24 November 1947

18th Parliament · 1st Session

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

page 2497


Nationalization : Petition

Senator COOPER presented a petition from certain electors of Queensland in relation to hanking in Australia.

Petition received and read.

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Annual Publication,”AsYouWere, 1947 “.

Senator AMOUR:

– I ask the Minister representing the Minister for the Interior when this year’s Navy, Army and Air Force Annual, issued by the Australian War Memorial authorities, will become available? What is its title, and how many discharged members of the forces will obtain copies? Will purchasers who wish to obtain these volumes for Christmas gifts receive them before Christmas ?

Minister for Trade and Customs · QUEENSLAND · ALP

- Senator Amour was good enough to inform me that he intended to ask these questions, and I have ascertained from the Minister for the Interior that the first supplies of the book became available on the 15th November, and that distribution is now proceeding. The title of the volume is As You Were, 1947, and those who require copies should send their applications to the Curator, Australian War Memorial, Canberra, enclosing a remittance of 9s. for each copy. The demand for the book is heavy and increasing, but all those who apply for copies now should receive them before Christmas.

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Walking-out Uniform.

Senator MURRAY:

– Recently, there appeared in the press pictures of the new type of walking-out uniform to be worn by members of the Australian Military Forces. I ask the Minister representing the Minister for the Army whether con sideration has been given to the provision and issue of suitable shoes, in lieu of boots, for walking-out purposes. Has consideration been given to the provision of a better type of summer uniform, and to improving the material used in the manufacture of uniforms?


– I shall bring the honorable senator’s question to the notice of the Minister for the Army and obtain an answer as soon as possible.

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Transport of Motor Bodies

Senator FINLAY:

– Last week I addressed a question to the Minister for Supply and Shipping regarding the accumulation of 3,000 motor bodies in South Australia awaiting shipment or land transport to the other States. I pointed out that if some action was not taken speedily to rectify this matter, unemployment in the motor body-building industry was inevitable. I ask the Minister now whether his attention has been drawn to the photograph published in to-day’s Adelaide Advertiser showing these bodies still on the wharfs at Port Adelaide? Has the Minister anything further to report as to what action the Government is taking, or intends to take, to expedite the transport of these bodies from South Australia?

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

– I have seen a newspaper in which mention is made of 3,000 motor bodies awaiting shipment in Adelaide, but I question the accuracy of the report. During the last two or three days, the number has increased by 1,000, and I do not think that motor bodies are manufactured in South Australia as quickly as that. Reports of this kind are part of a propaganda campaign to have motor bodies transported by road. I admit that insufficient shipping has been available to remove the motor bodies, and sometimes, when ships have been available, there has not been sufficient berthing space. It is a good deal cheaper to carry the motor bodies by road than by sea or rail. The Railways Department of South Australia, I understand, does not want to carry the bodies because they take up so much room, and it is not practicable to carry any goods inside the bodies. It is not for the Commonwealth

Government to decide whether they can be carried by road. It will be necessary for the State Governments of South Australia, Victoria, New South Wales and, possibly, Queensland, to issue licences for the carriage of motor bodies by road. If the licences are issued, my department will make available the necessary petrol.

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asked the Minister for Trade and Customs, upon notice -

  1. Has any material increasein price occurred on items on which price stabilization or subsidies have been withdrawn since the 30th June, 1946?
  2. If price increases have occurred on any items, what was the amount of the increase?
  3. What is the amount, or estimated amount, of saving in respect of each subsidy withdrawn since the 30th June, 1946?

– The information is being obtained and a reply will be supplied in a few days.

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– I lay on the table the following paper: -

Dried Fruits Export Control Act - Twentythird Annual Report for year 1946-47, together with Statement by Minister regarding the operation of the Act.

As shown in the report, the Australian dried fruits industry has for the third year in succession suffered a heavy loss because of the drastic fall in the production of currants, sultanas, and lexias in 1947, due to rain and humidity experienced during the harvesting period of February and March last. This year the crop is estimated to be only 56,000 tons, the lowest since 1.931. In order to make as large a quantity as possible available to the United Kingdom, it was necessary by arrangement with the industry organizations to curtail severely supplies to the Australian market and overseas markets other than the United Kingdom market. The long-term contract with the United Kingdom Government for the sale and purchase of Australian dried vine fruits will expire at the end of 1948, and negotiations for an extension of the contract for a further period are proceeding.

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The following bills were received from the House of Representatives, and (on motion by Senator Ashley), read a first time : -

Sales Tax (Exemptions and Classifications) Bill 1947.

Gold Tax Suspension Bill 1947.

War-time (Company) Tax Assessment Bill 1947.

War-time (Company) Tax Bill 1947.

States Grants (Tax Reimbursement) Bill 1947.

Income Tax Assessment Bill (No. 2) 1947.

Parliamentary Allowances Bill (No. 2) 1947.

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Second Reading

Debate resumed from the 21st November (vide page 2472), on motion by Senator Ashley -

That the bill be now read a second time.

South Australia

– When the debate was adjourned last Friday, I was dealing with the volume of propaganda which the private banks have circulated throughout Australia for the purpose of creating fear and doubt in the minds of the people. The private banks have acted in this manner because they do not want the public to examine the Government’s banking proposals quietly and calmly, and they have endeavoured to surround the subject with an atmosphere of emotionalism. In my opinion, this charlatan’s trick will not succeed. The matter is one which must be considered dispassionately. It is an economic problem, and when viewed from an economic standpoint, the Government’s proposals will be found to be in the interests of the people. I have in my hand two documents to which I propose to refer in this debate. One of themwas issued by the Commercial Bank of Australia Limited to its customers early last September, almost immediately after the Prime Minister (Mr. Chifley) had announced that the Government intended to introduce this bill. Contained in this document is the following paragraph: -

The extensive powers taken by the Government under the Banking Act of 1945 are more than sufficient to ensure that the trading banks conduct their affairs in the best interests of the community. No further powers are necessary to control the activities of the banks for this purpose.

