25 March 1947

18th Parliament · 1st Session

The President (Senator the Hon. Gordon Brown) took’ the chair at 3 p.m., and read prayers.

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– Recent press reports have stated that the Parliamentary Refreshment-rooms cost the taxpayers 28. for each meal. Can you, Mr. President, say whether persons other than members of Parliament are provided with meals at the same price as is charged to members?


– On a number of occasions I have said that it is not strictly in order to direct questions without notice to the President, but usually I answer questions that are addressed to me. The presiding officers of the two chambers - the President of the Senate and the Speaker of the Bouse of Repre sentatives - control the ParliamentaryRefreshmentrooms, and, therefore, it. seems appropriate that I should reply tothe honorable senator’s question. I didsee an article on this subject in a recent: issue of the Sydney Sunday Telegraph. I do not object to criticism ; on the contrary,. I believe that every public man and public- institution should be criticized if thereare grounds for criticism. At the sametime, I am of the opinion that some sections of the press should adopt a fairerattitude when criticizing parliamentary institutions, and bodies associated with the Parliament. It is true that the costsof running the Parliamentary Refreshmentrooms exceed the revenue, but thereare good reasons for that. No privatecatering establishment works under conditions similar to those which exist here.. When Parliament is in session 36 senatorsand 75 Members of the House of Representatives, together with secretaries toMinisters and other officers associated with the work of the Parliament, have to be catered for. That requires a certain staff. But when the Parliament is in recess and members are not here, fewermeals have to be provided. As a good’ Labour man, I do not believe in “sacking “ every man in the refreshmentrooms when the work there slackensoff and so a nucleus staff is retained. The costa of running the refreshmentrooms associated with the Parliament are, therefore, out of proportion tothe revenue, a condition which doesnot apply to private catering services.. Again, we are called upon to provide food at night, and to pay overtime to men and women working in the Parliamentary Refreshment-rooms. Costs have increased, but we are not credited in anyway with regard to those additional costs.. Only last week we were asked to providefood for supper in the expectation that Parliament would sit all night. Later,, that arrangement was cancelled; but inthe meantime waiters had been engaged and they were paid overtime. There aremany other aspects with which I could’ deal in detail which have contributed’ toward the increase of costs. Therefore,, a false impression has been given to thepublic. What I, and Mr. Speaker, resent is the continual attacks upon the institution of Parliament by people who are not fair to the Parliament. As to the article published in the Sunday Telegraph, costs, admittedly, are greater; but I emphasize that every member of newspaper staffs here is in the same position as members of the Parliament. The general public are not told that. The pressman responsible for this report did not tell the public that he himself and from 50 to 60 other journalists are provided with food at a certain cost which does not fully allow for administrative expenditure. He did not tell the public that fact. Neither did he tell the public that the Parliamentary Refreshment rooms serve meals to more outsiders and non-members than to members. I feel very strongly on this matter. Having occupied the position of President for more than three years, I believe that in fairness to members of Parliament, we should have refreshment-rooms for the use of members and their friends and chamber officials, and in addition, a cafe should be established to serve outsiders. Under such a system we should be able to show what expenses are being incurred, and what proportion is being borne by members of the Parliament. I am satisfied that if the Parliamentary refreshment-rooms were conducted strictly as such, and not as a general cafe, the public of Australia would know that members are paying for their food and drink, and members would no longer be grossly maligned by any weasel-minded wielder of a pen who happens to come along. I hope that in due course we shall be able to have refreshment-rooms for members of the Parliament and higher officials, and, in addition, a cafe for the convenience of outsiders. Under those conditions we should be able to establish a separate accountancy system, and the public could then be informed of the truth, whilst members of Parliament would no longer he subject to attacks of the kind which are now made upon them by certain sections of the press.

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– Spokesmen who purport to state officially the policy of the Government, have issued a statement, which is now circulating in South Australia, that regulations pegging the prices of land are to be relaxed in the near future in order to enable land to be sold at prices substantially higher than the present levels. I ask the Minister for Supply and Shipping whether those responsible for that statement are authorized to speak for the Government, and whether the report itself is correct?

Senator ASHLEY:
Minister for Supply and Shipping · NEW SOUTH WALES · ALP

– I am not aware of the identity of the alleged government spokesman who made the statement to which the honorable senator has referred, but he certainly was not speaking for the Government on this occasion. The National Security (Economic Organization) Regulations were introduced during the war to prevent an undue rise in the price of, amongst other things, land. These regulations have met with considerable success. Honorable senators will appreciate that it would be a physical impossibility to inspect every property that is to be sold and that reliance has to be placed upon valuations submitted by sworn valuers. Experience has shown that, in many cases, values cannot be based on prices ruling in February, 1942, ignoring altogether present-day factors. However, I can assure the honorable senator that, in the interest of the national economy, .the Government does not intend to permit any further increase of the price of land.

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Frequency Modulation - News Service of the Australian Broadcasting Commission.

Senator AMOUR:

– As radio manufacturers in Victoria are ready to commence production of combined frequency modulation and amplitude modulation broadcast receivers, but are not doing so because there are not yet any frequency modulated broadcasts, will the PostmasterGeneral inform the Senate when frequency modulated programmes will be available, thus encouraging the production of frequency modulation receivers which will enable listeners to enjoy programmes free of many of the present electrical noises?

Senator CAMERON:
Postmaster-General · VICTORIA · ALP

– I am not aware that manufacturers have yet produced frequency modulation receivers. The PostmasterGeneral’s Department has been experimenting for some time with frequency modulation in Melbourne and Sydney, and has arranged for officers to attend international conferences, particularly in America, to ascertain what can he done to develop frequency modulation broadcasting. I can assure the honorable senator that the department is doing everything possible to expedite the introduction <j( frequency modulation broadcasting.

Senator GIBSON:

– I ask the PostmasterGeneral whether any licences have been granted to broadcast on frequency modulation? Is it proposed to grant licences to companies or individuals for this purpose, or does the Government intend broadcasting on this short-wave length to be carried out by a government instrumentality?

Senator CAMERON:

– No licences have been granted for broadcasting on frequency modulation. Any decision on this matter will be made by the Government, and the Senate will be informed accordingly.

Senator AMOUR (New South Wales). - by leave - In to-day’s Sydney Daily Telegraph there appears under a prominent heading the following : -

The Australian Broadcasting Commission had estimated cost of an independent news service at ?200,000 a year, Mr. K. J. F. Boyer said to-day. . . . Mr. Boyer, Chairman of the Australian Broadcasting Commission was giving evidence before the Parliamentary Standing Committee on broadcasting.

The fact is that neither Mr. Boyer nor Mr. Moses, nor, indeed, any member of the Broadcasting Committee mentioned the sum of ?200,000. Mr. Boyer said that the cost of an independent news service to be supplied by the commission would be approximately ?155,000. He went on to say that, in the view of the commission, an independent news service could be provided for that sum. As the report in the Daily Telegraph is a distortion of the truth, and as a committee appointed by statute has the same rights, privileges and immunity as the Parliament itself possesses, will you, Mr. President, order the removal of all representatives of the offending journal from the precincts of the Parliament? Yesterday, I asked Mr. Moses the following question: -

I want to ask you a couple of questions about the independent news service, so that the public will know the truth, that is, if the newspapers will publish it. You have read the committee’s report and recommendation that the Australian Broadcasting Commission should establish an independent news service. Have you ever seen any attempt by critics of that recommendation to answer the evidence of the Australian Journalists’ Association that journalists are instructed or expected to prepare their reports in a way that will conform with the politics of the newspapers on which they serve?

Mr. Moses replied that he had not. The Daily Telegraph reported the question and answer as follows : -

Senator AMOUR:

– Have you ever seen an Australian Journalist Association report that journalists were instructed to conform in their reports to the policies of the newspapers on which they serve?

Mr. MOSES. ; I cannot recollect anything of that nature.

Eoi- twelve months that newspaper has deliberately distorted matters relating to broadcasting by stating that the Broadcasting Committee had foisted on the Australian Broadcasting Commission an independent news service costing, according to earlier reports, ?155,000 a year, and in to-day’s report, ?200,000. The committee does not make the laws; it submits recommendations to the’ Parliament, which either accepts or rejects them. The fact is that the commission has had its own news service since 1932. In 1944 the commission proposed to sign a contract with the Australian Newspapers Proprietors Association and Australian Associated Press Proprietary Limited; but the Minister, before signing the contract, referred the proposal to the Broadcasting Committee. The proposal was that ?7,500 should he paid for the Australian news and ?2,500 per annum for overseas news. In 1946, the Australian Broadcasting Commission again approach? i the Minister to sign contracts with the bodies mentioned, providing for a total payment of ?20,000, namely, ?12,500 for Australian news and ?7,500 for overseas news. Under that proposal the Australian Broadcasting Commission would have had to provide nineteen extra full-time journalists, whose services would be required in newspaper offices to check news items and make them ready for broadcasting. That arrangement would have meant a payment of ?83,000 by the Australian Broadcasting Commission for its news service. With its own independent news service, under which news would be gathered from a great many country centres in Australia, 240 journalists would be employed in country districts, in addition to other journalists in the capital cities and at such centres as Newcastle. The Australian Broadcasting Commission has made an arrangement with Reuters to supply overseas news, and it will obtain news also from the British United Press and the American press, with which it will exhange news by telegraph. News from those sources will be sent to the London office of the commission, and will he relayed from there to Australia. Instead of being fed into the Australia Associated Press office, where news for despatch to Australia is selected with a slant to suit the newpapers of this country, this news will be sent direct to the commission, and will be strictly impartial. It will give both sides of every question. The additional monthly cost of this news service to the taxpayers of Australia will be not more than a half-penny per capita. I trust, Mr. President, that you will take action against those responsible for reports of the kind to which I refer. Such reports present the facts in a distorted manner. Those responsible for them are not prepared to give to the Australian people a fair statement of the facts; but, according to evidence given on behalf of the Australian Journalists Association, are ready to do the bidding of their boss. The Parliamentary Committee on Broadcasting does not make any laws. It reports to the Parliament, and the Parliament makes the laws. Therefore, this attack is not made upon the committee but upon the Parliament itself; and I ask you, Mr. President, to lake appropriate action in the matter.

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Senator COOPER:

– Can the Minister for Health say whether it is a fact that Sir Raphael Cilento is to be appointed Commonwealth Director-General of Health ? If so, are negotiations now being conducted for Sir Raphael’s release from his present post with the United Nations as Director of Displaced Persons?

Senator McKENNA:
Minister for Health · TASMANIA · ALP

– The answer to both questions is “ No “.

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– On the 5th March I asked the Minister for Supply and Shipping whether redundant huts in military and Air Force camps could be made available to provide temporary homes for people in South Australia. . Is the Minister able to give me any further information on this matter?

Senator ASHLEY:

– I made inquiries regarding the honorable senator’s question, in which he mentioned the army camp at Largs Bay. The Minister for the Army has informed me that the temporary use of the hutments at Fort Largs for the purpose of housing accommodation has been actively under consideration for a considerable time. One of the difficulties associated with this area is that it is in periodical use by the Army authorities for schools and courses, particularly for cadets in the school holidays, and it will be definitely required for that purpose in September, 1947. The Ministor has asked the Army authorities to contact the South Australian State authorities with a view to arranging, if possible, for selected people to occupy the huts until they can be provided with housing, of either a temporary or a permanent nature, by the State housing authorities. Accordingly, the Commandant in South Australia contacted the Premier and advised him that the huts in the Fort Largs area, which are eight in number, might be made available until September next for temporary occupation by selected personnel awaiting provision of accommodation ‘by the State housing authorities, subject to the following conditions: - (a) Rental payments to the Department of the Army will not be required ; (b) electric light and water will be provided, subject to any charges for these services being made by the State Government authorities; (c) no alterations will be made to the buildings, except those which are necessary for the provision of additional cooking and such like facilities to enable them to be used by families for temporary housing accommodation. The Premier of South Australia is giving consideration to this offer, and his decision is now awaited.

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Senator NASH:

– In view of the acute shortage of nurses throughout Australia, would it be possible for the Commonwealth Government, through the Department of Health or the Department of Social Services, to take over the employment of all nurses under the conditions of employment that now apply in repatriation hospitals ?

Senator McKENNA:

– Apart from the repatriation services, the Commonwealth employs very few nurses. The exceptions are in hospitals in Commonwealth territories and in relation to some aspects of the health services. As honorable senators know, the new power conferred upon the Commonwealth at the recent referendum is a power “ to make laws with regard to the provision of medical and dental services, but not so as to authorize any form of civil conscription “. That plainly implies that, although the power is very wide, nurses, doctors, dentists and other professional persons could not be compelled to join any Commonwealth service. Most nurses, of course, are employed hy the States and by public and private hospitals. The Commonwealth has no control over those institutions. It would be impracticable for the Commonwealth to regard all nurses as Commonwealth employees when it has no control over the institutions in which the nurses are required to work. “When the national medical service is established it will be necessary for the Commonwealth to take control, on an Australiawide basis, of all questions concerning nurses, their recruitment, training, and even registration. Once that service is established and nurses join it, the Government will be able to legislate directly for their terms and conditions of employment. I think that is desirable in the interests of uniformity, because, at present, nurses who wish to have their conditions improved have to rely upon either a State industrial tribunal or the Commonwealth Court of Conciliation and Arbitration.

