9th Parliament · 2nd Session
Mr. Speaker (Rt. Hon. W. A. Watt) took the chair at 11 a.m., and read prayers.
Mr. E. S. LITTLE.
Mr. MARR asked the Minister for Trade and Customs, upon notice-
Inconnexion with the termination of the services of Mr. E. S. Little, late TradeCommissioner in China, will the Minister, in jus tice to Mr. Little, inform the House was the termination ofMr. Little’s services due in any way to his personal character, trustworthiness, or efficiency?
Mr. PRATTEN.- I have not yet had an opportunity of personally perusing the papers, but I promise the honorable member a considered answer next week.
Mr.FORDE asked the Treasurer, upon notice -
What was the number of Commonwealth bank notes in circulation in 1914, and for each subsequent year up to and including 1923?
What was the number in circulation on 30th June, 1924?
What was the amount of gold reserve each year from 1014 to 30th June, 1924 ?
What wasthe amount of cheque currency for each year in the same period?
What were the cost of living figures for the capital city of each state for each year since 1914 up to 30th June,1924?
– The answers to the honorable member’s questions are as follow : - 1, 2, and 3. The total value of Australian notes in circulation at the 30th June, 1924, was £56,890,225. The totalamount of gold held was£24,441,276 10s. The figures for the preceding years willbe foundon page 180 of the budget papers for 1924-25.
Electrical Engineer’s Department in South Australia - Wages of Employees.
asked the Minister representing the PostmasterGeneral, upon notice -
– The information is being obtained, andwill be furnished as early as practicable.
asked the Minister representing the Minister for Home and Territories, upon notice -
Has the Government secured the land at Spring Bay offered by the municipal council free of charge for the purpose of building a post office in that district?
– The position in regard to this land is that a survey thereof is about to be made. If, upon completion of the survey, the land is found to be suitable, the necessary steps to secure its transfer to the Commonwealth will be taken.
asked the Acting Minister for Works andRailways, upon notice -
If so -
– The answers to the honorable member’s questions are as follow:
Yes. 2. (a) P. W. Haese.
asked the Minister for Trade and Customs, upon notice -
What was the highest price the Australian canned fruit brought in England, and what was the average price of the total shipment?
– The information is being obtained.
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained:
Tariff Board Inquiry
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : - 1.Four.
– On the 7th August, the honorable member for Angas (Mr. Gabb) asked the following question: -
What is the amount of Excise duty collected on spirit manufactured from 1 ton of Doradilla grapes, according to departmental estimate?
I am now able to furnish the honorable member with the following information : -
It is estimated that 1 ton of Doradilla grapes would, on an average, produce about 31 gallons of proof spirit. The Excise duty payable on the spirit would be - (a) if used for fortifying wine, £9 6s.; (b) if used for making brandy, £40 6s.
In committee: (Consideration of Senate’s amendments).
. -I move -
That the amendments be agreed to.
The schedule of the amendments, which is in the hands of honorable members, seems rather formidable, but the majority of the alterations are consequential upon two or three important ones. The principles of the bill have not been really altered since the measure was considered by this chamber. Most of the amendments were moved by the Government for the express purpose of making the bill clearer, or of assisting the bank to exercise its functions as a central bank during the early stages of the re-organization. Another place decided by fourteen votes to eight to leave out the provision for the appointment of local boards, which was in the bill when it left this chamber. As the alteration is not in any way vital, the Government has accepted it. The only local board which the Government contemplated appointing immediately was to be located in Melbourne.
– Where the board of directors of the bank would meet?
– The board of directors will meet in Sydney, where the bank has its headquarters. The directorate will now have full power to exercise such functions as were proposed to be assigned to the local boards. It is hoped that the board of directors may see its way clear to meet in Melbourne occasionally for the purpose of coming into contact with the controlling authorities of the private banking institutions here. Although the head offices of the various private banks are distributed among the state capitals, most of them are in Sydney and Melbourne. The Senate left out the word “ lent “ in clause 5 and inserted “ granted,” in order to make it quite clear that the £6,000,000, which is to be given to the bank by the Treasurer as capital, is not to be repaid. During the debate on the measure in this chamber I stated in reply to remarks by the Leader of the Opposition that the intention of the Government was that this £6,000,000 should be contributed to the bank by the Treasury in practically the same way as private shareholders contribute the capital of private banking companies, the only difference being that shareholders of private institutions receive dividends on their permanent investment, and the Government will receive on this £6,000,000, only “ a rate of interest equivalent to the effective rate of interest payable by the Commonwealth on the loan raised for the purpose.” The profits of the bank are, of course, to be apportioned equally between its reserve fund and the National Debt Sinking Fund. The National Debt Sinking Fund will gradually extinguish the loan raised for the purpose of providing this £6,000,0000, and then the Commonwealth Government will be in the position of ordinary shareholders. This amendment will, to a large extent, meet the objections raised by honorable members of the Opposition on the manner in which the Government proposed to create the capital of the bank. It will also give a greater sense of security to depositors; though, of course, the bank would be absolutely secure in any case, for the whole credit of the Commonwealth is behind it. Buthad this amendment not been made there might have been a fear in some quarters that the bank would be obliged to repay this amount, and that that obligation would take precedence over the other liabilities of the institution, which was never intended. Another important amendment relates to the appointment of the board of directors. When the bill left this chamber it provided that the board of directors should include -
The other place deleted those sub-clauses, and inserted the following: -
It will be noted therefore, that all reference to persons with a knowledge of currency is removed. The amendment will tend to reduce the danger of making invidious distinctions in appointing the directors, and it will somewhat widen the scope of the Government’s choice, for it gives a much more general power than did the former provision. I do not think honorable members will offer any objection to it. Another important amendment has relation to the control of the note issue. When the bill left this chamber, it contained a provision that any decision of the board which affected the Note Issue’ Department of the bank should not be effective unless the directors who voted for it included two. of the following directors, namely, the Governor, the director who is the Secretary to the Treasury, and the directors appointed on account of their knowledge of currency. The amendment provides that any decision of the board respecting the note issue shall be effective if -
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.
The Government considers that this provision contains adequate safeguards, and also removes a possible source of discord and trouble in connexion with the internal working of the board. It will be realized that some such safeguard is necessary. In the Bank of France, three censors,, who have no vote in ordinary matters, must agree unanimously to any proposed alteration in the note issue before it can be effective. Another alteration made in another place will meet with the approval of the honorable member for Boothby (Mr. Duncan-Hughes) in particular. The provision that, in appointing the board of directors the Government should, as far as possible, give due consideration to the fair representation of the geographical divisions of the Commonwealth, has been deleted.
It was thought that the provision in the bill might limit the choice of directors. The deletion of the words will relieve the Government of the necessity of keeping geographical divisions in mind when making appointments to the directorate, and will enable it to appoint the best men obtainable; but no government, in making such appointments, would disregard the claims of the various states for fair representation, if that could possibly be arranged. Indeed, a direction from Parliament to consider state representation may be regarded as unnecessary. There are some consequential amendments to this clause, and the following new section is proposed to be inserted after section 12a: - 12aa - (1.) There shall be a. Board of Advice in London hereinafter called the London Board. (2.) The London Board shall consist of three members to be appointed by the GovernorGeneral upon the recommendation of the Board of Directors. (3.) The members of the London Board shall, subject to this Act, hold office for four years and be eligible for re-appointment. (4.) 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 aims at giving the bank the benefit of the advice of financial experts in London in the flotation of loans, and the transaction of other business there. The Government recommends the acceptance of the amendment as it willassist the bank to function efficiently. Section12b is left out because it refers to the appointment of local boards of advice. In section 13. the words “the London Board” have been substituted for “a local board.” That alteration is consequential. There is another amendment that prepares the way for words indicating how members of the board in London shall be remunerated. It leaves out the words, “ By way of salary at the rate of Two hundred pounds per annum,” and substitutes “ as is fixed by the Governor-General on the recommendation of the Boardof Directors.” The next eight amendments are entirely consequential and verbal alterations. The next I have already explained. The following amendment dealswith the appeal board. The Senate seeks to leave out sub-section 3 of the proposed new sub-section 16b, and to insert the following new subsections : - (3.) The Board shall refer the appeal to an Appeal Board consisting of three members, one of whom shall be appointed by the Board and one of whom shall be elected by the officers of the Bank in the manner prescribed, with an independent Chairman appointed by the Board. (4.) The Appeal Board shall consider any appeal referred to it under this section and shall submit its report thereon to the Board, which shall determine the appeal and notify the appellant of its determination, which shall be final and conclusive.
