18th Parliament · 1st Session
The President (Senator theHon. Gordon Brown) took the chair at 3 p.m., find read prayers.
Nationalization : Petition ; Statement by Mr. J. J. Dedman, M.P.
Senator RANKIN presented a petition from certain electors of Queensland in relation to banking in Australia.
Petition received and read.
– In view of the importance of honorable- senators having accurate information regarding the Government’s intentions when discussing the banking legislation now before the Senate, will the Minister for Supply and Shipping say whether the Minister for Post-war Reconstruction, Mr. Dedman, was speaking for the Government when he stated that, after nationalization, the Commonwealth Bank wouldhave to make a careful selection of the individuals and industries to which it advanced money?If so, does that not suggest the adoption of a policy of discrimination?
– The Leader of the Opposition has referred to the need for accurate information in regard to banking, If there is any inaccuracy, I suggest that it exists in the exaggerated, and inaccurate statements which appear in the press on ‘this subject. I cannot accept responsibility for any statement made by any one else, especially a statement reported in the press.
Report o:k Public Works Committee.
– As Chairman, I present the report, with minutes of evidence, of the Public Works Committee on the following subject: -
Proposed erection o£ permanent administration offices, Canberra.
– Has the attention of the Minister for Supply and Shipping been drawn to a report in to-day’s Adelaide Advertiser that 3,000 bodies for motor vehicles are exposed to the weather in South Australia, awaiting shipment to various ports of Australia? Has the Minister been informed of the position which exists in the motor body-building industry and, if so, can he say what can be done to relieve immediately the prevailing congestion in South Australia, which is seriously jeopardizing employment in the motor body-building industry?
– I am aware of the congestion in the motor body-building industry in South Australia. It is due not only to inadequate shipping but also to the fact that when shipping is available there are not adequate berths or facilities in that State to enable the bodies to be shipped. Moreover, there is a reluctance on the part of the South Australian. Railways Department to handle the motor vehicle bodies, the reason being, T understand, that, on account of their size, they do not constitute a paying load. My department is now carrying out an investigation, at the request of one of the motor body-building companies concerned, which has requested permission to transport motor bodies by road. Every assistance will be given by my department to facilitate the shipment of these bodies, and also to provide further transport by road.
Post Offices in New Settlements.
– As tremendous industrial expansion is taking place in the metropolitan district of Adelaide, and as a consequence new residential areas are rapidly appearing, will the PostmasterGeneral take the necessary action to secure additional sites for post offices in order that up-to-date postal services may be provided in these new residential areas at the earliest possible moment ?
– My department has already prepared a comprehensive programme for the erection of newpost offices. I shall make inquiries in order to ascertain whether provision has been made for post offices to serve the localities mentioned by the honorable senator.
Patients of Mental Hospitals - Tasmanian Institutions
– Is the Minister for Health and Social Services in a position to inform the Senate of the result of the negotiations between the Commonwealth and State Health Departments in relation to the payment of hospital benefits to patients in mental institutions?
– As the honorable senator knows, discussions did take place between Commonwealth and State authorities on the subject mentioned. The States were invited to submit to the Commonwealth particulars of the amounts collected from mental patients and their relatives for the maintenance of such patients in various institutions. That information has come to hand, and at the moment discussions are taking place between the Commonwealth and the States. I hope that it will be possible to reach an agreement similar to that which operates in respect of public hospital benefits whereby there will be no charge on mental patients or their relatives for the treatment and accommodation of patients in mental institutions. An agreement along those lines would involve the payment of certain sums of money to the States, so that the burden of payment would be removed from the patients without seeking to use that medium as a means of affording special relief to State budgets. It is hoped that the arrangement will be concluded in a way which will involve no additional expense on the part of the States but so that there will be a form of relief to patients.
– As Tasmania has the best hospital system in Australia, but very little cash, and as Tasmanian hospitals treat out-patients free, will the Minister for Health give consideration to making a grant to that State in respect of that service?
– It is sweet music to my ears to hear praise of Tasmania in any circumstances. I appreciate the great part that the honorable senator plays in hospital administration in Tasmania, and I know that he has a very full knowledge of the. position. The Australian Government has been in a position to render very substantial aid to Tasmania in connexion with the appointment of medical staffs to hospitals. I refer both to those employed on a sessional basis, and to salaried staffs, whether the salaries are payable in respect of parttime or full-time services. I have had the pleasure of drawing several cheques in favour of the Government of Tasmania. As the Senate will recall, under the Hospital Benefits Act, the sum of £500,000 a year was allocated to reimburse States which chose to employ in their hospitals for in-patient treatment medical practitioners of all kinds including specialists. So, I may say to the honorable senator that already the Australian Government has made substantial contributions. It will continue to make these contributions. Ample funds are available to assist other States in a similar manner.
Refitting of Coastal Vessels - Tasmanian Services
SenatorR ANKIN. - I ask the Minister for Munitions what is the position with regard to the refitting of ships in Australia for civilian purposes? Is it a fact that Aorangi and another vessel have been for many months undergoing refitting in Sydney, that other vessels are being refitted in Melbourne, and that still further vessels are awaiting their turn to he refitted ? If so, will the Minister give consideration to having some of this work done at the Cairncross Dockyards operated by the State Government in Queensland and thus expedite the return to the coastal services of much needed tonnage?
– Although, as Minister for Munitions, I am responsible for ship-building, the honorable senator’s question deals with the reconversion of ships that were used for war purposes, for which the Department of the Navy is responsible through the Ministry of Shipping. I shall bring the question to the notice of the appropriate authorities and an answer will be directed to the honorable senator.
– Yesterday, I asked the Minister for Supply and Shipping what progress had been made with negotiations in connexion with the reequipment of the steamer Nairana. Has the Minister secured any further information on that subject?
– Yes. Nairana will be required for the tourist trade to Tasmania for a period of two months from the 15th December, 1947, to the 15th February, 1948, inclusive. I am pleased to advise the honorable senator that the Government has now arranged for Tasmanian Steamers Proprietary Limited to operate the vessel during that period. Although the ship will be under the control of a company, the Government has undertaken to review the financial results of its operation and has guaranteed that the company shall recover its costs and a reasonable margin of profits for the service provided during the period. One of the obstacles to operating the vessel has been the fact that its crew accommodation requires major alterations to bring it up to modern standards. It was a physical impossibility to accomplish those alterations within the limited time available, and I pay a tribute to the maritime unions for their co-operation in agreeing to man the vessel although the alterations have not been made. A careful study of the Tasmanian passenger traffic reveals that both Taroona and Nairana cannot be operated economically on the Bass Strait service. The services of Nairana are really needed only for the duration of the brief tourist season and for a shorter period in winter when Taroona is laid up. Nairana was built specially for the Bass Strait service, and it lacks the endurance required for successful operation on other routes. The claims of the Tasmanian people for a regular and assured service are recognized by the Government. Inquiries as to methods by which such a service may be provided have been in progress for some time and are being continued.
Sena tor CLOTHIER. - Has the Minister representing the Minister for Works and Housing seen the Commonwealth Statistician’s report, which indicates that there has been a general increase of the supply of basic building materials since the termination of war? Can he inform me whether there has been a corresponding step-up in the number of homes completed ? How does the present rate of construction of houses compare with that of pre-war years?
– The honorable senator was asgood enough to inform me thathe intended to ask this question, and I consulted the Minister for Works and Housing, who has supplied the following answer: -
Yes, Ihaveseenthe report, anditgives me muchpleasure to inform the honorable senator that there has been a considerable increase of the numberof homes completed. In1945-46, the first year after the war, the numberof homes completed whs approximately 14,000. In1946-47, the number was approximately 32,000, and in addition some5,000 homes were provided by the conversion of service establishments.For the first three months of the 1947- 48 financial year, the commencement of houses was at the rate of 32,000 a year, and it is expectedthat the number completed will be a record. The completion of 32,000 houses in 1946-47 was5,000in excess of the 27,000 average for the ten years prior to the war.
– It has come to my notice that an offer has been made from Finland to sell 10,000 pre-fabricated houses to Australia. Will the Minister representing the Minister for Works and Housing inform me whether this is a fact ?
If so, are negotiations in progress to relieve the housing shortage by importing prefabricated houses ?
– I have no knowledge of such an offer. I shall discuss the matter with the Minister for Works and Housing and ensure that an answer shall be supplied to the honorable senator.
Tenure of Justices
– I ask the Acting Attorney-General whether it is a fact, as claimed in certain sections of the press and by certain members of the Opposition parties in the House of Representatives, that justices of the High Court are guaranteed life appointmentsunder the Commonwealth Constitution? If it is not a. fact that the Constitution ensures such life appointments, why are the present members of the High Court Bench and other federal court benches guaranteed life occupancy of their respective offices? Has any attempt been made at any time to appoint judges of a federal court other than the High Court for a limited period ? If so, what was the result?
– The Commonwealth Constitution does not expressly mention life tenure for justices of the High Court. However, section 72 provides that justices shall not he removed except on an address from both Houses of Parliament on the ground of proved misbehaviour or incapacity. Both the High Court in 1918, and the Privy Council in 1930, expressed the view that, under this section, it is not competent, either with or without legislation by the Commonwealth Parliament, to appoint justices of the High Court or any other federal court with anything but a. life tenure of their office. In the early years of the Commonwealth Arbitration Court, the act provided that the President was to hold office during good behaviour for seven years subject to removal on address from both Houses.
It was held by the High Court in Alexander’s case in 1918 that, as the appointment of the President for a period of seven years was at variance with section 72, the Arbitration Court was unable to exercise any strictly judicial powers, but only the powers of conciliation and arbitration. The result was that awards had to be enforced in other courts. In 1926, the act was amended to provide for the appointment of judges with a life tenure, so that since then the court has been able to exercise judicial as well as arbitral powers.
Australian Broadcasting Commission: Position of Mr. McCarthy.
– Recently, I asked a question of the Postmaster-General regarding the dismissal of Mr. McCarthy fromthe Australian Broadcasting Commission by the general manager. Yesterday, the Postmaster-General, in reply to the question, stated that, according to the commission, Mr. McCarthy had received, not only his full legal rights, but concessions beyond those rights. I am informed by Mr. McCarthy that this was not so. I now ask the Postmaster-General whether he will have laid on the table of the Senate the papers relating to the hearing of the case by a special committee of the Australian Broadcasting Commission ?
– The answer that I gave yesterday was supplied to me by officers of the Postmaster-General’s Department and of the Australian Broadcasting Commission. I shall give consideration to the honorable senator’s request for the tabling of the papers and supply him with an answer to-morrow.
– I ask the Minister representing the Attorney-General whether his attention has been directed to the campaign now being carried on in this country by a section of the press to hold up to ridicule the representative of His Majesty the King in this country? Does the Minister agree that such a campaign is prejudicial to good government in Australia, and an affront to the Governor-General ? If so, will the Minister ensure that this Parliament shall take the necessary steps to protect His Majesty’s representative in Australia?
– My attention has not been directed to the campaign to which the honorable senator has referred ; but if there is a campaign that tends to belittle the office of the Governor-General or its occupant every member of the Government will greatly deplore it. There is far too great a tendency in this country for people to deprecate our institutions and our public men. I agree with the statement implicit in the honorable senator’s question, that any such campaign is an insult to the Constitution, to the Governor-General, and, through him, to the King whom he represents. If the honorable senator will draw my attention to any particular instances of the campaignto which he refers,I shall have inquiries made and take whatever steps are appropriate after a full investigation of the position.
-I. ask the Minister for Supply and Shipping whether it is a fact that the Prime Minister stated recently that the Government would not take any action to suppress the Australian Communist party. If so, is the Minister in a position to inform the Senate of the reasons for that decision?
– The Leader of the Opposition is certainly setting me some problems this afternoon. First, I am asked to gaze into the crystal glass to see whether I can obtain some information in regard to matters that apparently are floating around in the press of this country; now, the Leader of the Opposition asks me whether I can determine the action of the Prime Minister in regard to a matter about which the honorable senator has probably read in the press. I shall not disguise the fact that I do not intend to supply the information that the honorable gentleman seeks. If he is anxious to obtain information from the Prime Minister I shall have much pleasure in conveying his request to that right honorable gentleman and I have no doubt that the Prime Minister will be prepared to speak for himself.
– Will the Minister representing the Minister for External Affairs say whether approval has been given for further Japanese whaling expeditions to the Antarctic next season? If so, have all. the conditions prescribed by the Australian Government in respect of this season’s expeditions been carried out? Is an Australian observer accompanying all the present expeditions?
– I have not at my disposal the exact information that the honorable senator seeks. I understand, however, that approval has been given by the American authorities in Japan for a further Japanese whaling expedition to the Antarctic. On the representation of Australia and other countries, precautions have been taken to ensure that the international conditions laid down for the conduct of whaling operations shall be observed. I understand that arrangements have been made for observers to accompany the expedition to ensure that the international conventions shall be adhered to, but I am unable at this stage to say whether or not these observers are Australians. I shall make further inquiries from the Acting Minister for External Affairs, and obtain the information that the honorable senator desires.
– I ask the Minister representing the Minister for Commerce and Agriculture, what is the position regarding the supply of bags for the handling of wheat, oats and barley at the coming harvest?
– I know that the Minister has given considerable attention to this matter, and I am sure that he has it well in hand. I shall bring the honorable senator’s question to his notice.
– I ask the Leader of the Senate whether the Government intends to hold a referendum on the alteration of the Commonwealth Constitution early next year? If so, will the questions to be submitted contain proposals for such alterations of the
Constitution as will enable the Government to carry out fully the Labour party’s policy for the complete nationalization of industry?
– The Government does propose to hold a referendum next year, but the Government is quite competent to decide what questions it will submit to the people. It does not require any outside advice in that respect.
asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has supplied the following answer, which, with the consent of honorable senators, I shall have incorporated in Hansard: -
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers: -
Motion (by SenatorCourtice) agreed to-
That leave be given to bring up a bill for an act to amend the Trading with the Enemy Act 1939-1940, and for other purposes.