I had hoped that the whole subject of the acute shortage of nurses would be discussed at a meeting of Health Ministers set down for the 14th and 15th April next, but because of election campaigns in two States it seems probable that the conference will have to be adjourned for a few weeks. In the meantime, emergency steps could be taken, with advantage, by the States and by local bodies administering hospitals. There is a very great wastage in the profession due to matrimony and other causes, but there are great numbers of women in the community who could give part-time service in hospitals. I invite attention to the re- port in The Lancet, of the 14th December last, of a successful experiment in Gloucestershire, England, where the nine infirmaries in the county have been staffed almost entirely by part-time employees working 4-hour shifts. As the result of an appeal for assistance, people offered their services as nursing orderlies, and women so re-arranged their domestic duties as to make themselves available for work on 4-hour shifts, with the result that the permanent staff was reduced to the nine respective matrons. I consider that something of this nature should be attempted in Australia. It would not be practicable for the Commonwealth at this stage to employ all nurses in the country, but I do hope that in the near future a large majority of the nursing profession will form part of the national medical service. We shall then be able to legislate directly for their conditions of employment.

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Senator LECKIE:

– I desire to ask the Minister for Supply and Shipping a question relating to the gift of £25,000,000 from Australia to Great Britain. At an Australian Natives Association conference held in Victoria last week, Senator Sheehan is reported to have said that he had been authorized by the Government to say that the United Kingdom Government had specifically asked the Commonwealth Government that the gift should be in hard cash, and not in food or goods. Can the Minister say whether Senator Sheehan was authorized to make that statement? Further, will he say whether the statement is true and, if so, in what circumstances was the request of the United Kingdom Government made ?

Senator ASHLEY:

– Neither I nor the Government can accept responsibility for every statement made by a member of the Parliament. I have not seen the statement to which the honorable senator has referred but I shall endeavour to supply him with an answer to his question.

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Senator FINLAY:

– Can the Minister for Health inform the Senate when it is contemplated that the free medical scheme will come into operation? Will the friendly societies’ medical associations which have established- branch dispensaries throughout the metropolitan area in South Australia be permitted, under the scheme, to supply free medical service to the general public from all its branches? If not, why not?

Senator McKENNA:

– It is in contemplation that legislation will be introduced soon after Easter to implement the pharmaceutical benefits scheme which was interrupted in 1945 by the decision of the High Court. I am hopeful that the scheme will be in operation not later than the 1st July next. The position in South Australia at present is that all friendly societies’ dispensaries are free to deal with the public in all phases of medicine. Under the bill which was declared invalid, it was provided that all dispensaries which were operating as at the 1st August, 1945, would be free to so deal with the public, but that all dispensaries established after that date would be given a limited approval. The limited approval would be conditioned by the obligation to supply pharmaceutical benefits only to members and their families. There is no valid law upon the statute-book at the moment dealing with this matter. Prior to embarking upon a consideration of the re-introduction of this legislation, I have recently been conferring with the federal councils of the dispensaries and chemists’ associations. They have somewhat diamentrically opposed views and interests. I have given to both those bodies an intimation as to the kind of recommendation I am prepared to make to the Government. I have not yet made any recommendation to the Government. I have invited the Federal Council of the British Medical Association to confer with me regarding its interests in the scheme. It has not been possible to arrange a meeting with that body; and I shall not be prepared to make a recommendation to the Government until I have concluded negotiations with all interested parties. The Chemists Guild asked for further time to allow it to submit a new proposal to me, and that time has now expired. The sole reason which has restrained me from introducing the matter to the Cabinet, and ultimately to Parliament, is that I have not concluded negotiation with the British Medical Association. I point out that the position has altered very appreciably since the Government passed the Pharmaceutical Benefits Bill. At that time, the Commonwealth had not power to determine whocould come into the scheme, or who must stay out of it. This position is altered to-day, because, by the passing of the referendum on this issue, the Commonwealth now has direct power to make laws with respect to the provision of pharmaceutical benefits; and that gives power to the Parliament to say who must, or must not, come into the scheme, and who may, or may not, come into it. Frankly, my view is that a government which is just about to introduce a national scheme of free medicine would find difficulty in justifying any differential treatment between friendly societies’ dispensaries in one State and those in another. The Commonwealth cannot differentiate regarding institutions of the one type just because of their differing geographical situation. Then, there may be virtue in the contention that section 99 of the Constitution comes into play. That section provides that no law of the Commonwealth relating to trade, or commerce, shall differentiate between States, or parts of a State; and it flows from that that the Commonwealth not only cannot discriminate but also may not give a preference. Whilst I have not yet made a recommendation, I do not hesitate to foreshadow to the Senate that my mind runs along the lines that friendly societies’ dispensaries should be dealt with on a uniform basis by the Commonwealth throughout Australia. It will be necessary to take steps to put them on an even competitive basis with the chemists. I am addressing my mind to this problem, and I hope that I have found a solution.

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Senator LECKIE:

– In the Sydney press of the 21st instant the following report appeared: -

Resignation of the Lieutenant GovernorGeneral (Dr. Van Mook) is expected following the resignation of three of the five members of the Dutch Commission-General.

Announcement of the commissioners’ resignations comes two days after the Dutch Government’s instruction to the Commission-General to sign the Dutch-Indonesian agreement.

Has the Minister representing the Minister for External Affairs any knowledge of that report ? Does that report mean that the eighteen months’ ban upon the loading of Dutch ships by waterside workers will be lifted, and that we shall now be given the gracious permission of waterside workers to trade with a friendly nation?

Senator McKENNA:

– I have not seen the report, and I have no knowledge of the facts, if they are facts, as outlined by the honorable senator. As to whether there is a ban, as he indicated, or whether such ban will be relaxed, or lifted, I refer the honorable senator to the body which he alleges imposed the ban.

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Tariff Board Report

Minister for Trade and Customs · QUEENSLAND · ALP

– I lay on the table the report of the Tariff Board on the following subject: -

Wine Export Bounty

Ordered to be printed.

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Policy - Strategical Air Routes

Senator COLLETT:

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

Will the Minister inform the Senate on what date he will be in a position to make a statement to Parliament in respect of plans for the future defence of the Commonwealth and the consequent re-organization of the Forces?

Senator ASHLEY:

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

Proposals relating to post-war defence policy have been under consideration by the Government and its advisers for some time, but as will he appreciated there are many important factors which have to be resolved as the result of developments during the war, the establishment of machinery for collective security, and the discussions at the Prime Ministers’ conference last year relating to co-operation in British Commonwealth defence. It is not possible at present to indicate the date on which an announcement will be made on the Government’s post-war defence policy.

Senator COLLETT:

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

  1. In regard to measures essential for the defence of Australia, has the Government taken any part in the survey and development of alternative air routes such as from Exmouth Gulf through Cocos, Diego Garcia, the Seychelles to Mombasa on the East African coast?
  2. If not, is the Government prepared to initiate action, or, alternatively, subsidize a private company undertaking the work under satisfactory guarantees ?
  3. Has there been any recent review, or discussion with the Governments of Great Britain and the Dominions, in respect of a strategical conception of airways’ routes and communications?
  4. If so, what areas of especial interest to Australia have been covered?
Senator CAMERON:

– The Minister for Air has supplied the following answers : -

  1. The general question of alternative air routes has not been closely examined since the war, but will undoubtedly be considered in conjunction with the problem of the defence generally of this country. During the war, an air route was developed and used between Australia and Ceylon via Cocos Island whilst flights were made between Ceylon and East Africa, via the Seychelles.
  2. The decisions as to what further surveys are necessary and who will undertake them will be considered in the general defence plans.
  3. No. not from the strategical angle, but these questions will be covered in future intergovernmental discussions on Empire defence. The Provisional International Civil Aviation Organization conference recently held in Melbourne discussed airways routes and communications from the civil viewpoint.
  4. See reply to No. 3.

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Senator COLLETT:

asked the Minister representing the Minister for Commerce and Agriculture, upon notice -

  1. What amount of superphosphate has been allotted to Western Australia for use in connexion with the 1947 sowings?
  2. Is the Minister assured that the Western Australian Railways are able to transport that amount to the various country sidings in time for use?
  3. If not. what action is proposed in order to enable the farmers to proceed with the production so urgently needed?

– The Minister for Commerce and Agriculture has supplied the following answers : -

  1. A quantity of 310,000 tons of superphosphate was allocated to Western Australia for the 1946-47 period. Of this quantity it is estimated that orders from farmers Wil amount to approximately 200,000 tons for delivery to 30th June. 2 and 3. Despatches to the loth March amounted to 118,000 tons, leaving a balance of 172,000 tons to be delivered. It is understood that, owing to difficulty in distribution of the large volume of supplies by rail alone, (lie Government of Western Australia is subsidizing the use of road transport to assist the position. It is planned to despatch 15,500 tons of superphosphate per week for the period I 18th March to 17th May, to be achieved by the transport of 11,000 tons a week by rail and -1,500 tuns a week by road. It is anticipated that outstanding deliveries will be overtaken il- the 17th May, when further deliveries will he made at the rate of 7,000 tons weekly. This should ensure that all required superphosphate will tie delivered to farmers in time for its effective use.

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Ais Strips

Senator AYLETT:
through Senator Nash

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

  1. What steps has the Government taken to preserve air strips built, at high cost, during the war, for use as emergency landing grounds in peace-time?
  2. Is it a fact that many of these air strips have had fences put across them?
  3. If so. would not such fences create a menace to a plane in difficulty and having to make a forced landing?
Senator CAMERON:

– -The Minister for Air has supplied the following answers : -

  1. All air strips required for the Royal Australian Air Force and civil aviation purposes have already been acquired or leased or are in the process of being acquired or leased as appropriate.
  2. The Department of Air has no knowledge of any fences having been erected and no permission has been given for the erection of fences across any air strips being retained for Royal Australian Air Force and civil aviation purposes.
  3. Certain air strips constructed during the war yeaTs are no longer required for Royal Australian Air Force and civil aviation purposes. Those not being maintained are being clearly marked with a large letter “Z”, which is the recognized symbol denoting an unserviceable strip, while, in the case of those properties which have already been dehired the owners have full rights over such lands.

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Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill.”

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Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Ashley) read a first time.

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South “Wales · ALP

– I move -

That the bill be now read a second time.

This measure seeks approval by the Parliament for Australia to become a member of the International Monetary Fund and of the International Bank for Reconstruction and Development. These institutions form part of the general structure for peace, security, and welfare in the post-war world, in the building of which Australia has taken a most active part and towards which the Minister for External Affairs (Dr. Evatt) has made no small contribution. The United Nations organization is the apex of this structure, but, recognizing that economic welfare is a fundamental basis for peace and security, special machinery for world economic collaboration has been developed within and around the United Nations. The broad object of this machinery is to promote throughout the world expanded production, employment and trade, and: higher standards of living all round.

Australia has consistently maintained’ the view that the successful working of international economic organizations and: the expansion of international investment and trade depend to a very great degree on the achievement and preservation of full employment in the major industrial countries. After a long series of formal and informal discussions at London and “Washington, at Hot Springs, at the Philadelphia Conference of the International Labour Organization, and at the Bretton “Woods Conference, we finally succeeded, at San Francisco, in June, 1945, in amending the purposes of the United Nations organization to include the promotion of “high standards of living, full employment and conditions of economic and social progress and development “. Since then, with the strong support of the Government of the United

Kingdom, we have secured the agreement of the Preparatory Committee on Trade and Employment to the inclusion of an International Employment Agreement in the proposed trade charter.

Employment and trade undertakings can be defeated by exchange manipulations, and it is the special object of the Monetary Fund to avoid the recurrence of these evils. Competitive exchange depreciation, discriminatory exchange controls, and the blocking of currencies were destructive weapons in the economic warfare which raged throughout the “ thirties “ and which contributed to the outbreak of armed conflict in 1939. “Their effect was to deprive international :trade of a stable basis, and, by greatly diminishing its volume, to impoverish ?people in all countries, especially those which, like Australia, depend largely upon external trade. By providing a permanent institution to promote international monetary co-operation, it is hoped to avoid these evils, to facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income.