In my opinion, the decision of the High Court, when the Melbourne City Council challenged the validity of section 48 of the Banking Act 1945, disproves that statement. The document also contains this statement -

To protect the personal interests of their customers, the banks intend to fight the action threatened by the Government with all the means in their power. The true success of the attempt to defeat this threat depends upon the personal resistance of each man and woman who is desirous of retaining control over his or her money affairs.

Later in my remarks, I shall show how jealous and careful were the private banks in the past regarding the interests of their clients. In that circular the general manager stresses the necessity of each officer taking prompt action with customers and the public generally. This whs dealt with by Senator O’Flaherty in a general way in the course of his speech, but I propose todraw particular attention to one paragraph, which states -

Offer your help to customers in the drafting of telegrams and letters of protest to the Prime Minister and federal representatives.A list of the latter is attached. The bank will gladly pay the postal costs involved on behalf of customers.

The same remark applies, of course, to petitions. A complete reply to propaganda of that type is furnished by the Leader of the Opposition in the House of Representatives (Mr. Menzies), himself, in the course of his book The Forgotten People. Chapter VII., “Freedom from Fear “, pages 37 to 38, contain the following observations: -

Indeed, in recent years, a great many people calling themselves democrats have discovered and practised the art of what is called “ pressure politics “, the “ pressure” taking the form of hundreds, and in some cases that I. can remember thousands, of stereotyped letters signed and sent to members of Parliament, on some particular topic, by their constituents, the usual ending being that “ if you do not act in accordance with this view I will do all I can to have you defeated at the next elections “.

This kind of pressure, much attempted a few years ago, for example, by the Douglas Credit people, really represents an endeavour to exploit the instinct of fear. The hope is that the member of Parliament will be suffi ciently spineless to abandon his own reasoned convictions for fear of losing his seat in Parliament.

We may go farther in this examination. It is notorious that many electors believe that the function of their member of Parliament is to ascertain, if he can, what a majority of his electors desire, and then plump for it in Parliament. A more stupid and humiliating conception of the function of a member of Parliament can hardly be imagined. Ifyou want mere phonograph records or sounding boards in Parliament, then phonograph records or sounding boards you shall get - and statesmanship will die; and democracy will die with it!

I find myself in full accord with the view of the right honorable gentleman. Another portion of the instructions of the general manager to his bank managers, to which I have referred, reads as follows : -

I make an urgent appeal to all officers who are not now opposed to nationalization, and to those who may now be doubtful, but can he persuaded, by intelligent reasoning, to “close up the banks”. We, and our fellow officers of otherbanks, must put punch, action and optimism into this fight. It is useless to wait apathetically for the tabling of the bill and the outcome of the legal contest. Public opinion mustbe roused and made vocal. Protests must pour in to members of Parliament. Every nerve must be strained to force a referendum so that the people may express their approval or disapproval in a truly democratic way.

However, I find myself in complete agreement with the views of a former antiLabour Prime Minister of this country. On the 11th September, 1929, following the defeat of the Bruce-Page Ministry, as the result of an amendment to the Maritime Industries Bill, moved by the present right honorable member for North Sydney (Mr. Hughes), the then Prime Minister, Mr. Bruce, wrote to the Governor-General in the following terms : -

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

Now that the issue involved in the present bill has become a national one, it is remarkable to observe the consistency of this Government’s attitude in refusing to submit the matter to a referendum, with the attitude adopted by previous governments of different political colour, and with the views advocated by prominent members of parties now in opposition in recent years, which is also in contrast with the inconsistency of honorable senators now in opposition. The trading banks would have one believe that the passage of this legislation would spell the doom of competition .between them, but I submit that they are an associated body and that competition does not exist between them. In that, I am fortified by the remarks of the late Sir Richard Butler, for years Liberal Premier of South Australia. When he made his statement, he was Leader of the Opposition in the House of Assembly of that State. I think an interjection at the time that there was no competition between the banks was made by Mr. Archie Cameron, who is now the honorable member for Barker in the House of Representatives. Mr. Butler said -

There is no competition between them, but there may be between associated banks and the State Bank. As long as the associated banks thought there was a benevolent government institution to carry a man whose credit was doubtful, they did not mind sending him to the State Bank.