Bill presented, and read a first time.
Debate resumed from the 19th November (vide page 2244), on motion by Senator Ashley -
That the bill be now read a second time.
– I listened with great attention to the speech delivered last night by the Minister for Supply and Shipping (Senator Ashley) in moving the second reading of the bill.. I have also read with care the speech made by the Prime Minister (Mr. Chifley) when moving the second readingof the bill in the House of Representatives. Comparing the two speeches, I notice that that delivered in this chamber by the Minister for Supply and Shipping omitted many matters contained in the Prime Minister’s speech which were severely criticized by the Leader of the Opposition in the Houseof Representatives (Mr. Menzies). Both the Prime Minister and the Minister for Supply and Shipping stressed the urgency of this measure, but neither of them gave any valid reason in that respect. Both stated that the object of the measure is to enable the Government to deal with economic and financial problems inthe transition period from war to peace and in the future. They said that the bill is designed to stabilize our “financial economy. The Prime Minister, when speaking on this measure and also in his budget speech, emphasized the buoyancy of the country’s finances and -expressed the Government’s pride in the fact that unemployment is now lower than it has ever been previously in the history of this country. The Opposition parties also rejoice in those facts; but is it not clear that the claim made by the Government that this measure is urgent because of the need to stabilize the country’s finances is in direct contradiction of those statements of the Prime Minister? Obviously, no urgency for this measure exists at all.
The Prime Minister admitted that the continuance of the private banking system is not an immediate menace to Australia’s financial and economic welfare, or to its general prosperity. He admitted that the private banks rendered great assistance during the war and since in helping to overcome the many problems which confronted us in that period. He said -
During the war and since its conclusion, (lit! Australian economy has been kept more stable than any economy of any country in the world.
That is a very great tribute to the private banking system of this country. The Government has given no valid reason for its refusal to comply with the demand by a large section of the people that this issue be submitted at a referendum before this measure is brought into operation. However, despite the wishes of the people mid the fact that no urgency exists for this legislation, the Government is determined to put it through as quickly as possible. The measure is most farreaching. It affects directly, or indirectly, the future of every citizen of this country. It will create a financial monopoly which will be able to grant, or withhold, advances to nil and sundry. Oan such a proposal be for the good of the greatest number? In our enlightened agc, with healthy competition in business, no undertaking can be carried on without financial backing. The time comes when those in control of any business find it necessary to obtain financial accommodation in order to tide a business over a difficult period, or for expan sion or the purchase of raw materials which, very often, have to be -purchased in advance. Adequate finance is also the first requisite for the establishment of new enterprises. Bearing those facts in mind, we must ask ourselves whether a monopoly bank will be capable of meeting all the requirements involved in carrying on successfully the business of this country in the future. We find that a monopoly bank will be able to exercise, through its control of finance, dictatorial powers over all productive and industrial undertakings. This is the greatest step towards complete nationalization that has been taken in the 47 years that have elapsed since federation. People are asking why the Government should introduce such a revolutionary measure at the present time. The answer is that the stage is now set to implement Labour’s platform of the “ socialization of the means’ of production, distribution and exchange “. I remind honorable senators that the Government has another two years to run before it faces the electors. The recent census taken of the population of this country reveals that there has been an increase of population in some States, which will, in consequence, entitle them to representation in the House of Representatives by additional .members of Parliament. This will result in a redistribution of seats, and it is expected that any redistribution which the Government makes will be based upon its appreciation of the way in which certain bodies of electors have voted in the past.. It is also rumoured that there is to be an increase of the numbers of members of Parliament, with a corresponding increase of the number of honorable senators. Should that take place, there will undoubtedly he a complete redistribution of parliamentary seats throughout Australia. As every one knows, a redistribution of seats affords an opportunity to create seats which may favour the political party in power at the time redistribution is made.
– The Leader of the Opposition must have learned something from the recent Victorian elections.
– No, but I did learn something from the last State elections in Queensland, which resulted in the return to office of the Australian
Labour party, although its members received only 44 per cent, of the votes. As i say, any redistribution of seats made by the party in power at the time will undoubtedly be intended to confer some advantage upon it. What more auspicious time could be selected for the introduction of a piece of legislation against which the country has manifested such hostility? The introduction of such a measure at the present time is no mere accident; the Government has taken stock of the position and has determined to take advantage of the present circumstances to force upon the country its proposal for the nationalization of banks. I maintain that the people must realize that they have to fight against a well organized section of the community, which has prepared complete plans for the overthrow of their democratic way of life in order to substitute a completely socialized order. Honorable senators opposite may contend that that is a bold assertion to make, but I shall proceed to justify it.
Official reports show that preparations to achieve the socialization of Australia have been under way since the AllAustralian Trade Union Conference held in 1921. That conference resolved unanimously on the following steps : - 1, The destruction of the craft unions and their replacement by industrial unions.
It has required 26 years for the opportunity to present itself to implement that decision. That is why I say that the present circumstances are ideal, from the point of view of honorable senators opposite, for the introduction of the present proposal. The conference which I have mentioned also resolved to secure -
The introduction of control of nationalized industries by boards consisting of representatives of the workers and the community.
This has already taken place. To-day we have the Joint Coal Board, the Stevedoring Industry Commission and many other boards and commissions constituted to control primary production. The conference also resolved to seek -
The establishment of an elective supreme council by nationalized industry to take the place of Parliament.
The first steps of the plan are now nearing; completion. Craft unions have been abolished in the main industries and their places have been taken by huge industrial unions. Every one knows that the majority of the leaders of the big industrial unions are members of the central committee of the Communist party.
– Tell us the trade unions concerned.
– There is the Seamen’s Union, of which Mr. Elliott, a wellknown Communist, is the secretary, and there are the Federated Ironworkers Union, of which Mr. Thornton is the secretary, the sheet metal workers, of which Mr. Wright is the secretary, the Waterside Workers Federation, of which Mr. Healy is the general secretary, and the Building Industry Employees Union, of which Mr. Thompson is secretary. Does the honorable senator deny that the men whom I have mentioned, who are all well-known Communists, occupy the positions I have mentioned? It is immaterial who elected them; I am quoting facts, and no one can deny that the men whom I have mentioned hold key positions in those unions.
– They may be capitalists !
– Some of them are capitalists, just as some honorable senators opposite are capitalists. To complete the list of trade unions under Communist domination, I mention the Railways Union, of which Mr. Brown is secretary, and the Federated Clerks Union, of which Mr. Hughes is secretary. A recent conference of Australian trade unions decided to appoint the Australian Council of Trades Unions to be their supreme body. Previously decisions were made by trades unions themselves, and State branches, and submitted to the council for consideration, but that has now been discarded in favour of the creation of a supreme council. Of course, the intention is that Parliament shall become merely the instrument for implementing the decisions of that supreme council.
Members of the Australian Labour party claim that the people authorized them to introduce the present bill by the result of the general elections in 1946, when they were returned to power. They contend that bcause the previous Labour government passed the Banking Act 1945, and the people returned Labour to office, they are justified in introducing the present measure. That was stated by the Prune Minister in the course of the speech which he delivered when he introduced the present bill in the House of Representatives, and also by the Minister for Supply and Shipping in the secondreading speech which he made last night. However, the fact remains that no mention was made of nationalization of banking in the policy speech which the Prime Minister delivered at the last elections. There were then two main issues, and on those issues the election campaigns were conducted. The Prime Minister intimated his intention of continuing his policy of high taxes if his party were returned to power. The Leaders of the Opposition parties contended that taxes could be substantially reduced and gave details of the reductions which they proposed to make if returned to office. That their contentions were justified is proved by the fact that six months after the election! the Prime Minister was able to afford some measure of relief to taxpayers, and it was disclosed that the state of the national finances was such that even more relief could have been granted than that promised by the Leaders of the Opposition parties. The other issue raised at the elections by the Prime Minister was that the Government had adequately provided for the rehabilitation of ex-service men and women, and he sought a mandate to continue that policy. He played upon the sympathies of the people, and alleged that if his government were not returned to office ex-service men and women would not be treated so generously - and the people believed him.
Honorable senators interjecting ,
– Order ! The Leader of the Opposition must be heard in silence. Honorable senators will all be afforded an opportunity to speak later, I hope.
– I do not seek to detract from the Government’s treatment of ex-service men and women; it did a good job; but so also would the Opposition parties had they been returned to power. In any case, I assume that no honorable senator would desire to make political capital out of what was done for ex-service men and women, and what may still be done for them, because they are entitled to proper recognition for the service which they rendered during World War II. However, as I say, the people accepted the Prime Minister’s undertakings, not realizing for one moment that he had in the back of his mind all the time a determination to introduce a measure designed to alter the entire way of life of every man, woman and child in Australia. In his policy speech the Prime Minister said -
Imbued with political honesty, the Government makes no extravagant promises. It has a full recognition of its’ responsibilities as a government.
Honorable senators on the Government benches have had sufficient experience of political life to know that it is the custom for the leader of a political party to intimate; in his policy speech at a general election that, if returned to power, a government led by him proposes to make certain changes. A change so seriously affecting the whole community as the nationalization of banking ought to have been mentioned in the policy speech of the Prime Minister at the last general election, if he intended to proceed in that direction. There was no mention of it, however.
Supporters of the Government claim that this legislation will introduce the golden age. They submit that when the banks have been nationalized there will be no more fear of unemployment or of a depression. Had the Prime Minister been sincere in that belief he would have been the first person to let the people know what a magnificent piece of legislation he intended to introduce into the Parliament, and what great benefit it would confer on the community. But he said nothing at all about this legislation. The right honorable gentleman’s statement that “ The Government makes no extravagant promises and has a full recognition of its responsibility as a government “, was evidently made to lull the people into a false sense of security. Now, however, the electors realize that they were deceived. During the election campaign of 1943, the present AttorneyGeneral (Dr. Evatt) went out of his way to declare that with a Labour government in office there would be more room for private enterprise than ever before. Indeed, he went so far as to issue a circular in which he said -
Labour is opposed to National Security Regulations except where they are essential for the prosecution of the war, and is pledged to revert to legislation in the norma’ manner as soon as war exigencies permit. The Commonwealth Constitution gives no general power to nationalize industries. Under Labour there will be more room for private enterprise ami business initiative after the war than ever before.
As far ba-ck as 1943 the right honorable gentleman believed that legislation to nationalize the banking system of Australia would be introduced at the earliest opportunity, and so he endeavoured to allay (he fears of the people by making them believe that as soon as the war was over all controls and regimentation would disappear. Although the war ended more than two years ago, many of the wartime controls still operate. Some of them may be necessary, but many of them, could “well be dispensed with. No greater control of the people could exist than that which would result from a monopoly of banking. That, surely, would be the perpetuation of one of the greatest of the war-time controls. Hundreds of thousands of people throughout Australia have signed protests and have sent letters to the Prime Minister and other members of the Parliament objecting to the Government’s banking proposals and asking that a referendum bc taken before legislation to nationalize banking is passed through the Parliament.
– The petition presented yesterday by the Leader of the Opposition contained 365 signatures.
– The petition presented to-day was signed by only 37 persons.
– Many thousands of electors have signed petitions which have been presented to the House of Representatives. Many thousands more have sent petitions to Labour members representing Queensland electorates in that chamber. They have done so because this legislation was dealt with first in the other branch of the legislature.
Obviously, the Government does not intend to take any notice of the wishes of the people in regard to its banking proposals. This afternoon, the Minister for Supply and Shipping admitted that the Government is preparing to submit certain proposals to the people early next year. That being so, it cannot say that the addition of a question relating to the nationalization of banking would add to the cost of the referendum. A further point to be borne in mind is that the Government need not fear that it would be turned out of office should a majority of electors oppose its referendum proposals. The Government cannot be displaced in that way. There is no valid reason why this legislation, if approved by the people at a referendum, could not become operative by the middle of next year. Commonwealth revenue is buoyant and all the people who are employable are working. Indeed, there is sufficient work available to keep all employable men and women in full employment for’ some years to come. There is, therefore, no reason why this measure, which means so much to the people of Australia, should not be submitted to a referendum, by the result of which the Government should stand or fall. Already the Government has had a clear indication of what the people think of this legislation, because only :i few weeks ago the electors of Victoria voted on it. Notwithstanding that many senators from that State went to help their colleagues in the Labour Government of Victoria, the result was an overwhelming defeat of Labour. It was one of the greatest defeats that any government in Australia has suffered. I emphasize that that election was fought on the issue of the nationalization of banking. The electors of Victoria - the only electors in Australia who have yet had a chance to voice their disapproval of this legislation - turned down the Government’s proposal practically with one voice. People overseas also are showing hostility to socialist legislation. “We have seen an instance of that recently in the United Kingdom, where Labour candidates for municipal honours received the biggest reverse for many years. People throughout the- world fear socialist legislation introduced by Labour governments, and, therefore, the Australian Government would be well advised to heed these warnings.
– Shortage of food waa the cause of the rejection of Labour candidates in the recent British municipal elections.
– The people are disturbed because of what is taking place in the legislative sphere. Hundreds of thousands of men and women previously with the fighting services voted for Labour candidates at the last general elections because Labour promised them a golden age after the wai1. That the people, however, are becoming tired of Labour administration was shown in no unmistakable way in Victoria recently. The people realized that the freedom which had been so hardly won was in danger, and that, under Labour rule, the war-time controls, which they were told would be removed when the wai- ended, would become a permanent part of Australian life. Hitherto, Australians have prided themselves that in this country governments are controlled by the people, and that the people have the final say. To-day, however, that is not so; the people are controlled by the Government now in office. There is no wonder, therefore, that the people arc becoming hostile. . realize that this bill will be passed through the Senate as it has already passed through the House of Representatives. I have no doubt that any amendment submitted by the Opposition will he summarily rejected. This legislation will be passed, not because of its merits, but because the Government has an overwhelming majority in this chamber. The Opposition consists of only three senators, compared with 33 supporters of the Government. That being so, what chance has the Opposition of getting amendments accepted? We can but voice our strong objections and our disapproval of the Government’s action in forcing this measure through the Parliament without having a mandate from the people to do so. The Prime Minister realizes that, if a referendum were taken, his proposals for nationalizing the banks would be overwhelmingly defeated.