The International Monetary Fund represents an attempt to avoid the errors of the past. It has already been commenced with 44 member governments. The chief nations which have not yet joined are Australia, New Zealand and Russia. The articles of the fund are the result of two years of intensive study by representatives of over 40 countries. Australia was represented at the several conferences, and successfully pressed important amendments. Inevitably, the articles represent, at certain points, a compromise, and experience may well prove that some changes are required. The fund is an inter-governmental organization and is wholly controlled by governments. Each member government has one representative on the board of governors, which determines policy, and voting power is allocated according to quotas. At present the Chancellor of the Exchequer in the United Kingdom, Mr. Hugh Dalton, is chairman of the board of governors of both the fund and the bank. Day to day management rests with executive directors, of whom there are at present twelve.

Broadly, the fund comprises on the one hand an international pool of gold and currency reserves to meet emergencies, and on the other hand a code of rules to regulate exchange relations between members. Each member joining the fund is assigned a quota which measures two things, namely, its obligation to contribute to the pool of gold and local currencies, and its right to draw foreign exchange from the fund. Australia’s quota is £A.62,500,000. It will subscribe this amount to the fund. Between £A.2,000,000 and £A.3,000,000 will be paid in gold and about £A.60,000,000 either in its own currency or by transferring to the fund non-negotiable noninterestbearing securities. Australia’s subscription could only be used for expenditure in Australia by other countries and could only be so used if Australia had a favorable balance of payments. Our drawing rights would total about £A.65,000,000. This would constitute an addition of that amount to our international exchange reserves, and would be available if our overseas funds ran down - for instance, as the result of drought. It would also assist overseas loan obligations in times of difficulty. Australia would be entitled to draw foreign currencies from the fund at a rate not greater than 25 per cent, of the quota in a twelve months period. Under certain conditions, and with the consent of the fund, it could draw on the pool beyond these limits.

Certain obligations are undertaken by member countries under the fund agreement in relation to exchange controls and the par value of their currencies. In general, members may not impose restrictions upon payments or transfers for current international transactions with other members. However, this does not applyto capital movements and it is subject to what is known as the “ transition period clause “ which, broadly, allows members to retain necessary exchange restrictions for five years after the fund begins operations. When a country joins the fund, it must agree with the fund its initial par value, i.e., its exchange rate.

In all cases to date, members have agreed their existing exchange rates and, in our case, the Government would propose to retain the present exchange rate of £A.125 to £100 sterling. Thereafter, exchange rates may be altered only to correct a fundamental disequilibrium. However, a member can make one alteration of 10 per cent, upwards or downwards without the consent of the fund. All other changes must be approved by the fund, but the fund is compelled to approve any change necessary to correct a fundamental disequilibrium.

Finally, there is the important provision that a member may withdraw at any time without penalty. A more detailed exposition of the articles of agreement of the fund is available to honorable senators in the review made by the leader of the Australian delegation to the Bretton Woods conference, which is contained in Parliamentary Paper No. 13b of 1944.

The undertakings which a member gives regarding exchange stability and the convertibility of its currency in respect of current transactions are, clearly, important commitments. However, there are adequate safeguards to ensure that reasonable exchange stability shall not become excessive exchange rigidity and that movements in exchange rates required for employment reasons shall be achieved. I have already explained that the fund is compelled to concur in movements of exchange rates required to correct a fundamental disequilibrium. It is further provided that the fund may not object to a proposed change because of the domestic, social, or political policies of the member proposing the change.

Like the Commonwealth Government, the United Kingdom Government is pursuing a full employment policy, and, as a further and final safeguard, the United Kingdom Government sought and obtained from the fund a ruling that “ steps necessary to protect a member country from chronic or persistent unemployment arising from pressure upon its balance of payments are among the measures necessary to correct a fundamental disequilibrium “. As the Chancellor of the Exchequer has stated, this “ removes any doubts which may be lingering in men’s minds regarding the interpretation of the phrase ‘fundamental disequilibrium in relation to employment ‘ “.

Further, in return for the exchange undertakings given, a member is assured of assistance from the fund in time of need and is freed from the fear of ita external trade being disrupted by fluctuations in the exchange rates of other countries and by the restrictive currency practices which caused so much trouble in the past. External trade is in itself an important determinant of levels of employment, especially for countries like Australia. Our major primary industries and all their related trades and services depend upon the sale proceeds of our exports, while much other economic activity depends upon the flow of imports. It is too often overlooked that a great part of Australia’s secondary industry relies upon imported materials, equipment and processed goods, and this need will grow as secondary industry expands. The par value of the currencies of members ‘a to be expressed in terms of gold as a common denominator or in terms of the United States dollar, and this has been described as equivalent to the gold standard. But this is not so. The central feature of the gold standard was rigid exchange rates, with currencies so linked to gold that countries were compelled to expand or contract the volume of credit within their territories as gold flowed in or out of their reserves. By contrast, the International Monetary Fund envisages controlled flexibility of exchange rates, and, by providing additional currency reserves for members, seeks to avoid the need for contractions of credit where members are subject temporarily to an adverse balance of payments.

The purpose of the International Bank for Reconstruction and Development is to provide a source of capital funds for the reconstruction of countries devastated by war and for the development of industrially backward countries. The bank has a share capital to which member countries subscribe according to quotas, our quota being £A.62,500,000, the same as for the International Monetary Fund. Australia would subscribe 2 per cent, or £A.1,250,000 in gold and 18 per cent, or £A.11,250,000 to be called up as required in Australian currency. This £A.11,250,000 could only be used by the bank with the consent of Australia. The balance of £A.50,000,000 would be a surety fund subject to call only when required to meet our pro rata share of contingent liabilities of the bank.

Loans issued or guaranteed by the bank would not be “ tied and Australia, as an exporting country, would benefit from the resulting expenditure. Australia would share with all other countries in any losses incurred by the bank, but they should not be great and would be spread over a long period. It is unlikely that Australia would itself require to borrow from the bank.

The bill before the House seeks provision for certain payments that will have to be made if Australia becomes a member of the fund. These include our subscriptions to the fund and the bank, of which details have been given, and also of certain contingent liabilities. Authority is sought to borrow money necessary to make payments required by reason of membership of the fund and of the bank, and also for the issue of special nonnegotiable, non-interest-bearing securities. Such securities may be accepted by the fund or the bank in lieu of a member’s currency to meet a part of its subscriptions or other payments. Further explanations will be given in committee.

A feature of these Bretton Woods organizations which commends them to the Government is that, taken with related bodies in the United Nations scheme, they constitute the first attempt in history to grapple with world economic problems by concerted action on a world scale for the common good. They recognize the vital fact that the complex and ever-changing problems of international trade, finance and economic relations generally cannot bc. allowed to drift as they did formerly, when individual nations followed separate and often discordant policies. They represent a bid to pull together the world situation, get it under control and set it on a steady and coherent course. The Government will review Australian membership of the fund and the bank when the final outcome of the present trade discussions is known. The Government’s application for membership will also be on the basis of admission on the same conditions as those applying to an original member.

Senator COOPER (Queensland) [4.12J. - The bill proposes to enact acceptance by Australia of what are known as the Bretton Woods Agreements for the control and exchange of international currency. Although the Parliament has only recently been given details of the proposals, the information has been in possession of the Government for the last two years, and it is common knowledge that the Labour party has had prolonged and acrimonious discussions upon it. The details should have been given to Parliament months ago, because this is essentially a non-party measure and that would have enabled all members of the Parliament to obtain a proper understanding of these matters. From the appearance1 of the Government benches, some honorable senators opposite will evade their responsibilities, should this bill be taken to a vote. At the present moment there is no unanimity in the ranks of the Government in regard to the acceptanceof these proposals.

The Bretton Woods Agreements provide for the establishment of an international monetary fund and a world bank. These organizations are integral part? of the proposals and are essential to their implementation. Briefly, the International Monetary Fund is to be set up to stabilize exchange and to assist in promoting international trade. These organizations will have an important effect on the future progress and development of the world. I shall have more to say about them later.

The International Bank for Reconstruction and Development will provide capital for the reconstruction of areas devastated in the war and the industrial development of backward countries. The world is so inter-related tha-t distress and poverty in any part of it affect the whole. As individual nations develop and prosper, so there is a general movement upward ; and consequently, any organization which will assist in the restoration of countries which suffered severely in the war should have the support of every other nation. This is a non-party proposal. It may not be perfect. I realize that the schedules to the bill must be accepted or rejected as they stand. The agreement requires ratification by

Parliament, but that is practically a foregone conclusion because the Government which has an overwhelming majority in each House can pass any legislation it chooses to introduce. The proposals before us fit into the pattern of proposals which have emanated from the representatives of many nations in an endeavour i.o bring order out of chaos in a world devastated by war. They demand our most serious thought because they represent an effort on the part of the nations of the world, not only to prevent those fluctuations which caused chaos in the past, but also to establish better trading relations between the nations. The agreement before us is complementary to the establishment of the United Nations of which Australia is a member. So is also the United Nations Conference on Trade and Employment which is now taking place at Geneva. The discussions there are of vital importance to Australia. These proposals are interlocked ; one cannot function properly unless the others do also.

As I have said, the proposal before us may not be perfect, but I believe that it is an honest attempt to set up something better than has existed in the past - something which will prevent the recurrence of those chaotic conditions which led to the outbreak of war in 1939. Admittedly, it is an experiment but it is an experiment worth making. Should we reject it we must consider the implications of its rejection. Similarly, we must have regard to the benefits which its acceptance will confer, not only on Australia, but also on other nations. Our experience in the period between the two world wars shows that violent fluctuations of exchange rates are most damaging to trade. There can be no doubt that difficulties associated with international trade were largely responsible for creating a state of affairs which led to war in 1939. It is essential to restore . early the volume of international business, and to maintain its continuity. Too often in the past there have been booms followed by slumps. It would be better to have a steady flow of trade between the nations, and, therefore, I support proposals to establish organizations which will tend to give that continuity, and prevent a recurrence of those conditions which in the past have led to conflict. Australia to-day is in an enviable position; it has emerged from the war more fortunately situated than most other belligerents. That is true particularly of our secondary industries. During the war these industries developed to a remarkable degree, and as the machinery was not damaged by enemy action, whereas in other countries great destruction took place, Australia has gained much and lost nothing in this respect. The result is that we are in a position to bring our secondary industries into full production immediately. All that is necessary is a willingness on the part of Australians to work, and, if necessary, to work harder than ever before, until production reaches a stage commensurate with the needs of the world. I believe that the International Bank for Reconstruction and Development will play an important part in the re-establishment of countries which were brought to the verge of ruin during the war. lt is of immense importance to Australia that countries which suffered severely during the war should again be enabled to recover economically, because in the past we supplied many of their needs. To a large degree we are a selling nation. We are a leading primary producing country, and only by exporting wool, meat, hides, tallow, wheat, fruit and many other products have we been enabled to build up credits overseas with which to purchase the goods essential for the expansion of our secondary industries as well as luxury goods in keeping with our standard of living. At the moment, Australia will not require assistance from the fund to be set up under this agreement, because we have substantial credits overseas. However, we shall need markets for our exports. In that respect we shall benefit substantially as a signatory of the agreement, because credits will be supplied to nations which were our customers in the past to enable them to purchase the goods which we can supply in abundance. Under the agreement, more nations will be enabled to purchase our exports. Thus we shall be better enabled to expand our industries and maintain full employment for our people.

Australia is not only looking for new markets; we are also vitally interested in the maintenance of Empire preference. This is a very live issue at present. It is being discussed at the preliminary conference of the international trade organization now being held overseas. I do not need to emphasize the vital part which Empire preference has played in stabilizing our primary industries. I need only remind honorable senators that we sell to the United Kingdom 99 per cent, of our meat and 90 per cent of our butter exports, as well as the greater proportion of our surplus production of sugar, eggs, cheese, wheat, dried fruits and other primary products. It would be a sad day for our primary producers should Empire preference be abandoned. Therefore, I hope that our representatives at the trade conferences now being held overseas realize fully the importance of Empire preference not only to our primary producers, but also in respect of our economy as a whole. Under that policy we have obtained markets for our exports and also reasonably high prices for them.

Already 43 nations have signed the agreement, and they include most of the countries with which we trade. That fact makes it still more important that Australia sign this agreement. The signatories include all members of the British Commonwealth of Nations with the exception of Australia and New Zealand, and I have no doubt that when Australia signs it New Zealand also will sign it. The United Kingdom was one of the first nations to become a signatory. I am informed that it was more or less bound to do so under the terms of the loan made available to it by the United States of America. However, the fact that the United Kingdom has entered into the agreement reveals the faith which the Old Country has in this organization, and its belief that the results flowing from it will be of great benefit to all countries. Should Australia refuse to sign the agreement it would run the risk of being the only member of the British Commonwealth of Nations to remain outside the organization. The only other hig nation which has not yet become a signatory is Russia. I repeat that in the past Australia’s trade has been with other members of the British Commonwealth of Nations and those other nations which have already signed the agreement. . That fact alone renders it necessary that we enter into the agreement.

