18th Parliament · 1st Session
Mr. Speaker (Hon. J. S.Rosevear) took the chair at 3 p.m., and read prayers.
– I present a petition from certain electors of the divisions of Herbertand Kennedy. It contains 917 signatures, the great majority being those of electors of the division of Herbert. The signatureswere collected by a ladies’ committee in Townsville, and the petition was conveyed to me for presentation to the Parliament. The petitioners pray that no further steps be taken towards the nationalization of the banking system in Australia without first seeking the authority of the Australian people. The petition is respectfully worded, concludes with a prayer, and is otherwise in conformity with the rules and orders of the House. Imove -
That the petition be received.
Question resolved in the affirmative.
Petition received and read.
Motion (By Mr.Chifley) - by leave - agreed to -
That leave of absence for one month be given to the. right honorable member for Yarra (Mr. Scullin), on the ground of ill health.
Tyres - British Exports
– During the week end I was approached by many farmers and agents for motor vehicle parts and tyres who informed me that instructions had been issued by the Commonwealth Government that Australia’s outputof tyres of the kind used on trucks which will be needed to transport the forthcoming wheat harvest were to be exported to New Zealand. Can the Minister representing the Minister for Supply and Shipping say whether any such instructions have been issued, either to manufacturers of tyres ortheir agents?
– There has been no direction by the Government to export tyres of any kind to New Zealand. On the contrary, the Government has prohibited the export of tyres to that dominion.
– In last Saturday’s newspapers, a statement was published that the United States of America had lodged a large order for British motor cars. The item stated that motor cars would be exported from Great Britain to the United States of America at the rate of 500 a week. Oan the Prime Minister inform the House whether these exports will affect the export of British motor cars to Australia?
– I have no knowledge of any particular orders lodged by the United States of America for British motor cars, but I do not believe that they will interfere with Australian orders for British motor car chassis.
Savings Banks Accounts
– In a section of the Western Australian press there recently appeared a letter from Florence Hodd in which she stated- that she had received a letter from Canberra relating to the launching of the Fourth Security Loan, and that the number of her Commonwealth Savings Bank pass-book was pencilled on the flap of the envelope, and that when she had complained to the manager of the bank he had replied that that was purely routine work. I now ask the Treasurer whether he has any knowledge of this practice on the part of Treasury officials, persons associated with the loan organization, or others. “Will he say whether it is the practice to ‘disclose the banking business of any person to those associated with the raising of war loans ; whether such officials are bound by any oath of secrecy; and whether in view of the fact that the writer of the letter to’ which I have referred regards the action as n threat, immediate inquiries will be instituted and a statement made to the Parliament?
– I know nothing of the particular matter to which the hon.orable member has referred. No instructions have been issued by the Treasury to the effect mentioned. If the honorable member will give me the address of the person to whom he has referred I shall have her complaint investigated, and will let the honorable member have a full answer in due course. I shall not, however, make any statement in the House on. the subject.
– As several towns inNew South Wales such as Broken Hill,, which are close to the border of another State are experiencing difficulty in obtaining building materials from adjoining States - their customary sources of supply - will the Minister for Post-war Reconstruction investigate the distribution of such materials in order to ensure that towns so situated shall be able to obtain supplies from the adjoining State, or alternatively, that they shall receive their quota from their own State?
– I recognize the difficulties which towns such as the honorable member has mentioned are experiencing. In normal times Broken Hill obtains its supplies of building materials from South Australia, whilst other towns in New South Wales, such as Wentworth, normally obtain supplies from Victoria. The responsibility of the Commonwealth in this matter is confined to the allocation of building materials as between States, and it is the function of the State authorities to allocate- those quotas as between individuals within their own boundaries. I do not know whether provision has been made for Victoria to supply such places as Wentworth or whether South Australia has arranged to supply Broken Hill, but I shall take the matter up with the State governments concerned. Should those governments not be prepared to make allocations of building materials to places in other States close to the border, I agree that some provision should be made whereby the New South Wales allocation will enable them to obtain supplies.
– Will the Minister representing the Minister for Supply and
Shipping state unreservedly that there is, and will be, no discrimination in the allocation of petrol to candidates in the Victorian elections?
– This matter concerns the Minister for Supply and Shipping, and therefore I cannot give any definite assurance; but I should say that it would be very remarkable if the Minister would not he prepared to give an assurance of the kind asked for by the honorable member.
– It appears that recently a Liberal candidate in the Victorian elections was incorrectly reported in the morning press in Melbourne as being a Labour candidate. Consequent upon this mistaken report, this candidate received through the post a copy of the Labour party’s “ Speakers’ Notes “ for the campaign. This was addressed to him in an official “ O.H.M.S. “ envelope bearing the inscription of the Premier’s Department, and the postage stamp affixed to it had the official “O.S.” perforation. I ask the Minister representing the PostmasterGeneral whether the Victorian Government has made any arrangement with the Postmaster-General’s Department for the use of official postal stationery and concessional postal rates for election purposes? Do these arrangements apply to all political parties and all candidates? If no such arrangements have been made, what action has been taken to discontinue this misuse of public funds and official stationery?
– I shall ask the PostmasterGeneral to inquire into the matters which the honorable member has raised. My own supposition is that the practice which is being followed in Victoria to-day is the usual practice which has obtained in all State elections, where the Premier of the day sends out from the Premier’s office information which is calculated to return his government to power. Every Premier that I ever knew in Victoria did, and I assume that every Premier in every State since the institution of responsible government has done so. The Minister for Commerce and Agriculture informs me that a few years ago he received from the Leader of the Australian Country party some information which had been sent to him in an official envelope with an “ O..S.” stamp. I do not know the rights or wrongs of that particular incident; but if the honorable member for Fawkner wants an inquiry into that matter, we shall undertake it. I agree with the honorable gentleman in one respect, namely, that any Liberal party candidate who is described as a Labour party candidate has certainly been incorrectly described.
Statements by Mk. G. J. Coles and A. A. Calwell, M.P.
– Has the Minister for Information and Immigration seen the following press report containing a statement alleged to have been made by Mr. G. J. Coles upon his return from a business trip overseas: - “ Britain’s people are listless and apathetic, always filling in forms and generally living under a mass of red tape,” he said.
He said that moving from England to the United States was “like coming from a cage to open country “. “ Everything in the United States is so free,” he said, “ and business is brisk and unrestricted.”
Although prices are high the average American working man buys more with his money than any other working man in the world “.
Does the Minister think that Mr. Coles was correctly reported and has he any comment to make on the matter?
– I happened to read that reported statement by Mr. Coles, and I think it was a most unfortunate statement for him to make. The people of Britain are waging a strenuous struggle to - survive, and any sneering statement of the kind mentioned is, to say the least of it, in very had taste. Mr. Coles happens to be a director of the National Bank, and that, perhaps, accounts for it. I travelled on the same ship from England to America as did Mr. Coles. I did not believe, when I left England, that I was leaving a cage, and I did not feel, when I reached the United States of America, that I had got into open country. Those metaphors are very offensive to the people of Great Britain who must submit to a certain amount of regimentation in order to survive. They are doing a very good job, and have won the admiration of people from all over the world. As for Mr. Coles’s comment on the purchasing power of money in the United States of America, I think that every one who has been abroad will agree that Australia has the soundest economy of any country in the world, and it is the best country for any working man to live in.
– I have here a copy of a London Daily Graphic, dated the 29th August, 1947, in which the Minister for Information is reported to have said at Ottawa the previous day that Europe and Britain were without spirit, hope or confidence. The report also states that Mr. Sandy Inglis, one of the British press correspondents present, walked out in protest against these remarks. Does the Minister think that he was rendering a service to Australia, Britain and the British Commonwealth of Nations by making a statement in another Dominion that the people of Great Britain are without spirit, hope or confidence ?
– I said nothing of the sort in the United States of America, Canada, or elsewhere. The honorable gentleman may wave that newspaper clipping as much as he likes; but of the hundreds of newspaper reporters to whom I spoke anywhere, that is the only reporter who attributed anything of that sort to me. I have never heard that stated before. At the press conference which I held in Parliament House, Ottawa, there were about 60 correspondents present, and that is the only newspaper which attributed anything of that sort to me. I praised the people of Britain, and said that all the peoples of Europe, including the British people, were suffering grievously, that they were fatigued and very often when going home from work went to sleep because they were not properly nourished. I said that we were doing all we could to help them, and that if the gates of Europe were opened and sufficient ships were available, millions of people, including British people, would want to come to Australia. That is what I said, and that is what I stand by-
– Some months ago I asked a number of questions with respect to Australian-manufactured tobacco smokers’ pipes. I have just been informed that during the financial year 1946-47, no fewer than 21,804 dozen smokers’ pipes were imported into this country, the total value of those pipes being £32,000 sterling. I have also been informed that during the months of July and August this year, imports of smokers’ pipes have greatly increased. I ask the Minister representing the Minister for Trade and Customs from what country .are these .pipes being imported, and under what wage conditions are they being manufactured? To what degree does the Minister believe these importations will affect workers at present employed in Australia in the manufacture of smokers’ pipes? Is he aware that some anxiety is felt in some quarters because of the great increase of these imports ?
– I shall obtain from the Minister for Trade and Customs the information sought by the honorable member.
– I ask the Prime Minister whether the Government intends to continue paying the subsidy to the coal industry which is now estimated to be costing the country £4,000,000 annually? If so, can he give any idea of the .amount of the subsidy for the current year, and in the future and any idea of what the price of coal would be if the subsidy were withdrawn ?
– As the honorable member is aware, subsidies have been paid to the coal industry for the purpose of keeping down the price of coal to the consumer. The whole subject of coal prices is being reviewed at present, and a decision will be made at an early date with respect to the continuance of the subsidy. As soon as that is done, I shall supply to the honorable member the information for which he has asked.
Canberra Service. - Transport to ‘ Melbourne Cup
– Is the Minister for Air aware that Trans-Australia Airlines has fixed a later hour for the departure of airliners carrying members of the Parliament from. Melbourne to Canberra, in some instances the departure’ being delayed by three-quarters, of an hour? What is the. reason for this inconvenient, and in my view, unnecessary, change? Does the Minister approve of the change ?
– The time-tables of the airline operating companies are not submitted to me, and I. am not aware of any change that haa taken place in. the time-table of the Traits-Australia. Airlines service:. If changes have been or are to be made which will be inconvenient to the travelling public and to members of the Parliament, I. shall look into the matter. I shall ascertain whether the altered services will provide transport at the most convenient times for the travelling public and members of the Parliament, and ask the companies to consider the necessity for providing services which shall be as convenient as possible for all concerned.
-Can the Minister for Civil Aviation inform me whether it is a fact that Trans-Australia Airlines is making special arrangements to fly 150 persons from Sydney to Melbourne to attend the Melbourne Cup on the 4th< November? Is it intended that each passenger shall be presented with a specially printed souvenir racebook and provided with special meals including turkey and champagne? Is it a fact that the fare to be charged will not be any higher than the normal one? If so, how does the Minister justify the expenditure of. a considerable sum of the taxpayers’ money to provide such special amenities ?
– I have not heard of the matter previously. The honorable member must have some “ inside “ information of what is likely to happen, because although I am the Minister concerned, I have not heard anything of it. However, if the luxuries mentioned are to be provided, I shall certainly be willing to facilitate the granting of leave to the honorable member to enable him to participate in their distribution.
– Is it a fact that galvanized iron, which is in short supply in Australia, is being exported? If so, what quantity has been exported,, and to what countries is it being exported ?
– Returns which have been submitted from time to time in reply to questions by honorable members relating to this subject disclose that galvanized iron. is. being exported in small quantities only to the territories and islands adjacent to Australia.
– A constituent of mine has given me rather disturbing Information. A relative of hrs was stricken with cancer and. ordered cantassium tablets by air from England. The tablets arrived at the. Launceston post office four weeks later, but the Department of Trade and Customs refused to release them. A week later the unfortunate cancer sufferer died. The chemist who handled the order Informed me that the department had prohibited’ the importation of cantassium tablets. Why should there be a restriction on the importation of tablets which give relief to cancer sufferers?’ Will the restriction be reconsidered with a view to encouraging the importation of drugs known and proven to be beneficial in the treatment of cancer?
– I shall bring the honorable member’s question to the notice of the Minister for Trade and Customs, and ask that full information be furnished.
– In. view of the conflicting reports regarding Australian exports of wool to the United States of America, is it possible for the Treasurer to disclose the total of such exports for the last financial year, and the estimated total for the current financial year? Will the reported’ decline in wool production in tha United States of America result in an increase in the. importation of Australian wool, and if so, what effect will this have on. the Australian dollar position ?
– I am unable, of course, to predict the quantity of wool that will be exported to the United States of America during the current financial yeal1, but 1 shall endeavour to obtain the information that the honorable member seeks.
– In view of the diligent action that is being taken to rid the United States of America of individuals carrying on un-American activities, will the Prime Minister ensure that if any members of the Teachers’ Federation known to be Communists are included in the proposed Australian delegation to the Unesco conference to held at Mexico City, the’ Government of the United States of America shall be informed of that fact.
– I assume that the honorable member is referring to a suggestion made here recently that the delegation includes an employee of the New South Wales Department of Education who is a Communist.
– There are two Communists.
– The activities of such individuals in this country are under review .all the time by the Commonwealth Security Service and I do not propose to have any inquiries made apart from those carried out by that service. If the Commonwealth Security Service obtains information that warrants action being taken, the Government will have no hesitation in acting.
– Will the Prime Minister inform the House of the names of the non-departmental lawyers who have been engaged to assist in the drafting of the Banking Bill 1947? Will he also state what fees have been paid to these individuals?
– I understand that the usual practice of the AttorneyGeneral’s Department is. to engage whatever outside legal assistance is required. 1 do not know whether it has been the custom of that department to state publicly the names of individuals so employed. I assume that financial provision is made by the Attorney-General’s Department for the payment of fees for legal assistance rendered to the department,. J. shall examine thu matter ; but my present feeling is that information of this kind should not be’ given.
Mr.- CONELAN- In view of frequent statements in certain sections of the press about the abolition of food rationing, is the Prime Minister able to make a statement about food and ‘clothes rationing?
– I have not. heard anything about any proposal for the abolition of food rationing, which is necessary in order that more meat and butter may be sent to the United Kingdom than could be sent in the absence of rationing. The matter of clothes rationing has been examined; but, in view of ihe uncertainty of the position regarding dollars and supplies from hard currency countries, my opinion, which I think is the Government’s opinion, is that it should be continued. I am not saying nhat it may not. be decided by the Rationing Commission, in its wisdom, to review coupon values; but at the * moment there is no intention of abolishing the rationing of either food or clothes.
– The following report from London appeared in all the newspapers yesterday: -
Britain had agreed to abolish all preferences (in tinned fruit.. Australia, with four-fifths of its tinned fruit industry working solely for England, would be hardest hit.
Oan the Prime Minister make a statement to allay the desperate fears of all associated with the canned fruits industry as to the consequences of abolition of Empire preference on canned fruits? Can he say whether there is any substance in the report or whether the Aus- ‘ tralian Government has any knowledge of the British Government’s attitude on the matter?
– The Minister for Post-War Reconstruction will answer the- question.
– I noticed in the press the statement referred’ to by the honorable.- member, and immediately issued a denial. I do not know whether the honorable gentleman has seen that denial; but I say emphatically that there has never been any question of the abolition of preference on canned fruits. That matter has never been discussed with’ the Governments of the United Kingdom, United States of America or any other country.
– Has the Treasurer seen a press announcement by the Lord Mayor of Brisbane, Alderman Chandler, that the City of Brisbane and the Sydney Metropolitan Water and Sewerage Board would have been successful in negotiating loans in the United States of America had the Australian Government allowed them to go on the New York market? Alderman Chandler is reported to have stated further that, since the Australian Loan Council insisted on no competition, it must realize that the exercise of its authority implied acceptance of responsibility. If those statements are correct, does the Australian Government intend to take over outstanding loans in the United States of America of all local authorities and grant them some relief by compensating them for the lower rates of interest they could have obtained in New York? If the Government does not intend to do that, will the Treasurer indicate the Government’s policy towards the flotation of local authority loans in the United States of America?
– It may be better if I give the honorable member a detailed reply. The matter referred to by the honorable gentleman has been raised in the House before. The Lord Mayor of Brisbane, Alderman Chandler, went abroad with the desire of floating a loan for the Brisbane City Council in advance of a conversion loan that was to have been floated in the United States of America on behalf of the Australian Loan Council. It is perfectly true that, as Chairman of the Loan Council, I indicated to Alderman Chandler that the loan for the Brisbane City Council should not be proceeded with. There was also some difficulty about a loan for the Sydney Metropolitan Water and Sewerage* Board. In each case, action was taken to ensure the best possible terms in the United States of America for not only governmental conversion loans, but also loans on behalf of local authorities. I will give the honorable gentleman the story in detail ; it is a fairly long one.
– I ask the Minister for Commerce and Agriculture whether he is able to provide any sacks for the potato harvest in northern New South Wales where the crop of potatoes intervenes between crops in other parts of Australia. It bridges the gap between them and usually takes about a month to be consumed, so that the sacks required for it would be in use for only four or five weeks. I have received telegrams on this matter from all parts, of the northern rivers area of New South Wales, where this special crop of potatoes is grown. Unless sacks are obtained, the crop will be wasted and people in the cities will have to go without potatoes. Can -the Minister help?
– Every endeavour will be made to meet the requirements of the potato-growers of northern New South Wales. I have discussed that matter with the Australian Potato Committee and have asked it to do its best for the growers.
– I direct ,a question to the Minister for Labour and National Service arising from the wheat-growers’ concern about the shortage of labour for rural industries. I have received a letter from a prominent official of the Farmers and Settlers Association at Grenfell containing this passage–
I would be pleased to know on what conditions these city men will accept harvest work at 50 hours a week, and what will be the position of the farmer if labour supplied is ‘lint satisfactory. Would they accept work at the rural harvest award and hours?
The writer also made comments in the letter which the Minister might like to read. What is the exact position regarding labour supplies for the big wheat harvest in New South Wales? Will this labour accept rural award hours and conditions? If sufficient labour i& not available, as appears to be the case at present, what steps does the Minister propose to take to overcome the shortage?
– The organization necessary to meet the requirements of the. bumper harvest which we all hope that every State will get has been in progress for the last “month in all offices of my department throughout Australia. This subject has also been raised on several occasions recently by the honorable member for Herbert and the honorable member for Wimmera. At present, the Department of Labour .and National Service has organizers engaged in canvassing employers in districts where wheat, dried fruits, sugar, peanuts and many other primary products are grown. The department hopes to be able to organize labour with the co-operation of employers’ groups in those districts. If, as the honorable member suggests, the regular forces will not be sufficient to harvest the crops, the department will try to organize any other kind of labour available. That is one of its responsibilities. Conditions under which such labourers work will be governed by the awards covering the respective industries. There is a harvest award.
– That award will apply?
– Yes. The labour will be sent to the districts where the employers co-operate by supplying the information which is being sought by the department’s organizers. We expect employers to pay award rates and to do their best to secure accommodation for the workers.
– Has the attention of the Prime Minister been directed to figures which the Commonwealth Statistician released recently, disclosing, that among other things, there was a substantial decline during August of the production of meat, gold, tobacco, cigarettes, bricks, cement plating sheets and black coal? If so, will the right honorable gentleman tell the House the reasons for this decline ? If he is not able to give the information at the moment, will he have inquiries instituted with a view to remedying the position, and stepping up the production of these essential items? Will he also make a statement to the House on this matter at an early date ?
– The Minister for Commerce and Agriculture will answer the question.
– The present fallingoff in the export of meat is due to the most bountiful season, which shows promise of a plentitude of green feed late into the year. The result is that graziers and farmers, quite naturally, are holding their lambs, sheep and cattle for a longer period than they would in norma] seasons, which end much earlier. The season is such that the grass seed menace, which forces producers to market their lambs early if they do not propose to shear, is now absent. The present fallingoff has distinct advantages because many of the lambs will yield additional quantities of wool, and when carried forward for a longer period, will put on more weight. Thus increased supplies of meat will be available for the people of the United Kingdom. The net result is that during this year the people of the United Kingdom will receive more meat from Australia than they would in a normal season because the export of meat terminates much earlier in normal seasons.