I venture to suggest that honorable senators on both sides will agree with the contention that, hut for Federal and State activities in carrying people financially, particularly the primary producers, in the depression era of low prices, conditions would have .been infinitely worse than they were. Let it not be forgotten that the private .banks received their pound of flesh as the result of those activities. The Labour party claims that this legislation is within the constitutional rights of the Australian Parliament. The Constitution was framed not by the Labour .party but by far-seeing statesman of other political parties who visualized the necessity for such power being in the hands of the Australian Parliament. I quite realize that to let bygones be bygones is a wholesome and sometimes necessary and salutary doctrine. But, while that may offer a peaceful solution of the troubles of our time, if the cause of those bygones is not removed, they could easily he the “ comeagains “ in another depression. Therefore, it is necessary to relate some of the happenings of the depression of 1929 and the early ‘thirties. In that period, when hundreds of thousands of our people were out of work and homeless and producers were practically insolvent, our governments, both Commonwealth and State, were sorely tried in their endeavours to meet the interest on our national debt, and most drastic measures were continually .before the various Parliaments. All that happened, mind you, in a land of great production. I quote, in support of that, a few of the harsh incidents that I witnessed or heard of in the depression years. In South Australia, in 1928, a big flour-milling company known as the United Milling Company operated at Birkenhead, a suburb of Port Adelaide. Early in July, 1928, the mill and stocks of wheat, the property of many wheat-growers in the State, were destroyed by fire. Subsequently, on the 11th July, 1928, a year before the onset of the depression,, the Bank of Adelaide petitioned in the. courts of South Australia against the company for £53,957, with the result that the company “ went through “. It is fairly common knowledge in South Australia, particularly amongst those who know business, that that indicated that the banks were awake to the oncoming depression, and were making every effort to tighten up. In 1931-32, the name Verco Brothers was a household word throughout the South Australian wheat producing areas. The firm had branches in the most prolific of the wheat-growing districts and many farmers for years had done business with it. At the commencement of the harvest in November, 1931, Verco Brothers commenced business in the usual way. They acquired the wheat offered to them by farmers, some of whom were forced to sell, whilst others followed their usual practice of storing their wheat with the firm awaiting a better market price. At that time the price of wheat was so low that many farmers stored their wheat with the firm. Imagine their consternation when, in January, 1932, less than three months after the wheat season had commenced, Verco Brothers went insolvent. The same trading bank, namely, the Bank of Adelaide, was the firm’s banker. The result of the firm’s insolvency was that many ‘hundreds of farmers who had stored their wheat with the firm were themselves driven to the insolvency court, thereby losing their title in their wheat. Their year’s labour went for nought. The action of the firm and of the bank was probably within the law but it was morally wrong. It was a confidence trick of the deepest dye, because both the firm and the bank must have known the firm’s financial position when it accepted the farmers’ wheat. I am confident that that action will never be forgotten by the many hundreds of wheatfarmers in South Australia who suffered because of it.

I hold in my hand a cutting from Smith’s Weekly of the 8th September, 1934, which should be of particular interest to honorable senators from Queensland. The cutting, which has rather startling head-lines, reads -


Hon. W. H. Barnes’ Pathetic Pleading with Union Bank.

When the Honorable W. H. Barnes, Treasurer of Queensland in the Moore Nationalist Government, died last year, the northern State lost a great man who had given 30 years of his life in the cause of public service. Public tributes from every section of the community were paid to his great services to Queensland. His funeral was the most largely attended that Queensland has known. It has been left to his widow to unveil the tragic end of this worthy man who, while grappling with the State’s problems, handling millions, was himself harassed by financial worries, and the demands of the Union Bank of Australia (Brisbane branch) for the repayment of his overdraft of £2,391.

Letters dealing with this case are here for honorable senators to read. One of them was written in March, 1932. Mr. J. Carter, manager in Brisbane for the Union Bank of Australia, wrote to Mr. Barnes at the Treasury stating that the bank was insistent that his account beplaced on a proper footing in view of his increased liabilities. The letter contained the following paragraph: -

If the further security, which should be made available, is made available, I shall recommend the account be allowed to continue subject to periodical reductions; if not, you must be prepared to have the account called up and to face the proceedings necessary for the bank to obtain repayment.

To that letter Mr. Barnes replied -

I beg to acknowledge receipt of your favour, of the 9th instant, following up your conver sation with me yesterday . . . and I now desire to briefly repeat the conversation which, Summarized, was as follows: -

1 ) That you desired that in order to furnish your bank with additional security for your overdraft (a) My wife should offer her property to your bank as additional security; (b) or she should furnish your bank with a guarantee formy account, or

That I should obtain some person, apart from my wife, to guarantee my account.

To this I replied stating that already your proposal of securing my property to you had been considered by my wife, and that she had refused to accede to your bank’s request. . . I would point out that she has already entered into an arrangement to assist me in paying my indebtedness to the Income and Land Tax (Departments. Touching the second request she states that the security which you hold is exactly the same as when the overdraft was granted to me, and that being so she is unable to meet your wishes . . Very respectfully I would point out that, as you are aware, I have already handed over my assets, and if you call up my overdraft as indicated in your letter, I shall be unable to meet it, not because I want to escape liability but because I have nothing further to go to the bank. If time is given I shall pay every shilling due . . If your bank will not extend the time for me to pay, it is certain that my present income cannot continue and my ability to pay will be removed, because I shall be deprived by that action of my public position.

The wrangle between Mr. Barnes and the Union Bank continued for some time. I do not propose to read all the correspondence, but I do say that a man who held the important positions occupied by this gentleman in the Queensland Government - he had held practically every portfolio - and who had rendered such valuable service to the people of that State, must have been most embarrassed to find himself in this position. Mr. Barnes wrote to the bank asking for further consideration on the matter, and on the 15th March, 1933, he received a reply which, to my mind, is unequalled for cheek. It shows how far some of these institutions are prepared to go, and what regard they have for government instrumentalities. They lose no opportunity to get their pound of flesh. The letter stated -

These matters are under consideration, but I would like to make these few remarks.

I asked if your wife would guarantee - not thatyour wife should guarantee.

Why should the Taxation Department be first?I would consider increasing the debt slightly if this further security were available.

The security is not the same, values have decreased considerably and, therefore, more cover or less advance is required.

Banks cannot insist their customers do not guarantee. Every case is on its merits.

Is there not some equity in your life policies ?

Yours faithfully,

  1. Carter, Manager.

This privatebank had the temerity to ask a Minister of the Crown why his obligation to a government department should come first! I say that the technique of the memorable “Jack the Ripper” pales into significance compared with that of the Union Bank in this case. “ Jack the Ripper “, if what we read of him is true, at least had some virtues, one of which was a regard for chivalry, but this bank had not even that saving grace. On the 8th May, in a letter to the bank, Mr. Barnes stated -

I have to state that the Income Tax Commissioner hats supreme power and indeed if he so desired could garnishee my parliamentary allowance. I am not suggesting that he would do that - he need not go to the court to obtain permission to do so, but has authority for such action. I may further add that he has taken such action with some members of Parliament.

The delicate phase of it is that it must not be forgotten that I am the Minister controlling the department . . .

