21 November 1947

18th Parliament · 1st Session

The President (Senator the Hon. Gordon Brown) took the chair at 10.30

ii. in., and read prayers.

page 2431


Nationalization: Petition

Senator COOPER presented a petition from certain employees of trading banks operating in Victoria in relation to banking in Australia.

Petition received and read.

page 2431




– Has the Minister for Supply ‘and Shipping received complaints from primary producers and other users of kerosene regarding the inferior quality of the kerosene now being marketed ? If so, will he take the necessary steps to protect the users of kerosene?

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

– Some complaints regarding the quality of the kerosene now being sold have been received by the Government. My department will take all steps possible to improve the quality of this product.

page 2431



Minister for Trade and Customs · QUEENSLAND · ALP

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

Hog casings.

Ordered to be printed.

page 2431



Senator GRANT:

– I have read repeatedly in the newspapers recently that members of the Royal Australian Air Force are being used by the Government of the

Dominion of India against the troops of Pakistan. Will the Minister representing the Minister for Air make inquiries regarding the truth or otherwise of that statement? If it he true, will he take the matter up with the Minister for Air with a view to having this practice discontinued? If Australians are acting individually on their own initiative, will the Minister ascertain whether anything can be done to put a stop to their participation in this terrible slaughter?

SenatorCAMERON.- I shall bring the matter to the notice of the Minister for Air and ask for his advice and comment, and I shall report accordingly to the Senate.

page 2432


General Agreement on Tariffs and Trade.


– I lay on the table the following papers : -

United Nations Conference on Trade and Employment - Second Session of Preparatory Committee - Geneva, 1947 -

General Agreement on Tariffs and Trade.

Schedules of Tariff Concessions (Volumes 1. and II.)

Protocol of Provisional Application. Final Act.

These documents arrived from Geneva only recently, and until they can be reprinted in Australia I regret that only a very limited number of copies will be available.

page 2432



Senator COOPER:

asked the PostmasterGeneral, upon notice - 1.Is ita fact that prior to the Overseas Telecommunications Commission assuming control, the two independent cable and wireless services provided messengers who collected cables for despatch?

  1. If so, has the Commission discontinued this service?

    1. If the answer to No. 2. is in the affirmative, (a) why has the service been discon tinued, and (b) will the Postmaster-General confer with the commission with a view to restoring this very useful service?
Senator CAMERON:

– The answers to the honorable senator’s questions are as follows : -

  1. A very limited facility was provided by the independent cable and wireless companies for collection of international messages for despatch, prior to the Overseas Telecommunications Commission taking over the operation of the external telecommunication services. 2.Yes. 3. (a) Discontinuance of the service in question is due to the extreme difficulty encountered by the commission in securing an adequate staff of messengers, which difficulty is not peculiar to the commission. For the same reason, the facility had previously been discontinued by the companies during the war years and had only very restricted application thereafter. The position in this respect has grown progressively worse recently, until the stage has been reached when itis not possible to provide messengers on request for this particular service. The facility was availed of by a very small proportion of the users of the cable and wireless services; (b) the circumstances abovementioned preclude steps being takenfor restoration of the facility under notice.

page 2432



Senator RANKIN:

asked the Minister for Health and Social Services, upon notice -

  1. How many deaths from gastro-enteritis. (a) in the under three-years-old group, and (b) in the over three-years-old group have occurred in Brisbane since the beginning of the epidemic?
  2. Has it been ascertained by medical research authorities that children’s napkins, which have not been thoroughly washed may be a source of contamination and assist in spreading the disease?
  3. Has there been an acute shortage of washing soap and soap powders in Brisbane during the period of the epidemic?
  4. If so, will the Minister confer with the appropriate Minister in an endeavour to overcome such shortage, and make a statement on the result of such conference?
Senator McKENNA:
Minister for Health · TASMANIA · ALP

– The answers to the honorable member’s questions are as follows : -

  1. The number of deaths from gastroenteritis which have occurred in Brisbane since the beginning of the recent epidemic are as follows: - (a) in thu under group, 100 (all under two years); (fi) in the over three-years-old group, nil.
  2. Yes. The medical research authorities engaged on the investigations of the outbreak are the Queensland Institute of Medical Research, Brisbane, and the salmonella typing centre of the Institute of Medical and Veterinary Science, Adelaide. The latter centre receives a Commonwealth grunt through the National Health and Medical Research Council. Thu causative organism has been ascertained. Children’s napkins need early sterilization free from fly contact. Thorough washing, with or without washing soaps or soap powder would not he as effective us boiling in water Tor 30 minutes, which would sterilize the articles. :j. lt is a fact that there has been a shortage of washing soap and soap powders in Brisbane recently.
  3. Although the supply and distribution of washing soap and soap powders is not subject to Commonwealth control, an endeavour will be made with the Minister for Supply and Shipping to overcome the shortage of these articles in Brisbane.

page 2433


Second Reading

Senator McKENNA:
Minister for Health, and Minister for Social Services · Tasmania · ALP

– I move -

That the bill be now read a second time.

The object of this bill is to extend the period of office of the interim council of the Australian National University. The principal act provides for the ultimate government of the National University by a council of not more than 30 members, partly appointed by the GovernorGeneral and partly elected by Parliament, and for the -staff, graduates, and students of the university, as in the State universities. As the permanent council could not be constituted when the act first came into force, provision was made for the appointment of an interim council to do what is necessary for the establishment of the university. The act provided that the interim council should remain in existence until the permanent council was constituted or until the 31st December, 1947. As it is not yet practicable to constitute the permanent council, it is necessary to remove the time limit on the life of the interim council. This is the only provision in the bill. If it is agreed to, the interim council will remain in existence until the permanent council is constituted, which is expected to be in 1951.

Senator COOPER:
QUEENSLAND · NAT; CP from 1935

– The Opposition supports this bill which is a machinery measure enabling the interim council of the Australian National University to carry on until the appointment of a permanent council. We are glad to learn that the interim council is now engaged on the developmental work, anc! we on this side of the chamber look with keen interest to establishment of the Australian National University at Canberra. We look forward to the day when the construction of the university will bc completed, and the institution will be in full operation. Research courses will then be available to not only Australian students but also students from overseas who, no doubt, will come here to engage in research in respect of matters concerning the Pacific. The establishment of the university will mark an important step in the advancement of Canberra as a seat of government and learning.

Senator LAMP:

.- I support the bill. However, I take this opportunity to make a suggestion concerning the constitution of the interim council. I understand that its personnel will not include an architect or an engineer from any Commonwealth department, and that the architect who is to supervise the construction of these buildings is a private individual having no connexion with any government department. As some millions of pounds is to be expended on this work, the Government would be wise to appoint one of its leading -engineers, or architects, to the interim council of the university. As chairman of the Public Works Committee, I submit that it is essential that special supervision of construction in the way I have suggested be maintained, particularly when the expenditure involved is so large.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

iri reply - I express to the Leader of the Opposition (Senator Cooper) my appreciation of bis cooperation in enabling the measure to go through without delay.

With respect to the suggestion made by Senator Lamp, I point out that the Minister for Post-war Reconstruction (Mr. Dedman), speaking in the House of Representatives, intimated that the personnel of the interim council will be broadened in the near future, and that he will give effect to the intention of the Parliament when it provided that a number of honorable senators and honorable, members should sit on the interim council. It may, or may not, he practicable to place on the council a government architect or engineer. I shall convey the honorable senator’s suggestion to the Minister for Post-war Reconstruction, but I imagine that the interim council will always have at its disposal the services of the Commonwealth technical officers, whilst 1 believe that Senator Lamp, who has had a wide experience in matters of public works, can himself be relied upon to keep a. very keen eye upon the work <is it progresses.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate.

Standing and Sessional Orders suspended.

Report adopted.

Bill rend a third time.

page 2434


Second Reading

Debate resumed from the 20th November (vide page 2365), on motion by Senator Ashley -

That the bill be now read a second time.

South Australia

– I have already pointed out that the Commonwealth Bank has earned enormous sums and has returned to the Treasury some millions of pounds. In addition, it has provided £20,000,000 to finance the establishment of additional departments within itself. All that has been achieved in the face of the dismal prophecies made at the time of its establishment that politicians should not enter into the business of banking. As I say. the result of the bank’s activities has been truly magnificent, and should remove any fears engendered by the trading banks’ propaganda. Control of the Commonwealth Bank and the financial policy of the country is the matter with -which we are now concerned. The policy of the Commonwealth Bank was altered in 1924, when it was removed from the control of the Treasury and became an entirely independent concern. However, that was recently rectified, and to-day the bank must conform to the policy laid down, for it by the Treasurer of the government of the clay. The continued successful operation of the bank provides sufficient answer to the critics of the bank and of the Government which contended that it should be conducted “independently of the politicians “. However, notwithstanding the bank’s fine record, it must be admitted that it contains a “ black spot “. I do not intend to discuss in detail the ramifications of the alteration of the original policy of the bank which the Bruce-Page Government made in 1924, except to point out, that because of that alteration the bank failed to function as it should in the depression of the ‘thirties. When that depression occurred, although the store-houses of this country were bulging with wool, wheat and other produce, and the warehouses contained huge surplus stocks of food and clothing, bread-winners could not obtain sufficient to subsist on, because they were unemployed. They were unemployed because there was not sufficient money to pay wages to them. Members of the board of the Commonwealth Bank at that time stated that they would cooperate with the private banks to assist recovery provided that the Government reduced wages and carried out certain other directions of the. bankers. In return for that they undertook to provide “ some money”. The directions of the bankers of this country were duly carried out - it does not matter by whom - but there was still not enough money to provide wages to re-employ men to enable them to secure the wherewithal to purchase the necessaries of life. Although some degree of recovery was eventually achieved, the fact remains that, immediately prior to the outbreak of World War II., there was a surplus of millions of bushels of wheat at a ‘time when thousands of people could not obtain sufficient to eat. The system operating in regard to the distribution of primary production is explained by W. L. Bain, who added to the well-known lines -

We plow the fields and scatter

The goodseed on the land -

But it is fed and watered

By God’s Almighty hand the following verse: -

But when the harvest ripens,

There’s such a frightful lot,

That as there is no money,

We leave most of it to rot.

A considerable proportion of the produce of this country did rot, merely because there was insufficient money in the hands of the people. The Government seeks to alter the basis of our financial system so that such a state of affairs shall not occur again.

The opponents of this legislation say that a government monopoly in banking will be set up if this bill is agreed to. They are attempting to mislead the people into believing that they are not in favour of monopolies. I have studied the directorates of all the banking institutions in Australia, and the information which I have gleaned is so interesting that I shall present it to the Senate.

The Bank of New South Wales directorate is interlocked with the Australian Mutual Provident Society by two directors, the Sydney Morning Herald, the Fairfax interests,Royal Insurance Company Limited, McIlraths, North- Western Pastoral Company, Perpetual Trustee Company Limited, Tooth and Company Limited and Sydney Smelting Company.

The Commercial Banking Company of Sydney Limited is interlocked with the Colonial Sugar Refining Company Limited by two directors, United Insurance Company Limited, also by two directors, Perpetual Trustee Company Limited, Tooth and Company Limited, North Coast Steam Navigation Company Limited, the Sydney Morning Herald, the Fairfax interests, and J. Vicars and Company Proprietary Limited.

The English, Scottish and Australian Bank Limited is interlocked with Australian Estates Company Limited, the bankers, Anthony Gibbs and Sons, the Bank of Westminster of England, by two directors, Australian Pastoral Company, Commercial Union Assurance Company Limited, Dunlop Rubber (Australia)

Limited, Imperial Smelters Company Limited, Zinc Corporation and its link of Broken Hill Proprietary Company Limited, with all its subsidiaries, The Midland Bank, Westminster Foreign Bank, Bank of New Zealand, New Zealand Mercantile Agency, which is a pastoral company, as well as a number of smaller companies.

The Union Bank of Australia Limited is interlocked by its directors with Gresham Fire and Accident Insurance Society Limited, Dalgety and Company Limited, Vickers Limited, by two directors, and through various links with Broken Hill Proprietary Company Limited, and its various subsidiaries associated with iron and steel, Marine Insurance Company, Westminster Bank as well as the bankers, Glynn Bankers Company.

The Bank of Australasia is interlocked with Anthony Gibbs and Sons and was interlocked with the Bank of England until it was nationalized.

The Commercial Bank of Australia Limited is interlocked with Hebburn Limited, Metropolitan Coal Company, Huddart Parker Limited and with its subsidiaries in the coal-mining industries. It also directs sugar through Fairymead Sugar Company and transport through Fleetways Transport Agency Proprietary Limited. Other interlocked companies are Oveseas Shipping Association, United Stevedoring Proprietary Limited and United Ships Services. It is associated with insurance companies through Atlas Assurance Company Limited, National Mutual Insurance Company, South British Insurance Company Limited and with various investment and finance companies through the Capel Court group of investment companies, New Zealand Loan and Mercantile Agency Company Limited. It directs oil through Colonial Oil Refineries Limited, and other industries and utilities through Gollin and Company Proprietary Limited, La Mode Industries, and Metropolitan Gas Company.

The National Bank of Australasia Limited is interlocked with Herald and Weekly Times Limited, with all the subsidiary papers of the Melbourne Herald, including the Adelaide Advertiser the

Adelaide- News and the Australian Newsprint Mills Proprietary Limited, the Australian Mutual Provident Society, Goldsbrough. Mort and Company Limited, G. J. Coles and Company Limited, Melbourne Steamship Company Limited, Hobson’s Bay Dock and Engineering Company, Metropolitan Gas Company, Mount Lyell Mining and Railway Company Limited, Mount Pleasant Coke Company Limited, and Australian Mines and Metals Association.

Queensland National Bank is interlocked with Bums Philp and Company Limited.

The Bank of Adelaide is interlocked with the South Australian Brewing Com.pany Limited, which is a subsidiary of the Carlton and United Breweries Limited, controlling breweries all over Australia, Adelaide Steamship Company Limited, South Australian Gas Company, Goldsbrough Mort and Company Limited, the Australian Mutual Provident Society, Alliance Assurance Company Limited and Royal Insurance Company Limited, Bagots Executor and Trustee Company, “Wills Gilchrist and .Sanderson, and South Australian Portland Cement Company Limited. In all, there are 35 directors of those banks, but they do more than direct banking policy. The banks are so interlocked with other concerns that these men direct the policy of those who control shipping,, coal, iron and steel, insurance, executor and trustee companies, newspapers, breweries and pastoral companies, whilst through the subsidiaries of the major companies they cover practically every key industry, business, trade and calling in Australia. Moreover, in order to ensure that those concerns shall be managed in accordance with the policy decided on by the banks, there is a Bankers’ Association. That association does not meet just for fun. These 35 men, with 47 others with whom they are associated in the direction of all the key industries and utilities of Australia, including government activities, have had the development of Australia in their hands for many years. That means that the livelihood and well-being of every person in Australia has been in their hands because of the control that they have had over the issue of finance, either in the form of direct credit or by the lending of depositors’ money - not their own, mind you - and also of credit based on deposits. Yet these 35 men have had the audacity to create- an agitation against a monopoly being set up by the Commonwealth Government under this bill.

I admit that this legislation authorizes the setting up of a monopoly, except that the States can compete in their own sphere. These men control not only banking institutions in Australia but, with others, they control every phase of Australian life. Moreover, they are linked with every phase and factor of life in other countries. That is why these controllers of finance are trying to force their will upon the down-trodden people of Europe. That is why Great Britain is in trouble to-day. My statement can be verified by reference to the register of directorates. The Bank of Westminster, the Midlands Bank and, until recently, the Bank of England, were associated with the international organization of financiers which now has its bead office in Wall-street, New York. These men dictate the policies of governments, as witness the recent happenings in Victoria. They have raised the agitation in Australia against this bill. The document which I produced in this chamber last night proves that they are willing to pay whatever expenses are incurred by their branch managers in the fight against it. They pay for all the advertisements that we see in the newspapers and that are broadcast over the radio stations. Why do they do so? Because we are taking away from them, by means of this measure, the privileges which they have created over the years. Those privileges are not their right. The right to govern themselves through their Parliament belongs to the people, but the financiers have taken it away from them. We are now trying to restore it to the people. I aim happy to be able to support a Government which, after the years of agitation in which I have taken part, is attempting to implement this part of the Labour party’s platform. This item of the party’s policy was enunciated long before some of those who oppose it in this Parliament were heard of in politics.


– It is a great privilege and pleasure for me to be able to make some contribution, however small, to the enactment of such important legislation as that now before the Senate. In connexion with the control of finance, Meyer Rothschild, a member of the international financial house of Rothschild, once stated -

Permit me to control a nation’s money and I care not who makes its laws.