That amendment amplifies and defines the rights of appeal of servants of the bank. A new clause proposed to be inserted after clause 11 makes a verbal amendment that was overlooked in the drafting of the bill; the word “Governor” is struck out and the word “ Board “ substituted for it. The next amendment prepares the way (for the addition of new sub-clauses to clause 16. At the end of clause 16, a proviso that was urged in this Committee by the honorable member for Perth (Mr. Mann) and the honorable member for Macquarie (Mr. Manning) has been inserted. It provides that Australian notes shall not be issued to the bank without the approval of the Treasurer. That will give the community an assurance that the bank will not, without the approval of the Government, issue notes to itself to meet its necessities and the circumstances of the moment. The Government is quite certain that such an amendment will not in any way affect the efficiency of the bank, and therefore recommends its acceptance. The following new clause has been inserted after clause 16: - 16a. After section 60o of the principal Act, the following section is inserted: - 600A. The Board may issue Australian notes to the Bank or to other banks in Australia in exchange for money or securities lodged with the London branch of the hank.
It will be noticed that the board “ may “ issue notes. The provision is not mandatory in any way. I expressly dealt with this point in my second-reading speech, and I thought I had made it clear to every one that the bank has the power referred to. The Notes Board has the right to hold securities in Australian Government stock, British Government stock, and bills of exchange not exceeding 120 days against its gold. The amendment of the Senate is designed to make it clear to those who read as they run that the Bank has this power. In my speech on the second reading of the bill, I said: -
Consideration of these possibilities will show that the Central Bank must not be directed to provide exchange at any particular rate or to issue notes for English money, and vice versa, up to any amount which the banks or the public may apply for. Unfettered discretion must be given to the Central Bank, in order that disturbances shall be- avoided as far as possible.
The amendment does not alter the powers of the Bank, but merely defines them. There is another amendment made by the Senate that was suggested by the honorable member for Swan (Mr. Gregory). The present act provides that the control of the note ‘ issue may, by proclamation, be transferred from the bank to the Treasurer. What the Government suggests is that that power should reside in Parliament, and not in the hands of the Government of the day. Should it be necessary !to restore the power of control over the note issue to the Government, tha conditions would be sufficiently urgent to necessitate the calling together of Parliament to discuss, the facts. The next amendment leaves out the date “ the 31st January, 1925,” in clause 17, and inserts “ a date to be fixed by proclamation.” The banks are willing to adjust their balances by cheques drawn on the Commonwealth Bank, but they point out that their present clearing house arrangements are such that it may not be possible for them to make the necessary alterations by the 31st January, 1925. If the date is fixed by proclamation, they will be able to effect the reform before the date is proclaimed..
– Does that mean that the alteration will be postponed indefinitely?
– No. The Government will get busy as soon as the bank commences to function as a central bank. In sub-section 7 of the proposed new section 60ad, it is desired to insert after the word “ public “ the words “ and allows interest thereon.” The sub-section reads - (7.) In this section the word “Bank” means a person or corporation carrying on the business of banking, and includes any person or corporation which receives deposits from the public, and which is proclaimed by the GovernorGeneral to be a bank for the purposes of this section.
That phraseology could be construed to apply to a co-operative store, in which a man places £100, and gradually takes it out in groceries. The amendment will avoid any possibility of vexation to such companies, which are further safeguarded by the power given to the GovernorGeneral to proclaim what are banks for the purpose of the section. A co-operative society that pays interest would not be proclaimed, but some means must be provided to make certain of getting statistics from those institutions that should supply them. The last amendment of the Senate deletes from clause 18 the proposed new section inserted by the honorable member for Melbourne (Dr. Maloney), and accepted by the Government. The proposed new section refers to the relations between the bank and its architects. The Senate felt that it was too small a provision ‘to make in the bill, and would give an instruction to the directors in a . matter that should be left to” their own judgment. The amendment is not of such vital importance that we should risk on it a conflict between the two Houses. I have taken this course of placing the whole of the amendments before the committee in globo because few of them are important, and many are merely consequential. Honorable members will have an opportunity of saying whether they prefer to discuss the whole of the amendments at once, or to deal seriatim with the more important.
.- The bill contains eighteen clauses, and the Senate has made no fewer than 33 amendments which have absolutely recast it. Yet we are coolly asked to deal with the whole of those amendments on one motion.
– As some of the amendments are likely to be discussed, I shall put them seriatim.
– I suggest that the Treasurer should postpone the consideration of all the amendments until the next meeting of the House.
Senate’s amendment to clause 4 agreed to.
Clause 5 -
Section 9 of the principal act is repealed, and the following section inserted in its stead: - “9.- (1.) The capital of the bank shall be Ten million pounds, consisting of the following:
Such sum not exceeding Six million pounds as is lent to the bank by the Commonwealth from moneys borrowed by the Commonwealth in pursuance of this act; and
Senate’s Amendment. - Leave out “ lent “ in paragraph (b), and insert “ granted”
Motion (by Dr. Earle Page) proposed -
That the amendment be agreed to.
– The Treasurer has stated that the money to be furnished to the Commonwealth Bank by the Treasury will be similar to a subscription of capital to a limited liability company, and the Commonwealth as a shareholder in the bank willreceive interest at the bank’s current rate. The proposed amendment is a mere side-stepping of the issue.. The money advanced by the Treasury is to be merely a ‘loan on which the bank will have to pay interest, and there is no analogy between such a loan, or grant, or whatever it may be called, and the contribution of the capital to a limited liability company, the shareholders of which may, or may not, receive profits. The profits of the bank should first be utilized to liquidate its indebtedness to the Treasury. The Senate has practically recast the bill, and one feels entitled to ask for an opportunity to make another second-reading speech upon it. The majority of the amendments have been made in the interests of the associated banks, at the instance of their champion, Senator Greene. He admitted that he was in constant touch with representatives of the associated banks. While the bill, as it left this chamber, was well designed to serve the interests of the money trusts, it is calculated to do so infinitely more effectively since Senator Greene has made his mark upon it. I protest againstthe Government placing an almost new bill before the committee, and suggesting that it should be accepted in globo. Such procedure is notin the best interests of the country. This is the first occasion in my experience of parliamentary life on which a government has tamely accepted radical alterations made in a bill by the Senate. The explanation is that this measure is drafted in the interests of the money trust.
.- No government has ever shown more incapacity and disregard of the people’s wishes than has the present Government in connexion with the bill now before us. The measure was rushed through this chamber with the aid of the guillotine, and for several days afterwards lay dormant. When it reached the Senate some persons, armed with a certain amount of information, and with perhaps more knowledge than the Government possessed, set about altering the bill to meet the wishes of the financial interests which support the Government. The Treasurer would be wise to agree to postpone this discussion in order to give honorable members an opportunity to study the effect of the amendments. It is indecent to ask the committee on Friday morning to hurriedly agree to 33 amendments of vital importance to Australia. The Treasurer has not attempted to explain the effects of the amendment to clause 5. What difference is made by the substitution of ‘ ‘ granted “ for “ lent “? I understand a grant to be in the nature of a gift, and a loan to imply an obligation to repay. Is money to be granted by the Treasury to the bank to be used as the directors think fit, and without any obligation to repay ? A loan is usually conditioned in regard to the application of the money and the period of repayment. Instead of granting money to the bank, would it not be better to merely lend capital to it, so that as it prospered it may be able to repay the Treasury, and rely uponits own resources? The clause,as amended by the Senate, means that £6,000,000 is to be granted by the Treasury to the Commonwealth Bank. I doubt if even a legal member of the committee can explain what is meant by the word “granted “ as it is employed in this clause. Any amendment proposed in this Parliament by a member of the legal profession is usually to benefit interests other than those of the general public. There is no doubt that the effect of this amendment will be to benefit those who, under the bill, will come into close association with the Commonwealth Bank. This should be the people’s bank.
– The honorable member must not make a second-reading speech.