On the 21st March, 1932, Mr. Barnes received a demand from the bank, through its solicitors, in the following terms : -

The Union Bank of Australia Limited hereby demands from you the amount of your indebtedness at date to the said bank, viz., £2,391 7s. 7d. (two thousand three hundred and ninety-one pounds seven shillings and seven pence).

Interest accrues at8s. 6d. per diem.

I shall indicate to the Senate the nature of the securities that Mr. Barnes held, and those honorable senators who come from Queensland will he in a better position than I to gauge their value. They included a bill of mortgage over certain lands at Bulimba, a mortgage over a life policy with the Australian Mutual Provident Society, and a script lien over 6,050 shares in Barnes and Company Limited.

Mr. Barnes died on the 19th February, 1933. Continued action on the part of the bank resulted in the sum of £852 11s. 2d., the residue of an insurance policy, being paid into court under a resolution of the Australian Mutual Provident Society. The Chief Justice was petitioned, and eventually handed the money to the Union Bank of Australia.

At Wynnum, near Brisbane, a monument has been erected to the memory of the late Mr. Barnes by the people, and in Brisbane itself, where he used to worship there has been installed a memorial in his honour. I have related the facts of this case to show how much the hanks are concerned with the welfare of their customers.

In South Australia to-day a Liberal Government is in office, and to show the insincerity of that administration’s attitude to this measure, I shall indicate to the Senate what has transpired in that State. Those individuals in South Australia who are sending letters to my colleagues and myself protesting against this measure will be interested in this. Until recently, the Adelaide electric supply was provided by the Adelaide Electric Light Company Limited, a private organization. To the surprise of Labour men, and of some of his own supporters, the Premier, Mr. Playford, not long ago introduced a bill into the South Australian Parliament to nationalize the electric light supply. The proposal was supported by the Labour Opposition, led by Mr. Richards, and this support enabled the Premier to carry the nationalization measure in the House of Assembly, although some members of his own party did not support it. The bill then went to the Legislative Council but was defeated. In the next year, however, Mr. Playford was successful in having the measure passed through the Legislative Assembly again, and this time it was agreed to by the Upper House, in which there were fifteen Liberal party members and only five Labour supporters. The bill provided for the protection of the rights of the employees of the Adelaide Electric Light Company Limited in regard to pensions, &c. In fact, the protection granted to them was almost identical with that provided for private bank employees under this measure. Every condition that the employees of the electricity undertaking had enjoyed whilst it was a privately operated concern was guaranteed to them by the Liberal Government. The shareholders were also fully protected. Yet I have not heard of a civil war having taken place in South Australia as the result of that legislation, nor has its passage produced the outbursts that we have seen in the past few weeks in relation to this measure. It is also interesting to note that Mr. Playford announced openly in the South Australian Parliament that the Commonwealth Bank was ready to provide the finance necessary for the acquisition of the electricity undertaking. The action of the Playford Government on that occasion, and its opposition to this measure reveal a remarkable inconsistency, and if reports are correct, the honorable gentleman now proposes to use the taxpayers’ money to assist the trading banks in their efforts to frustrate the measure now before us. Surely this action is bordering on unmoral politics.

The supreme civil authority under God in a nation is the government. This government, which in Australia has taken a democratic form, must be able to govern. If it cannot govern, there must surely’ be some form of injustice or anarchy. To be able to govern it must be able to control all powerful economic and political groups. It is evident that if certain key industries were controlled by private individuals they would be able to hold the community to ransom. The banking system is the very crux or pivot of finance. Bankers through the controls that they exert over the credit system and the usurious tribute they exact, have been able to maintain a stranglehold over the economic life of a nation. They have been able to dictate to governments and have, as Hilaire Belloc has stated, become a State within a State. This power becomes irresistible when exercised by those who, because they hold and control money, are able to govern credit, and determine its allotment, thus supplying, so to speak, the lifeblood of the entire economic body, and grasping in their hands the very soul of production, so that no one dare breathe against their will. We of the Labour party have never said that the banks alone are responsible for economic depressions. Economic conditions overseas must necessarily have repercussions in this country. Unfortunately, the older countries are in a terrible state economically at the present time. Primary producing countries, as well as highly industrialized countries, those where wages are high as well as those where wages are low, those whose fiscal policy is free trade, and those who favour protection, those with a republican form of government and those with a monarchial form of government - all are suffering from economic maladies the effect of which must be felt in Australia unless the cause is checked. In every instance the cause is the same - the breakdown of the monetary system. If we are to save ourselves, it is necessary to counteract these ill effects. I agree with the remarks of Sir Charles Stewart Addis, who was a vice-chairman of the Hong Kong and Shanghai Bank, and a director of the Bank of England. In a statement published in the Christian Science Monitor, of the 25th November, 1930, he said -

The first condition of security against such calamities is that we should be decided firmly, no longer to be the slaves of supposed mechanical necessities of periodical price movements, but be able to master our monetary institutions, so far as to secure for the world a reasonable stability in the purchasing power of its currencies.

This is very true, because the financial institutions accept payment only in what they themselves manufacture, and of which they have a monopoly. The private money monopoly has the farmer and all other producers just where it wants them, and wields a more sinister influence by its power to destroy money than by its power to create it. The present monetary and credit systems have failed, and those in control of them have put forward no remedial measures to check the recurring and pitiful paradox of poverty and misery in the midst of plenty.

Furthermore, in their greed for profits, those who control the system have resisted, by fair means and foul, the nationalization of credit - the only possible solution of the problem, and the only way to promote national well-being. They have fought to preserve private control of the financial system, which has profit-making as its sole objective.

I submit that this bill represents humanitarianism at itsbest. It is a sane, sound and practical measure. The scheme must’, and will, be protected from the “ huffings “ and “ puffings “ of the profitmaking institutions, which seek to destroy it in order that they may thrive and impose further misery and poverty on an already sorely tried people.

