9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and road prayers.
– Is the Minister for Homo and Territories in a position to state if the lithograph plans of the proposed building sites, to be offered for sale at Canberra on the 1st October, are yet available; and, if not, when they will be?
– Certain plans arrived to-day, but I have not yet had an opportunity of looking at them. I hope to be able to make an announcement on the subject early next week, or perhaps later during the present week.
– I should like to know, Mr. President, if you have yet received the certificate of His Excellency the Governor-General intimating that the Victorian Parliament has chosen Mr. J. F. Hannan to nil the vacancy in the Senate caused by the death of Senator Barker.
– No ; but I can assure the honorable senator that when the certificate reaches me there will -be no delay. I shall immediately inform the Senate.
asked the Minister for Home and Territories, upon notice - ,
– The answers to the honorable senator’s questions are as follow : -
asked the Minister representing the Minister for Works and Railways/ upon notice -
Will the Government hasten on the ballasting of the Trans-Australian Railway line to relievo the distress caused through the closing down of the Ivanhoe Mine?
– The Minister for Works and Bail ways has conferred with the Commonwealth Railways Commissioner, and regrets that he cannot hold out hopes of ballasting work being provided at present. Recently about 100 men employed in a quarry in the eastern section of the railway were put off, and as the next ballasting to be done will be in that section, these men, accustomed to the work, will expect to receive first consideration.
asked the Leader of the Government in the Senate, upon notice -
Is it the intention of the Government to assist the State Government of Western Australia in relieving the distress at Kalgoorlie resulting from the closing down of the Ivanhoe Mine?
– In view of the answer just given by my honorable colleague, it is feared that there is no ho,pe of any Commonwealth work being made available at present.
asked the Minister representing the Minister for Trade and Customs, upon notice -
If the answers to the above questions are in the affirmative, will the Minister consider the advisableness of abolishing the Tariff Board?
– The information is being obtained.
Debate resumed from 23rd July (vide page 2346), on motion by Senator PEARCE -
That the bill be now read a second time.
– When this bill was received by the Senate from another place, I felt that there were certain aspects of it that had not received sufficient consideration at the hands of the Government, and I was prepared to take the necessary action to ensure further consideration being given to this most important measure in this chamber. Since then the Government has realized, apparently, that something was lacking in its proposals, and the Minister in charge of the measure (Senator Pearce) has given notice of a number of very important amendments which remove many of the objections I had to it. Nevertheless, there remain certain viewpoints that require further attention, and I propose this afternoon to refer to them. I listened very attentively to the debate, and I. was particularly interested in o statement made by the Honorary Minister (Senator Wilson) yesterday in explanation of, and as an excuse for, certain phases of the bill. The Minister mentioned a number of facts that have been obvious to the Senate, and indeed to the business section of our community for a very long time. He said that the serious position which had been developing for some time still existed, particularly in relation to the accumulation of credits in London He also pointed out the further obvious fact that- for a considerable time exchanges have been completely out of gear. Although the Government have given the matter most serious consideration they have not been able to decide what should be done, and the proposal now before us is only one way of ‘dealing with one phase of the question. As honorable senators are aware, there has been for a long time an agitation on the part of the outside public and the business community generally for the Government to take some action in regard to this very important matter. To me it has been a wonder that the Government have not before this decided to do something to alleviate the position. I have waited very patiently - latterly, perhaps, impatiently - for the Government to announce their policy. But, so far, the bill now before us is the only means that they propose to adopt to deal with this very important and intricate financial situation, which is of the utmost consequence to almost every section of our producers, both primary and secondary. A number of schemes which have been put forward have not been adopted by the Government. An amendment of which the Government has given notice embodies a proposal submitted some time ago to relieve the position in regard to the accumulation of credits in London; ‘ but to almost all the other schemes there have been more or less serious objections which were apparent without very close consideration. It is not to be wondered at, therefore, that the Government has not seen fit to adopt any of them. The Government has preferred to wait until the position developed and something more definite or feasible was placed before them. One thing is obvious - it is something that seems to be common to a great many of the schemes - and that is the necessity to create some strong central authority to consider the position in all its details, and to have power to give effect to its decision. The proposal which the Government now propounds embodies a scheme for the creation of a central authority to deal with the present and future financial situations. An attempt has been made by Senator Greene and others to ascertain who the advisers of the Government are, and at whose request this scheme was submitted. The Government assure us that they have given the matter their very fullest consideration, and have obtained the opinions of those whose views they considered were worthy of .attention. It is, never rtheless,a fact as mentioned by Senator Greene, that the associated banks, who are directly con- cerned, were not, at the time when the Government’s scheme was brought for- ward, asked to say whether they endorsed it. I understand now that a conference has been held with a representative of the associated banks, and the original objections to the scheme have been largely removed. Honorable senators opposite seem to regard it as a heinous offence that the Government should have consulted anyone outside, particularly the representatives of the associated banks. It must be obvious to hororable senators who hold such views that in a matter of this sort, if we are to evolve a satisfactory scheme, it is far better to co-operate with the associated banks rather than to court their active opposition. It was stated yesterday, by an honorable senator opposite, that the Commonwealth Bank should be the only authority to act, that it should be the body to handle the accumulated funds in London, and to make the necessary arrangements for their transfer to Australia. Honorable senators, who look at the position in that light, forget that the accumulated credits in London are not the property of the Commonwealth Bank. That bank has no more right to take what does not belong to it than has an honorable senator. The Commonwealth Bank is faced with the situation that the accumulated credits in London are in the hands of individuals and other banks. That being so, how would it be possible for the Commonwealth Bank to act except by an agreement entered into between the representatives of the Commonwealth Bank and the holders of the accumulated credits ? Why can there be any objection to the Government consulting the representatives of the associated banks in order to adopt some scheme acceptable to both? The Government were blameworthy in the first place for not entering into negotiations with the associated banks. Something in that direction- has now been done, and an amendment has been suggested by the Minister, which, in my opinion, will remove a great many of the doubts which previously existed. The question of currency and finance generally is most complicated. It would appear from what has been said that with the exception of one or two honorable members in opposition in another place, no one in this country, or elsewhere, completely understands it. I have read many text-books upon the question, but there seem to bemore points upon which the authors disagree than upon which they agree. A great many of the accepted tenets of high finance, as they existed before the war, have now been thrown overboard. As a result of war experience international finance has undergone almost a complete transformation. We find our so-called financial experts floundering sadly when it come3 to suggesting schemes to improve the position. They seem to differ vitally and widely on the principles which govern it. If those supposed national and international experts differ so greatly in their views, it is not to be wondered at that honorablemembers of this Parliament cannot easily decide what should be done to remedy our troubles. As my honorable friend, Senator Gardiner, said, the problem is too big for an ordinary man in an ordinary lifetime to thoroughly appreciate and solve, even if he devoted his whole time to a thorough investigation of it. One or two honorable members know, or think they know, all about high finance, and they miss no opportunity of lecturing us and throwing their peculiar views, which are culled from all kinds of sources, at our heads, in the expectation that they will be received as the views of experts. I am not prepared to so regard them. But while, so far, insoluble difficulties exist, some aspects of the situation, when regarded from a commonsense point of view - and that is the point of view which we should adopt - may be apprehended and palliated. At all events, we are justified in exercising our reasoning powers in regard to them. I had hoped that when Senator Gardiner, with his wide experience, addressed himself to the subject, he would be able, with his very keen perception, to indicate some method by which we could ultimately find a way out of our troubles. But Senator Lynch has already expressed his regret, and I concur in it, that Senator Gardiner did not approach the subject from that high point * of view which might have been expected of him. I do not desire the Leader of the Opposition to think that I am, in any sense, adopting the role of the schoolmaster in making these remarks. I say that because he replied to Senator Lynch la3t night to the effect that he regretted that he could not entirely accept the schoolmasterly advice which Senator Lynch offered him. I hold the Leader of the Opposition in very high respect, and on occasions I have received very great bene fit from his remarks in this chamber, and also from the advice which he has given to honorable senators generally. Unfortunately, however, both for this Senate and the people of Australia, Senator Gardiner seems, latterly, to have become possessed of the peculiar idea, that everything which this Government proposes, no matter how harmless it may appear to be, is part of a deep-rooted and nefarious plan to knock away the props erected by the Labour party, when it was in power, to support the Commonwealth. He seems to think that every effort of the Government is designed to interfere with the institutions established and the legislation passed by Labour Governments for the benefit of the people. If I considered for one- moment that the scheme of this bill was designed to hamper the operations of the Commonwealth Bank in any way, or to interfere with the great work it ‘has done and is doing for Australia, I should bitterly oppose the measure. I would not countenance any attack upon the integrity, capacity, or ability of the management of the Commonwealth Bank. But, so far from being designed to interfere with the influence and usefulness of the bank, I think the bill, if passed, will result in strengthening it. The Government has a genuine desire to make the bank a still better instrument of service for the people of Australia. Of the many speeches we have heard on the bill, I believe it will be generally admitted that Senator Greene’s speech was the most important and created the widest interest.
– But what about the sincerity behind the speech ?
– The sincerity of Senator Greene was obvious to every one who was not “ one-eyed .” He was absolutely sincere in his criticism of the measure, and I must admit that I have never heard in this chamber a more damaging criticism of a Government bill than that of Senator Greene in respect to this measure. He tore the bill to ribbons in so far as certain of its clauses were concerned. His speech showed the Government the absolute necessity for giving further consideration to its proposals, and it is not surprising that Ministers took immediate steps to meet his criticism and to remove many of the objections which he, and other honorable senators on both sides of the chamber, had to the bill.
– Are we legislating for the private banks or for the people of Australia ?
– We are legislating in the interests of every .section of the people. The party which I have the honour to represent in this chamber is national not only in name, but in actual fact. It represents the whole of the people. Members of our party are not prepared to spend their time and energy in passing legislation in the interests of one section of the community. My honorable friend who has just interjected belongs to a party which has a magnificent record of beneficial service to the whole of Australia, and it is regrettable that in the last three or four years its high ideals have been almost entirely lost to sight. I know that certain honorable senators on the other side of the chamber consider this a matter of very grave concern, and are hoping that the day will soon come when the Labour party will recover the ideals which it formerly had, so that it may be able to represent, not merely one section, but all sections of the people. Senator Gardiner at one period in his political career was notable for speeches which had a broad Australian outlook, but now he hardly ever delivers a speech which does not refer in some way to the working class, to class consciousness, to capitalism, or the capitalistic system, or some kindred subject. No such references will be found in speeches delivered by the honorable senator years ago. My honorable friend now has to “ play up “ to his supporters outside, who are driving him, he does not know where, and does not very much care. He has to do their bidding because, he imagines, that course of action will pay him best. The national welfare of Australia can be thrown overboard so long as these men, who to-day control the Labour organizations, have their opinions voiced, if not actually put into force. I do not for a moment believe that the proposals that to-day are being put forward by Labour organizations in relation to banking and its application to the national welfare of Australia would be put into operation by many members of the Labour party. They realize that such proposals are not in the interest of Australia any more than they are in their own interests, and they are prepared to allow them to remain, indefinitely, a part of the Labour platform.
– I do not suppose they will exhibit haste in providing for the recall.
– I agree with the honorable senator. It is well known that the Labour platform is full of proposals that some Labour members would not have at any price.
– Order! I cannot see in the bill any reference to the Labour platform.
– Senator Greene referred to the policy that has been adopted by the Notes Issue Board in regard to the provision of an adequate currency. The deepest thought .and the fullest inquiry have led me regretfully to agree with his statements. The Notes Issue Board ‘appears to have been actuated by an entire lack of confidence in the future of Australia. Doubtless, it believed that a restriction of currency was essential, and that its action would assist in placing our currency system on a sound national basis. It appears, however, to have overlooked the fact that in carrying out the policy it had laid down,’ it was responsible for creating the very gravest difficulty in financing many business ventures. I would not for a moment advocate the inflation of the currency ; I would bitterly oppose any such proposal, because’ I know what it means. Some honorable senators opposite would give approval to the printing of bank notes by the million in order that they could distribute them in all sorts of ways for a variety of purposes. There are, however, other honorable senators opposite who recognize that such a policy would result in national destruction. The other day I read in a magazine an -article by a wellknown financial writer one portion of which struck me as being exceedingly appropriate. He pointed out that -
Inflation is a device that permits debtors to defraud creditors. It nullifies the value, of every promise to pay that is not expressed in terms of gold or non-monetary goods. But as every new issue of paper money sends down the value of bonds, mortgages, and other promises to pay, the value of land, commodities and the instruments of production shoots up like a rocket. Bond-holders are wiped out. Stock-holders are swept on to fortune.
If volumes were written they could not better express the danger of inflation. It is easy to realize, after reading that summing up, what would be the result to Australia of the acceptance of a policy of inflation. It is not to be wondered at, therefore, that the clearer heads- of the Labour party, the men who can see what would be the effect of the adoption of a certain policy, are as greatly opposed as we are to any policy of inflation. Whilst I feel that the board has not provided currency sufficient to meet Australia’s requirements, I do not advocate anything in the nature of inflation of our note issue. I have said that the Notes Issue Board has been unduly conservative. Its action leads one to imagine that Australia’s outlook developmentally is of the very blackest, when quite the contrary is the case. The outlook for our primary industries is as promising and as satisfactory as it could possibly be. Wool, assuredly, will continue to realize high prices. Where it was possible for buyers to bid with the knowledge that they could subsequently arrange for the necessary finance, at the last wool sales, the prices were higher than they have ever been. I believe that those prices would have been .still greater had adequate provision been made for currency and credit. The outlook is particularly bright, also, for our other great branch of primary production, that of wheat growing. Its position is made more favorable by the fact that crops in other countries are a doubtful quantity, because of the lack of a sufficient rainfall.
– The reason for the shortage in the supply is that America is not selling to outsiders any portion of her crop.
– America is now able to produce sufficient only for her own requirements. In Canada, the prospect of getting a good crop is noli bright. Generally speaking, therefore, our great primary industries are faced with a future that is full of promise. There is, consequently, no necessity for the conservative attitude that has been taken up by the Notes Issue Board. There is one point, of which we must not lose sight, concerning this restricted view of the Notes Issue Board. In March last very great pressure by the associated banks was necessary to force the board to issue £4,200,000 that was due to the banks by the board, and was urgently required by them to meet the calls which were being made for advances by the trading, the industrial, and the’ productive sections in Australia. Honorable senators can visualize the result if, at any time, it is impossible to arrange. advances for schemes of private or national development. The Government, of course, can make its own arrangements for the purpose of financing works of national development. Such a policy, involving as it does a restrictive policy on the part of the private banks, leads in turn to their denying to their clients the financial accommodation required for business operations. I had a case put to me in Sydney a little while ago in which a syndicate had been formed for the purpose of purchasing a steamer for the New Guinea service. The vessel, which was to take the place of a Government steamer that had been called off the trade, was bought for £6,000, and it was subsequently found that under the Navigation Act certain alterations were required to make the steamer conform to the trading requirments in that particular area. The syndicate consisted almost entirely of residents of New Guinea, who had exhausted all their capital in Sydney, where the vessel was purchased. They, therefore, approached the Commonwealth Bank, and although they offered the steamer as security, and did not require accommodation to anything like the extent of the value of the vessel, they were denied financial assistance.
– Because there had been such a restriction of currency.
– Why did they not put their guarantees behind the application ?