– The amendment will have a far-reaching effect, and I contend that the committee should be informed of the true position.
– Does the honorable member think that there is any real difference between the words “ lent “ and “ granted “?
– There is a serious difference. The alteration will not benefit the business of the bank. I should certainly support any amendment that would improve the bill, and I should like to know whether the Parliamentary Draftsman has revised this measure since it left another place.
– The Government has been in continuous touch with the Parliamentary Draftsman.
– I ask the Treasurer to give a reason for the amendment. This is virtually a money bill, as it deals with finance, revenue, and the note issue. The spirit of the Constitution throws upon this chamber the responsibility for any amendment of the bill.
– The Government suggested this amendment to make clearer the purpose of the bill.
– It is an unwarranted alteration, and the Government’s action will not be appreciated by the people.
.- I think that I may ease the honorable member’s mind if I explain why the word “granted” should be substituted for the word “lent.” Unless this money is granted to the Commonwealth Bank for an indefinite period, how can it regulate its business ? If the period were fixed at, say, twenty years, the bank would be responsible for the return of the money borrowed at the end of that period. If the money were lent only for a certain period, how could the bank finance individuals, aid the struggling settlers, or even conduct its own business ? Money is subscribed for an indefinite period to the associated banks” by their shareholders. The Commonwealth Bank should have the same security in regard to its capital in order to compete with the other banks. Therefore, the word “ granted “ should be substituted for the word “ lent.”
.- I have obtained Webster’s Dictionary to ascertain the difference between the words “ lent “ and “ granted,” which words affect, not only this amendment, but also others that are consequential. The intention of the Government is to make the sum of £6,000,000 available as capital to the Commonwealth Bank. Paragraph b of proposed new section 9, clause 5, as amended, reads -
Such sura not exceeding £6,000,000 as is granted to the bank by the Common-wealth from moneys borrowed by the Commonwealth in pursuance of this act.
Sub-clause 4 of proposed new section 10 has been amended to provide that the bank “shall pay interest on the grants made to it by the Commonwealth. The original word was “ loans “ and not “ grants.” Webster’s definition of “ lend “ is -
To allow the custody and use of, on condition of the return of the same; to grant the temporary use of; to allow the possession and use of, on condition of the return of an equivalent in kind; as, to lend money or some article of food.
From that definition it is evident that this money has to be returned at some future period. The clause as originally drafted would have given the Commonwealth Bank an opportunity to return the money whenever possible. The following is the definition of the word “grant,” using the substantive and not the verb : -
The act of granting; a bestowing or conferring; concession; allowance; the yielding or admission of something in dispute; the thing or property granted; a gift; a boon.
There is certainly a distinct difference between the two words. Under the amendment the Government will make to the bank a gift of £6,000,000 for which it must pay interest at the rate equivalent to the effective rate of interest -payable by the Commonwealth on the loan raised for the purpose. This is not the right procedure to follow. The clause should stand as originally drafted. A loan to the bank implies that the money, or an equivalent, has to be returned at some future period. We are asked to grant this money as a loan, but a grant is not a loan. As I think that the word “ grant “ would be incorrectly used in this clause, I cannot support the amendment.
– Since honorable members have raised this discussion on the meaning of the words “ lend “ and “ grant,” I should like to give some details from Murray as to the meaning of the word “grant.” I am not confident that the use of the word “ granted “ in this connexion is correct, though it is probable that in the circumstances its use is preferable to the use of the word “lent.” I doubt whether it is possible- to make a grant which is subject to the payment of interest. Murray gives as his third definition of the word “ grant “-
An authoritative bestowal or conferment of a privilege, right, or possession; a gift or assignment of money, &a., by the act of an administrative body or of a person in control of a fund or the like.
He gives an example of the use of the word in Green’s Short History -of the English People as follows: -
The Commons restricted their grant of certain Customs duties . . . to a single year.
According to Murray, in law, the word “ grant “ means -
A conveyance by deed or other written instrument - (b) Formerly in more restricted application. A conveyance of such property (viz., incorporeal hereditaments), as can pass only by deed. To be or lie in grant (of property) to be of a nature transferrable only by deed.
Dealing with the word “ grant v as a verb, Murray’s fifth meaning is -
To bestow or confer (a possession, right, &c. ) , by a f formar act. Said of a sovereign or supreme authority, a -court of justice, a representative assembly, &c. Also in Law to transfer (property) from oneself ito another person, especially by deed.
The point may not be of the greatest importance, but I find nothing in Murray’s definitions to suggest that it is possible to make a grant of the nature proposed, which under sub-section 4 of proposed new section 10 will be liable to the payment of interest. I know that some honorable members are not very particular in the use of correct English, because they have proclaimed themselves in favour of a “ compulsory franchise,” which is a contradiction in terms. They therefore may not regard this matter as one of very great importance. As interest is payable upon this money it is not a grant, but in virtue of the circumstances the use of “ granted “ in this case is preferable to the use of the word “lent.” I still think, however, that “granted” in this connexion is not a correct English expression.
.- I wish to move -
That the committee disagree with the Senate’s amendment.
I cannot say rauch more than I have already said on the question. I submit the amendment in order that the Treasurer may have an opportunity to say what he knows about the matter, and to explain why the substitution of “granted” for “lent” is proposed.
– I do not see any reason why we should not agree to the substitution of the word “granted “ for the word “lent.” It seems to me that in the main what the honorable member for Boothby (Mr. DuncanHughes) has said is correct. If we accept the suggestion of another place, and substitute “ granted “ for “ lent,” we shall be giving a meaning to the word “ grant “ which has not yet been accepted by the best, authorities. But that the Government is proposing to give to the word “ grant “ a new meaning, which up to the present has not been acknowledged, is no reason why we should’ not accept the amendment, because Ministers have done many things unique in the history of government, and we expect them to do more. There is no reason why they should not coin a new meaning for an old word. I know that the Treasurer (Dr. Earle Page) whilst going through his academic course in the Sydney University gave some very excellent; if unique, translations of phrases in other languages, and there is no reason why, having added to the accepted meaning of words in foreign tongues,’ he should not give to words of the English language ! meanings which have not up to the present been identified with them. For this reason I accept the amendment. Whether we use the word “granted” or the word “lent,” as originally proposed, provided we do not make any alteration in the conditions of the “grant “ or “ loan,” we shall make no alteration in the bill. We therefore need not quibble over the substitution of one word for another. The interpretation of the bill will depend upon the conditions, and not upon the use of a particular word in this case. Possibly the time may come when Murray j or some such authority; having seen the word “grant” used in this connexion will accept the use of the new meaning now proposed to be given to it, and will quote the Treasurer as his authority.
– The amendment of the honorable member for East Sydney (Mr. West),, being a direct negative of the motion, is out of order; the proper course for him to take is to vote against the motion. The use of the word “ granted “ in this connexion has been adopted for a special reason. Despite the remarks of my old schoolmaster, the honorable member for Barton (Mr. F. McDonald), whether the use of the word in this connexion is correct or not, the word has been so used before by this House. It was so used in connexion with the grant of £500,000 for main-road development. That was a grant made on certain conditions, for instance, that the State Governments should contribute £1 for £1 to the purpose for which it was made. We have made certain grants of money for the relief of unemployment, and granted loans on which interest has to be paid. The money which, under this Bill, it is proposed to allot to the Commonwealth Bank will be a grant under certain conditions. As I explained when introducing the Bill, it will be a grant to the bank as perpetual capital, but interest will have to be paid on it at the- rate at which the Commonwealth borrows the money for the purpose of making the grant. Every one wishes to see the Commonwealth Bank increase in credit, reputation, and prestige, and the main reason for the substitution of “ granted “ for’ “ lent “ is to remove beyond possibility any doubt which might arise in the public mind that the Commonwealth Government would have priority in a claim for this money over bank depositors. The public must feel that they will be in a preferential position if they deposit their money with the bank. For this reason, in the interests of the bank itself, the quibble regarding the use of the word “granted” should not be pressed. Even though the use of the word “granted” in this connexion may not be entirely in accord with the opinion of authorities upon English, I think the amendment should be accepted.