It is a most serious feature of the present system that so many directors of private banks are also- directors of great industrial and- commercial firms. This phase of their activities was exhausively dealt with by Senator O’Flaherty in his speech on the bill. I hold in my hand a pamphlet written and circulated by the Australian Women’s party, of Strathfield, Sydney, from which I quote the following

The Commonwealth Bank is the only legal source of money in Australia, lt has full control of the note issue. It could take over all mortgages, and pay off the national debt is it falls duc - without conversion.

I again- express my gratification at the introduction of the bill, and, in conclusion, quote a pledge given by the late Prime Minister, Mr. John Curtin, in his last speech before the 1943 election -

Never again will it he said that money con id be found for war and not for peace. I pledge my Government that it will find all 1,. money that is necessary to maintain full employment in this country.

That pledge was riot just an ordinary election promise. It certainly was a promise to the electors, but it was some-thing more - it was a challenge to his masters, the banks.

South Australia

– It is with pleasure that I record my support of the bill, and commend the Government for having introduced so important a measure. The Opposition claims that the Government has no mandate from the people for this legislation ; but I and my colleagues were elected to this chamber by an overwhelming majority of the electors of South Australia to put into effect the policy of the Labour party. That policy is now being put into effect by the Labour Government, which was elected by the people of Australia. That, I think, answers the question whether this Government has a mandate from the people for the nationalization of banking.

Of the many important and humane measures passed through the Parliament since the Curtin and Chifley Govern ments have been’ in power, I consider that the bill now before us is the most important, because it will ensure that future generations- shall enjoy economic freedom, and! enjoy also freedom from want and fear of financial and economic depression. The memories of the Australian people go back to the dark days of the depression - a depression caused by the control of the world’s finances by the private banks. Iri this way, they controlled also thepolicy of governments, and the destiny of nations. In Australia this control is soon to disappear, and the- nation’s wealth will be administered by the Commonwealth Bank, in the interests of the Australian people.

I wish to bring before the minds of honora’ble senators some of the conditions which existed during the depression, when those controlling the finances of the nation reduced the people to a state of poverty and’ degradation, while they protected their own financial interests. I recall conditions as they existed in South Australia in 1931 onwards. The withdrawal of credit by the private financial institutions caused the closing down of industries, resulting in wholesale unemployment. Farmers lost their holdings, and workers lost their homes. Throughout Australia, over 400,000 people were denied the right to earn an honest living, and there was starvation in a land of plenty. I saw highly educated young men, the products of our high schools, colleges and universities, carrying their swags over the countryside in search of the means to live. They did not find it until the outbreak of the war, when they enlisted to fight and to risk their lives in defence of the country. It is safe to say that 75 per cent, of those who enlisted in the first division were unemployed. If the control of the nation’s wealth is left in the hands of the private’ banks, those conditions will return. Only by the nationalization of banking can the people of Australia be saved from another depression.

I have received letters and telegrams from persons who are opposed to the nationalization of banking. I know that the great majority of them were sent at the request, and also at the expense, of the private banks, which are prepared to go to any extreme to retain control of the monetary system, which is the lifeblood of the nation. It is interesting to read what the Hoya! Commission on Monetary and Banking Systems, which was appointed by the Lyons Government, had to say concerning the policy of the private banks during the depression. At that time the Commonwealth Bank had been hamstrung by the Bruce-Page Government, which abdicated control of the financial policy of the nation. It placed the Commonwealth Bank under the control of a board which was responsible to no one but itself, and, thus created, a comic opera position. Whilst the board was not subject to the authority of the Parliament, it could, and’ did, dictate the financial policy of the Government. During the depression the control of credit was in the hands of a Commonwealth Bank Board and the private banks. The Royal Commission on Monetary and Banking Systems, in ita< report, stated - ,

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.

Early in the depression the Government wanted the note issue increased by’ £18,000,000 for the purpose of financing the wheat-growers and providing employ-i ment by undertaking a housing scheme.. That request was refused by the Commonwealth Bank Board which had been appointed by the Nationalist party. At present, the Government’s need to exercise full control of credit is most urgent. There are signs that before long the Australian economy’ may be subjected to serious trouble as the* result of the international economic crisis1 that is now developing. The boom in the United States of America is getting OUt of hand, and the dollar crisis is forcing; Great Britain, Australia and other1 countries to protect themselves by re’stricting imports. We have no time to lose if we are to make sure of the Government’s powers to protect our economy against depression and unemployment. The only way to do that isi to nationalize the trading banks. I assure: the people of Australia that with the control of credit in the hands of the Government they will never again be obliged to suffer the misery and sorrows, endured during the depression, but will be guaranteed conditions commensurate with the highest standard of living that Labour can, and will, give the Australian people. I support the bill, and congratulate the Government on introducing it.

Senator TANGNEY:
Western Australia

, - In rising to support the bill, I do so in all conscience. In view of the enormous amount of propaganda that has flooded the press, the radio and the mail-boxes of the citizens of this country during the last six weeks, it would be morally wrong for me to fail to speak on this important measure. I have received a great deal of correspondence on this matter, but I intend to vote for thu hill as my conscience dictates. The people of Western Australia elected me to the Senate to do my duty towards the Commonwealth and towards them, and I believe that only by supporting this measure can T discharge the duty entrusted to me. In connexion with the amount of propaganda evidenced in the number of letters and telegrams of protest, I point out that one telegram that I received, and which was directed to me in Canberra, was supposed to have been sent by a person at the identical minute when she was talking to me in St. George’s-terrace, in Perth. The time of lodgment of the telegram was shown to be 11.20 a.m. on a certain date, and on that date that person was chatting to me at that identical time at a SPOt from which the nearest post office was 3 miles distant. Yet, when I returned to Canberra I received that telegram hearing the name of that person as the sender. It would have been physically impossible for that person to have sent that telegram. She could not have lodged it at the time indicated even had she used one of Senator Nicholls’s helicopters.