– They offered everything they had. That is only one of many cases that have come to my notice showing how business and the development of primary production are suffering by reason of the policy of the Notes Issue Board. Why did the board apply the brake to such an extent? Was it of opinion that there was not sufficient gold backing for the issue of further notes ? It is hard to obtain exact figures, but we are informed that there is an accumulation of credit in London to the extent of £30,000,000 or £35,000,000. Some people say it amounts to as much as £60,000,000, but the former figures are, I think, nearer the mark. It would have 6een possible some time ago to issue notes as the Government now proposes to do. It is intended to issue notes against credits in London. Why did the Government wait until this bill came before the Senate, seeing that honorable senators have hammered at Ministers for a long time with all the force they could com.mand ? The action now decided upon should obviously have been taken in the first instance. It is late in the day to take this course, but I nevertheless congratulate the Government on its decision. There was no justification for the refusal of the Notes Board to issue additional paper currency when it was required. Australia has an enormous gold backing, far beyond the statutory requirement of 25 per cent, of the note issue. During 1923-24 the note issue . amounted to over £50,000,000, and the gold held was £40,000,000, or 80 per cent, of the issue. Let us look at the position in other countries. I shall first take Great Britain, which affords a fair comparison with Australia. I do not care to contrast the position in an AngloSaxon community with that in a Latin country, owing to the temperamental differences of the people. Among those of a Latin race there is probably greater danger of runs on the banks and other financial panics. In Great Britain, at the end of 1923, the gold backing amounted to only 37 per cent, of the notes issued, as against 80 per cent. in Australia. Great Britain had issued £423,000,000 worth of notes, .and its gold backing was only £154,000,000. The spending capacity of the people is not nearly as great in Great Britain as it is in Australia, and therefore not nearly the same amount of currency is required per unit of the population. To show the high spending power of the people of this country, I propose to mention some figures tabulated by the Bankers’ Trust Company of New York. The- average income per head of the population of Great Britain in pre-war times was £47, and in 1923 it was £42. In the United States of America the average income decreased in that, period from £70 to £56; in Canada it increased from £50 to £53; while in Australia it increased from £42 in 1914 to £51 in 1915, and to £63 in 1921-22. To-day the average income per head of the population in Australia is far greater than in any other country, even in the United States of America. Talcing our trade outlook generally, we note that it is growing. To finance our wool and flour exports £80.000,000 is required, and unless sufficient credit is available for those great industries it is easy to imagine what the result will be.
Not only is sufficient currency essential, but a great deal more than is now available is needed, for if the financing of those industries absorbs the whole of the available currency, the other great industries of Australia must suffer, since there will be no financial accommodation available for them. The necessity of elasticity in currency has been referred to. Many industries cannot expand, and others cannot start, owing to the difficulty in arranging finances. I am afraid that under this bill the policy of the Government will very largely perpetuate the trouble. “We have no guarantee that the board of directors to be appointed will reverse the policy of the Notes Issue Board, and we have no assurance that a more edequate currency will bo provided to meet Australian requirements. If the policy of the board should prove to be the same as that which the Notes Issue Board has followed up to the present, Australia, so far as the expansion of its bush ness interests is concerned, will be in a very serious financial position before many months have elapsed. We have been, told that, in all probability, certain gentlemen now on the notes board will be appointed to the Commonwealth Bank board. Possibly they have, to a large extent, seen the error of- their ways. At all events, let us hope they have. If they have not, steps will have to be taken to ensure to the people of Australia an adequate currency to meet trade and commercial requirements. I referred, in my opening remarks, to the necessity for the creation of a strong central bank to take charge of the financial situation, ‘ and govern currency requirements in a proper way. I also stated that the Government seemed to have taken a wrong course in this matter, and that what was required was not control, as stated by the Minister, although subsequently when challenged on the point he modified his statement with regard to control, but a policy of cooperation with other banks. If this course be followed it may be possible to evolve a policy that will be of the greatest assistance to Australian industry.
– I never said at any time that the Commonwealth Bank should control the other banks.
– I know the Minister made an explanation regarding the policy of the hank, but it did not entirely remove the impression which had been created, perhaps unintentionally, by his remarks, in moving the second reading of the bill.
– I make a clear distinction between the control of banking and the control of banks.
– I have already re-* marked, that what is required is cooperation with the private banking institutions in all the states. It has been stated by honorable senators opposite that the state savings banks should also be under the control of the Commonwealth Bank; in other words, that the state savings banks should be abolished altogether, and that branch of banking business should fall into the hands of the Commonwealth Bank.
– What is wrong with that policy?
– I cannot agree with it, for the reason that the resources of the Commonwealth. Bank are used, generally speaking, in financing the larger developmental schemes throughout the Commonwealth, including wool clips and wheat crops, whereas the money handled by the state savings banks, since state parliaments, under the Constitution, have full legislative control of domestic concerns, is employed more directly in financing housing schemes and works of a purely state character. The state savings banks are rendering a magnificent service to the people of Australia in this way.
– Why could not the same work be done by the national bank?
– Because, as I have already pointed out, the Commonwealth Bank will be more concerned in the oversight of the larger financial proposals, affecting the Commonwealth as a whole. If at any time we took charge of the state savings banks’ deposits, and if some other body had legislative authority to depress the value of those credits, the people might be placed in a very serious position. It is infinitely better, I think, that the state authorities, being charged with the responsibility of carrying out so many activities that are vital to the people of a state, should be left in control of all local finance.
– In Queensland, . under an arrangement with the Common wealth Bank, the state retains the right to use 70 per cent, of the savings banks deposits in that state.
– As my honorable friend has reminded me, when the Labour Government in Queensland entered into an arrangement with the Commonwealth Bank to take over the savings banks in that state, it specifically provided in the agreement that 70 per cent, of the money to the credit of the depositors in that state should be left in its hands.
– And that meets the whole difficulty.
– I do not think it does. I am afraid that, if the deposits in the state savings banks passed into the control of the Commonwealth Bank, the cost of administration, owing to the imposition of so many hampering conditions that would be necessary, would be so heavy that probably the rate of interest given to the people would have to be substantially reduced. We do not want that. I am glad, therefore, that there is no proposal in this bill to legislate for the control, of the state savings banks. There is just another matter I wish to refer to, and that is the capital of the bank. In this connexion the proposal of the Government seems to be rather peculiar, and requires further explanation. Up to the present, the Commonwealth Bank has been without any nominal capital, but the accumulated profits at the 31st December last amounted to £4,403,987, divided equally between the bank reserve and the redemption fund. Under this bill it is proposed to transfer to capital account £4,000,000 of the accumulated profits, and to transfer the remainder to the reserve fund. The redemption fund, which previously received a share of the profits, is dispensed with altogether. This £4,000,000 referred to will be the equivalent of the paid-up capital of an ordinary trading bank. If the ratio of the capital and reserve accounts of the bank be compared with the ratio’ of private banks - I think it is fair to do this - it will be found that, in the case of the Commonwealth Bank, the ratio of capital to reserve is only 5 per cent., and in the case of private banks it is about 20 per cent. In my opinion, the Commonwealth Bank ratio is not sufficient to warrant the bank undertaking the functions of a central bank for rediscounting purposes, and at the same time carrying on its competitive business. I agree with the remarks made by my honorable friend, Senator Greene, who urged that the bank should be either one thing or the other; that if it was to be a central bank, it should not concern itself with private trading interests at all.
– Would the honorable senator allow the business that has been built up to go altogether?
– The Government could have provided for the creation of a central bank, and allowed the Commonwealth Bank, as it is constituted at present, to carry out its present policy. I agree with the contention that there 13, as it were, a clash of interests between the Commonwealth Bank as a central bank, and the Commonwealth Bank engaged in the same sphere of business as the private trading banks. There is provision in the bill for the raising of a loan of £6/000,000 by the Government for the purposes of the bank. What is likely to be the position of the bank during a time of financial stringency ? Suppose the associated banks made application to the Commonwealth Bank for assistance, as no doubt they would, in view of the fact that certain of their holdings would be in the hands of the Commonwealth Bank. The bank would then be faced with the necessity of trying to raise money from a community crying out for the need of it. It could not turn to the notes issue department for relief. The banking and currency departments being distinct under this bill, the funds of the notes issue department could not’ be treated as part of the bank reserve. The bank would not be able to use the funds of the notes issue department to give relief that might be urgently needed. If additional notes were required, the bank would have to deposit securities with the notes issue department in the same way that an ordinary trading bank would be expected to do. So far as the notes issue was concerned, the Commonwealth Bank would be treated in the same way as the private banks. Thus, if ever the time arrives when the Commonwealth Bank will be called upon to meet a grave financial situation by affording relief to the private trading banks, it is not clear what will happen. I think it should be possible to evolve some scheme whereby the Commonwealth Bank could stand like a rock in a weary land; and be a means of salvation not only to associated banks, but also to the whole of the people of Australia. I have notified the Senate that it is my intention, if the second readingis carried, to submit certain amendmentswhich I consider essential. A most important one is that relating to the creation of a board of appeal for the staff,, such as we have under the Public Service Act. The men and women employed by the Commonwealth Bank are to an extent public servants, as they have in the performance of their duties tocomply with legislation passed by this. Parliament. We should therefore give them the same rights as we give members, of the Public Service in the matter of an appeal board.
– In common with other honorable senators on this side of the chamber, I wonder why this bill has “been introduced. The Commonwealth Bank hasbeen a phenomenal success, and it is cited all .over the world as a unique example of what a bank should be. The note issue branch was not associated with the Commonwealth Bank at its inception,, but it is now to be under the control of that institution. The Commonwealth Bank, with the assistance of funds obtained from the note issue, was successful in financing the states, and in carrying the Commonwealth through the greatest crisis in its history. That being the case, strong reasons should be brought forward for changing the management of the bank from the principle upon which it was established. When the Commonwealth Bank was created a governor was placed in sole control, and while owing to the expansion which has occurred the management requires strengthening, I see no reason why the principle of the bank being managed by its own officials and entirely free from outside influence, commercial and financial, should be departed from. I followed carefully the speech of the Minister who introduced the bill and the observations of other speakers, but so far as I can see no reasons have been advanced to justify an alteration in the form of management. I was a member of the finance committee of the Labour party which considered the provisions of the bill, and, in conjunction with our executive, was instrumental in framing some of the amendments submitted in another place. Whilst as a party we have no objection to an extension of the functions of the Commonwealth Bank, so that it shall be .a, truly national bank, with greater powers, we have no desire to see the management placed in the hands of those with outside interests. Its control should not be in the hands of a class of people :such as financiers and others who, I say with every respect, have been antagonistic to the establishment and continuance of the bank. The idea, which was embodied in the amendments submitted in .another place was that while the management of the bank might require strengthening, that could be done by the employees of the bank assisting the acting governor. Although provision is jna.de in the Constitution for the Federal Government to take over banking and currency, it was a good many years before that power was exercised. In looking up the records I find that in the first session of the Federal Parliament a Commonwealth Bank Bill was promised by the then Government, with the qualification that such a measure would be introduced as soon as the necessary data had been compiled. Nothing was done until some years later. I think the first provision of anything in that direction -was a Bills of Exchange Bill, which was introduced in 1909. Following that, a notes act was passed, and in 1911, the Fisher Government introduced the Commonwealth Bank Bill. The late Lord Forrest who was, I believe, acting Prime Minister, attended a conference of Commonwealth and State Ministers in Brisbane in 1907. and intimated that it was the desire of his Government to introduce a Post Office Savings Bank Bill. I wish to emphasize the fact that the first proposal of the Liberals, or Nationalists as they are now called, was for the establishment of a Commonwealth Post Office Savings Bank, whereas now a great many Nationalists, including Senator Duncan, are opposed to the Commonwealth Bank entering into the savings bank business. I wish at this stage to pay my tribute to a man who deserves the greatest possible credit for the establishment of a Commonwealth Bank. I refer to Mr. King O’Malley, who, from the inception of the Commonwealth Parliament, kept the matter not only before Parliament and his party, but before the people of Australia. At. the Brisbane Labour Conference in 1908, Mr. King O’Malley formulated a scheme.
– Is a Commonwealth Bank not mentioned in the Constitution 1
– The power to create such an institution is provided in the Constitution, and but for the Labour party it might have remained there until the present day without action being taken in the direction of introducing legislation. It is to Mr. King O’Malley that the greatest credit is due for the agitation he started and for keeping the matter before the Australian people. If we are to have a board outside the bank officials, I believe that Mr. King 0’Malley’s proposal would be preferable. He suggested that the Commonwealth should be associated .with the states which were to have an interest in the bank, and were each to have a representative on the board of management. I support most emphatically the statements made by Senator Grant in regard to the manner in which the depositors in the Commonwealth Savings Bank have been deprived of 1 per cent, of the interest due to them. The Treasurer (Dr. Earle Page) in moving the second reading of the bill in another place said: -
On the whole, it will be recognized Unit the Commonwealth Bank lias not boon a. serious competitor of the other banks. Indeed, it is understood that the policy of the management up to the present has been not to enter into active rivalry with the trading banks, a«nd, in pursuance of this policy, the interest payable on Commonwealth Savings Bank deposits is, and has always been, lower than the interes paid by the state institutions. It is fortunate . the policy has been such as has been described, because by reason of that policy the conversion of the Commonwealth Bank into a central bank has been rendered easier.
I cannot understand the last sentence. The fact that the Commonwealth Savings Bank has been defrauding the depositors of from j to 1 per cent, in the form of interest to which they are justly due, does not help the proposal that the Commonwealth Bank is likely because of that to be more easily converted into a central bank. There are of, course, some fairly well-to-do people who have deposits in the savings banks, but generally speaking it is the poor people who deposit their savings in such institutions. In view of this it is scandalous that the bank should deliberately, as stated by the Treasurer, not only not enter into competition with other banks, but handicap its own savings bank business by paying a lower rate of interest. Depositors in the Savings Bank of South Australia receive interest at the rate of 4J per cent. The Commonwealth Savings Bank is only paying 3£ per cent. The rate of interest paid by some state savings banks is as low as 4 per cent. It is quite clear, therefore, that the rate of interest allowed by the Commonwealth Savings Bank is from J per cent, to 1 per cent, below that allowed by the state savings banks. Surely no honorable senator will attempt to justify that. It would be a good thing if all the savings bank business of Australia was done by the Commonwealth Bank. The Commonwealth Government has control of the post offices, and in every way it seems to me that it should be able to afford the Commonwealth Bank greater facilities for conducting this business than the State Governments are able to give the states savings banks. Two institutions should not be competing for this business, for such competition must of necessity cause additional expense. I admit that the volume of business in Australia is so great that so far no serious trouble has . arisen in consequence of the two hanks operating. I say unhesitatingly, however, that in the states where the two banks are operating they should be put on equal terms in regard to the rate of interest offered to depositors. The national bank should not be handicapped and placed at a disadvantage by offering a rate of interest which is 1 per cent, less ‘ than that offered by the state savings banks. The Commonwealth Savings Bank is actually saying to depositors - “ We do not want your business, and if you put your money in our care you must be content with a lower rate of interest.” I was a trustee of the South Australian Savings Bank for fourteen years, and I have the highest opinion of the efficient manner in which that institution is conducted. It is operated in an exemplary way. Nevertheless, certain things could be done to popularize it. It would be a good thing, in my opinion, for its efficient and thoroughly experienced staff to be placed at the disposal of the Commonwealth Bank to conduct the whole of the South Australian savings bank business.
– The honorable senator would interfere somewhat with state rights.