That statement has equal force to-day. The truth which it embodies has been proved by facts, figures, history and the bitter experiences of the people. The banking system is composed of institutions which are purely and simply moneylenders. We all know how ruthless money-lenders are. The hue and cry that is being raised by the private banks and their supporters at the present time would lead one to believe that they have some irrevocable mandate to control the financial policies of this country. This is in spite of the fact that, in every national crisis, the banks h’ave failed dismally. Having failed, they have never hesitated to seek government assistance. Yet to-day they talk about political interference! They adopt the rule of injured innocents. That is an indication of their colossal effrontery.

In all the agitation and the propaganda which they use, they take care to avoid any reference to the bank crisis of 1893. They tell us that that was a long time ago and that we should bring ourselves up to date, although there have been one or two crises since then. I shall quote a few figures to show just how ruthless the private bankers have been and how they will not hesitate to repudiate their obligations to their depositors. Before doing so, however, I shall expose the real attitude of financiers towards the welfare of the people. I shall quote an extract from a letter written from London by the Rothschild brothers, the well-known international bankers, to their New York agents when they were arranging to introduce modern banking methods in America. This extract exposes the spuriousness of their professed concern for the welfare of the people. It proves their callous disregard for the people. It is as follows : -

The few who oan understand the system will either he so interested in its profits or so dependent on its favours that there will be no opposition from that class while, on the other hand, that great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system will bear its burden without complaint and perhaps without even suspecting that .the system is inimical .to their interests.

That is a damning indictment of private financiers. Now I shall refer to some figures in connexion with the 1893 bank crisis. Incidentally, it was largely because of’ that and preceding bank crises in Australia that provision was made in the Commonwealth Constitution for the National Parliament to have control over our monetary and banking systems. The report of the royal commission which inquired into the Australian monetary and banking system, presented on the 16th July, 1937, gives some idea of the cruel losses sustained by the public in the 1893 crisis. Depositors with the Federal Bank of Australia and the City of Melbourne Bank alone lost £3,990,000. Of the Queensland National Bank’s £3,117,000 of current deposits, no less a sum-

Senator COOPER:

– All of that has since been paid.


– No less a sum than £2,751,000 remained outstanding in 1936. The Leader of the Opposition (Senator Cooper) interjects that all of that money has since been paid. But many depositors died without ever having had the use of their money because the banks repudiated their obligations during the 1S93 crisis. The banks sought government aid then so that they could be reconstructed, but they did not call that political interference ! Furthermore, during the reconstruction process, while they repudiated their obligations to their depositors they paid dividends to their shareholders at rates as high as 12 per cent.

Throughout our endeavours to reform the monetary and banking system in Australia, we have met the same sort of opposition as we meet to-day. Most of us recall the establishment of the Commonwealth Bank by the Fisher Labour Government in 1911. That brought forth the same crescendo of protests as we bear to-day. We heard defamatory remarks about “ Fisher’s Flimsies “. The press of the time attacked the new bank. The

Melbourne Argus declared, among other things, that the whole thing was “ conceived in idiocy and doomed to failure “. However, only a few years later, during World War I., that fledgling institution was proclaimed by its early critics as the sheet-anchor of Australian finance. In fact, during the war it saved the people of -Australia hundreds of thousands of pounds.

I am referring only briefly to these matters because they have already been dealt with in detail. I consider that they should be repeated in order to remind the people of what has happened in Australia and to warn of what would happen again but for the introduction of this legislation. I refer now to events in 1924. We have been told by previous speakers that the Bruce-Page Government placed the Commonwealth Bank under the control of a board of directors whose members represented financial and industrial monopolies as soon as it had the opportunity to do so. When that change was accomplished, what did the private banks do? They immediately caused the financial crisis of 1924, during which they refused to finance the wool clip of Australia. These are the people who to-day are endeavouring to impress upon us that they are the guardians of democracy and freedom. But listen to this: In July, 1924 - shortly after the Commonwealth Bank had been placed under the direction of the private banks - they demanded the right to draw notes from the Commonwealth Bank to the amount of a further £3,000,000. The chairman of the Commonwealth Bank Board, Mr. John Garvan, said that that right was equivalent to an issue of notes to the banks without interest. He described the proposition as madness. The Treasury upheld that view, but the demand of the banks was conceded. That should be borne in mind to-day, particularly by those individuals who seek to uphold the rights of the private banks.

In August, 1924, the associated banks informed the wool councils that sales would not be financed without additional notes or rights to draw. The note issue department capitulated. In September, 1924, the right to draw another £5,000,000 was conceded. Credits were not released; they were actually tightened. Bates were not lowered, but raised. The newspapers announced that, at the Adelaide wool sale3, the price of wool had fallen. The Leader of the Opposition yesterday mentioned the fall of the price of wool. One of the main reasons for the fall was the manipulation of finance. In Adelaide, the price dropped because the buyers could not obtain bank credit, regardless of their security and at any rate of interest. The Sydney Daily Telegraph described the situation as a “ financial hold-up “, and members of the Opposition, I am sure, will not argue that that is a Labour journal. The banks responded to the outcries with a demand for an additional £1.0,000,000, promising abundant credits and lower rates of interest. But the next day, the Commonwealth Bank Board, the Bruce-Page Government, and the associated banks met in secret session. On the 14th October, 1924, the newspapers announced that the associated banks had delivered their ultimatum and had won on every point. We hear a lot to-day from the opponents of this legislation about political interference with banking : This is an instance, not of financial interference in politics, but financial dictation to politicians. The newspapers announced that the terms imposed by the banks were that they should have the right to draw another £10,000,000, no interest to be paid for the right to draw and 4 per cent, to be. paid on notes actually drawn. It is interesting to note that, although the banks had the right to draw and were to pay 4 per cent, interest on notes actually drawn, the bankers did not draw any notes at all. They operated solely on their right to draw. They made advances at the current rates of 5-J per cent, and 6 per cent. On that day, the Melbourne Herald stated that trades people and others were “ unable to obtain credit on the most adequate security at any rate of interest “. The apologists for the associated banks announced - “Associated banks will now release credit to the public at reduced rates “, but their first action after securing the extra £10,000,000 was again to increase the interest rate by another 10s. per cent., which meant an additional levy on exports of £750,000 a year. On the 17th October the Melbourne Sun NewsPictorial stated -

The demand rate oil London is now 77s. (id. per £100. That is to say, a bank advances money here at the rate, and receives it in London in 30 days’ time. The charge, therefore, works out at 40J per cent, per annum.

Now we come to the ‘thirties. Honorable senators opposite persist in their statements that the Scullin Government was in power in this legislature whereas in fact it was merely in office and everything it did to alleviate the prevailing economic distress was vetoed in this very chamber by a hostile majority. The banks dictated government policy and demanded reductions of wages, salaries, pensions, social services and all forms of government expenditure as the price of their co-operation. In fact, the then chairman of the Commonwealth Bank Board, Sir Robert Gibson, in his reply to the Scullin Government’s request for am increase of the note issue by £20,000,000 to enable it to fight the depression which by that time was advancing like a. landslide, no longer troubled to be polite. He was secure in his recent re-appointment. Incidentally, the Leader of the Opposition asked why the Scullin Government reappointed Sir Robert Gibson. The truth is that it had to re-appoint him because it had no power to restore control of the Commonwealth Bank to the people. Sir Robert Gibson’s answer to the Scullin Government was - “Mr. Prime Minister and members of the Cabinet - you ask me to inflate the currency by issuing another £20,000,000. My answer is that

I b- well won’t “. Sir Robert, of course, used the adjective in full, but I do not propose to repeat it here.

The Leader of the Opposition seemed to derive some pleasure from the fact that he supported the Premiers plan ; but we all know that the result of that plan was that tens of thousands of people literally starved, and tens of thousands of men upon whose services we had to depend for our liberty and freedom from 1939 onwards, could not secure employment and were reduced to the miserable pittance of the dole. How can members of the Opposition be proud of their support of the Premiers plan in these circumstances?

On the 22nd August, 1947, the Melbourne Herald published a statement issued by the Australian Institute of Public Affairs - one of those pseudononpolitical bodies. The statement was that the nationalization of banking would give enormous powers to the Government. But surely if enormous powers are to be held by any group in the community they should be held by the elected representatives of the people - the men who are responsible to the electors. In the statement that this measure would give enormous powers to the Government there is the obvious admission that the private banks hold those enormous powers to-day. We all know, of course, that they do hold these powers, and that they have always wielded them in their own interests.

Let us examine some of the propaganda against this measure: To-day it is more vociferous than ever. One argument is that the people should be allowed a choice of banks, but I point out that whereas in 1.917 there were 23 banks, to-day there are only nine. We know also that further amalgamations are under consideration, including the merging of the Bank of Australasia Limited and the Union Bank of Australia Limited. Have the depositors in those banks been consulted about the proposed amalgamation? Of course not. One day they were banking with the Union Bank of Australia Limited, and the next day they would find they were customers of the National Bank of Australasia. That propaganda, is effective with some people, but I am glad to say that the majority of our people are sufficiently intelligent not to take notice of it. The propaganda of the Opposition parties is designed simply to arouse the fears and emotions of the people. Another choice piece of propaganda is the claim that the Government has not a mandate to nationalize the banks. The Government’s success at the general elections in .1946, after it had passed the Banking Act. of 1945, was a mandate to implement its banking policy; because on every Labour platform during those elections, banking was made an issue. Yet, the Opposition parties have the colossal effrontery to claim that the Government has not a mandate for this legislation. I ask them who gave to the private banks a mandate to control the financial affairs of the nation, and to dictate to its governments?

Another feature of this propaganda is the demand for a referendum. Let us see how delightfully inconsistent are the advocates of a referendum on this matter. They demand that the matter should be submitted at a referendum in spite of the fact that the Constitution specifically gives power to the Commonwealth Parliament in respect to banking. However, to show their inconsistency on that point, the Premier of South Australia, Mr. Playford, stated publicly that, immediately this legislation was passed, his Government would approach the High Court for an injunction to restrain this Government from implementing it. Did he suggest that he should take a referendum of the people of South Australia in order to find out whether they desired him to seek an injunction against this legislation ? No.

The Opposition parties have not produced any evidence to show that this legislation is not in the best interests of the people. The only colourful spot, if it could be called “ colourful “, in the Opposition’s case was that provided by the Leader of the Opposition in the House of Representatives (Mr. Menzies) when he slashed the air and endeavoured to rise to Churchillian heights, reminiscent of Churchill’s famous passage that -Britons would fight the enemy in the streets in the cities, towns and country lanes. The right honorable gentleman played to the gallery, and said, “ We will fight this measure inside the House, outside the House and on the hustings “. That has been the only bright spot of entertainment provided by the Opposition parties in either chamber. The inconsistency of the Opposition parties in demanding a referendum on this issue is made clear from certain action taken by the Bruce-Page Government in 1929, when it was defeated on the Maritime Industries Bill by one vote in committee. That Government did not want a referendum. Mr. Bruce, in seeking a dissolution, stated in a letter to the GovernorGeneral -

In committee an amendment was carried by a majority of one vote declaring that the bill should not be brought into operation until il had been submitted to the .people at a referendum or at a general election.

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.

In this instance, the Constitution gives to the Parliament specific powers with respect to hanking. Therefore, there is no need to hold a referendum on this matter

I now propose to deal with some of the half-truths uttered by the Opposition in its propaganda against this measure. All will agree that a half-truth is worse than an untruth, .because of what it leaves unsaid. The Leader of the Opposition (Mr. Menzies) had said that the late Mr. Curtin had told him that as a private individual he could not obtain financial assistance from the Commonwealth Bank for a business with which he was connected and that he was obliged to go to a private bank. That may be true ; but the rest of the story is that at that time the Commonwealth Bank was not permitted to compete with the private banks. Half-truth No. 2 is the claim by the Opposition parties that the Scullin Labour government was in power during the depression years. We know, of course, that that government was merely in office and not in power, because it did not have a majority in the Senate. The Opposition’s third half-truth is the statement made fairly often, and repeated as recently as the 12th November last by the honorable member for Balaclava (Mr. White), that the only bank to close its doors during the depression was the Government Savings. Bank of New South Wales. He knows, as Ave all know, that that bank was not forced to close its doors because of financial unsoundness, but because of the fact that the private banks had declared war on the policy of the then government of New South Wales. As a matter of fact the actions of the private banks at that time compelled the then chairman of the Commonwealth Bank Board, Sir Robert Gibson, to make a nation-wide broadcast on the 31st May. 1.931, in which he said -

The Government Savings Bank of New South Wales was forced to close its doors because the people who had deposited their money in that bank were led to believe by the foolish statements of those who should have known better, and the statements of those who desired to bring about disaster, that that bank was not in a safe position. . . . The Government Savings Bank of New South Wales was in u perfectly sound position. There was no good reason, on account of lack of soundness, why it was compelled to close its doors.

That nails that half-truth; nevertheless, it is still being used by the Opposition parties in their campaign against this legislation. “With respect to the petitions of protest sent to honorable senators on this matter, I have no doubt that if those petitions were checked considerable duplication would be disclosed. In most of our large cities certain people have been dashing around looking for anything to sign which might be construed as a petition of protest against this legislation. In fact, the statement lias been made that employees in some big establishments could not put aside their lunch paper without some people wishing to put their signature upon it. I have received approximately 500 letters protesting against this legislation; but on making a check I found that 45 per cent, of the names of the persons alleged to have signed them do not appear on the rolls. That suggests that there may be some truth in the statement that the private banks have had agents going around the schools at lunch-time obtaining signatures of children to petitions. I have in my hand a letter which substantiates that, allegation to some degree. It is from a person who writes -

My young sister who turned fifteen years old as well as five or six other juveniles were compelled to sign a petition of protest. Firstly, she refused and was immediately told that she was a Commo. As the son of a farmer (now deceased) let me state my opinion. I am with Labour all the way on this matter. My late father always stated he was only working for the banks.

The Opposition parties, in spite of the facts, continue to claim that once the private banks are nationalized ‘the people will be subject to political interference in their financial affairs. Some of the arguments which opponents of the Go- vernment are using are simply an insult to one’s intelligence. The statement that the private accounts of individuals will be “open to the prying eyes of politicians” might “go down” in kindergarten classes, but it will not be accepted by intelligent people. Since there has been so much talk of “ political interference “, let me cite some irrefutable evidence of banking and financial interference in politics. The late Mr. Lyons, when he was the leader of an anti-Labour government of this country, addressed a public meeting in Adelaide in 1932, in the course of which he said -

It is only because the banks have confidence in my Government that we arc able to carry on.

Does that suggest political interference with banking, or does it suggest the very contrary? If honorable senators require any further evidence, I refer them to a statement made by Sir Bertram Stevens, when he was Premier of New South “Wales. The Sydney Morning Herald of the 21st November, 1932, reported a speech which he delivered at Deniliquin two days previously, in the course of which he said -

Within the last few months, the Government has been endeavouring to lay the foundations of proper economic progress. Now that we have done that, we are .prepared, as courageously as our bankers will allow -

I ask honorable senators opposite to take particular notice of those words “ as courageously as our bankers will allow”. He continued - to get out into the field of development to assist in arresting the drift from the country to the city.

So much for some of the propaganda employed by opponents of the Government.

I propose to deal now with another contention raised by critics of the proposal, which was exemplified in the petitions presented to the Senate this morning. I refer to the professions of solicitude by bank directors for the welfare of employees of the trading banks. Mr. McConnan, chairman of the Associated Banks of Victoria, is one who has expressed great concern for the welfare of the banks’ employees. According to the Melbourne Herald of the 13th September, 1947, he criticized members of the Government for what he termed their “ callous disregard “ for the feelings of 20,000 bank employees, and said that the Government’s proposal, which would “ upset the lives of 20,000 bank employees, their wives and families “, had “ shaken the very foundations of Australian democracy “. Of course, that is all very impressive, but I propose to furnish some indication of the real nature of the concern of bank directors for their employees. Directors of the trading banks are no more concerned now for the welfare of their employees than they were for other employees in 1932. An extract from the annual report of the Bank of New South Wales, published in May, 1932, indicates the real nature of their solicitude for employees generally. It reads -

It is evident that no .proposal for further borrowing will be approved unless it is accompanied by definite indications that the Governments are doing all things necessary to reduce their expenditures in keeping with the conditions of the time. This would involve n reduction in their establishments, with consequent additions to unemployment, but the problem of resultant unemployment is secondary, and should not deter governments from taking necessary action towards balancing their budgets.

That is the real measure of the concern of the self-styled beneficent bankers who are masquerading as the champions of employees. Only a few weeks after the Government announced its intention to introduce the present legislation a photograph appeared in the Melbourne Sun News-Pictorial, which showed a group of those gentlemen sitting around a table while solemnly declaring that they would “ fight the people’s fight “. What they did in the years of the depression furnishes convincing truth of the real nature of their regard for employees.

I wonder if the Leader of the Opposition, who is a member of the Australian Country party, has ever heard of the late Lieutenant Gordon Wilkins? Lieutenant’ Wilkins was a limbless soldier of World War I., and he was certainly not a Labour supporter ; in fact, he was a Country party member of the New South Wales Parliament. He has left it on record that the banks even took his military pension ! Yet bank directors tell us to-day that they “ will fight the people’s fight “ !