This mass propaganda is to be deplored. The only person it benefits is the Postmaster-General (Senator Cameron). I believe that most of it has been inspired by those whose interests do not lie along the way of the majority of the people. Members of the Opposition parties have described the nationalization of banking as a new proposition. However, I hold in my hand a circular distributed by the Bank Officials Association of

South Australia dated the 22nd -January, 1934, that is thirteen years ago, when the campaign to defeat any proposal that might be made to nationalize the private banks was really begun. That circular letter was sent from Room 47, Chamber of Commerce Buildings, 12 Pirie-street, Adelaide. It reads -

The matter of successfully combating the movement directed at nationalization of our banks is the most serious problem with which the Australian banking institutions has been confronted since their foundation. They ore threatened with extinction and your livelihood is in jeopardy. You must not treat this question lightly, for it is fraught with danger, not only to the banks but to you, and if you value your job you must fight for it.

Thirteen years ago the hank officers were being told by the private banks that their jobs were in jeopardy because of a proposal then made for the nationalization of the private banks. The letter continues -

Do you realize what would happen if the banks -were nationalized? … It is, however, suggested that in discussing this question with any persons not connected with the banks you do not stress too strongly your fear of losing your job. Should you do this, the strength of your argument in the public mind might be more or less discounted. I further suggest that you discuss the circular and the enclosed pamphlets with other bank officers, whether they are members of this association or not. This is a matter demanding the united action of all those engaged in the banking industry. A great deal of expense has been incurred in having these pamphlets compiled, printed and distributed, and it is expected therefore that you will now do your part as above indicated.

One part of that letter with which I most wholeheartedly disagree is that which describes banking as an industry. I have yet to see one commodity that the private banks produce. The wheatfarmers produce wheat and the boot manufacturers produce hoots, whilst people in all other industries produce something for the common weal; but banking has not produced anything tangible except a great deal of confusion in the minds of the people and in our economic system.

Much has been made in this debate of the woman’s point of view. I recall that ten years ago a party was formed in Australia which called itself the Australian Women’s party. A few weeks ago there was a march of women on Canberra. It was alleged to be un- political. It was so unpolitical that I, a Labour woman senator, was not invited to the deliberations of those women. A statement was made in Perth recently that I had been rude to the members of that deputation. The deputation did not approach me at any time. It may have approached the women members of the Liberal party in this Parliament. That fact shows how unpolitical was that movement. However, as I have said, an Australian Women’s party was formed in this country to deal with national problems, and one of the circulars sent out in 1937 by some of the very people who, to-day, are loudest in their condemnation of the workers, makes very interesting reading. The pamphlet states -

Women quite realize the national importance of the falling birthrate, but they are not justified in bringing children into the world under our present economic conditions. Dr. Harvey Sutton reported recently that malnutrition was retarding the growth of 40 per cent, of the school children in Sydney, and that 25 per cent, of ite children were suffering from rickets in some form or other. In a maternity home it is reported that out of 77 babies born whose mothers were receiving rations, 75 were under weight.

That is to say, these women were on the dole -

The toll taken by malnutrition, and the mental strain of long-continued unemployment and poverty, is creating physical and mental deterioration. In this rich country you will find thousands of slum tenements totally unfit for human habitation.

The following passage is most interesting:

The greatest and most tragic aspect of unempoyment at present is the degradation of youth, which at the age of 21 has never had a job, and it appears that no one can give them any assurance that they will be wanted for any purpose other than war.

How true that prediction was! The pamphlet proceeds -

The Commonwealth Bank must be reestablished as the people’s bank, and the nation’s policy must be based on the principle “ what is physically possible is financially possible “. Only a national bank can function in this way. . . Our money system must be a true reflection of the goods and services that the people lire capable of bringing into existence. Any money system that falls short of that can never release the world from the debt bondage it is in to-day.

That pamphlet was distributed in 1937 by the Australian Women’s party, showing that the women at that time had a clear realization of the vital part which banks had played in those years of the financial and economic depression which the community was still experiencing two years before the outbreak of World War II. The Labour party does not contend that the private banks caused the depression but it does assert that they materially helped to prolong it. I am aware that many honorable senators had most distressing personal experiences during the depression of the early ‘thirties. As for myself, I , was a member of a family of nine, and I was the only one in employment. At that time I received the princely sum of 28s. 4d. a week. Because I had this income my father could not get a job. He was told that he had a daughter who was working, and that there were many other families in a worse position than his was. Consequently, our family had to exist on an income of 28s. 4d. a week. We were only one of many families at that time who had the utmost difficulty in keeping body and soul together.

The school at which I taught was situated in a poor district, and it was quite a common occurrence for some children to go to the rubbish tins at lunch-time for the purpose of getting the crusts and other refuse which more fortunate children had discarded. Those conditions occurred in Australia - this free country about which we hear so much. We are told that the Banking Bil] will curb the freedom of the individual. What freedom of the individual did many people in Australia have during the financial and economic depression of the ‘thirties ? Was it not the freedom to starve? That was the only freedom experienced by the people in the Happy Valley camp in New South Wales, Blackboy Hill camp in Western Australia and similar relief camps in other States. What did the money power do in order to relieve that distress? A great deal of the misery of those years could have been alleviated if the Commonwealth Bank had then possessed the powers which to-day, we contend, are so> necessary for our national progress and welfare.