– I do not think state rights would be affected by such an arrangement. Senator Duncan strongly opposed the adoption of the course that I am advocating, because, he said, the funds now at the disposal of the state savings banks are made available to the state governments for developmental purposes. If I considered that the state governments would be de- prived of the use of the funds deposited within the state by reason of the fact’ that the savings bank business was taken over by the Commonwealth Savings Bank, I would not make this proposal. But to do as I suggest would not be to make an experiment, for in Queensland and Tasmania the Commonwealth Bank already does all the savings bank business. I understand that an arrangement was made pia or to the absorption of the state savings banks by the Commonwealth Bank, that 70 per cent, of the deposits made within the states concerned were to be made available to the state governments for developmental purposes. It is quite proper that deposits in the savings bank in a particular state should be made available to the government of that state. I have not heard of any difficulties that have followed the arrangement made by the Queensland and Tasmanian Governments with the Commonwealth Bank. I understand that Senator J. B. Hayes intends to participate in this debate, and I would be glad to hear from him whether the depositors, and the public generally in Tasmania, are satisfied with the present arrangement. I am astonished and shocked that the Commonwealth Government has attempted to justify the action of the authorities who control the Commonwealth Savings Bank in fixing the rate of interest on deposits at from f to 1 per cent, less than is paid by the state savings banks. The policy of the Labour party is that, ultimately, there shall be one national bank, and although the realization of that ideal is likely to be deferred for a long time yet; the least we should do, in my opinion, is to permit the Commonwealth Bank to engage in ordinary competition with the private banks. T certainly do not think that we should expect it not only to withdraw from ordinary competition, but also to facilitate the operations of private banking institutions. Yet I judge from the statement in the paragraph of the Treasurer’s speech, which I read earlier in my speech, that that policy has been adopted. The private banking institutions operate in the interests of their shareholders, and their object, all the time, is to secure the best return possible for the capital invested in them. That being so, I can see no reason why we or they should expect the Commonwealth Bank not to com.pete with them. I have no objection to private) banks as such, and I do mot suggest that they are doing other than a legitimate business, but the fact remains that their primary object is to ;make profits for their shareholders. That is also the opinion of the Treasurer (Dr. Earle Page). In his second-reading speech on this measure, in another place, he made the following remarks, which I endorse, in regard to the associated banks : -
Chiefly mindful of their own interests, which is natural, they can have no such regard for the public welfare as is undoubtedly required.
No one can gainsay the truth of the Treasurer’s statement. The concern of the private banks is to make profits, and they make them, out of the general public. The Labour party desires to establish a bank which will operate in the interests of the public in every sense of the word, and not one that will be mainly interested in making dividends for a small body of shareholders. I do not consider that the proposals in this bill will in any way assist to attain the objects which the founders of the Commonwealth Bank. had in mind. The Treasurer, in his second-reading speech, gave an interesting summary of the banking methods in England, France, Germany, and various dominions, but the Government did not follow the best example when it had this bill drafted. The banking systems which seem to have been most largely kept in mind are those of the United States of America and South Africa. The United States of America, as every one knows, is the home of capitalism, where the prevailing force is the almighty dollar, and the example of that country will not commend itself to Australia. The Labour party has information which indicates clearly that the South African system is not acceptable to Labourites in that dominion. On the eve of the recent South African elections, the then Prime Minister, General Smuts, stated, that the Commonwealth Government was so satisfied with the
South African Currency and Banking Act that it intended to introduce a bill to establish a central bank like that pf South Africa. The Australian Labour party, later on, received a communication from the Leader of the South African Labour party which stated that members of the Labour party in that dominion were opposed to many of the provisions of the South African measure, and could not recommend it as a model for Australia, for it has not been a success. In view of the fact that the Labour and Nationalist parties are now in power in South Africa, it is most likely that considerable modifications will be made in the South African system1. The banking companies of Canada are obliged to deposit 40 per cent, of their reserve funds with the Dominion Central Bank, and are granted dominion notes to the value of such deposits. The Commonwealth Government might take notice of that example. I do not know that I would ask for as much as 40 per cent, of the reserves of the private banks to be deposited with the central bank, but I certainly think that a substantial amount should be handed over. Although the German Government does not supply any of the capital to or assume any financial liability for the private banks . in Germany, it is entitled to a considerable share in their profits, and to assume full control of their administration and management. Although boards, are appointed, I understand that they act merely in an advisory capacity, the Government being the supreme arbiter. This board of directors which it is proposed to appoint will be a sort of imperium in imperio - a government within a government - because, whoever controls the finances of the country controls also the government of that country. It will not be advantageous to have a board that can act independently of the policy of the government of the day, and do as it pleases in regard to finance. The members of the board proposed to be appointed will be outside financiers and commercial magnates who, so far, have shown no sympathy with the establishment of the national bank. If that board is given too great a power, it may act detrimentally to the interests of the people when it obtains the control of finance. The provisions relating to the publication of discount rates and statistics are unimportant, because the power already exists to do those things. The main provisions of the bill are those which relate to the Appointment of the board, and those which make it compulsory for the private ‘banks to settle with the Commonwealth Bank by means of cheques. An indication has been given that the Government proposes to amend the bill so that the board may issue Australian note3 to the Commonwealth Bank, or to other banks in Australia, in exchange for money or securities lodged with the London branch of any bank that makes application. I have not a sufficient knowledge of high “finance, of currency, or of exchange, to estimate the effect of that provision, but it has satisfied honorable senators who,, presumably, have a knowledge of finance. Previously, Senator Greene and Senator Poll firmly believed that it was necessary for the bill to be referred to a royal com.mission, and they were supported by several ‘other honorable senators opposite. Honorable senators on this side welcomed the prospect of having a little more light thrown on this important bill. The frantic manner in which its passage -was hastened in another place deprived honorable members there of the opportunity to adequately consider it. t cannot see that the amendment indicated will have the extraordinary effect that is anticipated by some honorable senators. There is no doubt that an inconvertible note issue is a very dangerous expedient. It practically amounts to a loan without interest. Although the practice enabled Australia to finance its operations during the war it was, nevertheless, an emergency provision, and should not be extended too far. If Australian notes are issued in exchange for money or securities held in London, that action may ease, somewhat, a position that has been causing a good deal of anxiety in relation to the transfer of credit from London to Australia. Honorable senators on this side will propose certain amendments in committee, hoping that they will meet with more success than attended the efforts of honorable members in another place. I favour very strongly the idea of establishing rural credits. At the last election that was a principal plank in the platform of the Country party. The present Treasurer promised on the hustings that, as far as lay in their power, he and the other members of his party would see that the functions of the Commonwealth Bank were extended to provide for rural credits, in order to assist the primary producer. He has suddenly dropped that idea, but I hope that the Senate may be induced to insert in the bill a provision of that nature. We must not overlook the advisability of extending the popular side of the bank. The bill does not deal with that aspect of the bank’s operations. We on this side feel strongly that it is necessary to make the bank operate in the interests of the whole of the people, and not merely in the interests of the big capitalists and big business men. We do not mind helping them if it can be done in a legitimate manner, but at the same time we consider that the interests of the poorer people and the struggling primary producers should also receive consideration. I emphatically protest against the proposal to transfer the management of the bank to outside financiers and commercial men. We should adhere to the principle upon which the bank was founded, and upon which it has operated so successfully - that the management of the bank shall be in the hands of officials of the bank.
.- A good deal has been heard regarding the ability of the Commonwealth Bank to advance the welfare of the people of Australia. It has been said that the bank has not fulfilled anticipations. I think that has been largely due to the policy of the late governor of the bank. From its inception he adopted a conservative attitude and avoided friction with the private banks.
– - Will the honorable senator excuse line for interrupting him for a moment in order to announce that the New Zealand delegates who are on their way to South Africa to participate in the conference of the Empire Parliamentary Association are present. With the concurrence of honorable senators, I propose to do them the horour of accommodating them with a seat on the floor of the Senate.
The distinguished visitors, Sir John Luke, M.P.; the Hon. A. F. Hawk, M.L.C. ; Mr James Horn, M.P. ; and Mr. E. J. Howard, M.P., Members of the Parliament of New Zealand, were then admitted and seated accordingly.
– I think that the late governor of the bank adopted a wise attitude. The establishment of the bank did not meet with the approval of the associated banks, and he did not do anything which might further antagonize them. I think that his conservatism was responsible for the success that has been attained by the bank. He also went out of his way - if I may use that phrase - to advance money to local authorities for the carrying on of public works. When the savings bank branch was established the state savings banks raised their rate of interest to depositors by one-half per cent. Sir Denison Miller did not engage them in a war of rates. In that he showed his discretion. His careful handling of the Commonwealth Bank justified its existence. A great deal of what has been said in opposition to the bill is sheer misrepresentation. Most of it may be described as abuse, for the insinuation has been made that action has been taken to placate the associated banks to the detriment of the Commonwealth Bank. I invite any honorable senator opposite to submit amendments to restore any powers that the present bill proposes to take from the. bank, and I guarantee to give such amendments my hearty support. All the charges that have been made against the Government are so much gallery talk. I admit that the board will have full control over the bank, just as tHe late governor had control over it, and, if the board carries out its functions as efficiently as the late governor discharged his duties, the action of the Gevernment in making the alteration in management will be justified. Personally, I have nothing to say derogatory to the late Sir Denison Miller, but it must be admitted that it is beyond the power of any one man alone to effectively control an institution of the magnitude and importance of the Commonwealth Bank. With all due deference to the bank officials, I think that an outside directorate, in conjunction with the officials, will be much more effective, in the development of the bank along right lines, than if we left its management entirely in the officials’ hands. I was inclined at first to think that a directorate of eight would be too large, but on looking into the position in other countries I find that all similar banks elsewhere have large directorates.
Much has been said against the NotesBoard for not yielding to the clamour of the banks, and the people outside, for an. additional issue of paper currency. Although I entirely disagree with the board in its cautious attitude, I neverthelessgreatly admire it for the firm stand it took against what it thought would be= an unjustifiable inflation of the paper currency of the Commonwealth. One criticism levelled at the Government isthat it has gone out of its way to influence the Notes Board to do something in which it did not believe. That is a harmful suggestion to emanate from the Senate. If political influence had been used by the Government to induce the Notes Board to act- contrary to its own judgment, it would indeed be a sorry thing for this country.
– The honorable senator has put the position wrongly. He should say that the Government should not be, influenced by the private banking’ institutions.
– So far as I am aware, the Government has not been influenced by them, and I think it has shown its wisdom in meeting the manager of the associated banks, and in now deciding to allow the Notes Board to issue notes on London securities. I think that that course could have been previously followed without fear of undue inflation, but the Notes Board had no precedent for such an action. It is now proposed to give the board this power, and it may be very useful in future. There will be shortage of money to finance the wool. wheat, and sugar industries, and the issue of further credit is highly desirable. The Leader of the Opposition (Senator Gardiner) stated last evening that the Government had come to the heel of its masters outside.
– That is what we shall flog our opponents with at the next election.
– Now we know from whom the clap-trap emanates. .
– Soap-box oratory does not affect me in the least. I am well aware of- the clap-trap on financial questions that is talked from soap-boxes. In 1893, when most of the banks of Australia crashed, I happened to be in the Queensland Parliament. I was then a member of the Labour party, and the then Treasurer, Sir Hugh Nelson brought down a bill providing for the issue of notes on a gold basis. It was contended then by members of my own party that that action was taken in the interests of the private banks, but the notes were issued in the name of the Government of Queensland with a gold backing, and Queensland was saved from the effects of that great crisis. Let us recall what happened in New South Wales at that time, when Sir George Dibbs was Treasurer. He issued notes as legal tender, but not on a gold basis. The associated banks thereupon withdrew the gold from New South Wales, and would not use any of the notes issued by Sir Hugh Nelson, because they had sufficient gold to flood the state of Queensland. The paper currency issued in Queensland was not used until the New South Wales notes were withdrawn, and the gold floated back. That experience gave the ex -Prime Minister (Mr. Andrew Fisher) the idea of issuing Treasury notes. The object is not to help the private banks. I know of a company that went to a bank and offered a security of £40,000, but it was refused an advance of £1,800. Not one of the .banks, not even the Commonwealth Bank, would advance the money, for it was new business, and all the available money was required for other works in progress. The issue of Treasury notes is necessary, not simply to finance the marketing of our primary products, but also to provide sufficient currency to carry on local industries. Under the Government proposal we shall be able to finance our wool and wheat exports, and give relief to those engaged in the sugar plantations and in similar industries in Australia. But those . interested in primary industries have meanwhile to pay their way. Though the shearing season in Queensland is not yet in full swing, stationowners have been obliged by the Arbitration Court to pay another 5s. per 100 to shearers. Where is this money to come from until the wool is sold? There is no doubt that at present there is a marked financial stringency which is affecting employment. I am astonished, therefore, that honorable members opposite should have displayed so much opposition to the bill. They have directed many arguments against it, but, up to the present, they have not indicated one amendment that is likely to improve the measure. If, as they suggest, they are so much concerned about unemployment and Australia’s financial difficulties, why do they not endeavour to so amend this bill as to make it conform to their views?
– If private banks are such evil institutions, why has not the Labour party started government banks in all the other states? It has had the opportunity to do so.
– One thing that may be said of the Labour party is that, wherever it has been in power, it has ruined the finances. This is one of the weaknesses of the party. I am not saying this in party bitterness at all, but with feelings of the deepest grief. The Labour party has done a wonderful amount of good in Australia, but it has failed utterly in financial undertakings. The position is the same in all the states ruled by Labour. Instead of so bitterly attacking the private trading banks, honorable senators opposite should be grateful for all that they have done for Australia, despite big profits and big dividends paid to their shareholders. Why is the Labour party so lacking in initiative in connexion with this bill? Why do ‘not honorable senators opposite give evidence of statesmanship by bringing forward amendments that would make the bill what the Labour party would like it to be ? This would be a splendid advertisement for them when next they faced the electors. I can give them my assurance that, if they submit amendments that are likely to improve the bill, I shall vote with them every time.
– The Leader of the Senate (Senator Pearce), when introducing the bill now before us for consideration, said it was an important measure. If any honorable senator had doubts in respect of that statement, those doubts were removed yesterday by certain happenings. The three Ministers in this chamber of the BrucePage pact, as it is now known, were busily engaged during the whole of the afternoon. They were working at top speed. They were real live wires. There were no go-slow methods in respect of what they were doing yesterday. The reason for their activity was manifested very clearly by the fact that an honorable senator who sits on their side of the Senate had, a few days previously, made a speech - not, I should say, an impromptu speech, but a well-thought-out and reasoned utterance. It may have been prepared by himself, or, on the other hand, he may have been helped by certain institutions that are interested in this bill. Whether he was helped or not, he certainly, in my opinion, had a brief for the associated banks of Australia. He condemned the bill in unmeasured terms. Apparently his speech alarmed the Government, with the result that the three Ministers in this chamber had a very busy time yesterday. First of all, we had Senator Wilson, who read from a document that had evidently been prepared for ]lim by those who are interested in the bill, and who, perhaps, were not overpleased at some of Senator Greene’s remarks. Senator Wilson told us that -
The bill had been the result of much thought and reflection on the part of the “Ministry. Ministers had been guided by the advice of authorities and a knowledge of all the circumstances. . . . Ministers had been in close touch with leading bankers and financiers whose opinions were worth while.
This was in reply to Senator Greene’s statement that the bankers and banking institutions of Australia had not been consulted in connexion with the bill. Senator Wilson, after having made further remarks, apparently failed to convince Senators Greene, Foil, Duncan, and others, who had in a polite way intimated to- the Government that they intended to take a certain course of action. Then a gallant senator from Queensland, with characteristic courage and tenacity, anxious for the welfare of not only the people of his state, but of the Commonwealth, announced his agreement with Senator Greene that the bill was such a technical measure, and so full of possibilities, that the Senate should hesitate before passing it, and that there should be an inquiry by a royal commission. That body, we were led to understand, should have a roving commission. It should not confine its inquiries to Australia. If necessary, its members should go overseas to get the views of the leading lights in finance in the Old World as to the best banking system for Australia, and so as to be able to understand more thoroughly questions of currency and other problems incidental to banking with which, according to Senator Foil, the people of Australia are not at present familiar. Senator Foil,
I may add, gave notice of an amendment, and, after he had spoken, the Leader of the Senate, rising to reply, said -
This is a most serious amendment.
– Order! The honorable senator is not in order in discussing an amendment that has been disposed of.