.- I should not have risen if the word “ quibble “ had not been used. If the employment of one of these words rather than another is only a “ quibble,” why has the time of this committee and of another place been wasted, over it ?- The officials, after three months’ incubation, produced the word “lent.” After the bill had been dealt with here it was sent to another place, where it was discovered that the word used should be “granted.” Now we are told that that is only a quibble. Why has the Senate submitted about a dozen amendments if the difference between the words in the bill and those they wish to substitute is only that between tweedledum and tweedledee? I was myself of opinion that that was about the difference between them until I heard the honorable member for Richmond (Mr. R. Green), quoting from about half a ton of dictionary that he had in front of him. Thereupon, to show that all the learning and erudition is not on the Government benches, I went to the Library and procured Roget’s Thesaurus, and I propose to set this authority against those cited by the honorable member for Richmond, the honorable member for Boothby (Mr. DuncanHughes), and- the honorable member for East Sydney (Mr. West). According to my authority, “ grant “ means to credit, or trust. I suppose that if a man trusts me he will make me a grant, but if he lends to me, that is an entirely different proposition. The Thesaurus says that “ grant “ means “ to give credit, to believe, to put one’s trust in.” No one would ; do that with the Government. “ To repose implicit trust in; to take one’s word for.” We know what the Treasurer previously said, and we have just heard what he says now. Can we then take his word for anything ? “ To place reliance on ; to swear by.” I set this interpretation against that of the honorable member for Richmond. I decline lo be regarded as standing in the shadows of ignorance. My definition continues -
Think, hold, take it; opine, be of opinion, conceive, ween, trow, fancy, apprehend; have-, hold-, possess-, entertain-, adopt-, imbibe-, embrace, get hold of-, hazard-, -an opinion.
Half-way down the page we come to the adjectives. The use of adjectives in this chamber is deplorable. The definition reads -
Believing, &c, v.: - Certain, sure, assured, positive, cock sure -
Like the honorable member for Richmond. The definition goes on -
Confiding, suspectless unsuspecting, unsuspicious, void of suspicion, credulous”, wedded to.
When we come to the adverbs, which are more important than the adjectives, the definition reads -
In the -opinion, -eye, -of; me judice, meseems, -thinks; to the best of one’s belief; I -dare say, -doubt not, -have no doubt, am sure; sure enough, 4c. (certainty) ; depend-, rely-, upon it; be-, rest-, assured; I’ll warrant you, &c. (affirmation) .
Now, perhaps, honorable members understand what the Government means by “ granted.” But let us examine the Thesaurus definition of “ lent.” It is as follows : -
N., lending, &c; v., loan, advance, accommodation, feneration; mortgage, &c. (security), investment.
Mont de piété pawnshop, my uncle’s.
Lender, pawnbroker, money lender, usurer.
The definition of the verb reads -
Lend, advance, accommodate with, lend on security; pawn, &c. (security).
Intrust, invest;, place-, put-, out to interest; let, demise, lease, sett, underlet.
The adjectives are “ lending, &c, v. ; lea I, &c, v. ; unborrowed, &c,” and the adverb are “in advance; on -loan, -security.’” With those words of wisdom added to the definitions already given, I am quite sure that honorable members now know the exact difference between “ lent “ and “ granted.”
Motion agreed to.
Clause 6 -
Section 10 of the principal act is repealed and the following section inserted in its stead : -
The bank shall pay to the Treasurer, half-yearly, interest on the amount due by the bank to the Commonwealth in respect of loans made in pursuance of this section.”
Senate’s Amendment. - Leave out “ amount due hy the bank to the Commonwealth in respect of loans,” and insert “ grants “.
Motion (by Dr. Earle Page) proposed -
That the amendment be agreed to.
– I move -
That the Senate’s amendment be amended by adding after the word “ grants “ the following words: - “and the bank shall retain its profits to enable the bank to meet its interest obligations.”
I wish to ensure that, in a time of difficulty, the bank shall not be obliged to pay out interest to such an extent that it will be hampered in its operations. We know that, in spite of all the talk about the need for water conservation, and so on, by honorable members who support the
NationalistandCountrypartiesAustralia issubjecttodroughts.Inatimeofdepression consequentuponadrought,whenit might be speciallydesirablethatthebank shouldassisttheproducers,itmightbe obliged,unlessmyamendmentisadopted, topayouttheTreasurerlargesumsin interestwhichwouldotherwisebeavailabletoaidtheproducers.Weshallbe wisetofreethebankfromanysuch obligation.Asthisbillisdesignedab- solutely in the interests of theprivate banking institutions, the adoptionof my amendmentisthemorenecessary.Iam quiteconvincedthat,iftheGovernment and some of the privatefinancialinstitutionswithwhichitisinclosecontact could compel the bank to close its doors, they would be delighted to do so. I do not think that they would hesitate to, use any means that would bring about that end. I trust, therefore, thathonorable memberswhoreallybelievethatthebank is of benefit tothecommunitywillsupport my amendment, and so. afford the institution some security.
. -This matter has already been discussed and decided in this chamber. Clause 11 of the bill repeals section 30 of the principal act, and’ inserts in its stead the following word’s: - “30. -(1.)Thenetprofitsofthebankin eachhalf-yearshallbedealtwithasfollows: - (a)One-halfshallbeplacedtothecredit of a fund to becalledthebankre serve fund;and; (b)One-halfshallbepaidintothe NationalDebtSinkingFundassoon as practicable after the preparation of each Balance-sheet. “ (2.)Thebankreservefundshallbeavailableforthepaymentofanyliabilitiesofthe bank.”
The bank is properly safeguarded by the concluding paragraph of the clause. The only reason why the honorable member is able to. introduce his amendment at this stageisthatanother place substituted in sub-section 4 of the proposednew section 10 the word “ grants “ f or the words “amount due bythebanktotheCom- monwealthisrespectofloans.” But the arguments that wereused in our previous debate on the proposal that is now submitted by the honorable member for Werriwastillapply.TheGovernment willbeobligedtoraisealoantoobtain this money for the bank; and it isonly reasonable that the bank should recoup it for any interest it pays in respect of that loan. The institution will not be asked to gay a heavy rate of. interest, but only the amount which the Commonwealth itself has to pay. Honorable members opposite are attempting to draw a subtle, but unreal, distinction between the terms “ Commonwealth” and “ Commonwealth Bank.” The Commonwealth Bank belongs to the Commonwealth. Its position in the past has depended, as in the future it will depend, upon the credit of the Commonwealth Government and the people of Australia being behind it. The real security of the Commonwealth. Banklies in the fact that a provision in the Bank Act makes the Government ultimately re sponsible for the bank’s liabilities. That being so, there is no justification for the amendment. The only way in which the profits of the bank come back to the Treasury is in the form of contributions, to the sinking fund for wiping out our national debt. The wiping out of that debt would be beneficial to the people of Australia as well as to the bank.
Question - That the words proposed to be added be so, added (Mr. Lazzarini’s motion) - put. The committee divided.
Majority . ….. 11
Question so resolved in the negative.
Motion(Mr. Lazzarini’s) negatived.
Motion (Dr. Earle Page’s) agreedto.
Amendments consequential to the amendment in clause5 agreed to.
Sections eleven to fifteen, bothinclusiveof the Principal Act are repealed, and the following sections inserted in their stead: - “ 11. -(1.) TheBankshallbe managedby a Board ofDirectorscomposed ofthe Governor and sevenotherDirectors. “(2.)Subject tothis Act, theseven other Directors shall consistof - (a)the Secretary to the Treasury ; (b)twopersons who areorhavebeen associatedwithmanufacturing in dustries orcommerce; (c)twopersons who areor have beenassociated with agricultural, pastoral, or other primary industries; and (d)two personswhohaveaknowledge of currency and are declared by the Governor-General tohavebeen chosenbecauseofthatknowledge.
Senate’s Amendment: -Leave outparagraphs (b), (c.) and(d),insertthe followingnew paragraph:- “(b.) six other persons who are or who havebeenactivelyengagedin agriculture, commerce,finance,or industry.”