I wish to express my pride in having been permitted to support the Government which is endeavouring to enact this legislation. We have set our course for freedom, and, although there may bo heavy seas ahead, we have implicit faith in our pilot and in the justice of our cause.’ We are inspired and fortified by the certain knowledge that the people of Australia will be eternally grateful to the present Government for restoring to the people control of the nation’s credit and monetary system. Control of that system by the Government will usher in the dawn of a new era of national greatness, and we shall enter into a new civilization, which will be reflected in the prosperity and contentment of the people, freed from the ruthless dictation of the private financial oligarchy.

Senator RANKIN (Queensland) [11.43 . - In the heat and turmoil of a hotly contested debate, such as has raged around this nationalization proposal, it is easy for basie and fundamental arguments to be side-tracked and pushed aside in favour of the brightest red herring. But women are not easily side-tracked, and I believe that this discussion should be based upon the actual principles of the proposal. Shorn of all window dressing, and denuded of its many decorations, the proposal is obviously and bluntly the socialization of banking. It represents another step towards the introduction of the socialistic state. Its only motive is to force an unwanted ideology on an unwilling people. The proposal is one of socialism ! Obviously, the Government is uncertain of the reaction of the Australian public to the idea, because it has tried to dress up its proposal in other colours. That attempt has certainly not succeeded. The word “ nationalization “ has been used, and used freely, to describe this proposal. Probably members of the Government feared that the Australian people would find the word “ socialization “ unpalatable, so they tried to “sugar-coat” the pill by employing the neat, tidy word “nationalization”. The Victorian elections have shown, in no uncertain manner, that the Government’s fears were justified, and that Australia does not want socialism. Further evidence of the timidity of the Government is supplied by the very title of the bill. How bland is that title, thu “ Banking Act 1947 “ ! Surely, a government convinced that it was carrying out the will of the people would not seek to conceal its purpose behind such a naive title, but would come out openly, perhaps oven proudly, with the true title, the “ Socialization of Banking Act 1947 “. Phis timidity, this shrinking from an outright expression of purpose, this attempt to soften the harshness of the word “ socialization “, is intended to lead the people to believe that the proposal is something which is necessary for the national well-being, rather than an attempt to place Australia under the yoke of socialization, lt savours too much of tactics, and gives an outright denial to any suggestion of sincerity on the part of the Government.

Let us take the reasons advanced by the Government for the introduction of this bill. I>o those reasons state the truth bluntly and sincerely? No. With characteristic timidity the Government has carefully refrained from stating the clear truth of the socialization proposal. lt is true that two arguments have been advanced to justify its introduction. The first is that certain sections of the Banking Act of 1945 may be attacked on constitutional grounds; and, secondly, the Government contends that nationalization is necessary to combat a depression that may some day arise. I shall deal with the sincerity of those two reasons later in this address, but I say now forthrightly that they arc not basic reasons. The basic reason is socialization, the introduction into Australia of a foreign ideology in a big way - an ideology to which the majority of Australians are firmly opposed. The bill bears all the hallmarks of timidity and uncertainty; it masquerades under an innocuous title boosted as “nationalization”; it is lauded for reasons which are not the real reasons for its introduction. Is it any wonder, therefore, that the people of Victoria recorded the attitude of all Australians towards this measure at the recent elections in that State?

The way in which this legislation is being forced on the people is deserving of strong comment. Surely the Government, does not contend that this is just a harmless machinery measure! Every word spoken by Government representatives tends to show that they realize that this is the most important attack on our existing economic structure that could be undertaken. The bill has aroused opposition throughout the length and breadth of Australia. It has been the major issue in a State election, and has resulted in the defeat of one government. Yet, despite all the evidence that the people are opposed to the bill, the Government refuses a referendum. Is such an attitude democratic? Surely the Government, should consult the people before “mangling” our banking system in this way. The cynicism with which the elections in Victoria have been brushed aside is a clear indication of a fanatical belief in socialism rather than a. sincere belief in democracy. The Government’s obvious intention to take advantage of its majority to force this unwanted legislation on an indignant people is a clear indication that it intends to force socialization on us, whether we want it or not. That, is not. government of the people by the people for the people. I say emphatically that the Government should consult the people before proceeding further with this proposal, particularly as there was no mention of it in the Prime Minister’s policy speech at the last general elections. Why will the Government not submit .the question to the people at a referendum? It has been stated that the Constitution provides for a referendum only on constitutional matters, but surely it would be easy to make this a constitutional issue.

The Prime Minister has stated, and other members of the Government have reiterated, that one of the reasons for this violent change of our banking system is doubt as to whether the Constitution covers certain sections of the Banking Act of 1945. How simple it would be to hold a referendum to amend the Constitution to validate the suspected sections. Is there any reason for not doing so other than the fear that such a. referendum would not succeed? Obviously, the Government wants to put the banks out of action more than it wants to amend the laws in relation to banking. I see in this legislation a desire for the destruction of independence and of initiative, which to me is both alarming and distressing; for the suppression of private enterprise which has done so much to build up this great country; for the regimentation of the people and for controls of various kinds. With legislation of this character on the statute-hook, I fear that we shall see the people being told where they are to go, and what they are to do. I see, in short, the lives and liberties of the people being controlled in every direction. The thought that these controls will extend right into the homes of the people causes me grave concern .and worry. These, I fear, will be the inevitable consequences of this legislation. No proposal since the conscription issue in World War I. has so roused the people of this country. From all over Australia there has been evidence of wide-spread disapproval of the Government’s proposal. From outback villages, as well as from the more settled areas, letters and telegrams of protest have poured in. The Victorian elections showed plainly how the people of that State view these proposals. A majority of the electors there showed what a majority of the electors throughout Australia generally think of this legislation. They are opposed to it, and demand that they be given the opportunity to say so at a referendum. Why not put it to the people? I remind honorable senators of the lines of the Marquis of Montrose -

We either fears his fate too much

Or his deserts are small -

That dares not put it to the touch

To gain or lose it all.

I ask the Minister in charge of the bill to make plain to honorable senators, and to the people, what this proposal for the socialization of banking is supposed to do, and in what way it will serve the community. Tt has been said that this legislation will enable the Government to fend off a depression, because it will have control of the expansion and contraction of credit. It is easy to understand how this legislation will enable the Government to contract credit, because, all it will have to say will be “ Stop credit to the graziers “ and the monopoly bank must do so. That the graziers might be ruined, through having to meet a policy direction by the Government is easy to understand. Whether it is right for the Government to have such power still has to be decided by the electors. What the public cannot understand is how this monopoly bank would enable the Government to expand credit in a depression as well as. or any any better than under the present system. Let us consider the case of a grazier who is losing money because of the low prices received in overseas markets for his wool and meat. In those circumstances does he want more credit to buy additional sheep or cattle? Obviously, he will buy if it suits him to do so, and he can get credit if he is sound just as easily before monopoly as after. That the Govern’ment admits that its remedy for depression conditions is a programme of public works is evident from its programme of emergency works in the various States. That policy in my own State has been reported upon by the Treasurer in his financial statement and incorporated in the report of the Co-ordinator-General of Works. Public works are ordinarily financed by loans, and loans are floated by the Commonwealth Bank or the hank creates credit. So it seems that if a recession should occur, then the Government plans to meet the situation with public works and to raise the money required for that purpose through the Commonwealth Bank, either by means of a public loan or by the use of central bank credit. Just what difference does it make to the creation of central bank credit whether the trading banks are still in existence or whether they are socialized into a huge monopoly, so long as the special deposit account conditions are retained? I suggest that it makes no difference whatever and that the Government already has all the power to expand credit that it. is possible for the nation to give.

All that this bill does is to create a huge government monopoly of banking. It gives the Government unprecedented power over commerce and over our private lives ‘by creating an unhealthy power to restrict credit and by playing on a fear complex about the alleged need to expand credit some day, which power it already possesses. I invite the Minister for Supply and Shipping (Senator Ashley) to explain in simple terms understandable by the public just how the Government’s power to expand credit will be improved or enhanced by the creation of this socialistic monopoly in comparison with the powers it now has. I say that this measure is unnecessary and unwanted. Now I draw an analogy between the broadcasting system and . the banking system of this country. “We have in Australia a very satisfactory banking system, which gives excellent service to the people. We have privately owned banks and we have government banks. We have, in our broadcasting system, privately-owned commercial stations and government stations. We have the right of choice! We have competition ! Therefore, I believe that we have the best system possible in these matters.

As I see it, industrial conscription is clearly proposed in this bill. In effect, the Government is saying to the bank clerk, “ Transfer to the Commonwealth Bank, or else ! “. Nominally the clerk has the right to elect not .to transfer. But, in fact, what is the worth of this right? He has spent years acquiring knowledge and skill at banking, the particular occupation which, he has chosen as the means of earning his livelihood. There will be only one bank, and therefore, unless he transfers to the Commonwealth Bank, he must seek different employment from that in which he is skilled. This is no choice! The married man in particular must either transfer to the Commonwealth Bank or face a reduction of his earning power. Therefore, the employees of the private banks must transfer to the Commonwealth Bank. This, I contend, is industrial conscription. I am amazed that a government which, has promised the workers that there will not be industrial conscription can be so indifferent to its own declared principles as to force this measure upon its citizens.

If we are to enjoy real freedom in Australia the Government must be just and unbiased in the exercise of its powers. The bill contains provision for the payment of compensation to shareholders in the private banks, whom the Government professes to despise, and to the directors of the banks, against whom it has fulminated. But no compensation will be paid to the bank clerk who does not want to transfer to the Commonwealth Bank. Nothing more callous or more dictatorial has been placed before this Parliament since the Commonwealth was created. The Government has, indeed, gone out of its way to create a fear complex about this banking proposal. “ Come into the Commonwealth Bank”, it says, “ or get another job where you cannot use your skill “. Is this fair to a group of men and women who have given faithful service for many years? No! It is tyranny. The many young people who see no alternative but to join a service whose total staff will probably be nearly 30,000, and who will, therefore, become mere units in a huge organization - probably the largest in Australia - are tobe unjustly treated. They should be compensated according to their length of service. This injustice that will be doneto bank employees is entirely contrary to the principles of democracy.

We of the Opposition are sorely concerned about the provisions of this measure. I oppose it bitterly. It has been introduced with timidity. Its true purpose is not disguised by its apparently harmless title. It has aroused a universal protest. The ostensible reasons for its submission are weak and insincere, and the way in which it is being forced through the Parliament, and will be forced upon the Australian people, in spite of widespread protests, is repellent to all Australians and a direct negation of democracy. I am probably one of the last speakers in Australia to oppose the bill as a whole, because we are a small opposition, numbering three against 33. If this bill accomplishes its purpose, and destroys the banking system of Australia, it will destroy something that has played a worthwhile part in the development of the nation. I remind the Senate of these words of Winston Churchill which we should not forget -

We must beware of trying to build a society in which nobody counts for anything except a politician or an official, a society where enterprise gains no reward and thrift no privileges.

In opposing this measure, I am speaking for all those people who have written from all parts of Australia asking me to protest against it.

Senator LAMP:

.- This Government is determined that full employment shall be brought about in Australia, and it is to be congratulated upon its determination to ensure that the banking system shall play its part in keeping the wheels of industry moving so that a state of affairs can be created in which there shall be security for all.

With regard to Senator Rankin’s reference to the Victorian elections, I shall tell an anecdote which I heard recently. In a certain school there was a teacher with a very conservative outlook. The school inspector was not conservative. A little girl came to school one day and said to the teacher, “ Please, teacher, my cat has five kittens, arid they are all Liberals”. “Good”, said the teacher, “ will you tell that to the inspector when he calls next week? “ When the inspector came next week, the teacher whispered to the little girl, “Now is your chance, Mary”. Mary rose and said, “Please, inspector, my cat has five kittens, and they are all socialists “. “ Oh “, said the teacher, “ that is not what you said last week”. “No”, said Mary! “they have their eyes open now “. When I was in the United States of America last year, 1. was invited with other members of the Australian and New Zealand delegations to the 28th session of the Maritime Industries Conference to a dinner given by the Califfornian Bank in the city of Seattle. My worthy codelegate, Mr. Burke, of the Department of Supply and Shipping, Melbourne, said to me, “Lamp, you will never live this down - dining with the bankers “. However, I found that the hankers were very genial fellows indeed. They gave us all we required, showed us over the bank premises, and explained the machinery of banking. I. was very pleased with the experience, but I might mention that at the dinner there was also an elderly gentleman named Holm, who was the delegate of the New Zealand shipowners to the conference. He was the only delegate who voted against everything. But he was the main speaker at the bankers’ dinner, so it is not hard to see where his allegiance lay. Another gentleman who was attending the dinner said to me, “Senator, will you explain who are the chief opponents of Labour in Australia “. I said, “ That is easy; the chief opponents of Labour are the bankers “. The truth of that statement cannot be doubted.

The banking organization in America i.« the same as it is in this country, except that the term “directors” is not used. Directors of American banks are known as “ vice-presidents “, and they are all associated with industry throughout the whole nation. In Seattle we saw the American banking system in operation in a very grand manner. Cheques came into the bank, were checked, and then cashed. They were then passed through a camera which recorded them on film. At the same time, a record was made of when the cheques were presented, cancelled and so on. The object of photographing them is to conserve storage space. The rolls of films take up much less room than bundles of cheques. The manager of the Californian Bank in Seattle, after showing us over the premises, said, “ You can- see the volume of work that goes through a bank “. I said. <: Yes. lt is proof to me that the difference between the interest that you pay on deposits, and the interest that you charge on loans and overdrafts, is not thi; source of your profit “. He said, “ Of course not. Anybody can see that. We make our profit by lending ten times the amount, of our actual deposits. That is the system that we use in creating credit”. We on this side of the chamber have been unable to convince many people in the community that banks do actually create credit, of ten times the actual value of their deposits, but here we have a clear admission by a banker that this is the source of his profit.

The Leader of the Opposition (Senator Cooper) said that he was proud to have been associated with the Premiers Plan. All I can say is that I am very disappointed in the honorable gentleman, whom I thought to be a Christian. Apparently he is proud of the fact that he helped to starve people to death, and after all there is little difference between killing people by starvation and killing them by the sword. In the depression days, we had the spectacle of poverty amidst plenty. There was no scarcity of anything in the world except purchasing power which had been restricted by the private banks. There is a very worthy family living next door to my home, and !.’ recall that during the depression years one of the girls who was lucky enough to have a job had to keep the whole family of four sons and daughters. Throughout the Commonwealth, men were employed by municipal authorities chipping weeds for a miserable pittance.

We say that this shall never happen again; but I also remind honorable senators opposite, that Australia could not stand another depression like the last. It is useless to argue that depressions are not the fault of the present financial system. Either they are the result of the capitalistic system generally, or they are due directly to the activities of the hankers. As I .have said, we saw the spectacle of poverty amidst plenty. All over the world foodstuffs were being destroyed and production restricted. The late Arthur Kitson, a noted inventor and engineer who carried on the battle against money power for 4S years, said -

The world’s troubles are due to the immense power wielded by the international bunkers, who, to suit their own ends, can sway peoples and individuals as they will.

We had an example of that at the recent Victorian election. No political party can defeat an organization that has hundreds of thousands of pounds at its disposal. Kitson went on to say -

Hie money question is the greatest moral and social question which mankind has ever had to consider. It concerns the lives, fortunes and happiness of every human being in society and of generations yet unborn. All other questions sink into insignificance compared with this one. Money is the life-blood of trade and commerce, and, unless there is an ample supply to meet the growing demands of t rane, enterprise is cheeked, trade is depressed, mid the public is unable to secure and to enjoy the abundance of the necessaries and good things of life which inventors and scientists have been able to provide.

That is very true indeed. I have before me a circular issued by the English, Scottish, and Australian Bank. It was given to me by Mr. Sid Richardson, of Burnie, Tasmania. It says -

The .proposed nationalization, by whatever method adopted, will mean, in practical effect, the establishment of mie government monopoly bank, which in due course would be in a position to supervise and direct the personal money affairs of every individual.

The private banks are claiming, in effect, that we, on this side of the chamber, who have been responsible for the greatest humanitarian legislation that the world bias ever known, would stoop so low as to pry into the private financial affairs of bank depositors and use the information so obtained to their detriment. We have no intention of doing what is done to-day by the private bankers and the captains of industry. I shall tell honorable senators of the experience of a friend of mine who is a painter. He tendered for a job worth approximately £4,000 and applied to a. private bank for finance to purchase paint, and employ men to do the work. Shortly afterwards, he received a letter from the bank stating that the loan would not be made. Seeking the reason for the refusal, he found that the contract was ultimately given to another individual who was a shareholder in and a director of the private bank concerned. The painter told me that story himself, and I know it to be true.