– Perhaps I shall be in order if I say that Senator Pearce, referring to a certain matter, said that it was most serious - a matter of life and death to the Government.
– What was the matter?
– The honorable senator knows all about it, but I am not permitted by the Standing Orders to mention it. This “ serious matter “ was subsequently dealt with by another Minister. As honorable senators are aware, very often there is a change after the dinner adjournment; sometimes a change for the better, sometimes for the worse. Last night Senator Crawford, the third Minister to take part in yesterday’s proceedings, entered the chamber after dinner with a changed countenance. There was victory and triumph on his face. To his credit it may be said that he saved the bill. Possibly he saved the Government, and, perhaps, a double dissolution.
– Do not talk like that.
– The honorable senator was told, during the afternoon, that it was a most serious amendment.
The) PRESIDENT. - I again remind the honorable senator that the amendment having been disposed of, debate on it cannot be revived.
– I did not intend to mention it, Mr. President, and I shall not .again refer to it. Senator Greene was kind enough to furnish me with a proof copy of his speech. I expect other honorable senators have also received copies. In the course of his remarks, he said -
So .far as this bill is concerned, I would, if I could - . . . shatter- it to -bits - and then Remould it nearer to the heart’s desire.
He had an opportunity to shatter the bill to bits, but when that opportunity presented itself what did he do? Apparently he became cold-footed and ran away.
– Senator Greene realized the company in which he was likely to be.
– He was not certain about honorable senators opposite, but he knew what our attitude would’ be, and that at every opportunity we would exorcise the powers which’ we have in this chamber to defeat the objects which the Government have in view in regard to the Commonwealth Bank. He said that he would shatter the bill to bits, and went on to say, “There are pitfalls and dangers of the gravest possible character associated with it.” “Was that not an additional reason why he should stand, up to his guns? If I had expressed views as strongly, as vigorously, and as clearly as the honorable senator did, I should not have hesitated to take ‘every opportunity to give effect to them. But apparently all that the honorable senator had in view was to delay the passage of the bill and secure what he was apparently seeking in the first place- financial assistance for the associated banks. That was the only object he had in delivering a long speech and in pointing out the dangers and pitfalls associated with the bill. He went on further to declare, “ I say unhesitatingly that, in an important issue of this nature, before acting finally we ought to have the considered judgment of all those men in whose hands the financial stability of the Commonwealth at present rests.” He knew that the Government had the benefit of the advice and experience of the Treasury. He had a memorandum before him supplied by the Department of the Treasury containing historical references to banking institutions throughout the world, but he passed this matter lightly by, saying that he had every respect for the gentlemen of the Treasury, but they had not banking experience. He further said that he had every respect and regard for the Treasurer, but he, too, was lacking in banking and commercial knowledge. We can, therefore, take it that, according to Senator Greene, there is one authority, and one authority only, in this chamber on banking and finance generally - Senator Greene ! Others may be important in their own particular sphere, but they lack banking and commercial experience. He went on further to say - and this is a statement to which I take strong exception - that “ Nine- tenths of our difficulties arise from an inelasticity of currency that is very largely inseparable from and unavoidable in connexion with a note issue controlled as it is in Australia.” The honorable senator is of the opinion that nine-tenths of our difficulties are caused because we have a board controlling the note issue. He said that the deflation of currency, caused by the actions and activities of the Notes Issue Board, was responsible for the financial stringency in Australia, and in effect that ninetenths of our difficulties would be removed if we curtailed the powers of the Notes Issue Board. In other words, he told us not to deflate currency, but on the contrary to inflate it.
– The honorable senator did not advocate that.
– He said that the Notes Issue Board was deflating the currency, that it was not sufficiently elastic, and that certain institutions from time to time approached the board with a view to getting assistance. The board, he said, had steadfastly refused to expand the currency. Neither the inflation or deflation of the currency in Australia will, however,, seriously improve our position. After listening to the speech of the honorable senator one would think that Australia was distinct from any other portion of the universe, and that if we had here a system of our own we should have little to fear. Some, possessing superficial minds, believe that so long as the sun shines, the rain falls, and the grass grows, prosperity in abundance will be with us. It is well for the sun to shine and the rain to fall and the grass to grow, but it is more pleasing, more satisactory, and , more profitable to know that with bountiful seasons and an abundance of commodities the doors of the world’s markets are open to- us, and that good prices will be obtained for the commodities which we produce. Does any one seriously suggest that with an inflated currency to tide us over our temporary difficulty we would solve the problems, that confront not only Australia, but every Other country throughout the world ? Why is it that at the moment there is in Great Britain a larger army of unemployed than there has been for. one hundred years ? Is it because of an inflated currency? The average citizen is unmindful of factors. To-day the world is more or less chaotic and bankrupt. Depreciation of currency exists in every zone of the globe, In Britain trade is worse than it has been for a number of years. And why ? Merely because its export trade has fallen off. The reason for this is the impoverished state of Europe. Some may ask what that has to do with Australia. It has everything to do with Australia, because Europe’s prosperity means Australia’s prosperity. Improved economic conditions in Europe would be better for all concerned, .and in Great Britain there would be fewer unemployed. If industrial life were more active, there would be increased employment, and there would be a better market for our commodities. Solutions have been submitted by members of the present Government. Before the present Minister for Trade and Customs (Mr. Pratten) joined the Cabinet he had a panacea for our present financial difficulties. He said -
The Government should now consider a reform in our banking arrangements, whereby our surplus credits abroad could be used in the liquidation of our securities held there - be they Government stocks or any other security - thus automatically liberating credits in Australia to help in developmental work.
That was the statement of the present Minister for Trade and Customs before he joined the Cabinet. He said that in effect our difficulties arise from the fact that we are extensive borrowers abroad, .and that the more we borrow abroad the greater the quantity of goods we import. His remedy was to cease borrowing abroad, and under such a system there would.be almost a cessation of imports. If, he said, we ceased borrowing abroad we could borrow, within Australia. He further said that it would be much better to borrow in Australia than to go overseas, and he took exception to the present Government borrowing £7,500,000 overseas, on the ground that if that amount were raised in Australia it would be better for the Commonwealth and for the Australian people. He admitted that we should have to pay high rates of interest, but that, he said, was immaterial, because the interest would be paid to Australian people. Let us see what another member of the Cabinet has to say in reply to the present Minister for Trade and Customs’ solution of the existing difficulty. According to the Treasurer (Dr. Earle Page), the Minister for Trade and Customs has not gripped the situation. The Minister for Customs stated that the difficulty could be overcome by. stopping imports, ceasing to borrow abroad, and by floating loans within Australia. In reply to the latter statement regarding borrowing, the Treasurer said -
As to the suggestion that existing London credits should be adjusted by the liquidation of Government debts there, it is necessary to point out that the money at credit in London is private money, and its owners are not willing to hand it over to the Government as an investment. Indeed, in view of the peremptory demands of current’ business, they cannot afford to do so. The only alternative would lie in the raising of a loan in Australia, giving the proceeds to the banks here in exchange for their London money, and then redeeming Australian Government securities by purchase in the London market. This alternative, too, is impracticable, because already public borrowing in Australia has proceeded rather too far, and great difficulty is being experienced in finding money here, even for necessary development. Any attempt to carry out these suggestions would raise interest in Australia to a prohibitive rate, stagnation would be apparent everywhere, and the remedy would be worse than the disease.
That is the Treasurer’s reply to another Cabinet Minister who says that he has a solution to the problems which confront us. It is a case of doctors differing.
We were told that the Government had given the fullest consideration to the drafting of this bill. If that is so, then very great differences of opinion must have existed in the first place among the members of the Cabinet since they still express such varying views. “ The Commonwealth Bank was established for a definite and specific object. It was to be essentially the people’s .bank, and it was certainly anticipated that it would compete with the private banking companies. When the Labour party placed before the country its proposal to establish the bank, that plank in’ its platform was , explained by the then secretary of’ our organization outside in a pamphlet which he issued on the subject. In that publication he stated that in the course of time the Commonwealth Bank would probably “ eliminate “ a number of the small associated banks. What he meant by that was that it would eliminate them by competition. That statement was widely used against the Labour party in the subsequent election campaign. The people were told that the Commonwealth Bank, when established, would eliminate some of the private banking companies, and that there would be no compensation paid. Well, in the pioneering days in this State the people were content with coaches and wagons to convey them from place to place, but when those days passed they decided to adopt a faster means of transportation. In their wisdom they resolved to build publicly owned and controlled railways. In the course of time trains began to run, and the coaches and wagons, which up till then had been the principal means of conveyance, were practically run off the road. No one at that time suggested that the owners of those vehicles should be compensated for the loss of their business. Years ago the people of Melbourne were satisfied with horse drawn cabs and omnibuses to carry them from one part of the city to another, but eventually a private company was formed to establish the cable tramway system. “When the trams commenced running, the cab and omnibus proprietors lost their business, and it was never suggested that they should be compensated. The Commonwealth Bank could only eliminate private banking companies by more efficient and better management. If private companies lost their business in those circumstances they would have only themselves to blame.
– The Commonwealth Bank was established to give the people a better service.
– That is so, and it gave them wonderfully good service during the war. It is admitted on all sides that it not only saved Australia millions of pounds, but also steadied the rate of interest and the rate of exchange.
– Did not the private banking companies help materially in those matters ?
– So far from the private banking companies assisting the country, they were actually assisted by it. The Treasurer stated. in his secondreading speech on this bill that during the war the private banking companies were given three Commonwealth Bank notes for every sovereign they lodged with the Treasury. That is the kind of help the associated banks gave to the country.
– And the British Government was behind it all.
– I am not now discussing what the British Government did. I say without fear of contradiction that the Commonwealth Bank was of immense assistance to this country in the time of its greatest need. “We are told that drastic alterations in its constitution are necessary in order that it may become a central bank. Senator Greene informed us that if it was to become a central bank it could not possibly carry on ordinary banking business in competition with the private banks. Therefore, it is apparent that if we accept these proposals the bank will not be able to render to the producers that’ assistance which the Labour party desired that they should obtain from it when it was established. The Government has suggested that the savings bank branch could come to the aid of the producers, but we consider that the help should come from the national bank. One of the main reasons for the introduction of this bill is, we are told, to provide power to increase the bank’s capital. As a matter of fact, the bank already has power to increase its capital. The real reason for the introduction of the bill is, in my opinion, that the Government wishes to transform the bank in such a way that it will only function in accordance with the Government’s policy. We all know that the Ministry is opposed to government enterprise of every kind, and that it has taken every possible step to limit the usefulness of established government institutions.
– Will the honorable senator tell us how this bill will limit the usefulness of the Commonwealth Bank?
– The happenings in this chamber yesterday demonstrated clearly that the Government is susceptible to outside influence.
– That does not answer my question.
– Honorable senators were informed when the Government introduced this bill that thorough consideration had been given to every aspect of the measure, and that it was framed only after frequent consultations with financiers and bankers. It was passed by another place two or three weeks ago, and has been before this chamber for some time. Many speeches have been made upon its provisions, but not until after a certain happening yesterday, following which a hastily convened conference wa9 held, did the Government suggest any important amendment of the measure. I should like to know who was consulted, where the consultation occurred, and what views were expressed. There should be no hole-and-corner business with a bill of this description. It is far too important to be treated in such a way. During my membership of this chamber I have never heard of anything that could be compared with the happenings of yesterday. The Government has adopted a course which is without precedent in the history of responsible government in Australia. Although the Notes Issue Board has stoutly declined to be influenced by certain financial institutions to take a particular course which, in its opinion, would be diametrically opposed to the best interests of Australia, the Government has decided, in consequence of a certain consultation, to instruct it to yield to those influences, and do something which is not only opposed to the conscientious views of the board, but also to those of the Government.’
– Does not the honorable senator think that this bill will be more effective if the foreshadowed amendment is agreed to ?
– If that amendment will make it more effective, then all I can say is that the Government did not give careful and close consideration to its preparation. No effort was made to introduce that amendment until Senator Greene had addressed this chamber. If the amendment will make such a vast difference in the usefulness of the bill, it can hardly be sincerely suggested that the Government had previously availed itself of the best financial advice that could be had. If this amendment is so desirable^ then the Government’s previous statement about the care it took in drafting the bill cannot be true. It is extraordinary that such an amendment should be introduced after a hastily convened conference if the Government had previously been in close touch with the financial authorities of the private banking institutions. We were told yesterday that the Government realized that the acceptance of a course suggested by another honorable senator - the appointment of a royal commission - would mean delay in the passage of the measure. I ask what serious results would have followed a delay of three, six, or even twelve months ? Have we not also been informed by the Government that the bank, as at present constituted, has full power to deal with any serious financial stringency that may arise? It is a serious thing that the Notes Issue Board is apparently to be compelled to do as the Government desires on the plea that we are faced with a situation of extreme urgency. Such an action as the Government took yesterday is not in the best interests of Australia. I regret exceedingly that the Government is about to make a drastic change in the constitution of the bank which will result in the institution becoming weaker and less powerful rather than stronger and more effective in protecting the people’s interests.
– Does the honorable senator think that this legislation will weaken the Commonwealth Bank ?
– It is difficult to judge what the bank will do under the guidance of the directors whom the Government will appoint. Those gentlemen may be the very best that can be secured in any part of Australia. Those appointed to control the note issue also may be the very best that Australia can produce. On the other hand, they may be biased, some consciously and others unconsciously against government enterprise. There are members of the Government who are unreasonably biased against every form of government or public enterprise. If they are actuated by bias the directors may commit an act which in their wildest ‘ dreams was never anticipated by the people. What does the Treasurer say in regard to the private banks ? Senator O’Loghlin quoted one statement which should be emphasized. It was -
We have a number of banks which, though’ loosely associated for some purposes, scarcely can express a corporate opinion. Chiefly mindful of their own interests, which is but natural, they can have no such regard for the public welfare as is undoubtedly required.
From that class the directors of the Commonwealth Bank may be chosen. Further on, the speech of the Treasurer contains the following statement: -
Their individual outlook and interests render them unsuitable for the exercise of that prevision which is absolutely necessary for the construction of a sound public policy, and its wise application during a long period.
– In view of that statement, it is not likely that a selection will be made from that particular class of banking institutions.
– The Treasurer was speaking of those who control private banking institutions. For the moment it is not material whether the directors or the shareholders of private banking institutions are referred to. The outlook of both is naturally limited, because they are concerned with the success of their own particular institutions. Therefore it may be difficult to obtain the services of men of independent minds, whose sole aim would be the success of the Commonwealth Bank, as against every other bank in Australia. It is because I have a doubt on that matter that I cannot support the bill in its present form. What control -will -we have over the directors, or those who will handle the note issue? It is true that they will be appointed for a period only.
– Had we any control over the governor of the bank?
– He’ was appointed for a certain period. It must be admitted that the management of the bank has been highly successful. In view of that fact I think that we ought to leave well alone. I do not know why there should be such a desire to place the bank under the control of eight men, to be drawn from all parts of Australia, and be paid about £50 for every sitting. In addition, there are to be local boards, which will exercise certain powers. The real management of a bank is not with those men who are called directors, but with the managers, the sub-managers, and the staff of the bank. Some men are placed on the directorates of banks and other institutions because they figure prominently in certain spheres of activity. After these men have been ap-pointed, we may find ourselves asking what are their special qualifications for the office that they hold. If Senator Greene, Mr. Pratten, and Dr. Earle Page were chosen to constitute a directorate of three members, they would never reach finality on any proposal to relieve the present financial stringency.
– They would probably fight like tiger-cats.
– The honorable senator knows that their proposals for remedying the present financial stringency differ very materially from each other. That will probably be the experience of the eight men whom it is proposed to appoint to this board. If we cannot defeat the bill on the motion for its second reading, I hope that we shall be able to materially amend it in committee.