Motion (byDr. Earle Page) proposed -
. -Badas the original proposal was,theSenate’s amendment is immensely worse. For the original proposalit could at leastbe saidthat it wasdefinite. This is indefinite. Itprovidesfor “ six other persons who are or who havebeen activelyengagedinagriculture,commerce, finance, or industry.” All the six members couldbe takenfromonesectionof the community. Thecommittee ought not to agreeto the proposal. Amazementhas been expressed - and no wonder that it shouldbe - thatthe Treasurer has meekly acquiesced in allthe amendments oftheSenate . Canbe contendfor one moment that it wouldberight toappoint the sixdirectors fromone industry? Itwas said byeveryspeaker on the Governmentside, including the Treasurer, thatthebank, underthe managementof oneman,had workedmarvels.
If the Treasurer hadbeen able to saythat the bankwas a failure,that ithad not performed thefunctions for whichit was created, or that it had not served this country during the very trying time of the war, there wouldhavebeen some excuse forthe alteration.He did not say that, but he did sayquite definitely that one-man control lad resultedin a great servicebeing rendered by the bank to the country.The statement that such service has been rendered has not seriously been challenged. . I need not go into the history of the bank, but no honorable member can deny that it was the great bulwark of this country in the perilous timesthrough which wehave just passed. Thebank has accumulated a profit of £4,500,000, and it saved this country £7,000000 or £8,000,000 in -the cost of ‘floating loans for war purposes. The achievements offire bankhaveoften beenmentioned and I mention themagainto show that one man control hasnot,atall events, been found wanting.Members onthis side, While theycontendthatone-mancontrol has beena success, agreed tothe appointment of aboard of three directors,and if we nowacceptthe amendmentofthe Senate, it is impossible to say whatwill happen ultimately. All the sixdirectors could, undertheamendment,be appointedfromamong theshareholdersof private banks.Thatwouldbe a serious stateof affairs for theCommonwealth Bankforitwill have to deal with the grantingofnotestoprivatebanks.The boardofdirectorswillhavetoconsider, amongotherthingsthequestionofthe inflationordeflationoftheissue.. Cananyonecontendthatthe control of ournoteissueshould be left in the hands of people who mayall be engaged in the onebig industry, and who maybe shareholders in privatebanks? Willanyhonorablememberdenythat it is possibleforthedirectoratetobe composed ofmenrepresenting onlyone industry and largelyinterestedinprivate banking institutions.? I assume thatbeforethe Treasurer made his secondreading speechon this bill be consulted with the Treasuryofficials, andwas convinced thatthe bill asdrafted , wouldbe ofbenefittothecountry. Now he is meekly accepting amendments moved in another place by a gentleman who wishes to deprive the Treasurer of one of his supporters at the next election.
– He will not do that.
– I have grave doubts about that, and I am sure the doubts of the honorable member for Richmond (Mr. R. Green) are graver still.- By his meek acceptance of these amendments the Treasurer practically admits that a member of another place knows more about banking than do Ministers and the Treasury officials. The gentleman responsible for these amendments desired to embarrass the Treasurer rather than to assist the Commonwealth Bank, for it cannot be contended that they are calculated to promote the welfare of the institution. No honorable member will deny that the amendment now before the committee is infinitely worse than the original clause, bad though it was.
– The workers are not to be represented on the board.
– There will be no representation of the masses, who are the mainstay of a people’s bank. The Government’s acceptance of this amendment lends colour to the statement that the real desire of Ministers is to hamstring the bank. The Government desires the Commonwealth Bank to be a bankers’ bank only, and, therefore, it offers no protest against an amendment which makes possible the appointment of a board wholly representative of private banking institutions. The amendment is most dangerous, lt is said that the directors are to receive about £50 per sitting on one day in the month, and they may do something which will bolster up their private interests to the infinite detriment of the Commonwealth Bank. I have a shrewd suspicion that the Government has already decided ‘ who the directors shall be. The names of Sir John Higgins and Mr. Edmund Jowett have been mentioned, and it is to be expected of the present Government that it will appoint only representatives of the wealthy classes. We may be certain that no working farmer will get a seat on the board; yet, a practical farmer making a living ‘from a small area would have a better idea of finance than would some wealthy squatter who was rich merely by inheritance. It is quite possible that the majority of ‘these directors will know very little about finance. The Treasurer would not call in a barrister to set a broken limb; yet he is prepared to entrust the control of the bank’s finances to men who are not qualified financiers.The desire of the Labour party was to have a board of three permanent directors who were fully qualified by man years’ experience of banking. The only men who will be able to administer the affairs of the bank successfully will be those who have given many years of study to the involved problems of finance. The amendment makes it possible for the directorate to consist of men having interests in private banking institutions and engaged in ordinary commerce, which does not necessarily give a knowledge of finance.
– It is not likely that unqualified men will be appointed.
– I say it is possible, and if the honorable member does not wish that to be done he should assist to have his ideas expressed in the bill. The Labour party’s proposal to appoint a board of three permanent directors received cordial support in another place from ministerial adherents. * Sitting suspended from 1 to 2.15 p.m.*
– It is distinctly dangerous to appoint to the board of directors men who have not the financial knowledge necessary to ensure the successful operation of the bank. Any young person desiring to become a doctor or a lawyer must spend years of study to fit himself for such an occupation. The intricacies of banking are just as great as those of the medical or legal profession. Yet under the amendment it is possible that men not qualified for the position may be appointed to the board of directors. Any road now open to such appointments should be effectively closed.
– The honorable member wanted to put a farmer on the board.
– I did not say that. I said that, if one of the directors were drawn from the landed interests, he should be a working farmer, and not a person representing the great pastoral industry who had merely inherited his wealth. I shall have no objection to persons from any industry being appointed to the board so long as they have the necessary qualifications.
– Does not everything depend upon the care with which these appointments are made?
– That is so, but it is wrong to leave the door open for the appointment of unqualified men.
– I would remind the honorable member that the same was said of the Northern Territory Land Board.
– The same can be said of any board when proper safeguards are not provided. It is only fair to the bank and to the people of this country that all possibility of unjustified appointments should be removed. The assurance should be given by the Government that the appointees shall be persons with banking and financial experience, wholly employed in the service of the bank, and free from outside influence. If a representative of any great section of the community is appointed, he will act more in the interests of those whom he serves than in the interests of the Commonwealth Bank and of the people of this country. It would be intolerable to have such men controlling the bank. If the bill, as amended by the Senate, is passed by this committee, the door will be open for the operation of outside influences. The position is serious. I am strongly of the opinion that those who inspired this amendment in another place were thinking more about embarrassing the Government than about the bank’s interests. I do not wish to impute motives, but any one who has the interests of the bank at heart could not say that the amendment was designed in the interests of the bank. The board should be responsible to the bank, to the people, and to this Parliament, and not to powerful sections of the community.
– Does the honorable member think that a knowledge of our industries is a disqualification?
– No. I should. not object to the appointment of a farmer or a person engaged in any other industry, provided that he had a knowledge of finance and banking.
– Does the honorable member think that the Government will appoint any one who has not those qualifications ?
– If it is the intention of the Government to insist on these qualifications, we should make doubly sure by providing that persons appointed to the board must be permanently employed in the service of the bank. To give effect to the Labour party’s original amendment, that there shall be three directors on the board including the Governor and the Secretary to the Treasury, I move -
That the words in paragraph 6 of the Senate’s amendment be left out, with a view to insert in lieu thereof the following words : - “ one other person who shall be. permanently employed in the service of the bank.”
.- The honorable member for Hume (Mr. Parker Moloney) has given the committee merely .a re-hash of what we heard for five and a half hours when the bill was previously before the committee.
– What does that matter ?
– I admit that it does not matter to honorable members who are here with the one idea of blocking progress ; but it is a serious matter to those who realize their full responsibilities when an important measure like this is before them. I am ill complete accord with the honorable, member for Hume in that we should discuss these amendments on their merits. If we think that they are not in the best interests of the bank, we should not hesitate to ask the Senate to review its amendments. This is a matter of vital importance.
– The honorable member does not give other people any credit for holding that opinion.
– I do; but honorable members opposite simply bring up matters that were discussed until left absolutely threadbare on two previous occasions. The honorable member for Hume takes great exception to the clause as framed, because of the possibility that a wrong person may be appointed. I would point out that we cannot prevent by legislation an act of folly by a Ministry, or by a Minister. We must rely on the Government appointing to’ the board persons who hold qualifications for the position.
– It is impossible to make any act fool proof.