– Can the Treasurer inform me whether American exservicemen undergoing rehabilitation training courses at Australian universities and technical colleges in Australia are to be taxed upon the subsistence allowance paid to them by the United States Treasury? If that be so, what is the reason for it? Are similar allowances paid to American ex-servicemen undergoing training in the United States of America exempt from income tax? If that is the case in the United States of America, will the Treasurer apply that benign principle to American ex-servicemen undergoing rehabilitation training in this country?
– I am not familiar with the details of the matter mentioned by the honorable member, but I shall inquire into it and inform him of the result.
Australian Broadcasting Commission: Inquiry
– Can the Prime Minister inform me whether an investigation is being conducted, or is about to be conducted, of the financial affairs of the Australian Broadcasting Commission? If so, what is the nature of the inquiry, who are the investigators, and what is their investigation expected to reveal?
– The question is really one for the Postmaster-General to answer. However, it is a fact that a committee is examining the financial aspect of the Australian Broadcasting Commission’s operations. I do not recollect the names of all the members of the committee, but I believe that it includes Mr. A. A. Fitzgerald, public accountant, Mr. W. Harris, and Mr. Bonney-
– The Department of Information, of which Mr. Bonney is Director-General, is the most expensive in the Commonwealth Public Service.
– I am endeavouring to answer the question which the honorable gentleman asked rae, but I do not intend to reply to his interjections. The committee which I mentioned is examining only the finances of the Australian Broadcasting Commission, and I understand that its report will be available in approximately one month.
– A report in to-day’s issue of the Sydney Morning Herald, under the heading “ Sacks for Harvest : Wheat Board Moves “, states that 7,000,000 additional cornsacks are to be imported from India in an effort to cope with the State’s expected record harvest of wheat. The report goes on to state -
However, because 6,000,000 of the promised bugs cannot reach Australia until early next yen r, farmers still have to find temporary emergency storage for about 25,000,000 bushels.
Oan the Minister inform the’ House the approximate date on which the 6,000,000 sacks are expected to arrive, and how long is it anticipated that farmers will require to make provision for temporary storage on their farms because sufficient sacks have not yet been provided by the Australian Wheat Board?
– The Government has done everything possible to ensure the availability of adequate supplies of jute and cornsacks. By close personal negotiation with the Indian Government, and by adopting a long-range forward purchasing policy, it has bought considerably more jute goods for shipment to Australia in 1947-48 than has ever been shipped to this country in any previous year. As a result, there will be imported during the current year an all-time record quantity of 130,000 tons, compared with the average of 93,000 tons during the years 1936 to 1938. This 130,000 tons represents every ton of jute goods available to Australia., and places us in a most favorable position compared with other countries. The Government decided upon the policy of forward purchasing early this year, and also made arrangements with the Indian Government for a special increase of the Australian quota. It was anticipated not only that all Australian requirements would be met, but also that a saving of more than £1,000,000 would be effected by purchasing in advance of the recent increases of Indian prices. The Government jute purchasing plan, which was introduced in 1940, has enabled Australian .requirements of jute goods to be met in ‘each year since it was introduced, and it will be continued until the stage has been reached that sufficient stocks have been accumulated and private traders are in a position to resume purchasing. So far, on account of the financial risks, the jute trade has been unwilling to assume this responsibility, and only the operation of the Government’s plan has ensured our having obtained Australia’s needs of these vital goods. The figures in regard to cornsacks are interesting. The purchases for 1947-48 total 78,000 tons or 260,000 bales, compared with an average importation of 55,000 tons or 182,000 bales in the three years 1936 to 193S. There may be some short-term shortages owing to shipments running a little late, but the latest advice is that the leeway in shipment is being overcome, and shipments will be arriving regularly throughout the wheat delivery period. The anticipated huge crop in New South Wales has presented this year an unprecedented problem in supplying cornsacks to meet the excess over what can be handled through the silos ; special arrangements have been made in this regard. . On behalf of the Government, I acknowledge the splendid co-operation of the Government of India in facilitating supplies of jute goods in response to Australia’s requests. Mr. K. Punjab, Indian Secretary for Pood, and Sir Raghunath Paranjpye, Indian High Commissioner in Australia, have rendered most valuable assistance in this connexion. Australia, in turn, has assisted India in meeting its foodstuff requirements, principally of wheat. Thus the two countries, by helping each other, have proved in the final analysis to have helped themselves. This is an excellent example of the benefits of reciprocal trade between two great dominions.
Supplies of Australian Wheat and other Grain.
– I ask the Minister for Commerce and Agriculture whether the Governments of India and Pakistan have asked the Australian Government to make available to them increased quantities of Australian wheat and other grain ? Can the honorable gentleman say what stage the negotiations have reached? In view of the surplus of grain sorghum in Queensland, will he consider lifting the embargo on the export of tha’t commodity, =o as to enable the surplus to be shipped to India and Pakistan? .
– The Governments of India and Pakistan have asked the Australian Government to provide the maximum quantity of wheat that it can supply to them. The quantities that can be supplied have not yet been determined, an’d they will be the subject of negotiations in the near future. In regard to grain sorghum, I point out to the honorable gentleman that during the period o.: the drought, vast quantities of grain, mainly “wheat, on which the Australian Government had paid a ‘flat rate subsidy of ls. ‘6d. a bushel, were ordered from Victoria. South Australia aird other
States, so as to assist the people of New South Wales and. Queensland. That subsidy has cost the Australian Government £1,850,000, and it has been of direct assistance to the stock-feed industries in those States. Now that there is every prospect of a surplus of wheat in Queensland, and the cry of the world is that wheat shall be a priority grain, it is expected that the quantity of grain sorghum remaining in Queensland can be absorbed for stock-feed purposes, and that maximum quantities of wheat can be exported instead. As nearly 3,000,000 bushels of grain sorghum have gone into consumption since the last crop was harvested, it is anticipated that there will be no difficulty in disposing of the 1,000,000 bushels which, it is estimated, is at present in Queensland. There has been great pressure on the Government to permit exports to be made. That proposition, we can well understand, is most attractive to the grain sorghum suppliers.
– I ask the Prime Minister what action the Government has taken to investigate the enormous growth of the number of Commonwealth employees, especially those who are employed in government departments? If no inquiry has yet been made, will the Prime Minister assure the House that the matter will be investigated, and that it will be informed of the justification for the increase?
– A special committee was appointed and examined all departments just prior to the termination of the war and immediately afterwards. The Public Service Board, which has been strengthened by the appointment of two full-time commissioners, has been instructed to review all public departments, with a view to deciding whether there is a surplus of workers in any section. That work is constantly proceeding. The board having had that special duty imposed upon it, no further outside inquiry is proposed.
Bill returned from the Senate without amendment.
Message received from the Senate, intimating that Senator O’sullivan had been appointed to fill the vacancy now existing on the Public Works Committee.
Bill received from the Senate, and (on motion by Mr. Pollard) read a first time.
Bill returned from the Senate with an amendment.
In committee (Consideration of. Senate’s amendment) :
New clause 2a.
Senate’s amendment. - After clause 2, insert the following new clause: - “2a. The Arbitration (Public Service) Act 1911 is repealed.”.
– I move -
That the amendment be agreed to.
The only section now remaining in the Arbitration (Public Service) Act 1911 is one which is designed to fix the classification and status of the office of Industrial Registrar in the administrative division of the Public Service. It contains a special appropriation of the Consolidated Revenue Fund for the salary attached to this office. The administrative division of the Public Service no longer exists and the salary range provided is not considered at present to be appropriate to the position. So long as the section remains the salary is unalterable, and it should be subject to reclassification in common with other positions in the Commonwealth Public Service. It is therefore desirable that this provision should be abolished.
– The Prime Minister (Mr. Chifley) was good enough to show me the Senate’s amendment and to indicate the reason for it. It seems to be quite clear that unless this amendment be made the position of the Industrial Registrar will not be susceptible to reclassification, which it undoubtedly should be. I therefore support the amendment.
Question resolved in the affirmative.
Resolution reported; report adopted.
Debate resumed from the 24th October, (vide page 1369), on motion by Mr. Chifley -
That the bill be now read a. second time.
. -I shall make only the briefest possible comment on the speech of the honorable member for Werriwa (Mr. Lazzarini) who preceded me in this debate. The honorable member is rather to be envied, because he has such a simple method of dealing with problems great and small. On this issue he is positive on two things : first, that he is right, and, secondly, that all who do not agree with him are stupid. I shall leave him to his dreams.
On such a momentous occasion it is proper that I should quote the opening lines of Lincoln’s famous Gettysburg address in which he said, inter alia -
Four-score and seven years ago our fathers brought forth on. this continent a new nation conceived in liberty and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether this or any nation so conceived and dedicated can long endure.
Those words were spoken on a famous battlefield at the conclusion of a successful campaign for the abolition of slavery and the institution of freedom. In reverse order, the fight that is now being waged on the Australian continent through the medium of this bill is almost a re-enactment of that scene. I recall the prophetic words - “ Testing whether this or any nation so conceived and dedicated can long endure “. The testing is that our fight is for the retention of freedom against the proposal to introduce a system of regimentation, which is akin to slavery. Not only Australia, but also other countries, know that the fight for the retention of freedom will be just as strenuous as was the fight for the abolition of slavery, but with this difference - that the weapons used will be tongue and pen instead of sword and pistol. In spite of the fact that from 60 per cent, to 70 per cent, of the people of Australia recognize that democracy is threatened in this country, today, spokesmen for the Labour party persist in ignoring the principle inherent in Lincoln’s conception of democracy. They pretend to believe, and they try to make intelligent people believe, that this is just a simple little measure, the trading banks versus the people. The monotonous regularity with which the depression of the early ‘thirties is imported into debates of this kind, and ascribed to the maladministration of the trading banks, is deplorable in more ways than one. En the first place, such a statement cannot withstand five minutes of fact-finding examination; secondly, it indicates a complete lack of imagination and of constructive thinking; and thirdly, what is more alarming to Australia in this period of transition is the fact that in the consideration of a measure which may have far-reaching and even detrimental effects on the national economy, and, indeed, on a world economy which is now struggling for equilibrium, spokesmen on behalf of the Labour party can be so forgetful of their responsibility as individuals and as a corporate body that they can play the party-political game. Why? Because, in my belief, they lack the courage to get behind their constituents in this fight against the dictatorial edicts from their party machine. We may ask ourselves, “ Oan we blame them?” I frankly admit that if the position were reversed, and I found myself in the unenviable position of having to defend a measure of this description, my defence would probably be equally futile and my remarks just as puerile as the statements which issue from time to time from government spokesmen hoth inside and outside this House. We can. blame them because we know that it is merely an attempt to fulfil the provision of what is now known as the socialist plot, hatched in 1921, to which every member of the Labour party pledged himself - let us hope without realizing the seriousness of its import.
The bill which was awaited with so much apprehension, irritation and impatience by the Australian people has at last been brought before the Parliament. It has satisfied every pessimist in the country; it is just as bad as he expected it to be. In my opinion, it contains something which is contemptible and extremely offensive. It is contemptible in the clauses which seek, to appease individuals, and even institutions, which have expressed hostility to the measure. These individuals must be warned that, whatever the methods employed, the end and the objective will be the same - a socialist state with all its humiliating possibilities. We all remember the Nuremberg trials at which certain convicted persons were sentenced to be hanged. Army personnel protested against the sentence, and pleaded to be shot instead of hanged. The end and- the objective would have been the same, but probably one method would have been a little less ignominious than the other. It is the same with this bill. Any one who succumbs to the lure of this sugar-coated pill will, metaphorically, be accorded the dignity of being shot instead of hanged. The offensive clauses postulate the belief that there is a price at which Australians are prepared to sell or sacrifice their freedom. Whether we like it or not, the major significance of this debate is not this miserable bill, but whether a free people in a free country shall remain free, or become little tin marionettes, dancing whenever the strings are pulled by the most totalitarian government that this country has ever known. This measure to me is easily recognizable as a major step in Labour’s ultimate objective to destroy the federal system, the form of government which we “now enjoy, and to substitute for it a system of unification. This action, which I describe as the most brazen yet attempted, has been preceded by many others - important in themselves, but which, compared with the arrogant assumption of dictatorial power inherent in this measure, are of minor importance, and were in the nature of a “ try on “ to test public reaction. Prominent among these legislative stepping stones was the uniform tax legislation of 1945-46, which has made mendicants of the States. That measure passed through thisHouse with the greatest possible ease, and the ease with which the Parliament accepted the repudiation of the written word and promise of two responsible Ministers has encouraged the Government to this greater arrogance. To use a colloquialism, it has encouraged the Government to “ turn on the heat “, and we are now faced with a situation which, if not thwarted, may have catastrophic consequences to the future of a hitherto free nation.
If the Government’s case is to stand at all, it must stand on a basis of truth. The oft-repeated innuendoes by spokesmen of the Labour party that this bill is necessary in order to ward off another depression is definitely not the truth. The statement that the trading banks control credit, and may use this power against the interests of the nation, is not true. It is rather a desperate defence designed to meet a desperate situation. In other words, it means that the people, who have been very good to the Labour party, have at last caught up with it, and are calling a halt to this unauthorized attack on institutions which have played an. important part in the development of Australia. These spokesmen, desperate in guilt, are trying to brazen it out by manufacturing evidence which has no basis in reality and, like the dictators of the past, these would-be dictators of the present and future are finding it increasingly necessary to stage circuses in order to keep themselves in the limelight.
Strangely enough, the Minister for Commerce and Agriculture (Mr. Pollard) and I are agreed on the proper method of procedure in matters of this kind. In Hansard, volume 186, page 1286, the Minister is recorded as saying -
The Labour party is not ashamed of its socialistic objective, and what is more, we have never been ashamed of it. I do not see any reason why ‘ the electors, when they are ready to accept socialization . . . should not have the right to do so under the Constitution. That would not be a matter for this Government, or for the Australian Country party, but for the people themselves to determine.
The Minister may complain that I have quoted a paragraph divorced from its context, but there is no escaping the conclusion that the Minister meant that, when the people were ready to accept socialism, it was for them to move in the matter, and not for any government or any political party to do so. I agree with that, and I assert as a general premise that, in spite of the conferring of powers, and in spite of the written word, when it comes to fundamentals the only true constitution in democratic politics is that founded on public opinion. The Minister and I are quite agreed on that, but there the similarity between us ends. I believe in it, and. I will vote for it; he believes in it, but he will vote against it. Contrast the belief in this principle which I have just enunciated with the easy assumption by the political wing of the Australian Labour party that, because it is believed that a power exists under the Constitution, a party,, when it gets into office, has a perfect right to exercise that power whether the people want it or not- in fact, to exercise it in utter contempt of public opinion. Contrast it again with the impudent claim that because a remote plank in a still more remote platform - so far as the general public is concerned - indicates that the Labour party intends to socialize industry, and the means of production, distribution and exchange, it has a mandate from the people to perpetrate the outrage now contemplated. In point of fact, I will prove that the Australian Labour party, through its leaders, has never sought such a mandate - that it has, in fact, a mandate to do the exact opposite. In order to do that I will drag up a. few ghosts of the past - at a most convenient time to haunt those who stray from the path of virtue. First, I will quote the following, which is printed under the headline “ Plan of Action “-
I turn back now to 1911, when Andrew Fisher was Prime Minister. He said that the Commonwealth Bank was not to displace, but to compete with, the trading banks. More recently, the right honorable member for Yarra (Mr. Scullin), in his policy speech of 1931, said that the Commonwealth Bank was intended to be a trading institution, and to operate freely in competition with the trading banks. Again, in his policy speech of 1934, the right honorable gentleman said -
The bank willbe free to enter upon a policy of vigorous competition with the trading banks.
We now come a little closer to the present - to 1937. The then Leader of the Australian Labour party, the late John Curtin, said -
The bank’s business as a trading bank should be expanded, with branches in all suitable centres in vigorous competition with the private banking establishments.
In the Melbourne Town Hall, on the 9th September, 1946, the present Prime Minister (Mr. Chifley), said -
We have too much respect for the people of Australia to be politically dishonest.
T am waiting to find out how, in view of that statement, he is going to justify the present bill. All this shows that the leaders of the Labour party have never sought the mandate they claim, and that they have, I repeat, a mandate to do the exact opposite from what they are proposing to do. The claim is so false that we can understand its being made only because it facilitates a. convenient repudiation of another plank in the same party’s platform. I refer to paragraph d of plank 3, which states the belief of the Labour party in the initiative, referendum and recall. Indeed, it demands the acceptance of that principle. Now, however, it is very convenient to forget that plank, when the people are clamouring for the very thing in which the Labour party professes in its platform to believe.
It is necessary to draw a distinction between a political platform and a policy, so that we may make it easier for the people to understand the present issue. A platform, as all honorable members know, is a document drawn up by the inner council of a party and later submitted to a general convention of the same party, and endorsed at that convention ; but it is a document which is npver submitted to the people for endorse ment, and, consequently, is not approved by the people. On the other hand, a policy is a programme designed to meet the requirements of the present and immediate future, and it is the policy, not the platform, of a party which receives the endorsement of the people. The platform seldom, if ever, changes: but the policy changes from election to election. Therefore, the people understand the falsity of the claim made by honorable members opposite that they have a mandate to nationalize the bank?. The falsity of that claim will be admitted by all who are not completely biased.
The Government’s refusal to meet the demand by the people for a referendum is understandable, because of two important factors. First, the Government knows that it would be soundly thrashed if it took a referendum : and, secondly, it is hoping that time will tend to allay public suspicion. We have all heard the saying “Uneasy lies the head that wears a crown”; I do not think that such uneasiness is to be compared with that which several honorable members opposite face in the future. Their hopes for the future are based on one of two contingencies, either, that the redistribution of electoral boundaries will favour them, or, that their old* friend political apathy will come to their assistance. To show that this is their line of reasoning I shall quote the following from The Socialist Plot in Action. published in 1921 by Mr. Wentworth. The rules are only few in number, but they will have a familiar ring in the ears of honorable members. They are -
And this is what I emphasize when I sa.y that honorable members opposite hope that their old friend political apathy will come to their assistance - in the hope that it will not be remembered when polling day comes round.
How familiar that is -
Do not make Socialism an election issue.
There we have briefly set out the modus operandi for the implementation of the Socialist plot. The basis of the hope of those who perpetrate outrages of this description is that the people will forget their action by the time the next general elections are held. This legislation is one of the’ greatest deceptions that any party has yet attempted to perpetrate upon the Australian people. They are asked to believe that communism is not making any strides at all in Australia. Honorable members opposite glibly point to the fact that Communist candidates lose their deposits at every general election. The Communists regard the winning of elections as of secondary importance. Their main idea is to have their policy implemented; and can any one deny that nationalization of the banks is one of the major planks of the Communist platform? I believe also that the candidate who stands as a Communist at electipns is merely a decoy, his purpose being to ensure the election of the socialist who masquerades as an Australian Labour party candidate.
That is a clear deception on the part of the full-blooded socialist who pretends to be a sincere democrat. However, the people danced to the tune which was called by the Labour party, and I believe that we shall now be forced to pay the Communist piper. But if Government supporters depend upon political apathy to come to their assistance on this occasion, they are doomed to disappointment; because to-day our people exhibit a belated appreciation of the warning given by Mr. Winston Churchill when he said -
Beware of a state of society in which none but politicians and bureaucrats will count in a condition of affairs in which enterprise gets no encouragement and thrift gets no reward.
If that is not an apt description of Australia to-day, it will be if ever this measure becomes operative.