– Judging by the tenor of the speeches we have already heard, it is a foregone conclusion that the bill will pass not only the second reading, but every other stage. When I first read the bill I thought that sufficient information had not been gathered before it was intro duced. Whether that was a’ fact or not, a very important aspect that required serious consideration was the urgency of the measure. Even a layman, from a perusal of the newspapers and an observance of present-day ‘happenings, cannot help concluding that unless something is done immediately, Australia will be on the verge of very grave financial difficulties. The extension of the operations of the Commonwealth Bank seems to offer a way out. In a few weekstime this season’s wool clip will be available, and it will probably be the heaviest and most valuable that has yet been shorn in Australia. The newspapers this week have apprised us of the fact that to obtain comparatively small sums of money from England as high a rate as £3 7s. 6d. per cent, has been paid. Only a moment’s thought is necessary to show what it would mean to move sufficient money from England to Australia to finance our wool and our wheat. I would give the private banks every facility to continue trading. I believe that those institutions fill a place that cannot be filled by others. There is ample room for the extension of both the private and thepublic banks. To rectify the exchanges and bring them as close to par as possible, a big institution like the Commonwealth Bank is necessary, because our existing financial institutions are unable to do so. The Minister has foreshadowed an amendment which will give the Commonwealth Bank the power to issue notes to the amount of money or security lodged in London. Perhaps the Minister will tell us in committee the meaning of the word “ money.” I should have expected “ coin “ or “ bullion “ to be stipulated, because in these days “ money “ might mean anything. I listened carefully to the speeches delivered by honorable senators opposite. Their chief objection to the bill was that under it the bank will be used to assist the private banks. Senator Hoare, on behalf, I suppose, of the Opposition,” stated that they would, if they could, abolish the private banking institutions. I have always known that nationalization is a part of the platform of the Labour party, but I have never before heard the statement made with such directness that that party would go ‘so far as to- abolish the private banks.
– The honorable senator ought not to take any notice of statements of that kind.
– When -a declaration has been made with the directness with which Senator Hoare made this statement, and is not contradicted by any honorable senator opposite, it is no use Senator McDougall advising me not to take any notice of it. Nothing will be gained by telling the people outside not to take any notice of that statement.
– Senator McDougall, at present, is the Deputy Leader of the Opposition, and he gives the statement a flat denial.
– Senator McDougall has not given it a flat denial. The Leader of the Opposition (Senator Gardiner) was in the Senate when the statement was made.
– He was not.
– I accept the honorable senator’s denial that Senator Gardiner was not in the Senate at the time. I presume, that Senator . Hoare was speaking entirely for himself?
– When the statement is read in Hansard, I think it will be found to bear a different complexion. I listened with a great deal of interest to the speech that was delivered by Senator Greene. It was an admirable speech, but I was amazed to find that he opposed the bill for a reason entirely different from that of honorable senators opposite. He opposed it because it might be detrimental to the private banks, and .they opposed it on the ground that it will help the private banks. Viewing .those inconsistent grounds of opposition, I immediately came to the conclusion that there could not be very much wrong with the bill. The interpretation which I placed upon the remarks of Senator Greene was that it would be dangerous to give the powers proposed to the Commonwealth Bank, because of the possibility that that bank might, at some future date, be subject to the direction of another government. Senator Greene said that the Government would find all the money for t’he bank, make every appointment to the board, and control the note issue. The prospect placed before us by Senator Greene influenced me very much at the time. I thought that it would be dangerous for these wide powers to be given to a govern ment composed of men who desired to abolish the private banks. I immediately came to the conclusion, however, that such a government, with a majority in both Houses of the Parliament could pass whatever legislation it liked, and give itself the power to abolish the private banks. I think that we can pass the bill without any twinges of conscience. There is, in this Commonwealth, room for both private and national banks. We want a Commonwealth Bank that will work in friendly competition with, and assist, the other banks. I am quite sure that those objects will be attained by the bill. It is a wise precaution, in view of the extent of the present operations of the bank, and the dimensions to which it must grow, to place its management in the hands of a board. It should be remembered, however, that the governor of the bank, and possibly the officers immediately under him, will in any case have the principal voice in the management, and I ask the Government whether it would not be advisable to stipulate in the bill that the governor shall be chairman of the board of directors, and have a casting vote. In the event of a financial crisis the advice of a board will be most useful, but the board should not be given power to dictate to the governor as to the policy to be adopted. It seems almost impossible to obtain a governor with attainments equal to those of the late Sir Denison Miller, but no doubt a good officer will be secured, and he will be in the best position to deal with the crisis from a banker’s aspect, no matter how valuable the advice of the board may be. I am aware that there is power in the present act to extend the functions of the bank, but I should have liked to see provision in the bill for the establishment of rural credits. The farmers, and especially the small farmers, are not well off at the present time. Owing to the financial stringency, and . possibly owing to the borrowing policy of the various states, farmers are experiencing the utmost difficulty in renewing their mortgages. I do not .advocate rural credits on stock or implements, or any such unstable security; but I know many cases where, although the Security and the” men have been undoubted, their legal and personal expenses in renewing mortgages- have put an additional 1£ to 2 per cent, per annum on the cost of their, loans. The worry attached to these renewals has been almost sufficient to drive the average working farmer out of his mind. The state savings bank of Victoria is doing excellent work in advancing money on agricultural property d on the Credit Foncier system, and there is ample room for an extension of activity in that direction. The Commonwealth Bank could well take up the matter, perhaps through its savings bank branch. There is no better way to help the Australian producers than to institute a system of rural credits on the Credit Foncier system. The aim, under it, is to charge about 1^ per cent, per annum, in addition to the ordinary rate of. interest, so that in that way both principal and interest are paid off over a term of years. It would be an excellent arrangement for the producing community, seeing that farmers in many cases are now paying an extra 1 per cent, in legal expenses for renewing their mortgages where is is possible to obtain renewals. I believe that an amendment was moved in the other branch of the Legislature for the purpose of establishing a system of rural credits, but I do not think I should be willing to support a spectacular amendment with that avowed object.
– The honorable senator is now climbing down.
– Not at all. If such an amendment were tabled, the most it could do would be to give the board of directors power to institute such a. system. I understand that sufficient power exists in the original act, but I ask the Government to consider whether they should not ask the board to make the adoption of that system one of the foremost planks of its policy. I am sure that the board would have no cause to regret its action, for great benefit would be conferred upon the farmers of Australia. The schedule to the bill contains a form that is to be filled in by the private banks, stating the amount of bullion and Australian notes held by them, and, no doubt, it will be very helpful to have that information. But I point out that, in my opinion, it is also desirable that the banks should state whether their assets are in London, the United States of America, or Australia. I suggest that the Government should confer with its currency officers to ascertain whether or not that additional information would be of material assistance. I have pleasure in supporting the second reading of the bill, believing that it will advance the interests of the country.
– I shall be very brief in my reply to the points that have been raised. The statement was made by the Leader of the Opposition (Senator Gardiner) that the Commonwealth Bank is to cease to be a competitor with the private banks, and he quoted section 7, strange to say, of the principal act. If he looks at the bill he will see that that section is not touched by it. It is not the intention or desire of the Government that the Commonwealth Bank should withdraw from general banking operations, nor that it should pursue a policy of intense competition with the other banks. I do not think that would be desirable, but if it is to be a central bank it will be necessary for it to do a certain amount of general banking in order to make profitable use of the large funds at its disposal. The Bank of England and the Bank of France both do a considerable amount of general banking business. Senator Gardiner seemed to imagine that there was some ulterior motive in transferring the control of the note issue from the Treasury to the Notes Issue Board. The note issue was placed under the control of a board by the Government of the day when Australia was passing through a dangerous period. Criticism was then being levelled at the note issue, and it was made to appear that there had been a dangerous inflation. Whether that was so or not, the fact remained that so long as political control continued there would always be the danger of a suspicion of political interference with the note issue. It is, therefore, the desire of the present Government to render it impossible to suggest such interference. Senator Gardiner further suggested that the Government intended to appoint its friends to positions on the board of the Commonwealth Bank. Such criticism is unworthy of the Leader of the Opposition. It carries him nowhere, and it is a reflection on the public life of Australia which hurts, not only those on the Government side, but the whole parliamentary institution. It reacts against the Opposition in the long run, and affects them just as much as it does other parties. I do not propose to refer to the criticism on the other points raised, since they have mostly been dealt with by other honorable senators, and some of them have been replied to by my colleague, Senator Wilson. Senator Duncan said that the Commonwealth Bank should have capital and reserves m a similar ratio to the private banks. What would it matter, I ask, whether the Commonwealth Bank had £5,000,000 in capital and £5,000,000 in reserves, or whether it had an available capital of £10,000,000? Would it militate against the soundness or success of the bank? That, I think, is the answer to Senator Duncan. We listened to Senator Findley’s speech with much interest. The first portion of it would do credit to any honorable senator who had made a study of the financial situation. He expressed in simple language the present position in regard to currency in not only Australia, but every other country, and said that the trouble was that the people of a great many nations were too poor to buy. He also quoted with apparent approval a statement by the Treasurer, that we can be paid for our exports only by imports. That, of course, is rank heresy from a protectionist’s point of view, because, if there are imports, what becomes of the tariff ? Senator Grant and Senator Findley might thresh that matter out between themselves. After reaching such a high plane in the earlier part of his speech, it was a surprise that Senator Findley could not remain there, but had to come down and repeat the general inuendoes that have been made by honorable senators opposite with reference to what would follow the passing of the bill, and particularly as to the amendment foreshadowed by the Government. Whether we believe in the principle of private trading banks or in the nationalization of banking, we must admit that the private banks are an important factor in the financial structure and progress of the Commonwealth. It would be foolish and suicidal to suggest that the bill must be passed irrespective of representations which they might make regarding its pro-, visions. I reiterate, notwithstanding what Senator Greene has said, that from the time the Government first gave consideration to the preparation of this bill invitations were issued to the representa tives of banking institutions to come forward with suggestions, ideas, and criticisms, but we have had very little from them.
– There is a difference of opinion as to that.
– There should be no difference of opinion at all. I am stating facts that have come within my personal knowledge. I have been present at conferences held with representatives “of trading banks with regard to the currency problem.
– That is quite a different matter
– It may be, but currency problems were mentioned by other honorable senators, including Senator Foll, and it has been made to appear that this financial stringency is due to the fact that the Notes Issue Board and the Government would not listen to the demands of the private banks. Senator J. B. Hayes raised one or two queries as to the meaning of the word “ money “ in the amendment which has been foreshadowed. Money, according to the meaning given to me, is currency by means of which commodities may be bought in England or elsewhere. This currency may be gold, cheques backed by credit in the banks, notes, silver, &c. As regards the extension of the provisions of the bill to include rural credits, I may add that this measure is not the last word of the Government with regard to banking. We believe that if the subject of rural credits is to be dealt with effectively it must be by means of another bill, because Ave shall have to set up the machinery to operate that branch of finance. It is the intention of the Government to deal with that subject by separate legislation.
– This session?
– I cannot promise that, but it will be done at the earliest possible moment, and perhaps during this session. The other matters that were raised during the debate may, I think, be dealt with more appropriately in committee,
Question - That the bill be now read a second time - put. The Senate divided.
Majority … … 11
Question so resolved in the affirmative.
Bill read a second time, and committed pro forma.
Silting suspended from 6.29 to8 p.m.
Bill returned from the House of Representatives without amendment.
The PRESIDENT (Senator the Hon.
Certificate laid on the table and read by the Clerk.
– I move-
That, inasmuch as the gold-mining industry of the Commonwealth has during late years given unmistakable evidence of alarming decline, and as such decline cannot be said to arise from any fault on the part of the people carrying on the industry, but is entirely due to external causes, including amongst others -
That, further, the Senate is of opinion that such assistance can best take the form of-
This motion, as will be seen, is submitted with the intention of asking Parliament to consider the condition of the gold-mining industry of Australia, and to do something to assist it. I believe I am right in saying that this is the first appeal which has been made to a Commonwealth Parliament since the inception of federation far assistance in any shape or form for this industry. It is quite true that the motion is rather liberal in language, but amplification is necessary to strengthen a good cause. The importance and significance of the cause is so important to the country that I have no apology to offer for the somewhat lengthy form of the motion as submitted. It is a simple and humble appeal to Parliament to take stock of the gold-mining industry, and to carefully consider in what direction it can be assisted. Honorable senators are aware that the representatives of other industries, without exception, have at some time or other found their way to the Federal Parliament to seek assistance, and their quest has not been in vain. In perusing a long list of the industries which are in operation throughout the Commonwealth, I was puzzled to find one whose representatives have not at some time or other approached the Federal Parliament. For years the mining industry has been dependent upon its own resources, but now, having regard to its1 serious position, its sponsors rightly ask this Parliament to give it assistance in the direction I have indicated. As the motion indicates, the mining industry stands as a stalwart buttress of the secondary industries of the Commonwealth. From Cape York in the north to Wilson’s Promontory in ‘ the south, and from the eastern to the western extremities of the Commonwealth, mining operations scattered throughout this wide expanse of territory have drawn liberally upon the secondary industries for their requirements. The people engaged in this industry, to their credit be it said, have been willing at all times to assist, as was their bounden duty, the secondary industries of the Commonwealth. They have done so, and now, at a time of stress in their own case, they naturally look for some return. When I was first returned to this Parliament as a representative of the western state, I was a Protectionist. But I owe my political advancement and political existence in this country to the fact that the people engaged in the mining industry in Western Australia supported me, and because I was associated with an industry the very existence of which so much depended upon free markets for its requirements. My appearance here may have been the last thing that was anticipated. I am proud of the fact that .1 assisted to frame the tariff of 1907, which gave substantial protection to the secondary industries. At a later stage, I acted similarly in connexion with other tariffs; but what has happened to the mining industry in the meantime ? It has been assisting secondary industries, but- has it ever had a farthing in return? Senator DRAKE-BROCKMAN - No.