As I said before, the bankers do not care for the welfare or the happiness of the people as a. whole. We have heard on several occasions of a famous letter written by Sir Robert Gibson, a former chairman of the Commonwealth Bank Board to the Scullin Government. It has been quoted many times in the House of Representatives, and it, was repeated yesterday by the Leader of the Government in this chamber (Senator Ashley). I believe it. is my duty to quote it again. In February, 1931, ‘ the late Sir Robert Gibson, in conveying a decision of the board to the Treasurer of the day, said -

Subject to adequate reductions of wages, pensions and social benefits of all kinds, and other factors which affect the cost of living, the bank board would co-operate with the Government in maintaining industry mid reducing unemployment.

Provided the Government reduced living standards, regardless of its own policy, and not otherwise, would the private banks allow the Government to carry on. Senator Sandford has referred to a statement made by Sir Bertram Stevens, when Premier of New South Wales, that he would carry out the policy which the private banks permitted him to carry out. I can vouch for that statement, because I, myself, heard Sir Bertram Stevens make his speech on that particular occasion. This is what the Royal Commission on Monetary and Banking Systems said about private banks -

The trading banks must bear some responsibility for the extent of the depression. In some eases they caused hardship by forcing realization of assets, and refusing credit to some credit-worthy borrowers.

As I have already said, I know of a number of families who were obliged to live on a miserable pittance during the depression when, in this country, poverty existed amidst plenty. This feature of the present economic system is admirably summed up in the following lines by Eimar O’Duffy, an Irish poet: -

The banker in his counting house, counting out his money,

The land was overflowing with bread and milkand honey,

The shops were full of good things, the factories likewise,

The banker shut his books and said, we must economize.

Sing a song of plenty, a planet full of fools,

Everybody starving, by sound financial rules.

The purpose ofthis legislation is to alter those so-called financial rules and to guarantee to the people economic security and plenty for all time. Some time ago, the Southampton Chamber of Commerce, in co-operation with the London Chamber of Commerce, appointed a committee to inquire into the causes of ike depression, and that committee reported -

The fact that the authority for the creation of money is vested in private institutions seems an anomaly, and it would seem that a power nothing less than the control of the entire economic activity of the nation is vested in a private monopoly.

That report was endorsed by the London Chamber of Commerce. That committee was of “the opinion that all economic activities were vested in the monopoly held by the private banks. The Leader of the Opposition stated that the pioneers in the early days went out with a few horses, a dray and a crowbar to pioneer our great open spaces. With the honorable senator we believe that the pioneers did a magnificent job. No one would deny them the fruits of their labour. We say that any man, who by his labour creates anything, has every justification to call it his own. But what have the private banks created? They have never turned a sod, or struck a blow ; they have simply created credit, using only pen, ink and paper for that purpose. On that credit they have, in the form of interest, sucked the lifeblood of the people. While we have many wealthy bankers, we have not too many wealthy farmers. The farmers know who their friends are, and when the testing day comes I am certain that they will be found on the side of right and justice.

In 1944, the Union Bank of Australasia Limited, one of the smallest banks of this country, made a profit of £340,612. In the following year its profit was £345,912 and in 1946, the profit was £362,086 or2½ per cent. greater than its profit in 1945. That bank possesses assets valued at £55,000,000, of which £21,000,000 is now placed in the special account with the Commonwealth Bank. I shall now answer some of the lies uttered by the Opposition parties in their campaign against this legislation. A member of the Australian Country party in the House of Representatives made a statement which has been repeated in the Parliament of Tasmania, that the private banks were forced to pay to the Commonwealth Bank approximately £300,000,000 as special deposits, on which the private banks were receiving only 10s. per cent, interest, whilst the Commonwealth Bank was advancing that money at the rate of 3½ per cent. Such action, if it were true, would be inflationary; but we know that the reason for the establishment of the special accounts with the Commonwealth Bank was to prevent inflation. The truth is that the Commonwealth Bank will not release those funds held in special accounts except for the purpose of purchasing war savings certificates or government bonds. Senator O’Flaherty presented very enlightening information regarding the set-up of the banking system. He showed how the interests of the private banks are preserved by the interlocking of directorates, and stressed the immense power that such directorates wield. He also showed how that power was wielded through the representatives of the private banks over the Melbourne City Council to induce that body to challenge the validity of the 1945 Banking Act. The Government was of opinion that that act was valid ; but the private banks are not content to submit to it. Their action in influencing the Melbourne City Council to challenge it in the High Court has rendered necessary the introduction of this measure at this time.

Opponents of the Government’s proposals have heaped ridicule on the Commonwealth Bank. I agree with Senator Sandford that similar ridicule was hurled at the Commonwealth Bank at its foundation. On this point I take the following statement by the late Mr. Andrew Fisher from his speech on the bill which established the Commonwealth Bank-

There must be absolute security for all investments, and we propose to meet public requirements at the lowest rates of interest. Our chief aim is not to make profits but to ensure safety and security of depositors, and as the Commonwealth will honour all the obligations of thebank, it must therefore be as safe as any bank can be. The whole resources of the Commonwealth are behind the bank, both in its trading and in its saving activities, but it is to make its own headway.

Mr. Fisher went on to say

If this bank is a success - as I venture to say all honorable members hope it will be - the profits in time to come, though small compared with those of the present banks, will be enormous as far as reserve and redemption purposes are concerned.

The words, the very wise words, uttered by Andrew Fisher have come true. The Commonwealth Bank has rendered invaluable service to the nation. At the head of the present Government we have a man who will ensure that the Commonwealth Bank shall achieve even greater successthan was prophesied for it by Mr. Fisher when it was founded. Professor Soddy, a world-renowned authority on finance in his work Man Versus Money, stated -

The gigantic interests in the private issue of money have always pretended it to be the public that insist on there being something behind paper or credit money. But during the war the change from gold coins to paper money was effected without the public being in the least disturbed. In fact it may be said that they welcomed the change. These interests arc always trying to persuade the public of the unsoundness of any kind of money they have not the issue of. But to any impartial person forming conclusions from the evidence the present system may appear as fundamentally the worst and most unsound monetary system the world has ever known.

That was written by an acknowledged authority on public finance. He state? quite clearly that the present financial system is the most unsound one which the worldhas ever known. Because of statements such as that it is abundantly clear that it is the duty of the Government to place the financial system on a proper basis. The late Lord Bryce, in his book Modern Democracies, wrote -

Democracy has no more persistent or insidious foe than the money power. It may say, as Dante said when he reached the end of his journey through Hell, the dwelling of the God of Riches. “Here we found wealth the great enemy “. That enemy is formidable, because he works secretly bypersuasion or deceit, rather than by force, and so takes men unawares. He is a danger to good governments everywhere.

William Jennings Bryan stated -

The money power preysupon the nation in times of peace and conspires against it in the hour of calamity. It is more despotic than monarchy, moreinsolent than aristocracy, more selfish than bureaucracy, it accumulates by conscious fraud more money than it can use. It denounces as public enemies all who question its methods or throw a light upon its crimes. It can only be overtaken by the awakened conscience of the nation.

The duty and the purpose of the Government is to awaken the conscience of the nation, and honorable senators on this side of the chamber are convinced that the passage of this legislation will result only in good for humanity.

Senator CAMERON:
PostmasterGeneral · Victoria · ALP

.- Naturally I am pleased to be associated with my colleagues in supporting the bill. In my judgment it represents a step towards the establishment of a more stable economy within the nation, a step which is very necessary, indeed, in the light of our experience. Whenever such a step has to be taken, it naturally arouses a great deal of interest. That is all to the good, because the more banking is discussed the clearer will be the light in which people will view the functioning of the present system. There are three distinct stages through which any new proposal of any magnitude must pass. The first is one of uncompromising hostility; the second is one of discussion and argument, leading to critical toleration of the proposal ; and finally, in the light of success, there is complete and unanimous approval. The act which established the Commonwealth Bank had to pass through those stages. One has only to refer to the newspaper files of 1910 to realize that similar criticism was expressed and the the objections offered to that proposal were similar to those being advanced against the present one. The plan to establish a national bank was ridiculed throughout the country. People were told that if one were established it would lead to national bankruptcy, and the services of lawyers and editors were engaged to satirize and ridicule the proposal throughout the length and breadth of the country. As a natural result of such concerted efforts some people were led to believe that there might be some substance in the criticism. But the Government of that time, to its eternal credit, pursued its policy, and the Commonwealth Bank has proved itself a complete success. During World War 1. it rendered magnificent service to the nation, and enabled the energies of the country to be employed in waging war far more effectively than they could have been if the Government had had to rely upon the trading banks. To-day there is complete and unanimous agreement that the Commonwealth Bank is a necessary institution. Now we propose to take the next step forward, and we find ourselves confronted with similar criticism. But supporters of the Government are not appalled at the hostile reception given to its proposal by a section of the community. The editors of powerful newspapers can criticize us, misrepresent us, and even libel us, but it will not have the slightest effect on us. Members of the legal profession, who are for sale to the highest bidder under our present system, may discuss the legal aspects relatively and subjectively, and even objectively, and seek to advance theses on every clause of the bill, but it will not make the. slightest difference to the Government’s purpose. The step which we propose to take now is one which is dictated by practical necessity, and will prove just as successful in the days to come as the step taken by the Fisher Government when it established the Commonwealth Bank.

Viewed from the standpoint of economic organization, the banking system is the most artificial and evolved feature of the present capitalist state of society. The theory of banking is based upon the assumption that those who deposit their money in the banks will not require fo withdraw it simultaneously. That theory has been tested, and it has been proved to be based upon assumption and not upon fact. Whenever the banks have been tested they have failed. I well remember the bank crash of 1893. At that time, the people had no reason to believe that the money they had deposited in the banks was not safe, but an orgy of wild speculation took place, and when it was over a number of banks closed down. That meant that thousands of workers in Victoria lost their jobs and their homes almost over-night. Had it not been for the discovery of gold in Western Australia about that time, I believe that there would have been a long period of semi-starvation in many parts of Australia. The discovery of gold was indeed most fortunate, because thousands of Australians, including myself, who went to Western Australia, were able to earn a living, which they could not have done in Victoria. That collapse of the private banks was due to mismanagement, ignorance or callousness. At that time, the Government of Victoria guaranteed the financial stability of its State bank, and said that all claims made upon it would be met in full. The people realized then that a State banking institution was much safer than a private bank.

Banks are not in business in order to rendel’ service to the public, but, as has already been stated, they exist for the purpose of making profits for their shareholders. I believe that banking facilities are necessary for the conduct of trading operations, but I arn convinced that if banking were unprofitable the first people ro demand its nationalization would be the opponents of this measure. They would say that banking facilities were a necessary service to the trading public, and that, as banking was an unprofitable undertaking, the State should accept the responsibility for conducting banking business. But, because banking is profitable, and because private banks are able to dictate policy, those who control them want to retain their power. Banking is so profitable that those who control banks do not scruple about the methods that they employ to defeat any proposal to nationalize banking. I am reminded that many years ago Mr. P. I. Dunning said that when profits are adequate, capital is very bold; that a certain return of 10 per cent, will ensure its employment anywhere, and that- a certain 20 per cent, profit will result in eagerness. He went on to say that the prospect of a 50 per cent, profit produced audacity, whilst the lure of 100 per cent, would make capital ready to trample on all human laws. For a profit of 300 per cent, there was no crime at which capital would scruple, nor was there any risk it would not run, even the risk of the owner of the capital being hanged. Banking is so profitable that those in control of banks will stop at nothing to retain their power. That is the reason why, at this moment, large sums of money are being expended in an effort to defeat this legislation. The banks will continue to pour out money to retain their present privileges.

It should be clear to all honorable senators that all the eminent counsel, as well as those respectable editors of newspapers, who profess to be acting in the interests of the people, and even to be willing to sacrifice themselves for the people, are not supporting the banks because they believe that the banks render service to the people, but because it is profitable to support the banks. Their economic interests determine their attitude. Supporters of the Government do not say that the nationalization of banking will prove a panacea, for all economic ills, but they do claim that it will assist in preventing many of the ills, from which the community has suffered in the past, from recurring in the future. National control of banking would provide an effective safeguard against the ill-effects of falling prices overseas and a reduction of exports, and it would enable national undertakings to be financed. What do our opponents offer as a means of preventing falling prices arid another depression 1 They have no policy for such times. Whenever there is a depression, prices fall, and, just as naturally, when prices fall the depression extends. Opposition senators say that the last depression was caused by a fall of prices, but they never try to explain why prices fall. I tell them that prices fell naturally and inevitably because of the low purchasing power of the community, particularly the workers in the community. If the value of the people’s purchasing power was approximately equal to the value of the goods produced, there would be no fall cf prices, and no depression; but when the purchasing power of the people _ is a diminishing quantity, prices inevitably fall. During the depression, markets were glutted with goods which people could not afford to buy. In every country, particularly in Britain and. Australia, millions of pounds had accumulated but were “ frozen “. In a time of plenty there were idle factories and idle hands.

Sitting suspended from 12. to 2.15 p.m.

Senator CAMERON:

– At that time there was a Labour government in office in the House of Representatives. That Government did everything that was physically possible to obtain finance for necessary national undertakings. It proposed, amongst other things, to issue fiduciary notes amounting to £18,000,000. It also proposed to obtain revenue in other ways. At that time, however, the present numerical strength of the parties in this chamber was reversed. There were 33 non-Labour senators and only three Labour senators, and whenever a proposal was submitted by the Government for the raising of money to keep industries going and to relieve unemployment, the -Senate refused its approval. In other words, for all practical purposes, the anti-Labour senators were -bank “ Yos “ men. Whatever policy the .banks laid down - and they did lay down policies as we all know - the anti-Labour majority in the Senate adhered to with the result that nothing was done that it could possibly prevent. Yet hundreds of thousands of Australian workers had been reduced to working for the dole; homes were being broken up, and families disbanded. A state of chaos existed. These conditions prevailed right up to the outbreak of war in 1939. It will be recalled that in 1931 there was considerable criticism of the private banks not only in this country but also throughout the English-speaking world. This criticism was so sustained and so effective, that the Government of the United Kingdom appointed a committee to inquire into the operations of these institutions. The Lyons Government subsequently took similar action in this country. The body appointed by the British Government was known as the Macmillan committee which, in its report submitted to the House of Commons in June, 1931, stated -

When practical bankers and business nien can explain clearly the causes of the trade cycle, why prosperity is followed by depression, and depression by prosperity, and can find practical means to avoid economic waste caused thereby, and when they can adjust more satisfactorily the powers of the modern world to consume and absorb wealth with its powers to produce wealth, they will have more justification than they now have in ignoring and treating as of little or no consequence economic research into these very difficult but vitally important problems.

That was the finding of the Macmillan committee indicting the private banks, newspaper editors, and anti-Labour politicians who claimed the right to decide financial policy on the ground that the ordinarypeople were not competent to express opinions. Evidence was taken by the committee throughout the length and breadth of the United Kingdom from men occupying responsible positions. The committee’s report continued -

The practical man is satisfied to make profits when the sun shines, and to bear bis losses when bad times come, regarding these alternatives more or less as the laws of nature, when very oftenthey are due to the working of the monetary machine and are to some extent under human control.

That is a comparatively mild criticism of those individuals who controlled the money machine of the United Kingdom at that time; but it all goes to show that private control of public credits has been the object of sustained criticism throughout the years. Practical experience has proved beyond doubt that, should another depression occur, the attitude of the private banks would not be any different from what is was on the last occasion, when hundredsof thousands of people were reduced to semi-starvation in this country, and millions in the Old Country. Not a hand was stretched out to assist these people by the reactionary forces then controlling our financial destinies. Fortunately, inthis country to-day, there is a Labour government with a majority in both Houses of Parliament. We have learned the lessons of bitter experience. Our opponents claim that whereas we are merely theorists, the bankers are practical men of experience; but for all their practical experience they have proved themselves blind in times of economic adversity. No attempt was made in those days to give effect to the policy supported to-day by Senator Rankin, namely, the implementation of a programme of national works to absorb the unemployed.

Anything that was done to relieve the position was done by powers over which the hankers and even the parliaments of that day had no control. As I have said, we have learned the lesson of bitter experience and this Government could not justify its existence if it did not attempt to do what it is doing now. When prices fall and our exports are curtailed, as is likely to happen when countries overseas are rehabilitated and the world’s markets restocked, we must be ready to act, because if we are not ready, the position that will arise may very well be worse than that which prevailed in the thirties.

