their immediate superiors, and had no possible chance of getting a fair square deal.

Senator Duncan:

– We all know of those cases.

Senator GREENE:
NEW SOUTH WALES · NAT

– These things happen, but the Governor of the bank will not know anything about them. He will be guided by the reports of his officers. There may be cases in which these reports might be absolutely prejudiced. There ought to be some method other than that provided in the bill. I am not prepared to state what it should be, but Senator Duncan’s proposal goes too far..

Senator Duncan:

– I am willing to compromise.

Senator GREENE:
NEW SOUTH WALES · NAT

– In view of the late hour, I ask the Minister to allow the matter to stand over. I do not see much hope of getting finality under existing circumstances.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– I have a suggestion to make. .1 directed my artillery against Senator Duncan’s amendment.

Senator Duncan:

– I have a very effective reply.

Senator PEARCE:

– No matter how effectively Senator Duncan replies, his proposal is dead.

Senator Duncan:

– Like some of the clauses in the bilL

Senator PEARCE:

– But the fact that Senator Duncan’s proposal is dead does not make the proposal in the bill perfect. It has been said that the appeal proposed in the bill is from Caesar unto Caesar, and as that criticism is justified by the fact that the governor of the bank would be on the board of directors, I have given instructions for the preparation of a new sub-section in substitution of sub-section 3 of the proposed new section. The effect of it will be as follows: -

The board shall constitute a board of appeal consisting of three persons, one of whom shall be an officer representing the employees of the bank, and shall be elected in the manner prescribed. The board shall consider and inquire into the appeal and shall report its findings to the board of directors, whose decision shall be final and conclusive.

Senator Duncan:

– Who will be the other two members of the board of appeal.

Senator PEARCE:

– They will be appointed by the board. As I have already pointed out, we cannot and must not take away from the board the right to give a final decision in the matter of employment and transfers. We must give the board control of its own staff, but we shall give an employee, who may consider that he has been unjustly treated, an opportunity to refer his case to this independent board - upon which he will be represented - which will inquire into the whole circumstances. This board will make its finding, which will go before the board of directors, whose decision will be final. Only one member of the board of directors is concerned, and that is the governor, because he has to order promotions and transfers. The proposed new provision does not go so far as Senator Duncan intends; but it provides for an independent inquiry, and that the report of the finding shall come before the board of directors, whose -decision shall be final. In order to enable the proposed new clause to be submitted in a proper form I ask the committee to agree to the postponement of the clause.

Clause postponed.

Clauses 9 and 10 “agreed to.

Clause 11 -

Section 30 of the principal Act is repealed and the followingsection inserted in its stead : - “30.-(1) The net profits of the Bank in each half-year shall be dealt with as follows : -

One half shall be placed to the credit of a fund to be called the Bank Reserve Fund; and

One half shall be paid into the National Debt Sinking Fund as soon as practicable after the preparation of each balance-sheet.

The Bank Reserve Fund shall be available for the payment of any liabilities of the Bank.”

Senator LYNCH:
Western Australia

– I intend later, if this clause is passed in its present form, to move an amendment, to provide that the reserves of the bank shall be in a fixed ratio to the bank’s liabilities to the public. I merely indicate the fact that I intend to move in this direction, and that I may ask that the clause be recommitted for that purpose.

Senator GRANT:
NEW SOUTH WALES · ALP

.- I move-

That after the word “ and “ at the end of paragraph’ (a) the words “ if the amount granted by the Commonwealth has been refunded “ be inserted.

If my amendment is adopted this provision will then read -

If the amount lent by the Commonwealth has been refunded one half shall be paid into the National Debt Sinking Fund as soon as practicable after the preparation of each balancesheet. ft has been decided that the Commonwealth shall grant to the Commonwealth Bank £6,000,000. The amendment I have moved will, if adopted, provide that no payment to the National Debt Sinking Fund shall be made from the net profits of the bank until the moneys granted under a previous provision of the bill have been repaid by the bank. I have already expressed my ‘opinions in opposition to the granting of £6,000,000 to theCommonwealth Bank as a round-about way of finding funds for the institution. It seems to be absurd to make a grant to the bank by one operation and by another to take one-half of its profits and place that one-half to the credit of the national debt sinking fund. I have consistently opposed profits of the Commonwealth Bank being utilized for any such purpose. I have always held that the profits made by the bank should be utilized in extending the bank’s operations. The Commonwealth Bank will, I presume, have to pay interest on the amount granted it from the profits derived, but if it proceeds in the future as it has been during the last six months, its profits will not be great. The first duty of the bank is to repay the money it has borrowed. I am not proposing that one-half of the net profits of the bank shall for all time be withheld from the national debt sinking fund, but only until such time as the £6,000,000, or whatever sum may bo granted to the bank, has been repaid. If a further proposal is made that the national debt sinking fund be reduced by the misappropriation of the profits of foe Commonwealth Bank, I shall, if I have the opportunity, oppose it. The proposal to place one-half of the profits to the bank’s reserve is all right so far as it goes.If it had not been for the decision to grant £6,000,000 to the bank, I should have been in favour of the whole of the net profits being placed to the reserve fund to enable it to meet its obligations and also to extend its operations. It was never intended by those who advocated the establishment of the Commonwealth Bank that the profits should year after year be utilized for any purpose other than an ‘extension of the bank’s operations. When the establishment of the bank was under consideration, we were of the opinion that we were not getting a fair deal from the private banking institutions, but it was never intended that the operations of the bank should be hampered by this misappropriation of its profits. I find on reference to the last halfyearly balance-sheet that the total profits made by the bank exceed £4,500,000. It is intended to take at least £4,000,000 of that sum and place it to the credit of the bank reserve fund, to be used in furthering the operations of the bank. That will be a perfectly legitimate use for the money. But the proposal that has been sprung upon us during the last few days to continue to pay half the profits into the national debt sinking fund, can have been dictated only by a determination to prevent the development of the bank’s operations. I am informed, on very good authority, that it was decided a considerable time ago to establish a branch of the bank at Goulburn, but that for various reasons the managementhas not been prepared to expend the necessary money. I know, also, that land has been purchased in other localities, but the establishment of branches in those centres also has been delayed.

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

, - There are only two contentious matters left, one relating to the appeal board and the other relating to the issue of notes against London securities. On the understanding that the committee stage of the bill will be completed by 4 o’clock to-day, I propose to report progress.

Progress reported.

Senate adjourned at 3.35 a.m. (Friday).

Cite as: Australia, Senate, Debates, 31 July 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240731_senate_9_107/>.