– Senator DrakeBrockman is right. If has not. While we see these things going on, we must admit that the time is over-ripe, in fact rotten-ripe, for an appeal to be’ made to. the Parliament with all the strength that we can command. We must take stock of our position, and ask ourselves as representatives of the sponsors of the industry., if it is not our duty to immediately assist those who are doing the real pioneering: work of opening up our great interior. It is time that the representatives of the mining; industry came forward, without any apologies, to seek that assistance, which has’ been so freely given to other industries in the Commonwealth, be they great or small. I have assisted the Queensland meat industry by my vote in this chamber for a bounty, in order to* keep it going, and I shall do so again if the necessity arises. I have alsohelped the hop industry in Tasmania, and so on with all the rest. The representatives of the mining industry have neverfaltered in their desire to support other industries, and now, as a result of a combination of circumstances, the mining industry is in its present plight, and asksthe representatives of other industries, and the people generally to lend a friendly hand to assist it. What is the position ? It is so alarming, as the terms of the motion disclose, that it does not need any effort on my part to place it before the Senate in its true perspective. Prior to 1914, the gold yield of the Commonwealth was 2,050,000 oz., but last year the production dropped to 700,000 oz., showing a clear shrinkage to one- third. In 1914, 29,700 men were engaged in the industry, but last year only about 11,000 were employed. Not only has production declined, but there has been a severe reduction in the number of men earning a livelihood in mining. These men, to their credit it may be said, do not spend their time seeking employment in attractive portions of the Commonwealth, in the vicinity of the coast, or occupy their time hanging round street corners or supporting lamp-posts, but carrying their burdens on their backs, render a useful service in some of the most remote parts of this great continent. In search of minerals they traverse untrodden paths. Large areas in Queensland, Western Australia, and the Northern Territory are awaiting attention, and with reasonable help will soon attain to a higher stage of development. It cannot be said that the alarming decline in the production of minerals is due to the fact that our possibilities are exhausted. Tt is due to other causes, which I am .now about to relate. One is that during the Avar period this industry, more than any other, in the interests of the commonweal of the nation, was subjected to conditions with which no other industry had to contend. When war was declared an embargo was placed on the export of gold. Those who had the product to sell were prevented from seeking a free market. Instead of disposing of gold in the markets of the world, to the highest bidder, such as the owners of primary products were free to do, the gold producers, in order to serve the ends of the nation, were compelled arbitrarily - I do not say it was done to injure the industry, but to safeguard the nation’s liberty and well-being - to sell at a fixed price. The price was reduced, notwithstanding the fact that those engaged in the industry had to pay an increased price for everything they required. The producers had to contend with a decreased price for their product, and with increased prices for the commodities they required. It is quite natural that, as a result of such conditions, those engaged in this industry, which has been such a good friend to the Commonwealth, helping to drag it through many a miry slough, should now be compelled to appeal to this Parliament for help. We do not come here with a light heart. We would rather continue in the spirit of independence, and refrain from asking Parliament or any other authority for help. I feel that my appeal will not fall upon deaf ears, for when I interested myself, in a humble way, in this matter previously and asked honorable senators to present themselves at the Prime Minister’s room to support an appeal on behalf of the industry, I am glad to say that they; realizing the importance of the matter, came forward in almost their full strength. At any rate, so many attended that barely a quorum was left in this chamber. I expected them to do so, but when I saw my expectation fulfilled I must admit that I was glad. I trust that on this occasion honorable senators will again show their sympathy in an unquestionable way by supporting my motion. May I say, in passing, that we have not yet had a reply to the rc- quest that was made previously. We shall not be doing any more than we ought to do in asking the Government to do someing to rescue the gold-mining industry from its present pitiable condition. I have already mentioned some of the causes that have contributed to its condition, but another merits consideration. When the industry found itself between the two opposing and crushing forces to which I have referred, the mine managers were obliged to direct their efforts to the exploitation of the richest pockets of ore in their mines. The richest deposits were exhausted during the war, whereas if the industry had been permitted to develop in the ordinary way, the lower grade ores would have been worked regularly, and some of the rich deposits would still be available for mining operations. In consequence of the practice that had to be adopted on account of the exigencies of the war situation, huge reserves of lowgrade ore are now, to all intents and purposes, buried, and it will be almost impossible to recover them. It was very serious to the industry that the mining companies had to work under such conditions, for they are not now able to treat their low-grade ores, and it is a hundred chances to one against the gold in them ever being recovered. I do not desire to labour this matter, for I feel that1 my request needs from me only slender support to commend it, to the sympathetic consideration of honorable senators. But I must point out, before I sit down, that there are deserted mining settlements all over this continent - from the north of Queensland right through to Western Australia. I am reminded of Goldsmith’s beautiful line, “ Sweet Auburn ! loveliest village of the plain.” There are many deserted villages and settlements, which formerly were the homes of successful miners. I desire to see these erstwhile flourishing settlements reinhabitated and restored by men who will be able to make a living by working the unexhausted gold deposits on which they are established. To-day the only tenants of these deserted homes are wild goats. I am not speaking on behalf of my own state alone - I hope that I never shall be guilty of taking a parochial view of an important industry like that of gold mining - but I am necessarily specially concerned about Western Australia. Seventy-five per cent. of Australia’ s gold output comesfrom that state, and it took the lion’s share in supplying the nation with gold when gold was so badly needed. These villages should be repeopled, and this industry revivified ; and I look to the Government to do something really practical to give effect to the objects I have in mind. As the motion states, the industry has been given considerable help by the State Governments. It may be said without fear of contradiction that nearly every state in the Commonwealth has dipped deeply into its local Treasury to pay bonuses, rewards, and subsidies to prospectors with a view to helping the industry. In Western Australia and Queensland particularly, railway rates have been lowered, and all possible charges have been cut down to the bone in order that everything should be done to encourage the’ industry, for its great value to the community is recognized. The State Governments expected to reap some reward from their policy, but lo and behold much of the benefits were taken by the Commonwealth Government, and the State Governments did not get a halfpenny in return for all that they had done. To adopt an expressive phrase from one -of our best-known writers, the time has come when we should “ bite our nails,” and see what we can do to put the industry on a proper footing again. Not only did the gold-mining industry assist the nation during the recent war, , when the freedom of the world was trembling in the balance, but away back in the nineties, when this state was going through a period of serious depression, when 100,000 people were out of work, when soup kitchens were established in Melbourne and Sydney to supply the unemployed with some nourishment, when governments were at their wits end to know how to overcome the calamity which had fallen on the country, when the banks were closing their doors, when the land boom had ended, and when complete disorder and disorganization had overtaken the trade and industry of the country, the gold-mining industry in Western Australia came to its aid, and saved the nation from inexpressible poverty and’ misery. I remember, during those distressing times, reading in the Sydney Bulletin that a man with a horse and dray at Bendigo could earn only 4s. l1d. a day. The discovery of gold in
Western Australia at that time eased the situation in the eastern states. It was as though a magic hand had waved over the scene. The depression ended, and the industries of the country became reestablished on sound lines. The sole reason for this was that gold had been discovered in Western Australia, and its broad areas were swarmed by bands of gold seekers from the devastated and desolate areas of the eastern colonies. I am glad to saythat the men and women who went to Western Australia in those days oecame, and still are, among its best citizens. The gold discovery relieved serious economic disorders, provided food for the hungry, and ended the miseries of tens of thousands of people, but, to-day, the industry is itself in sad need of assistance. I think that I may now leave the matter in the hands of honorable senators, for I feel confident that they will do their duty and give my motion that sympathetic consideration that it deserves. If they do not support it, they will not be doing their duty, and will, in fact, act entirely against the country’s welfare. It will be a serious thing for Australia if the goldmining industry is permitted to sink and die, for it has been the bulwark of both our secondary and primary industries in the years gone by, and will be so again if something worth while is done. I have never hesitated to use my voice and vote in promoting the interests of our primary and secondary industries. I trust that I shall always do so in this chamber and elsewhere. I therefore the more confidently appeal to honorable senators to support my request that the Government shall quickly give this industry a belated, but well-deserved, measure of justice and recompense-
.-Senator Lynch is to be commended for having brought this matter before the Senate. It should concern all of us, and the Commonwealth generally, that gold mining, which at one time was one of our leading primary industries, is in such a serious state of decline. It is well that the attention of the Commonwealth Parliament should be directed to the problem, so that it may examine any and every proposal that can be put forward to arrest the decline. If a sound economic remedy can be found, it should be applied to the industry with a view to re-establishing it in the proud position which it once held. We all agree with the mover of the motion as to the great assistance and value the industry, has been to Australia. There is very .little doubt that the disco very of gold in Victoria and New South Wales, in the early history of this continent, was a great incentive in luring .to Australia those sturdy pioneers who did so much to make this country what it is. I went to Western Australia before the gold lure, and I have a vivid recollection of what the discovery of gold meant to it. I saw the rapid development of some of -the rude mining, camps of those days into the thriving cities which they became in later years. It has been an occasion of sadness to me to revisit those one-time prosperous -towns and to see their empty and ruined buildings. “ I remember, some time after the discovery of gold, visiting the town of Kanowna, which then had a population’ of from 9,000 to’ 10,000, and was a prosperous, thriving centre. I doubt whether to-day it could produce 200 people-. I remember visiting the Murchison gold-fields when Cue and Day Dawn had a population of several thousands: To-day I suppose those two towns combined have not a .population of 500. I remember the town of Kookynie, when it? population ran into several thousands. To-day I doubt if it can muster 100. I have known the town of Menzies when its population ran into thousands. Today it is given over mainly, I think, to goats. In examining this matter now, we should not merely be swayed by sympathy. We should make quite sure that the remedies we propose to apply are economically sound. If we apply uneconomic remedies, remedies that prove to be unsound, we shall do no good to the industry. We may, for a time, cause a fictitious revival, but as soon as those remedies are withdrawn, when their unsoundness has been demonstrated, the industry will lapse into its former state of depression, or a state still lower than that which it formerly occupied. : Therefore, whilst we may all share the views of Senator Lynch, and regard with regret the decline of the mining industry, let us be quite sure that ‘ we ascertain the correct causes of that- decline. It must not be assumed - as I am afraid Senator Lynch’ .assumed - that the whole of the decline has occurred since the outbreak of the war. :N»”one knows better than Senator. Lynch that in the case of Kanowna,. Kookynie, Menzies, and - to a less extent - Cue, the mining industry had declined before the war broke out.
– But other towns sprang up in their places.
-Quite so; but, those particular towns which at one time? were thriving hives of industry had become almost deserted before the outbreak of the war. It is a fact for which I can vouch that .Coolgardie .was practically deserted before the outbreak of the; war. When I first went, to Coolgardieit was a town of hessian and canvas, and. I assisted in the erection of the first gal-‘ vanized iron building. .1 was also presentwhen the foundation-stone was laid of the first brick building.. . In the earlier. years: of -the war, when the price of galvanized1 iron- rose so tremendously,’ practically thewhole of the buildings in Coolgardie wererazed to the ground, and the galvanized* iron sent to other’ parts of the state.- Very few of the original, population were then left there. It would not be wise for US therefore, to assume that the war and’ the conditions brought about by it, were the sole or the main cause of the decline1 of the- gold-mining industry in- Western? Australia. The decline of those particular fields was due to quite different causes.. It was brought about by the fact that in many of those areas the reefs and lodes: were very rich in value in the shallower1 depths, but decreased in value at al greater depth, and became unpayable,, especially when the management had to’ cope with the water difficulty. In many of the fields that I havementioned there were extensive deposits of alluvial gold. That was particularly the case at Coolgardie. Whilst that alluvial gold was being worked a large population’ was. /supported, but when it became worked out. there wereno big lodes to absorb the labour, that had been engaged on the alluvial gold, and, consequently, the town that had sprung up, mushroom-like, as the resultof the discovery of alluvial gold, gradually declined. Let us consider the case of Southern Cross, where gold in lodewas first discovered in Western Australia^ While the lodes were being worked hundreds of men were employed, but thevalue of the lodes declined and the mines- became more and more unpayable, and the population passed on. No matter how we search, I submit that we cannot find any remedy for such causes as those. The trouble with the mining industry generally is that when the mineralis taken from the earth it does not reproduce itself. In that respect it differs from agriculture. A hole is left where formerly there was a lode, or where the golden nugget reposed. Therefore, when the alluvial gold has been mined, or the rich lode material extracted, there is no reproduction. Whilst we may lament it, it is useless to try to invent a means for overcoming that difficulty. Senator Lynch concentrated on the point that there are lodes carrying a certain percentage of gold which at one stage could be mined profitably, but, because of the greater depths at which they must now be worked, together with the increased cost of production caused by higher wages and higher cost of materials, they cannot, are present, be worked at a profit. That is a problem which should not be insoluble, and we should endeavour to. ascertain if we can apply some remedy which will once again bring such mines into productive use. There, also, we have to be careful. After all this is national wealth. It may be owned fey companies, but those companies render a public service, because in the extraction of the metal they give employment, not only to those engaged directly in the industry, but to employees in other industries, which are dependent upon it. On that account, the nation is asked to come to their assistance. In doing so, care must be exercised to see that the economic sacrifice which the nation makes is not greater than the economic reward that the nation will receive. I am quite sure that Senator Lynch would be the last person to advocate that we should do anything of that kind, as he would then be propounding the old fallacy that it, is profitable to employ men in shifting wheelbarrows of sand from one point to another, because wages are being paid, and money is circulating in the country. The Commonwealth Government has not been directly concerned in this matter, and I do not think it is fair to blame either this or any other Commonwealth Government for the present position. Mining has-been left exclusively to the State Governments. The land upon which the mines are situated is controlled by the states; they pass the mining laws, and take the whole of the responsibility. I do not suggest that they have not been alive to the need for action to bring about a revival, or that they have not done their best to cope with a difficult situation. I know that the Government of the state of Western Australia has used to its utmost capacity the resources of the taxpayers in order to assist the industry. Senator Lynch now claims that the industry is in such a condition, and the problem is so diverse, that there are avenues in which the Commonwealth Parliament, by its legislation, or the Commonwealth Government, by its administration, may be placing burdens upon the industry, and that inquiry should be made to see whether the Commonwealth Government, in the avenues that lie within its power, can give some relief to the industry. It was that point of view, put by Senator Lynch and others, that induced the Commonwealth Government to take an interest in the matter. Senator Lynch knows that, following on the representations that were made, the Commonwealth Government appointed a committee to investigate and report upon the matter. That committee reported on the 8th May, 1924, and with the indulgence of the Senate I shall read portions of its report. The constitution of the Committee was -
Commonwealth Government representatives -
Mr. C. J. Cerutty (Assistant Secretary, Commonwealth Treasury), chairman.
Mr. G. A. Cook (Institute of Science and Industry) .
State Government representatives -
Mr. R. H. Cambage (Under Secretary for Mines, New South Wales).
Mr. A. H. Merrin (Secretary for Mines, Victoria).
Mr. C. P. V. Jackson (State Mining Engineer, Queensland) .
Mr. L. Keith Ward (Director of Mines, South Australia).
Mr. M. J. Calanchini (Secretary for Mines, Western Australia).
Mr. W. A. Pretyman (Secretary for Mines, Tasmania).
Representatives of Gold Producers’ Association -
Mr. C. Gordon Lyon.
Mr. T. Maughan.
After setting out the history leading up to the present position of -the industry, and giving the figures illustrating the decline both in output and in number of men employed, the report, in paragraph 6 stated -
As some measure of recompense for past losses, and a stimulus to future mining activities, the representatives of the gold-mining industry have asked the Commonwealth Government . to grant a subsidy of 5 per cent. per annum forfive years on the annual value of the gold produced. Taking the value of the annual gold output at, say, £3,000,000, the subsidy would amount to £150,000 per annum, or a total of £750,000 in five years.
Further on the report stated -
Though the suggested subsidy of5 per cent. cannot be regarded as a very substantial assistance to so widespread an industry, the members who are in favour of a direct subsidy feel that the moral effect of any Government aid would immediately be manifested in a renewed activity in. gold-mining, both in the more vigorous development of existing mines and in the search for new mines and new fields. Moreover, it is believed that even the small amount of assistance claimed will help the industry to tide over the next few years and re-establish itself when normal conditions are again reached.
In the special circumstances, therefore, the majority of the conference think that the Government “would be justified in granting the temporary subsidy asked for, subject to proper safeguards as to its allocation. Should the subsidy be granted, it will be a matter for consideration whether it should be a flat rate on each ounce of gold produced, or based on a sliding scale, according to production, or starting with a high initial rate, diminishing annually to the point of extinction at the end of five years.
I invite particular attention to the following portion of the report, for it has a distinct bearing on what I said of the danger of applying remedies that are economically unsound : -
In connexion with the proposal to grant a direct subsidy, the question was raised as to whether that form of assistance would be acceptable, either to the Commonwealth Government or to the public generally. It should be pointed out that the economic soundness of such a proposal has been adversely reported upon by the British Gold Production Committee. The following are extracts from that committee’s report, presented on the 29th November, 1918 -
A ‘subsidy for the production of gold appears to us to be fundamentally unsound.
If we want gold, and cannot produce it at a profit, we must depend on our capacity to render services, and to produce at a profit the commodities wanted elsewhere by the holders of gold, and to do so we must adjust our prices to world prices. We shall not be able to keep gold which we acquire by means of a subsidy if the balance of trade is against us, and, apart from the shareholders in gold-mining con- cerns, whose gain would be merely temporary, the only people who would benefit by the subsidy would be the foreign purchaser of the gold. To give more for an ounce of gold than it is worth in currency appears to us out of the question, except on - the supposition that we want gold for the. purpose of keeping it locked up and unavailable for export. We cannot, however, see any use in acquiring gold for such a purpose.