I shall now deal with some of the excuses offered for the introduction of this measure; and I shall deal first with the weakest of all of them, the one propagated most assiduously by members of the Labour party, who flounder for reasons for this action, namely, that the Commonwealth Bank is not in a position to compete with the trading banks because it was strangled in 1924 by the Bruce-Page Government. Honorable members opposite make a particularly unfortunate choice in the periods they select for their fairy stories ; because it is unchallengeable that for industrial, commercial and social expansion this period in the ‘twenties has no parallel in Australian history. But let us consider the process of strangulation. In 1922, two years before the stranglers got to work, the assets of the Commonwealth Bank were valued at £134,000,000. In 1932, eight years after the stranglers had been operating, the bank’s assets were valued at £248,000,000, or £114,000,000 more. In 1942, ten years later still, the value of the bank’s assets had increased to £481,000,000, or by £233,000,000 in that decade, and £347,000,000 more than its assets were valued at twenty years earlier. In the same period the staff of the Commonwealth Bank increased from 1,800 to 6,300. And I want honorable members to note particularly this sign of decay:. Whereas the profits of the bank in 1922 amounted to £405,000, they amounted to £726,000, or £321,000 more, in 1932, and to £951,000 in 1942, or £546,000 more than in 1922, when the stranglers were supposed to get to work. My only comment on those figures is that if such development can be correctly described as strangulation, the sooner the same process is applied to other government instrumentalities the better it will be for the taxpayers of this country. What is more significant still is that in 1929-30 the Scullin-Theodore Government introduced a bill to establish a central reserve bank. That Government forced the bill through this House and proposed that the management of the bank should be conducted by the same gang of alleged stranglers as had been appointed by the Bruce-Page Government and obtained from exactly the same source. This indicates to me that prominent Labour men do not believe one syllable of the propaganda they issue for public consumption from time to time. They know it is completely false, but they are so unfair to the innocence of the elector that they try to poison his mind with lies in order to encourage him to vote for them.
The honorable member for EdenMonaro (Mr. Eraser) in a spirited, but to his credit, shame-faced, defence of this measure, quoted extensively from speeches made by prominent banking authorities, both past and present, including this very much hackneyed phrase attributed to the late Sir Reginald McKenna -
They who control the credit of the nation also control governments and hold in the hollow of their hands the destinies of the people.
In his confusion, however, the honorable member failed to note that every quotation he made was a condemnation of monopoly control in respect of the issue of credit and banking policy. The honorable member foolishly used these damning quotations to justify his determination to vote for monopoly control and to smash the institutions which to-day have no monopoly power but are still giving good service to the people and still allow them freedom of choice as to how they will conduct their own financial affairs.
The next excuse offered by honorable members opposite is that the powers sought in this bill must be implemented to avoid another depression. What are the powers now held by the Commonwealth Bank over the trading banks? The trading banks trade under licence subject to cancellation if they break the law. Through the Commonwealth Bank, which must accept direction from the Treasurer, the Government now controls the rates of interest the trading banks pay on moneys lent to them; the maximum rates of interest the trading banks charge for loans ; the classes of loans which may be made; the transactions the trading banks have outside Australia; and the surplus funds of the trading banks. The trading banks cannot buy Government securities or shares without the consent of the Commonwealth Bank. The profits of the trading banks are dependent on the operations the Commonwealth Bank permits. I believe that is sufficient evidence that this excuse is merely another fabri cation to catch unwary people who are not in a position to know these things.
The next excuse, namely, that the banks exploited the people during the depression and fattened up their already over-enriched shareholders by contracting credits in order to accentuate the difficulties brought about by the depression, is even more heinous. I have no hesitation in characterizing that as just another lie. The Leader of the Opposition (Mr. Menzies) quoted a case where the advances of the private banks exceeded their deposits. That has happened on many occasions at the peak period of loans, which I may “describe as seasonal loans, particularly for harvest purposes, which were repaid a few months later when the crops were harvested. In December, 1929, the percentage of advances to deposits was 105.327 peT cent. In December, 1930, the total deposits in the trading banks of Australia amounted to £263,000,000, and the total advances to borrowers amounted to £278,000,000. Thus, the percentage of advances to deposits was 105.703 per cent.
– Those figures were disproved long ago.
– Why not accept the figures presented by the Royal Commission on Monetary and Banking Systems?
– In September, 1931. the percentage of advances to deposits was i02.663 per cent. At that time the total number of shareholders in the private banks was 71,000, the average holding of each shareholder being 182 shares. They would not get very fat on that! Of the total shares issued, 80 per cent, were held in Australia and New Zealand, and 20 per cent, were held abroad. The profit on shareholders’ funds in the Australian trading banks during the depression, which honorable members opposite consider to be a period when the bankers exploited the people for the benefit of their shareholders, fell from 7.2 per cent, in 1929 to 2.9 per cent, in 1933, while in the same period the profits of 514 companies representative of other phases of industry fell only from 7 . 4 per cent. - a higher figure than that received by the trading banks - to 3.8 per cent., a still considerably higher figure than that of the trading banks. “What a beanfeast the Labour party would have had had there been a rush on the banks at a time when advances exceeded deposits and had the banks been forced to say to their depositors, “ We are sorry ; we have lent al] our money to the Government and to industry, and we cannot pay you “. Labour supporters would have immediately characterized that as a repetition of the repudiation of 1S93 and would have said, “ We must smash the private banks “ ; but because that did not happen Labour still proposes to smash the private banks.
It will be seen that the excuses offered by the Government will not do. In my view there is some.’hing more sinister behind the move to eliminate the trading banks than the mere implementation of a traditional Labour objective. It .is on all fours with Labour’s objective to eliminate private enterprise, wherever it exists, in order to establish a socialist state. It unquestionably had its origin in Soviet policy as announced by Lenin in 1917, when, in addressing a Bolshevist conference, he used these words -
We are all agreed that the fundamental first step in this direction must be such measures us the nationalization of the banks and the trusts. Let us put into practice these and similar measures, and we shall see . . . We cannot at once nationalize the small consumers’ concerns - i.e., those with one or two employees - nor can we at once place them under a veal workers’ control.
And .listen to thi9 -
Hut the role of these small men can he made small to the vanishing point, and through the nationalization of the banks they can be tied hand and foot.
Undoubtedly that was the origin of this measure.
I intend now to show how necessary trading banks have been to the progress of this country. The only gauge for the future, after all, is a consideration of the mistakes, and a study of the precedents, of the “past. I propose only to give one or two examples to make my meanings clear. The first concerns a public instrumentality. In 1931, the Commonwealth Bank refused to take over a Melbourne Harbour Trust loan of £ 600,000 maturing in London. The loan was eventually taken over by one of ‘the trading banks without any ‘demur; but the point I wish to make is that even with the excellent security offering, the Commonwealth Bank was not prepared to take up that loan. Had there been no private banks what would have been the result? Stagnation in the harbours and in Melbourne. The importance of private trading bank competition is emphasized by this further example: In 1938, the Commonwealth Bank refused an advance of £3,000 to the Chicory Board of Victoria, which had taken delivery of 400 tons of chicory from growers. The board had to approach a private trading hank, which readily made the necessary credit available and so enabled the board to satisfy the growers. The interesting point is that the chicory was worth £40 a ton, or a total of £16,000; yet that was not sufficient security for an advance of £3,000 from the Commonwealth Bank! Had the services of a private banking institution not been available, the board would have had to put that huge quantity of chicory on the market to be snapped up at whatever price the traders were prepared to pay.
Whilst I believe that all people will suffer to a greater or lesser degree should this measure become operative, no section of the public will be more inconvenienced than the farming community, because in no other phase of industry is goodwill between banker and client more in evidence than in farm finance. Millions of pounds have been advanced to farmers on the security of their own integrity, and this treatment cannot be continued by a regulationcontrolled institution no matter how sympathetic the banker may be. Of course, the Government probably intends to relieve farmers of the obligation to manage their own businesses, because just as a lack of a mandate from the people has not prevented the introduction of this measure, the lack of a mandate will not prevent the socialization of production, and this would involve every primary producer in the community. It must be accep’ted as axiomatic that monopoly control of money means monopoly control of every human activity, and if we are f oolish enough to let this -Government or any government regiment the people’s money, the order of priority for the extension of the “ blessings “ of socialism to other industries will be relatively unimportant, because all will be completely hamstrung by the monopoly control of money. “We .can imagine the insurance companies and the major industries coming automatically within the socialist edict, but the “ small people “ - which includes every farmer ‘ in the community whose love of freedom is indicated by his choice of calling, the soldiers of two world wars who have maintained the freedom of Australia on two occasions at a tremendous cost in blood and treasure, and the ordinary man in the street who is proud of his right to say, “ I shall do as I please “ - must, according to Lenin, be shackled hand and foot by a dictatorship to render them more easily subservient to their own servant, the Government.
I have received thousands of letters and petitions on this subject, many of them bitter in their denunciation and despairing in their sense of betrayal by this Government. Honorable members opposite argue that signatures to petitions have been obtained under duress; that bankers have stood over their clients and said, “ If you do not sign this we shall do something unpleasant to you “. But that argument is strangely at variance with the claim, that under Labour administration, primary producers have paid off their overdrafts and are far better off than ever before. It is twisted logic that can be suited to any circumstance, and it is a gratuitous insult to hundreds of thousands of honest people. To these honest people I say - “ You have begun the fight by demanding a referendum. Continue that fight; you will never have an issue more worthy of your best efforts. A cardinal principle of democracy is that a government must be the servant, and the people the masters. If you permit that principle to be reversed, you will be recreant to your obligations to future generations, and you will be sacrificing the greatest heritage that your forefathers have entrusted to you - the heritage of freedom.”
– Order! The honorable member’s time has expired.
.- I rise to support the bill. I should like to refer first to one or two unfortunate quotations made by the honorable member for Gippsland (Mr. Bowden). In his opening remarks, the honorable member stated that that great statesman, Abraham Lincoln, at the Gettysburg dedication ceremony, stated that the fallen had sacrificed their lives for liberty and freedom ; but that this bill was aimed at filching the freedom and liberty of the people of Australia. The honorable member is palpably wrong. This bill will give to the people of Australia real freedom - freedom from the control of financial dictatorships and greedy’ monopolistic financiers. It will also give to the citizens of this country control of the nation’s finances - control by the people for the people. The honorable member also said that the Government was afraid of a referendum, and hoped that time would erase suspicion. Of course time will erase suspicion. Time will also prove the desirability of the legislation now before us, and when the Labour representatives in this Parliament face their masters two years hence when the operation of this bill can be reviewed, the people of Australia will be satisfied that the Labour Government has done a very good job indeed.
The honorable member also said that he and. his colleagues had received many petitions against the nationalization of the private banks. But petitions that have to be sought are not petitions in the true sense of the word. People will sign even petitions to save hardened criminals from well-deserved punishment. People can be induced to sign petitions for almost anything. Canvassers employed by the Opposition parties to organize petitions are paid £10 a week, but 31,000 signatures on a petition from “Western Australia is a poor return from the flock of canvassers who have been pestering the people there to sign petitions.
I do not intend to deal with the involved technical issues contained in this bill. Other speakers from this side of the House have already done that most ably. My purpose is to translate the bill to the workers in the terms they can understand - terms of bread and butter. What applies to the workers of this country, both “ white collar “ and manual, applies with equal- force to the small businessmen throughout Australia who are dependent on credit and even more dependent on the working classes,, on whose patronage they rely, who have jobs and the money to buy the goods they want to sell. I intend to reply to certain statements made about this legislation by honorable members of the Opposition parties.
It is suggested by the Opposition that detailed supervision of the Commonwealth Bank by politicians will take place if the bill is passed, but the Treasury’s power over the Commonwealth Bank is in the direction of a general policy. Nothing could be more inefficient than the accentuating of the booms and slumps of the trade cycle, which is the inevitable result of leaving the contraction and expansion of credit to a private profit motive. Treasury policy will ensure the expansion and contraction of credit against the trade cycle for a social purpose. In the words of Professor Sir Frederick Soddy-
Once the nation resumes control of the issue of its money it can place, as it should, the whole technical revision, control and operation of its financial system in the hands of experts who can be trusted to act exclusively in its interests.
That is the Government’s motive in proposing to nationalize the private banks.
It is suggested by the Opposition that the depositors’ money will be subjected to government confiscation and surveillance. The purveyors of this particular piece of mendacity do not dare suggest that the £428,000,000 in the Commonwealth Bank is so subjected. No depositor would believe them, and that it is not believed is shown by the absence of any move or run on the Commonwealth Bank. Honorable .members opposite also claim that governmental institutions are inefficient. The institution in question is the Commonwealth Bank. No convincing case that it is inefficient has been made, or even attempted. They also claim that a great increase of taxation will take place when “ just compensation “ is paid to the shareholders of the private banks. The Commonwealth Bank will itself manage that aspect of the matter as part of its business activities, not the Treasury. .
It is claimed by the Opposition that to industry the proposal means progressive nationalization under the deliberate pressure of the one big government bank, which will control all finance. Is not industry under the control of government legislation? To argue that this Government intends to control all industry is contrary to fact and not based on firm ground. Just as under private banking the success of private industry is essential to national welfare, so will it be under nationalization. At least the threat of overseas control of our banking system is to be removed. The success of any industry is the success of those engaged in it. The worker contributes very largely to that success, and his reward is not in proportion to his efforts. Such a worker is entitled to some say in the results of his work; through this enactment it will be possible for him to achieve that end in an indirect yet satisfactory method. At present the benefit is confined to shareholders, promoters and the like. They are entitled to a just recompense, hut not to absolute control. Many of these controllers are outside Australia. This is not communism but common sense and justice. Neither is it socialism, nazi-ism, fascism or any other “ ism “. The Opposition claims that “nationalize the banking system “ is the catch-cry that Hitler used when he simultaneously put all the German people to work and into chains. During the years 1940-45 we were regimented, pushed about and around, controlled and subjected to interference in many of our private affairs. The circumstances warranted such treatment. Present conditions, with the added threat of future instability, justify the Government’s proposal as wartime conditions justified war-time regulations. The old catch-cry of “ socialism is the Opposition theme song. There is no such thing as Australian socialism. Never at any time has the Prime Minister (Mr. Chifley) or any Labour Prime Minister threatened us with dictatorship. This measure will implement the will of the majority, the working men and women, against that of the minority, the vested interests, who control a majority of the wealth. There can be dictatorship on both sides. The giving of reasonable conditions, the right of every worker to work, is not dictatorship. The majority expect this implementation of their desires. The Government was democratically elected “by the people, of the people, for the people “. If this measure is the will of this democratically elected Government, it is not socialism.
The Opposition, referring to the Government, claims, “ It will maintain full employment but you will have to go to the job you are ordered to take - in Darwin or the coal mines “. Of course it will maintain full employment, and that is what is required of any government, but, under National Security Regulations, the Government did not send carpenters to coal mines, or bricklayers to dairies, unless their services would have been more gainfully employed in that way. That is reasonable. If I do not want to work, no government can force me to; but if I want to live, then I must he prepared, in a time of emergency, which may soon be upon u3, to work where my services will be best employed. Does the Opposition’s argument imply that another government will keep us all in cities near the coast? If so, that is by no means desirable. Liberty of the subject is all very nice and is a good drum to beat, but in hard or dangerous times each one of us has a duty to his neighbour. The common good must come before that of the individual. Those who are not willing to accept that responsibility are not worthy citizens and any effort to make them shoulder it is a. good thing.
Now, let us examine the Opposition’s charge that the mere announcement of the Government’s intention to nationalize the private banks has produced a business crisis. I will not bother to argue the charge, but let the facts speak for themselves. I produce three pages from the Sun Pictorial. They are dated the 16th, the 17th and the 18th September, 1947. Page 21 of the Sun Pictorial of the 16th September contains five columns, the headings of which are as follows : “Profit rises at £41,320- Hume Pipe’s year “. - That is one prospectus which indicates a 6 per cent, ordinary dividend - “ Sleigh’s issue opens to-day “ ; “ Yellow Express profit steady at £26,793”; “Share values go higherdealings lighter “ ; and “ Snow’s Men’s “Wear - record profit”. On the same financial page of the same paper on the next day, the 17th September, were the following headline’s: “Mutual Stores best profit - seventy-five years trading “ ; “ Olympic Tyre expects satisfactory year “ ; “ Faulding’s new share issues - good asset covers “ ; and “ Share prices advance - many small rises “. But, of course, these headings might have “ just happened “ in the same casual way in which the depression of the ‘thirties “ just, happened “. .So I turn to the financial page of the Sun Pictorial of the next day, the 18th September. Again we get the same picture of industry, supposedly “ in ‘ the grip of panic and prices tumbling” - words almost reminiscent of the depression days. Here are the headings on that day - “ Whisky and gin profits - products in demand “ ; “ Australian Paper Manufacturers - profit rises £42,577 to £269,889 “-that is a lot of money to make; in fact, it is a startling amount by which to increase profits in these days of “business panic and uneasiness “. There seem9 to be something contradictory about the Opposition’s claim when it is considered side by side with such profits. In fact, it was a startling increase of profits in these days of supposed business panic and uneasiness. The third column had the heading, referring to Robertson and Mullens Limited, “ Profits raised slightly “. The next headline is an indication of the good government of this country under the Labour party administration. . It is, “ Tax abolitions help markets - Buying is stronger “. That reflects directly upon the Government’s action in reducing taxes. The comments which I have quoted were all published after the Government announced its intention to nationalize the banks. Their whole tone is summed up in the head line, “ Buying is stronger “. I ask the Opposition to read those pages, or the financial pages of any newspaper to-day. They disclose a similar optimistic outlook, although two months have elapsed since the Prime Minister notified the people of Australia of his intention to nationalize the banking system. Therefore, our answer to honorable members opposite is that they cannot rightly claim that the proposal to nationalize banking has created a business panic. I leave that point.
Now, I deal with the working man’s greatest enemy - depression. It was said that this cry of “ depression “ would be bandied about by members of the Government party in any discussion of the nationalization proposal. Of course it would be! This is the biggest factor in the lives of the working classes. The people must not be allowed to suffer once more the indignities brought upon them by ‘Unemployment during the period between 1931 and 1939, when they had to wait for a war to alleviate their conditions. Two hundred thousand people were out of work in Australia when World War II. started, and when the Labour party came into power in 1941 there were still 100,000 unemployed. Anti-Labour governments gave no consideration whatever to the circumstances of those thousands of people. Therefore, we will talk about depressions. During the depression in the ‘thirties, ‘hundreds of workers had their eyes on the Gosford district in New South Wales. Some of them even went there because of a rumour that the district was to be electrified. The farmers were to be supplied with electricity, but they lack it even to-day. What happened? The workers camped around the district. They had neither money nor food. Their bellies were empty. All that they could rely upon was a dole. Yet, just on the other side of the barbed wire fences outside which they were camped, fruit was rotting on the trees. The farmers who produced the fruit could not sell it. They could not afford to give it to the unemployed, because that would have further depressed the already low price of citrus fruit. So, we had the grotesque picture of .hungry and miserable men on one side of the fence and fruit being allowed to rot on the other side; and the men who produced the fruit were not much better off than those who were on the dole. Most of the time, the soles were hanging from their working boots because they could not afford replacements. They had to do tedious work by hand because they could not afford machinery to lessen the hardship of their toil. They could not even take their wives to see a picture show because they lacked the money. Most of them were in debt to the banks and had the ever-present terror that the banks might foreclose. Honorable mem- bers on both sides of the House agree that such things should not be, that men should not starve in the midst of plenty while the producers of plenty live like serfs, but under the terror of foreclosure instead of the knout.
What was wrong ? What factor produced those conditions during the depression? It was not the men. They were prepared to work. They were prepared to produce the boots that should have been worn on the farmers’ feet instead of the worn-out rubbish that they were wearing. They were ready to dig the ditches and lay the mains that would have electrified the farmers’ houses and given them and their wives relief from drudgery. They were ready to do anything. It was not the farmers’ fault. They had done their hit. They had grown their oranges. They had contributed their share towards feeding the nation. But the nation was not being fed. Children were getting rickets who, if those oranges had been added to their diet, would have been strong and healthy. Invalids were going without the vitamins that those rotting oranges would have provided because they did not have the price to pay for them. Harassed mothers in Sydney were desperately wondering how to feed their families while their breadwinners were laid off from the bootmaking factories, while, in Gosford, equally harassed farmers’ wives were wondering how to raise the price of new boots for their husbands.
One doe9 not have to be very astute to know what was wrong. It was not the fault of the producers. There could be no use in them producing if people could not buy their products. Yet thousands of people needed their products. Was the fault with the producer? Obviously, no! Was the fault with the consumer? Equally obviously, no! I supply the answer that would be supplied by any intelligent person : the fault was with distribution. It is at this point that the Government and its supporters part company with the Opposition. ITd to this point, we are in agreement that such things as occurred during the depression should not be allowed to occur. But, from this point on, we disagree. At this point, Labour says that such things must not happen again and Labour now has prepared plans to prevent them from recurring. But the Opposition mumbles pious platitudes and says that such things are inevitable, that depressions, like wars, are inescapable. Such a confession has been made on innumerable occasions and is again being made, by um plication, through the Opposition’s negative attitude to this bill. Has the Opposition supplied one constructive suggestion as an alternative to the Government’s proposals? Such a confession would be merely a fitting monument to the incapacity of the Opposition. Unhappily, there is something much more sinister and criminal than mere incapacity behind the Opposition’s attitude.