– That is so, but the law can be framed so that under reasonable administration its purpose will be carried out in the proper spirit. The original bill provided that certain industries were to be represented on the board. It is absolutely absurd to suggest that men connected with great industries have not some knowledge of financial matters. ,
– That was never stated.
– It was stated over and over again. That was the whole essence of the debate. The Senate’s amendment has broadened considerably the scope of the bill, because the Government will now havethe power to reject any personwhom it thinks is unfitted for the position. In my opinion, the Government will use that power sanely and reasonably. The honorablemember for Hume has said that a directorof the bank should have had special training in ban king. He has reminded us that members of the legal and medical professions require special training. If we were dealing with the appointment of the manager of the Commonwealth Bank, there would be a good deal of force in the honorable member’s contention. To propose that the Governor of this bank should be a man without years of banking training would be absurd. But we want on the directorate of the bank men possessed of a wide knowledge of the conditions of the country, because, with that knowledge, they will beable to render invaluable assistance to the Governor in the administration of the bank’s affairs. The directorate should not be composed only of men withbanking training. Although I have every respect for the conservative way inwhich our banking institutions have acted in the past, it has been felt that they are sometimes too conservative, ‘because those controlling them have not the practical knowledge of the conditions of ‘the country to enalble them to acquire a complete grasp of all matters brought before them.I do not thinkthat the Commonwealth Bank will function intheway it should, unless, for instance, itwidens the field within which it makes advances. Unless we have onthedirectorate men qualified to advise the Governorof thebank, we shall hamperthe institution instead of assisting it to extend its functions forthe benefit of the country.The scope of the bank’s operations will, I believe, be considerably widened ifwe have on the directorate men, not only of great finan- cial experience,but who will under stand the broad issues which will be submitted to them as directors ofthisinstitution.
. -I have listened with interestto the speech ofthe honorablemember for Macquarie (Mr. Manning). Onewouldthink from his remarks that the Commonwealth Bank isjustbeginningitshistory,insteadof being an institution established forsome years asapeople’sbank,andonethathas renderedgreatservicetothepeopleof Australia. The institution has been carried on successfully so far, mainly by men trained inits service. The honorable member desires thatcertain sections in the community shall be representedon the directorate in the interests ofthe very persons whoopposed the establishmentof the bank in the first instance.
– The membersofthe honorable member’s party in the Senate desired to haveonthe directorate arepresentative of the employees.
– If you allowthe representation on the directorateof one interest you must allow the representationof all.If an industry, primary or secondary, isrepresented on the directorate of the bank, why should notthe workers also be represented? I agree with the amendment of the honorable member for Hume (Mr. Parker Moloney.) The only persons who should be on the directorate are men trainedin the bank and influenced by the reasonsfor which it was established. The chief supporters off the Commonwealth Bank are not those belonging to the sections thathonorable memberson the Governmentside wish to have representedonthedirectorate,but the public generally who have become depositors in the bank.
– I do not intend to support the amendment proposed by the honorable member for Hume (Mr,. Parker Moloney).On the other hand,I wish to make it perfectly clear that I am also opposed to the Senate’samendment. My reason was given inmyspeech on the second reading of the bill. . I then expressed my approvalgenerally of the principles of thebill, and the form of management proposed. A great deal at criticism has been levelled at themanagement of currency matters in this country, based upon the view taken bythe Notes Issue Board. . Iventured, in speaking on the second reading of the bill,to join a minority in this chamber insaying that I considered that the Notes Issue Board haddone right, and that the currency experts had actedsoundly. Iwas, therefore,naturally pleased at the directorate proposed forthe bank when the bill was originally introduced. I believed that the billwascarefully and thoughtfully drawn up, and wasbased onsound principles. Apparently an influence opposed to a conservative control of currency has made itself felt in another place. I hold the belief that in currency and financial matters conservatism is a sound policy. Looking at it from every point of view, I can see nothing in the past policy of the Notes Issue Board that can be considered wrong. It is considered wrong only if it is looked at from the point of view of certain definite interests. I decline to regard it from the point of view of those interests. The Senate’s amendment proposes that in addition to the Secretary to the Treasury, there shall fee on the directorate six other persons who are or have been actively engaged in agriculture, commerce, finance or industry.” In another place the views of this House with respect to the directorate were adopted with the exception of the proposed inclusion of currency experts.I agree that the interests referred to should have representation on the directorate, but the Senate’s amendment does not specifically define the relative degree to which the influence of those interests may be exerted. In that respect, I think the Senate’s amendment is wrong. It has been rightly said that it is impossible to make a measure such as this foolproof, and in this connexion everything will depend on the care exercised in the
Appointment of the directors,. That is perfectly true, but by acting carefully in the matter we may limit the area within which under this bill carelessness can be exercised and diminish the evils which may follow from it. The original provision for the directorate was inmy opinion better than that now proposed, because it afforded less scope for a. departure from sound principles. The Senate’s amendment camouflages the position because, while apparently the clause as amended by the Senate is intended to convey the same idea as the clause as originally introduced, it really does not do so, in that it leaves so much latitude to those who will have in their hands the appointment of the directorate. I do not say this because of the objection urged by the honorable member for Hume, because I do not agree that a working farmer is necessarily a financial expert.
– I did not, say so.
– Nor is a successful squatter.
– Every consideration of the matter shows how complicated’ and difficult financial and currency questions are. The clearest thinking is necessary to avoid pitfalls in considering them.
-That is all the more reason why trained bankers should be on the directorate.
– It is all the more reason why we should have currency experts on the directorate.
-Are not officers of the bank experts?
– They are not necessarily currency experts. When the honorable member talks in that way he shows that he does not understand what a currency expert is.Some of the views expressed on the matter are influenced more by the business requirements of private banks than by sound currency considerations.
– It is practical bankers who will have to carry on this institution.
– The honorable member is one of those who say that the private banks are suspect, and should be distrusted, but he now says that they are the practical people who know what they are talking about. I do not know how he can claim consistency for that kind of argument.
– I referred to the officers of the Commonwealth Bank.
– The honorable member is not fair. He has not been following my argument. I said that the demands with regard to currency, which have been the crux of the whole difficulty, have come not from the Commonwealth Bank, but from private banks,and have been prompted as much by the immediate business requirements of the banks as by sound currency considerations. That is why I am opposed to the elimination from the directorate of the Commonwealth Bank of the mem who have, in my opinion up to the present, been standing firmly and wisely against the pressure brought tobear upon them. I believe those men, against great opposition and great pressure, have been acting in the interests of the country. It will be very much to be regretted if they are eliminated from the directorate. There is, in my opinion, nothing to be gained by accepting the Senate’s amendment in this case. I consider it is due to the pressure of certain interests which, so far as I could gather, were perfectly satisfied with the originalpro-vision for the directorate of the bank, or at least were prepared to accept it. But because they saw an opportunity to exert influence they used it. With whatever knowledge and judgment I possess I shall oppose any outside interests which attempt to dominate this Parliament.
– Perhaps it could be stated definitely in the bill who are currency experts.
– It should be just as possible to decide who are currency experts as who are medical, scientific, or . engineering experts, although I suppose that just as opinions differ on that matter in one profession they will differ in another. The value of a man’s opinion on any subject depends largely upon what he knows of it. An ignorant man is not qualified to decide who is an expert. Although a treasurer may not be an expert in currency affairs he has sources of information available which should make him capable of reaching an honest and honorable decision on them. Certainly he would be far less liable to error than the man in the street who had no such advice available. There are men in the community who have made currency matters the- study of their lives, and I can see no reason why they should not be represented on the Commonwealth Bank directorate. Honorable members of another place agree with us that the board of directors of the Bank should be representative of various interests in the community, but whereas we determined the proportion in which such interests should be represented they are willing to leave’ that matter to the discretion of the Government. I consider that it would be in the interests of the. bank for honorable members to determine that at least the great producing interests of the community should be somewhat evenly represented. For the reasons given I shall oppose both the motion and the amendment.