I have outlined the main benefits which will accrue to Australia as a signatory of the agreement; but, of course, we must also accept certain responsibilities and obligations in return for those benefits.. “We cannot take everything and give nothing. Critics of the agreement contend that by signing the agreement, Australia will surrender its sovereignty to a large degree. Admittedly, we shall be obliged to make some concession in that direction ; hut we surrendered some measure of our freedom when we joined the United Nations organization. For instance, we surrendered direct control of any of our fighting forces which might be required by the United Nations in the event of that organization being obliged to discipline an aggressor. However, au ordered system of society could not possibly be maintained unless each of its units surrendered some measure of freedom in the interests of the whole. That observation applies also to this agreement, which is designed to benefit world society by facilitating international trade. We must be prepared to make some concession in return for the benefits which we shall derive as a signatory of the agreement. Should we fail to enter the agreement we should be completely isolated from those nations which have been our best customers in the past. As an exporting country, we cannot afford to do that. I repeat that our primary industries depend entirely upon overseas markets. Therefore, we must not do anything, that would deprive us of those markets.

Critics of the agreement also contend that it involves a return to the gold standard. The Minister for Supply and Shipping (Senator Ashley), in his secondreading speech, explained that that was not entirely the case. I agree with him to a certain degree. There cannot be a return to the gold standard as we knew it. In those days it was necessary tha’ there should be a high fixed reserve of gold covering our note issue. I assume that under the Bretton Woods proposals the gold reserve will be flexible in its relation to the note issue. In this way the International Monetary Fund will be given a greater measure of stability. It is inevitable that in any international monetary agreement, American dollars must play an important part. The American dollar has become the world’s stable currency, and, no doubt, under the Bretton Woods proposals many countries will seek dollar funds for the purchase of goods. The use of the American dollar as the recognized currency of the international bank will have a stabilizing effect and will result in freer trade between nations.

The Bretton Woods proposals have not been hurriedly or carelessly drafted. They have been drawn up in good faith by experts. Leading financial authorities of the world have pooled their knowledge for this purpose. As I have said, the scheme is purely experimental. Certain alterations may become desirable. Provision is made for the making of such alterations, and for the remedying of whatever defects may become apparent in this scheme. Without some plan for the control of international finances, the world might easily drift into a state of anarchy. World peace depends first of all upon contented peoples, and to have contented peoples there must be a high level of employment in all countries, which, in turn, necessitates the free exchange of the products of all nations. Inevitably a cessation of the flow of international trade will result in discontent, disruption, and finally war. I believe that the Bretton Woods proposals represent an honest endeavour by the majority of the leading nations of the world to prevent such a catastrophe again taking place. The English-speaking nations are backing that endeavour, Australia and New Zealand being the only ones that have yet to become signatories. Australia can do much to strengthen the ties between Empire countries, to preserve world peace, and to facilitate the development of world trade, by joining the other nations associated with these proposals.

Senator LARGE:
New South Wales

Senator Cooper is welcome to whatever satisfaction he may derive from his belief that there is a division of opinion in the ranks of the Labour party over this measure. I remind the honorable senator of the old saying that people in glass houses should not throw stones.

I am sure that the happenings at meetings of the parties now in opposition would not stand the light of day.

For many years, I have been convinced that gold, as a medium of exchange, has lost its usefulness. As far back as 1896 the proportion of gold to the world’s solid and liquid assets wa3 less than 2-J per cent. When we contemplate the enormous increase of the world’s wealth that has been brought about since then by the introduction of labour-saving appliances during two world wars, by the frenzied advance of man’s inventive genius, and by the vast expansion of world trade, we can readily imagine that to-day the gold backing for the world’s wealth represents less than one-quarter per cent. Therefore, we are only deluding ourselves if we claim to be on the gold standard. Many years ago, when discussing this matter, I was asked a question relating to the future of gold in world finance. My conjecture then was that while gold might have some place in an international banking organization that had for its object the balancing of world trade, it could serve no other useful purpose. When I examined the Bretton Woods Agreement, I came to the conclusion that the proposed international monetary organization was very much like the bank I had visualized twenty years ago. At first, the fact that gold and dollars were to be used by the international bank as basic currency made me suspicious; it made me think that we might be in the process of handing ourselves over to the tender mercies of Wall Street. But when I considered that America had the bulk of the world’s gold, and was also the leading trading nation of the world, so that whether we became signatories to the agreement or not we should still be very much subject to America’s will in regard to trade, I ca,me to the conclusion that we should be better in the Bretton Woods organization than out of it. By becoming a signatory to the agreement, we shall at least have a voice in whatever decisions are made by the 45 member nations.

Senator Gibson:

– There should be 80. Senator LARGE. - All the nations that count in world trade, except Russia, have already signed. In such international organizations as the United Nations and Unrra, Australia has played an important role, due mainly to the dynamic personality of its Minister for External Affairs (Dr. Evatt), and it is reasonable to believe that in this connexion also we shall have a voice that will be heard far and wide. The International Bank 13 to be used largely for reconstruction purposes, and, having seen some of the devastation of the war in my recent journeys abroad, I have come to the conclusion that there is much more merit in the Bretton Woods proposals than I thought at first. A safeguard is that Australia may withdraw from the agreement at any stage without penalty. I need say nothing more about the benefits of the agreement. The opposition to it is merely a storm in a tea cup. Many people are raising “ furphies “ and chasing bogies. The same sort of thing happened a few years ago when the Government decided to extend our lines of defence in the Pacific area. As soon as this decision was announced, howls of calamity arose and alarmists screamed that this represented a breach of our conscription laws, f regarded the Government’s defence plans as common sense, not conscription. The elements in the community which raised that outcry are now protesting against the signing of the Bretton Woods Agreement. These are the elements which could have screamed, but did not, against the Premiers plan many years ago when the nation was in dire distress as the result of the visit of Sir Otto Niemeyer, who would be more’ aptly named “ Nightmare “. He was a night-mare to us when be came to Australia. I have watched the panorama of political events in Australia for many years. I have seen people become greatly excited over trifling matters, and I can listen calmly to the present wails of misfortune, knowing that the Government’s decision is a good one. What these prophets of evil do not know would fill volumes. I have seen their phophecies disproved before, and I contemplate the outcome of the Government’s decision in this instance with satisfaction. I am not in the least perturbed by the knowledge that Australia will become a party to the Bretton Woods Agreement, because I do not believe that it has any bearing on a return to the gold standard. Furthermore, we are in the safe position of being able to withdraw from the agreement without penalty should suspicions to the con-* trary appear to be well grounded.

Western Australia

, - I doubt whether any subject, apart from the war, has aroused more public interest and criticism than the Bretton Woods Agreement, since negotiations for it were commenced in 1943. We have had a long time in which to study the details of the agreement and its probable effect on the future of international trade. I have given my support to it for a considerable time, particularly in my home state of Western Australia. C support it for three major reasons, if for no others. The first reason is that the agreement represents an attempt to do something for the welfare of distressed humanity. The second reason is that it would be repugnant to me for Australia to remain outside the agreement while Great Britain was a party to it, having regard to our attachment to the Mother Country through the ties of not only blood and sentiment, but also of trade economy. The third is a geographical reason. A.s a representative of Western Australia, the greatest gold producing state of the Commonwealth, I favour the agreement because it will give stability to the gold producing industry, which has been endangered for many years by the whims of various financial cranks who believe that the root of evil, particularly in international trade and commerce, is gold.

The agreement represents a valuable attempt to solve the vexed problems of international trade and its consequent adjustments in relation to international exchange. By means of the agreement, an endeavour will be made to smooth out the hills and valleys shown in the graph of international exchange which came into being after World War I. Under its terms, a debtor nation will have immediate recourse to financial assistance from the fund. In this regard, the agreement will be of great assistance to Australia. Many of our exports immediately after World War I. were sent to debtor nations. For instance, Belgium was in serious financial difficulties after World War I., yet that country was then one of Western Australia’s best customers for lead concentrates, meat, and many other valuable products of the soil. Under the agreement, nations with excessive debit balances, instead of having to negotiate at great length with international banks, will be able to have recourse to the International Monetary Fund and thus obtain quick relief. This will place them in a favorable position for purchasing the exportable goods for primary producing countries like Australia. That is only one small advantage of this voluminous agreement, but it will be a definite move towards making the flow of international trade smoother and thereby improving conditions in all countries. There may be flaws in the agreement, but I doubt whether any international agreement such as this one could be perfect in the first instance. In the course of time, and in the light of practical experience, I have no doubt that such flaws can be removed.

I should have been greatly disappointed had Australia remained aloof from the agreement, having regard to the position of Great Britain. I know that it has been suggested in many quarters that the Government of the United Kingdom was forced to sign the agreement. However, the fact is that it did so, and that Great Britain is now an integral part of this world-wide organization. Some time ago I had doubts as to the fate of imperial preference under the Bretton Woods proposals. I would do nothing which would jeopardize imperial preference, because I want to see imperial preference agreements not only continued but also consolidated. But imperial preference alone could not relieve Great Britain of its present agonies. I might be opposed to this agreement if imperial preference could save the Mother Country; but, although imperial preference may be of great advantage to us, Great Britain cannot hope to restrict its export trade to Empire countries alone. It must trade with other nations, and this agreement will enable such trade to be facilitated. I’ll us the agreement will be of advantage to Great Britain in its present difficulties, and that is a major reason why I sup port. Australia’s participation in the new international organization.

My third reason for supporting the agreement is that it will give stability to the future of the gold-producing industry. Under the agreement, every nation will have to pay 25 per cent, of its contribution to the fund in gold. Australia’s contribution to the fund will be 200,000,000 dollars. This alone will do more to stabilize the gold industry in Australia than anything else that has happened since the beginning of the depression in 1929-30. When Great Britain went off the gold standard, much was said and written about the unsuitability of gold as a means of international barter, and various schools of thought which advocated the abolition of gold as a standard means of exchange came into existence. The theories of such school* were expounded in this chamber. The creation of this new international organization has proved conclusively that the contempt for gold expressed publicly by such persons was empty and illfounded. Gold is emerging now as a proper medium of international trade and exchange. Exaggerated statements have been made regarding dangers inherent in this bill. Doubtless there are hidden dangers, but they have yet to be discovered and they can be dealt with when they appear. I do not consider that any of these are major difficulties’. To suggest that Australia may lose its sovereignty by becoming a party to these agreements is absurd. There is no danger of that nor is there any cause for apprehension concerning the control of this fund. Australia will not, of course, enjoy any great prominence in the control of the fund because Article XII. of the first schedule provides that of the twelve directors to be appointed as executive directors, five are to represent the five nations which have the largest quotas. That means that the executive directors will be nominees of the United States of America, Great Britain, Russia, China and France.

Senator Grant:

– Russia is not yet a party.


– I am aware of that. The article goes on : to provide that five shall be elected from countries “ other than the American Republics.” So that, if it is to be a question of voting according to the amount of the subscriptions, I doubt very much whether Australia -will be represented on the original executive of the fund although. Canada may be. However, I do not think there is any hidden danger of a Wall-street collapse precipitating a world-wide depression, as some critics have suggested.

These proposals represent a serious attempt to bring some organization into the whole realm of international trade and exchange, and I have every hope that it will succeed, because nothing more calamitous could occur than the disintegration of organized economy. Furthermore, the organizations to be set up under these agreements give the smaller nations access to the fund in time of need. For those reasons 1 consider that Australia should become a party to them. We should have done so with the other countries of the Empire, and I hope that before long New Zealand will follow Australia’s example.

Senator O’FLAHERTY (South Australia) 5.18]. - Those honorable senators who have spoken do not appear to oppose Australia’s participation in the Bretton Woods Agreements. It is remarkable that Labour, Liberal and the Australian Country party senators should all advocate the same thing, and if I had not examined these proposals, that, in itself, would have made me suspicious of them. However, I have studied the proposals carefully from the aspect of their probable affect on the working communityI am not so much concerned with the financial and industrial factors involved.