Honorable members opposite would like to see industrial discipline, which, to them, means the worker being “ put in his place”. The workers’ place to these gentlemen is the place where he cannot rebel against tough working conditions, rotten pay and lack of amenities. There is nothing like a “ reservoir of unemployed “ to promote the kind of industrial discipline that honorable members opposite want. That is the phrase they use - “ a reservoir of unemployed “. There is nothing so brutal as to cow men because they and their wives and children ‘are on short rations. Honorable members opposite have never come out into the open and said what they wanted. They dare not do so because their own followers - at least the section of their followers which retains any semblance of humanity - would rebel if they did so. However, that is the term that they use in their deliberations. We know they use it. Everybody knows they use it. A “ reservoir of .unemployed “ ! That is their means of imposing industrial discipline. It is a phrase that coldly and savagely overrides the deepest depths of human suffering - when a man sees his wife and family going hungry. That is one of the reasons why honorable members opposite oppose this hill.
A government which has complete control of the banking system cannot let the women and children of this country go hungry so that their menfolk will have to submit to industrial discipline. Even a Liberal government could not do that. The people would wipe it out if it tried to do so. But a Liberal government could shelter behind the present banking system and, when the banks were calling in their money and foreclosing on homes and farms, say piously that it could not interfere with the proper and legal functioning of a bank. The Labour Government can and will interfere with the functioning of the banks. It intends to say that a proper function of a bank is to look after public welfare and that it is illegal for a bank to function other than for public good or merely to make profits.
– I rise to order, Mr. Deputy Speaker. Is it permissible for the honorable member for Cook to read a brief that has obviously been prepared outside of this House instead of making a proper speech from notes?
– The honorable member is entitled to make reference to copious notes, as did the Leader of the Opposition.
– I have fairly substantial notes. I have prepared this speech very diligently. I realize the importance of this bill, I am aware of the opposition to it, and I am determined that I shall state in this House the message which I have in my mind for the people whom I represent. I prepared this speech, and I am glad that I have the opportunity to deliver it.
The Labour party contends that financial and economic depressions must not happen again, and we are now outlining our plans to prevent these disturbances, and a breakdown in distribution of goods. Distribution is achieved through the financial system of a country, and, consequently, the Labour party proposes to nationalize banking. The fact that the banking system controls distribution is another reason why we propose to control it. At least, on one hand, we have logic on our side. On the other hand, the two political parties which constitute the Opposition in this Parliament contend that financial and economic depressions should not occur, but they do not point out how they can be prevented. In fact, the Opposition goes farther, and abjectly says that depressions cannot be prevented, because Australia is too dependent upon its overseas markets to escape the impact of a depression produced by overseas conditions. Again, on this aspect, the Labour party finds itself in fundamental conflict with the Opposition. Of course, we shall feel the impact of a depression overseas, but the effect can be cushioned. We must discard all the mumbo-jumbo of the professional economists, and examine with common sense the problem with which one day we may be faced.
No one will deny that this country has an abundance of the fundamentals of existence - food, clothing and shelter. The present housing shortage will be overcome. The problem during the depression was not to find a house to live in, but to provide the rent for a house. I emphasize that food, clothing and shelter are the most important things in a worker’s life. If we can give to the people these basic requirements, they can never be so badly off as the workers were during the depression of the 1930’s. I emphasize also that each of these requirements is in abundance in Australia. Even if the bottom falls out of the wool market, the price of wheat reaches an all-time low, and we never sell abroad a side of beef or pounds of mutton, those basic requirements will still be here in Australia. As they are already present, all the economic crashes that happen in other parts of the world cannot deprive us of them, but the people must be assured that they will have them, irrespective of what happens elsewhere. Economic crises in other parts of the world can deprive us of our fine motor cars - though when an Australian motor car is in production* even this will not happen - restrict the number of moving pictures which we may see, or even reduce a man’s supply of tobacco and cigarettes. Those things are beyond our control. But the ability to give to the people the three fundamentals - food, clothing and shelter - even in the most difficult of times, is not beyond our control. Provided distribution - call it banking if you like - is controlled by the people, for their own interests, we can, and will, give to the people a guarantee that they will never go short of the three working-class fundamentals. Can such a guarantee be given? The Labour party says that it can, provided the banks are nationalized, and the nation, not private interests, control the system of distribution, which is only another name for the financial machinery of which the banks are the most vital part.
Recently, the banks issued an advertisement in which they quoted an extract, from the report of the Royal Commission on the Monetary and Banking System.*. The extract, which was signed by all members of the commission, including the present Prime Minister (Mr. Chifley) reads -
There is no justification for the view that the trading banks, in order to enlarge their pro/its, deliberately expanded credit to produce a boom and then contracted so as to produce a depression.
The banks should not have published that advertisement. It was bad tactics to do so. It makes people think; and that is what the banks should not encourage them to do. It is a great mistake to have people thinking about things which they have always accepted unthinkingly as a part of normal life. If they accept things without thinking, they do not see why these conditions should not be a part of everyday life. The banks’ propagandists try to impress upon the people of Australia the idea that the private financial institutions are sacrosanct. The people should not be encouraged to remember that the banks manipulate the currency in order to create booms or (financial and economic depressions. A man does not deliberately go on breathing. He just does it because it is natural for him to breathe. Of course, the banks did not deliberately contract credit so as to produce a depression. A man does not deliberately flinch when he is hurt. He does it because he cannot help it. The principle, as it applies to the banks, i.? the same. The ‘banks could not help it. They are conducted for profit and to safeguard the shareholders’ funds. I do not blame them. Profits are the reason for their existence, and the directors who failed to safeguard the shareholders’ funds would soon be looking for another job or charged with criminal negligence. The expansion of credit, and then its contraction, did not have to be done deliberately. It was part of the make-up of the banks, and was as inevitable as death and equally as natural.
When money was plentiful, conditions were good and employment easily obtainable, there were more good risks offering than in less prosperous times. A bank manager’s duty is to lend money when the risk is good; and the risk is always good when times are good. A bank manager knows that the bank will be repaid, for which he has responsibility, without much difficulty. So he grants loans, thereby unconsciously contributing to boom conditions. When the boom breaks, he must, as a good and faithful servant of his employers “ tighten up “. We cannot blame the individual for this, because he is working for an employer who needs profits to sustain him and safeguards to ensure his continuance. But as the supply of money diminishes, at the time when people need assistance to meet the unforeseen contingencies of a falling market, he must safeguard his employers’ money. So again, often unconsciously, he contributes to a contraction instead of a boom.
This mode of operating cannot be justified. It is not scientific to pour money into a community at a time when money is plentiful, thereby adding to boom and inflation conditions, and when money is scarce, to close up and further reduce the funds available. That is not a common-sense .policy. The proposition is as absurd as any that can be advanced. Yet it is the basis of the private banking system, and we cannot escape it while the banks are conducted on the present system. An- analogy is to try to pour more water into a bucket which is already full. Some of the water overflows. That is what the banks do in good times. They pour money into the community, and the only result is the overflow of inflation, and a higher cost of living for the workers. Then conies the drought of hard times, when every drop in the bucket is valuable. So the banks figuratively rip a large hole in the bottom of the bucket by calling in their loans and foreclosing right and left. That is not common sense. Personally, [ should have thought that one of the principal things that the war proved was the importance of men and materials and the relative unimportance of money. Even if we had had tens of millions of pounds more than was at our command, we could not have produced an extra shell. It was not money that counted. All the money in the world would not have provided an extra pair of hands, or the materials that went into the making of a shell, or a can of food for the troops. That was because, during the war, the artificial limitations upon distribution, which the banks normally place upon us, were suspended. There was proper, scientific distribution. We- estimated how many producers there were in the community, and Ave knew how much material was available. The matter was quite simple. When a pocket of unemployment occurred through men not producing because distribution was f aulty, we judiciously “ pumped in “ the means of distribution. The banks then were fighting like the rest of Australia for their existence. Their profits, though still important, were secondary. At that time they did not yell about unsound finance. They accepted our dictates, and agreed with them.
Now, the position is changed. The policy of the banks again places upon them the necessity for profit-making, and so their artificial limitations again apply. This cannot be permitted. The thing is too big for artificial limitations. The acid test must be nian-power and materials. We must ascertain whether all our men who want to work are at work. If they are not, we must do something about it. We must discover whether all the materials are available that will provide work for our man-power. If they are not, we must do something about it. We have had two great lessons. The first was the financial and economic depression of the nineteen-thirties. The second was the World War II. In the depression, it was not production that failed. Any one who looked at the long “ dole “ queues knew that it was not a falling off in appetities or a failure of the desire for a few of the comforts of life. It was distribution that failed. This failure was demonstrated by the depression, and was proved during the war, when the relative unimportance of money was conclusively driven home, fmd the premier position of man-power and materials was irretrievably fixed. Let us profit by our two lessons ! Distribution is only another name for the financial system. The system of distribution first employed was one of barter, then it progressed to coinage, then to banknotes, whilst to-day cheques drawn on banks is the system in vogue. The system of distribution failed us during the depression, and it will fail us again if it is left to the manipulation of irresponsible private enterprise. That system must fail under any form of private control, and it is obvious that distribution must be under national control. The bill places distribution under the nation’s control, and I commend its introduction as the greatest step forward which the Australian nation has taken since federation. Its proposals will create employment for the people, and bring stability to, and confer economic freedom upon, the workers of Australia. T heartily support the bill.
– The honorable member for Cook (Mr. Sheehan) made several rather remarkable statements. He dwelt at some length on the depression, and I propose in a few minutes to address myself to his remarks concerning that subject. However, at the moment I point out to him that the Government already possesses all the powers which he says it is necessary to exercise in time of depression. As a result of the banking legislation of 1945, the Commonwealth Bank has control of interest rates, credit and loan policy, overseas exchange, the issue and withholding of currency; and the general direction of investment. Furthermore, it must not be forgotten that it is constituted a “ central bank “, and. as such it has all the powers necessary to ensure the utilization of the country’s financial resources in the best possible way. If the present bill is intended only to carry out the functions mentioned by the honorable member, I cannot understand the necessity for its introduction.
The honorable gentleman said that the Government desired to free itself entirely from any suggestion of overseas control in regard, to its financial affairs. However, that control by overseas interests is the very thing which the Minister foi Transport (Mr. Ward) warned the country would occur if the Government implemented the Bretton Woods agreement. At that time he criticized the Government for putting Australia into exactly the position which the honorable member for Cook says we must not occupy. The honorable member for Cook also referred to the “ reservoir of unemployed “. Is he not aware that that is an economic phrase which went out of currency years a,go? I have been present at a great many discussions-, and that phrase is- certainly not used by members of the Opposition. However, the most remarkable statement made by the honorable member was that “ there is no such thing as Aus- tralian socialism “. I propose to read from the “Federal Platform and Objective “ of the Australian Labour party, which mentions as its aims : “ The socialization of industry, production, distribution and exchange “. Yet the honorable member says, “We have no Australian socialism ! “ Perhaps he means that we have not yet brought about socialism in Australia. However, it is significant that not the first objective mentioned in the platform but “ socialization of exchange “ the last, is selected for implementation. . Quite obviously that is the key to all socialization and can open doors that are at present secureLy locked in order to preserve the people’s freedom.
At this stage I should reply to the statement made by the Minister for Transport in connexion with the deputation of women, which’, came to Canberra. The organizers of that demonstration have furnished to me some information which should be conveyed to the Minister and to the people. The official count of those who attended the meeting to which he referred was- 623, not 400 as the Minister stated. Those who came to Canberra did so entirely at their own expense; they were not provided with free transport or accommodation, as alleged. As a matter of fact, the only individual who made any material contribution to the accommodation of the visitors was the Prime Minister (Mr. Chifley) himself, who gave tea to six members of the deputation who waited upon him. It is only right that incorrect statements made by the Minister for Transport should be corrected.
Mr. Fuller interjecting.
– Order ! The honorable member for Hume (Mr. Fuller) must not interject.
– I am glad that the honorable member for Hume interjected, because I’ am always pleased to deal with his interjections.
The CBE AIRMAN”. - Order ! The honorable member for Darwin must address the Chair.
– I propose to address myself now to the speech of the honorable member for Cook. His speech struck a few chords in my own breast, and from the standpoint of the honorable member himself, I believe that it was a good speech. He made some points which were of considerable interest. He pointed out that because of the rates of interest charged on money borrowed to finance the construction of railways in this country, although railways have been paid for over and over again the capital debt still remains. I should like to remind him that the same can be said of the plight of small home-builders in this country under the legislation passed by this Government which he supports. Any one who wants to build a home is subjected to exactly the same kind of financial treatment. The honorable member went on to speak of the “ moneychangers in the Temple “. I am a somewhat sentimental person, and hi9 remarks rather affected me. However’, I point out to him that the money-changers were driven from the Temple, not merely because they were changing money but because they were using it to cheat and to desecrate the House of God. “ My house shall be called of all nations the house of prayer, but ye have made it a den of thieves.” It is perfectly true that in all ages men have used money for ignoble ends, and it is equally true that they will continue to do so till the end of time, through government or private institutions. That will go on whether the banking system be controlled by the Commonwealth Bank or private concerns. Man’s cupidity must always be kept in check, not only a moral suasion, but also by the introduction of physical restraints, amongst which we might include control of public credit. However, that is not the issue involved in this bill. There is another, far more fundamental, issue than the mere alteration of the method of providing finance. We must look not only at the bill, but also around and beyond it. We must look not only at its provisions, but also at the moral and political sanctions upon which it rests and the circumstances surrounding its introduction. Even the time of its introduction becomes important. Those are all factors which tend to justify or to condemn the bill. It cannot be denied that it has been introduced during the greatest possible disturbance of social and political conditions which the world has known. The bill has been brought forward at a time when we should be working in a unified endeavour to make good the deficiencies and rifts in our social fabric which have come in the wake of war. Honorable members opposite profess to believe that the protests which have come from all over the country are manufactured, and unreal. Let me assure them that they are very real indeed. To say that all the petitions which come to the Parliament are the result of organization is true, inasmuch as some one must be responsible for the printing and distribution of the forms. However, let me assure honorable members that in my electorate officials of branches of the Australian Labour party have walked into banks and asked for permission to sign forms of protest.
– Then they are not genuine Labour supporters.
– They are Labour to the backbone. I received a letter from a man, whose politics I do not know, who echoes the thoughts of many people. He stated that quite recently he had received a letter from the Prime Minister - no doubt, in response to one of his own - informing him that, although abolition of the means test was part of the Australian Labour party’s policy, it could not be implemented at present because it would cost £4’0,000,000 a year. The simple people are saying, “ If they cannot have £40,000,000 ready to abolish the means test, how can they have £100,000,000 ready to take over private banking ? “ At this time, there is in this country, and in every other civilized country in the western world, a growing fear of the prevalence and spread of communism. That also, cannot be disregarded when we are viewing a measure such as this. I believe that ministerial members are astonished at the extent of the protest against this legislation, even though they still, I have no doubt, continue to believe that some of it is not real. I, myself, had rather a surprise when I received a telegram which read, “Whole electorate is disturbed at projected banking legislation, which should first be referred to the people”. It was signed “E. J. Ward”. When I saw that signature, I must confess, I was, for the moment, rather “ rocked “ - to use the colloquial phrase. But I found that the telegram had come from a woman in my electorate who was very greatly concerned about the matter. If honorable members opposite believe that these protests are not genuine, that there is no real concern, that there is no real danger of seriously splitting the community, let me read to them this small extract from the North-Western Advocate, published at -Burnie. It is the report of a smoke social of the Trades and Labour Council. A Mr. Moline proposed the toast “ The Trade Union Movement “. Towards the end of his remarks, he said - and these words are quoted -
There is a big possibility that a few of you will be called upon to bleed before this battle is over. There is no room for “ squibs “. We must take more interest in the Australian Labour party and elect more trade unionists to Parliament.
That is evidence from members of the party which is supported by those who sit opposite. I hope that they will not neglect it. It is something that cannot lightly be put aside. I beg the Government, even now, to consider well before it really splits this community into factions which will keep bitterness alive for many years to come. This is not the time, if ever there was one, when legislation such as this should be introduced.
What are the reasons for the disquiet in the public mind? I believe the first reason to be fundamental, namely, that deep and instinctive feeling against too much, or unnecessary, government control, which is inherent in Australian people. We had the first evidence of it at Eureka. That is a name which has been put to very unfortunate and ignoble uses. But do not forget that that was the very first occasion in Australia on which repressive government action was resisted. That feeling has been reinforced recently by many serious events, the first being the experience of -controls which the war imposed upon up.
The methods of policing those controls have driven it a little farther. If any one wants to know how deep is the resentment against some of those methods, he has only to go into country districts, into places where agents of the Prices Branch move around, and actually tempt people to break the law in small, piffling, miserable ways, and then take them before the courts, while at the same time those people know that there are others operating in large ways who go “ scotfree “. There is, further - and I say this with very great solemnity - the growing distrust of officials and politicians alike in this country. One need refer only to the land sales scandals. It finds an echo in many people’s hearts. There is grave disquiet in the public mind in regard to similar transactions in many places. During the last sessional period, I drew the attention of this House to a statement by a public official who had retired from the Department of Trade and Customs. He had been, as I recall, an official of that department for over 30 years. In a press interview after his retirement, he said, “ All politicians are racketeers “. 1 raised the matter in this House. I regarded it as serious, coming from the source from which it had originated. It was treated with considerable levity. The Prime Minister promised me that he would make some inquiry. I have heard nothing since. There is also the frequent conflict of statement between members of the Government, so that one Minister cannot be said to be responsible to his Prime Minister, nor can the Prime Minister’s guarantee be accepted with the complete assurance with which it used to be accepted.
We come, then, to inescapable evidence of the abandonment of old standards of probity and integrity throughout the community. We find that in government circles. I refer to this matter with considerable sorrow. I have been a member of this House for four years. There - have been occasions on which I have been shocked at the evidence of old standards having gone in administration ‘ and government. I do not forget the occasion on which the Commissioner of Taxation invited the public to send to him anonymous letters, not signed letters, the individual giving the infpronation being guaranteed protection ; and that suggestion received the sanction of the Government. Does the Government know what the writing of anonymous letters does to the one who writes them? It progressively undermines integrity. Does it know what effect that kind of moral rottenness in any section of the community has on the whole of the body politic? Then, quite recently, I was horrified to hear over the air, on an occasion when I was absent from this House, a Minister quote from a certain document, and upon being asked to place the document on the table of the House, say, “ I cannot ; it is confidential “. Again, in the bill before us we have evidence that old standards have gone. Clause 23 of the measure, which offers certain rewards to people if they will set aside their legal rights, has been described in one newspaper as “ a subtle attempt to divide the banks “. It is, instead, an unsubtle revelation of a sharp decline of political morality.
That is the background against which this measure has been introduced, and it is no wonder that there is a sharp reaction and a distinct fear throughout the community. That is the reason for the demand for a referendum. The Minister for Transport said quite recently that there had been no demand for a referendum on other occasions; there had been no complaint about the Bretton Woods agreement, and on other similar occasions. The very fact that there was no demand then and there is a widespread request now should be sufficient to induce the Government to take notice.
Then we come to the Minister’s further statement that there had been no plea for a referendum at the time of the Premiers plan, when pensions and wages were reduced all over Australia. There was no call for a referendum ; that is very true. But there was the suggestion of an election by no less a person than the late Mr. Curtin. In his book, Caucus Crisis: The Rise and Fall of the Scullin Government, by Warren Denning - a sympathetic history of the Labour party’s history at that period - honorable members will find the following: -
Mr. Curtin was one of the keenest opponents of the Premiers plan in the party.
He regarded its adoption as fatal to Labour, foreseeing the inevitable loss of confidence and bewilderment which it would cause throughout the whole of the Labour movement. His advice to the Ministry, if no alternative existed to the adoption of the plan, was to resign office and seek a specific mandate from the people on banking reform, and so seek a way out of the financial impasse in this direction; or otherwise to accept defeat at the polls, and allow the Conservative parties to implement the plan.
– That was because the Senate was against him.