The gold production committee found, inter alia, that, from the point of view solely of gold production, the abandonment of the treatment of low-grade ore in favour of high-grade ore will not, within any measurable period, reduce the total output of the Empire, and that the continuance of the working of low-grade mines, which are unable to work at a profit to themselves, is not, therefore, a matter of any great importance to national interest.
It is only fair, of course, to say that that does not apply to Australia, since the abandonment of low-grade ore production has meant a considerable decrease in our output. The report continues -
The committee also stated that they were not prepared to recommend any bounty or subsidy for the purpose of stimulating the gold output of the Empire; gold being the standard of value, no more can properly be paid for it than its value in currency.
It should, however, be noted that the committee’s report was made during the war, when the embargo on exporting gold existed, and only the nominal price was obtainable.
The conference also gave consideration to other suggested means of assisting the goldmining industry in the event of the Commonwealth Government refusing to grant the desired subsidy. The following alternatives were fully discussed, and are recommended for the Government’sfavorable consideration, viz.: -
That the income derived from gold- mining operations be exempt from income tax until the whole of the working capital invested has been returned to the owners.
Then the committee proceeds to give its reason for that recommendation, which is that the gold industry is quite different from any other, in that it involves a waste of capital. The next recommendation reads -
That would involve no departure from precedent, for in several other directions subsidies have been granted on the £1 for £1 basis. For instance, I might mention the Commonwealth subsidy to the states for road development. Then we have the further recommendations -
To some extent at any rate, that is the present policy of the Customs Department. If it can be shown that machinery is not commercially available in this country, a rebate is granted -
Australia by steamers of the Commonwealth Line be reduced, and that, if necessary, the Commonwealth Government grant a subsidy to the Commonwealth Line to the extent of such reduction.
The report is signed by each member of the committee, and it is now undergoing examination and consideration by the Federal Cabinet. I can assure honorable senators that it is receiving every sympathetic consideration that we can give it. But the recommendations are of such a character that they cannot be agreed to offhand. They involve many considerations that have to be carefully weighed. It must be recognized that we have to ask ourselves whether, if the recommendations were put into effect, the decline in gold mining would be arrested and the industry restored to its pristine vigour. In the second place, we must inquire whether the adoption of the recommendations would entitle other industries to receive similar treatment, and if so, what financial responsibility would be thereby involved. The Government, of course, cannot commit itself to assist one industry when another industry of a like character may be refused a similar request. I can assure the Senate that the questions involved are undergoing the careful scrutiny -of the various Government departments concerned. We -hope soon to have their reports on the effect of the recommendations, and then the Government will announce what, if anything, it can do. I thought it desirable, instead of moving the adjournment of the debate in the customary manner, to mention that the Government is impressed with the need for an examination of this subject, and is desirous of assisting the industry, if it can be done on sound and economical lines, and if it is within the power of the Government to appeal to Parliament to make the necessary financial provision.
– In supporting the motion, I cannot claim to have resided in Western Australia for quite as many years as the Minister (Senator Pearce), but I have been a resident of the eastern gold-fields for the last 26 years. During that time, I have seen some of the ups and downs of the mining industry in that state. What were once flourishing townships are now desolate places. The mining industry of Australia did not receive the benefit of the increased price of gold during the war period, and was practically robbed of the excess profits amounting to £3,000,000. If Western Australia produces 75 per cent, of the gold of the Commonwealth, that state has lost at least £2,00Q,000 because of the restrictions imposed, and thus the industry there has been deprived of capital urgently required for the further prosecution of the work on the eastern gold-fields. It is necessary that developmental work should be continued. As the Minister has pointed out, the. ore in many cases deteriorates in value as the workings become deeper. Had the industry in Western Australia been allowed to handle the whole of the profits on the gold production in that state, it would have been able to replace the present machinery, which in many instances is obsolete, and thus deal with the low-grade refractory ores now available at the deep levels. I have it on good authority that it would pay to treat ore returning 7 dwt. of gold to the ton. In the Golden Mile at Kalgoorlie there are millions of tons of ore that would yield from 6 to 7 dwt. of gold. But it is impossible for the mining companies to install the necessary plant, since their profits have been filched from them. In the southern portion of Boulder City no less than 126 houses have been removed in the last twelve months, and, as the families range from three to nine in number, one can readily realize what a tremendous decrease in population there has been in the mining centres. There is plenty of gold in the mines of Western.
Australia, and it will be a long time before the payable ore, is worked out. The population of Kalgoorlie and Boulder City once numbered between 30,000 and 40,000, but it has now dwindled to about 11,000. Unlike mining centres such as Bendigo, in Victoria, the goldfields of Western Australia are not backed up by fertile agricultural country, and, therefore, the mining towns have one industry only to support them. The Senate in its wisdom has agreed to bonuses being given to the sugar and cattle industries, and to the fruit-growers, and why should the mining industry be deprived of the full fruits of its labours ? I realize that it may be difficult to decide how the proposed grant should be distributed. The gold-mining industry, which has been the backbone of the state which I represent, and, indeed, of the Commonwealth, should not be allowed to languish for lack of support from the Government.
– What has been the increase in wages during the period of decline in production ?
– Nothing worth speaking about. As a matter of fact, the last arbitration award decreased the .wages of miners by Is. 6d. per day. Perhaps the honorable senator does not know that. Perhaps, also, he is not aware that gold-miners, working three shifts underground and taking all the risks- of accidental injuries- and- of contracting occupational . diseases, work for . 1,3s. 6d. a shift. Wages have decreased to the extent of 9s. a -week, but the cost of living has not come down. The” increased, cost of all mining requisites is largely responsible for the present state of the industry. It is time that the Government did something to encourage gold-mining, not only in Western.. Australia, < but throughout the Commonwealth. The gold-miners, who take all the risks, are” the first to have their wages cut down. Men working underground in some of the auriferous” mines last only about . two and a half years before they find their way to a sanatorium for treatment for that dreaded disease known as miners’ phthisis. Many of them- remain in a sanatorium for another . two- years waiting to die. The Government of Western.Australia has reduced the cost of water to. the mines to enable the management to .reduce battery .charges. It has also reduced freights, and given other concessions, but with” an accumulated deficit of £6,000,000, naturally the State Government has not much to give away. In view of the fact that the Treasurer has a surplus in the vicinity of £10,000,000, the Commonwealth Government might very .well give financial assistance to the gold-mining industry.
– Even if the Treasurer did not have a surplus, this claim for assistance would still stand.
– Exactly, especially in view of the fact that the industry made such sacrifices during the war period. Senator Lynch and Senator Pearce have clearly stated the position in Western Australia. I was one of the dele- ‘gation that waited on the Prime Minister and the Treasurer in connexion with this matter, and I was pleased to-night when I heard Senator Pearce state that the Cabinet was at least thinking about the proposal, although it has taken the Ministry four months to -get to that stage.
– The report which I read to-night was dated the end of May.
– It is more than two months since we waited on the Treasurer. However, I shall leave it at that, and will conclude by expressing the hope “that the Senate will support the motion, so ably moved by Senator Lynch and supported by Senator Pearce.
.- Senator Lynch is to be congratulated for having brought this matter before the Senate, and also for the manner in which he dealt with it. We all recognize that the gold-mining industry .has been of wonderful assistance to Australia. I am not one of those who believe that we have reached the end of our “resources in gold production. I come from a state where gold-mining operations have been carried out, perhaps on a much smaller scale than in. Western Australia, but I know what it means to a state. In Tasmania certain gold-fields were for a long time very productive, but in later years there k has been a decline, population has left the districts, and finally the fields have been abandoned. I was interested ‘ to learn from Western Australian senators that in the western mining fields there are still very large reserves of low-grade ore that may be- worked at a .profit under favourable conditions, and it was gratifying to hear Senator Pearce say that Cabinet was giving favourable consideration to a proposal to assist the industry. It appears to me that the Commonwealth
Government”, with the endorsement of Parliament, may help the industry in more than one direction. Anything that may be necessary to encourage gold mining will have to be done with the cooperation of the ‘state governments. It is on record that in other fields of activity the federal and state authorities have worked together harmoniously, for the obvious reason that if a state is prosperous so also is the Commonwealth. The Government would be more than justified in relieving from direct taxation, at all events for a period of years, those goldmining companies that have anything like a reasonable prospect of success. It has already been pointed out that many of the difficulties with which these companies are confronted are due to the fact that they are not equipped with modern machinery to handle low grade ores, and I was pleased to hear Senator Pearce say that this phase of the problem would also- be considered by the Cabinet. With regard to the proposal that there should be a remission of- duties on mining machinery, I hope that if any decision is come to by the Government it will be rather in the direction of allowing the duty to be in abeyance. If it is possible to import suitable machinery at a lower cost than that at which the Australian machinery can be purchased, then in the interests of the mining industry we ought to waive to a certain extent the settled policy of the country for the maintenance of Australian industries, at least in regard to the manufacture of mining machinery. The Government would be fully justified in doing . this. There is another way .in which the Government may help the industry. I do not know anything about Western Australia. It is one of the states which I have not yet visited, but it looms larger than any other state in this debate, and probably the conditions that apply in Tasmania also apply there. We have to recognize that the immense amount of .wealth taken from the mines is a direct result of hardships endured by our pioneer prospectors. In Western Australia those pioneers were responsible for the discovery of huge gold deposits. There is no doubt in my. mind that it will still be profitable ‘ to prospect immense auriferous areas in various parts of the Commonwealth, but we cannot expect men to undergo all the privations of a prospector’s life without reasonable en couragement. The state governments have done a great deal in this direction in the past. The Government of Tasmania has spent considerable sums of “ money in aiding prospectors, and with good results. If the Mines Department of Western Australia, or for that matter that of any of the other states, believes in a policy for the encouragement of prospecting, in view of the possibility of a revival of the gold mining industry through the discovery of gold-bearing propositions in areas hitherto undiscovered , the Federal Government will be justified in giving substantial financial aid. If a state government cannot afford to spend large sums of money in this direction, the Commonwealth Government might favourably consider a proposal to make the money available from Commonwealth funds. I believe that the motion will meet with the approval of honorable senators. The Leader of the Senate is sympathetic. I believe, also, that the Cabinet, if this matter is placed before it in the right way, will be sympathetic, and that before long we shall have a definite promise of substantial aid to the industry with, as a result, the possibility of a gratifying revival in gold mining throughout Australia.
– I have listened’ to the debate with a very great deal .of interest, and I have been amused at the onslaughts made by lifelong protectionists on our national policy of protection. It is somewhat disquieting that they should 110W question its wisdom. There has been some reference to the probability of the Commonwealth Government giving financial assistance to the industry. Who isgoing to pay this money?- Is it proposed that the money shall be withdrawn from the Consolidated Revenue? If so, I may be permitted to remind honorable senators that the great bulk of our revenue to-day is derived from the taxation of goods introduced to Australia from foreign low-wage protectionist countries, and that these goods are still coming here in increasing volume. Last year we collected at the Customs House about £36,000,000. . I suppose that Senator Lynch and the other honorable senators who have spoken in favour of this motion want, to get some of that money for the gold-mining industry. It appears to me that almost every industry must now be subsidized from the proceeds of . our national taxation.
– This is about the only one left.
– There are a number of others. We have not heard of any one seriously proposing that those engaged in the construction of homes should be subsidized by the Government. Having regard to the extortionate rents demanded by landlords, and the overcrowding which exists throughout the Commonwealth, those engaged in the building industry are just as much entitled to receive a bonus for each dwelling they erect as are those following other avocations. We have passed many measures during the past year or two for the purpose of subsidizing some industries incapable of standing upon their own resources. On one occasion Parliament granted a substantial subsidy to those engaged in the production of oil from shale and to those producing sulphur. In fact, it would be difficult to know what Australian industry has not been subsidized. This is another attempt in the same direction. I do not intend to oppose the motion. I do not think it would be any use to do so. I would remind the representatives of Western Australia and the people of that state that, in pursuance of an arrangement entered into when federation was accomplished, the Parliament and the country agreed to undertake the construction of a railway line from Port Augusta to Kalgoorlie on the understanding, amongst other things, ‘ that the Western Australian people would convert the gauge of the line from Kalgoorlie to Perth to that of the Trans-Australian line. Up to the present that has not been done. I would further remind them that the Trans-Australian Railway is being run at a very substantial loss, and that that loss has to be met mainly by the taxpayers of New South Wales and, to a lesser degree, by those in Victoria. Of course, Western - Australia contributes a small proportion.
The DEPUTY PRESIDENT (Senator Newland). - I direct, the honorable senator’s attention to the fact that the motion does not relate to railway construction. “Senator GRANT. - I am aware, of ‘that; but I thought I would be in order in directing the attention of the Senate to the fact that large sums of money are contributed by the people in all the states to support a venture partly in Western Australia and partly in South Australia. Senator Lynch recently pointed out that, in consequence of our policy of protection, Australia would be saddled with the payment of an additional £50,000 in connexion with a recent tender let to a Victorian firm for the building of fourteen locomotives for the Port Augusta-Oodnadatta railway.
– In what way does that affect the gold-mining industry?
– The gold-mining industry, more particularly in Western Australia, is seeking a subsidy from Consolidated Revenue. Western Australia and South Australia are always making appeals, and Tasmania is never far behind in any. effort made to extract money from the Commonwealth Treasury. The only states that do not make requests are New South Wales, Victoria, and Queensland.
– I thought the honorable senator intended to support the motion.
– I do. At one time the gold-mining industry did not require assistance, and those who have perused the records of the industry know that for a number of years little or no assistance was sought from either the State Parliament of Western Australia or the Federal Parliament. Those engaged in the industry relied upon their own resources, but in recent years that spirit of self-dependence, which was so conspicuous in the early pioneering . days, has almost disappeared. To-day it is almost impossible to find any industry depending upon its own resources. I am pleased to see a recognition by those who have already spoken of the desire to remove taxation from production. If there is anything more stupid and likely to produce stagnation it is the methods adopted by the Federal Parliament to tax those engaged in production in proportion to the volume of work they perform. Why men engaged in extracting gold should be taxed is something entirely beyond my comprehension.
– I thought the honorable senator would be right in the end.
– What I have said is right. Those engaged in mining should not be taxed in proportion to the value of the service they render to the community. We tax farmers oh natural increases in live stock. That is typical of the taxation we impose. I am glad to see that there is still a small ray of hope, and that some senators realize that it is unfair to impose taxation upon those engaged in mining gold in proportion to the quantity of precious metal which they produce. This motion does not apply solely to Western Australia, because the other states are more or less concerned. It is true that Western Australia today is the largest producer of metals of all the states. According to the latest official figures, it is shown that in 1919 the value of gold mined in Western Australia was £3,728,882, whilst the total production for the whole Commonwealth was £5,408,157. The records disclose a constant reduction in the value of gold produced since 1903. I shall not say that the reduction in output is due to the taxation imposed upon the industry, or those engaged in it, but undoubtedly that is one reason. The mining industry is not comparable with rural industries, because when once the gold is removed from a field further supplies are not forthcoming. We ought to look forward to the time when gold-mining will not be regarded as one of our staple industries. It is not so regarded to-day. Coal production exceeds in value that of gold. At any time gold discoveries may be’ made in the Commonwealth far exceeding in richness anything yet disclosed. Those who have given the matter consideration know that all the territory of the Commonwealth has not yet been traversed by white men, let alone tested for precious minerals. Is it true that the Western Australian people have been robbed because an embargo was placed upon the exportation of gold)
– It is quite true.
– I am not sure that in consequence of the operations of the War Precautions Act, or any other measure, the Commonwealth succeeded in robbing the Western Australian people of £2,000,000 or £3,000,000. If such is the case, in common fairness that state should be reimbursed.