As Senator Grant said, private bank domination, assisted by acquiescent governments, has been responsible for upheavals throughout the world. Although the United States of America is the leading creditor country in the world, and is 100 per cent. self-contained, although it holds the bulk of the world’s gold, and has practically unlimited resources, unemployment there is increasing. This must surely be an indication of maladministration or bad management by those in control in the political and economic fields - and we know that those in control of the economics of a country generally control its politics also. What have the leaders of the United States of America to offer by way of relief? Nothing, but mere generalizations, mere appeals to sentiment, and emotional attacks on other people. No attempt has been made to relieve the situation in a practical way, but there is in progress a heresy hunt against those who would challenge the Government, and a similar heresy hunt would have been organized in Australia if our opponents happened to be in power. Such demonstrations are organized to stifle criticism of those who are really responsible. During the last depression, our political opponents had no policy to deal with the fall of prices and the contraction of overseas markets. Neither did they have any policy for the permanent relief of unemployment. Indeed, the only effective remedy which they discovered for unemployment was to participate in the war. War always solves unemployment problems, and it will be resorted to in the future, no doubt, just as it has been in the past.

Those who control banking are able to regulate debits and credits, and thus control production. During the depression years, the banks reaped a veritable harvest, as they hope to do again. They foreclosed on every worthwhile property that they could get their hands on, and made no attempt to recompense the people whose property they took. In this way, they . obtained a stronger grip on the means of production, as was indicated by Senator O’Flaherty. There has been developed an interlocking system between banking and the actual means of production.

National control of banking does not mean the socialization of banking. National control of railways does not. necessarily mean socialist control of railways. For all practical purposes, the railways are privately owned - that is to say, the policy of the railways commissioners is determined, not by what the government would have, or by what the people would have, but by financial obligations. When two-thirds of the revenue earned by the railways has to be set aside for the payment of interest on borrowed money, the policy of the railways is necessarily determined by financial obligations. Those who say that the national control of hanking means the socialization of banking have a good deal to learn.

It has been said that national control of banking would interfere with the freedom of the people. It would not do so any more than State control of banking has done. When we speak of the freedom of the people, let us remember that there is no such thing as absolute freedom. Nobody enjoys that, but there is such a thing as restricted or regulated freedom. The freedom of the working man is determined, more or less, by his wages. The lower the wages he receives the less freedom he has - the less freedom of access to the things by which we live. The greater his income, the greater access he has to the things by which we live. Consequently, the man on the basic wage has less freedom than the man on the higher inco me. The worker’s freedom, economically, politically and socially is determined by the amount of wages he receives. It is true that the worker, at the ballot box, is equal to the wealthy mau, but after their votes are cast the worker goes back to the workshop at the same rate of pay, whereas the rich man, his employer, goes back to his luxurious office and his luxurious home. So long as the wages system remains as it is there can be no such thing as economic equality. Economic freedom does not exist for the worker beyond the limits of his wage rate. While it is good that the worker should enjoy political freedom on equal terms with his employer, his freedom should be extended to allow him to live and work on equal terms, economically. That has never yet been done, but this Government proposes to take a step in that direction. By national control of banking, it proposes to ensure that the worker shall be at least guaranteed continuity of employment. The private banks were never able to give them that; indeed, they never intended to do so. The private banks depend upon profits. The greater the profits the less the service rendered to” the community. Profit has been increased to the point where it has resulted in reducing the purchasing power of wages as never before, whether that power is expressed in depreciated currency or otherwise.

The opponents of this measure need not fear that they will wake up the day after it has been proclaimed and find the country in a state of chaos. As a matter of fact, the national control of banking will be accompanied by smoother working of industry. Most industrial disputes have their origin in the provocative attitude of incompetent management, and that cause will be modified, if not eliminated, by the national control of banking.

Many authorities have been cited during this debate, and the opinions have been quoted of men occupying important and responsible positions in the banking world. I quote the following statement of Vincent Cartwright Vickers, who was Deputy Lieutenant of the City of London, and a director of Vickers Limited for 22 years. In 1910 he was made governor of the Bank of England. He resigned the appointment in 1919. He wrote a booklet recording his experiences, his conclusions and what he knew about the technique of banking. I quote a few paragraphs from it for the information of honorable senators. He said -

The present order o£ our lives is governed and controlled by the governors and controllers of money, so that those who have developed the business of letting out strawberrybaskets on hire now control the production and consumption of strawberries.

If an economist from Mars, or a little child of ordinary intellect, were told the present position they would rock with laughter at the blind stupidity of mankind.

Slowly but inevitably the old financial system is crumbling under the weight of modern conditions and the better education of the people; the sooner it crumbles the better, and the sooner it gives way to a better and more modern technique the sooner will the world achieve goodwill and peace among men.

The chaotic state of the world is due to the inability of consumers to use and profit by the world’s ability to produce.

If once we can decide what it is that constitutes a barrier between the producer and the consumer whilst both remain dissatisfied, we shall have discovered not only the main cause of the world’s discontent and of the existing enmities and jealousies among nations, but at the same ..time the true road to the peace of the world.

Let us discard all biased opinions and we shall find it possible only to arrive at one decision - that the health and welfare of the individual, the happiness of the community, thu contentment of the nation, and the pence of the world art) mainly, if not entirely, a monetary problem.

Those are not the words of some neophyte, not the words of a man with no practical experience of banking; they are the words of a man who occupied the position of governor of the Bank of England, the observations of a man who grew up with banking, who spent a lifetime of practical experience in the banking profession. I paraphrase his observations in this way : The law of cause and effect operates in the world of human affairs just as it operates in the external world. When we establish, as we can, the relationship between cause and effect, we shall find that most of the troubles of this world, within the boundaries of the nation, and internationally, are due mainly to dictatorial or private monopoly control of finance in the various countries. To-day that control has been challenged as never before. It has been challenged here in a peaceful and constitutional way. As one who participated in bringing about federation years ago, I am certain that the reason why power to control banking was given to the Com. mon wen! th in the Constitution was because of the disastrous and tragic experiences brought about by the failure of the banks in 1S93. The framers of the Constitution, one of whom is living now - I refer to Sir Isaac Isaacs - would, if they were here, support what I am saying. The charter has been handed to us in the form of a Constitution, and it is our obligation to give effect to it if we are to avoid, in the future, all the misery and hardship that has been caused in the past by maladministration, ignorance and indifference. We intend to give effect to the heritage that has been handed to us, and when this bill becomes law this country will be all the better for it.

Senator CLOTHIER (Western Australia) [2.42 1 . - Those who have listened to the broadcast speeches delivered by honorable senators on this side of the chamber must have felt that the progaganda disseminated in the press and on the air by the opponents of the nationalization of banking has been effectively answered. The Government has given an undertaking that when this bill becomes law, and the Commonwealth Bank is the sole banking institution in Australia, the bank shall conduct its business without discrimination. The people may safely leave their financial affairs in the hands of a government which so effectively cared for their interests and safety throughout the war. I have heard it repeatedly said in Western Australia, and I have read in many letters, that the young men who work in the banks are frightened of their jobs because of this proposal. They have been forced, time and again, to sign petitions opposing the nationalization of banking for transmission to members of Parliament. If there be any dictatorship, surely that is where it lies. I have received many letters and telegrams indicating that the senders would mark No. 4 against my name on the ballot papers at the next elections. These threats do not deter me. When the time arrives, I am prepared to abide by the decision of the people in relation to this proposal. People who utter such threats do not know what happened in times gone by. I remember the bank crash in Queensland, and die sufferings and misery that resulted from it. Some of my relatives had been depositors in the banks which closed their doors. It would be interesting to know if they or their descendents got their money. When this bill is passed, I shall ask the Government to conduct an investigation in order to ascertain whether they were paid. A bitter campaign has been waged against this proposal, the full weight of the associated banks being directed against ir. A great deal of money has been spent by both its protagonists and opponents.

Despite the fact that the nationalization of banking is a plank of its policy, the Australian Labour party has had to expend considerable sums of money in rebutting the false propaganda spread among the people by the banking interests. The amount of money expended in sending letters and telegrams to members of Parliament alone has been colossal. In one envelope I received no fewer than 47 telegrams, all of which had been lodged at a post office in Western Australia at precisely the same time ! I have also received letters galore from various places in all parts of Western Australia. In some instances as many as 40 or 50 letters had been signed and addressed in the same handwriting. Prom the way the letters were folded one could tell that only one person bad done it. I also received a number of stereotyped letters which were signed but did not show the addresses of the senders. These facts prove that the great majority nf these letters of protest are simply “fakes”. I know two girls, both aged fifteen years, who signed so-called petitions of protest in two banks in Western Australia.- Those facts indicate the method by which the banks have sought, to work up these petitions. Obviously, they will achieve no purpose. Indeed, they benefit only the PostmasterGeneral’s Department, the expenditure incurred in postage and telegrams serving only to swell the revenue of that department.

Those who oppose the nationalization of banking claim to be defending the liberties of the people. Their hearts bleed for the little man. However, the people are not deceived by this propaganda. Certainly, those people who remember the depression will not be deceived by it. During the depression, I was a member of the State Parliament of Western Aus tralia, and I and my colleagues in the Labour party in that legislature fought tooth and nail to obtain a “fair go” for the people. However, the only relief granted to them was the dole at the rate cf 7s. per unit. During that period I was not able to have a meal without being interrupted by callers who, in their distress, came to me seeking assistance.

The private banks must take the blame for causing the depression, because they called up overdrafts and thus obliged employers to put off hands. The municipal councils ami roads boards were the first bodies to retrench their employees; and it was only a matter of time before small shopkeepers and small industries had to put off their employees. Many tragic cases of distress came to my notice in those days. On the other hand, 1 admit that some individuals were not deserving of sympathy. ‘ I recall that the father of five children who, in respect of himself, his wife and his family, received relief at the rate of 49s. a week, refused to accept a job which I obtained for him. When I asked him to cut down some small gum trees in a school yard he replied, Why can’t you pick me a better job than that?”

I wholeheartedly support this measure. I shall continue to fight the private banks. Senator Rankin declared that this proposal was not submitted in any way to the people at the last general elections, and, therefore, the Government has no mandate for this legislation. That statement is untrue. I participated in the last general election campaign, and I dealt with the Government’s bankingpolicy at every meeting that I addressed. 1 n any case, even if there were some ground for the contention of the Opposition that this was not an issue at the last general elections, the fact remains that the people, in returning this Government to office in 1946, endorsed the hanking legislation that it enacted in 1945.

The Opposition parties also claim that this matter should be submitted to the people at a referendum. It is clear, however, that the Constitution gives to this Parliament specific powers with respect to banking. For that reason, no case can be made out for the holding of a referendum. I should like to know whether the private banks, who clamour for a referendum, have even thought of consulting their shareholders to obtain their authority for the huge expenditure incurred in the present campaign against the Government. It is also interesting to note the inconsistency exhibited by various members of the Opposition parties with respect to financial policy. Speaking in the House of Representatives in November, 1935, the honorable member for Indi (“Mr. McEwen) said -

There is a doubt in the minds of an over “helming majority of the electors of this country as to whether the banking and monetary systems have kept pace with our social evolution and industrial progress. There is not mie of us who is not aghast at a condition of affairs in which production, increased beyond the dreams of our forefathers, exists side by side with dirt want. Many of our people, even the very people who arc producing in such abundance, are ill-fed and ill-clad. Many trained thinkers claim that our banking system is either wholly or partly responsible for our present condition. The increasing strength of radical thought has placed vested interests so much upon the defensive that they have been utterly stagnant in relation to any endeavour to improve the system. The inert power of resistance of nervous or selfish vested interests, and the mediums of propaganda which they control, have prevented a mandate from being received by those who have sufficient enterprise to act.

Despite that statement, the honorable member is out to defeat the Government’s proposal by hook or by crook. This measure is designed to protect the interests of the people by effecting alterations of the kind which he advocated in the statement which I have just read.

The Commonwealth Bank was established in 1911 as a people’s bank. It was founded in the face of bitter opposition on the part of the same interests as those now attacking this legislation. Since its foundation, the Commonwealth Bank has rendered notable service to the nation. Ft expanded rapidly during World War I. and in the intervening years. In 1924 the Bruce-Page Government placed the hank under the control of a bank board to which the Government appointed representatives ot the big financial and commercial interests.

Let us see how the private banks serve the ordinary citizen. I know of the case of a young man in Western Australia who applied to a private bank for an advance to enable him to establish a business. He was told to return within three days. When he did so, he was refused the accommodation he required ; and it was clear that the reason why the bank rejected his application was because he intended to open a business in competition with certain persons who were shareholders in that bank. That is typical of the attitude of the private banks towards the ordinary citizen. In 1910, the private financial interests which endeavoured to defeat the proposal to establish the Commonwealth Bank, told the people that, owing to the financial policy of the government of the day, the nation was in danger of being pushed over the edge of a precipice, and that the implementation of that policy would cause industrial chaos. All of us recall the cry of “ Fisher’s flimsies “. The people were told that bank-notes would become utterly worthless, and. would not buy the working man even a pint of beer. Reverting to the campaign being conducted against this measure, I have in my hand a circular, in the form of a cheque, issued by the private banks, which reads -

Stop payment! Sept. 10, 1947, and onwards. Trading Banks of Australia. Pay Federal Treasurer. My rights, mv freedom, my future. U. N. Mee.

It is printed in Victoria ! I invite honorable senators to have a look at it - it is worth framing! In 1945, the banks and vested interests did everything possible to have the legislation defeated. They concentrated their propaganda, at that time upon the working man, and warned him of the terrible consequences that would follow the passage of that legislation. The Leader of the Opposition in the House of Representatives (Mr. Menzies), according to the Da;ih/ Telegraph of the 13th March, 1945, stated that, the enactment of the measure would place the note issue under political control, and said, “ People’s money will not be worth taking home”. However, no one has heard that the right honorable gentleman has refused to take any money that came his way. All the arguments which are now being put forward in opposition to the present measure were raised when the bill to establish the Commonwealth Bank was before Parliament, and again in 1945. when a ‘previous Labour government sought to reform the banking system. We all know what the banks did in the bank crash of the nineties, when the Government had to take them over, and again in the depression of the ‘thirties. They blighted more lives than the worst floods, droughts and bush-fires that this country has experienced, and more men’s spirits were broken by overdrafts called up than by the calamities of nature. The banks recalled advances without discrimination, and, as I have said previously, that was the principal cause of the depression in this country. The recall of overdrafts resulted in employers having to dismiss their staffs in order to meet their obligations. At that time, I had an interest iii a shop. I was more or less a “ dummy “, and I know that, because of the banks’ attitude to my partner, I had to lend him money to obtain tobacco. They forced him to dismiss some of his employees. 1 say, without fear of contradiction, that it was the action of the banks which , precipated the depression in this country.

Two honorable senators opposite who spoke on this bill had a great deal to say concerning the creation of a .banking monopoly. But, as we all know, a banking monopoly already exists. The nine trading banks of this country exercise an almost complete private monopoly. They determine the policy in regard to advances and they fix standard interest rates. This measure intends to convert their private monopoly into a public monopoly. The directors of the trading banks and their satellites ought to be the last people in this country to complain of dictatorship. In 1925, they went on strike and refused to finance the wool clip. The Leader of the Opposition (Senator Cooper) might remember that. Even the Sydney Morning Herald described their action as a “ financial hold-up “, and the Melbourne Herald pointed out that business men were unable to secure credit, even on the best security, at any rate of interest. There is every reason to believe that the private banks did not actually advance any money; they simply advanced credit to the extent of four times the amount demanded, in the knowledge that they would reap their reward later on. Of course, they charged interest of more than 4 per cent, on the money. The attitude adopted by the trading banks at that time was one of “ stand and deliver “, and is an example of the way in which they hold trade, commerce and industry at their mercy. They even dictated terms to the Commonwealth Bank, which had to do as it was told.

I propose to show now the part played by the private banks in ruining farmers during the depression. It will be remembered that the report of the royal commission which inquired into the plight of wheat farmers years ago, showed that the total debt of the wheat farmers of Australia was estimated at £151,000,000. In 1936 it was stated that in Western Australia alone there were 2,791 abandoned wheat properties in the possession of the Agricultural Bank, and according to the Melbourne Herald of the 19th March, 1940, Mr. Dunstan, the then Premier of Victoria, declared that there were 2,000 deserted wheat, farms in that State. Mr. E. A. McLarty, managing trustee of the Agricultural Bank, had something to say on the matter also. Mr. McLarty is a brother of the present Premier of Western Australia, and I know him well. In evidence which he gave before the Commonwealth Grants Commission some years ago he stated that the cause of the farmers’ troubles was indiscriminate lending to the farmers-

Senator Cooper:

– The honorable senator means that the banks loaned too much to the farmers?


– The Leader of the Opposition knows that, does he?

Senator Cooper:

– I am asking the honorable senator, because, he has previously asserted that the banks would not loan the farmers anything. He cannot have it both ways.


– Of course they loaned them too much.

Senator Cooper:

– The honorable senator has been contending that the banks would not lend them anything.


– I did not. The fact is the banks loaned the farmers whatever they wanted in order to place a rope around their necks. As I was saying, Mr. McLarty stated that in his opinion the causes of the farmers’ troubles were indiscriminate lending to the farmers by the banks, the extension of excess credit, extravagance by farmers, high interest rates and over-capitalization. The banks even went so far as to urge people to accept overdrafts. Advances were made so that people could buy property at* exorbitant prices, and when the boom burst and prices dropped the banks foreclosed and farmers were forced off their properties. Do honorable senators opposite deny that?