– I shall say something about the Senate in a few minutes. At that time an appeal to the country was suggested, but it was ignored, just as a similar appeal is being ignored to-day. History is repeating itself. There is ample evidence to show that if this Government went to the country there would be no backing for the legislation which it has placed before the Parliament. But the present Government is not going to the country, no doubt for the same reason as on lie former occasion. The honorable member for Martin (Mr. Daly) referred to the Senate. I was glad to hear his interjection, because hitherto the cry of the Labour party has been that the banks prevented the Government from carrying out its policy. It is perfectly true that at the time of the depression it was the banking institutions, including the Commonwealth Bank, that drew the attention of the then Government to the serious state of the country’s finances. The whole of the banking institutions of Australia warned the Government of that day, but the Government was not anxious to accept their suggestions. And so it did what I believe was the only proper thing to do : it introduced into this House legislation designed to implement its own plan, in the face of the advice given by the banking institutions. That legislation was rejected in the Senate. In other words, it was rejected by the Parliament of this country. What happened then ? This is something which cannot be repeated too often, although, unfortunately, it has been allowed to slide into oblivion, while the same old propaganda is continued year after year by the Labour party. What happened was this : A plan was discussed at a conference of Premiers, and it was agreed upon. Mr.
Curtin, as I have already said, strongly opposed the plan. But the Government of the day, rather than accept his advice to go to the people and ask for a mandate, brought into the Parliament a bill to give effect to the plan which had been agreed to at the conference of Premiers which included a reduction of -wages and pensions. I do not know on what date the bill was passed by the Parliament, but it was assented to on the 17th July, 1931. That bill was the Financial Emergency Bill. Its full title read, “ A bill for an act to make necessary provision for carrying out a plan agreed to by the Commonwealth and States for meeting the grave financial emergency existing in Australia, re-establishing financial stability and restoring industrial and general prosperity”. That was the object of the legislation which the Labour party introduced - legislation which it now repudiates. I cannot imagine any more damning evidence of the insincerity of the Government when it speaks as the honorable member for Cook spoke this afternoon. That Government remained in office as long as it could, until a group of people, known, I think, as the “ Lang planners “, turned it out of office. The Government appealed to the country. The result of that appeal was that ‘the Premiers plan, was accepted by .the people, and the Labour party was turned out of office. It remained out of office for years. The Lyons Government was returned three times. As the result of a later election another anti-Labour government assumed control. The whole point is that the Government of that day did not face the electors until driven to do so. It believed that its ulan was of such a nature that it would save everything, but the people did not believe it. I say that the present Government is in precisely the same position concerning this measure as the government of that time was concerning the Financial Emergency Bill.
I have said that there is ample evidence to show that there is great disquiet in the country, and no confidence in this measure. We have become accustomed to look at the results of Gallup polls as indicating public opinion. I know that they are not final evidence of what the people think, but generally they indicate public opinion fairly well. The last poll provided overwhelming evidence that the majority of the people of Australia are against this measure. In Tasmania, 79 per cent, of the people are against it; and even then some had not made up their minds. I ask the Government : Ls it honest to proceed ? I say that it is not honest to do so. We are told that this policy has been included in the platform of the Labour party for years. That is perfectly true.
– The honorable member subscribed to it.
– I have been waiting for that interjection, and so I shall tell the honorable member for Hunter (Mr. James) something about it later. I point out that the nationalization of banking, and a number of other things, were in the Labour party’s platform on the 12th March, 1936, when Mr. Curtin said -
If that be the case, my accusation is that the Constitution imposes upon this Parliament the responsibility for determining the monetary policy of this country. Here 1 point out that monetary policy is a distinctly different thing from bank management, or the management of treasury-bills, or decisions as to whether or not Brown shall get credit which is refused to Jones. I deny - and I hope that the country will regard my denial as emphatic - that the Labour party ever did, or does now, stand for .political interference with banking, as between bank and client. Further, I deny that this party has ever stood for interference with the Commonwealth Bank Board in the discharge of the functions of bank management. But when it comes to the rate of interest which governments shall pay for credit, based upon their own tax-collecting capacity, and to deciding whether or not credit shall be issued by its own national instrumentality, on conditions favorable to the people or favorable to speculators and investors, then I say, most definitely, that if the people of this country are to be sovereign, their sovereignty must express itself in the national management of the credit structure of the nation.
I could give other quotations, some of which would be from statements made in 1937 which, so far as I am aware, was the last occasion on which the Labour party made a considered pronouncement on its financial .policy to the electors. The Labour party published a booklet under the title Why Australia Should Vote Out the Lyons Government. After a great deal of information on various points, we come to this -
The last, of course, has been used as the excuse for this measure, combined with the adverse decision of the High Court in respect of the Banking Act passed in 1945. Therefore, when we are asked to believe that the existence in the Labour party’s platform of nationalization of banking for a great number of years is to be regarded as a mandate for this legislation, I can only say that if that argument be valid there has been a great deal of dishonesty practised during a long period.
Why is this bill introduced? If we analyse the speeches of honorable members opposite, the only reason is the failure of the Scullin Government during the depression years. Honorable members opposite have convinced themselves that that failure was due to the lack of absolute power over the banking machinery of Australia. I have shown that the Labour party had not the confidence of the people at that time, or for very many years afterwards; because, subsequently, the Lyons Government was endorsed at election after election. Nevertheless, this Government determined, the moment it got into office, to put into practice its nationalization plans, so that it would have these and other absolute controls ; and it began its campaign as soon as it could after the conclusion of the last war. It started with the 1944 general referendum, when it attempted to obtain certain powers that would have made possible the implementation of a very great deal of the Labour party’s platform which could not be put into operation by this Parliament earlier. But the people saw through the Govern ment’s proposals, particularly its proposal with respect to employment and unemployment. The’ Government has been pursuing this policy ever since, but by rather devious means. It has been enacting coercive legislation, of which this measure isbut a part. A long list of measures can be mentioned in this respect, including the Stevedoring Industry Act, the Commonwealth Conciliation and Arbitration Act and the Banking Act; andnow this measure is introduced. All of those measures have one point in common, namely, none makes provision for any appeal from any authority which is set up under it. There is no appeal from a decision of the Stevedoring Industry Commission; there is no appeal from a decision of any of the conciliation commissioners; and there is to be no appeal from a Federal Court of Claims, to be established under this measure. That is the pattern repeated over and over again. In this respect, I draw the attention of honorable members to a statement by Aldous Huxley, who cannot be said to be a member of reactionary forces in this, or any other country. Speaking of the safeguards of general freedom, he said -
In the past there was always an appeal from the Pope to the Emperor, from the barons to the king; but we are fast approaching the point where there will be no appeal from the man-made, soulless State.
That, of course, is becoming more and more obvious, and, as I have pointed out when discussing legislation in this House during recent years, that pattern has been not merely suggestedbut also stated in precise terms. It is the position into which this party has moved almost without awareness on the part of the great bulk of its supporters, and, perhaps, even on the part of some who implement its policies. Are the roots of this measure in the early ‘thirties, or in 1921? I was a member of the Labour party in 1921, when the objective of the party was altered. Honorable members opposite do not like any reference to 1921, because they know that there were certain statements made then of an official kind which will not bear repetition at this moment before even their own supporters. I was a member of the Labour party then, and I was present at the convention of the Tasmanian Labour party when we were asked to ratify the change of objective. In those days in Tasmania, the general objective was stated to be secure to every man the full return of his labour “. I remember the argument I used against the change of objective then proposed. I fought that proposal right from the beginning, and so also did my late husband. But, in 1921, the change of objective was made in face of my opposition. The argument I used was that we then had an objective which was a statement of a principle of justice. It seemed to me to be completely admirable, and it is one to which I still give allegiance. I still want to secure justice for every man according to his labour and deserts. I said, “ The change you wish to make is to substitute a statement of principle for a statement of the means you now regard as being necessary for obtaining your objective. By the time you are in a position to put your plan into operation it may well have the effect of defeating it “. That is precisely the position which has been reached today. They no longer wish to ensure justice for each man; they want to give him something at the direction of a government. But those who support that proposition will find that they have robbed those people whom they wish to serve. The greatest thing they fought for, namely, their rights as private citizens has been taken from them by legislation such as this.
What, then, was my position in those days when I had voted against the proposal to alter the objective of the Labour party, and fought against the new revolutionary doctrine which it accepted as its new objective? My position then was precisely that in which many honorable members opposite now find themselves; a position they are trying desperately to maintain. They do not believe in socialization; but they thought that objective was something remote from ordinary practical politics. Thousands of supporters of the Labour party will find themselves in the position in which I found myself, but which I long since abandoned. No one now can for a moment believe that the stated objective has no relation to practical politics. The stated objective is the real objective. That is now abundantly clear. Does any honorable member opposite deny that this is the first step towards putting into operation the whole objective? None of them answers. He dares not deny that he must fight to the very end for the objective of the party; and its stated objective is socialization. The honorable member for Cook says that there is no such thing as Australian socialism! There will be very many more outside this House who will see plainly, as many honorable members opposite should see, and probably will, that they” cannot maintain their present position. . The whole speech of the Minister for Transport on Thursday evening suggested that this was the last step; but honorable members opposite cannot possibly maintain that position as they very well know. I suggest that this particular item in the stated objective has the greatest possible significance, because it is the key to all of them and will afford means by which the’ others can be achieved.
Sitting suspended from 6 to 8 p.m.
– Any act of government is of necessity in some degree coercive. Some num’ber of persons, great or small, must through its operation act in ways they would otherwise avoid. The necessity to ensure justice in society, therefore, is the only sanction upon which an act of a democratic government can be based. There is no such necessity for this measure. Every possible power that social necessity could demand, except, the final power to direct the placing of banking business, whether of private citizens1 or public institutions, already resides with the Government by virtue of the Banking Act 1945. Time after time, the Prime Minister has said, either in connexion with this measure or another, “ There is no guarantee that the power will be used even if it is there “. That is perfectly true, but the whole history of recent times is such that we dare not trust to the easy optimism of that view. No man can answer for his successor - indeed, not always for himself. Let me, in the words of Boris Sokoloff, say this to the Prime Minister, with full and complete respect for his high office, and a profound appreciation of its responsibility -
It is a difficult tiling to be the leader of a democracy - far harder than being the leader of a revolution or a dictator, for there is no greater temptation for a man who has power than to abuse this power - to exercise it wilfully over a multitude.
The more a man is convinced of the
Tightness of his intent, of his will to do well, the greater is the temptation. However much he may believe himself justified, however much he may persuade himself that his more intimate knowledge of the nation’s problems gives him the better judgment, no leader of a democracy has a right to execute any plan as revolutionary and far-reaching in its effects as this without the clearest evidence that such is the people’s will.
To be a statesman requires more than a memory for events. It needs a sense of history that relates each incident to its background, and to its place in time and the stream of human progress. The final test of statesmanship is to be found, not in the execution of plans formed in the past to deal with the problems of the past, but in the clear-sighted recognition of the needs and dangers of the present, and their threat to the future; and in taking measures against them.
– I rise to speak on this measure with a sense of deep elation and high enthusiasm. Since the decision to bring all banking services, except State banking, under the control of the Commonwealth Bank was first announced, a deal of criticism has been directed at the Government. That criticism was crystallized in the speech of the right honorable the Leader of the Opposition (Mr. Menzies) last Thursday, and in the speeches of other Opposition members who have spoken since. Criticism has centred in matters of principle and details of method. I propose to use part of the time at my disposal answering some of the points made in criticism of the bill, and while doing so to draw attention to some highly satisfactory features of it. The remainder of my time I intend to use to substantiate the main case for this legislation.
The Leader of the Opposition painted a black picture of the future of Australia if this legislation is operated. He spoke of servility and slavery. If there is any truth in what he said, this bleak prospect must be reflected in the outlook of business people. Who would want to invest in a country of the kind he prophesied Australia would become when this measure has been implemented ? A country which shows even the slightest tendency to totalitarianism or servility is not a. country in which commercial interests would seek to expand existing business or promote new enterprises. If the Leader of the Opposition would deny that,he would, in fact, be saying that commercial interests, evidence of whose confidence in the future of this country I shall presently produce, prefer high returns in what he has said will be a servile state, to lower returns elsewhere. But what are the facts?
Never before in the history of the Commonwealth has there been such overwhelming evidence of confidence in the future of this country, and this evidence has continued to accumulate during the months that have elapsed since the announcement of this legislation was made in August last. Two very large overseas firms - Thos. Owen and Company and Imperial Chemical Industries - decided in September to invest very large sums of money in new industries here. A representative of one of these companies, it is true, violently opposed this legislation in public, but the following week he was in my office discussing with me his plans for expansion. In the domestic field the number of firms seeking assistance from the Industrial Finance Department of the Commonwealth Bank during the last three months has markedly increased. Advances by this new department of the bank now exceed £6,000,000.
Now turn to the financial pages of the press of Australia. I have here a copy of the Melbourne Herald of last Wednesday night. Let me quote some of the head lines - and any other newspaper, of any other date, would have served as well - “ Cyclone to expand in three States “, “ Paper company’s profit jumps “, “ Record year for K.M. Steel Limited “, “ H.B. Smith profits this year £48,000, last year £35,000”, “Metal shares rise “, “ Neon’s profit spurts “- and in small print is the usual paragraph headed - “ Industrial share indices for United Kingdom and Australia,” -
London, market a month ago 115, latest 111, a fall of 4 points.
Melbourne market a month ago 136, latest 141, a rise of 5 points.
Is there any evidence that commercial prospects are bad? On the contrary all evidence goes to prove that the right honorable gentleman’s statements about impending economic slavery are utterly mendacious and false. Later on, the right honorable gentleman said, and I quote his exact words -
The only two countries in which the banks have been nationalized are Communist Russia a,nd Fascist Argentina.
That statement is also false. France has a nationalized banking system, but it is not the only other country with such a system. France’s decision to nationalize the banks was no doubt related to the fact that its post-victory government found that the private bankers had been the quisling collaborators with Hitler, proof of which in the form of an official cable I gave to the House in a recent debate.
The Leader of the Opposition has accused us of following in the footsteps of Hitler. I wonder whether it is not really the Opposition and its friends who are following the advice and repeating the tactics of Hitler. Hitler affirmed that the bigger the lie the more people were likely to believe it, and that a big enough lie had only to be repeated often enough and loud enough to be implicitly believed by the people. This is precisely the course Opposition members are pursuing when they keep reiterating charges which I have proved to be completely false.
Another serious charge levelled against the Government for introducing this bill to bring the trading banks under public ownership and control is that the measure is a threat to the liberty of the people of Australia. To say, in all seriousness, that the Government is threatening the liberties of the people, as the Leader of the Opposition ha3 done, is not an accusation which can be taken lightly. I shall examine it carefully, therefore, and endeavour to expose this bogy which has been paraded before the people of this country so assiduously in recent weeks by the honorable members opposite and the financial interests which support them. The truth is that those in charge of the banking system will, in future, be far more effectively accountable to the people for what they do than ever before. At present, many of their powers are exercised in secret conclave, in the exotic board rooms of the trading banks, by the rich representatives of powerful financial, commercial and industrial interests, who, in practice, are responsible only to themselves. They are, as every one knows, closely associated with the Opposition parties, which derive their funds from them. It is incredible that any thinking man should really believe that the transfer of the control of the trading banks from a few dozen rich and aged bank directors, responsible in theory to their shareholders, but in practice only to themselves, to a reputable public institution of nearly 40 years’ standing, owned by the people of Australia, is a threat to liberty. Such a suggestion is a travesty of the word. Liberty is the most precious, word in the English language, and ;t should not be bandied lightly around the political arena and made the small change of party politics. Honorable members opposite seem to specialize in debasing the meaning of words. One party opposite has already polluted the ‘ term “ liberal “. At a time when we have jus 1 averted what was really a threat to our liberty, when the international horizon is still clouded with insecurity, and the world is torn by the sinister forces of darkness, the use of the word “ liberty “ in this context is a mockery and an insult to the intelligence of the people. Liberty is the ancient rallying cry of our people. It is dishonest to exploit it. Its appeal will not be enhanced by irresponsible politicians trying to stampede the country with cries of “ Wolf ! Wolf ! “ The word “ liberty “, when it falls from the lips of the Leader of the Opposition, and from his New Guard deputy, the honorable member for Wentworth (Mr. Harrison), has a very “phoney” ring. This wild talk by the Opposition about, liberty is, in reality, nothing but an attempt to befog the people by submerging objective thought in a torrent of poisonous propaganda. It aims to arouse too much emotional prejudice for the case to be examined closely on its merit?. Thi constant harping on liberty is merely a device to obscure the bankruptcy of the Opposition’s case. The only liberty which is being destroyed is the liberty of small- privileged groups to dictate in secrecy the financial destinies of thousands of people. The liberty which is being created is that of the people to control their economic destinies.
Another charge is that the Government has no mandate from the people for this legislation. Nationalization of banking has been part of the official policy of the Australian Labour party for a generation. This fact is very well known and was well known when the people of this country returned Labour to power at the last elections. There has never been anysecret about it. By returning Labour, the people endorsed the banking legislation of 1945, which aimed at bringing the banking system under full public control. The recent decision of the High Court, however, has thrown that legislation into the melting pot. Although the people endorsed it at the 1946 elections, its legality is doubtful. Although every one thought that the banking system had been brought under public control, we suddenly find that this is very doubtful. I confess that T was unable to follow the argument of the Leader of the Opposition that the 1945 legislation is not in jeopardy. The original statement of claim in the recent High Court case, in which the decision went against the Government on section 48 of the Banking Act contained a challenge to sections 18 to 22, which are the key sections in that legislation.
– It did not..
– Order ! The right honorable gentleman must keep silent.
– It did. The statement I made is true.
– It did not.
– Order !
– I have seen the statement of claim. The Leader of the Opposition may say that I have not used the correct verbiage to describe the document. Be that as it may, I have seen the document and what I have said is true. It is true that this part of the claim was not gone on with, but four facts confirm me in the belief that the banks are only biding their time. The first is that the banks have written in terms which suggest they will presently test its validity; the Treasurer (Mr. Chifley) quoted one of the letters in his second-reading speech. The second is the sinister fact that the solicitors to the associated banks are also the solicitors to the Melbourne City Council, which defeated the Government on section 4S. The third is that when the 1945 legislation was before the House, the Leader of the Opposition pledged himself and his party to- undo our work if returned to power. The fourth is a statementby Mr. Kemp, of the Institute of” Public Affairs, one of the highsounding organizations working for the.defeat of this legislation. Mr. Kemp was quoted in the Melbourne Herald as saying -
The Government could have called the trading banks into conference in an endeavour to obtain a binding undertaking that in no circumstances would the powers of the .Government under the 1045 Banking Act be challenged by the banks.
Just imagine the impudence of that suggestion that a government with sovereign powers under the Constitution to legislate in all matters relating to banking should go cap in hand to the private trading banks and ask them to give an undertaking that in no circumstances would they challenge the validity of the Banking Act of 1945. I am therefore fortified in my belief that if this legislation were not being brought forward, the private trading banks would presently be back in the saddle as they were between 1924 and 1941.
The Opposition also criticized the provisions of clause 23 of the bill relating of the taxation of moneys received by shareholders as a result of the acquisition of the private trading banks. I see nothing wrong with the clause. Every Australian-owned bank will be acquired either by agreement with the bank to sell for a lump sum to the Commonwealth Bank, or by compulsory acquisition of shares by the Commonwealth Bank. When a shareholder, other than a dealer, sells shares at a profit, the profit is treated as a capital accretion and is not subject to taxation. The shareholders in a bank acquired by the method of compulsory acquisition of shares by the Commonwealth Bank will, therefore, not pay taxes on the money received by them. As the taxation laws stand, shareholders in an Australian-owned private bank acquired by agreement would have to pay taxes on the money received by them. All that clause 23 does is to place the shareholders of a bank acquired by agreement in approximately the same position as shareholders of banks whose shares are acquired compulsorily.’ No reasonable person can take exception to that.
The next charge that I shall deal with is that this legislation will put the Commonwealth Bank in a position to discriminate between persons seeking financial accommodation. The short answer to that is that the private trading banks have always exercised the powers of an oligopoly and have always discriminated between would-be borrowers. The Leader of the Opposition read from the report of the Royal Commission on Monetary and Banking Systems, which sat in 1936, some carefully culled extracts about competition between the private trading hanks. It is a sign of the weakness of his case that he studiously avoided mentioning the following sentence from paragraph 568 :-
There is competition between the banks of the kind to be expected from semi-monopolistic institutions.