Approaching these proposals from that point of view, it is necessary to review the financial developments of the aftermath of the first World War. The Bank of International Settlements was set up, with British assistance, for the purpose of rehabilitating the former enemy countries, and particularly Germany. Credits were made available to permit the re-establishment of Germany’s major industries and cartels and “spheres of influence “ were established in every country of the world except Russia. Russia could not be compelled to take part in these arrangements, because of internal revolution and subsequent events ; but the international financial group which controlled England, France, Germany, and almost the whole of Europe, attempted to coerce Russia into doing so. Having obtained control of the world’s trade, these international financiers then proceeded to set up in Germany a political body which later came to be known as the Nazi party. Their purpose in doing this was to build up Germany’s industries as a bulwark against the expanding economy of Russia. Following that arrangements were made for a concerted attack on the ideology of Russia; but because of the germ of self-destruction inherent in capitalism, these international financiers failed wholly in their objective, and instead the German financiers found themselves in an unexpectedly strong position. The German capitalists then attacked their former friends, the international financial group. While all this was going on Germany and the Allies were still subscribing to the Bank of International Settlements. Finally, the German financiers, who were controlling the industry of the world from Germany, were succeeded by the Nazis. The Nazis were opposed to Russia. In the first place, having disposed of the rest of Europe, they attempted to subjugate Russia directly, and eventually, as honorable senators know, Britain was the only other European country standing out. It was said then that even if Great Britain won the war it would have to adopt Nazi-ism afterwards to save itself. The people of Great Britain, of course, did not subscribe to those sentiments, any more than did the people of Australia; but the fact remains that the war against Great Britain, and against us, was financed in large part from Allied funds in the Bank of International Settlements. That bank had shifted gold from Germany to Belgium, from Belgium to Switzerland, Switzerland to England and then, through tortuous channels, back to Germany to enable Germany to fight us. This happened because Great Britain and all the other countries regarded the funds of the Bank of International Settlements as a sacred trust.

To-day we are asked to become a party to the Bretton Woods agreements. The argument is put forward that because we already belong to a number of international organizations we should, as a matter of course, subscribe to these proposals. I disagree with that. It is a fact that we have been represented at a great number of international conventions and conferences, including the United Nations organization, but the distinction lies in the fact that any decision of those bodies has to be ratified by this Parliament before it is binding on the Australian Government. The delegates whom we send to these gatherings cannot bind the Government; they merely report and make recommendations to it. But the position is entirely different in respect of the organizations to be set up under the Bretton Woods agreements. Once Australia has joined these organizations it will be subject to their control, without any ratification by this Parliament. That is a consideration which must constantly be borne in mind. When one remembers the history of the international financial institutions set up after the first World War - which were regarded as sanctified bodies - and their machinations, of which I have just given an example, one realizes the potential danger. I repeat that Australia’s participation in the operationes of these bodies will not be subject to any direction by this Parliament. To these organizations we give absolute control of our destiny. Even the officers of those institutions will bc absolutely immune from criticism. The result is that the controllers are to become absolute dictators of the 44 subscribing countries.

Senator Cooper remarked that he hoped there would be no interference with Empire preference. I thought that every member of this Parliament realized that, independently of the Bretton Woods agreements altogether, there is to be a modification of imperial preference; and I am very doubtful whether it is going to be to the advantage of the working people of Australia. But, for better or for worse, modification of imperial preference is part and parcel of the Bretton Woods agreements. _ Of course, I myself, think that a modification of imperial preference may be to our advantage. I think that we should be disposing of our produce in markets nearer than Great Britain, and I think that the exploitation of those markets would do more good for Australia than the retention of imperial tariff preference. But there is another factor. In 1944, when the world was at war, the board of the Bank of International Settlements issued a report in which it stated that no world bank would be of any use unless it had the power to control the economy of governments. That simply means that the bank which was set up after World War I. realized that it did not have the controls that it desired, notwithstanding what it had done to build up the Nazi regime. It found that things had got out of hand. Accordingly, in 1944 it said that any other world bank would be useless unless it had control of the economy of the nations which joined it. And so there is provision for that control in these proposals. It has been said that this body will not be able to control exports from Australia, or the nation’s internal economy. I doubt that, because I believe that exports can be controlled by controlling imports, for which provision is made. Those who control imports can also control exports, and therefore they can control a nation’s internal economy. I believe that financiers will consider these matters, but that they will not repeat their actions on former occasions. Honorable senators will recall that a gentleman who ostensibly represented the Bank of England came to Australia, at the invitation of the then government, and said that certain things ought to be done quickly. Those things were done. This time I do not think that the financial dictators will attempt to force their policy on the nations so quickly. Their policy will be “ a little at a time, so that the people will not notice it “ ; but gradually one country after another will come under their heel.

I know that I shall be twitted by honorable senators opposite about speaking in this way and then voting for the bill. I have given, in broad outline, an account of the events which led up to these agreements. I believe that they will not be of benefit to Australia or Great Britain. I firmly believe that Great Britain and other members of the British Commonwealth of Nations have been driven into a corner, and have had to succumb to pressure. No one in authority will say so, but if we follow the trend of world events and study what has happened in connexion with imports and exports and the placing of restrictions on trade at the direction of a financial dictatorship, we shall see that these proposals will not benefit Great Britain as much as we expected.

There is another way out, but this is not the time to discuss it. However, in passing, I mention that under the lendlease proposals which operated between the United Kingdom, the United States of America and Australia, credits were raised in this country, and Australian commodities were exchanged with the products of other countries in order to prosecute the war. I believe that that principle could be extended. 1 am diametrically opposed to the Bretton Woods Agreement, and as long ago as 1937, I expressed myself against the proposals of international financiers to establish a world bank. In the light of what I have said and written regarding the effects of setting up a form of international control, with its cartels and combines, I now find myself in a somewhat difficult position. In the first place, I am a member of the Australian Labour party which has not considered these proposals. I do not know why it has not done so. Apparently, some one had a brain wave, and said “We had better leave them to be discussed by the representatives of the Labour party in the National Parliament “. That, in other words, is the body known as caucus. It is true that caucus considered these proposals, and decided that the Government should be a member of the International Monetary Fund and also of the International Bank for Reconstruction and Development. Because of that, and because I believe that the strength of the Labour party is based on the solidarity of the movement, and also that the defeat of the minority is only temporary, I shall bow to the will of the majority, and support the hill. I hope that members of the Labour party outside the Parliament who hold views similar to my own will also accept this temporary defeat. At this stage, it is useless for any section to claim that its views are necessarily right. Time alone will prove who is right. ‘ I accept the assurance of the Government that, should time prove the decision of the majority to ‘be wrong, Australia can withdraw from the scheme. Should it ever be found that the scheme is deleterious to Australia’s economy, I shall be one of the first to ask the Government to withdraw from it and proceed along the lines that I have suggested.

Senator LECKIE:

.- I cannot help having a certain amount of sympathy with Senator O’Flaherty in the difficult position in which he finds himself. Probably it is not the first time that he has been in a similar situation. The honorable senator appears to have been able to swallow his scruples without difficulty. When I remember the vociferous denouncement of the Bretton Woods Agreement by the honorable senator and other supporters of the Government, -I cannot help wondering where the Labour party stands in regard to it and whom honorable senators opposite really represent. Are they merely echoes of caucus, or do they represent the free electors of Australia? It is clear from what Senator O’Flaherty has said that there is in this country an authority greater than the people who elect the Parliament.

Senator Grant:

– Has not the Opposition its own caucus?

Senator LECKIE:

– We on this side have our party organization, but we are still free to exercise our independent judgment.

I desire to examine some of the fallacies associated with the Bretton Woods Agreement with a view to ascertaining why honorable senators opposite now support a proposal which they previously denounced. In his second-reading speech the Minister for Supply and Shipping (Senator Ashley) said -

The Government will review Australia’s membership of the fund and the bank when the final outcome of the present trade discussions is known.

What does that mean? Does it mean that if Australia does not get all that it seeks at the United Nations Conference on Trade and Employment it will immediately withdraw from the fund? [f so, the Government is entering into this agreement in a most -extraordinary way. In effect, it says, “We believe in this agreement. We believe that the future of mankind will depend largely upon friendly trade relations between the nations”; and then it says, “ But if you put in anything that we do not like, we shall pull out at once “. Later, in his second-reading speech the Minister said -

The agreement states that we can withdraw at any time on giving notice and can ;fret back our subscriptions. . . . Whether at any time vc shall find it advisable to withdraw will be a question for decision in the light of all the circumstances.

Let us consider whether Australia has the right to withdraw from the fund, and whether withdrawal is the simple thing that the Government would have us believe. In my opinion, nothing is ever gained by overstating a case, saying something that is not a fact, or hiding the truth. Under Article XV., section I., any member may withdraw from the fund at any time by transmitting a notice in writing to the fund at its principal office and withdrawal shall become effective on the date such notice is received. If one does not like to read any further than that, one is on safe ground - a member can withdraw at any time it wishes and will receive its money back. But let us read further. Section 3, which deals with the settlement of accounts with governments ceasing to be members, shows that withdrawal is hedged around with conditions, the first of which is that any country whether it withdraws, o.r not, shall still continue to shoulder its contingent liabilities.

Senator Ashley:

– Liabilities up to the time of withdrawal.

Senator LECKIE:

– Yes; but supposing that half of the fund has been lent to borrowing countries, then Australia, or any other country, must remain in the fund until all its liabilities have been met. Therefore, membership is not so easy as it looks. Many aspects of the agreement are hidden from the people. They see that the subscriptions total 9,100,000,000 dollars, of which America’s subscription is 3,175,000,000 dollars, and then conclude that America’s subscription represents 34 per cent. However, whilst Russia is not coming into the scheme at all, its subscription is put down at 1,200,000,000 dollars.

Senator Large:

– How does the honorable senator know that Russia is not coming into the scheme?

Senator LECKIE:

– Because Russia has said so. Deducting the subscription appearing in the name of Russia, the subscriptions total 7,900,000,000 dollars with the result that America’s subscription to the fund increases to 40 per cent. That means that the United States of America will own 40 per cent, and not 34 per cent, of the stock. I remind honorable senators that the money in the fund is held in shares. When any country withdraws, its shares shall be valued at the valuation shown in the books at the time of its withdrawal. It is provided that the shares of any country which withdraws will go on the market. .Supposing that up to fifteen of the smaller countries, or two of the bigger countries, withdraw, and their shares are put on the international market, who will buy them? Who has the money to buy them? Again, it is the United States of America and the United States of America only.

Senator Grant:

– The Government of the United States of America, and not individuals.

Senator LECKIE:

– I am aware of that. Thus by inducing some of the smaller nations to withdraw from the fund and buying up their shares, the United States of America will own 50 per cent, of the stock within a very short time. I am drawing attention to these things only because they have not been pointed out before. They have been carefully hidden by the Government from the people and the Parliament; but those are the facts, and when one examines them one realizes that in spite of all the arguments advanced in favour of the fund, we need to be careful as to the degree to which Australia will really be committed under a long-term arrangement of this kind. When we find the government saying in so many words that Australia can withdraw at any time and take back its subscription, and then we find that it cannot do so, but, on the contrary, has contingent liabilities which may last for years, we suspect that the arguments advanced by the Government are a little specious.

Sitting suspended from 6.52 to 8 p.m.

Senator LECKIE:

– The Government claims that Australia can withdraw from theBretton Woods Agreement any time it likes, but honorable senators opposite seem to forget that certain contingent liabilities will continue. The purpose of the international bank, we arc informed, is to provide a source of capital and funds for the reconstruction of countries devastated by war and for the development of industrially backward countries. That is plain enough. But will any one argue that Australia is a backward country and that, therefore, advances will be made by the international bank for its reconstruction or industrial development? Obviously, if such an application were made it would be rejected. Any borrowing that is to be done from the international bank will not be done by Australia. It will be our funds that are borrowed. It will not be so easy to withdraw from the agreement as honorable senators opposite might believe. Section 4 of Article VI. of the International Bank Agreement states -

  1. When a government ceases to be a member, it shall remain liable for its direct obligations to the Bank and for its contingent liabilities to the Bank so long as any part of the loans or guarantees contracted before it ceased to be a member are outstanding; but it shall cease to incur liabilities with respect to loans and guarantees entered into thereafter by the Bank and to share either in the income or the expenses of the Bank.
  2. At the time a government ceases to be a member, the Bank shall arrange for the repurchase of its shares as a part of the settlement of accounts with such government in accordance with the provisions of (c) and (d) below. For this purpose the repurchase price of the share shall be the value shown by the books of the Bank on the day the government ceases to be a member.

What does that mean? How will it be possible to determine, day by day, the value of the shares that are held by any particular country? Section 4 continues -

  1. The payment for shares repurchased by the Bank under this section shall be governed by the following conditions: -
  2. Any amount due to the government for its shares shall be withheld so long as the government, its central bank or any of its agencies remains liable, as borrower or guarantor, to the Bank and such amount may, at the option of theBank, be applied on any such liability as it matures. No amount shall be withheld on account of the liability of the government resulting from its subscription for shares under Article II., Section 5 (ii). In any event, no amount due to a member for its shares shall be paid until six months after the date upon which the government ceases to be a member.

    1. Payments for shares may be made from time to time, upon their surrender by the government, to the extent by which the amount due as the repurchase price in (b ) above exceeds the aggregate of liabilities on loans and guarantees in (c) (i) above until the former member has received the full repurchase price.
    2. Payments shall be made in the currency of the country receiving payment or at the option of the Bank in gold.