– The British Government nationalized the Bank of England.
– Exactly what does the honorable senator mean by his interjection? Does he mean that the British Government nationalized the
Bank of England as this Government intends to nationalize the banks in Australia? If so, he is wrong. The British Government did nothing of the sort. It brought the Bank of England under a certain amount of control, hut that bank is still governed by a board of directors. It is in the position that the Commonwealth Bank was in before the enactment of this Government’s banking legislation of 1945. The bill now before the Senate proposes that the Government shall completely take over the private banks. If this Government were prepared to co-operate with the private banks as the Government of the United Kingdom is co-operating, through the Bank of England, with the private banks in that country, our objections to this measure would not be nearly so strong as they are.
The fact is that the Government has determined to destroy the competitive banking system before the next elections. The Prime Minister and his colleagues are very wary. They know that once the private banks are broken up it will be virtually impossible for any future government to reconstruct them. Honorable senators may ask why such a task would be impossible. In the first place, the staffs of the private banks would be dispersed. Some of them would be distributed through branches of the Commonwealth Bank in various parts of the Commonwealth, some of them would be employed in other government departments, and some would be retired. What would be the position of a bank officer formerly employed by the private banks if, at some future date, another government decided to re-establish the private banking system as we know it to-day? Consider the position of a young, ambitious married man who had been absorbed into the Commonwealth Bank for (wo or three years. If he were asked to return to a reconstructed private bank he would immediately say, “ If the Labour party returns to power it will bust up the banks as it has done before. Furthermore, I shall be penalized for having returned to a private bank. I shall be a marked man. I am. ambitious, I have my life to live, and I do not wish to be discriminated against if the Labour party regains control of the country”. He would prefer not to endanger his chances of advancement or to make a second, and perhaps a third, complete change of his career. The next difficulty to be overcome would be that of obtaining permission for the Capital Issues Board to raise £100,000,000 or more of share capital. It is problematical whether the board would give permission for the raising of such a large amount of money. Also, the investors who had experienced the first bank grab by this Government would be reluctant to invest it again with private banks for fear that the investments would be endangered by the action of some future Labour government. Suitable buildings would have to be obtained and the reconstructed banks would have to build up their businesses from the beginning. Customers would have to be brought back to them, and the whole system of banking, which has taken 130 years to develop in this country, would have to be re-created.
We are not blind to these facts. We know that that is one reason why the Government desires to push this legislation through the Parliament as quickly as possible. It wants to have time in which to break up these institutions which have given wonderful assistance to the nation and have been a credit to it during the last 130 years. There is no logical justification for taking over the private banks. On the admission of the Government, nationalization is not necessary for the purpose of stimulating trade or creating employment. The Government is proud of the fact that unemployment is at the lowest level ever known m Australia. Trade is not being starved. We can sell everything that we can produce or manufacture. There is a great shortage of consumer goods and an abundance of purchasing power. Therefore, there- is no need to stimulate trade. The Government boasts of full employment and buoyant revenues. Yet it is prepared to expend at least £100,000,000 in order to take over private banks. This will not create employment for one man or woman. It will not cause the nation to produce one extra ton of cement or coal, or an additional 100 super, feet of timber. The bill will merely transfer one asset from a certain number of people to some other people.
– It will prevent insolvencies and unemployment.
– I am glad to hear the honorable senator’s interjection. Nationalization is more likely to create unemployment by displacing man-power now serving with the private banks than it is to prevent unemployment. It is obvious that the bank staffs will be reduced when private bank branches are closed.
Ministers have stated that surplus bank staffs may be transferred to already overcrowded government departments. The Postmaster-General (Senator Cameron) has said that they will be transferred to his department. The Minister for Post-war Reconstruction (Mr. Dedman) has made a statement on similar lines. If such staffs are not to be transferred to government departments, then, on the Government’s own admission, they must be thrown into unemployment. Under nationalization, opportunities for promotion will decrease, because naturally there will be fewer executive positions in the banking system. If there is to be one bank, there can be only one executive instead of seven or eight.
The Government proposes to expend £100,000,000 on the acquisition of the private banks at a time when spending power is already so high that the people are unable to secure all the goods that they wish to buy. Production cannot satisfy the demand. The Prime Minister has said that private bank shares will be paid for by means of cheques or bonds. Cheques can be cashed and bonds are negotiable. Therefore, the shareholders can exchange their cheques or bonds for the ordinary currency of the country if they wish. If the volume of our currency is increased at a time when the spending power of the community is at an excessively high level, the result will be increased competition for purchaseable goods on an already limited market. Many shareholders are dependent, either entirely or in some degree, upon their income from dividends. I do not attempt to plead for the sympathy of the Government on their behalf, because I know that it would be useless to do so. I merely state the fact. These people will naturally want to re-invest the money which they receive for their shares. They will not want to spend it.
The fact that £100,000,000 of investable money will be placed on the market will cause the prices of shares in other undertakings to rise to fictitious values. The result will be that people who wish to regain their lost incomes will not be able to buy shares at sufficiently economic levels to return incomes equivalent to their dividends from bank shares. Therefore, it is wrong for Ministers to declare that the purchase of bank shares will have no effect on the stability of our financial structure. The cheques or the bonds presented to shareholders will be negotiable and the recipients ‘will want to re-invest their money at once. This will give rise to trouble.
Many productive works could be undertaken in Australia to-day. The country is crying out for them to be done. L need only mention water conservation and irrigation. Honorable senators opposite will argue that this development is already planned in the Government’s public works programme, but, undoubtedly, there are huge expanses of dry land in this country which would offer an immediate return for the investment of even half of the £100,000,000 that the nationalization of banking will cost. For example, with proper water supply and irrigation, cotton-growing in this country could be made a safe and profitable undertaking. Production of cotton would assist greatly to conserve our American dollar resources, and, in addition, would provide employment for a large number of people, both in the primary and secondary phases of this activity. There are many other avenues of investment into which this £100,000,000 could be diverted. For instance, there is in this country a crying need for control measures for tuberculosis. The expenditure of a few million pounds could rid this Country entirely of this scourge. Yet the Government is prepared to expend £100,000,000 to acquire assets from a group of individuals who to-day are doing a good job. lt is very doubtful, indeed, whether our banking system, under governmental control, will do half as good a job as it has done in the past under private direction. The nationalization of the private banks will concern almost everybody engaged in production. Customers of the private banks to-day number approximately 1,500,000. Many of
I7«l these people are carrying on small businesses, and others substantial undertakings, and a great majority of them are financed by the private banks. Finance is the blood-stream of industry, and in this country to-day it is flowing most liberally from the private banks. Industries backed by these institutions are providing the bulk of the employment offering in Australia. The proposed monopolistic bank will be in a position to withhold or grant finance at will. The choice of banks will be abolished.
Both the Prime Minister and the Minister for Supply and Shipping have sought to belittle the advantage of a choice of banks, but I, and many thousands of country people, have found this choice to be a considerable advantage. Many individuals have had applications for assistance rejected by one bank but granted by another. The private banking system has not been built up solely on the physical assets of its customers. It has always had regard to the character of the individuals with whom it deals. The cut-and-dried system of the Commonwealth Bank, whereby a fixed limit is imposed on loans according to the assets available, does not apply in the private banks. There is a. substantial degree of elasticity in their transactions. This policy has been made possible as the result of the experience that has been gained over the years. Obviously, a bank does not operate for 130 years without gaining some knowledge of the characteristics of individuals. The manager of a private bank, upon an application being made for assistance, assesses the individual first and then considers his prospects of succeeding in his venture. Then, as I have said, if one bank is not satisfied with a proposition, the individual concerned has, on the admission of the Prime Minister himself, at least seven other institutions to approach, and that is not counting the brokerage concerns.
– They ring up and tell each other that so and so is coming.
– That is typical of the propaganda that the honorable senator has had pumped into him ever since he was a boy. But those who have had business dealings with the private banks know that the position is quite different. I myself have found the choice of banks to be a considerable advantage ; but under this proposal there will be only one bank - a government-controlled monopolistic institution. It is claimed that a client whose application for assistance is rejected will have the right of appeal to some other authority. But who will constitute that authority? Will it not be merely an appeal from Caesar unto Caesar? After all the policy of the Commonwealth Bank will be determined at the head office, and all branches will be notified of that policy. Therefore, when a branch manager gives a decision, that decision will be strictly in accordance with policy. In addition, the appeal bodies will probably be situated in the capital city of each State.
Take the case of a primary producer who lives 1,000 miles from a .capital city. He goes to a branch manager and asks for assistance say, to purchase some stock. He needs the money immediately to close the deal. The branch manager says he will have to refer the proposition to a. higher authority or turn it down altogether. Should the application be rejected, the client will inquire, “ To whom do I appeal, and where?” The answer may be that, the appeal .has to be made to a special tribunal in, say, Brisbane The client, boards a plane, travels to Brisbane, only to find that he has to go to Canberra, and by the time he has travelled around the countryside in this manner, he lias missed his chance to close the deal and he has no redress. [Extension of time granted.’] I thank the Senate for allowing me an extension of time. I shall cite an instance of the prompt despatch of business by a private bank. Recently, I had a letter from a friend who has a property in southwestern Queensland, stating that for eighteen months he had .been endeavouring to get a large tractor and hydraulic scoop to carry out certain earth work. One day he received a wire from the agent that such a tractor and scoop were available, but that an immediate reply must be given because other purchasers were waiting. The sum involved was approximately £5,000. The man immediately interviewed his branch manager in the little township, and within two and a half hours the transaction had been closed. The £5,000 was made available immediately. I do not say that that could not be done by the Commonwealth Bank, but my experience with governmentcontrolled banks does not lead me to believe that it will be done.
The present high standard of service among private banks has been built up under a competitive private banking system. The Minister, in his secondreading speech, stated -
Since .private banks are conducted primarily for profit and therefore follow .policies which in important respects run counter to the public iinterest, their .business should bc transferred to public ownership.
This evidently means that all private businesses that are being run for profit should he transferred to public ownership, or in plain language, socialization of all private enterprise. For ] many years, the Labour party parrot-cry has been, “ Production for use and not for profit But what is wrong with the profit motive? In the past it has meant initiative, ambition and progress. The history of the settlement of this country has been the search for profit and the hope of reward. Pioneers have taken up land far from the amenities of city life, expecting to make a profit from their venture. Many of them have gone out with little except their two hands, and, perhaps, a pick and shovel and crowbar, fi few horses and a dray; and by hard work, with a little financial assistance, they have made reasonable profit out of their venture. Po honorable senators opposite say that pioneers should be deprived of that profit ? If the profit motive is abolished, how can we expect any people to settle in the back country of this huge continent? How can we expect to populate the empty spaces of this country? Will men and women go into the outback unless they have some incentive to work for? No. The prospector sets out in the hope that he will make a. rich and profitable find. AH ventures are undertaken with a view to making profit.
The great improvement effected in the standard of living in this country during the last century has been due to the profit motive, which provides the pool from which all services and wages are drawn. Only yesterday, Senator Fraser, who was formerly a Minister in the present Government, asked that, in view of our dollar shortage, the Government give consideration to seeking a pegged price of gold in order to encourage greater production. Is that not asking that extra profit be given to those engaged in the gold-mining industry? And what did the Minister reply? He said that the Government recently suspended the operation of the gold tax, the estimated benefit to the industry from this step, based on the present rate of deduction, being £550,000 per annum. The Government has given that £550,000 in the form of profit to the gold-mining industry. Honorable senators opposite decry the profit motive, but the Government which they support, hands back £550,000 in profit to the goldmining industry !
– Does not the honorable senator agree with that policy?
– Yes; I am strongly in favour of the profit motive, and 1 am trying at the moment to expose the error of the colleagues of the Minister for Supply and Shipping, who on one occasion decry the profit motive, but on another uphold the opposite, and correct, view. We should give every encouragement in order to increase production in this country. Members of the Opposition parties have consistently urged the Government to reduce taxes in order to achieve that purpose, because when taxes are reduced more money is left in the pockets of producers.
Another favorite cry of members of the Labour party is that the private banks caused the depression in the ‘thirties. The facts show that there is no foundation for that statement. The depression was world-wide; and Australia suffered as the result of thu collapse of prices for our exports. For instance, the price of wool fell from ls. Sd. per lb. to 9d. per lb., and the price of wheat fell from 5s. (3d. a. bushel to 2s. 6d. a bushel, whilst at one period it was as low as ls. lOd. a bushel. From 1928 to 1931 the national income fell by £220,000,000, with the result that Australia had to export more goods to meet its fixed commitments overseas. At the same time, however, we received less goods for the income we derived from the sale of exports. Consequently, for a time, our standard of living declined.
Honorable senators opposite constantly ask in what way the trading banks assisted this country during the depression. The private banks not only came to the rescue of the government, but also threw the whole of their resources into the common pool.
– From 1929 to 1933, the total advances made by the banks-
– What about all the insolvencies ‘<
– If the honorable senator refers to insolvencies in respect of primary producers, I inform him that those were chiefly cases of producers who dealt with the State Agricultural Bank in Victoria. I can give him full particulars showing that State agricultural banks foreclosed on a large number of producers, and drove them off the land. The facts entirely disprove the claims made by honorable senators opposite that the private banks caused the depression. From 1929 to 1933 total advances made bv the private banks increased from £263,000,000 to £281,000,000, whilst, from December, 192S, to December, 1929, their advances increased from £236,000,000 to £269,500,000, or an increase in that vear of £33,500,000.
– Where did the honorable senator get those figures?