Senator O’sullivan:

– I - I do.


– The honorable senator does not know anything about farming. No restraint was exercised by the private banking institutions during the boom period; they safeguarded themselves in every deal, and, as usual, it was the farmer who paid.

Senator Cooper:

– Did not the Agricultural Bank of “Western Australia have to write off some millions of pounds of the amount which it had advanced to the farmers ?


– Yes.

The CHAIRMAN (Senator Nicholls:

– Order! Senator Clothier has the call.


– For many years past primary producers have suffered bitterly at the hands of the private banks, especially during the depression when thousands were ruined and forced to leave their holdings. Farmers received no consideration from the private banks, which relentlessly foreclosed on all who could not meet their obligations. It is being asserted to-day that the average countryman is opposed to the nationalization of banking. That is not correct. Primary producers have not forgotten their bitter experience with private banks in the past, and this is proved by the adoption of certain resolutions by members of various primary producers’ organizations. One such resolution reads -

At a. conference of the Victorian Wheat and Wool Growers Association, held in March. 1945, more than 200 delegates voiced their approval of the Commonwealth Bank hills, and declared that, unless the National Government had continuity of financial policy, it could not run the country.

Honorable senators opposite cannot deny that, because that resolution is on record.

I do not object to any opponent of this measure voicing his opinion of it, but I do object to his resorting to -untruths. That is exactly what Mr. R. G. Casey, who is going around the country trying to stir up opposition to the Government, has done. He told a deliberate untruth regarding a former Prime Minister, the late Mr. Curtin, in connexion with Mr. Curtin’s association with the W ‘estralian Worker. I invite honorable senators from Queensland to take notice of what I am about to say in this regard.

Senator Cooper:

– I know all about it.


– The Leader of the Opposition knows that it is true?

Senator Cooper:

– I know that what the late Mr. Curtin said was true.


– The real facts of the matter are contained in a recent newspaper article, which stated -

Anxious to make capital out of this story in the bankers’* campaign against the nationalization of the private banks, Queensland People’s party President Hulme improved on it at the City Hall, and said that the Westralian Worker - he said he thought that was the name of the paper - wanted from the Commonwealth Bank, with whom it had an account, additional accommodation of £35,000, The Commonwealth Bank refused. “The editor at that time was John Curtin “, said Hulme, “ and he took the account from the Commonwealth Bank a,nd gave it to a trading hank, and it has remained with it ever since “.

Casey said: “As has been mentioned, the editor of the Westralian Worker, which banked with the Commonwealth Bank, found that the Commonwealth Bank refused to carry the paper’s overdraft any longer. He went to another trading bank, which looked over the enterprise and then gave him the overdraft”.

Those statements were replied to later by the managing editor of the Westralian Worker, and the newspaper from which I have read the foregoing extracts published the text of the letter from that gentleman. That letter stated -

Facts regarding the Worker account are: In February, 1932, the Commonwealth Bank refused the company the extra financial assistance sought. In April, .1932, the Commonwealth Bank advised that the company had overdrawn by £340 in excess of the authorized limit of £3,500, and asked that the amount be brought within the authorized limit without delay.

The Commonwealth Bank was then approached, but this bank refused to take over the company’s account.

Tim Hunk of New South Wales was then approached, and that hank agreed to the company’s application for an advance limit of £5,000. Thu account was then transferred to this bank, where it still remains. John Curtin was never on the board of directors of the company . . .

As those facts reveal, Mr. Casey’s statement in the City Hall, Brisbane, was false, and was an attempt to poison the minds of the people. The article, quoting the letter, continues - “‘Lt was all arranged by our thun manager, the late David Watson. The date of the transfer is significant, ft was then that the Commonwealth Bank was being smothered by the associated banks, mid ours was but one of the accounts taken from the Commonwealth Bank by those methods. At that time we had assets worth at least £25.000. The Bank of New South Wales took a mortgage over everything. T hope these facts will be of use to you. Yours faithfully - O. Walters, Managing Editor.”

Thu cold dispassionate recital of facts in this letter proves the story told by Cox and Hulme and Casey a flagrant lie. It is significant beyond measure that though both Hulme and Casey made a strong point of this story when addressing the people in the City Hall (Casey’s speech being- broadcast), neither the CourierMaU noi’ the Talcum-ph printed one word of it. in their reports next day. Why? Why did not these papers print one solitary word of this story which Hulme and Casey presented as a (bunning indictment of Commonwealth Bank practice, and also as witnessing to a break with tile bank bv John Curtin 1 Was it because they knew it to be a lie? We cannot escape the conclusion that they did know.

When a person tells such untruths it is time he got out of business. Of course, any legislation does not suit everybody, but the banking bill suits the majority. The minority are those who have vested interests in the private banks, which operate for profit, whereas my idea is that nil bank profit* should belong to the people. The people can trust the Government. lt did » splendid job in the war find it has done and will continue to do a. splendid job in time of peace. It is interesting to tell the public what the Government is doing by way of subsidizing vari ous commodities to keep the price of food down. Details of the subsidy vote for the current financial year are - Potatoes, £2,500,000; tea, £5,500,000; whole milk, £1,800,000; basic wage adjustments, £400,000; wool for home consumption, £2,400,000; imports other than tea. £2,500,000; coastal shipping freights, £1,000,000; other items, £600,000. But for the subsidy on tea it would cost 2s. per lb. more, but many of the people outside do not know that.

A reliable measure of the efficiency of Labour legislation is the opposition of its opponents, who are prepared to pour out their money in an effort to defeat it. I cite the Chambers of Manufacturers, the Chambers of Commerce, the anti-Labour political parties and the Bank Officers Association, which are banded against this legislation. 1 know several young men employed in private banks who are solid supporters of Labour. They have campaigned on my behalf. Now they dare not say anything because their bread and butter would be in jeopardy. When this legislation is passed their futures will be assured in every way.

Four times as many people bank with the Commonwealth Bank as with the private trading banks. The number of depositors with the Commonwealth Bank increased from 2,340,000 in 1939 to 3,800,000 in 1947.

Senator Cooper:

– Of that number 3.600.000 are depositors in the Savings Bank’.


– The honorable senator seems to know all a.bout it.

Senator Cooper:

– I do.


– I disagree. Deposits in the Commonwealth Bank have risen from £14.6,000,000 in 1939 to £435,000,000 in 1947. What an example of confidence in the Commonwealt,1 Bank! Only 1,250,000 people bank with private banks. Since 1941, when the Labour party took power and was called upon to save Australia, it has justified the confidence the people have reposed in it. The private banks have spent vast sums of money in campaigning in the press and over the air against this proposal, but they are wasting their time and money in seeking a referendum on the subject. I heard a remark about the result of the Victorian general elections. We are not worrying about the defeat of the Victorian Labour Government, because Victoria, has never been a Labour State and the Labour party has gained office there only now and again.

No one would deny that the late John Curtin saved Australia. He had a worthy successor in the present Prime Minister, who is a man with a great love of humanity. He has my support and that of all my colleagues. We are united to-day in the Labour party as we have never been before. All the propaganda in petitions, letters and leaflets, which is designed to split the party, has only strengthened our solidarity.

The cause of the depression is a matter which has brought about a good deal of controversy. Sir Herbert Holden, however, an eminent banking authority in Great Britain, is very definite as to his view on the subject. He stated -

What brought about the depression? Everybody knows that the depression was caused by the bankers the world over in following up their time-old policy in calling up their overdrafts and advances.

It will be seen, therefore, that the private banks were responsible to a large extent for the depression, but also were responsible for the continuance of the suffering and the misery that took place during it. Men had to keep families on a dole of ls. a day. With the private banks no longer operating, such a state of affairs will never recur. In pamphlets issued by the Institute of Public Affairs, which is the mouthpiece of the private banks, it is alleged that without the help given by the trading banks, the 1930 depression would have done much more harm. That statement is not correct. It will be remembered that from 1929 to 1939 the average number of unemployed was 250.000. These 250,000 had wives, children or dependants and all would represent approximately 1,000,000 persons on the dole. The conditions then were heart-rending.

This bill will be passed into law; nothing will stop it. The poisonous propaganda that we have had thrust under our eyes strengthens our resolution rather than weakens it. One man in my suburb wrote to me -

Dour Bob, - I have always supported you, but if you do not oppose the nationalization of banking and vote for a referendum I will vote for you last at the next elections’.

In my reply, I told him that he had never voted for me in his life. I went on to say that when the provisions of the Bank-

Sena (or Clothier. ing Bill had been explained to him, and he realized that much that appeared in the press and over the air was not the truth, but mere “ hooey “, he would have a different opinion and would be perfectly satisfied. I know of many farmers in Western Australia who transact their business with the Commonwealth Bank and are perfectly satisfied. There was a time when that bank referred prospective clients to the private banks with which they had previously dealt. If the financial position of an applicant for a loan was sound, the Commonwealth Bank advised the private bank that it would be safe to make an advance to him. Otherwise no advance was made. Those days have gone.

What is the reason for the hostility to this measure? Those who are leading the fight against nationalization say that the bill is opposed to all ideals of democracy, freedom and liberty. Those people become staunch advocates of these principles only when it suits their purpose to do so; but the reasons stated by them are not the real reasons for their violent opposition. They are not concerned about the ordinary man except to use him for their own purposes. The real reason for their antagonism is to be found in the statement by Mr. Reginald McKenna, a former Chancellor of the British Exchequer and Chairman of the Midland Bank, the largest trading bank in England. Addressing the shareholders of the bank in 1924, he 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.

In the past the private banks have had complete control of the credit of the Australian nation. As is well known, all the large commercial and financial interests are directly connected with the directorates of the various trading banks, and as a consequence these men wield a power far greater than that of any government, and are able to manipulate money to such a degree as to bring greater profits and further power to themselves. Seeing this power slipping away from them and being placed in the hands of a national hank responsible to the Government, which in turn is responsible to the people, these men are now making a desperate effort. They are using any means, available to them to safeguard their interests and retain their power. These are the people who fight against this proposal and tell the people that it will mean the los9 of their freedom. I remember the time when, in the suburb of Maylands in which I live, there were big notices, 20 feet by 10 feet, depicting men and women rushing in through the open doors of a bank to withdraw their money, because of their fear of losing it in the event of a Labour government being formed. That is the way in which those in control of the banks try to poison the minds of the people. That kind of propaganda has been successful in the past, but it will not work this time. The people are more enlightened to-day.


– The people of Victoria showed recently how enlightened they were.


– The honorable senator would be wise not to take too much comfort from what happened in Victoria. It is necessary for the Australian Government to have complete control of the country’s finances. Members of the Liberal party have said that, if returned to power, they will restore the private banks. I can understand their desire to do so, because they are the servants of vested interests. The banking institutions are spending a great deal of money in the campaign against this legislation. It will be interesting to note whether their next balance sheets will reveal a lowering of dividends to their shareholders. Mr. Mackenzie King, the Leader of the Liberal party in Canada, and the Prime Minister of that dominion, is emphatic on the subject of monetary control. Recently, he said -

Until the control of currency and credit is restored to the Government, and recognized as its most precious and most sacred responsibility, all talk of the sovereignty of Parliament and democracy is idle and futile.

In a pamphlet issued by the Institute of Public Affairs, the following question is asked : -

Who will control the politicians who will be in control of the nationalized banking system?

That question is easily answered, and I shall answer it here and now. The people will control them.

Senator O’Sullivan:

– T - That will suit us.


– It has also been said that there was no reference to the nationalization of banking in the policy speech of the Prime Minister (Mr. Chifley) at the last general elections. I remind the Senate that those elections followed the passage of legislation in 1945 to control banking. It is significant that the electors showed their approval of it by returning only three anti-Labour candidates to the Senate.


– What about the present bill?


– The honorable senator who has interjected is a lucky man to be in this chamber at all. Should the people be dissatisfied with the present Government, they can turn it out and put another in its place. That is their privilege in a democracy. The people are the final judges, and they can turn out a government or an individual member of the Parliament. I have been turned out, and I have also been returned again. I was turned out of the Parliament of Western Australia, and I know that the electors afterwards regretted that they had done so, because they realized that I had worked hard in their interests. At the next election I wa3 opposed by a strong candidate in the person of Sir George Pearce, but I defeated him. When a man tells the truth and does an honest job, he need never be ashamed or afraid. I can go anywhere in Western Australia at any time and repeat what I have said previously without any fear whatsoever. That is more than a lot of people can say. The people have nothing whatever to fear from the nationalization of banking. They will not lose anything by it. On the contrary, they will be able to enjoy a banking service as good as, or better than, that provided by any private banking institution. With this legislation in operation, bank customers will be negotiating with their own bank, which has the backing of the nation. The only losers will be the leaders of commercial and financial interests, whose power and profits will be considerably curtailed, because they will no longer control credit. Those who are fighting against the Government’s proposal are fighting to restore to vested interests the power that they held in pre-war days. In conclusion. I say that the people of

Australia should have confidence in the Labour Government, because it will prevent a recurrence of the depressions which have had such harmful effects in the past.

Senator WARD (South Australia) ‘ 4.24]. - I am privileged to be a member of the Senate to-day and to have the opportunity to support this bill for the nationalization of the banks of Australia. I believe that when I cast my vote in favour of the bill it will be one of the best acts that T have ever performed, because it will mean the easting of a vote in i he interests of the whole of the people of Australia. A.s Senator Clothier has said, the only people who will suffer as a result of this legislation will be the directors of the private banks. They are few in number, and if they are men of ability they should not have great difficulty in obtaining other jobs. It is to be hoped that they are men of ability. I regard ;i private bank as an exceedingly great evil, and I believe that the nationalization of banks will be in the best interests of the Commonwealth. The nationalization of banking became a plank of the Labour party’s platform in 1921. Members of the Opposition in this chamber and in the House of Representatives speak of this measure as if it embodied a new principle; in fact, the principle of bank nationalization has been before the people for 26 years. They must have known that legislation of this description would be introduced as soon as there was a Labour Government with a majority in both houses of the Parliament; yet, not until now has there been a demand for a referendum. It is quite true that the Prime Minister (Mr. Chifley) did not refer specifically to the nationalization of banking in his policy speech at the last elections, but he asked the people to judge him and his government on their records, and that 13 what the people did. They knew of the Labour party’s splendid record in the introduction of legislation benefiting the community generally, and they realized that nothing of that kind could be expected from the Opposition parties. The electors were willing to trust the Prime Minister. In effect, they were prepared to give him a blank cheque. During the 1940 election campaign, the then Leader of the Opposi tion, the late John Curtin, declared that national control of banking policy and the instruments of exchange was necessary as a first step towards any effective national planning. He added that neither the Menzies Government nor any other anti-Labour administration would ever rescue the nation and its people from the clutches of money-power; only a Labour government could do that. In view of that declaration made as far back as 1.940, the intention of the Labour party to nationalize banking should never have been in doubt.

Senator O’Sullivan:

– T - The honorable senator got as big a shock as we did when the Prime Minister announced this proposal.

Senator WARD:
Minister for External Territories · SOUTH AUSTRALIA · ALP

– No. I have been looking forward to this action ever since the nationalization of banking became part of the Labour party’s platform. I realized, however, that no action could be taken until Labour had a majority in both branches of the legislature. It now has. that majority.

The treatment of this measure by the press of this country is deplorable. The newspapers are always proclaiming the virtues of liberty; but they do not want liberty of action on the part of the ordinary people. They seek, for themselves, not liberty, but licence. A former British Prime Minister, Mr. Stanley Baldwin, said that the press was the harlot of the world, and was without responsibility. That is quite true. The press is always on the side of vested interests. Its main source of revenue is advertisements, and so it protects its advertisers. The Australian press has descended to an exceedingly low level. That, however, does not apply to newspaper reporters, most of whom are Labour supporters, although I suppose that when they reach higher positions they too will have to write according to instructions.

In the United States of America at present, charges are being laid against certain individuals for “un-American activities “. Similar action should be taken in this country against those who engage in “ un-Australian “ activities, and everybody who opposes this measure is so engaged. I do not know what penalties could be imposed for this offence but in the case of the Leader of the Opposition in the House of Representatives (Mr. Menzies) I suggest appropriate punishment would be banishment to Spain where he could enjoy the congenial company of General Franco. On one occasion the right honorable gentleman expressed his admiration for Hitler. Now that he has lost that friend, he might welcome General Franco’s company.

I have been in politics for a long time i.nd I know that many of my friends will be guided by my opinion. To-day, we are addressing the electors of the whole of the Commonwealth, and I should like to quote the opinions of certain notable men in regard to banking. The first of these is Abraham Lincoln, one of the greatest statesmen who ever lived ; a great patriot and a great lawyer. Most people, I am sure, have great faith in the opinions of that great American. He said -

Money is the creature of law, and the creation of the original issue of money should be maintained as an exclusive monopoly of 1 1 nationa l gooveru in en t.