The difference between an oligopoly, a semi-monopoly and a monopoly I leave the people to work out for themselves. The point I wish to make is that while all private’ monopolies or semi-monopolies are bad, public utilities answerable to the people are not necessarily so. Telephone, electricity and water supplies can be operated successfully only if controlled by a public authority. Incidentally, would any one suggest that in a Labour-controlled State those citizens who did not support Labour would be discriminated against by being denied an electricity supply on terms as favorable as those offered to Labour supporters? The idea is fantastic, and equally fantastic is the notion that the Commonwealth Bank, which is respon- sible through Parliament to the people, will discriminate against individuals.
There is a problem here which requires careful analysis. In an expanding economy, increasing population and new techniques normally require that additional supplies of new money be created from time to time to enable the additional quantity of goods and services to be exchanged at stable price levels. Let us assume that in the next twelve months the amount so required will be £10,000,000. In such circumstances there are always far more people who think they can use the additional resources than there are resources available for use. In the aggregate, demands for advances to use the resources may total, let us say, £20,000,000. To avoid inflation, there must be, somewhere in the banking system, an authority exercising careful selection with a view to limiting total advances to £10,000,000. But the private banks have gone beyond careful selection of those to whom advances should be made, and have exercised wrongful discrimination against many people. Here is a concrete example to illustrate the method by which the private banks can be proved guilty of discrimination. I quote from the Australasian Manufacturer - a non-Labour journal - of December, 1924:-
Last week, Minister Pratten, speaking at Geelong, Victoria, told a startling tale that bears out the indictment of our banks in last week’s issue.
Coming from the Commonwealth Minister for Customs, the authenticity must be accepted and the situation discussed calls for drastic action on the part of the Australian Government.
Mr. Pratten told how a man wanted an advance from his banks to produce his winter stock of blankets. The bank refused it and the manufacturer asked how he was to retain his customers.
The bank promptly offered to finance him to buy in London, but refused to do so to enable him to make or purchase in Australia.
As the Minister said, “ There is something very wrong when a- thing like that can happen “.
Other textile manufacturers were obtaining accommodation, therefore this one was being discriminated against. Because the bank would make a higher profit if its London funds were used to import blankets, pressure was put on the manufacturer to accept a decision which would have thrown a number of textile workers out of work. “Interlocking directorates “ is the term used to describe the method by which big business firms retain monopolistic advantages through directorships in related enterprises. Every big industry is represented on the boards of directors of the private trading banks. This provides the ideal set-up for discrimination against would-be competitors. Take the case of Mr. Jones, who requires some financial help to start a grocery business in a Sydney suburb, and goes to the Bank of New South Wales to get it. When he is refused assistance he will probably be unaware that Mr. Mcllrath, of the firm which runs a chain of grocery stores in Sydney, is a director of the Bank of New South Wales. Or take the case of Mr. Smith, who owns a property on which there are valuable. mineral deposits. Does he imagine that, if their exploitation would interfere with the profits of the Broken Hill Proprietary Company Limited, the banks, on whose directorates that company is represented, would give him the financial assistance he deserves? The whole structure of the boards of private trading banks makes the practice of discrimination inevitable. This constitutes one of the strongest reasons why this legislation should be supported. Whatever may be said about the Commonwealth Bank, it cannot be claimed that its officers are in any way interested in whether applicants for advances will, if successful, affect the profits of big business monopolies.
It is to be noted that the Treasurer has announced the intention of the Government to set up regional appeal authorities as a safeguard against the refusal of advances on unreasonable grounds to any applicant, and, indeed, as a safeguard against any discrimination at all by officers of the Commonwealth Bank. That is a safeguard that has never been provided under the private -banking system.
I propose to say a word or two about, the criticism of the Leader of the Australian Country party (Mr. Fadden) that the method of purchase through the Commonwealth Bank is inflationary. The right honorable gentleman, as I have frequently stated in this House, himself sponsored a scheme for financing our war effort much more inflationary in character than this-. The Treasurer has for six years managed the financial affairs of this country so efficiently that the stability of our economy is the envy of the world. The public can nest assured that such an efficient Treasurer has not approved of this method without, making certain that no harm will come of it. After all, the Commonwealth Bank started with nothing. In les9 than 40 years it has earned profits totalling £64,000,000. During the war it advanced £400,000,000 so that primary producers should be paid for their wheat and other produce. In the light of that record the provision of the £100,000,000 required to purchase the private banks does not seem too big a task for it.
The bill now before the House will give effect to a principle that I have long advocated, the principle that the supply of all forms of money necessary for the economic life of the community should be wholly the responsibility of the Commonwealth Bank, answerable through the Parliament to the people. At the risk of covering matters which some may think are so elementary as to require no explanation, I propose to outline the arguments by which, long ago, I established this principle to my own satisfaction.
– I was never a “Douglas Creditite”. The prime function of economic activity is to have produced the maximum quantity of goods and services which our’ resources are capable of producing. In the attainment of this objective the volume of money is as crucial a factor as is the supply of water in a modern community. Just as a shortage of water will restrict growth so an insufficient supply of money will prevent that full employment of resources without which maximum production cannot be effected. Just as superfluous water will retard growth so a too plentiful supply of money will generate forces inimical to maximum production. Concrete evidence of the truth of these two maxims is available to every one. In the years between the two world wars an insufficient supply of money condemned thousands to almost perpetual unemployment with consequent loss of production, causing an extraordinary amount of misery, and indeed, reducing a great many people in this country almost to the point of starvation; but as soon as the Labour Government took office and took steps to ensure the availability of a sufficiency of money, maximum production automatically followed. On the other hand, the danger of inflation caused by a too plentiful supply of money is too patent to require exemplification. The power to control the volume of money in the community is therefore a power the exercise of which can cause untold misery and unhappiness to the people. It was an appreciation of this which moved Sir Reginald McKenna, chairman of one of the biggest banks in the world and an ex-Chancellor of the Exchequer in a non-Labour Govern.ment in Great Britain, to say publicly -
Those who control the credit of a nation direct the policy of governments and hold in the hollow of their hands the destiny of the people.
Another big banker, a director of one of the “big five” London banks, put it somewhat differently. He said -
The banker is the final arbiter of the world’s economy.
The statement of still another, Sir Basil Blackett, adviser to the then Indian Government on matters of finance, I put to my listeners to-night in rhetorical form -
Isn’t it strange to find modern States accepting as axiomatic a limitation of their sovereignty in the sphere of money so far reaching in its effects on the daily lives of their citizens?
The method by which private banking institutions increased or decreased the volume of money is now too well known to require explanation. I link certain evidence on this point with the letter written by the then Chairman of the Commonwealth Bank, Sir Robert Gibson, to the Treasurer of the day, in the depth of the depression. I re-quote that letter -
Subject to adequate and equitable reductions in all wages, salaries, and allowances, pensions, social benefits of all kinds,- including war pensions - interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the governments of Australia in sustaining industry and rostering employment.
The government of the day was left no option but to submit. How did the trading banks co-operate? The answer is to be found in the Bank of New South “Wales circular of June, 1931. I quote -
Not being able to borrow existing money, the banks come to the Government’s aid by creating new money.
This makes it crystal clear that the government of that day was forced to reduce wages, pensions and other social services because the banks, not the Government, had the power to create new money.
Having shown how vital to the wellbeing of the community is the volume of money circulating, the question I now ask is this: Should private institutions operating for profit have the power to create and destroy credit, which is a form of money? Surely, the only answer a democrat can give is an emphatic “ No “. If one answers “ Yes “, what one is saying is that a few directors of companies concerned mainly with rates of profit, and not elected by the people, are able to set at naught the plans of governments elected by the people. That is the very antithesis of democracy. Since I have a firm conviction that the great majority of the electors of this country are democrats at heart, I am certain that this measure will have their enthusiastic support. Those who are opposed to this legislation say it is undemocratic. Democracy has been well defined as government of the people, by the people, for the people. The directors of private trading banks, not of the people, not elected by the people, not for the people, but for private gain, wield a power over supplies of money which overrides the power of this democratically elected Parliament. I say with all the emphasis at my command that true democracy cannot flower in this country until the private trading banks are deprived of the power they have exercised, and would again exercise if this legislation is not passed.
I have been directing my attention to substantiating the principle that the regulation of the volume of money is so all-important to the people that it should be controlled by the people through the Commonwealth Bank, which is answerable to the people’s elected representatives in this Parliament. Every opponent of this bill expressed satisfaction with the policy of the private trading banks between 1924 and 1941. Let us have a look at what happened during those years. In 1924 the Bruce-Page Government emasculated the Commonwealth Bank by putting it under the control of a board, whose personnel were the willing tools of the private trading banks. Between them, the board and the private trading banks bungled the business of regulating supplies of money. To those who had to suffer untold hardships during many of those years, the introduction of this legislation, which will for ever prevent the private trading banks from mismanaging the nation’s affairs, will be hailed with acclamation. And bungle and mismanage them they certainly did ! If the purpose of monetary policy is to ensure maximum production through full employment, hundreds of thousands who were denied the opportunity to engage in productive work during the ‘thirties will affirm that bungling and mismanagement are mild terms to apply. Criminal ineptitude would be closer to the mark. And those who now oppose this measure never lifted a finger in defence of the rights of the masses of the people. There is no need to accept mv word that monetary policy under the direction of the private trading banks was inept. Chapter VII. of the report of the 1936 Royal Commission on Monetary and Banking Systems makes this abundantly clear.
Permit me to quote certain passages from that report, always bearing in mind that the Commonwealth Bank of that time, through the board appointed by the Bruce-Page Government, was the tool of the private trading banks. I quote from paragraph 540 -
The monetary and banking system must share some responsibility for the extent of the depression. The development of boom conditions could have been checked and the depth of the depression could have been lessened. Monetary ‘ measures alone did not produce recovery’, but their effects would have been greater had they been taken earlier.
And from paragraph 543 -
In our opinion, the depression would have been lightened, and some of its worst effect avoided, if certain measures had been taken earlier.
And from paragraph ‘547 -
In our opinion, it would have been better had the expansion in hank credit come earlier.
And from paragraph 565 -
Along with other parts of the system, the trading banks must bear sonic responsibility for the extent of the depression.
And from paragraph 567 -
At the end of January, 1930, the trading banks, along with the Commonwealth ‘ Bank, raised the rates of interest. In our opinion, this increase was inappropriate.
Speaking of this, it is noteworthy that the fall in interest rates since this Labour Government took control from the private trading banks has saved the people of Australia £20,000,000 in interest. Could there be a more damning indictment of private banking than is contained in those extracts from the report of a royal commission whose members, mark you, were predominantly anti-La’bour in character?
Unstable economic conditions overseas underline the need for the enactment of this legislation. Yesterday over the air it was announced that President Truman was calling a special meeting of the United States Congress to check inflationary tendencies and to expedite aid to Europe. While the chairman of the National Bank was saying to the people of Australia, “ There is no fear of a depression “, President Truman used these words, “ Inaction will lead to depression “. Inflationary conditions in the United States of America can the more easily result in the beginning of another depression, because many countries have been forced to limit the purchase of goods from the United States of America on account of the shortage of dollars. There is every justification for this bill. More than that, the Government would be recreant to the trust imposed in it by the electors if it did not, within the Constitution, forge the most powerful weapon possible to combat the threat of being invaded by another depression. This legislation gives us that weapon. It is being forged in a way which is fair and just to every one. The staffs of the private trading banks will be transferred under conditions better than any they have ever enjoyed. The shareholders will receive fair and just compensation. The public will be adequately protected. I predict that within eighteen months the Commonwealth Bank, transacting then, as it will be, the ‘banking business of all the people, and exercising with impartiality the functions which I have been discussing, will be giving such service to the people of Australia as will make people wonder what all the tumult was about. Full employment and rising standards of living will then be guaranteed to an extent which would be impossible while the trading banks remained in existence. I have never had more pleasure in commending a measure to the House than I have on this occasion.
Motion (by Mr. McEwen) proposed -
That so much of the Standing Orders be suspended as would prevent the Leader of the Australian Country party (Mr. Fadden) from concluding his speech without interruption.
– There being an absolute majority of the whole number of members of the House present, and no dissentient voice, I declare the question resolved in the affirmative.
– I do not propose, at this juncture, to endeavour to combat the futile and misleading statements that have been made by the Minister for Post-war Reconstruction (Mr. Dedman). I do not intend to traverse the period from 1924 to 1931, upon which the honorable gentleman laid such emphasis, claiming that the events of that period constituted a foundational reason for the introduction of this bill, because everything that happened then in relation to banking was adequately dealt with to the satisfaction of the nation by a royal commission, which conducted a very searching investigation for two years and submitted its report in 1937. That commission decided by a majority - and its decision was accepted by the people - that the best system of banking in the interests of Australia was assuredly one which involved co-operation between the trading banks and the central bank as it existed then, but in respect of which certain recommendations were made.
This bill marks a turning point in Australian history. It is, in fact, the obituary, notice of the trading banks. Fourteen strong, healthy bodies corporate have been condemned to mass execution by the Treasurer (Mr. Chifley) without benefit of appeal to a jury of their peers - the electors of Australia. But it is not only the obituary notice of the trading banks; it also sounds the death-knell of the freedom of the Australian community. Consequently, I speak in this House having behind me, not merely the support of the Australian Country party and the Liberal party, but also the support of a vast concourse of people whose opposition to this measure has been clearly and indignantly demonstrated during the last few weeks. I speak, primarily, not on behalf of the Australian Country party or of the Opposition generally, but on behalf of a great majority of the electors of all sections of the community. I remind honorable members that we are in Parliament for the purpose of giving expression to the public will. It would seem, however, that the astounding uprising of feeling in every part of the Commonwealth against this legislation is of no concern to the Prime Minister or to those who sit behind him in this House. It is nothing to the Government that hundreds of thousands of citizens have protested against this legislation. It is nothing to the” Government that thousands upon thousands of people throughout the Commonwealth have resolved that they are opposed to its proposals. It is nothing to the Government that the thousands of bank officers, who derive their livelihood from the ‘banks which the Government seeks to destroy, have protested against its intentions.
When the history of the present time is written years hence, much will be said of the bitter opposition which has been shown to this measure outside the House, not only hy those directly concerned, but also by all sections of the community, because every section is at least indirectly concerned. The reason is that this bill means the control of the physical as well as the financial resources of each Australian citizen. That being so, it means control and regimentation of, and power over all that we have and all that we are. If the Prime Minister doubts the strength of public revulsion, let him take notice of the results of the public opinion polls. They have shown remarkable consistency in forecasting election and referendum results in recent years. On this occasion, two different organizations took polls which show such a striking similarity that it cannot be swept aside as a coincidence. One organization’s poll showed 64i per cent, and the other poll 63 per cent, against nationalizing the banks. The small difference consisted of people who were undecided.
The similarity goes even farther. Results for each Slate are so nearly the same that both organizations can class the States in the same order; and in every State, there is a substantial majority against nationalization. There is also another interesting aspect. One would expect that the majority against nationalization would be largely confined to trading bank customers. This is not so. One of the two organizations classifies results according to occupation, and naturally gets the largest majorities - 86 per cent. - among professionals, executives and farm owners. But, the next classification - clerks and shop-hands, the majority of whom do not deal with the trading banks - shows a vote of 71 per cent, against nationalization, whilst skilled workers were 56 per cent., semiskilled 51 per cent., and unskilled 45’ per cent, against the proposal. Thus, only among unskilled workers is there less than a 50 per cent, vote against nationalization, but that does not mean a majority for it. On the contrary, the poll showed only 35 per cent, in favour, the rest being undecided. Therefore, even the workers have deserted the Australian Labour party on this issue, and who can blame them? They know, as well as the Government knows, that this is a step towards industrial conscription. It could not be otherwise, because it is inseparable from and a component part of th.e nationalization scheme. The nationalization of banking, L ernphasize, will mean the control of the physical and financial resources of each person in Australia. The Australian worker does not like industrial conscription any more than the German worker or the Russian likes it. He hates being “ pushed around “, and he, fortunately, still subscribes to the plank in the Labour platform advocating the cultivation of an Australian sentiment, which the Labour party saw fit to abandon in favour of the nationalization plank 25 years ago.
The people have revolted against this legislation because they see in it the beginning of the end of personal freedom, private property and representative government. Ample justification for this assumption lies in the vital part nationalization of banking assumes in Labour’s platform and policy; accordingly this bill must be regarded primarily as a revolutionary means to a terrifying end. It concerns the very lives of the Australian people; it sounds the deathknell of the free Australian community, and of its way of life.
The Prime Minister said that he would not heed public demands for a referendum because the Government had the power and the mandate to pass this infamous measure. He undoubtedly has the power, and even supposing that, without question, the people at the last elections were aware of the Government’s intentions - of course they were not - the Government would still not be absolved from the responsibility of ascertaining the people’s will on such a revolutionary move. But the public opinion polls which have been taken since the elections and arguments advanced in this House show quite conclusively the Government cannot now claim to have the support of the people. The Government’s reluctance to consult the will of the electors now is, of course, definitely related to its silence on its final objective whenever an election approaches.
Why are members of the Labour party so anxious to put into practice its socialization platform, when it means in this instance, a flagrant breach of another part of the Labour platform? They know that in clause 3 (d) of Labour’s platform they subscribe to the initiative, referendum and recall. Notwithstanding public clamour, they are prepared to ignore this in their indecent haste to rush through this audacious piece of legislation. If Labour members have any regard for the principles of democracy, they will, even at this late stage, respect the people’s will by taking a referendum on this revolutionary and far-reaching proposal. ,So inexplicable and astounding is the Government’s attitude that it cannot be explained by examining the bill as a separate piece of legislation. It must be viewed against the background of Labour’s history since the time the Communists began to superimpose their ideas on the platform of the Australian Labour party.
I shall so examine it. The antidemocratic and un-British policy enunciated in this legislation was born 26 years ago when the Labour party adopted, as its single final objective, the socialization of industry, production, distribution and exchange. A year earlier, the Communist party was formed. The Labour party scrapped its traditional policy and made a decided move to the “ left “. The next move was made at a conference of trade unions, held in June, 1921, when, largely under Communist pressure, a plan was adopted which included the nationalization of the banks and certain industries and also the setting up of a supreme economic council which, in the words of the right honorable member for Yarra (Mr. Scullin), was “really to take the place of our Parliament of to-day “.
In October of the same year, the right honorable member for Yarra expressed similar views at the federal Australian Labour party conference, adding that Labour’s objective rendered it necessary to have a supreme economic council. This conference adopted the socialization objective and bank nationalization as the essentia] step towards it. Thus, political Labour became a socialist party taking its orders from the industrial wing of the Labour movement. In 1922, and again in 1925, when Labour went to the polls, it was defeated and socialization was put into cold storage until 1930, when the Scullin Government came into power. By 1931, Communists had increased their hold on the Labour movement. In New South “Wales, a socialization committee was established by the Australian Labour party central executive. A development occurred in that year which has a definite bearing upon this legislation and explains the eagerness of government members to push through this socialist measure. The Easter conference of the Australian Labour party framed the socialization pledge, which all applicants for endorsement as Labour candidates must sign. Will any government member dare to deny that he has pledged himself -
To actively support and advocate at all times the -party’s objective - the socialization of industry, production, distribution and exchange?
Will government supporters deny that this pledge carries the obligation to support this legislation to nationalize the banks, even though the people are against it? Will they deny that if they oppose this measure, they will lose the endorsement of their Labour branches ? Government members are not free to vote on this bill, having regard to the wishes of the people and the public interest, but, because of their pledge, they must view it solely as an instrument for furthering socialist policy.
Bank nationalization and the socialization objective have come under public notice only in the last two or three years when Labour’s position in the Commonwealth and several of the States seemed secure. In earlier years, the campaign was kept going largely by Communists, who had a powerful influence over the trade union movement. The Australian Labour party’s defeat in 1931 and 1932 drove the campaign underground. There, it was kept going largely by Communists, who had infiltrated into powerful trades unions.