– The honorable senator can get them from the Year-Bool:. The percentage of advances to deposits in the trading banks increased from SO per cent., which was regarded as a reasonable figure, to an average of 9S per cent., and at one time rose to 105 per cent. Owing to the low prices received for primary products, many advances were frozen because farmers, graziers and woolgrowers, when prices of their commodities fell, were unable to repay the loans. In J92S, 1S.900 wheat-farmers had borrowed a total’ sum of £22,600,000, but in 1934 their total borrowing had increased to £33,000,000, or an increase of 50 per cent. All of these facts are revealed in the Year-Book. During the depression, the private banks, in many cases, suspended the payment of interest due to them, and, subsequently, wrote off those debts. The interest rate was reduced from 7 per cent, in 1929 to 5 per cent, in 1934. In 1930, the rate of interest charged by the Commonwealth Bank was G per cent., and in July, 1940, that rate was reduced to 3^ per cent, in respect of rural credits. That reduction was made before the Labour government assumed office. Yet, honorable senators opposite, although they cry about the private banks refusing to reduce interest rates, have seen fit, through the Government which they support, to allow the rate charged by the Commonwealth Bank to remain at 3-J per cent. If they are really sincere in making those claims, why has not the Government reduced that rate of interest ? It was due to the initiative of the private banks that the exchange rate was increased to the ratio of £130 Australian to £100 sterling, and finally stabilized at £125 Australian. That meant that for every £100 worth of primary products sold overseas the Australian producer received £125. That provision proved to be the greatest factor in helping this country to stabilize itself financially, and it was made on the initiative of the private banks. It was the means of saving many primary producers from getting into serious difficulties after the depression. During the depression a Labour government was in power.
– In office.
– It had a majority in the House of Representatives, and to that degree it was in power; but that Labour Government refused to accept the advice of Sir Robert Gibson, who was then Chairman of the Commonwealth Bank Board. Honorable senators opposite laugh when I mention that gentleman’s name; but the right honorable member for Yarra (Mr. Scullin), who was then Prime Minister, re-appointed him as Chairman of the Commonwealth Bank Board for a period of seven years. The government of the day need not have made that re-appointment, but, obviously, it must have been satisfied with his services. However, the Scullin Government refused to take the advice of the Commonwealth Bank Board or the private banks at that time. Events which have occurred in the meantime have proved that advice to be sound, whilst we now see that the Scullin Government was simply determined to stick to illusory monetary theories, hoping thereby to overcome the difficulties confronting it. Its policy was rejected by the electors not only in 1931, but also at the general elections held in 1934 and 1937, because the issue on each of those occasions was the inflationary monetary policy of the Labour party. Furthermore, the same policy was again rejected hy the people at the referendum held in 1944, when they were asked by this Government to give to the Commonwealth Parliament the power to nationalize the banks. I was a member of the Senate during the depression, and I supported the Premiers plan, which, in fact, proved to be the only way out of our difficulties and the most effective means of stabilizing our finances. Indeed, one result of implementing the Premiers plan was that Australia recovered more quickly from the depression than did any other country. Honorable senators opposite are now advocating the same monetary theories that were advocated by the Scullin Government during the depression. However, as I have already shown, the action taken by the private hanks in that period was endorsed by the people at the three following elections.
The Prime Minister quoted incomplete figures dealing with the number of customers of the Commonwealth Bank compared with those dealing with the private banks. He 9aid that the Commonwealth Bank had 3,800,000 depositors, but he did not state that of that number, 3,681,000 have accounts in the savings bank. That means that the Commonwealth Bank, in its trading division, has only 119,000 accounts, whereas the latest figures available show that the private banks have approximately 1,500,000 customers. From the 1st July, 1945, to the 30th June, 1946, advances by the private banks totalled £284,000,000,’ whereas advances made by the Commonwealth Bank during the same period totalled only £22,000,000. Those facts refute the arguments of honorable senators opposite. They show clearly that the public is satisfied with the service rendered by the private trading banks, and reveal the overwhelming confidence of the public in the private banking system. The great majority of advances made by the private banks are devoted to production. This has the effect of improving our standards of living, because by such means we increase production. The private banks do not advance money for the extravagant personal expenditure of their clients. I warn the Government that if it abolishes the trading banks it will abolish the best safeguard of our present high standard of living.
No English-speaking country has established a government monopoly bank. It is interesting to observe that in two totalitarian countries, Russia and Argentina, there is a similar type of bank to that proposed to be established by the Government. We are all more or less familial with the conditions operating in Russia, but the operation of a totalitarian regime is something new in Argentina. To give honorable senators some idea of the way the national, bank functions in Argentina, I shall read extracts from an article published in the August issue of The Readers’ Digest. The article states -
Just before leaving officii in June, 194.fi, Peron’s puppet, President General Edelmiro Farrell, issued a decree which made every Argentine bank merely an agent of a nationalized central bank, and enabled the latter to seize every bank deposit. Each bank had to get government approval of its individual loans. Peron had Congress approve this decree and gave Miguel Miranda, head of thu Central Bank, a free hand.
Having obtained control of the banks, control of production soon followed, and the Government became the sole exporter of foodstuffs. The article continues -
Peron’s Government has not only become the sole exporter of foodstuffs, but the sole buyer on the local market. . . . This is how it works out. The Government forces a rancher to sell his cattle at $50 a head and then exports to England at $175; or it forces a farmer to sell wheat at 75 cents a bushel and exports this at $2.81 - in each case pocketing the difference. On some items the Argentine Government is said to be making 300 per cent, profit.
Of course, I admit that the proposal of the Government of Argentina goes a step farther than the proposal of the Australian Government. The article also states -
After assuming office, Peron felt that the Argentine courts, always independent, had become reactionary. His chamber of deputies thereupon indicted four of the five members of the Supreme Court. The Senate immediately tried them under impeachment proceedings, on the ground that they had condoned the military dictatorship.
I do not assert that the Government contemplates taking such unconstitutional action, but the point is that the passage of the bill will afford every opportunity to some future government to take exactly similar steps to those taken by Peron in Argentina, because any government of the future will find itself in entire control of the banks and the finances of the country. Through manipulation of finance it can purchase the produce of any industry, primary or secondary, at any price which it chooses to pay, and sell it in the world’s markets at a profit. Does any honorable senator contend that this will not be the case when this legislation is enacted ? We are ‘affording extremist governments of the future the opportunity to complete the cycle of events which precedes the introduction of communistic control and the establishment of a totalitarian government. Furthermore, I point out that the extreme statements made by members of the Government and supporters of the Government in the House of Representatives in. criticism of justices of the High Court also follow the trend of events in Argentina.
Finally, I stress the fact that the conduct of banking by private concerns has resulted in the payment of considerable sums to the Treasury in taxes.
– It is a most lucrative business.
-It may be, but it has resulted in tire payment of large sums to the Treasury. Furthermore, that private trading banks have conducted their business fairly is proved by the fact that the average rate of dividends on their shares is only 3£ per cent, per annum, and during the depression it was as low as 2+ per cent.
– What about their hidden reserves?
– I hope that the Government will take cognizance of their hidden reserves, if they exist, when it is compensating the shareholders and pay for them. However, the point I am endeavouring to make is that government enterprise pays no taxes, and, therefore, produces no revenue. The present tax rates are so high that the community already has a heavy burden to bear, and because of it people are not producing nearly as much as they should. The enactment of the present proposal will result in the imposition of even higher taxes to compensate for the decline of revenue caused by the fact that no taxes will be received from private hanks.
The solution of our problems does not lie in the introduction of further measures of regimentation and the institution of more controls. Australians have in the past been proud of their freedom, and it was for that freedom that they, fought in two world wars. This bill is designed to restrict and curtail freedom. The great need to-day is for increased production of goods of all kinds. It is obvious that the element of compulsion, which will be introduced into business life by the nationalization of banks, will not create the confidence which is so essential to the smooth functioning of industry. And, after all, the manipulation of money will not, of itself, increase production. It should be realized that all this bill will accomplish is the manipulation of the community’s finances. If money were all that was required to ensure prosperity, we should have proSperitY to-day, because plenty of money is available. The note issue is more than three times greater than it was in 1939, and there is extraordinary buoyance of revenue. But the fact remains that, there is a most acute shortage of goods. Production is the thing which counts, not the amount of money in circulation, and the only important consideration is the quantity of goods available to the community. In conclusion, [ believe that the electors will express their profound disapproval of the fact that this legislation has been forced upon them without any mandate, and of the regimentation which its provisions entail.
[5.9 J. - We live in great times: I do not know of any piece of legislation introduced by any former government of Australia which can rank in importance with the measure now before us. Because of its importance the Government afforded three weeks in the House of Representatives for discussion of its proposals so that every member of that House who wished to speak on the measure would be afforded an adequate opportunity to do so, and I believe that the Government’s action in extending that time to honorable members was predominantly right. I thank whatever destiny governs myself that it has allowed me to be a member of the Senate in order to take part in the present discussion of this momentous measure. What is the condition of the world to-day? The nations are confronted by wai- and rumours of war; by poverty, on the one hand, and extreme riches on the other; by starvation which faces so many of the peoples of the world ; and we find that each government is struggling desperately to protect its own people. Honorable senators on this side of the chamber as members and supporters of the Government, believe that we can justify our continued political existence only by taking steps to nationalize the trading banks in order to protect the community.
Ever since finance and economics have become vital factors in the world, mankind has had to contend with the most disastrous depressions. Those slumps have occurred with tragic regularity. In modern times the passage of every ten, twelve of fifteen years has witnessed an economic disturbance. To-day we are .satisfied in our own minds that those disturbances are due to the operation of the present financial system, and that their recurrence can be prevented. I have before me a graph showing the economic “ ups and downs “ of mankind since 1831, and it is extraordinary to observe the vicissitudes through which the peoples of the world have passed in that period. It shows that men have had to contend not merely with one depression in each generation, but that, there have been as many as four major economic disturbances within a period as short as 60 years. Are we to accept, as a fact that nothing can be done to prevent a continuance of this disastrous cycle? Are we, as representatives elected by the people, to accept this tragic cycle of economic disorder, and say that we can’ do nothing; that the problem is insoluble? Or are we to attack it courageously, and take the steps which are within our compass to prevent another depression? Since 1S31 not twelve years have elapsed without the occurrence of a substantial regression, and those regressions have culminated in the economic disasters of which we read in history.
As one of the younger members of the Senate my recollection does not go back to the economic dislocations of 1893 and the early 1900’s, but I do recall very vividly the tragic depression of the thirties. It may interest honorable senators to know that even as late as 193S we were heading for another depression. Evidence given before the Royal Commission on Monetary -and .Banking Systems shows that deflation had recommenced in 1936, so that had we not been plunged into a world war in 1939 we should have faced another major economic disaster. If we can believe Opposition senators, we moved into that world war in a period of prosperity. But the fact remains that there were then 250,000 men and women unemployed in this country. In 1932 the number of unemployed in Australia totalled 480,000, of whom 203,000 had been unemployed for over two years. The Leader of the Opposition (.Senator Cooper), bandied the word “freedom” about rather carelessly. I agree with him that, we are now engaged in a fight for freedom, but I urge the honorable senator to be careful on which side he lines up. For whom does the honorable senator fight? Does he fight for the banks, which would create a depression complex, or does he fight for the freedom of men and women and children to pursue their lives under conditions which will enable them to look forward to the future with hope without fearing that the foundations will be swept away by an economic depression ?
– They are the ones for whom I fight.
– I often wonder whether honorable senators ever try to understand the minds of the men and women and children who were affected by the depression. I thank God that I was not greatly affected by it personally. There was always enough food in my home; my circumstances were not altered to any great degree by what then took place. But I saw what the depression did to the boys and girls with whom I went to school. Even in those days I could see that if people moved into other circles they were soon told that they were not wanted. I saw a new generation - the boys who went to school with me - leaving their homes with their “blueys” on their shoulders. I have never seen such courage. Many young fellows left their homes without even the fare to the nearest railway station in their pockets. They walked to the station. By some means, they obtained transport to country areas, where they sought work. Some of them experienced those conditions for many years. Some of the boys who went to school with me moved from Pyrmont to the country, and, after six or eight months, they came back again. They were prepared to do anything rather than add to the burden of a family already depressed and overwhelmed by cares and worries. When war broke out in 1939. those young fellows constituted a fruitful field for the recruiting officers. There were 250,000 Australians out of work. There is no doubt that in the first callup to defend this country a number of those who answered the call came from the ranks of young men who had very little to thank this country for, because they had never had a day’s employment in their lives.
– That is true of my son, who lost his life in the war.
– That, unfortunately, is a history of every country in the world in which private financial interests have been able to influence governments. They have done so in Australia as in other countries. Yet, we are told that the banks did not cause the depression. I pity any one who holds that view. Honorable senators may bs interested in what a former senator had to say on this subject. Ex-Senator Abbott attacked the banking system and the trustee companies which he said had bled the farmers white. His remarks are recorded in Han surd for all to read. One member of the House of Representatives who championed the cause of the private banks at other times and in other circumstances, has, when subjected to other influences, viciously attacked the banks.
To me the proposal before us is simple indeed. If banks can influence governments, they have no right in the economic system of any country. We all know that banks have influenced, and do still influence, governments. We know the story of Sir Robert Gibson, who, during the depression, was Governor of the Commonwealth Bank, telling the then Prime Minister that wages and pensions must be cut down. His letter to the right honorable member for Yarra (Mr. Scullin), who was then Prime Minister, has been read in this Parliament on a number of occasions, but it so pin-points the true position that. 1 shall read it again. We know the terrific problems that Australia faced in order to combat that world fall of prices which was caused by the financial institutions withdrawing money from the community. There can be no question about that. It is not sufficient to say that the prices of wheat and wool fell. We should know what caused those prices to fall. In those tragic days, when 480,000 Australians were out of work, Sir Robert Gibson sent to the then Prime Minister, a letter in which he said -
Subject to adequate and equitable reductions in wages, salaries allowances, pensions, and social benefits of all kinds, and in spite of other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the Government of Australia in sustaining industries and restoring employment.