– As the honorable member for Perth (Mr. Mann) has said, it is not difficult to infer that the associated banks, through Senator Greene, took a hand in the framing of the amendments inserted in this bill in another place. In my opinion, to” make the alteration that the Minister now proposes to accept will be to remove still another provision which in some measure safeguards the public interests. I am glad that the honorable member for Perth intends to oppose the motion,, but I am sorry that he cannot accept the amendment moved by the honorable member for Hume (Mr. Parker Moloney). If the honorable member for Macquarie (Mr. Manning), and the honorable member for Perth (Mr. Mann) vote in accord with their speeches we shall at least be sure of two more votes to prevent the directorate of the bank being exclusively representative of ‘the associated banks and the financial institutions of the country. I regret that the honorable member for Macquarie suggested that the amendment was moved to waste the time of the committee. This measure would have justified consideration for three months, and Parliament should have had the opportunity to give adequate consideration to it. I am suspicious that if the motion is agreed to the only interests that will be represented on the board of directors of the bank will be those of the big insurance companies and the associated banks. If that should be so, the bank would not be operated in the interests of the people. How can we reasonably expect men who are deeply concerned in the prosperity of the private banks to promote the interests of an institution which is diametrically opposed to them? Common sense forbids such a conclusion. The honorable gentleman who moved, in another place, for the insertion of the provision which the Treasurer now asks us to accept, prejudiced his own case by stating - and I speak on the authority of press reports - that he was in daily contact with private financial institutions. The .honorable member for Macquarie ridiculed the statement of the honorable member for Hume (Mr. Parker Moloney) that workers could have a sound knowledge of financial affairs. It is quite evident that he has never heard of, or else has given no consideration to, the reasons for the huge success of the workmen’s banks in America. Those institutions were established on email capital, and are flourishing under the control of working men. How can we expect gentlemen, who all their lives have conducted their business operations with a view to the payment of large dividends to private interests, to make effective directors of a national institution, the chief aim of which is service to the nation ? Such men should not be entrusted with the guidance of a national institution like the Commonwealth Bank. Not only have they used the hours of daylight, but they have frequently burned the midnightoilto devise ways and means of squeezing a little more profit out of their business, or of extorting a little higher rate of interest from the people to whom they lend money. The chief aim of a national institution is not profit, but service. That is the line of demarcation between a private and a government concern. One is operated for profit, and the other for service. The great captains of industry and the prominent financiers of the country are totally unfitted to evolve a progressive policy of national service, for they have been all their lives concerned with earning profits for private persons. Some honorable members opposite were amused at the statement of the honorable member for Hume that a working farmer might have an even better knowledge of finance than a big squatter. Many of the financial and currency problems about which honorable members opposite talk so glibly are only difficult to understand because of the stupid language which people use in talking about them. The principles of finance are not so intricate as the general public is led to believe. Farmers who have to work hard to pay the heavy in terest which the banking institutions demand from them are generally possessed of a sounder knowledge of finance than big squatters who have inherited all their wealth and have never done a day’s work in their lives. I suppose the Government would consider a wealthy man to be a currency expert. Perhaps it would even go so far as to say that the mad American millionaire, of whom we read in the press a few days ago, was a currency expert. Apparently, it gives no consideration to how a man obtains his wealth. It may have been inherited from the buccaneers of the years gone by, or obtained by the sweating of the employees in an industrial undertaking, or at any rate by many of the questionable practices which big business adopts. The fact that certain individuals arc wealthy is no guarantee whatever that they are currency experts. I have said on every occasion when a bill has been brought before us for the appointment of men to such positions as these, that the Government should announce their names. The Treasurer may tell me that it is not the practice, but I do not care whether there is a precedent for it or not. It is time we broke away from some of the precedents that have enslaved us in the past. The honorable member for Fawkner (Mr. Maxwell) rightly interjected that the success or failure of the bank would depend entirely upon the men appointed to the board. What is the use of our wasting time considering this bill when we cannot say a word on the appointment of the members of the board, upon the choice of whom success or failure depends ?
– It is impossible to say before the bill is passed who will be appointed.
– Has the honorable member any doubt that the bill will be passed? His interjection is only a legal quibble. In any case, the Government could give the committee a guarantee that the names of the persons intended to be appointed would be submitted to Parliament for ratification. It is said that we should not mention names, but a lot of speculating has been going on outside Parliament. The name of Sir John Higgins has been repeatedly mentioned in certain circles, and, if we searched the Commonwealth, I do not suppose we could find a man less fitted for the job. I wonder whether he will lose his memory when he gets on the board ? Men with such commercial records as his ought not to be appointed to the board ; they are eminently unfitted for such work. I question whether we could find one representative of big financial and commercial interests that is fitted for this job. Such men cannot view the business from the right angle, because their environment and the associations of their lifetime have unfitted them for the work.
– Is it a crime to be successful ?
– I am pointing out that these men can only regard institutions like banks as means for squeezing out profits. The first function of a national institution like the Commonwealth Bank is to render service to the nation. The difference between profit and service is very great. With these gentlemen, the first and last consideration is profit, whereas the first and last consideration should be service.
– Did not Sir John Higgins give his services to this country free during the war?
– He got a good job out of it.
– That is nota fair reply.
– There are many men who waved flags during the war, and, as a result, got good positions afterwards. The country is full of them. The Treasurer has let down his party - the Country party - completely. We are told that the Country party stood for the representation of rural interests on the board, but the associated banks, through their representative in another place, have declared otherwise. They could not put it in the bill that representatives of rural interests should not sit on the board, bub the amendment is so framed that they need never be appointed, and I make bold to say that they never will be appointed. I stand behind the policy of the Labour party. If the Treasurer intends to appoint representatives of rural industries, why did the representative of the associated banks in another place deliberately move an amendment to omit all reference to them ? If there is no purpose behind the amendment, it is merely stupid. Six persons from any one of the interests named could be appointed, and, I believe, will be appointed from the financial interests. I strongly support the amendment moved by the honorable member for Hume (Mr. Parker Moloney). It is wrong to give men £50 to sit on a board for half an hour or an. hour a month. The Governor and the staff of the bank will have to do all the work, and the Governor and one or two representatives appointed from the staff could manage the bank better than the proposed board. Once men from outside meddle with that institution, and have a voice in its future policy, the bank will suffer. Men appointed to the board should be compelled to divorce themselves from all other interests; their lives should be devoted to the welfare of this great national institution. It is not sufficient that they should give a few hours of their time to the bank after they have attended to other interests that may be in direct rivalry with it. Members of the Ministry would not for one moment tolerate a proposition of this kind if it affected their own businesses. Would the Prime Minister allow a representative of a rival concern to sit on the board of directors of his firm to decide its future policy? Certainly not. The thing is patently absurd.
.-I listened attentively to the speech of the honorable member for Werriwa (Mr. Lazzarini), and I should like to put one or two salient questions to him. I should like to know what knowledge he has of the internal workings of any bank in Australia. Has he any knowledge of their commitments at home or abroad? I believe he has not. But he pretends to almost the omniscience of the Almighty, and claims to know everything about the business. It is the height of selfconfidence. Each bank knows its own job best. It knows what currency it requires-. The trouble to-day has been caused by the idiotic decision to make Australian notes legal tender. If the Australian note had not been proclaimed legal tender our present difficulties would not have arisen, for they are due to the Commonwealth interfering in a job about which it knows nothing. The Bank of Australasia and the Union Bank conduct their business in this country and abroad. They are debarred by the British Government from moving their liquid assetsfrom London to Australia., and our Australian notes are not negotiable in England. Their credit balances are in England. If they were allowed to use their own gold, and to issue their own notes against that gold. - not against securities - there would be no need for the debate we have had, and for the humbug to which we have had to listen. I wish honorable members would refrain from talking about things of which they are ignorant.
– The people who lost their money in the financial crash years ago knew something about it.
– No one who held a bank note in Australia ever lost 6d. on it. Every bank note was backed with five sovereigns, and. whoever says anything to the contrary does not speak the truth.
– I know a man who sold a bank note for 12s. 6d.
– He was a fool to sell it. I support the Senate’s amendment. We shall need brains on this board. I do not care what interests the directors represent so long as they have brains and know what currency means. What can be done with a few flimsies unless they are backed by gold?. No bank and no Government should issue notes without a gold equivalent. If they do, they are sailing on a ship that will bear them to destruction. I shall not say any more on this subject, because I “have heard enough theorizing and piffle about banking to make the angels, let alone a member of Parliament, weep.