During the financial and economic depression of the ‘thirties, the Commonwealth Bank was powerless to advance to the Commonwealth Government a loan of a few million pounds - an amount which during World War II., a few years later, would have been spent in a few days. The Commonwealth Government had sought this financial accommodation from the Commonwealth Bank for the purpose of providing employment. When this money was not made available, we had the dreadful spectre of unemployment, which continued for a number of years. As I have shown, even in 1937 75 out of 77 babies born in our maternity hospitals were underweight, because their mothers had lived on the dole in slum areas. Those are true pictures, and we, as Australians, should ensure that those conditions shall not recur.

Now the Government is warned that this bill, if given effect, will destroy the freedom of the individual. Our opponents complain that the Government is denying to the people an opportunity of declaring, by referendum, whether they prefer the present banking system or desire to have the Commonwealth Bank as the sole banker. What is the actual position? We know that the Constitution, as drafted in 1900, does include a provision authorizing the Parliament of the Commonwealth to pass legislation with respect to banking. The Opposition contends that the Constitution does not contemplate that nationalization. However, we know that in 1900, Australia was emerging from the great financial and economic depression and the catastrophic bank slump of 1893. In that year, twelve trading banks closed their doors, and 100 land banks and 500 land syndicates failed, and 48 building societies collapsed. After a lapse of 54 years, the English, Scottish and Australian Bank, which was involved in the disasters of 1893, has not repaid to shareholders or depositors in Australia an amount of £2,000,000 owing to them. The late Professor Shann, in his book, Bond or Free, said that at the dawn of federation, at the turn of the century, Australia was just beginning to emerge from the bank slump. Will any person attempt to convince me that those who were drafting the Constitution in 1900 to give the people of Australia some kind of freedom in the future would not have had clearly in their minds that dreadful bank cataclysm which brought so much despair and misery to the people in the years immediately preceding 1900? Therefore, I contend that the provision which gives to this Parliament power to legislate with respect to banking was specifically included in the Constitution so that a bank catastrophe similar to that of 1893 should never recur.

So much for the constitutional aspect. The Opposition asks, why does not the Government ascertain the views of the people, regarding the banking proposals, by way of a referendum? Usually a referendum is held, not to affirm something already in the Constitution or to remove a provision from it, but in order to add something to it. “We already have inherent in the Constitution a power with respect to banking, and the Government is giving a lead to the people by its proposal at this stage to nationalize banking. What does the “ nationalization of banking “ mean ? It means that we shall give to the people of Australia that wonderfully powerful agency, which, Sena.tor Cooper and Senator Rankin have assured us, money power possesses. They stated that if the Government nationalizes the private banks, we shall deliver into its hands the freedom of every man, woman and child. If I had anything to confirm my own belief that now is the time to nationalize banking, it would have been the speeches of those two honorable senators. They said that if this legislation becomes law, an immense power will be placed in the hands of the Government. Surely, if such an immense power is involved in banking policy, it should be in the hands of the elected representatives of the people, who have the power of recall after every three years, rather than in the hands of private banks who do not owe anything to anybody except their own shareholders and directors. In the private banks there are 70,000 shareholders. Of that number, more than 20,000 are beyond the confines of Australia. Approximately 50,000 in Australia have shares in the private banks. The Government now proposes to place this immense power, to which Senator Cooper and Senator Rankin referred, in the hands of, not 50,000, but. 7,000,000 persons who live in Australia.

The Opposition has complained that this is not an opportune time to nationalize hanking, that the Government announced its decision to introduce this bill very suddenly, and so on. However, this is the first time for many years that the Labour party has been not only in office but also in power in both chambers of this Parliament. The Labour party has seen itself frustrated in Commonwealth and State Parliaments because it did not have a majority in the Upper House, and also - even more important - because it did not control the big financial interests of this country. The Labour party has powerful supporters for its policy to nationalize banking. For instance, the Adelaide Advertiser, on the 20th June, 1934, asked the Australian people the following question : “ Are we in bondage to the banks?” I wonder what the reply of the people would be to that question to-day. The late President Wilson, speaking in 1911, said that the greatest monopoly is the money monopoly. The financiers are more powerful than the nominal rulers. I direct attention particularly to the word “ nominal “. Surely if any country is to work out its destiny its actual rulers - not its “ nominal “ rulers - must be those who are elected by the suffrages of all members of the community who are entitled to vote. A government is, of course, responsible to its electors, and because of that it is obvious thai; the rulers of a country should be the elected representatives of the people, and not the independent financial interests who seek to control the destiny of the country for their own profit.

Quite recently there came into my possession a small pamphlet published in Queensland, with which I should, perhaps, allow honorable senators from Queensland to deal. However, in case it has not come to their notice, I propose to refer to it, although I should hate to think that any honorable senator from Queensland had anything to do with its publication. This pamphlet states that Hitler, Mussolini and the Prime Minister (Mr. Chifley), are the three dictators of the age, and it alleges that each of them inaugurated totalitarian regimes by suppressing the private banks. Of course, nothing could be farther from the truth, because if any man owed his rise to power to the active co-operation of private banks it was Hitler. In this connexion it is interesting to recall something said by Mr. Montagu Norman in February, 1939, a few months after the sack of Austria and not a great while before the outbreak of World War II. Mr. Montagu Norman who was at the time Governor of the then privately owned Bank of England said -

We should have to give Germany a loan of £50,000,000. We may never be paid back, but it will be a lesser loss than the fall of nazism.

That statement was made, I repeat, in the early days of 1939. Later, the great English and American banking institutions assisted to finance Hitler by advancing £50.000,000 to Germany. Because of that assistance Germanybecame, a short while later, the greatest force for evil in the world’s history and one of mankind’s greatest inflictions. Schacht and other German bankers were in Hitler’s confidence, and but for their willing collaboration Germany could never have rearmed itself as it did. Yet the people in Queensland who published the pamphlet to which I referred have the audacity to refer to the present Prime Minister as the third member of a triumvirate which created totalitarian regimes by suppressing the private banks! I sincerely hope that honorable senators of the Opposition, who represent Queensland, will disown this dastardly publication because it is unworthy of them or the electors whom they represent.