Is there not room for some manipulation there? If for instance Australia decided to withdraw from the fund, and had to be paid off, would it not be possible to so depreciate the value of Australian currency that the repayment would be almost worthless? I do not propose to enlarge upon those matters at this stage. I am merely endeavouring to show that these proposals have not received the consideration that is due to them. Certain things have not been disclosed to the general public or to members of the Parliament. We should not be asked to enter into an agreement of this nature without knowing exactly what it involves.

I am concerned most of all with the concluding portion of the Minister’s second-reading speech. He said -

The Government will review Australian membership of the fund and the bank when the final outcome of the present trade discussions is known. The Government’s application for membership will also be on the basis of. admission on the same conditions as those applying to an ordinary member.

That passage seems to imply a threat. Australia apparently is not becoming a partner in this experiment wholeheartedly. We are reserving to ourselves the right to withdraw from the agreements under certain circumstances - if, for instance, we do not get our way in the international trade discussions. In effect we are giving a warning that we do not trust other members, and we are providing a loophole for escape. We are entering into these agreements falteringly, because, apparently, there are some doubts in our minds. That is entirely the wrong attitude. We should be prepared to pledge our fullest cooperation honestly believing that we are acting for the benefit of mankind. Then even if the experiment were to fail, and we were to suffer financially by its failure, at least we should have made an honest attempt to place world trade and world financial relations upon a sound footing.

The Minister indicated that in some way, Australia’s participation in the agreements would assist full employment in this country. That is merely leading the Australian people towards a mirage. Undoubtedly freer trading between nations would provide more employment, but to hope for permanent full employment as the result of these agreements is stretching optimism too far.

I have no doubts about the Bretton Woods proposals although apparently some honorable senators opposite have, and I am rather astounded at their attitude as representatives of free electors. Their attitude to this measure has been dictated not by the people who elected them to the Parliament, but by another organization altogether.

I have done what I regard to be my duty by pointing out that certain aspects of the Bretton Woods proposals have not been fully disclosed. Again I say that we must be prepared to co-operate wholeheartedly with other countries in this great experiment. We must enter the agreements with strong hearts and clear heads. We must be prepared to give the scheme a fair trial. The Government has endeavoured to sneak the bill through the Parliament upon the plea that at any time Australia can withdraw from the fund ; but, as I have pointed out, once we enter into the agreements we assume certain obligations. We enter into a partnership with the other nations concerned. We must stick to our guns. If we lose, then it is our mistake. I shall vote for the bill because my view, contrary to that of some honorable senators opposite, is that the Bretton Woods proposals will be a success in spite of the dangers to which I have drawn attention.

This is a worth-while experiment. For that reason I shall vote for the bill.

I commend Senator Large for his candour in relating his doubts about this agreement and I sympathize with him. I confess that at first I decided that the agreement would be a good thing but later, when I began to consider its implications, I experienced some doubts. However, having considered it in its entirety, and realizing that we face a new world, in which we need new methods, I know that the dangers which I foresee can be surmounted if we are fully aware of their presence. Therefore, I am prepared, on behalf of Australia, to take any risk that may be involved in order to bring about a state of affairs in the world which will benefit the people of Australia. I hope that, in the committee stage, the Minister will be able to dissipate the doubts which I have expressed and reassure those honorable senators who may question the wisdom of Australia becoming a partner in the new organization. The Minister said that the matters that I had raised could be dealt with in committee, but I remind the honorable senator that the agreement must be taken as a whole. This House has no power to alter even one comma in the agreement itself. No matter what may happen in the committee stage, we must either accept the agreement as it stands or reject it.

Senator Ashley:

– I said that the points raised by the honorable senator would be explained in committee.

Senator LECKIE:

– .The Minister is only throwing dust in our eyes. We all know that the agreement can not be altered in any way. We must take it as it stands or leave it. I am optimistic enough, and have sufficient knowledge, to believe that we are entering a new era of international relations. We are putting aside the sentiment that governed the League of Nations and trying to start afresh on a hard business basis. I hope that we shall be able to ensure that there shall be no poor people and no backward nations in the world.

Senator Herbert Hays:

– The honorable senator is an optimist.

Senator LECKIE:

– I know that I am an optimist, but this is a great experiment which is worth while trying. Before the war, we might have thought that such an experiment would be absurd, but we are in a new world now and we know that sentiment alone cannot hold the nations together. International trade, if it be conducted honestly, may help not only to rehabilitate the impoverished nations but also to keep them at peace.

Senator NASH:
“Western Australia

.- Whilst I intend to vote for this bill, I am not enamoured of it. I have been influenced considerably by a statement on the Bretton Woods Agreement issued by the Prime Minister (Mr. Chifley) recently, when he said -

I do not say that it is perfect as a piece of mechanism. Necessarily the scheme is experimental and capable of improvements, hut that to me is a most compelling reason why we should now be taking part in its activities. Of all the dangers that beset international relationships, the greatest is the illusion that any country, least of all a small country, can stand apart in isolation. That, however, is not to say that we must abandon ourselves to the drift of events. On the contrary, history is full of instances of small nations asserting themselves successfully and beneficially in world affairs, and that has never been more true than in the last few years.

T admit that this statement has had a great effect on my attitude towards the bill. We have every reason to know that we cannot afford to maintain a state of isolation as a nation. Even the great United States of America has realized the impossibility of maintaining a policy of complete isolation. We in Australia, with our small population of 7,500,000 people, would find ourselves in a very difficult situation if we endeavoured to remain apart from the rest of the world, particularly in view of the part that we have recently played in international affairs.

The purposes of the International Monetary Fund and the International Bank for Reconstruction and Development are to bring about international monetary co-operation, to facilitate the expansion and balanced growth of international trade, to promote and maintain high levels of employment, and to promote exchange stability. None of us can complain about those purposes. However, I am concerned about the methods of giving effect to those principles. I shall never forget the depression years, when about 30 per cent, of our people were out of employment. The effects of that depression in Australia, and elsewhere were terrible and the nation took, a long time to recover from that condition of economic instability. As SenatorLarge pointed out, a former government invited certain international financiers tovisit Australia in order to advise it on. economic policy. It adopted the advice with certain results. I shall not give an. historical record of all that happened at that time, but I am very concerned about the possibility of such things happening again. We have been told that this international organization under theBretton Woods Agreement has been created for the special purpose of preventing a repetition of such tragicevents. Under the old system of international finance, the financial interestsof the world - not of any particular country - decided that certain things must be done in order to bring about economic stability after World War I. We know what happened as a result. Now we are told that the new organization will safeguard the world against a repetition of such events.

The new system is a world organization in two phases. One phase is for the purpose of creating an international monetary fund so that member nations may obtain assistance from it when they are in need. The second phase is represented by the International Bank for Reconstruction and Development. Reconstruction, as I understand it, applies not so much to Australia as to other member nations of the organization which were devastated by war. I believe that the period of reconstruction will elapse within five years from the commencement of the bank. The International Monetary Fund is a different proposition. It will continue to operate indefinitely if it proves to be successful. The agreement sets out that this organization will be free of private international financial interests. Therefore, there is no possibility of there being any financial “jiggery pokery”. The fund is governed by a board of governors, and every member nation has the right to appoint a governor. Each governor has a vote in accordance with the amount contributed to the fund by his nation. Australia will have a quota of 200,000,000 dollars, which will give it a voting strength of 2.27 per cent, of the total. The governors will meet at least once each year. They constitute a policy making body, but they delegate their powers almost exclusively to an executive of twelve members. This executive of twelve members has all the powers of the governing body, so that if Australia does have a voice in determining the policy of this organization that voice will not be very strong. We are over-optimistic if we think that on the initial establishment of the International Monetary Fund Australia will have direct representation on the managing committee. I ask leave to continue my remarks at a later hour.

Leave granted; debate adjourned.

page 1075


Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Cameron) read a first time.

Second Reading

Senator CAMERON:
PostmasterGeneral · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to obtain parliamentary approval for the ratification of the Convention on International Civil Aviation signed at Chicago on the 7th December, 1944. The bill also provides for such changes in the Air Navigation Act “1920-1936 as will become necessary by reason of: (a) the coming into force of the convention, and (6) the continuous development of civil aviation.

At present air navigation is regulated by the Air Navigation Act 1920-1936, referred to in this bill as the principal act. The act of 1920-1936 enabled effect to be given to the convention for regulating air navigation signed at Paris on 13th October, 1919. Australia, together with other contracting states, by ratifying the Chicago convention, undertakes as between the ratifying countries that the Chicago convention shall supersede the Paris convention. The Chicago convention comes into operation 30 days after the twenty-sixth State has deposited its instrument of ratification. The twenty-sixth instrument was deposited on the 10th March, 1947, so that the con vention becomes effective as on and from the 10th April, 1947. The notice of denunciation of the Paris convention given by Australia is expressed to take, effect one year after the 10th August, 1946, or on the date on which the Government of the Commonwealth of Australia becomes bound by the Chicago convention, whichever is the later date. Now that the Chicago convention has been ratified by the requisite number of States the denunciation takes effect on the 10th August, 1947. It follows, therefore, that between the 10th April, 1947, and the 10th August, 1947, Australia is under an obligation to apply the provisions of two conventions relating to air navigation.

The difficulties which might arise from this situation were _ recognized by the International Commission on Air Navigation established under the Paris convention, and many of the technical provisions of that convention have been amended pursuant to the power contained in Article 34 of the Paris convention, so that they now correspond with the relevant provisions of the Chicago convention. It will be noted that section 6 of the amending bill provides for the repeal, as at the 10th August, 1947, of the section relating to the Paris convention, and accordingly it will be necessary as at that date to substitute a new set of regulations to implement the Chicago convention and carry out the purpose of this bill. In the meantime, it is not proposed to introduce any new regulations which conflict with either convention. It is considered that this action is consistent with the spirit of Article S2 of the Chicago convention, which places on contracting states a duty to obtain release from such inconsistent obligations as soon as action can lawfully be taken after the coming into force of the Chicago convention.

I shall now deal with other aspects of the bill on which honorable senators may desire clarification. Proposed new section 3a of the act provides that “ The ratification on behalf of Australia of the Chicago convention is approved “. The Chicago convention covers all aspects of international civil aviation and is intended to replace the Paris convention of 1919 and the Havana convention of 1928. The provisions of these conventions were considered no longer adequate to meet the changed situation in post-war international civil aviation arising from the great development of aviation during the war. It was obvious that new rules for the more efficient conduct of civil aviation would have to be evolved and enforced by common consent of the nations of the world.

In view of the invitation of the United Kingdom Government to deposit our instrument of ratification simultaneously with other Commonwealth Nations, and in view of the resolutions of the Provisional International Civil Aviation Organization and the former International Civil Aviation Organization, recommending that signatories deposit ratifications on the 1st March, 1947, and, particularly, because of the importance of Australia becoming an original member of the permanent organization, Cabinet authorized the depositing of the instrument on the 1st March, 1947. This will assure Australia of representation at the first meeting of the permanent assembly scheduled to meet in Montreal on the 6th May, 1947. As indicated, the convention now becomes binding on the Commonwealth of Australia on and from the 10th April, 1947. Clause 3 of the amending bill seeks Parliamentary approval of the action of Cabinet in authorizing the ratification on behalf of Australia of the Chicago convention. Clause 5 of the amending bill gives power to make regulations for the control of air navigation in respect of certain enumerated subject matters

It appeared desirable to take this opportunity to enlarge the power to make regulations in respect of the control of air navigation so that it will be more nearly coextensive with the power inherent in the Constitution. It will be noted that in addition to providing for the carrying out of the Paris convention the existing act gives power to make regulations for the control of air navigation (a) in relation to trade and commerce with other countries and among the States, and (b) within any territory of the Commonwealth. It is considered that the addition of the further powers enumerated in clause 5 of the amending bill covers more fully the power inherent in the Constitu- tion to make regulations for the control of air navigation. In particular, power is given to make regulations for the control of air navigation within any State, the Parliament of which has referred to the Parliament of the Commonwealth the matter of the control of air navigation within that State.

The decision of the High Court in the Goya Henry case in 1936 appears to limit the power of the Commonwealth to control directly civil aviation within a State to matters connected with naval and military defence, postal services and the rules contained in the first schedule to the regulations. These comprise, briefly, what might be termed the “ rules of the road “ and flight procedure. In view of this decision a conference was held in 1937 between the Commonwealth and the States which resulted in an agreement by the States to pass uniform State legislation requiring observance of the Commonwealth Air Navigation Regulations by all aircraft flying within such State. This State legislation, in effect, applies regulations made under the Air Navigation Act 19S0-1936, as amended from time to time, as part of State law. It will be noted that clause 1 of the amending bill has been drafted so as not to disturb the existing pattern of State legislation. Nevertheless it appears desirable to provide in advance for the situation which will arise if, at any time hereafter, the power to control directly air navigation within any State becomes vested in the Commonwealth. With the development of civil aviation it appears likely that some States may be disposed in the future to refer to the Commonwealth, pursuant to section 51 placitum xxxvii of the Constitution, power to control air navigation within that State.