The Commonwealth Bank Board was working in complete harmony with the private trading banks when Sir Robert Gibson said that the banks would help, and that money would be made available, so long as the conditions which they imposed were faithfully observed. Only n few weeks ago we had an extraordinary example of the influence of the private banks. Honorable senators opposite may take passing pride, if they will, in the result of the recent elections in Victoria. I tell them that that is a scar upon the political life of this country, and that long after we in this chamber have gone to our reward it will be referred to as evidence of the influence of the trading banks. Let us recall what happened. Sir Frank Clarke, who three months previously had said that in no circumstances would supply be refused to the Govern- ment of Victoria by the Legislative Council, changed his views overnight, and said that supply would be refused. That meant that wages were withheld from State public servants in Victoria. Why the change? What was the reason for that overnight change of front? The reason was that the banking institutions of Australia decided that there should be an election in Victoria, and so they forced that election, despite the undertaking that supply would not be refused, given by Sir Frank Clarke only three months earlier. What pressure was exercised upon Sir Frank Clarke to make him change his mind ? I do not know whether much pressure was needed, but the fact remains that he exerted pressure on his colleagues in the Legislative Council of Victoria, with the result that the Cain Labour Government was forced to go to the people. In an atmosphere created by the most extreme type of political propaganda that Government was defeated. But its opponents gained a pyrrhic victory, because so long as democratically minded nien and women talk about these matters, they will refer to that happening as just another instance of the influence which the private trading banks have exercised over Australian governments. That influence will not continue any longer if I can prevent it. When this bill becomes law, the Commonwealth Government, not the private banks, will be in control of the financial policy of this country. I remind the Senate that Mr. Reginald McKenna, a former Chancellor of the British Exchequer and chairman of the Midland Bank, once said -
Those who control the credit of a nation direct the policy of governments and hold in the hollow of their hands the destiny of their people.
That statement sums up the Government’s approach to this problem.. During the six years that Labour has been in office in the Commonwealth, and despite the fact that a war for existence has taken place during that period, this country has attained a measure of prosperity which is the envy of other countries. That is something which the Government is determined to maintain. 1 believe that there will be no complaint by any section of the community if economic conditions in Australia do not get any worse than they now are, because never in Australia’s history have they been so good. The present Government will strive to improve those conditions. The only way to do that is to make certain that unfavorable economic circumstances shall not again overwhelm an Australian government and force another depression on the people.
What is the picture presented to us to-day? Every year 37,000 young people leave our schools, and they are immediately rushed by employers offering them jobs. I remember the time when I was first elected a member of this Senate. It was then our common experience to have four-fifths of our time taken up interviewing unemployed boys and men who were seeking our help to obtain work. I remember that the stage was reached when members of this Parliament, when approached by, say, a builder seeking work, would pick up a telephone directory and go through the classified advertisements, and then ring up builder after builder to ascertain whether there was any chance of a job for a building tradesman. That happened, not in 1931, in the depth of the depression, but in 1937, when I entered the Senate. We thought that we had done a good day’s work if we found a job for one boy as an apprentice. To get even that result we had to battle and strive, and use all the personal contacts that we could. But the position to-day is different. Boys and young men are being rushed with offers of employment when they are about to leave school. That is because we have raised our standards of living to a higher level than at any previous time. The Government’s policy of full employment has increased the purchasing power of the people, and now we have reached the position that if the Government can control the banking institutions, and thereby check inflation and deflation, there is no limit to what this country may achieve in the future. The Government has many fine achievements to its credit, but it has not found the task easy. The onerous nature of some of the restrictions that have been imposed has caused resentment, and the Government has been subjected to considerable pressure from even its own supporters.
The chief complaint has been against the continuance of prices control, notwithstanding that that system has proveda boon to the community. When we compare conditions in Australia with conditions in other countries where prices control has been less effective, the Government has much for which it can takecredit. On the subject of price fixationthe comments of the chairman of David Jones Limited is most interesting. As honorable senators know, that company is one of the biggest retail organizations; in Australia. Its chairman, Mr. Charles Lloyd Jones, in his address at the annual meeting of the company in October, 1947, said-
We would be lacking in fairness if we did not acknowledge frankly that price-fixing has been of benefit to the community. In further proof of the effectiveness of price control in war-time, we quote the following facts: -
The average value of our sales in 1939 was 8s. 5d. ; whereas the average value of our sales to-day is 10s.10d.
This shows an increase of a little over 25 per cent., and means that the average customers who came into our stores paid only 20 per cent. less in 1939 for the merchandise we are selling than they pay to-day. This increase would compare favorably with any country in the world.
The Australian currency has been stabilized and its value maintained. In one sentence, that points to the difference between what has happened here and what has happened in the rest of the world. The United States of America has often been praised to the clouds as the citadel of private enterprise. After the war, the Government of that country eliminated controls and declared, “ Competition will level things out in this great land of ours “. Competition and production were the keywords. Competition and production were allowed to proceed unfettered, but what is the situation confronting the people of the United Stales of America to-day? Their President has had to go to their Parliament and ask that the controls which were abolished in 1945 be re-imposed before it is too late and the country is swept into a period of inflation that will be the precursor of a depression which, in Truman’s own words, may well wreck their civilization. What control is listed as No. 1 amongst those which must be re-imposed ? The most important thing, in the judgment of the United Stales Government is the restoration of .control over purchases and restraint of inflationary bank credit.
Because America did not have the type of banking control that was exercised in Australia during the war, it now has a secondary, or linkers’”, inflation which 1 believe, will finally prove to be too weighty for the people of the United States of America to carry. Eventually, they will return to the inevitable state of depression which must occur under the ordinary private financial system. That depression will be felt throughout the world. It will be felt in Australia, but if we control our currency and maintain its value, we shall so cushion its impact that it will not be felt by the average working man and woman in this community. What has happened in Great Britain? The British £1, as we know, is undergoing terrific travail. What has happened in Europe, and what is happening in South America? South America did not feel the weight of war, but there is inflation in that continent as the result of the operation of privatelycontrolled financial systems. Apparently Senor Peron has recently taken definite steps in an attempt to counteract this inflationary tendency. But the story of events in South America, is the story of an inflation that is sweeping whole countries before it.
Even in Canada, a nation comparable with Australia, there is inflation on the one hand and unemployment on the other. All that we want to do is to maintain the standard of living that we achieved in Australia during the war. That is not an impossible aim for us to set for ourselves. This Government has had great courage in introducing this bill. It never would have been introduced but for the successful challenge to the validity of the 1945 legislation in the High. Court. We have the courage to make sure that control of the financial System shall lie in the hands of the Australian Government. Much has been said about the fight for freedom, but I believe that never has the government of any country been privileged to fight such a momentous battle for freedom as we, the members of the Labour party, are fighting by means of this bill. The real question before the people of Australia is not, “Who shall be my banker”?, but, “ Who shall be my ruler? “ I have shown, conclusively, this afternoon that, under the old financial system, the banker rules this country whenever he wishes to do so. He does not show his hand every day of the week, or every week of the year, but, when it suits him, shows his hand in such a fashion that he proves to the world who rules the country. This is a question of sovereignty. Shall the sovereignty of this country rest with the banks, or shall it rest with the people? We are lined up to-day on the side of the people of Australia. Let the Leader of the Opposition (Senator Cooper) and his colleagues take their place alongside the bankers if they will!
Many people have given great thought to this problem, because this is not a matter that has cropped up only within the last, few years. I notice that the press of Australia has given great publicity to the sayings of an archdeacon in the South of Tasmania, but I have not noticed any newspaper quoting what was said by Pope Pius XL, when talking about control of a nation’s credit. This is what he said -
This power becomes particularly irresist-ible when exercised by those who, because they bold and control money, are able t” govern credit and determine its allotment, for that reason supplying, so to speak, thi’ life-blood of the entire economic body, and grasping, as it were, in their hands the very soul of production so that no one clare breathe against their will.
This is what G. K.. Chesterton has said on the subject -
The end of the struggle is not yet; but if the bank is stronger than the sword or sceptre of popular sovereignty, the end will be the end of democracy.
We in Australia face a future even beyond the imagination of the Jules Vernes among us. I believe that we face the prospect of creating a nation of even greater stature than is envisaged by those who speak in terms of a population of 20,000,000 or 25,000,000. I see no reason why, with the advancement if science and the development of wise government, together with proper control of finance, there should be any limit to the development of the nation. We shall not be here to view the crowning achievements of our country. However, the fact remains that we, the youngest people in the world, have already made extraordinary advances. These have been made possible by the strength of will and courage of the men and women of Australia. All that this Government wants to do is to make easy the path of progress, to open the gates so that we can march through and onward. The only limit to what we can do lies in the hearts and minds of the men and women of Australia. Those hearts and minds ring loud and true. There is courage in them. And with that courage, allied with wise government, we shall go forward until Australia takes its proper place amongst the nations of the world.
– I congratulate the Minister for Munitions (Senator Armstrong) on the very fine address that he has given to the Senate, because he has dealt with the real kernel of the problem with which we are dealing. I support this bill, because 1 firmly believe that the control of the issue and cancellation of credit in the nation through the Commonwealth Bank of Australia, instead of private enterprise, is the only way in which the immediate and future welfare of the people of Australia can be safeguarded. Having listened attentively to the remarks of the Leader of the Opposition (Senator Cooper), and bearing in mind the propaganda that has appeared recently in the newspapers, particularly during the recent election campaign in Victoria, I am convinced that the whole case against the nationalization of banking in Australia is based upon deliberate misrepresentation. .Furthermore, that misrepresentation has been knowingly added to by elected representatives of the people in the National Parliament. They speak and >act not in the best interests of the people but in the interests of the financial institutions. The effectiveness of their opposition to the nationalization of banking depends upon appeals to the emotions of the people, particularly fear, and they have concentrated their campaign on the female section of the community. They have set themselves out to convince the housewives that their money will not be safe if this bill becomes law.
I have received 273 letters and 258 telegrams, a total of 531 communications, on the subject of nationalization of the banks. Of that number, SO came from housewives who protested against this proposed legislation and requested the holding of a referendum. That number represented 14 per cent, of the total number of letters and telegrams. Those protests arose from the fear complex that had been created in the minds of the women by the propaganda of the Opposition parties and their supporters. I have been- reliably informed that housewives who refused requests made by paid canvassers to sign petitions against this proposal were told, “But this is only to secure a referendum “. That is why many of them agreed to sign petitions. Thirty per cent, of the letters and telegrams that I have received, numbering 161, were mimeographed copies of the same letter. They were identical word for word. That proves that they were the outcome of mi organized effort to sabotage this measure, and that they did not represent, a spontaneous reaction of the electors. I checked the names and addresses of 3S per cent, of those letters and telegrams, a total of 202, and found that the names were not registered in the electoral rolls at the addresses stated. That forced me to the conclusion that the signatories had stated addresses which were not registered for electoral purposes or that many of them were too young to be enrolled as electors.
There are 300,000 electors enrolled in Western Australia to vote at Senate elections, and therefore the total of only 531 communications in opposition to this bill that I have received gives me little cause to worry. An interesting feature of many of the letters received was that they contained direct attempts to intimidate me as a representative of the people of Western Australia. This is ia typical declaration -
As an elector of yours, I assure you that your action in this matter will he my principal guide in my attitude towards you in the next election.
Another one is as follows -
Should your action in this most vital matter he .not satisfactory I must vote you last at any future election.
There were other threats of a similar character. We are supposed to be living in a democratic community in which we have freedom of thought and freedom of action, yet I am warned that unless I do what I am told to do by this minority I must beware of the consequences to myself at the next elections! I inform these individuals now that I shall act according to the dictates of my conscience and make decisions that I believe to be in the best interests of the people of this country. I support this measure because I believe that, in the interests of the people generally, control of the issuance and cancellation of credit should reside in this democratically elected Parliament through its instrumentality the Commonwealth Bank, and not in private enterprise which has dominated governments of this and other countries in the years gone by.
Great capital has been made by the opposition out of the request for a referendum on this legislation. Electors have been instructed by the press, “ Ask your federal member to press for a referendum on this matter “. The Leader of the Opposition has said that, if the Government had nothing to fear in regard to this measure, it would arrange for a referendum. My answer to that is to agree wholeheartedly with the views expressed by the Leader of the Opposition in the House of Representatives (Mr. Menzies) in his book The Forgotten People. In that volume the right honorable gentleman speaks of “ pressure politics “ and, goodness knows, “ pressure politics “ is at its apex to-day. This is what the right honorable gentleman says -
The true, function of a member of Parliament is to serve his electors not only with his vote but with his intelligence. If some problem arises in Parliament about which he lias knowledge and to which he has devoted his best thought) how absurd it would be - indeed how dangerous it would be - if he should allow his considered conclusion to be upset by a temporary clamour by thousands of people, most of whom in the nature of things could not have his sources of information, and have probably in any event not thought the problem out at all. ‘
On this occasion, the press has outdone itself m its endeavours to misrepresent what this measure means to the people. The press, of course - I refer in the main to the popular press - must, of necessity, uphold the interests of commercial advertisers; but in addition to having to rely upon advertisements for their revenue, we find that certain newspaper directors are also directors of private banks. I shall give one or two instances ; I am reliably informed that Mr. J. H. Fairfax, who is a director of the Sydney Morning Herald, is also chairman of directors of the Bank of New South Wales; that Mr. E. W. Fairfax, another director of that newspaper, is also a director of the Commercial Banking Company of Sydney Limited; and that Mr. H. D. Giddy, vice-chairman of the Herald and Weekly Times Limited, is also chairman of the National Bank of Australasia Limited and a director of the Australian Newsprint Mills. I reveal these facts to honorable members and to the people of the Commonwealth so that they may know that there is a link between the banking interests and the press of this country ; and while I am dealing with the press, I propose to read an extract from an article published in a journal known as Australian Coal, Shipping, Steel and the Harbour. This is not a Labour publication but one directly opposed to Labour ideals. In its issue of the 1st August, referring to the press, it has this to say-
Wearing the white flower of a blameless life, it squares itself up to its accusers, talks largely of its freedom, its honesty, and its purity; parades itself as the last remaining barrier between democracy and the onset tiny totalitarianisms; and generally confuses an issue that the ordinary man of affairs can dissect pretty accurately for himself. Truth is, the press was never in greater need of defence. Never has its standards been so completely low. The popular press is, of course, and always has been, past praying for. That does not matter such a great deal; but when we see the papers once regarded as reliable in the news and dependable in their comment Following the popular press down the circulationcumadvertising alley and all that implies - then one does wonder. Not only are “ the great editors “ of “ the great morning dailies “ no more; but the moralities and ethics of journalism that they stood for have passed with them “.