The Government possessing the power to rente and issue currency and credit as money and enjoying the right to withdraw both currency and credit from circulation by taxation and otherwise, need not and should not borrow capital at interest as the means of financing governmental work and public enterprise.

Thu Government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of the consumers.

Thu privilege of creating and issuing money is not only the supremo prerogative of government, but it is the Government’s greatest op[!ortunity.

By adoption of these principles: the long-felt want for a uniform medium will be satisfied.

The taxpayers will be saved immense sums in interest, discounts, and exchanges.

The. financing of all public enterprise, the maintenance of stable government and ordered progress and the conduct of the Treasury will become matters of practical administration.

The people can. and will be furnished with a currency as safe as their own government

Money will cease to master and become the servant of humanity.

Democracy will rise superior to the money power.

In the early stages of the campaign against this measure I replied to many letters that I received stating that I was convinced that the nationalization of banking was in the best interests of the people, and that I intended to support the bill. Quite a number of individuals to whom I wrote subsequently informed me that after reading my letter they were quite satisfied that the nationalization of banking would he in the best interests of the community generally.

I remind honorable senators of the following statement by Mr. Meyer Rothschild, the father of the House of Rothschild : -

Term it me to issue the money of a nation and I care not who makes its laws.

Mr. Reginald MeKenna, a former Chancellor of the Exchequer and a Director of the Midland Bank, said -

They who control the credit of a nation direct the policy of governments and hold in the hollow of their hands the destiny of the people.

The Royal Commission on Monetary and Banking Systems, appointed by the Lyons Government, stated in its report -

The trading banks must bear some responsibility for the extent of the depression. In some cases they caused hardship by forcing realization of assets, and by refusing credit, to some credit-worthy borrowers.

As the Postmaster-General (Senator Cameron) has pointed out, a similar inq 117 r y was carried out in Great Britain by a committee headed by Lord Macmillan, K.C. That committee came to the conclusion that the banks should have made more credit available in the depression years. Addressing a meeting of students at Oxford, Mr. Herbert Holden, a former director of the Bank of England, said -

Every one knows what caused the depression. The banks caused the depression by following their time-honoured custom of refusing advances and calling up overdrafts.

I have heard members of the Opposition express opinions quite different to that, We read in the newspapers recently of a monopolistic conspiracy amongst American banking interests. I quote the following newspaper comment on recent, events in the United States of America : -

A cable message from Washington that received little prominence in a small section of the Tory Press and was totally excluded in another section was the announcement last week of the United States Attorney-General. Mr. Tom Clark, that he was filing an antitrust suit against seventeen of the largest investment banking firms in New York.

The message, which waa of special significance to Australians in view of the Federal Labour Government’s banking legislation, reveals that the Attorney-General charged the firms with having “conspired to monopolize the securities business in this country by restricting, controlling and fixing the channels and methods, prices, terms and conditions upon which security issues are merchandized “.

Securities are described in the suit as stocks, notes, bonds, debentures or other interest certificates “.

Mr. Clark said that the action was one of the largest and most important in the history of anti-trust laws.

In addition, the United States Government would ask for the dissolution of the Investment Bankers’ Association of America, which maintained head-quarters at Chicago.

It seems that the banks in the United States of America are no worse than ours here. They all seem to be tarred with the same brush. I have here an extract from a Church of England publication in Adelaide -

Some there are who are perplexed by present events and would like to have some leadership. The great Malvern Conference in England in its findings and in those of a Committee of Economists and Industrialists under Archbishop Temple appointed to complete its work, spoke on such matters in 1941.

I quote some part of the later report - “ Money should become functional to man in his economic activity, and the grounds of any suspicion that economic activity has become functional to money must be finally removed. It is therefore urged that the State should control the issue and cancellation of money or credit utilized as money “.

That is a very important statement to emanate from a responsible church body. Recently, I read the following paragraph in a newspaper: -

The longest novel in the English language is Samuel Richardson’s Clarissa Harlow. It ran to eight volumes, more than 800,000 words. The shortest book ever published contained only one word and was called Who rules the World? The author was a Yugoslav journalist, and inside the book was the single word “ Money “. So intrigued were the proprietors of a Paris newspaper that they awarded him a cash prize. The book of only one word ran into four editions.

It would appear that so many people were of the same opinion that they bought the book in order to convince others of its truth, and many of the speeches which have been delivered here to-day have helped to establish that truth.

The closing of the banks in 1893 proves that the private banks cannot be trusted with the money of depositors. Nearly all the banks then operating closed their doors. Some paid their depositors nothing at all, and some have taken over 50 years to pay the money back. If it was possible for the banks to close their doors 50 years ago it is possible for them to do it again. If the people of Victoria had had those experiences in their minds at the recent elections in that State they would not have voted against the Cain Government. They would have realized that a nationalized banking system was safer than a private banking system. We all remember the great number of insolvencies which occurred during the depression. As a matter of fact, many of those who were declared insolvent were actually in quite a good financial position. I heard Mr. Albert E. Smith, a former member of the House of Representatives, tell recently of a woman whose farm was sold up, and who had £3,000 clear after the sale. Surely the bank could have carried that customer? A man who ran a motor business told me that another man, who owed him money, was declared insolvent, and was sold up. At first he paid 2s. 6d. in the £1 on his debt. The following year he paid 15s., and the next year he paid off the remaining 2s. 6d. A man of that kind might well have been trusted.

We know that the private banks tried to prevent the establishment of the Commonwealth Bank. Mr. King O’Malley, who can claim credit for its. establishment, said that the bankers went to Mr. Andrew Fisher, who was then Prime Minister, and to Mr. Hughes, who was deputy Prime Minister, and practically convinced them that a Commonwealth bank would not pay. Mr. King O’Malley had to take the matter to a meeting of the party in order to get a motion passed agreeing to introduce a bill to establish the bank. Were those private bankers knaves or fools? I do not think there can be much doubt as to what they were. I cannot believe that they were foolish enough to think that the Commonwealth would establish a bank that would not pay; therefore, we must stigmatize them as knaves.

During the 1914-18 war the Bank of England closed its doors for three days. We have always heard this bank spoken of as the strongest bank in the world. I do not know how it compares with some of the banks of the United States of America, but, at any rate, during the war, it closed down for three days, and it was unable to resume operations until the government supplied it with notes. Since then the Bank of England has been nationalized. If there had been any popular outcry against that in England we should have heard plenty about it here, but it passed over practically without notice. Yet, in Australia, when it is proposed to nationalize the banks, scurrilous articles are published in the press, and a great deal of trouble has been stirred up by the newspapers, and by the bankers themselves.

Major Douglas, who came to Australia advocating social credit, once said that a bank was an institution that lent one an umbrella on a fine day and took it away again when it began to rain. That really puts the matter in a nutshell. I remember, some years ago, meeting a man coming out of the Bank of Adelaide. He said that he had been to the bank to arrange for an overdraft of £200 with which- to finish the building of a home. He said that he had £500 on fixed deposit in the bank, but he needed an overdraft of £200 to enable him to finish building the house. He was a man of good character, and reputed to be a capable builder. The private hank refused to give him the overdraft. Later, I introduced him to the manager of the local branch of the Commonwealth Bank, where he received the accommodation he desired. We know that up till a few years ago the policy of the Commonwealth Bank was that it must not take business away from the private banks even if people approached it of their own accord. Do members of the Opposition call that liberty, and competition? The Commonwealth Bank Board appointed by the Bruce-Page Government was guilty of absolute treachery in deciding a policy of that kind, because it was appointed to make a success of the bank. Instead, it set out to cripple the bank.

The Leader of the Opposition (Senator Cooper) said that banking had been nationalized only in Russia and Argentina. Some of my colleagues have pointed out that other .countries have also nationalized their banking systems. Recently, I read a book dealing with the operation of the banking system in Russia, and I gathered that it was very successful. If our experience proves to be as successful, as I have no doubt it will, our people as a whole will he more than satisfied.

Like other honorable senators, I have received numbers of letters and telegrams protesting .against the nationalization of the private banks. However, so far as 1 could judge, not one of the persons who sent any of those protests is a member of the Labour party. I am not likely to take any advice offered to me by probable political opponents. Among the protests addressed to me, I received a batch of petitions under cover of a letter which was signed by a man who I judged to be an ex-bank manager whom I knew many years ago. The letter stated -

I hand you herewith 111 forms of petition addressed to the Right Honorable Joseph Benedict Chifley, P.C., Prime Minister of the Commonwealth of Australia, embodying the signatures of approximately 3,000 electors in this State.

As my representative in the Federal Parliament at Canberra, I request that you will be good enough to present these petitions to the Prime Minister so .that they arc immediately brought under his notice.

I advised the writer of the letter that I would present the petition to the Prime Minister when I returned to Canberra. In reply, I received the following letter-

Your letter of the 22nd instant to hand and I note you will present the petitions to thu Prime Minister at a later date.

However, I wish to state that .1 was not the sender of the 1 1. 1 forms and am somewhat puzzled by your letter to myself.

I shall be pleased to hear from your good self from time to time regarding the probable fate of efforts made to arrange for the Commonwealth Bank of Australia to offer a scheme which will attract the consent of the trustees and contributors, past and present, of our Bank of Adelaide Provident Fund, when the time arrives for negotiation.

The concluding paragraph confirmed my assumption that the writer was the person I had known previously. Later he wrote to me as follows : -

The laugh is on me. I now recollect having been asked to sign the letter whilst talking to others and did not fully comprehend the details, not reading same as I am unable to use my reading glasses, in which case I would have refused. However, you will now gather I had nothing to do with the 111 forms nor do I intend to trouble myself with or about any forms. I nin heading for “ cataracts “ and my face is close to the nil), therefore, reading is slow .work. 1 thank von for the final .paragraph, regarding the members of the Bank of Adelaide Provident Fund.

Apparently, that gentleman was asked to sign the letter because he was a man of standing in the community. However, as he stated, he had nothing to do with organizing the petition, and did not intend to interest himself in such matters. On another occasion a friend of mine pointed out to me a nian who said he had signed seven petitions. When asked why he had done so, he replied, “ I did not like to refuse; but if there is a referendum I shall certainly vote in favour of the Government’s proposals to nationalize the banks”. Another friend of mine, who is an engineer, told me that one of his workmates signed nine petitions.

My first experience of petitions was when I was a boy at school. At the time, an aboriginal bad escaped from the Adelaide gaol. The police were always on his heels, and succeeded in capturing him after a chase lasting for two months. A petition was then taken up for his release. I got all my schoolmates to sign the petition. We thought it was good fun. I mention that incident because I believe that sufficient evidence is available to show that the petitions of protests forwarded to honorable members and honorable senators against the Government’s proposal to nationalize private banks have, in many cases, been signed by children as well as adults. We know that many people have, on entering their bank, been asked by bank clerks to sign one of these petitions. In such circumstances most people would comply with the request. However, I am satisfied tha t the great majority of those who have signed petitions of protest would not have done so had they been informed of the facts. I have no doubt that when this legislation is implemented, banking will continue to be administered smoothly in this country, and that people who are kicking up all the row to-day will wonder what all the trouble was about. I take it that for some time it will be necessary, in order to avoid dislocation, to continue operating the present banks with their existing staffs. That will probably be the case, at least, in the bigger cities. All employees of the private banks have been given a guarantee by the Prime Minister (Mr. Chifley) that their services will be retained. I am not certain whether it will be possible to retain all of them in the banking sphere.

Senator Sheehan:

– There is an assurance to that effect.

Senator WARD:

– I understand that there is, and I believe that it is probable that all of them will be retained. I ann satisfied that the bank clerks will bo in a. much better position in the service of the Commonwealth Bank than they have been in the service of the private banks. If an employee of a private bank does the slightest thingwrong - it may have been only a political action, such as voting for me or some other candidate - he may easily get the “ sack “. But, as a servant of the Commonwealth Bank, he will be entitled to appeal against his dismissal, and the tribunal, which hears the evidence, will make a fair decision. We all know how badly bank clerks were paid for many years until they formed a trade union. Since then, they have received increases of salary, and gained improved conditions, and it is possible that they will receive additional advances in the future. We all recognize that the Commonwealth Bank, as an employer, will not contest fair claims, on principle, as private employers do. I arn quite satisfied that I am acting in the best interests of the people of Australia when I state that 1 intend to vote foi- this bill. I am sure that when banking in Australia is nationalized everybody will be thoroughly satisfied.

Senator MURRAY:

– It is not my intention to weary honorable senators and members of the public who are listening to the broadcast of this debate by adding unduly to the huge mass of words which has been uttered and written for and against this bill ever since the Prime Minister (Mr. Chifley) introduced it in the House of Representatives several weeks ago. Therefore, I decided to compress my remarks into a simple appreciation of the situation as I see it. This takes the form of question and answer, relating to the most important points which have been submitted to me by many sections of the community. 1 shall also sum up the points raised by the Opposition. I put this case before the Senate without heat, anger or malice, disregarding previous distortion, supposition, bitterness, personalities and mudslinging which, unfortunately, have been a feature of this controversy to date. I believe that if a person throws mud he must first stoop to pick it up.

The first question which I was asked is, “ What were the factors which led to the decision to nationalize the private banks at this juncture, particularly in view of the many pressing problems, &c, now confronting the government? “ There is a reason for everything that we do. People have asked me why the Government introduced this bill. To the best of my ability, and with due regard to researches that L have made and arguments which I have heard, this is the answer. In order to win the wai’, it was necessary for the Australian Government to control the credit of the nation, and direct the full financial policy of the Commonwealth so as to achieve that objective. This was done under powers provided by National Security Regulations. So successful and beneficial to Australia did this control of credit prove in war-time that it was worth while to continue, these powers in the best interests of the people in peace-time. For this purpose, the Banking Bill of 1945 was enacted, and the best legal authorities in the country considered that it gave to the Government complete power over banking. When, however, section 48 was successfully challenged recently in the High Court by the Melbourne City Council, aided and abetted by the National Bank, it became necessary to review the whole act. It was then discovered that other sections, particularly sections .1S-22 were vulnerable. This being so, the permanent objective of the Government - to ensure the financial and economic stability of this country - could be defeated. This risk, no government having the welfare of the people at heart could take or would take. Therefore, Cabinet approved the introduction of this bill, not in anger or in haste, but logically and fearlessly, well knowing the full ferocity of the political and financial opposition which could be expected.

I ask: What have men like the Prime Minister, the Attorney-General (Dr.

Evatt), the Minister for Health and Social Services (Senator McKenna) and other Ministers to gain personally from the enactment of this measure ? We know perfectly well that, were they in private employment, they could earn five or six times as much as they receive as Ministers performing duties for and on behalf of the people of Australia. Some people say that there are sinister figures lurking behind the scenes, egging on Ministers to bring this country to destruction. The answer is simple. Ministers believe that the nationalization of banking will be in the best interests of the people.

Obviously, if a safer and more lucrative avenue for the employment of capital could be found, there would not be any private banks. That capital would be used in other forms of reproductive employment such as shipping companies, transport, operations, and agricultural pursuits. It is because banks are such a lucrative and, at the same time, safe investment that money is kept there. That is why banking interests throughout the world are supporting the banking interests of Australia, They know that if this bill becomes law, as it will, we shall storm the bastion of the banks, and overrun the citadel of capitalism. People in the United States of America, and other countries will follow Australia and get a far better deal with the nationalization of banking that they are receiving from private banks. They will profit from our example.

Another question which was often addressed to me was, “ What arc the objectives and benefits of the nationalization of banking?” To my mind, these objectives and benefits are: -

First, to harness and direct the financial strength of Australia in order to offset or cushion the effect’s of any financial or economic crisis which is likely to eventuate overseas. The Prime Minister has stated that certain things will happen. If we take this step to nationalize banking, it will go a long way towards softening the blow which, we consider, will, as surely as the sun will set to-day, reach Australia. But having taken this action, we can only hope that it will be the proper one, and will sweep aside the terrible things which are now happening in

Europe, and which may spread to other countries.

Secondly, to support Great Britain in the dollar crisis, and aid its economic recovery by controlling overseas assets and credits. The nationalization of banking in Australia will provide us with one simplified complete control, and we shall be able to assist Great Britain more quickly and easily than we can now. Honorable senators must realize that in order to have world peace and economic recovery, the Government must have power to enable it to play its full part without restrictions from private, profitmaking interests.

Thirdly, to reduce interest charges and make available to primary producers, home builders, and the community in general, better and cheaper credit facilities. In addition, experts will be appointed who will advise the small business man, the agriculturalist, the operator of transport, and many others on their financial problems. This will be a specialized banking service.

Fourthly, to utilize the profits of banking- and credit in the interests of the nation by reducing our national debt, providing improved health and social services, improved and more modern defence forces, scientific research and many other things necessary to our national welfare. Those are the answers which I consider should be given to questions relating to the objectives and benefits of the nationalization of banking.