The addition of this provision in clause 5 provides for such a contingency and by making appropriate amendments to the Air Navigation Regulations they can be made applicable as part of Commonwealth Law to any State which at any time hereafter transfers power to the Commonwealth to control air navigation without further amendment of the Air Navigation Act.

Debate (on motion by Senator Cooper) adjourned.

page 1077


Second Reading

Debate resumed (vide page 1075).

Senator NASH:
“Western Australia

– Before the debate on this bill was adjourned earlier to-day, I was referring to the voting power and the constitution of the International Monetary Fund. There will be twelve directors, or governors. When we compare this body with the General Assembly of the United Nations we find that the latter is, in effect, an international parliament in that it makes recommendations and decisions. As has been pointed out by other honorable senators, those recommendations come before the Parliaments of the member nations for ratification or otherwise. But this board of governors will have complete control ; they will be able to come to any determination they think necessary; and there will he no appeal against their decisions. That is a departure from established practice in international matters. The old International Labour Organization came to decisions, which were known as conventions, which had to be ratified by the Parliaments of the member nations. It will be different with this organization.

What I have said of the International Monetary Fund applies also to the International Bank for Reconstruction and Development, and for that reason I am not enamoured of this proposal. However, we have been assured that there is little to fear in this connexion, because this body of men will be responsible to an internationally created governmental organization. It is something altogether distinct from the set-up of any other international institution. To that degree it is not an international creation such as the Bank of International Settlements and similar organizations which were created in the interests of private enterprise. Regardless of what we may think about the proposals, there is a good deal of merit in the suggestion that the United States of America might buy out the share capital of member nations which desire to withdraw from the fund. In my opinion, that indicates that the dominating control in this new international set-up will reside in the United States of America. Although I shall not speak at length of the gold standard, the fact remains that most of the gold in the world is in the United States of America. This proposal takes as the basis of exchange the par value of our currency. That par value must be related to a certain weight of gold, which I understand was the quantity contained in the American $1 in 1944. We are told that that is only a method for determining the relevant value of the currencies of the nations associated with the organization, but I cannot see why we should lay down a system of measurement which provides that the value of the Australian £1 is the par value of our currency at a certain date compared with the value of the American $1 in 1944.

I understand that we shall have the right’ to vary our exchange rate not more than 10 per cent, on any one occasion without the approval of the fund. There will be no appeal against the decision of the fund, except where a member nation desires to withdraw from it. The right of appeal against any decision of the fund is strictly limited. We have heard a lot about the right of a member nation to withdraw from the fund. It has been said that all a nation has to do is to tell the fund of its desire to withdraw and to serve notice in writing to that effect. Professor Melville, who was the representative of the Commonwealth in the negotiations which led to this agreement, said -

Technically, members may withdraw from the fund at any time. In practice, however, withdrawal would be difficult and, perhaps, impracticable.

Why should withdrawal be difficult or impracticable? The only answer I can suggest is that associated with these two organizations is another which is still in the process of determination, namely, the International Trade and Employment Organization. Those three organizations - the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Trade and Employment Organization - are linked together. If Australia becomes a member of the International Bank it must also be a member of the International Monetary Fund. What is woven into this agreement is interlaced with the bank agreement, and I think that the final draft of the International Trade and Employment Organization will contain similar principles. We must go farther, and remember that, although the Bretton Woods Agreement did not originate at the San Francisco conference in 1945, there was created at that conference an economic and social council, one of whose functions is the improvement of the conditions of the peoples throughout the world. From the point of view of principles and performance this is an international endeavour to bring about improved economic and cultural conditions throughput the world, particularly among member nations. That is what makes it so difficult. T have an international outlook, and I greatly desire more international co-operation, both economic and otherwise, and therefore I find it hard to say that this agreement will be of no benefit to the people of Australia or of the world generally. Our acceptance of it might be the best thing that we can do for them.

We must let the people know some of the factors associated with this international document. I have heard it said that it has been a burning question for a long time, but if so, it has been so regarded in very restricted quarters. I have had practically no correspondence from electors in Western Australia in respect of the Bretton Woods Agreement. A few people have suggested that I should oppose its ratification by this Parliament, but apart from a few isolated instances, I have had no considerable correspondence on the subject. That means that I, as a member of the Senate, must come to a determination in respect of this matter without guidance from the people whom I assist to represent.

While I was in the United States of America I had an opportunity to attend a meeting of the Foreign Affairs Committee of the .Senate when it was taking evidence in public as to whether the United States of America should join the United Nations. A large room was packed with people interested in the proceedings. Both oral and written evidence was given. The result was that a committee was set up by Congress to obtain the views of the people generally as to the attitude which the United States of America should adopt in respect of certain matters. In Australia no such means is provided to ascertain the views of the people. However, I refer to that aspect in passing, because I believe that the Government should set up a foreign affairs committee representative of all parties in both chambers for the purpose of advising it on foreign policy. The purpose of the organization proposed under the measure is to promote and maintain high levels of employment. All of the information which I have on this matter leads me to believe that the establishment of the bank, the fund, and the International Trade and Employment Organization will promote high, if not full, employment throughout the world. However, with respect to that aspect, 1 refer honorable senators to documents relating to the Bretton Woods conference from the 1st July to 22nd July, 1944. Professor Melville, in a general review of proceedings at that conference, stated -

A number of countries argued that the International Monetary Fund could not function successfully unless it were accompanied by efforts to reduce tariffs and other barriers tn trade, and a resolution was carried recommending to the participating governments that they reach agreement as soon as possible on ways and means whereby they might best . . .

facilitate by co-operative effort the harmonizing of the national policies of member States designed to promote and maintain high levels of employment and progressively rising standards of living.

Those resolutions were submitted. Professor Melville continued -

In the discussions, there was fairly general opposition to the specific proposal that the countries represented at the conference should be invited to sign an agreement concurrently with the monetary agreement. It was argued that, while the relationship between employment and monetary policy was recognized any resolution implying that acceptance of the monetary fund should be contingent on an employment agreement went beyond the terms of reference of the conference.

Having regard to that statement, I cannot accept the suggestion that merely by entering this agreement we shall create high employment. That is why I have referred at length, to the proposed International Trade and Employment Organization, which is in the process of being established. I have no doubt that in due course documents relating to the present discussions will be placed before us and that, ultimately, the proposal submitted to us will be based on principles designed to establish higher standards of living throughout the world.

Upon entering this agreement we shall accept certain advantages; but in return for such benefits we must also accept certain obligations. This agreement is one of the most involved documents I have ever read. As I have not had any legal training, I can only approach it in a common-sense way. However, we are assured that the agreement will not adversely affect our internal economy. T sincerely hope that that assurance will be fully justified, particularly in view of the progressive banking legislation which has been enacted by this Government. We cannot overlook the possibilities latent in the agreement by reason of the fact that the controlling^ bodies will be a law unto themselves. “Whilst there can be no appeal from their decisions, it is ‘possible that they may make decisions which will restrict our imports and exports and thus vitally affect our internal economy.

Senator Herbert Hays:

– That possibility exists whether we enter the agreement or not.

Senator NASH:

– That is so. However, I have already dealt with that aspect. As T have said, the Prime Minister has pointed out that by entering into the > agreement we shall know where we stand, whereas should we fail to accept it, we should not know what difficulties might confront us. “We are told that this proposal is an experiment; but whilst admitting that fact, none of us will find fault with the objective of the experiment. How the experiment will work remains to be seen. Upon entering the agreement, we shall require to obtain approval before we can trade with countries which are not members. As with all other international organizations, we must enter these bodies in spite of the possibilities which critics of the agreement envisage. “We must enter into the agreement, because, as a member of the British Commonwealth of Nations, we must stand by Great Britain. I support the bill.

Senator BRAND:

.- J support the measure because the agreement offers Australia a choice between isolation and co-operation in the international financial and economic structure. “With the world in such a mess to-day, Bretton “Woods furnishes the only ray of hope for economic recovery and the prevention of war on a large scale in the future. Opponents of the agreement consider that it will lead to another world depression. If, as some people believe, the depression of 1930-32 was attributable to a group of international financiers and not to a superabundance of unsaleable primary products throughout the world, Bretton “Woods supplies the corrective. Private financiers have had no part in the organization, nor any say in its policy. It is strictly an international organism created by governments in the interests of their countries and the world at large. A board of directors consisting of sixteen persons elected by the governments of the member countries will be responsible for implementing policy. The present chairman is Mr. Hugh Dalton, Chancellor of the British Exchequer. Great Britain must have seen some merit in entering into the agreement. Canada and South Africa have signed it, and Australia will do so when this measure is passed. It is confidently expected that New Zealand will follow suit. What is Australia’s alternative? Outside Bretton Woods, out of step economically with the rest of the Empire, we should be a pariah among the nations. Why is Russia the only nation which still stands aloof from this agreement? Its reasons are not clear, because it has not put all its cards on the table. I repeat that Bretton Woods does not offer an absolutely certain remedy for the world’s ills; but if it will stall off another world depression, as competent authorities maintain, it is worth a trial. What we in Australia fear most is a local depression, due not to lack of money to buy commodities, but, because of industrial unrest, to a lack of commodities which can be purchased. That is the very opposite of the condition which caused the ‘economic catastrophe in 1930-32.


– We may view the proposal embodied in the bill as an international experiment which is being undertaken with the object of seeing whether, thereby, better understanding can be established between all nations. This agreement is linked very closely with the objectives of other international ‘associations, and forms part of the general scheme being devised by the United Nations in order to maintain world peace and prosperity. Every honorable senator realizes fully its implications. We know that it cannot be altered by this Parliament, but only by decision of the signatories. The success of the experiment will depend entirely upon the efforts of the countries which sign it. We are entering into these agreements on an equal footing with 44 other nations. The experiment can succeed only if each partner is willing to co-operate wholeheartedly and with the utmost goodwill. We should not be making the reservation that at any time we can withdraw from the agreements, and so shed our responsibilities and liabilities to the other nations.

Senator Finlay:

– What will happen to the Ottawa Agreement?


– I shall not speculate about that, nor about other important questions that may be raised by the Bretton Woods proposal. We shall all await with interest the results of the forthcoming international trade conference. We must exhibit an international outlook towards the endeavours that are being made to solve international financial and economic problems. The world outlook to-day gives no cause for optimism, but this scheme is a step in the right direction. I have no wish to speak on this measure as a carping critic. I wish the experiment every success, but we must not ignore human factors. Details of the agreements have been worked out by financial experts who no doubt have been biased, probably unconsciously, towards the interests of their own country. In the period between the two world wars, the League of Nations represented the greatest endeavour that had ever been made by the leading nations of the world to foster a proper international understanding, but there too, human failings such as selfishness, cracked the structure, and one by one the nations withdrew their support until the League ceased to be a potent force in world affairs. Why did it fail? It failed because it lacked the power to enforce its decisions just as the laws of any country would- be impotent without the power and the authorities necessary to punish transgressors. The Bretton Woods proposals represent a genuine attempt to improve international relations. We have been informed that the funds of the International Bank will assist world-wide full employment.

In a country such as Australia the maintenance of full employment presents a relatively easy problem, but what of China, India and Japan with their far greater density of population and their much lower standard of living? How can these countries play their part unless something is done to raise their standard of living? How is it possible to give full employment to the *teeming millions of Asia? In this country there are vast empty spaces to which these people could migrate, but are we prepared to accept such migrants? Our population is only 7,000,000; but, in the interests of world-wide full employment, are we prepared to abandon the White Australia policy which we regard as being vital to this country? Let us not deceive ourselves that the Bretton Woods proposals are a cure-all for international ills. Only if all signatories to the agreements enter into this partnership in a spirit of unselfishness and goodwill can the experiment succeed. During the war, the British Empire, America and Russia, united to fight an oppressor. The Allies were successful only because they were willing to co-operate wholeheartedly, to extend mutual aid, and to maintain goodwill; but to-day, although the war has been over for less than two years, world conditions are such that a most serious condition could arise at any time. Agreements of themselves are of no importance. What matters is the spirit in which the agreements are entered into. The hope for world peace depends upon international tolerance and goodwill. I do not look upon the Bretton Woods proposals with any suspicion; .but I feel bound to refer to these matters because although we may deceive others, we are foolish indeed if we deceive ourselves. I support the hill because I do not know of any better instrument to achieve the purpose for which it is designed. As Senator Nash has pointed out Great Britain has signed the agreements, and whatever may be our personal or individual views on the matter, Britain having given the lead, it is up to us to follow. What would be thought of this country if we -were to stand aloof? It has been stated that the United States of America will dominate the other nations; but whether we sign, the agreements or not, the United States of America is the only nation to which any country that is in financial difficulties can turn for assistance.