The article concludes -
But where is this allegedly free and honest press? Where? We ask you!
This comment, I consider, fairly describes the modern press and i9 particularly applicable to the attitude of the press to the nationalization of banking. The function of the press to-day is that of a propaganda machine, aimed at misleading and misdirecting the electors of this country when they are called upon to make decisions on matters affecting their own interests, as against those of the financial institutions.
Recently, I, and two other Western Australian Labour senators in this chamber, Senator Clothier and Senator Harris, made a reply to an attack made by the associated banks in Western Australia in the Perth Daily News upon a previous joint statement issued by us. Although I forwarded that reply two or three weeks ago, it has not yet been published in Western Australia. The newspapers of this country will publish what it suits them, to publish in their own and allied interests, but they will not publish that which is merely in the interests of the people. I have seen ample evidence of this since I have been a member of this chamber. No publicity whatever is given to the actions or utterances of the Labour representatives of Western Australia in the Senate, but when a certain individual who does nol belong to the Labour party in Western Australia, makes a speech, it is always fully reported in the capitalist press of that State, particularly if he says something that is to he detriment of the Government.
L come now to the question of a referendum. Chapter VIII. of the Constitution provides -
This Constitution shall not be altered except in the following manner: - The proposed law for the alteration thereof must be passed by an absolute majority of each House of the Parliament, and not less than two nor more than six months after its passage through both Houses the proposed law shall be submitted in each State to the electors qualified to vote for the election of members of the House of Representatives. . . .
When a. proposed law is submitted to the electors the vote shall he taken in such manner as the .Parliament prescribes, and if in a majority of the States a majority of the electors voting approve the proposed law and if a majority of all the electors voting also approve the proposed law. it shall be presented to the Governor-General for the King’s assent.
That definitely establishes that a referendum can only be taken on a proposal to alter the Constitution. There is no provision for seeking the opinion of the electors as to whether a proposed law should, or should not, be enacted. I do not profess to be a lawyer, but on my understanding of the Constitution, it is not possible for the Parliament to appropriate money for a referendum on any matter other than a proposed amendment of the Constitution. I refer the Senate to what “was done by the Bruce-Page Government in 1929. Honorable senators will recollect that at that time there was a proposal that the Commonwealth should vacate the field of industrial arbitration, and just as to-day people are demanding a referendum on this measure, so, at that time, they demanded a referendum on the proposed abolition of the Commonwealth Court of Conciliation and Arbitration. The Bruce-Page Government was defeated on the Maritime Industries Bill, and, seeking a dissolution of the Parliament, the then Prime Minister, Mr. Bruce, wrote to the Governor-General as follows: -
In committee, an amendment was carried by a majority of one vote declaring that the bil] should not be brought into operation until, it had been submitted to the people at a referendum or at a general election.
That situation is on all fours with the position to-day. Mr. Bruce went on -
The Constitution makes no provision for a referendum of this description, and the Commonwealth Parliament has no power to pass effective legislation for the holding of such a referendum.
The Leader of the Opposition spoke to-day of the need for a referendum; we have heard the arguments day after day over the air, and we have read them in the press; the matter has been dealt with exhaustively in the House of Representatives; but how many members of the Opposition in that chamber or in the Senate have told the people the facts to which I have drawn attention, namely, that the Constitution of this country does not permit the holding of a referendum on any matter except an alteration of the Constitution, and that there is no power under the Constitution for the Parliament to appropriate money for a referendum on any other question. I am of opinion that the only authority for the holding of a. referendum such as that now proposed by the Opposition exists in war-time powers. I understand that during World War I. a referendum was held under the War Precautions Act, on the conscription issue. In view of the clamour that is being made to-day for a referendum, it is most important that the people should know the true position. This measure does not propose an alteration of the Constitution because the Constitution clearly empowers the Commonwealth Parliament to legislate in respect of banking, other than State banking. Briefly, therefore, the Government has specific constitutional power to do what it proposes in this measure, but it has no constitutional authority to comply with the request that a referendum be held in regard to it.
Silling suspended from 6 to S p.m.
– I remind honorable senators opposite that in 1924 the BrucePage Government amended the Commonwealth Bank Act by creating the Commonwealth Bank Board. That board was not representative of the people, and it was not responsible to the Government; it was responsible only to itself. It determined that the Commonwealth Bank should not compete with the private banks. It made that decision despite the fact that the Commonwealth Bank was established by a Labour government in 1911 to compete with the private banks, ‘ and thus break the monopoly which the private banks enforced at that time. When the BrucePage Government made that amendment of the Commonwealth Bank Act in 1924, it did not .submit the matter to the people at a referendum, despite the fact that the amendment prevented the bank from achieving the purpose for which it was primarily founded.- During the war the importance of the control of credit by the nation became most pronounced. Despite the statement by the Leader of the Opposition (Senator Cooper) that throughout the ‘war the private banks cooperated with the Government, the fact is ti »a t they were compelled to do so under National Security Regulations made by this Government. The Banking Act of 1945 was passed in order to continue those controls.
The private banks were so loyal to the people of this country in their cooperation with the Government that they found it expedient to challenge section 48 of that act. As .all honorable senators are aware, the High Court declared that section to be ultra vires; but that judg ment also cast doubt upon the validity of other sections of that act which the Government, on the best legal advice available, thought gave it complete control of credit. We have been informed that sections 18 to 22 of the Banking Act of 1945, which were most vital, because they were thought to give to the Government, through the Commonwealth Bank, control of credit, were referred to in that case. In the House of Representatives the Leader of the Opposition (Mr. Menzies), when submitting a motion of want of confidence in the Government because it proposed to nationalize the private banks, referred to those sections IS to 22 as follows : -
It is quite true that they were brought under challenge theoretically in the High Court proceedings. It is also true that the very distinguished lawyers who conducted the argument abandoned that challenge as not arguable.
That is what the Leader of the Opposition in the House of Representatives said when be was speaking to the motion of want of confidence, but during the course of the debate on this measure he said that it was sheer nonsense for the Prime Minister to claim that the bill was brought down because he doubted the validity of sections 18 to 22, since their validity had never been challenged. Which of those statements is correct? Apparently, some people of importance in this country speak with two voices. I emphasize that the Prime Minister has intimated that the validity of the Banking Act of 1945 as a. whole is under challenge by the trading banks. Had it not been for the action of the Melbourne City Council in challenging section 48 of the Banking Act of 1945, and the consequent challenge to the validity of that act as a whole, there would have been no necessity to introduce the measure now before us. Therefore, if any one is to blame for the nationalization of the private banks becoming necessary at this stage, it is the trading banks themselves, because they sought to challenge the 1945 legislation, which was enacted in the interests of the nation by continuing National Security Regulations made during the war.
Under sections IS to 22 of the Banking Act of 1945 the private banks were obliged to lodge their surplus investible funds in special accounts with the Commonwealth Bank. The private hanks have made it clear they do not intend to observe any control any longer than they must. In a letter to the Commonwealth Bank, one of the private banks, obviously acting on behalf of the other banks, and on legal advice, made the following reservation : -
We ave most anxious to co-operate with your bunk to ensure the continuance of our present harmonious relations, but you will appreciate that our duty to our shareholders compels us to have regard to our legal position; therefore, we feel it necessary to advise von, with all due respect, that acquiescence or compliance on this bank’s part with any request or directions from you is not to be taken to import any contract with your bank in the terms of the net.
That is positive evidence of the intention of the private banks. Who is to control the credit resources of this country - the government elected by the people, or the private trading banks? It has been claimed that competition exists among the private banks; and this is cited a# one reason why the people should not endorse the Government’s proposal to nationalize the private trading banks. Giving evidence before the Royal Commission on Monetary and Banking Systems, Mr. L. J. McConnan, chief manager of the National Bank of Australasia Limited, at page 164 of the minutes of evidence, said -
There is a general understanding among the associated banks that wc shall not compete with one another on questions of rate. The charges for other services. .i,ch as keeping of account, internal and external exchange, &c, are also fixed by agreement between us.
That statement was made on oath by a representative of the trading banks. Therefore, when the Opposition parties declare that nationalization of the private banks will deprive the people of the benefits of competition, they are given the lie by one who, speaking on behalf of the private banks, said that there is no competition between the private banks. Competition exists between them only when one bank is prepared to take a greater risk than another and grant credit to an applicant who does not deserve it. It has been said that no other country, except Russia, has nationalized its banking system. On this point, a publication entitled Post War Britain. 1946, issued by the
Central Office of Information, London, states that, under the Bank of England Act 1946, the bank was brought under public control as from the 1st March, 1946. Previous stock held is now held by the British Treasury. The governor, deputy governor and directors of the bank are appointed by the Crown. The Treasury gives directions to the bank, and, subject to such directions, the bank’s affairs are managed by a court of directors. With respect to the relations of the bank with other banks, it can request information from, and make recommendations to, bankers, and, with the authorization of the British Treasury, it can issue directions to any banker for the purpose of ensuring that effect shall be given to any such request or recommendation. I do not suggest that that is nationalization, but it is so close that there is hardly any difference; as some honorable senator expressed it to-day, it represents only the difference between tweedle-dum and tweedle-d.ee. The Bank of England is not now the bank it was; to-day it belongs to the people of England, and not to the private shareholders who formerly governed it. The Minister for Munitions (Senator Armstrong) referred to a statement made by Mr. Reginald McKenna, a former Chancellor of the Exchequer, who said -
They who control the credit of the nations direct the policy of governments and hold in the hollow of their hands the destiny of the people.
Those words contain the justification of the Government’s present proposal. The policy deliberately followed by the trading banks in England during the depression was the predominant factor in prolonging the sufferings of the people of that country, and that policy was followed slavishly by the banks of this country, with the tragic result that 30 per -cent, of our people starved, as the Minister pointed out. I propose to quote another authority, an Australian who is very well-known, namely, Professor Walter Murdoch. According to the Melbourne Herald of the 9th September, 1947, in answer to a. question: “Do you approve of nationalizing the banks ? “, he stated -
Yes, I do most heartily. . . . My conclusion, not come to all of a sudden without due thought, is that our money system - the regulation of the issue and recall of currency and credit on a rational and scientific basis - is far too important, far too vital to the welfare of all of us to be left to private profitmaking firms. It is the concern of the nation. We talk of responsible government; if there is one thing a responsible government ought to be responsible for, it is surely this.
I submit that the conclusions arrived at by Professor Murdoch are entirely in point. I support the bill whole-heartedly. I firmly believe that it will introduce a reform which is absolutely essential, and one which is in the best interests of the people of this country. Obviously, the control and regulation of credit should reside in the Government, because the ebb and flow of money is the life-blood of the country and should remain in the hands of the Government, through its instrumentality, the Commonwealth Bank.
– It gives me great pleasure to support the bill, and I think that it will be the most important one ever to pass through this Parliament. 1 believe that its passage will confer on Australia the distinction of being the first country in the British Empire to deal with the greatest monopoly which that Empire has ever known. The private banks do not exist for the people; they have no concern with the people. They do not care whether the money they advance is to be devoted to the construction of a hospital to combat tuberculosis, or whether it is intended to be used to assist the spread of bacteria. The interests of the people are not the interests of the banks at all. Once and for all we must catch up with this terrible anachronism, the co-existence of private banks and a national debt. We on this side of the chamber have said that the banks are dictating the fight waged by members of the Opposition. I say now - and Senator O’sullivan may contradict me later if he so desires - that not only are the banks dictating the fight waged by honorable senators opposite, but they are actually dictating what they shall say.
– That is grossly untrue.
– What is untrue?
– That the banks dictate wl * we say.
– dlf the honorable senator would listen more carefully he would not indulge in such asinine interjections. The honorable senator can get up and contradict me when I have spoken, if he wishes. What I say is that the banks lay down the line of attack. They say that this is a Communist proposal; that this is what Hitler did; that it will abolish liberty; that it will destroy free competition ; that 5,000 clerks will be done out of their jobs, and, finally, that it is something conjured up in the brain of the Prime Minister (Mr. Chifley). Those criticisms are mutually contradictory and contain their own refutation. Not one member of the Opposition has shown that he is capable of thinking outside the propaganda disseminated by the press.
For 300 years banks have exploited the people; but before I deal with them, I should like to say something on behalf of the Prime Minister, whom we revere in our party. He does not need our commendation. but supporters of the Government who attended caucus meetings, are alleged to have come out and told the world what took place at. those meetings. I have never done that, and I look upon a man who divulges what, happens at those meetings as a traitor. Furthermore, I think honorable senators on this side of the chamber will agree with me that not only was the Prime Minister eminently fair at the caucus meetings, not only did he refrain from attempting to sway members of his party to support this measure, but he even urged them to oppose it if they believed that they should. He invited any member who was opposed to the measure to vote against it. And in spite of the machinations of the press and their attempts to divide supporters of the Government into Catholics and Presbyterians, members of the Labour movement stood solid to a man and endorsed the present proposal unanimously. They did that not because they were bidden to do so by a dictator, but because they know that while the present capitalist system remains unaltered, another disastrous depression must surely follow, and that unless we establish machinery now to forestall that depression when it comes, Australia will endure misery of the kind that is being suffered by the peoples of France and Italy to-day.