Another important question which I have frequently been asked is, “ How will the nationalization of banking be put into operation, and what steps will be taken to safeguard the interests of bank shareholders and bank employees “ ? “When this bill was announced, my first concern was for the comparatively junior members of the staffs of private banks - not the directors or shareholders in England and other countries who are obtaining dividends, but the messengers, typists, comptometrists, ledger keepers, tellers, cleaners and the hundred and one classes of “ small “ employees. I was concerned as to how they would fare, because it is the primary objective of the Labour Government to ensure that the working people shall be properly and justly treated. The answer to that is that there will be nothing in the nature of a “ grab “, as has been stated by honorable senators opposite, the press and the banking institutions. The bill provides for full and adequate compensation to be paid to the shareholders of the private banks as determined by the Federal Court of Claims, the provisions for the establishment of which are included in Part V. of the bill. A great deal of time and thought has also been devoted to the protection of the rights of persons employed by the private banks. I have discussed the whole of Part VIII. of the bill with bank employees and only in one instance was adverse comment made upon it, and that on the ground that bank officers dislike the thought of becoming public servants. It is strange that so many people in the .community cast aspersions on persons in government employ. The ability and integrity of the officers of the Public Service are of a very high degree. There are to be found in the Public Service as efficient employees as there are in private enterprise. It is strange that many ‘bank officials should object to this measure principally on the ground that they resent becoming members of the Public Service. Public service is the best type of service that can be rendered to the community provided that that service is so organized as to benefit the people. Honorable senators opposite have criticized the Government on the ground that it is building up a huge army of public servants. It is true that the Public Service is expanding, but that is necessarily so, because we are undertaking an increasing number of works with government money and providing improved services for the people. The State is better able to render many services to the community than is private enterprise. If a bank employee said, “ I do not want to change my employment and work as a public servant “, it would show how misguided he was, particularly when we consider the highly skilled staffs employed throughout the Commonwealth service.

The next question is: How will this proposal be put into operation? Without disclosing my identity, I discussed this matter with the manager of a private bank. After giving me what he considered to be his reasons why chaos would result from the acquisition of the private banks, be said that it would almost be a physical impossibility for the banks to be taken over by the Commonwealth. I then discussed the proposal with officers of the Treasury and also with a branch manager of the Commonwealth Bank. They saw no difficulties in the way. If the name of the Bank of New South Wales, for instance, were changed to the Commonwealth Bank, New South Wales branch, the employees’ of the bank would not realize that a change had been made. The managers of the various branches of the bank would then be directed to furnish monthly returns to the head office of the Commonwealth Bank instead- of to that of the private bank. The employees of the private banks would know nothing of the change except that they would receive better wages and conditions than they now enjoy. Instead of bank credits being established overseas for the payment of dividends to the English nobility and wealthy sections of the community, these credits would remain in Australia to be devoted to the welfare of the Australian people. I have no complaints to make about those who, realizing the desirability of investing their money in banking as a profitable venture, draw large incomes from that source, but I believe the time to be ripe for the profits of banking to be devoted to the people as a whole.

The next question is: Will banking facilities and personal and private arrangements be restricted under nationalization? The answer is an emphatic “ No “. The bill provides for established banking procedure to be maintained and upheld. The standard of discretion and integrity of the Commonwealth Bank and its employees has always been high. I have gone through this bill minutely. I am not a lawyer or a great scholar, but I have applied a few simple tests in order to ascertain the efficacy of the measure. Speaking as an ordinary man, I see nothing in it which will upset established procedure. This bill will give to the Commonwealth Bank no greater opportunity to pry into the private financial affairs of the people than it has to-day. The law already provides for the scrutiny and investigation of banking accounts by officers of the Taxation

Branch, the Customs .Department, the Attorney-General’s Department, bankruptcy officials and the police. The suggestion that at present customers’ accounts in the private banks are secret and inviolable is untrue and misleading. These investigations may be conducted irrespective of whether the accounts are in a private trading bank or in the Commonwealth Bank. There were many instances during the war when accounts were scrutinized by the defence authorities who suspected that the persons concerned had been trading with the enemy. Safe deposit boxes were also examined for gems or precious stones hidden for unlawful purposes. Despite that, the opponents of this measure say that if the private banks are taken over by the Commonwealth Bank the inviolable secrecy with which customers’ accounts were guarded will be invaded. Criticism of this kind is but n lot of “ tommy rot “.

After looking at the records of the private banks, I have come to the conclusion that within the next ten years, if not sooner, but for this measure, there would have been a further contraction of the number of private banks operating in Australia. Since 1926 the number of banks in Australia has been reduced from twenty-six to nine. Inevitably, there would have been three groups, the Australian group, headed by the Bank of New South Wales, and including the Commercial Bank of Australia Limited, the Commercial Banking Company of Sydney Limited, the Bank of Adelaide and the Queensland National Bank. All of those banks are Australian owned and controlled. Then, there would be the English group, headed possibly by the English, Scottish and Australian Bank Limited, the Bank of Australasia, the Union Bank of Australia Limited and the National Bank of Australasia Limited. The third group would comprise the people’s bank, namely, the Commonwealth Bank. As the result of amalgamations and absorptions, the number of private banks was reduced very considerably without a referendum of the people, without seeking the approval of their customers or their employees. If the private banks may do that, surely, in the interest of Australia, there is nothing wrong with the absorption of all the private banks by the Commonwealth Bank. Inevitably, during the passage of time, there would have been a great contraction of the number of private banks. Proof of that trend is seen in the fact that prior to the announcement of the introduction of this bill the Union Bank of Australia Limited and the National Bank of Australasia Limited were proceeding to amalgamate. Did the directors of those banks ask their employees or depositors whether they were agreeable to the amalgamation? Why, then, should we be expected to ask the people for permission to take over all the banks and to operate them in their interests?

Senator Rankin seemed to evince great pleasure in the fact that the Victorian Labour Government was defeated. We cannot deny that that government was defeated, but I think that the close analysis of the votes cast at that election which appeared in the Melbourne Herald recently reveals some interesting facts. In the first place, it shows that, although Australian Labour party candidates secured 459,008 votes, they won only sixteen seats, whereas Liberal party candidates, who secured only 41S,145 votes, Avon 28 seats. Although the latter party’s candidates secured fewer primary votes, they won twelve more seats. Of course, we know the reason is that the Victorian constituencies were established many years ago. Honorable senators opposite contend that the result of the Victorian elections should be accepted as a criterion that a referendum on the Government’s banking proposal would have been defeated, but, because of the figures revealed by that analysis, I very much doubt that contention. Those figures certainly show that Labour gained the majority of votes. Be the result as it may, members of the Australian Labour party have learnt their lesson, and we hope to profit from it in the future.

Discussing the raising of interest rates by the private banks in 1936, after the Commonwealth Bank had made available to the public £1,000,000 worth of treasurybills, the Melbourne Age, on the 5th March, 1936, stated -

Whether the reasons are sound or not, the fact that impresses and startles the community is that, in such matters of vital national importance, the Federal Government can bc a mere cypher, and the great institution which is owned by and acts for the people, the Commonwealth Bank, instead of making policy, is forced to follow a course dictated by others. the weakness is due directly to the present Federal Ministry’s abdication of its power, and evasion of its responsibility. If the National Government deliberately excludes itself from all participation in the making and changing of monetary policy, obviously it cannot govern, except in a secondary degree.

The press does not make comments like that to-day; it has altered its policy under the direction of its largest advertisers, who supply most of its revenue.

The fallacy underlying the fear engendered in people regarding money and its ability to alter our way of life has been mentioned. In my opinion, the most important feature of this debate has been the constant reference to fear. We have witnessed exhibitions of “fear psychology “, and we have experienced the “ fear “ propaganda disseminated by the opponents of this proposal. The appeal to fear has been repeated again and again. My earliest experience of it was when, as a small child, my mother threatened me that the police would take me if I were not a good boy. As a result of the fear instilled in me then by my mother, I grew up in the belief that the police were people to be feared, and it took me some years to realize that the good order and control of society requires the exercise of some discipline. It was not until a policeman took part in a game of cricket with me, and I discovered what a decent fellow he was, that I came to view members of the police force in their proper light. If people cry “ wolf “ long enough, some people are bound to be affected by it until they discover for themselves that there is no real need for fear. I believe that of the important questions which I have been asked concerning the present proposal, the major one is this: 19 the proposal in the best interest of the people of Australia, having regard to all the circumstances and the future of the country? My unhesitating answer is that it is. I invite opponents- of the measure to consider for themselves for a moment what we, as supporters of the Government hope to gain from the enactment of this measure, apart from the natural satisfaction which we shall experience at having introduced something which we believe to be in the best interests of the country.

It is said that human nature is complex and bad, and that if we confide too much power to any individual that power will be abused. I do not agree with that contention, because 1 believe that man is inherently good. “When man is born there is no hatred or malice in his small brain, nor does it contain any anti-social ideas. What makes a bad man of an innocent child is experience of bad conditions, bacl food and inhuman treatment, and worst of all, bad example. We know from our own early experience that if those who should know better do not set us a. proper example all sorts of bad tendencies develop in us. But in the small child, which turns its tiny hands to its mother for warmth and comfort, there is no inherent evil. As I say, the evil which manifests itself in the grown man is the result of experience.

I believe that this measure will prove one of the best measures ever enacted by any government in any country. It has been contended that the idea that money is everything, and can achieve anything, is fallacious. That contention contains some .merit, but T do not wholly agree with it. We know that in war and in peace there must be authority. Authority implies power, and power certainly resides to some extent in money. Of course, money cannot achieve everything. If the mere expenditure of money could have released members of the Eighth Australian Division from captivity, I have no doubt whatever that the people of Australia would have spontaneously subscribed £100,000,000. But it was not the power of money which captured and enslaved the men of that division; it was the forces of tyranny. Money certainly cannot overcome them. During the war Australia spent £3,000,000 a day on the prosecution of the war, but no one can point to any particular time when we were in danger of losing the war, because of shortage of money. Nor, for that matter, were Hitler, Mussolini or Tojo ever in danger of losing the war because of shortage of money. We know that the reason why they lost the Avar ultimately was that their forces could not withstand the ‘ skill and valour of our combined might, and that those are the things which make and break nations.

The measure before us now cannot overcome the deficiencies of human nature, but it can achieve something for the people of this country, and I would sooner go down endeavouring to achieve that than continue to sit here doing nothing. Opponents of the Government say that it is seeking too much authority. But we must have authority if we are to achieve anything, because experience has taught us that nothing worth while can be accomplished without the exercise of real authority. We have only to recall the splendid victory achieved at El Alamein to realize that. Until complete authority was conferred on Field-Marshal Montgomery, victory in the Middle East could not be achieved. We saw another example of that in Normandy. It was not until real and complete authority was conferred on General Eisenhower that things began to happen. If we get the power to control the monetary system of this country, things will begin to happen here. I commend and support the bill, and gladly accept my share of the responsibility for its acceptance by this chamber, well knowing it to be in th best interests of the people of Australia. We are here, not so much to attack one another, as to get down to fundamentals, and make up our minds whether this proposal is good or bad, disregarding all propaganda and side issues. We must look at the issue fairly, and say, “Is this going to do any good? Will it do what we hope it will ? “ If the answer is “ Yes “, we must support it.

South Australia

– I rise to add my congratulations to the Australian Labour party for having introduced, at long last, but at its first opportunity, this long overdue reform. I realize that, in introducing legislation of such far-reaching effect, the Labour Government was fully alive to the seriousness of the position, and was aware that it would lead to continued attacks upon it by those who,- up to the present, have had sole control of the country’s finances. I think the Senate will agree that we should have been utterly stupid iff we had expected to introduce such a. measure without causing a tremendous outburst by the controllers of the private financial institutions. All members of the Labour party will agree that the greatest disappointment that the opponents of this measure have experienced in the long and tedious debate in the House of Representatives, and in this chamber, is that, in spite of their vitriolic attacks on the Labour party, they have failed to divide us. I sincerely trust that now that the measure is well on its way through the second-reading stage in this chamber, appreciation of its importance will continue. I know very well that in a bill of this magnitude there must be a doubt in the minds of members of the Labour party whether all members unanimously support it. ‘ That is because of the continued appeals to the people by those who would seek to destroy the La.bour party. They have to a degree created a doubt, particularly among Labour members of the Parliament, but I think that their fears will be allayed when the position is made clear in legal terms. In spite of the attacks on this legislation, and on the Labour party, we are unshaken.

I ask for leave to continue my remarks at a later date.

Leave granted ; debate adjourned.

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The DEPUTY PRESIDENT (Senator Nicholls). - In conformity with the sessional order that, unless otherwise ordered, the motion for adjournment should be put, on Friday, at 3.45 p.m., I f formally put the question -

That the Senate do now adjourn.

I suggest to the Senate that the motion be negatived in order to allow the Leader of the Senate (Senator Ashley) to submit, before we adjourn, a motion relating to the next day of sitting.

Question resolved in the negative.

page 2472


Motion (by Senator Ashley) agreed to-

That the Senate, at its rising, adjourn to Monday, the 24th November, at 3 p.m.

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Postal Department: Promotions

Motion (by Senator Ashley) proposed -

That the Senate do now adjourn.

South Australia

– In dealing with a claim by the postal employees’ union recently, the Public Service Arbitrator also dealt with what is known as the “ barrier “. There is a barrier against any postal official getting promotion beyond a certain range, or receiving a salary in excess of a certain amount, unless he passes certain examinations. The unionists consider this provision most unnecessary. When issuing his determination relating to conditions for the advancement of postal clerks, the Arbitrator stated that, as no objections were raised by either the Public Service Board or the union to the words “ advancement beyond £294 per annum shall be subject to passing such tests in telegraphy and postal work as are notified by the board from time to time “, being replaced by “ advancement beyond £306, standard, is conditional on certification to the board by the chief officer of the employee’s efficiency in the performance of the full duties of his office “, he was required to give effect to an agreement reached by both parties. Some time later, the Public Service Board ruled that the elimination of the “barrier” simply meant that the postal clerk was enabled to proceed to the maximum of his salary range without the imposition of the “ barrier “ ; but, of course, contingent upon the certification of the chief officer that the postal clerk could efficiently perform all the functions of his office; but if he desired promotion to the positions of senior postal clerk or postmaster, he would be required to pass the examination referred to in Part IV. of the Commonwealth Gazette, No. 136, dated 12th July, 1945. There is a dispute about the interpretation by the Public Service Board of the award given by the Public Service Arbitrator. I ask the Postmaster-General (Senator Cameron) to take up the matter with a view to ensuring that the Public Service Board’s interpretation shall comply with the Arbitrator’s determination.

Another factor is that the Public Service Arbitrator made a determination making it unnecessary to pass an examination in order to go beyond the point at which the barrier formerly operated, but apparently he did not deal with the question of promotion to the position of postmaster. The part of the examination that the unionists considered most unnecessary, namely, technical telegraphy^ is a stumbling block to many good officers. These men have proved their capability for any position in the Service, apart from technical positions. They are not technicians, and they do not need to be. So these good officers are losing promotion because they are unable to ‘pass aa examination that partly deals with repairing telephone batteries and the like, which is a mechanic’s job. Then, again, the new training classes put juniors through their examinations before they leave the classes, an opportunity never given to’ the older men, which means that boys are leaving the classes ready for promotion to the position of postmaster or chief clerk. I ask the Minister to look into this matter with a view to obtaining an interpretation of the award which will be just to the employees.

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

, - in reply - I regret that the Postmaster-General (Senator Cameron) is not now in the chamber. He had to leave for Melbourne on official business and will proceed to Sydney on Monday. I am astounded that conditions in the Postmaster-General’s Department should be as stated by Senator O’Flaherty, but I am certain’ that the honorable senator will agree that the Minister in charge of the department has the interests of its employees at heart.


– T - The Minister has been overruled by the Public Service Board.

Senator ASHLEY:

– I was PostmasterGeneral for three years, and I then thought that the situation in regard to promotions, particularly in respect of ex-servicemen, was most generous. I know, for instance, that during the absence of men on service, . appeals were submitted on their behalf in cases in which it was thought that they would apply for promotion, if in Australia. There may be some recent development of which I am not aware, but I can assure the honorable senator that his representations will be carefully considered by the Postmaster-General. If there is just cause for complaint, I aim sure that the position will be rectified.

Question resolved in the affirmative.


The following papers were presented : -

Science and Industry Research Act - Twentyfirst Annual Report of the Council for Scientific and Industrial Research, for year 1946-47.

Ordered to be printed.

Sugar Agreement Act - Sixteenth Annual Report of the Fruit Industry Sugar (Joncession Committee, for year ended 31 st August, 1947.

Senate adjourned at 4.38 p.m.

Cite as: Australia, Senate, Debates, 21 November 1947, viewed 22 October 2017, <>.