Senator Finlay:

– Can we say that Britain entered into the agreements voluntarily?


– I am not in a position to judge. As the honorable senator is aware, many factors govern Great Britain’s participation in this scheme. For instance, the war has exhausted its foreign credits. I think we shall find that as the years go by, the link between America and Great Britain will become closer.

Senator Sheehan:

– America has offered to take over Great Britain.


– This matter is too serious to warrant levity and foolish remarks. We can ill afford to make adverse comments about the United States of America, and we should be ungrateful if we did so. Not long ago we worked in the closest harmony with that country, and we were glad to turn to it when it came to our assistance. We must live at peace with the world. Peace will not result from any policy of isolation. We must play our full part in dealing with the problems that will have to be solved from time to time, not the least of which will be the problems of international finance and trade and commerce. I support the bill.

Senator SAMPSON:

– In considering this wonderful document, the Bretton Woods Agreement, we should recall how it had its origin. It was conceived in July, 1944, at Bretton Woods, in the State of New Hampshire, United States of America. Events at that time indicated that the war might last for years. The agreement therefore originated when the representatives of various nations met in harmony at a time of common peril. In examining the agreement, we should put it in its proper setting. It is one of the instruments of the United Nations, the international organization which has succeeded the defunct League of Nations. The broad overall aim of the agreement is to promote peace and world progress through international co-operation. We had international co-operation of the first order in 1944 at Bretton Woods. The agreement also places great emphasis on “full employment “.

The two main branches of the United Nations by which that organization functions are the Security Council and the Economic and Social Council. The role of the Security Council is to stop brawling among nations, although it has no mandate to change the conditions which make brawls likely or possible. The Economic and Social Council is charged with the more positive function of promoting international co-operation in economic and social fields and, in particular, with co-ordinating the activities of (1) the Bretton Woods plan, which we have before us now; (2) the Food and Agricultural Organization; (3) the International Labour Organization; and (4) the International Trade Organization. The two “ babes in the Bretton Woods “ are (1) the International Monetary Fund and (2) the International Bank for Reconstruction and Development. More is expected from the former than from the latter. The main purposes of the fund are to stabilize exchange rates and facilitate free conversion of one currency into another. The voting power of a country, is in proportion to its contribution to the fund, which is based on its status in world trade. Therefore, the United States of America and Great Britain have the greatest voting power. The fund is forbidden to interfere with the domestic policy of any of its members. This is a most important provision, which is distinctly laid down without equivocation. It is also made clear that a member may withdraw from the fund and secure the return of its subscription if it wishes to do so. Of course, its obligations to the fund must be honoured in any event. Members of the fund agree not to vary their exchange rates by more than 10 per cent, without the permission of the fund, and they also forego their right to use exchange restrictions. In international trade, stability of exchange rates and free convertibility are two important factors which benefit both the buyer and the seller of goods. They tend, first, to keep price fluctuations within narrower limits than would otherwise be possible, secondly, to eliminate serious losses through sudden and arbitrary alterations of exchange rates, and thirdly, to prevent consequent abrupt shrinkages of the volume of trade. Thi3 should be of great importance to Australia, because one-fifth of our national income is derived from external trade.

The mechanism of the organization cannot be expected to be free from the flaws inherent in any new invention. This is a hew invention ; it has never been tried before. The approach to exchange flexibility has been conceived in a spirit broad enough to give the plan a chance of being workable. That is obvious, although the document is long and complicated and I do not profess to have the ability to interpret it as clearly as I should wish. Nothing can happen to Australia as a member of the fund that could not happen to it in worse degree if it were not a member. After World War I., nation after nation established parities by independent action without any regard for the inter-relationship of currency values. That happened throughout Europe. The tariff barriers and restrictions that were imposed were amazing. Those nations had to pay for their actions. This attempt to prevent a. repetition of such events was initiated during a terrible war when we all were striving for a common aim, which should give us some hope that it will work. If international trade problems had been attacked after World War I., as they are now being attacked, by concerted international action, there would have been a better chance of securing a set of workable exchange ratios from the outset and there would have been less exchange dumping and competitive depreciation. These competitive methods led to a series of other defensive measures, including tariff adjustments, some of which were extremely bad, and quota restrictions, which were worst of all. All of these measures had disastrous effects on tho stability of prices, wages, and employment everywhere. We can easily recall the shocking conditions of sixteen or seventeen years ago. The International Monetary Fund has started operations in advance of post-war adjustments, not after them, which is all to the good.

I have been disappointed with the debate on this bill. I was extremely interested to read that caucus had decided to enter into the Bretton Woods Agreement. Unlike Senator Nash, I have received, much correspondence on this subject during the last eighteen months, in typed, hand-written and printed form, from all parts of Australia. I did not receive One letter advocating that the Commonwealth should enter into the Bretton Woods Agreement. All of my correspondents were bitterly opposed to the plan. I read many of the letters, but L put the remainder into the waste paper basket, because, in the main, the authors, although sincere, were currency cranks. They trotted out many “ bogies “, one of which we hear about interminably, namely, the gentleman who visited Australia in 1930, Sir Otto Niemeyer, the “ arch fiend “ according to the Minister for Transport (Mr. Ward), the honorable member for Reid (Mr. Lang), and others. The writers of the letters said that Australia would be swallowed up and put in financial bondage if it entered into the Bretton Woods Agreement, because it would be handed over lock, stock and barrel to international financiers and others. Who will manage the fund and the bank ? The governors are appointed by the members and decide broad policy; directors appointed by the governors control day-to-day management ; and administrative officials are chosen impartially from member countries. Private financiers have no place in the organization, or in its policy. It is strictly an international organization created by governments, not by those dreadful people, the international financiers of whom we have heard so much. The present chairman of both the fund and the bank is Mr. Hugh Dalton, the British Chancellor of the Exchequer. He is most unlikely to play the game of private international financiers. I should like to have heard any reasonable argument that could be. advanced against our entering into this agreement, but I have not heard any in this debate.

Another reason why we should become a party to this agreement is that, irrespective of what the future may hold, our economy is closely linked with that of Britain. Britain has become a leading member of the Bretton Woods Agreement, and is committed towards a general reduction of trade barriers and the restoration of multilateral trading. Only incredible ignorance and folly could lead Australia to pursue an external economic policy which disregards or cuts across, in a fundamental sense, the wishes and ideas of the other nations, and especially those of the Mother Country and of the United States of America. Cooperation with these great powers is essential for us, from the point of view of both our security and our economic well-being.

In common with most other countries, our domestic policy is aimed at the prevention of unemployment; and that policy, if it is to be effective, must be co-ordinated with the policies of other countries so as to permit expansion of our overseas trade. I believe that this measure will accomplish that. This cooperation does not mean that we shall be compelled to abolish tariff protection or sacrifice the basic structure of our secondary industries, and it is clearly to Australia’s interest to join wholeheartedly in this attempt to restore the trade of the world.

In conclusion, I shall read the final paragraph of the report of the Governor of the Commonwealth Bank, Mr. H. T. Armitage -

The basic fact has tobe borne in mind that in economic matters particularly, the countries of the world are mutually dependent.

That is absolutely true to-day -

Complete freedom of action is, in reality, quite illusory. Freedom to resort to currency depreciation, to impose exchange controls, or to discriminate through various trading devices, may confer short-run advantages, but past experience indicates that other countries quickly follow suit in self protection. No country can expect to have it both ways.

That applies to Australia; there must be give and take, and I can see no danger whatsoever in our becoming signatories to this agreement and loyally abiding by it.

Senator ASHLEY:
New South WalesMinister for Supply and Shipping · ALP

. - in reply - I express my appreciation of the reception given to this bill by the Deputy Leader of the Opposition (Senator Cooper) and honorable senators generally. The Bretton Woods Agreements deal with very complex and involved matters, and I confess that I am not completely conversant with them. There has been certain comment by the Opposition on the proposals, but no serious criticism of them has been offered. One of the suggestions was that the United Kingdom, and indirectly Australia, had been forced into the agreement by the United States loan to Great Britain. The answer is that the Government of the United Kingdom took part in drafting the Bretton Woods agreements, and that membership of the organizations to be set up under those agreements is regarded as a vital step in the development of Britain’s economic, policy. Whilst it was a collateral undertaking of the United States’ loan agreement that Great Britain would become a signatory to the Bretton Woods agreements, it seems obvious that Great Britain would have done so in any event. However, Australia was not bound by the American loan agreement or by Britain’s undertaking to join the Bretton Woods organizations. On the other hand, I think that Australia was committed, to some degree at least, to membership by its advocacy of an international employment programme at Philadelphia in 1945. When Australia’s representative, Mr. Beasley, made this suggestion, not a voice was raised in opposition. At that conference, it was pointed out that there were international and world agreements on every subject and of every kind, and there was no reason why an agreement could not be entered into to provide for maximum employment. It was pointed out that unemployment in any part of the world must affect the prosperity of every other country.For that reason, and for the further reason that those who have opposed our entry into these agreements have been unable to suggest any alternative, I submit that Australia must become a party to these agreements.

Some minor criticism of the measure was made by Senator Leckie, who contended that the United States of America could enlarge its shareholding in the bank, and hence its control in the management of the fund or of the bank to the detriment of other countries. The fact is that it is not possible for any country to buy additional shares in the bank. Share-holdings of members are determined by their quotas which are fixed by the agreement - “ No change in quota can be made except by a four-fifths majority vote “ - and the United States could not command such a majority.

The suggestion was made that no member of the fund or the bank could withdraw from them because it would remain liable for any debts of those institutions. The answer to that contention is that when a member withdraws from the fund or the bank there must be a settlement of account, just as there would be in any ordinary private business.

Senator Herbert Hays:

– Those remaining in the partnership will make the assessment.

Senator ASHLEY:

– That is so. If agreement cannot be reached, a formula for settlement is provided in Schedule D. The general effect of that provision is that the member country shall recover its subscription plus any amount owing by the fund to it, or less any amount owed ; by it to the fund. That provision should work quite equitably. I point out that when a member withdraws from the bank, it remains liable for its direct obligations and for contingent liabilities in respect of loans made by the bank while the country was a member. This is merely to protect the bank against countries evading their proper liabilities by withdrawing from the bank. In respect of liabilities contracted after withdrawal, the bank has no responsibility.

Senator Herbert Hays:

– The member concerned can he penalized.

Senator ASHLEY:

– Not in the circumstances which I have explained. Senator Hays said, “ We have become a member of a partnership, the terms of which we cannot alter “. I quite agree with that. Who would seriously suggest that Australia should be in position to alter an agreement reached by 44 nations, including the United Kingdom and the United States, to the possible detriment of those countries?

Senator Herbert Hays:

– I did not suggest that.

Senator ASHLEY:

– I realize that; the suggestion was made by Senator Leckie. Some protest was made that sufficient time had not been allowed for the discussion of this measure. The fact is that every opportunity has been given to-day to honorable senators for discussion, and even now, the Government does not wish to curtail the time of honorable senators to discuss this most important matter.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1084


SenatorCOOPER- I present the first report of the Printing Committee.

Report - by leave - adopted.

page 1084


The following papers were presented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1947 - No. 13-

Amalgamated Postal Workers’ Union of Australia.

Audit Act - Finance - Treasurer’s Statement of Receipts and Expenditure for year 1945-46, accompanied by theReport of the Auditor-General.

Commonwealth Public Service Act - Appointments - Department -

Commerce and Agriculture - C.G. Setter.

Supply and Shipping - H. B. Owen, L. S. Prior, E. F. Thyer, K. H. Zelman.

Customs Act - Regulations - Statutory Rules 1947, No. 35.

Defence (Transitional Provisions) Act - National Security (Shipping Coordinanation ) Regulations - Orders- - 1947, Nos. 1, 8.

Distillation Act - Regulations - Statutory Rules 1947, No. 26.

Excise. Act - Regulations - Statutory Rules 1947, No. 28

Lands Acquisition Act - Land acquired for postal purposes -

Five Dock, New South Wales.

Moonee Ponds, Victoria.

Port Augusta, South Australia.

Redfern (Strawberry Hills), New South Wales.

Southport, Queensland.

Talwood, Queensland.

Nauru -

Native Administration Ordinance - Regulation.

Ordinance - 1946 - No. 2. - Registration of Australian Patents.

Naval Defence Act - Regulations - Statutory Rules 1947, Nos. 33, 34.

Senate adjourned at 10.2 p.m.

Cite as: Australia, Senate, Debates, 25 March 1947, viewed 22 October 2017, <>.