.- Because the future of the Commonwealth Bank will depend wholly upon the men controlling it, honorable members on this side attach a great deal of importance to this clause. Under the late Sir Denison Miller the bank was well managed, and the Fisher Government was many times commended for having made such a wise choice of the first Governor. This lull originally contained a provision for a directorate of eight. The Senate has reduced that number. We maintain that the guiding principle of the bank should be “safety first.” The honorable member for Darwin (Mr. Whitsitt) has urged that the directorate should consist of men connected with the banks, and having an intimate knowledge of their resources and transactions. When the original bill was introduced into this Parliament, Mr. King O’Malleysaid that the bank would assist the “ dirt farmers but not those who farmed the farmers.” He meant that the institution was intended to benefit the actual tillers of the soil, and not those men living in cities and towns whose occupation is expressed on a brass plate bearing the words “ farmers’ agent.” Sir Denison Miller, and all of his officers, were fully qualified and experienced in banking. The success which attended his administration convinces us that the bank should be controlled in future by a Governor and two other experienced bankers, giving the whole of their time and, abilities to the affairs of the bank, and having no outside commercial interests. Commercial men fear that their business competitors may obtain seats on the directorate of the bank, and gain for themselves undue advantages. Misdeeds are often merely the result of opportunity. I remind this committee that not one of the amendments now before us was. carried by an absolute majority of themembers of another place. The greatest number of senators supporting any amendment was fifteen, and an absolute- majority of the Senate is nineteen. I do not dispute the right of the Senate to make these amendments, but when they have been carried by such small majorities we should examine them very carefully.
-I call attention to the state of the committee. [Quorum formed.]
Mr.WEST. -The honorable member for Perth (Mr. Mann) seems to be greatly concerned because the Senate’s amendment eliminates from the proposed board the two currency experts. I do not know why those so-called currency experts were ever included. I understandcurrency to mean liquid assets in the form of gold, silver and notes, but there is no possibility of Australia reverting to a gold currency. Freetraders have some faddish ideas about currency. I cannot understand why the Senate did not adopt the Labour party’s proposal to have . a board of three permanent directors. That chamber is. supposed to be a nonparty body, and it might be expected to take a broad view of the requirements of the bank, and not be prejudiced in favour of or against a proposal because of the party from which it emanated. It must be remembered that the board of directors will have control of the note issue, and that will give it a great power for good or ill in the affairs of the Commonwealth. I am still hopeful that the state governments and state instrumentalities will do their banking with the Commonwealth Bank, and give it an even more powerful influence upon Australian finance. If we cannot have our proposal for three permanent directors adopted, I. shall be obliged to accept the Senate’s amendment as the less of two evils. The people of Sydney took a lively interest in the discussion on the original Commonwealth Bank Bill, and I feel that I am voicing their opinion by protesting against the Senate’s amendment. The Commonwealth Bank should be placed under the management of financial experts who have the interests of the people at heart.
.- The original clause in the bill was more definite than and certainly preferable to the amendment from the Senate. I was strongly in favour of the Labour party’s original amendment, that the board of management should consist of three members whose time should be wholly and solely devoted to the service of the Commonwealth Bank. That amendment was defeated. Now we are faced with the Senate’s proposal that the board shall consist of a governor and seven other persons, one of whom shall be the
Secretary to the Treasury - and with that we agree - the others to be persons who are or have been actively engaged in agriculture, commerce, finance, or industry. Much as I disliked the original clause, I regard this amendment as infinitely worse. The original proposal did provide that those six persons should not all be drawn from one industry, or from one section interested in kindred industries. It provided for the appointment of two persons associated with manufacturing industries or commerce, two persons associated with agriculture, pastoral, or other primary industries, and two persons with a knowledge of. currency. The amendment inserted by the Senate, at the instigation of Senator Greene, would certainly not have been accepted by the Treasurer had not pressure been applied by a majority in another place. It is quite possible that the whole of the six persons to be appointed may be drawn from one industry. Thedanger of such a provision cannot be too often impressed upon the public, who really own the bank. I do not profess to have any expert knowledge of banking, except what I have gained in the course of many years’ transactions with private banks. The Commonwealth Bank should be under the control of a board of three directors having a knowledge not only of finance’, but also of the science of banking. The bill precludes the appointment of men controlling other banks, yet we still have left a field wide enough from which to choose at least one expert financier with a lifetime of banking experience. It will, no doubt, be possible to appoint to the board an officer of the Commonwealth Bank who was previously drawn from a private bank. Those appointed should be wholly employed by the Commonwealth Bank; to keep the public mind free from any suspicion that the board of directors was acting in the interests of the private banks to the detriment of those of the Commonwealth Bank. I have had the advantage of a long discussion with the manager of a very important Melbourne branch of one of the private banks. While he and I did not agree that managers of other banks should be excluded from the directorate of the Commonwealth Bank, still I was glad to get his opinion on the general merits or demerits of the measure introduced by the Treasurer. This gentleman, who has been engaged in banking since his boyhood, absolutely laughed at the idea of governing this national bank by the board as at first proposed to be constituted. He quite agreed with the contention of the Leader of the Opposition (Mr. Charlton), and those who followed him on the same lines, that it would be very dangerous indeed to have a national bank controlled by men capable of being swayed by their private interests. He held that the only way in which the institution could be made of real value to the people of Australia was to have a board of three or five gentlemen - he preferred five - whose time should be fully devoted to the service of the bank, and who should be adequately remunerated for their work. He thought that they should have no other interest in life but the control and welfare of the bank, and he expressed the belief that the bank would never advance to its fullest extent or become the great institution the people of Australia- wished it to be, and which it was intended to be when it was established, unless its management was in the hands of such a board . The honorable member for Darwin (Mr. Whitsitt), in his breezy speech of a few moments ago, said that there has never been an occasion in Australia when a bank note has depreciated in value below 20s. The honorable member probably forgot the occasion on which the Van Dieman’s Land Bank closed its doors, and next day its notes were being sold in the open street for 12s. 6d. That was an instance of the management of a bank by a board whose time was not fully given to the service of the bank. It was under the management of one man, who had a board of directors associated with him.
Motion (by Mr. Bruce) put -
That the question be now put.
The committee divided.
Majority … … 9
Question so resolved in the affirmative.
Question - That the words proposed to be omitted stand part of the Senate’s amendment (Mr. Parker Moloney’s motion)- put. The committee divided.
Majority … … 8
Question so resolved in the affirmative.
Question - That the Senate’s amendment be agreed to - put. The committee divided.
Majority … … 3
Question so resolved in the affirmative.
Senate’s amendment agreed to.
Bill received from the Senate, and (on motion by Mr. Bruce) read a first time.
Bill returned from the Senate without amendment.
Bill returned from the Senate without amendment.
The following paper was presented : - .
Lands Acquisition Act- Land acquired at
South Launceston, Tasmania - For Postal purposes.
– I desire to inform the House that His Excellency the Governor-General has approved of the appointment of the honorable member for Echuca (Mr. Hill) as Minister for Works and Railways. As honorable members are aware, Mr. Hill is now on his way to South Africa with the Commonwealth parliamentary delegation, and a few weeks must necessarily elapse before he returns to Melbourne. In the meantime the Department of Works and Railways will be administered by the Minister for Home and Territories (Senator Pearce). I was desirous of obtaining the services of Senator Wilson, but he is so closely engaged with the problems of immigration and the overseas marketing of Australia’s surplus products, that it was impossible for him to undertake the work. He will, however, render such assistance as he can give to Senator Pearce.
– I move -
That the House do now adjourn.
Parliament has now been sitting tor a considerable time, and, although I think it will meet the convenience of honorable members if no action is taken to add to the number of sitting days next week, the Government intend, as there is a great deal of business to be done, to ask the House to sit on Tuesday in the following weeks of the session.
.- I was under the impression that the quantity of work that the Government expects Parliament to transact was so small that we might easily have adjourned earlier, to escape the influenza epidemic. But if the work remaining is voluminous, no days will be too many, and no time too long to devote to the legislative duties required of us by the country.
Question resolved in the affirmative.
House adjourned at 4.10 p.m.
Cite as: Australia, House of Representatives, Debates, 8 August 1924, viewed 22 October 2017, <http://historichansard.net/hofreps/1924/19240808_reps_9_108/>.