Opponents of the Government and the press hooked up the Government’s proposal with communism and stated: “ Karl Marx said this in the Communist manifesto, therefore, ipso facto, it must be wrong”. Why, most of them had never even heard of the Communist manifesto before!
Allow me to deal for a few minutes with the origin of the banking system. When the gentleman known as “ William of Orange” - who should have been called “William of Gold”, because he crucified the people of the world on a cross of gold - came to England there was practically no national debt. I have no time now to deal with the goldsmiths of Holland, who gave him two million ducats to come to England. Paterson said when he created the Bank of England that he had the right to all profits, earned on money created out of nothing. The establishment of that bank certainly enabled him. to create money out of nothing, and the encyclopedia bears that out. Within two years the national debt had grown to £30.000.000, and after the Napoleonic war’s it ‘ rose to £900,000,000. Within a period of 120 years, when, the population of Great Britain was far less than it is to-day, every man, woman and child was saddled with a colossal debt. To-day the national debt belongs to us, but the banks belong to . their shareholders. However, that will not continue for long now, and the passage of this bill represents the beginning of the end of that system in Australia. I shall say now something about the Communists. First, Opposition speakers attribute this legislation to the influence of Communists, and then they go on to say that it is evidence of fascism. They point to what has happened in Argentina, which they say is a Fascist country, but apparently they do not know that the banks cf that country are still in private hands. In Czechoslovakia, the banks are in the hands of the State. Had France nationalized its banks before the present crisis deepened, it may not have reached such tragic proportions. If honorable senators opposite were as keen to fight communism as they are loyal to their own party they would support this bill. It is not a revolutionary measure.
– Nonsense !
– When the honorable senator who has interjected agrees with me, I shall know that I am not talking sense. The agitation for the nationalization of banks did not begin with Karl Marx. Patterson, the Scotchman, whom I have already mentioned, caused a lot of trouble when he started the Bank of England. Bishop Burnett at that time said that the conservatives in the British Parliament, recognized that the control of money would result in a monopoly, which would mean ultimately that the bankers would control industry. That is what has happened in every country. It happened in the United States of America, when Theodore Roosevelt was President. 1 do not know whether honorable senators opposite have studied history, or whether they are just opposed to the truth. In the time of Theodore Roosevelt, at the period of the Sherman anti-trust laws, those who controlled the oil, steel and other key industries said that the banks which they controlled would issue paper money and not gold. They forced Roosevelt to withdraw his bill.
Senator O’Sullivan interjecting,
– This is not a Sal- vation Army meeting, and I can get along quite well without the honorable senator’s “ hallelujahs “. I am quite capable of looking after myself. The honorable senator’s tactics are the same as those of the banks. I am reminded of the words of Burns -
Here’s freedom to him that wad read,
Here’s freedom to him that wad write!
There’s none ever fear’d that the truth should be heard,
But they whom the truth wad indite.
Bishop Burnett advocated the nationalization of banking, as did also Bishop Barkley later on. It is interesting to observe that that policy has been advocated by Christians, atheists, Douglas Credit devotees, socialists, communists and all sorts of other people, each according to its own point of view. The philosophy of Bishop Barkley was the exact opposite to that of Karl Marx. Bishop Barkley believed that nothing exists outside the Supreme Mind and that only through that mind are we permitted to see things. Marx, on the other hand, believed that the development .of man’s mind was a process of material evolution, and that changes came about only by changes of material conditions. Despite their different philosophies, they both advocated the nationalization of banking. If local Communists were in line with their world policy they would not agree with the Labour party, but would say, “We do not want nationalization of the banks because that is not the way to bring about a depression. We cannot obtain power where capitalist economy is stabilized.
I shall deal with some of the other contradictions of the Opposition. Its members say that Hitler rose to power by suppressing the banks. I say without hesitation that there would never have been a. second world war but for the banks. I challenge any member of the Opposition, including the Leader of the Opposition in the House of Representatives (Mr. Menzies) with all his histrionics, to prove to me that the statement that Hitler rose to power by suppressing the banks is true. I am amazed that Professor Bland, who is supposed to be a professor of civics, should sign his name to a statement that Hitler got into power by crushing the banks. At the time of the Dawes plan, under which terrific indemnities were demanded from Germany, the late Lloyd George said that the bankers wiped everyone aside, and issued a ukase in the name of “King Dollar” and “ King Sterling”. The German people worked hard and produced commodities in great quantities which they sent to the United States of America. They sent so many goods to that country that special tariffs had to be imposed against them. The result was that the United States of America had 13,000,000 of its people out of work in a period of depression. We are told that that depression was due to a. fall in prices. How .profound a. statement ! The fall of prices was due to the fact that the policy of the bankers had put so many people out of work that they had no purchasing power, although the world was full of commodities which the people could not buy. If the bankers had been interested only in their own affairs at the time of the Dawes settlement, they could have’ said that they would cut up large estates in Germany, and distribute the land among German farmers. Had they done that, there would have been no dictatorship in Germany.
It is not correct to say that Hitler rose to power by smashing the banks. Norman and other big financiers provided credit to Hitler in 1931, and right up until war broke out in 1939 they denied metals to Britain while supplying them to Germany. And so it was possible for London to be blitzed by the Germans. The result of the action of the bankers was the destruction of thousands of British lives. Yet honorable senators opposite and those who agree with them have the impudence to say that the present Prime Minister is a man like Hitler. The German financier, Thyssen, who wrote I paid Hillar, tells us in his book that von Papen said that the banks, including the bank of France, agreed to finance Hitler. He tells us that the banker Schroeder was a cousin to Baron Schroeder who was in England in 1914. He was a great financier. I bring these historical records up to the. 23rd July, 19.18, when it was stated in the House of Lords that unless Baron Schroeder had been naturalized when war broke out in 1914, the city of London would have become bankrupt. These are the people who financed Hitler. Financiers are kept in power by paying politicians and pressmen, by financing charitable institutions, and so on. Rothschild said, “ When we fight, the people who understand will be dependent upon us and the rest will be so stupid that they will not know that we are against their interests “. Those are the sort of people the opponents of this bill would defend! They are the people who stirred up Germany against the French. The same group, controlling the French Parliament, worked against the Germans. The result was that they secured great armament orders from both countries and the peoples were all lined up in readiness for war. Yet to-night we are told that our good Prime Minister is akin to Adolf Hitler.
Nationalization of banking has been advocated by all kinds of people. Ramsay MacDonald, when he was in power in Great Britain, was told by the Bank of
England that the dole budget would have lo be reduced by £12,500,000 a year, and., according to Thirkell, the Labour party Whip at the time, he had to telephone Wall-street to ask whether that cut would be sufficient. Ramsay MacDonald said, “ All this time they thought about their own interest and their own interests alone”. Was he a Communist? Mr. Mackenzie King said in effect, “ Unless we give control of the banks to the people, any talk of democratic government is useless and stupid “. Leon Blum said that it was impossible for him to carry on the Government of France. The bankers beat him. Yet honorable senators opposite oppose this measure, claiming that they fight for liberty! I throw away my notes and I shall tell them about liberty. First, however, I shall say something about the Anglo-German Fellowship. Three directors of the Bank of England and three directors of the Midland Bank were members of the fellowship. I shall speak slowly at this stage, because, if anybody is listening to the broadcast of this debate, particularly in Victoria, I hope they will get this well into their heads: A. member of the Anglo-German Fellowship, Lord Hutchinson of Montrose, was the economic advisor to the very same bank of which Sir Frank Clarke is a member. He belonged to the Cliveden set, all of whose members were prepared to sell England to Hitler any day of the week. Yet honoraide senators opposite declare that the Labour party was behind Adolf Hitler! The next cry that they raise is that nationalization of banking will do away with competition. I shall leave that subject to some other honorable senator to deal with later in the debate. There is as much competition between the private banks as there is between the bookmakers at Randwick race-course since betting boards have been introduced there. The bookmakers’ interests are not the interests of the public. Now that they can see from the betting boards the odds that are being offered by their fellows, they take good care not to compete with each other. Although I am not a betting man myself, T know the practices of the bookmakers well.
Honorable senators opposite and their supporters are using all the verbiage at their command in an attempt to blind the people, to the fact that a group of individuals has control of the currency of this country. Competition ! I shall say no more about it. 1 shall speak about liberty. The honorable member for Fawkner (Mr. Holt) said that conditions in England to-day were the result of legislation like that now before the Senate which had been passed by the British Labour Government. No statement could be further from the truth. I was in Great Britain not long ago, and I saw what conditions were like. No Government could have done a better job than has been done by the Labour Government of Great Britain. Socialization is not the cause of Britain’s troubles. The trouble is that, for generations past, the people of Britain have been born into debt. Unless legislation like this is enacted in Great Britain, children yet unborn, and their children after them, will suffer the same fate. British taxpayers have to pay about £400,000,000 sterling each year before they can balance the budget. Britain has to export Rolls-Royce motor cars at a price of £6,500 each in exchange for food for the people. Yet the honorable member for Fawkner blamed the legislation enacted by the Labour Government for conditions in Great Britain. I wish that I had sufficient time at my disposal to quote authorities on this subject. One of the most reliable of those authorities is worth mentioning. Honorable senators opposite should take note of his words before they accuse the Labour party of being responsible for conditions in Great Britain. This authority points out that, from 1920 to 1933, British Governments paid off £8,300,000 of interest on debts, but that the nation was then £300,000,000 worse off than at the outset. The same writer declares that there is nothing wrong with the “ dear Old Country”, except that the people have handed over money that should belong to themselves to the banks, so that now they are in the hands of the moneylenders. That is the position in Great Britain. The British people have no chance to get out of debt under a Labour government, or any other form of government, until they do away with those terrible anachronisms, the private banks and the national debt.
L refer now to the statements of the right honorable member for Cowper (Sir Earle Page). By the most terrible perversion of history that I have ever heard, the right honorable gentleman passed, by a series of mental jumps, like a: kangaroo, from 500 b.c., through the days of Julius Caesar, Oliver Cromwell, and the French Revolution to Abraham Lincoln. Seemingly, all the people whom we thought had fought for freedom fought, .in fact, for slavery! Dear old Lincoln once said, “I have two enemies. One is the Southern army at my front and the other is the financiers at my back, ,and, of the two, the financiers arc the worse”. The antiLabour newspapers reported the declarations of the right honorable member for Cowper, and, by some legerdemain, they purported to prove that Lincoln would have opposed this bill had he been alive, [f I had. sufficient time to spare, I should quote what the London Times said about Abraham Lincoln in his day. It declared that if Lincoln were permitted to continue with his policies he would wipe out his country’s debts, and America would become more prosperous than any country the world had ever known. It ended by asserting, “ This government must be destroyed “.
We have heard a great deal from honorable senators opposite and their friends about “the British way of life”. What is the British way of life? The British people, through the House of Lords, the Anglican bishops, and the bankers, backed slavery to the hilt against Lincoln. According to Emil Ludwig, they employed the tools who assassinated the man whom I consider to have been the greatest president the United States has known. Yet honorable senators opposite drag Lincoln’s name into their arguments against this bill. I have said sufficient about him ! The right honorable member for Cowper also said that this Government should heed the words of Lord Macaulay, who asserted that governments should, as far as possible, not interfere with “ the entrepreneur “. The w<v sounds much better than “ capitalist “. T have taken the trouble to peruse a history dealing with the times of Lord Macaulay. He was born in 1800, and he died in 1857 - the period of which Charles Dickens wrote. I suppose that even the members of the Liberal party have heard of Dickens, though one would not think so from their arguments on this bill. Honorable senators opposite should read Oliver Twist, David Copperfield and other books that Dickens wrote. They describe conditions in Lord Macaulay’s day. In Liverpool then, one person in every seven lived in a cellar! Children only five years of age were employed putting hooks and eyes on cardboard. Taskmasters were appointed to keep them awake. In those days, the population of Ireland fell from S,000,000 to 4,000,000 within two decades. There were some religious organizations to care for orphans, but the State made no provision for waifs. They were sold into the factories 100 at a time, and there were three imbeciles in every 100. Those were the days of Highland evictions, when not only the crofts were sold but also, in certain instances, children were impounded.
Honorable senators opposite would have us return to those times ! They declare that we should not interfere with entrepreneurs, the sort of people who perpetrated such infamies. In those days, education was a private thing. The army was a private organization once, and so were the navy and the post office. Only the stupidity of the people - and that stupidity has been colossal - permitted such things to be. It is as plain as the trunk on an elephant that the banks care nothing for the people. They will not. care if all the rich soil in this country is eaten a.way because the farmers have to overstock their paddocks and take too much out of the soil because of the terrible burden of interest imposed on them. Yet, honorable senators opposite say that we should not interfere with the banks. I was born in the Highlands of Scotland, near the west coast of which is the island of Skye. The people of that island suffered very greatly from the aftermath of the battle of Waterloo. When the soldiers who had fought with the English in that battle returned to Britain, they were left in London and had to trek home on foot. They arrived home to find their crofts gone. In one case, the few sticks of furniture that an unfortunate woman had left had been sold, but as there was still not enough money, her child was impounded for six pence, and her dog for a shilling. The politicians of that time put up the same arguments that honorable senators opposite are advancing now - the British nation would be ruined if the children were taken from the mines. Those were the days of which Shelley wrote -
Back to your cellars, holes, and cells;
In halls ye deck another dwells.
Why shake the chains ye wrought? Ye see
The steel ye tempered glance on ye.
We remember from our school days the lines that Tom Hood wrote -
With fingers weary and worn,
With eyelids heavy and red- and the last verse runs -
But why do I talk of Death? That Phantom of grisly bone,
I hardly fear his terrible shape, It seems so like my own -
It seems so like my own, Because of the fasts I keep;
Oh, God! that bread should be so dear And flesh and blood so cheap!