Dr. Lloyd Ross, now director of Public Relations in the Department of Post-war Reconstruction, was prominent in spreading the doctrine of socialization. At the same time, he was preaching the doctrine of communism. This is ‘ quite obvious from statements which he made in his capacity as Newcastle District Tutorial Lecturer of the University of Sydney, at the Australian Institute of Political Science Summer School, held in 1934. He stated -
The only planning that means anything is socialist planning - in Australia, as anywhere else.
He further stated -
A planned State in Australia would, and must, resemble the general picture of Soviet Russia.
He also made the statement -
In Australia, the first necessary and practical step would be to make the Commonwealth Bank an instrument for carrying out the financial policy of the government of the day; the second, to set up an investment board to control investment; and the third, to bring private banks under State control.
Dr. Lloyd Ross said also that a socialized banking policy would have to be followed quickly by socialization of the key industries. Although Dr. Lloyd Ross left the
Communist party in 1940, he retained his socialistic views and assisted Labour in formulating socialist plans.
– Order ! I find it difficult to connect the right honorable gentleman’s remarks concerning socialization with the Banking Bill.
Mr. Gullett interjecting,
– Order ! The Chair will decide the matter without the assistance of the honorable member for Henty (Mr. Gullett). For the last ten minutes die right honorable gentleman has been addressing himself to anything but the Banking Bill.
Mi’. FADDEN- Might 1 suggest, sir, that my remarks are related because-
– If I allow the members of the Opposition the latitude which the right honorable gentleman seeks, I must allow similar latitude to supporters of the Government.
– The Prime Minister devoted an entire page of his printed speech to the platform of the Australian Labour party. Surely I am entitled to link the policy of that party with the present bill by pointing to the development of the socialistic programme of the Australian Labour party!
– It is all a matter of .proportion. Although the right honorable gentleman has spoken for fifteen minutes, his remarks concerning the Banking Bill have occupied only about two minutes. I do not propose to allow him to go to all sorts of. lengths.
– I must bow to your ruling, sir.
– It is not a question of accepting my ruling; it is a matter of common fairness. For thirteen of the last fifteen minutes the right honorable gentleman has been addressing himself to a subject which has nothing to do with the bill.
– But the Prime Minister devoted at least one page - of his printed speech to the policy of his party. Am I not entitled to develop my argument by traversing the more recent history of the party’s policy in regard to socialization ?
– If one page of the Prime Minister’s speech was devoted to the platform of the Australian Labour party it would not take him more than four .minutes at most to read it.
– In December, 1943,. the triennial conference of the Australian Labour party passed a series of resolutions to establish complete control of banking. These included legislative action to secure control of the banking: system by the Commonwealth Bank, and stipulated that the Commonwealth Bank should be subservient to the government.. In all, there were nine proposals. Mr.. W. C. Taylor, who was appointed to theCommonwealth Bank Board by theLabour Government, was one who sponsored the resolutions. In doing so, he stated that the Prime Minister (Mr.. Chifley), who was then Treasurer, concurred with the committee’s views. ‘ Incidentally, those proposals were, in the main, incorporated in the Commonwealth Bank Act of 1945. Later the conferenceadopted a resolution in the followingterms : - “ That a nation-wide campaign for socialism be started immediately and that the implementation of such campaign be left in the hands of the Federal’ Executive “. The Australian Labour party then proceeded to develop its plansto introduce comprehensive socialization.. The campaign associated with the- “ fourteen powers “ referendum, which included the introduction of industrial conscription, was launched. The real intention was to foist socialization upon the Australian people.
– Order! The fourteen points have nothing to do with thebill.
– If I persevere with, the history of the Australian Labourparty’s socialization plan, I must deal with the place and time of this important decision - -
– But the Banking Bill will be still-born if the right honorable gentleman is not going to deal’ with it.
– I suggest, sir, that the Banking Bill is part of a tenyearplan, and that that plan had its inception in 1934. When the Banking Act of 1945- was before Parliament the Government went to great lengths to combat suggestions that nationalization was. intended.
The present bill is part and parcel of the plan with which the Australian Labour party has persevered for over ten years. That plan was unknown to the rank and file of the party, and it has been nurtured and advanced by a small junta founded in Canberra in November, 1945, after the royal assent to the Banking Act 1945 was announced. Plans were formulated then that if’ the Labour Government was returned to -power at the succeeding elections it would embark on a full-blooded scheme of socialization. The first necessity of any such scheme was to acquire a monopoly of the control of money. That is the background of the presentation of this bill. I emphasize thai nationalization of banking is regarded by members of the party opposite as the forerunner to the implementation of a complete scheme of socialization.
I turn now to an examination of some of the principal arguments that can be advanced against specific points of the bill, and to the Prime Minister’s speech in support of it. The first item upon which he apparently bases his whole case, . relates to what are known as “special accounts “ in central bank control. He stated that he fears that the sections of the Banking Act 1945 which relate to special accounts might be declared invalid. He maintains that, as a result of the High Court judgment, the “ special accounts “ sections of that act may be challenged on constitutional grounds. Have the trading banks given any indication that they intend to challenge the validity of those sections? The letter received by the Commonwealth Bank from a trading bank, which the Prime Minister read, was simply part of the normal procedure adopted by the bank to ensure that its compliance was without prejudice to its legal rights. That is a flimsy excuse to justify the introduction of such a farreach.ing and revolutionary measure as the present one, and the sensible and discerning people of Australia will not accept it. If the trading banks successfully challenge the sections of the Banking Act 1945, to which I have referred, it would show only that, constitutionally, the banks were right and the Government was wrong. Surely it is not improper for an organization or a person to insist that the Government should act within the Constitution. If the Government really believes that the “ special accounts “ section of the act are of doubtful validity, surely its attempts to introduce nationalization of banking are of even more doubtful validity. If, the Government ‘ doubts its constitutional position regarding the “ special accounts “ provision of the Banking Act 1945 the only honest course for it to adopt is to submit, to the people a proposal for an amendment of section 51 of the Constitution, designed to confer on the Government power to carry on the “ special account “ technique of central bank control. That would resolve the matter finally.
The “ special deposits “ system, undoubtedly, functioned effectively during the war by assisting to promote a greater war effort. But when the Government perpetuated this system by the introduction of the Banking Act in 1945, the one object it had in mind was to curb the power of the banks to lend to private enterprise. In that way it hoped to cramp the development of free enterprise. The Government hoped that the operation of the “ special accounts “ section of the act would prevent the reticulation of depositors’ money into private enterprise, if the Government wants to prevent inflation the obvious way to do so is to reduce wasteful government expenditure, but this the Government resolutely refuses to do. The most potent, and indeed the only source of rapid inflation, is government spending in excess of its revenue and what it can borrow openly from the public. That very dangerous source of inflation is available to either this or any other government. It is primary inflation, and is far more dangerous than the secondary inflation which the Government apparently fears so much, and against which it would have the people believe adequate and proper safeguards can be provided only if it has control of the special accounts as it desires and intends to control them. In war-time, primary inflation is inevitable, and it is right to prevent secondary effects from developing, because all the country’s energies must be diverted to war production. In peace-time, this objective ought not to be pursued, because that would involve travelling the straight road to industrial conscription; towards forcing individuals into certain occupations with or without their consent. The most powerful weapon which the Government could use’ to prevent primary inflation is the simple and sensible process which it continually ignores, of stepping up production. That is the whole basis of. the welfare of this country. In addition, the Government should live within its means, and should avoid the calamitous expenditure that is being incurred daily throughout the country.
It is obvious that the Government intended, by the Banking Act of 1945, to achieve the eventual ownership of the trading banks without paying for it. The pattern of government-operated airlines was to be followed, and the trading banks were to be eliminated by a process of slow strangulation. The key provisions of the Banking Act of 1945 which were to be used to achieve this objective were, first, those which gave to the Commonwealth Bank the control of the special deposits of the trading banks, and, secondly, section 48, which was designed ro give to the Commonwealth Bank a monopoly of the banking business of local authorities and other bodies. The Government was thwarted in its second objective, as the High Court decided that in that respect the legislation was unconstitutional. Instead of meeting the situation calmly and logically, the Government chose the drastic alternative of “ giving no quarter “. It announced its proposal for the complete nationalization of the trading banks, the special deposits of which the Commonwealth Bank, had control during the war totalled £26S,800,000 at the 30th June last. That was real money. It had been earned by mid belonged to the people, and had been deposited by them in the trading banks for safe-keeping and for re-investment hy those institutions, virtually on their behalf. The control of this money by the Commonwealth Bank gave to the Government a powerful asset with which to further its socialistic plan. The alternative, which obviously was distasteful to the Government and its political advisers, would have been to hand back those hundreds of millions of pounds to the trading banks, by whom they would have been reticulated through industry for the re-establishment and strengthening of private enterprise. I say unequivocally that the Commonwealth Bank cannot hand those deposits back, becauseit has not the necessary funds. It holds special deposits aggregating £268,800,000. Those deposits were lodged with it by the trading banks as trustees for the people of Australia, who had earned and owned them. The Commonwealth Bank has not the wherewithal to meet a demand for their return, because it has invested £274,000,000 in Commonwealth securities, including treasury-bills. That is the real reason for this rush legislation to nationalize the trading banks. I challenge any ministerial supporter who follows me in the debate to deny that.
The whole basis of the banking business of the community is the confidence of the depositor in his bank, and the trust that is reposed in it by a borrower, who must be assured that his debt will not be arbitrarily called up. Let us compare the amounts held on deposit, and the advances made by the Commonwealth Bank, with those of the trading banks, in order to determine the esteem in which each is held by the average citizen of Australia who has to use a bank, has to be the means of somebody else using a bank, or through whose use of a bank somebody else is assured of employment. If the figures for the June quarter of 1947 are averaged, they show that deposits totalling £654,000,000 were held by the trading banks, compared with just over £60,000,000 by the Commonwealth Bank. I emphasize that £268,800,000 nf that £654,000,000 has been deposited by the trading banks in special accounts with the Commonwealth Bank. The figures in relation to the Commonwealth Bank show that it held less than one-tenth of the total amount deposited. Is there any need to proceed further in order to prove whether the private banking system or the Commonwealth Bank is more favorably regarded by the people? The trading banks were seriously curtailed in regard to advances, in that they were compelled by law to maintain heavy special deposits with the Commonwealth Bank. Nevertheless, the average figures for the June quarter of 1947 show that trading bank advances amounted to more than £284,000,000. That is a barometer of the confidence that is reposed in those institutions by the people of Australia who have to use large sums of money in order to develop this country, provide employment, and find the wherewithal for production, which is essential to the existence of the Government, both internally and externally. In the same period, the advances by the Commonwealth Bank aggregated ‘only £21,700,000. In other words, the trading banks hold more than 90 per cent, of the total deposit business and more than 92 per cent, of the total advance business of Australia. Those figures cannot be challenged successfully. It has to be remembered that every person in Australia who finds it necessary to use a bank has been at liberty to transact his banking ‘business with the Commonwealth Bank. There has been no restriction on where any one may bank. All have been absolutely free to place their money on deposit with the Commonwealth Bank if they wished to do so, and have not been compelled to rely on the trading banks to meet their financial requirements by way of advances or overdrafts. That freedom of choice is to be withdrawn by this legislation. The Government will be able to crush those who threaten governmentowned enterprises, and to liquidate any enterprise which it may consider undesirable. It is obvious, therefore, that this bill is not merely a faltering step towards socialization, but is the key to the whole plan for the full-blooded socialization of the means of production, distribution and exchange in Australia.
Let us now view the position from the rural stand-point. This bill is vitally important to those who earn their livelihood in the country. To them, freedom of choice is paramount. With a socialized banking system, the farmer who required an overdraft in order to finance his operations would have to satisfy the manifold requirements of what will be, in effect, a government bureaucracy before he would be able to obtain it. The department’s refusal, perhaps on grounds of Government policy in no way associated with either the credit-worthiness of the prospective borrower and his proposal, or the availability of funds, would be final. With the trading banks liquidated, the process of lending to farmers and pastoralists would virtually become a government monopoly. A government 0th. cial would determine the areas to be sown, the nature of the crops, and the number of stock on any holding. He could withhold financial assistance unless the client carried out the Government’s wishes. All rural operations would come under government control centralized at Canberra, and the granting of financial aid would be determined more by political influence than by genuine necessity. The country people of Australia have been pushed around long enough. They will not put up with bureaucratic control in times of peace as they did when the country was at war. The effect of this policy on Australia’s foreign trade may be quite disastrous. I shall not pursue that aspect now, but I shall deal with it when the bill is in the committee stage.
Let us consider now the position in respect of savings banks. In this connexion I am reminded of what the Leader of the Opposition said in his brilliant and vigorous speech. The banking legislation passed in 1945 was “designed to give to the Commonwealth Bank an advantage over the trading banks. What was the result? From the average weekly figures supplied by the Commonwealth Statistician, it will be seen that deposits in the general banking division of the Commonwealth Bank between September, 1945, and August, 1947, rose by only £2,700,000, whilst during the same period deposits with the trading banks increased by £49,000,000. Therefore, the individuals most concerned showed conclusively that they preferred to give their business to the trading banks rather than to the Commonwealth Bank, notwithstanding that the latter held all the trading advantages which could possibly be bestowed upon it by the Government, consistent with its policy. As the Leader of the Opposition (Mr. Menzies) has said, the Commonwealth Savings Bank has had a virtual monopoly in the savings bank field, except in the States of Victoria, South Australia and Tasmania. In those three States, where there are other savings banks, and therefore open competition, the figures show that the Commonwealth Savings Bank has lagged badly in the number of operative accounts. At the 31st August, 1947, the
Common-wealth Savings Bank held fewer than a quarter of the operative accounts in Victoria, fewer than a fifth of them in South Australia, and about a third of the accounts in Tasmania. It had a monopoly in the other States, and held a total of nearly 3,700,000 operative accounts throughout Australia.
Including amalgamation payments to State authorities, the monopoly Commonwealth. Savings Bank made a profit of about £1,500,000 in 1947. The total Commonwealth Bank profit for that year, including profit made by the Note Issue Department, but excluding the. Commonwealth Savings Bank, was a little over £5,000,000. I ask honorable members to compare that amount with the £2,800,000 aggregate net profit made by eleven trading banks for the financial year ended June, 1946. The Commonwealth. Savings Bank is supposed to be the workers’ bank. It made a profit of £1,500,000, largely because it paid an average of l£ per cent, interest on the deposits of the people and invested 83 per cent, of the total assets in Commonwealth securities carrying 3£ per cent, interest. I could say a great deal more about the loan policy of the Government and the degree to which deposits with the Commonwealth Bank have been used in various directions. Suffice it to say that no Commonwealth loan has been genuinely and bona fide subscribed since Labour came into power in 1941. The people have not been told that their deposits with the Commonwealth Savings Bank were used, without their consent, to bolster up every loan that has been raised during recent years. I suggest that honorable mem”bers should compare the £2,800,000 pro-fit of the trading banks with the £1,500,000 of the Commonwealth Savings Bank made in the way that I have indicated. Those who have lived long enough “to compare the relative efficiency of government control with private enterprise are agreed that the former is far less efficient than the latter. Hitherto, the Commonwealth Bank has made profits because of the spur of competition with the trading banks, and because its staffs were trained in the trading banks. “These men are no longer young, and they are gradually disappearing.
What will the future position be? Let us assume that the Commonwealth Bank will pay £100,000,000 for the business of the trading banks. If bonds are issued at the ruling rate of interest on government bonds - and I cannot imagine that just compensation would permit a lower rate of interest than that - the amount will approximate the £2,800,000 net profit made by the eleven trading banks. That would mean the creation of a new liability for the Commonwealth Bank - the payment of compensation amounting to £100,000,000. Even at 3 per cent., that more than absorbs the £2,800,000 profit that the trading banks have made after 100 years of experience. During two wars and a depression they have given efficient service to the nation. Should history repeat itself, and efficiency decline, profits may drop considerably, and the trading bank business which the Commonwealth Bank will take over may show a net loss on the capital invested’. The £100,000,000 compensation to the trading banks will, in the main, be frozen assets, such as buildings, plant and equipment, and probably a secret reserve against bad and doubtful debts. ‘ The Government will take over frozen assets of the trading banks, for which it will pay £100,000,000 in bonds, and yet it talks about inflation ! If the undue profits allegedly made by the trading banks are justification for their liquidation, the same allegation can be applied with greater emphasis against the Commonwealth Bank. Three strong reasons exist for the large profits of the Commonwealth Bank compared with the profits made by the trading banks. First, the Commonwealth Bank makes a large profit on the note issue. Secondly, trading banks pay heavy taxes, including income tax, land tax and pay-roll tax, to say nothing of the taxes levied by local authorities, while the Commonwealth Bank pays no taxes whatever. The Commonwealth Bank has the use of deposits by the trading banks amounting to £268,000,000, which is the figure at which they stood on the 30th June last. With the true instinct of the usurer, the Commonwealth Bank has paid an extremely low rate of interest on these compulsory deposits, . no more than 10s. per cent., and has then lent the money to the Commonwealth, either by taking up treasury-bills on which the charge is 1 per cent., or by investing in Commonwealth securities on which it receives, on an average, 3£ per cent. And yet, the Government says it proposes to nationalize the trading banks because they make excessive profits. Is it any wonder that the Commonwealth Bank is able to make large profits ? The Commonwealth Bank is so closely allied to the Government that monetary transactions between them are often in the nature of mere book entries, and no handling charges are involved. The trading banks have no such facilities for making easy profits, and they are required to give to their customers far greater service for the returns which they receive. Consequently, it must be admitted that the profits of the trading banks are most moderate in comparison with those of the Commonwealth Bank.
In his dissent from the report of the banking commission, the present Prime Minister (Mr. Chifley) recommended that the trading banks should be limited to 5 per cent, profit on shareholders’ funds, or 8 per cent, on paid capital, whichever was the less. The profits of the trading banks have not reached either of those figures. On the contrary, bank profits have been in the vicinity of 4 per cent, on shareholders’ funds, instead of - 5 per cent, as recommended by the Prime Minister.
In his second-reading speech on this bill, the Prime Minister said that the Commonwealth Bank would buy out the shareholders of the trading banks from its own resources, payment to be made either in bonds or in notes. As a matter of fact, the Commonwealth Bank has no resources of its own. Unless it resorts to inflation, it must buy the shares with the trading banks9 own deposits, compulsorily lodged with the Commonwealth Bank. These deposits, as I have said, amount to £268,000,000, and the assets of the bank constitute gold balances held a;broad amounting to £138,000,000, against which are set liabilities amounting to £139.000,000. Other Commonwealth Government securities held by the bank amount to £274,560,000. Therefore, I repeat that the Commonwealth Bank has no resources of its own out of which to pay £100,000,000 to the shareholders of the private banks. It has no resources unless it creates them, and if it issues special debentures or bonds, it will be doing what it says the trading banks do, namely, creating credit. Will it run the risk of removing the safeguard against primary inflation, to say nothing of secondary inflation ? No regard has been given to the economics of this proposal, attention being focused on the legal aspect.
As I have said, it is a fair assumption that bonds will be given to the shareholders in exchange for their assets. I cannot imagine any shareholder taking notes, especially fast-depreciating notes. Thus, a new liability of approximately £3,000,000 a year will be undertaken by the Commonwealth Bank. This will have to be paid out of revenue. On present profit and loss account figures, the bank’s yearly profit is approximately £5,000,000.’ To this must be added the profits of the trading banks, namely, £2,750,000, together with the taxes now paid by the banks, which, of course, come out of their profits, and for which the Commonwealth Government will not be liable. These taxes total about £3,000,000 a year. The total gross profit, therefore, if available figures are any indication, will be about £10,750,000, from which must be deducted the amount of £3,000,000 to be paid annually to the bondholders. That will leave a net profit of about £7,750,000, some of which, especially in the Note Issue Department, is fictitious.
However, under the Commonwealth Bank Act, one-half of the net profits of the central bank, the general banking division of the Commonwealth Bank, and of the Commonwealth Savings Bank must be paid into the National Debt Sinking Fund, whilst the other half goes into the bank’s reserve funds, and cannot be touched by the Government. This basis of contribution cannot be altered by legislation except by repudiating the conditions under which Australian loans were subscribed. Consequently, assuming for the moment that the change-over will not . affect the profit, £3,000,000 a year will be received by the Commonwealth Bank as extra profit instead of being paid into Consolidated Revenue by the trading hanks by way of taxation. This £3,000,000 a year will no longer be under the control of Parliament, and a portion of it will be ear-marked for sinking fund purposes over and above the amounts already deemed to be adequate under the National Debt Sinking Fund Act, and under financial agreements with the various States. None of the profits will go to Consolidated Revenue, over which this Parliament has at least some control. What are the taxpayers going to get out of the deal? Consolidated Revenue will be reduced by £3,000,000 a year, representing the taxes which the trading banks have paid. As a consequence, taxation on individuals will have to be kept unduly high in order to make up the deficiency. In the final analysis, that is the price the people will pay for the taking over of the trading banks.