– The total profit made by the Commonwealth Government was £11,000, and that was made on one parcel of gold.
– The Minister states that the total profit made during the war on gold produced was of the amount stated. The Western Australian representatives, supported by those of Tasmania, suggest that the amount is £2,000,000 or £3,000,000. It is satisfactory to know that the Minister is in possession of other information. If it can be shown that Western Australia is entitled to a refund, I presume other states will also submit claims. I am glad to know that it is tacitly admitted that the effect of our great and glorious policy of protection is to increase the value of the machinery imported. I agree with Senator Lynch, that if it can be shown that the gold-mining industry is being unfairly handicapped in consequence of protection, then, even at the risk of being strongly denounced by that great organ known as the Age, and of being misunderstood by the people, we ought to have the courage of our convictions, and come to the assistance of the industry. We should not do so by taxing “ Tattersall’s “ sweeps, picture shows, whisky, and so on, and subsidize those engaged in the industry from the proceeds so derived; but remit taxation which in .the, opinion of the mover of the motion tends to increase the cost of commodities required in the production of minerals, and so enable them to obtain what they require at a price approximating their value. I am of the opinion that no matter what we might do to assist the mining industry, the men who engage in it could obtain more remunerative employment in some other calling. It is quite certain that they could find a more healthy occupation, for as everybody knows that both metalliferous and coal mining are extremely unhealthy callings.
- Senator Graham says that mining kills a man in two and a half years.
– Gold-mining is a healthy occupation.
– I do not think that Senator Thompson knows anything about -it. He certainly knows nothing about hard work.
– I assure the honorable senator that he is quite wrong in that.
-Well. I will say that Senator Thompson does not appear to have done very much hard work. It amuses me to hear some honorable senators opposite talk about hard work, for in many instances they do not know- what it is. I do not think that the best way to encourage the mining industry is to grant subsidies such as have been suggested. If the Government earnestly desires to help, the industry, I suggest that it should adopt a policy of- land values taxation, and compel the people who .own ‘ the land to pay the taxation necessary to enable the Government to carry on its work. It would then quickly find, that mining and other industries would be placed on a satisfactory footing. If, as we have, been told, the states have been robbed of only £11,000 by way of the profit on gold made by the Commonwealth Government, we are not faced with a very serious problem in that regard. ,
– But that is not correct. .
– - In any case, I shall not. oppose the motion. I am glad to see that at last- a ray of light appears to be penetrating into the minds of some honorable senators who are ardent protectionists. They are discovering that the policy which- they advocate will not realize all that they desire.
. I feel that I ought not to allow this debate to end without making a contribution to it, inasmuch as I have had a ‘ long and ‘ intimate connexion with one of the biggest gold-producing’ mines in the world, and one, I may add, that has been losing large sums of money in the last three years. It has been kept in ‘operation with -the sole object of providing employment to support the 10,000 men, women, and children who depend upon it. I sympathize with ‘ the motives which prompted Senator Lynch- to move the motion, but I must say that he discussed I,he : sentimental rather than the practical aspect of .the subject.’ ‘I am’ glad, therefore, that Senator Pearce later on. made such a practical speech. The report from “which he quoted contained a number of valuable suggestions . on ways, and means of assisting the industry which I hope will receive favorable consideration from the Government. I am pleased that the Customs Department has lately been treating very sympathetically imported mining machinery which cannot be manufactured in Australia: The proposal that ..mining profits should not be taxed does not amount to very much, when mines have been working at a’ loss for. some years, for in such cases- , there .are .no profits to tax. I heartily support the suggestion that the Commonwealth Government should subsidize, on the poundforpound basis, the amount voted by the state governments to encourage pros;pecting operations. I am quite confident that throughout Australia, and certainly in Queensland-, fresh gold deposits will yet be discovered, and I agree with one honorable senator who said that, so far; only the surface had been scratched of many of the deposits that have been worked. That is also the opinion of men who are much better qualified than T am to- speak on the matter. -If prospecting operations were carried on throughout Australia on . a comprehensive scale, I have not the* slightest doubt that good results would follow. The reference of Senator Lynch to our numerous deserted mining villages reminded me that we have probably the most serious illustration of that in Charters “Towers, Queensland. Before the war Charters Towers had a population of 30,000, and was a most progressive town. To-day the population is only 5,000. Unlike Gympie, it is not surrounded by good country, and its people are not able to engage in agricultural or dairying pursuits. I understand that an-effort is being made to grow cotton - there, and I trust that it will succeed, in order that- the residents may be relieved from their present parlous condition. I am in entire sympathy with the motion, and .should like to hear from the Leader of the Senate a definite statement that the Government will give it sympathetic consideration. , Senator Pearce. - I shall certainly inform the . Cabinet that the Senate is entirely sympathetic with the motion.
– I am glad to hear that. As I wish to quote some figures which are not available to me at the1 moment, I ask leave to continue my remarks at a later period.
Leave granted; debate adjourned.
Debate resumed from the 17th July (vide page 2191), on motion by Senator Lynch -
That, inasmuch as the Commonwealth Parliament, after grave . consideration, has fixed the amount of protection ‘that each individual industry should enjoy from unfair oversea competition, the Senate is of .opinion that no lenders should ‘ be’ accepted for Government requirements, the effect of which would be to raise the rate of duty above that applicable to the commodity required and thereby to upset the judgment and determination of Parliament.
– I regret that I was not present last Thursday to hear Senator Lynch move the motion now before us, for, although I should not have agreed with his contentions, I should have listened with interest to his address. The primary reason for the introduction of the motion was the acceptance by the Government of the lowest Australian tender for locomotives required on the Port Augusta-Oodnadatta railway. Senator Lynch, however, did not confine himself to that matter, for he spoke in strong condemnation of the general fiscal policy of the country, terming it, “our baneful system of protection.” I assure honorable senators that the Government gave very careful consideration to the tenders for the supply of these locomotives before it decided to accept the lowest .Australian offer. I have no doubt that the people of this country generally approve of the Government’s decision.
– This part of the country, not this country, and that is a very different thing.
– There was a marked difference between the lowest oversea tender and the lowest Australian tender, and also between the lowest and other oversea tenders. Some very exceptional circumstances must have been connected with the tender submitted by Messrs. Armstrong, Whitworth and Company. The difference between it and the other oversea . tenders might reasonably suggest the existence of unfair competition. Industrial conditions abroad were very unsettled at the time these tenders were submitted. Great depression existed in the metal trades in Great Britain, and there was similar depression in those trades in Australia.
– That is not provided for in the tariff.
– The tariff was designed to meet ordinary circumstances, but the circumstances of the metal industry, both here and abroad, have, for some time, been extraordinary, and the Government has to take that into consideration when dealing with matters of this kind. In justification of the Govern ment’s acceptance of the lowest Australian tender, may I say that a great deal of the additional cost of the locomotives will come back to the country in various ways. The work will now be done in Australia, and the men who are employed on it will -contribute to the revenue out of the money they earn, and so, to a very substantial extent, will the. contractor, if the contract proves to be as profitable as Senator Lynch imagines that it will be. The mover of the motion seemed to be very concerned about the possibility of the extra cost of the locomotives being passed on to the people who will use the Port AugustaOodnadatta line, but I assure him that the Government has no intention of increasing the freights and fares on that railway. As a. matter of fact, the people who use the line are specifically protected against such an action by the agreement that wan entered into between the Commonwealth and South Australian Governments. One’ of the provisions of this agreement is as follows: -
The. Commonwealth will give and continue to give to the state and its citizens equal facilities at least in transport of goods and passengers on the Port Augusta railway to those provided by the State Government at the present time, and at rates not exceeding those for the time being in force on the railways of the state for similar services.
The people using this line will, therefore, have the double protection, of the goodwill of the Commonwealth Government and the agreement- that has been entered into between the Commonwealth and the State of South Australia.
– The Commonwealth has desired for many years to set aside that provision in. order that it might charge high fares and freights on that particular line.
– I think that the honorable senator is in error in making that statement. Originally the provision was that the rates should not exceed those in force at the time that the agreement was entered into. As a result of negotiations, that provision was amended in 1919 to provide that the rates charged should not exceed those for the time being in force on the railways of the state for similar services. The honorable senator made some reference to firms ‘which had prospered under the protectionist policy of the Commonwealth. The fact; that firms in a large way of business made considerable profits does not by any means indicate that those profits were excessive. The honorable senator referred to Hoskins and Company in New South Wales, and H. V. McKay in Victoria. If investigation were made it would probably be found that the profits of those firms did not bear a high percentage to the turnover of their businesses, although “in the aggregate they represented a considerable sum. A great deal might be said generally on the policy of protection, but as the motion is directed particularly against the acceptance of the Australian tender for these fourteen locomotives, I shall content myself by again assuring the Senate that the decision of the Government was arrived at only after very careful consideration, in which every interest was taken into account.
Debate (on motion by Senator Needham) adjourned.
Senator Joseph Francis Hannan made and subscribed the oath of allegiance as a senator for the State of Victoria.
Welcome to Senator Hannan - .Steamers “ Fordsdale “ and “ Ferndale “ : Cost, and Price to the Commonwealth Shipping Board.
(9. 50]. - In moving -
That the Senate do now adjourn, J take the opportunity of welcoming to the Senate Senator Hannan, and I wish him a pleasant stay among us.
– It is with very considerable reluctance that I find myself impelled once more to make a few remarks on the motion for the adjournment of the Senate. I regret that I have not a different subject upon which to speak. I- again desire to draw the attention of the Leader of the Senate, and through him the Government, to the extremely unsatisfactory answers that I continue to receive to my perfectly legitimate queries concerning the cost of the construction of the steamers Fordsdale and Ferndale. With regard to the prices at which those vessels have been taken over by the Commonwealth Shipping Board, the answers that have been given amount, in my estimation, to a direct flouting of the rights of Parliament. I am quite willing to pass over the little slight which has been put upon me as a senator by this board which has instigated the Government to assure me that it does not think it desirable that the price at which these boats were taken’ over should be disclosed. The board says that it wishes to conduct the undertaking on business lines. May I be allowed to say that this evasion, this neglect to supply a satisfactory answer to my question, is directly designed to conceal the fact that it is not being run on business lines. Let me draw the attention of the Government to the stated cost of the construction of these vessels. The Fordsdale has cost, including £37,500 for overhead expenses in Melbourne - which seems to be very heavy - no less a sum than £858,000. The Ferndale is estimated to have cost, including £25,000 for overhead expenses in Melbourne, £815,000. The total for the two vessels was, therefore, £1,673,000. I am assured, on the word of a man who knows what has happened, that these ships were taken over by the Commonwealth Shipping Board at a cost of £250,000 each. Therefore, there was, written off perfectly new ships, which were on the slips when the board was created, no less a sum than £1,173,000. If I am asked to believe that the writingoff of £1,173,000 on those two vessels indicates that this concern is being’ run on business lines, I refuse to believe it. In my opinion it is a direct infraction of every canon of business. Furthermore, touching my right to ask for this information, I point out that if I were a shareholder in a company which was running these boats, or constructing them, I would have every right to know at what price they appeared on the company’s books. I am a shareholder, every member of the community is a shareholder, in this concern. Yet, when a representative of the community asks to be supplied with this information it is withheld. That is why I say - that the action of the board in this matter constitutes a direct flouting of the rights of Parliament. I do not yet know what method to adopt, but I shall certainly not allow the matter to remain where it is at present. Though mild as a rule, I am not so meek a person as to take a thing like this lying down. I intend to avail myself of every, means which the facilities of Parliament afford me to obtain the information, to which I’ consider I am thoroughly entitled. I know that it is possible to supply this information, and T desire to get it before the debate on the budget takes place in the Senate. I regret extremely to find the Government on this occasion taking the side and adopting the tactics of the Commonwealth Shipping Board. Answer number two reads as follows: -
The board does not consider it desirable that the price at which the steamship Fordsdale and the steamship Ferndale were taken over by the board should be made public, as it is not usual for shipping companies to disclose such figures with regard to ships being run by them.
The answer proceeds, with a strange change in the personality of those supplying it: -
As this Parliament has decided that this line should be controlled on ordinary business lines, the Government does not propose to further urge the board to disclose this information.
The first part of the answer, apparently, has been supplied by the Shipping Board, and the second part by the Government. I have heard of people who speak with two voices, but 1 have never previously encountered it personally. 1 do not want to debate the- matter with any heat. I ask the Leader of the Government in the Senate to endeavour to get his colleagues to look at this matter as a possible breach of parliamentary privilege, and to restore to the Senate and to Parliament the right .which it undoubtedly possesses to be supplied with information relating’ to any concern that is being conducted by the Government. State enterprises cannot be run on strict business lines; that is an absolute impossibility, and this is a proof of it. .Every socialistic enterprise must, when the demand is made by the representatives of the people, lay all its cards upon the table. That, I think, even the most strenuous advocate of state enterprises will concede. In this case there has been a distinct failure to do so. I should like the Minister to use his influence with his colleagues to have the information supplied as quickly as possible.
Senator McDOUGAlL (New South Wales) [10.0].- I recently asked to be informed of the circumstances under which the steamer Gunemba had been sold, and the reply I received was that the vessel had been disposed of to a private firm. I should now like a little more information on the subject. I am given to understand that tenders were called for the purchase of the vessel, which cost the Government’ £9,000. The engines alone cost £3,000, and they were of such a character that when they were put into operation the nose of the vessel was driven under water. An attempt was made to rectify the trouble by a method that was the very opposite of that which should have been adopted. The firm whose tender for the purchase of the Gunemba was accepted had put in the price of £500 as a joke. This firm has taken the engines out of the vessel, and has, I am told, sold them for £2,000. The vessel was designed by the Navy Department, for the use of the Customs Department in catching Customs thieves, but all it caught were the barnacles in the Brisbane river. A very serious blunder has been committed owing to .the overlapping activities of Government departments, especially in the designing of vessels. I desire to know whether the steamer was sold for £500, who received the £2,000 subsequently paid for the engines alone, and who is to get the sum of £1,000 expected to be made out of the re-sale of the hull and other fittings?
– I shall certainly bring the remarks of Senator Kingsmill under the notice of the Prime Minister (Mr. Bruce), but I take it that the Prime Minister has considered the honorable senator’s former comments. At any rate the latter part of the answer given seemed to indicate that he had. I would , remind Senator Kingsmill, however, that the competitors of the Commonwealth Shipping .Board arc under no obligation to place their cards’ upon the table. Why, therefore, should the board be expected to do so?
– That difficulty must be faced, when a government begins or continues a state enterprise.
– Since it was demanded by Parliament that the Commonwealth Government Shipping Line should be conducted, as a commercial enterprise, why, I ask, should the board be compelled to put its cards on the table? Why should we place it at any disadvantage compared with its rivals? Senator Kingsmill has endeavoured to make it appear that Parliament has, in some way, been kept in the dark regarding these ships. Full information has been given to Parliament as to the cost of the vessels, even to the overhead charges. The taxpayers, therefore, have in no way been kept in ignorance. We should consider whether the board would not be placed at a disadvantage if it had to disclose the capital charge in the books of the Shipping Line.
SenatorKingsmill. - Why should that place it at a disadvantage?
– I am informed that no private shipping line discloses such facts to its rivals.
SenatorKingsmill. - But it does to its shareholders, and the people are the shareholders of the Commonwealth Shipping Line.
– Unfortunately we cannot have a shareholders’ meeting, for the shareholders include those controlling the rival lines.
SenatorElliott - Does the hoard show how much has been written off as loss ?
– The taxpayers certainly know what the line has cost them. . I shall see “that the remarks of Senator McDougall are brought under the notice of the Prime Minister for investigation.
Question resolved in the affirmative.
The Senate adjourned at 10.6 p.m.
Cite as: Australia, Senate, Debates, 24 July 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240724_senate_9_107/>.