Those were the days too of which Elizabeth Barrett Browning wrote in The Cry of the Children -
Do ye hear the children weepingO my brothers,
Ere the sorrow comes with years?
They are leaning their young heads against their mothers
And that cannot stop their tears.
The young lambs are bleating in the meadows,
The young birds are chirping in the nest,
The young fawns are playing with the shadows,
The young flowers are blowing toward the west -
But. the young, young children,O my brothers,
They are weeping bitterly!
They are weeping in the playtime of the others
In the country of the free.
Those are the days that we shall never allow to return. This is a young country, yet almost untouched. We want thousands of immigrants to open it up. If transport is most needed then it shall have transport; if agriculture is most needed it shall have agriculture. We know that we cannot entirely eliminate depressions, but we can cushion their effects. We are determined that money shall not be lacking. Think what could have been done in theCity of Sydney alone in the depression years ! The Bondi railway, for instance, could have been built. Thousands of men were out of work, ample materials were available, but the cry was, “ There is no money “. Honorable senators opposite talk of controls; but there is one control that is being brought to an end now - control by the banks. I have often said that, during the depression, any woman could go out and buy a mink coat in the morning and a musquash coat in the evening, every day in the week, provided she could do it on5s. a week. That was the control that was imposed upon the community in those days. But the only real wealth in the world is that produced by the energy of the people - the application of physical and mental energy to natural resources. I do not care whether the bankers are as wise as Solomon or as gentle as doves; the fact remains that in modern society no individual or group of individuals has the right to own the medium of exchange.
No indictment of mine of the bankers could be too great. In the past, financial institutions have set nation against nation, and exploited even their own nations. They have exploited patriotism. In the words of Johnson - “ Patriotism is the last refuge of a scoundrel “. Not an honest man, mark you, but a scoundrel! They have gaoled the innocent and released the guilty. They have corrupted the judiciary. That has been their policy. Through their control of industries they have dictated to the entrepreneur and to the farmer. They have sold the farmers up in time of economic stress and they have given credit when there was no necessity for it. All these things are true. If they are not, I invite honorable gentlemen opposite, or the honorable lady opposite, to contradict them. Now, after almost 300 years of fighting, the people are not merely going to control these institutions; they are going to put them out of existence altogether. Their money belongs to us - to the people. It should never have belonged to the banks. We are told by the opponents of this legislation that the banks have done this and that for the benefit of the community; but they have never done anything with their own money.
In conclusion, I say that it has been the greatest pleasure of my life to be here to speak on this measure. Even if the Labour party goes down at the next elections - there will be a hard fight - it will not matter so long as we are doing what i.s right. Others, younger, more virile, and more intelligent, will take up the cudgels. Private bank control is finished. lt cannot live in the world of to-day. We have to choose between revolution and organized reform. Organized reform is essential if we are to survive. The financial institutions have been weighed in the balance and found wanting, and I believe that future generations will rise and call us blessed. My last words to-night are those of William Morris, who also would have been in favour of nationalization of banking -
What is this, sound and rumour? What is this that all nien hear,
Like the wind in hollow valleys, when the storm is drawing near,
Like the rolling of the ocean in the eventide of fear?
Tis the people marching on.
I have much pleasure in supporting the bill.
– The only speech that we have heard to day in opposition to this bill has been on the orthodox lines of utterances that have been made, not only in this Parliament, but in the press, and over the radio of this country. In the absence of any departure from these orthodox lines, I shall not endeavour to answer any of the statements that have been made in this chamber. I shall try to analyse the position as I see it, apart from all the criticisms that have been offered, although I shall refer to some of those criticisms.
It is an economic factor that has caused the overhaul of our whole internal economy, and this nationalizing bill is an important correlating part of that movement. For instance, the economic position of a working man, and indeed, of many people on fixed incomes as well, is such that any increase of wages is immediately swallowed up by increased prices of commodities. It is the neverchanging vicious circle of a dog chasing his tail and never quite catching up with it. People in the fixed income group have even suffered diminishing incomes in the face of increased costs of commodities. Without going into any further details, I say that the whole plan of our economy is such that we can get nowhere at all in the direction of better living standards simply because all expenditureof governments and semi-governmental authorities has no relation at all to theneeds of the nation either in regard to development or production, and no account has been taken of potential production other than that some smart businessman may speculate to secure huge profits for the risks he takes. Thus the simple question arises : Are we to continue the old haphazard policy with its booms and bursts, and its consequent human sufferings, or are Ave to plan for a change in the old order and the implementation of a new one embodying the co-operative Commonwealth with the co-operative slogan, “ Each for all and all for each “. This cannot he done unless there is some radical change in our monetary system; nor can it be done immediately even after changing the monetary system. Neither can it be done immediately, even with a change in our monetary system. It will take some time; but I prefer some alteration now, rather than continue the old method. For that reason I support the measure.
What is the monetary system ? Notes and coins of the realm are issued by the Commonwealth Bank and the Note Issue Department on behalf of the Commonwealth Government. But those notes and coins represent only the small change used by the community in the payment of wages and in meeting the ordinary commitments of industry. In addition, there are the cheques and other forms of currency, such as, bills of exchange, sight drafts, &c, which represent a much greater amount. Indeed, they account for from SO per cent, to 90 per cent, of the currency. Thus, whilst the Government controls the issuance of the small change, it does not control the real currency of the country. The associated banks, in their advertisements, admit that they control 80 per cent, of the currency. Therefore, they control the economy of Australia.
Under the old system, Governments and local governing bodies have piled up huge debts. Those loans have, in the main, been issued in the form of credit notes at certain rates of interest. The interest represents not only the cost of issuance of that credit, but also the profit made by the private banks on their right to issue the credit of. the nation. Thus, until recently, the credit of this country has been issued by the private financial institutions which, by that means, have controlled governments. Therefore, we had an economy in which policies were dictated by the few who control the private banks. They made and unmade governments at their will, always at the expense of the people. lt is in this respect that .the Opposition parties persist in making a serious mistake. They slate supporters of the Government’s proposal to nationalize the private banks, and they defend the private banks solely by illustrating the efficiency of the administration of the exchange houses of this country. We are not concerned solely with the administration. That will go on just the same. No hank official in this country has ever decided the policy of the private banks. That policy is decided by the few who direct the private banks; and their employees simply carry out that policy. In future, the banking system will be administered in order to give effect to the policy of the people of Australia fis laid down by the Parliament.
What has been the policy of the private hanks? Their policy has been to allow governments to run into debt, and then, following a policy initiated overseas, they created difficulties for governments which then found that they could not pay the interest due in respect of loans. The private banks then allowed governments to borrow more money; and more credit was issued to enable them to pay their debts, including more interest to the people who issued the credit. Up till a. few years ago that was how our national debt was piled up. That policy has been followed throughout the world. If members of the Opposition parties, or any one who opposes nationalization of the private banks, can show me how we can pay off our national debt simply bv borrowing more money to meet our commitments, and, at the same time pay additional interest on further borrowing - in other words, by borrowing to pay our debts - I am prepared to reconsider my vote on this measure. But I know that that cannot be done. I know that that has been the policy of the private banks in the past. It has been the foundation of their method of controlling governments.
Much propaganda has been issued by the private banks against the Government’s proposals. Most of that propaganda is deliberately untrue. The private banks have even gone so far as to release employees from the restriction previously imposed upon them not to engage in party politics, so that they can array themselves against supporters of the Government’s proposals. I have in my hand a copy of a circular which was issued by the general manager to one of his branch bank managers. All the things alleged by honorable senators opposite, and all the arguments urged byopponents of the bill outside Parliament, through advertisements in the press and radio propaganda, are contained in this circular. It sets them out quite clearly, in the instructions of the general manager of the bank concerned to his branch managers. In that instruction he tells them just what they are to do and the “line” they are to adopt with customers. The instruction states -
No harrier will be placed in the path >! those who wish to voice their views, publicly or privately, personally or politically, in the campaign against nationalization. This iau all-in out-in-the-open battle. Past instructions about noil-participation in political matters are waived completely.
The banks are dictating to their employees exactly what they are to do, and the political view which they are to adopt - “Past instructions about nonparticipation in political matters are waived completely “.
– That is the new “ badge of freedom “.
– All the arguments which have been publicized in the press are set out in the pamphlet, and it provides a complete denial of the contention of honorable senators opposite that they are not carrying out the hanks’ instructions. When they deny that they are slipping away from the truth.
– The ho senator is not being dictated to?
– I heard Senator O’Sullivan interjecting while other honorable senators were speaking, and I think that he should stand up and take a look at himself and see how long the shadow is that he casts. A man who will stoop to so ghoulish an act as to fetch out of the grave the activities of another man is not fit to interject during any speech.
– That is grossly untrue.
– This bill proposes to confer on the elected representatives of the people the inalienable right to declare the financial policy of their country. It will consummate Labour’s proposals to secure full employment and the proper development of Australia, which has not previously been possible. It aims at stabilizing the prices of primary and secondary produce, and expanding the health and social welfare proposals of the Government. Those aims are all bound up in the control of banking policy, and I emphasize that they cannot be obtained without government control of banking. The Labour movement seeks to control financial policy, which has, up till now, been administered by the employees of private institutions. If those employees do not like the Government’s proposals, they can always leave the Commonwealth Bank - they are quite free to do that, without any political restrictions whatever. But there need be no alteration of the administrative aspect of banking, save insofar as it is necessary to carry out the transfer of the trading banks to the Commonwealth Bank. The Government’s purpose in introducing this measure is entirely democratic; it seeks to achieve something for the benefit of the whole people, in place of the present system which operates for the profit of a few. So far as the existence of the profit motive is concerned, it is not possible, under the capitalist system, to abolish it; but it may be possible to do so in the future. No one is questioning the amount of profit private institutions are making; what we are questioning is the utilization of that profit.
Almost all the appeals embodied in the agitation against this proposal arc based upon fear. No attempt is made by members of the Opposition to outline any constructive measure to prevent a recurrence of trade booms, and their consequent depressions. The same type of “fear” propaganda was used by opponents of
Labour to defeat the establishment of the Commonwealth Bank, and it was used against the Banking Act of 1945. Indeed, the instructions circulated by one of the trading banks, to which I referred previously, makes this quite clear. Notwithstanding that we were told, when the Commonwealth Bank was created, that we should be able to buy “Fisher’s flimsies “ for “ a bob a sugar-bag full the £1 note lost none of its value. The reason for the vicious criticism made at that time was that bankers were fighting to maintain the privilege of issuing currency notes. In that fight they raised the “ fear “ bogy, and they sought to frighten the people by telling them that the bank notes issued by the Commonwealth bank would be valueless. But the £1 notes issued then are still in circulation, and are recognized throughout the world as a medium of exchange for goods. That has exploded the “ fear “ bogy, because, as I say, the value of the £1 note still stands unchallenged.
At that time we were told that it was the business of bankers to conduct banking, and that no politician should meddle in such business, and that is one of the arguments employed to-day by the opponents of the Government. At that time it was suggested that the monopoly of banking exercised by a few people who controlled the banks was a highly specialized one, secret and sacred to them - they alone knew how to conduct banking. Notwithstanding the halo which they placed on their own heads, the Commonwealth Bank prospered from the very beginning. It was started with a capital of £10,000,000, advanced to it by the Government. The fears raised then by opponents of Labour were precisely the same as those which they seek to raise to-day. The Commonwealth Bank began operations in 1912, and in 1914 it had a credit balance of £9,000. When the trading banks found that it was going ahead they changed their tactics. They no longer derided it, but instead of coming out into the open they employed strategy. By the use of strategy they eventually obtained control of it. Because of the treachery of a government of this country, the bankers won the day in 1924, and from then on they controlled the people’s bank.
After the financial crisis of 1924, and as the result of a conference held on the 11th and 12th October, 1924, between representatives of the Government, the Commonwealth Bank and the trading banks, an alteration was made in the control of the Commonwealth Bank. The alteration was such that even the tory press of the day felt itself constrained to state that the bankers had “ won the day “. When people criticize the Scullin Government for not taking effective action in 1931, they do not know of what they are talking; that Government never had a chance, because at that time the bankers controlled the Commonwealth Bank. Notwithstanding all the “ fear “ propaganda disseminated by opponents of Labour, and in spite of the hampering restrictions placed upon the operations of the Commonwealth Bank, the profit earned by that bank in all its departments last year amounted to £64,771,000 of which £35,803,000 was returned to the Treasury. In addition to that the sum of £18,661,000 was repaid to the Treasury between 1940 and 1947. Labour governments were in power during those years. In addition, the bank has paid into the National Debt Sinking Fund, £10,473,000. The bank’s capital, including, the amount invested in rural credits, capital account, mortgage department and reserves amounts to £20,000,295. The Commonwealth Bank has achieved this despite the dismal predictions of the “ croakers “. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Bill received from the House of Representatives, and (on motion by Senator McKenna) read a first time.
The following papers were pre sented : -
Australian Soldiers Repatriation Act - War Pensions Entitlement Appeal Tribunals - Reports for year 1946-47.
Commonwealth Public Service Act - Appointments - Department of Labour and National Service - A. C. Clarke, E.J. Moran.
Defence (Transitional Provisions) Act - National Security (Economic Organization) Regulations - Order - War service land settlement - Western Australia (dated 4th November, 1947).
National Security (Enemy Property) Regulations - Order - Persons ceasing to be enemy subjects.
National Security (Rationing) Regulations - Orders-Nos. 147, 148.
Lands Acquisition Act - Land acquired for - Defence purposes -
Department of Works and Housing purposes - Garbutt, Queensland.
Postal purposes - Mount Surprise, Queensland.
Lands Acquisition Act and Lands Acquisition Ordinance of the Northern Territory - Land acquired for Defence Purposes - Sattler, Northern Territory.
Senate adjourned at 9.10 p.m.
Cite as: Australia, Senate, Debates, 20 November 1947, viewed 22 October 2017, <http://historichansard.net/senate/1947/19471120_senate_18_195/>.