From whatever economic angle wo view the Government’s proposal for the destruction of the Australian banking system, it must appear that the financial stability of the country will be adversely affected. The present banking system has served the country for more than a century. It enabled Australia to recover more quickly from the depression than any other country did, and it successfully financed the country during and after two gigantic wars. If it is destroyed, the effects will not be confined only to our internal position, but will also react to our .detriment abroad. At no time in our history have we experienced greater industrial development than we enjoy at present. This development is being financed in a large measure by British and overseas capital. We need that capital if we are to progress, and the destruction of our present banking system will not help us to get it. I can find no virtue in making this profound change in our economic life. It means a change from the British way of life to that of the totalitarian countries which we have so recently fought. The possible financial consequences must cause even the most irresponsible member of this House to ponder whether he is discharging his trusteeship in Australia’s interests.
Let us analyse the relative position of the trading banks that are to be acquired by the Commonwealth Bank and that of the Commonwealth Bank itself. What consideration has been given to the economics of this change-over? Surely, the Prime Minister does not think that the 1,250,000 voluntary customers of the trading banks will be better served by being virtually conscripted into the Commonwealth Bank’s clientele of about 120,000. The owners of the £654,000,000 of trading bank deposits have placed them in those banks because they have confidence in them. How can it be expected that their confidence will not be shaken if this huge volume of deposits is transferred to a bank’ which, after 35 years of existence and government support and fostering, has only been able to encourage the degree of confidence reflected in only £60,000,000 of customers’ money entrusted to it? The same may be asked regarding those who borrow from the trading banks. Will those who are now assisted and guided by the trading banks be encouraged and helped in their enterprise and initiative ? Will they get better support and, at least, equal service from a bank that has lent but £22,000,000 as against the £284,000,000 lent by the trading banks? These relative figures demonstrate the confidence which the community has in the present system.
This House should pause and consider well before replacing the existing system with one that certainly can do no better, but will only destroy initiative and, consequently, the nation’s general productive capacity. Will the long-suffering, overtaxed people feel that the change-over has been worth while when it is realized that one of the effects has been a forfeiture of taxation revenue of at least £3,000,000 - revenue which would otherwise be available to reduce taxes and encourage initiative and production? Will they be consoled by the fact that sinking fund payments have been increased in their time and generation? There is a psychological factor as well. The nation will experience a sense of frustration because, as I have demonstrated, this is being done against their will. This frustration must shake confidence further. Even if the Government’s measure had a single virtue, and I deny that it has, this is a most inappropriate time to shake confidence and frustrate initiative.
We need production, both because we, ourselves, are short of many things we need, and because it is up to us, as a partner in. the British Commonwealth, to help hard-pressed and war-worn Britain. Oan it be said that the Prime Minister has done more than pay lip service to Britain’s needs in his assurances of further aid when he introduces this bill, which, instead of giving impetus to our productive power, will greatly hamper it? Greater production is our outstanding problem to-day. It has been disregarded. Why? Merely in order to implement a doctrinaire, socialist policy, which will destroy the British way of life that has made Australia what it is. Once the Government gets the power over our financial resources, it will have the power to direct every citizen to do its bidding. This means industrial conscription. That is the price Australia will have to pay when this bill becomes law. .
In conclusion, let me say a few words to those Australians who voted the Labour party into power on the assurance that if the Chifley Government were returned, democracy would be in safe hands. These people now find that their hitherto democratic way of life is in the gravest peril. Are they satisfied to allow the very Government, which they returned to power to safeguard their interests, to filch from them their personal liberty and freedom? Are they willing to be pushed around by a socialist government, to be told when and how they shall spend their money, where they shall work and in what occupations they shall engage ? Let me tell those people that they have been the victims of the greatest political confidence trick in Australia’s history. That is the political crime which the Chifley Government committed when it introduced this bill. The Australian Country party and the Liberal party are thoroughly united to defeat this action by every constitutional means at their disposal. We are determined that Australia shall continue to be a bulwark of democracy, a citadel of freedom, and a Mecca of the white race.
.-Labour’s banking policy has long been founded on three fundamental principles : first, that money should be the servant and not the master; secondly, that the nation’s credit should be based on the real wealth of the nation; and, thirdly, that such credit should be managed by the banking system in the interests of all the people and not in the interests of the privileged few. Those are the principles to which I have subscribed all my political life, and for which I have fought. The real test of any banking measure is whether it will fulfil the principles I have stated. Both a private banking system and a national banking system can be used to defeat the principles laid down in the La,bourparty’s banking policy. That is why I feel that the Parliament should be concerned, not so much with the machinery of the ‘ proposed new banking structure, as with the policy upon which it will operate. A monopoly can be a two-edged sword. A monopoly designed- to assist the people can, in the wrong hands, be used to oppress the people. A monopoly bank in the hands of the enemies of the Labour movement might be a most effective weapon to crush the Labour movement absolutely and completely. That is why I believe that the Parliament should examine the banking policy of the present Government, the Government’s background, and its record. If I were satisfied that the Government would implement Labour policy, my support would go to this measure without any reservation. But how can I trust a government that sacrificed a vital principle of the Labour movement? It repudiated its own pledge to the people when it introduced conscription of human life. Is it prepared to apply Labour principles in banking, or will it again betray the Labour movement? What would be the policy of a monopoly Commonwealth Bank? Would it operate under a vigorous charter, plan the resources of Australia, finance new investments, reduce interest rates to a cost basis, and underwrite the future of Australia, by making it easy for people to obtain loans and establish new industries ? Or would the bank continue its present policy of hide-bound conservatism, far more conservative than any of the private banks, and be a hindrance to the proper development of this country? An ultraconservative Commonwealth Bank, operating as a monopoly, would do far more damage than an ultra-conservative Commonwealth Bank in competition with the (private banks. The policy of the monopoly bank under this legislation would be the ‘policy of the government of the day. We cannot get away from that. Under a Labour government it should, but not necessarily would, be a Labour policy. Under an anti-Labour government the policy of the bank would be opposed to that of the Labour movement. Therefore, the first consideration should be to make certain that, at least in its initial stages, the policy of the monopoly Commonwealth Bank would be a Labour policy.
It is not my intention to go back to happenings during the financial and economic depression except for one particular phase that has a direct bearing on this bill. The present Prime Minister (Mr. Chifley) was a Minister in the Scullin Government. His economic philosophy to-day is the same as it was then. He has not changed. The policy of the Scullin Government was that of deflation, of reduction of’ credit, of restrictions, of reduced wages and pensions, and the idolatry of money as the master. The history of ‘that Government showed the danger to the Labour movement of a banking monopoly. The Scullin Government was a party to that monopoly. It was the tool that carried out the monopoly’s instructions. The monopoly at that time consisted, not of the Commonwealth Bank alone, not of the private banks alone, but of the Commonwealth Bank and the private banks working together with a common policy, under one direction and with one spokesman - the chairman of the Commonwealth Bank. At that time the Commonwealth was being paralysed because the banking monopoly refused to find the money for employment. Then, as now, a Labour government was in power. Then, as now, there were two schools of thought in the Labour party. The then Prime Minister, Mr. Scullin, supported by his protege, the present Prime Minister, by the late Mr. Lyons, and Mr. Penton, followed the Niemeyer line of deflation. Other Labour men, like “ Frank “ Anstey, the late Mr. Curtin, the honorable member for Batman (Mr. Brennan) and a group of members from New South Wales, including the then honorable members for Werriwa, West Sydney, Lang, Hunter and Barton, demanded that the nation’s credit should be utilized to provide money for work for the unemployed. ‘In 1930, the Prime Minister went to England for an Empire conference. Mr. Theodore was out of the Cabinet over the Mungana incident. Mr. Fenton was left in charge of the Government, with Mr. Lyons as acting Treasurer. Mr. Theodore went to caucus and proposed that the Government should raise credits to the amount of £20,000,000 for public works to absorb the unemployed. Mr. Scullin, who was then in London, was informed of what was happening in caucus. He then sent a cable to Mr. Lyons setting out his own views in the following terms : -
To create credit for £20,000,000 for loan works is unsound and I expect the banks to refuse to do so. The Government cannot deliberately coerce the administration of the banks. Such a proposal means permanent inflation, which cannot be checked as implied and would demand further inflation.
That cable wrecked the Labour movement. It meant the parting of the ways and a struggle that lasted for many bitter years. It was followed immediately by the demands on State Labour governments from both the Commonwealth Bank chairman and the private trading banks. The ‘banking monopoly made the demands; the chairman of the Commonwealth Bank issued the orders. The leader of the Commonwealth Labour Government supported the banking monopoly up to the hilt. That was how a Labour government failed this country in time of need. That was how a Labour government surrendered to a banking monopoly. It was the issue that brought the honorable member for East Sydney (Mr. Ward) and the honorable member for Dalley (Mr. Rosevear) into -this Parliament. It was the policy of the Government that was wrong. The Government refused to govern. What happened then can happen again. The machinery of banking is relatively unimportant. It’ is the policy of the government that controls the banks that is all-important. A monopoly Commonwealth Bank under a government with the same outlook as the Scullin Government would fail the people of this country in exactly the same way as that administration failed them. On the other hand, if this measure is passed, and survives all the legal obstacles, no future Labour government will be able to use banking as an alibi for failure. If its policy is wrong, it will have to accept complete responsibility. It will have no excuses and no alibis.
Labour’s monetary policy was clearly defined at a federal conference of the Australian Labour party held in Adelaide in 1936, and published in a booklet on behalf of the Federal Parliamentary Labour party by the late Mr. John Curtin, in 1937. That statement was a clear enunciation of the principles for which the Labour movement in New South Wales had been fighting, and provided the basis for a unity agreement between the two groups - one led by Mr. Curtin and the other led by myself in New SouthWales. The Labour party’s banking and credit policy as set out at that time has never been altered. It reads as follows : -
The utilization of the real wealth of Australia to ensure a maximum standard of living consistent with the productive capacity of the Commonwealth through national control of its credit resources and the establishment of an efficient medium of exchange between production and consumption.
In addition, provision was made for theestablishment of a national credit authority to plan and finance industrial and domestic development in this country.. So, it is not enough for this Government to bring down a bill providing certain, machinery to create a banking monopoly. It is also necessary that it should define the principles upon which the bank is to operate in exactly the same way as the Adelaide declaration defined the fundamental principles of Labour’s banking policy. It is necessary to know what provision is to be made for oo-operative finance; what is to be the credit policy of the bank; and what action is to be taken to ensure that interest rates shall be reduced to an actual cost basis. These are fundamental considerations to every intelligent Labour man and woman who has subscribed to the platform of the party. Of what use will it be to set up only another hide-bound, bureaucratic institution, strangled at birth with red tape, and devoid of any real policy? A monopoly bank, adopting a conservative banking policy with unnecessary delays to and frustrations of its customers, and committed to a policy of restricted credit instead of expansion would undermine the whole economic life of the nation.
Now is the time for the Prime Minister to tell us what is to be the policy of this bank and what steps he proposes to take to make certain that that policy shall be given effect. We do not want shibboleths about full employment or promises of a golden age. We want reality. There should be written into this bill a provision that the Commonwealth Bank shall be a non-profitmaking institution. That would be strictly in accordance with Labour policy. There should be a provision stipulating the maximum rates of interest for both deposits and advances. There should be a provision to make certain that advances shall not be subject to the arbitrary whim of a particular employee, but that there shall be some speedy appeal to a representative advisory body. The only test of the Government’s sincerity on banking is whether or not it has made a real attempt to put into operation the Labour party’s banking policy. The 1945 Banking Act was intended to give to the Commonwealth Bank, not some of, but all of the powers specified in the plan of action. The operations of the Commonwealth Bank were removed from the control of, and made entirely independent of, private banking interests. The Commonwealth Bank Board was abolished, and the original method of control restored. There could be no further hindrance to the expansion of the Commonwealth Bank’s business as a trading bank. The only impediment encountered so far has been the failure of the statutory provision that the banking of all public bodies should be reserved for the Commonwealth Bank.
But how has the Government carried out the mandate it received under the 1945 act? The Commonwealth Bank is still the most conservative bank in the Commonwealth. Its lending policy is rigid and restrictive. There has been no real competition with the private ‘banks. There has been no attempt to force down the rate of interest. Apart from the financing of the Government’s guaranteed housing loans, the Commonwealth Bank has made no attempt to underwrite the industrial expansion of the Commonwealth. Although it no longer turns away customers by ordering them back to the private banks, it offers no real inducement to them to transfer their business. By healthy competition, the Commonwealth Bank could have captured the banking business of the Commonwealth. It has failed because its executives are still steeped in the idea that the function of a bank is to be at all times ultra-cautious, and ultraconservative. What guarantee is there that when this bill becomes law, that policy will be reversed? This Parliament is entitled to know who is to be the Governor of the bank and who is to be responsible for banking -policy.
With the passing of the 1945 act, this Government had the responsibility to introduce Labour party policy. It has not done so. Its failure clouds the entire consideration of the present measure. This question of policy is of paramount importance. The Government has the fixed idea that another depression is around the corner. The banking system has failed Australia in every depression. That applies both to the private banks and to the Commonwealth Bank since its establishment. If the Prime Minister is right in his diagnosis of the world’s future, we are surely entitled to know something more of the Government’s banking policy. If the Government adheres to the same ideas as the Scullin Government had in the last depression, then the outlook is grim indeed. In the hands of this or. some other government, the monopoly control of banking could be used to enforce a plan of economic conscription. The wages cheques of even many of the largest industrial firms are financed week by week on bank overdrafts. By restriction of credit, it would be possible to force those firms out of business. If the Government wanted to close down certain kinds of industries, then all it would have to do would be to call upon them to reduce their overdrafts.
One other aspect of this bill that flouts every known principle of Labour policy, is its compensation provisions. No one can assess the amount of money involved. The actual current share valuations could be regarded as a basis only. The High Court might have other ideas regarding the just price principle that it has held must rule in such transactions. Who is going to get these compensations? According to the Prime Minister’s own official organ, and also the official organ of the Communist party in New South Wales, the amount of compensation paid to 527 shareholders would amount to £18,000,000. It is for the Prime Minis- ‘fer to say whether that is a statement of fact, if the basis of compensation is higher than that anticipated by the Government, those shareholders will benefit, accordingly.
More than £100,000,000 will probably be involved. With that amount of money suddenly becoming fluid, assets would be created that could be employed with the most damaging effects against the Australian economy. It could be the spring-‘ board for inflation. Labour’s policy never envisaged such compensation. Had the Commonwealth Bank implemented Labour policy, the need would never have arisen to compensate the private banks. A peoples’ bank, operating on a nonprofit-making basis, would have destroyed, by vigorous competition, all threats of a private banking combine. It was only the failure of the Commonwealth Bank to carry out Labour policy that provided the excuse, on which this bill is based. The mergers of private banks in recent years have demonstrated that they were vulnerable to competition. The Commonwealth Bank never took on the fight. Now the taxpayers are to be called upon to pay huge amounts in compensation, not only to return capital actually invested in the private banks, but also to compensate them for their huge concealed reserves.
It would appear that the Government is entering upon a marathon litigation that will please the legal fraternity and appal the community at large. If it lasts till after the next elections, the result might prove just as appalling to many supporters of the Government.
That is the bill with all its imperfections, and all my reservations. The Government elected by Labour votes says it cannot fulfil the trust imposed in it by the Labour movement without this legislation. This bill is its responsibility, and I accept no share of the responsibility for its introduction. But I am not prepared to give this Government any further excuse for defaulting on Labour policy. If it is granted all the powers it asks, and then fails to carry out Labour’s pledges, it will be responsible directly to the people. The responsibility for the policy to be followed rests, not only on the Prime Minister, but on every member of his party. The Government has framed its own bill. It has an absolute majority in both Houses. So I am prepared to vote to give it a mandate to’ provide itself with the machinery it says it needs. For that reason, and for that reason only, I propose to vote for the second reading of this bill.
Debate (on motion by Mr. Howse) adjourned.
The following papers were presented : -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1947 - No. 77 - Australian Journalists’ Association.
Australian Soldiers’ Repatriation Act - Regulations - Statutory Rules 1947, No. 149.
Commonwealth Public Service Act - Appointment - Department of Supply and Shipping - D. J. Guppy.
Regulations - StatutoryRules1947, Nos. 146, 147.
Defence (Transitional Provisions) Act - National Security (Prices) Regulations - Order- No. 3114.
Lands Acquisition Act - Land acquired for Defence purposes - Amberley, Queensland.
Northern Territory Representation Act, Northern Territory (Administration) Act and Commonwealth Electoral Act - Regulations - Statutory Rules 1947. No.148.
House adjourned at 10.19 p.m.
The following answers to questions were circulated: -
Former Italian Colonies.
Mr.Chifley. - On the8th October, the honorable member for Balaclava (Mr. White) asked the following question: -
Has the attention of the Prime Minister, who is Acting Minister for External Affairs, been directed to the report that Australia is one of the countries whose views will be sought in regard to the future control of the former Italian colonies in Africa? Has the Government any views on the matter? If it has,what. form of control does it intend to propose shall be imposed? Has the right honorable gentleman noted Russia’s interest in the region ?
The answer to the honorable member’s question is as follows : -
Largely through the efforts of the Australian delegation to the Paris conference, a treaty of peace with Italy obliges the Governments of the United Kingdom, the United States of America, Prance and the Union of Soviet Socialist Republics, with whom the final decision on this lies, to take into consideration the’ views of other interested governments before making a decision. The Government has taken all possible steps, as indicated by the Minister for External Affairs in his statement on international affairs tabled in the House on the 6th June, to ensure that its views will be considered to the maximum extent permissible under the treaty. Preliminary consideration is now being given to this question by the special deputies of the Council of Foreign Ministers. The immediate objectives of the Government are that it shall receive in good time all information available to the deputies, including reports of any commissions of investigation which may be sent out to ascertain the wishes and welfare of the inhabitants of the areas concerned and that its final view shall be submitted on the highest level to the Council of Foreign Ministers. It is expected’ that the preliminary fact-finding work will take some months. At the conclusion of this period, and on receipt of all available information, the Government will formulate its final views on the future of the Italian colonies.
Commonwealth Bank: Building Activities.
– On the 14th October, the honorable member for Wentworth (Mr. Harrison) asked a question regarding the establishment of documentary letters of credit with the Commonwealth Bank. I am now able to inform the honorable member as follows: -
The Commonwealth Bank advises that it is quite usual for banks to establish documentary letters of credit with a 25 per cent, security cover or even less, but it would be contrary to established banking practice for the bank to discuss, or in any way disclose, the affairs of its customers in relation to matters such as that raised bv the honorable member.
n asked the Minister for Post-war Reconstruction, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Treasurer, upon notice -
– The answers to the right honorable gentleman’s questions are as follows : - 1. (a) Advances made to the Australian National Airlines Commission under section 30 of the Australian National Airlines Act 1945 are as follows: -
6 ) Advances carry interest at £3 2s. 6d. per cent. Interest has been charged on advances as from the commencement of regular flying operations on the 7th October, 1946.
Banking : Accounts.
Mr.Archie Cameron asked the Treasurer -
How many accounts are operated in each State by (a) the Commonwealth Bank and (b the trading banks?
How many savings bank accounts are operated in each State by (a) the Commonwealth Savings Bank and (6) all other savings banks?
y. - The answers to the honorable member’s questions are as follows : - 1. (a) The number of accounts, including fixed deposit accounts, at the 30th April, 1947, was -
Official statistics of the number of accounts operated by the trading banks are not available. However, information published by the trading banks shows the numberof credit current accounts as 1,127,558, fixed depositors including those with current accounts as 175.212, and debit current accounts as 283,386.
Australian Prisoners ofWar: Refunds of Advances.
asked the Minister for the Army, upon notice -
s. - The answers to the honorable member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 28 October 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19471028_reps_18_194/>.