I have said sufficient to show that the nationalization of banks is not a measure which has been hurriedly introduced by the Government, because the Government has made it quite clear on previous occasions that it regards control of finance as the most important function of government. Experience has proved that no government can work successfully unless it has control of the financial machine. In our own experience we have witnessed the frustration of governments of this country and of this Parliament because of the machinations of the financial interests. As the article in the Adelaide Advertiser, to which I have referred, stated : “ Governments were in bondage to the banks “. In the past governments have been powerless to check the drift towards unemployment and reduction of wages because of the power of financial interests, not only of this country but also of overseas interests, which interlock with banks and large secondary industries in this country. During the depression those interests declared that there was not sufficient money to put people in employment. I know that that is not true. I remember the depression very vividly, and during a recent tour of hospitals and sanatoriums I found that even fifteen years after the depression there are men and women in those institutions who will never recover from its. scars. In rural areas I spoke to small farmers, many of whom lost everything in the depression because the banks would not advance them the necessary money to carry on their farms.

A great deal has been said in the course of this debate in regard to the feeling of security experienced by customers of trading banks, and of the sympathy extended to them by those banks. Quite recently I attended a function in Melbourne which included amongst the guests two bank managers, who twitted me regarding the Government’s proposal for the nationalization of banks. One of them remarked to me: “ You know that customers cannot expect to receive half the sympathetic and tactful treatment from your people that they receive from us “. Before I could reply, the other banker said : “ You know, old chap, as well as I do, that that is a lot of tommyrot. The only time they get tact and sympathy is when they have a pretty good security behind them “. That is perfectly true. Supporters of the Government realize that when this bill becomes law the security offered to customers will be far greater than the security offered by the present trading banks, because the assets of the nation will be behind the enlarged Commonwealth Bank. Because of the financial power which the Government will then enjoy, it will be possible to develop this country and exploit its vast potentialities, something which has never been possible before. The development of those immense potentialities will benefit every man, woman and child and enable them to enjoy their birthright. This bill contains the power to achieve all this. Honorable senators on this side of the chamber believe that its passage is absolutely necessary if the Government is really to govern and not continue as a government in name only. It must have the power to develop this country, and to prevent or minimize the effect of any future depression. The new national bank will be one created by the representatives of the people, functioning for the benefit of the .people and guaranteed by the people.

Senator O’BYRNE:

– It is with very great pleasure that I support the measure. Twice in my lifetime I have seen the youth of this and other countries sent out to die in battle on the promise of those who did not go, that when they returned there would be a richer and fuller life for the survivors. That better life was to include the enjoyment of the “ Four Freedoms “ - freedom from fear, from want, freedom of speech and of religion. Those of us who served in World War II., together with those who served in World War I., who were caught in the economic blizzard of the thirties and experienced the meanness, emptiness and coldness of the years between the two wars, cannot bear to imagine that people should again suffer the privations they did in the depression. I believe that that is the real reason why the Government has introduced this measure, and it is for that reason that I support it enthusiastically. I wish to place before the Senate the viewpoint of an ex-serviceman who did, in reality, experience the loss of freedom. A great deal has been said about the word “ freedom “ by people who do not understand its implications. I had the misfortune to be one of the victims of the machinations of international finance, and I charge the operators of that system with being responsible, because of their stupidity, negligence and selfishness, with failing to avert the depression and is calamitous consequence, World War II. The only logical outcome of power politics, which has for its principal feature the development of competitive overseas trade, must be war.

When vested interests find that their profit returns are contracting because of the diminution of overseas markets, it is inevitable, under the present system, that they will apply pressure to secure markets elsewhere. Racial theories, geographical boundaries, living space and all manner of reasons are advanced as excuses for waging war, but at the bottom one finds that just a few people in each country are responsible for the chain of events that lead groups of countries to fight each other. There is no group of people on whom the responsibility for war can be more truly placed than those who direct the policy of private banks along the lines that perpetuate the system that allows these monstrous wars to occur. I say to those who sent so many of my friends and countless thousands of other men to their deaths that I owe it to my fallen comrades to support a measure that will curb their power. The power that they wield in each country transcends politics and morals. It sponsors and encourages greed, selfishness, avarice and all the baser instincts of man. It is the money power - the power that the private ‘banks wield in pursuit of profits that I submit should rest only in the hands of the people.

Mr. Lloyd George, speaking of the peace negotiations after World War I., said, in reference to the international bankers, who include the Australian private bankers -

They swept statesmen, politicians, jurists and journalists all on one side, and issued their orders with the imperiousness of absolute monarchs, who knew that there was no appeal from their ruthless decrees.

Mr. Reginald McKenna, a former Chancellor of the Exchequer, and Chairman of the Midland Bank, addresssing the shareholders of that bank, in 1924, placed his finger on the reason for the introduction of this bill when he 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.

That point cannot be stressed too fully, because, until this bill becomes law, that control will remain in the hands of a section of the people that is not answerable to the people as a whole. True democracy cannot prevail until that control is in the hands of the Australian Parliament, which is answerable to the people.

The opposition to this bill has been marked by gross distortion by a section of the press which has overstepped the bounds of its traditional freedom. “When the Prime Minister^ in closing the second-reading debate in the House of Representatives, assured the people that the Government’s motive in bringing down his bill was for the good of humanity, the press derided his statement and reported that Opposition members had laughed when he made iti That is a gross injustice not only to the Prime Minister and the party he leads, but all the people who stand for elevation of the moral standards of Australia. Unless we incorporate moral and spiritual values in the Australian society we must continue to degenerate. I cannot allow this opportunity to pass without voicing my disapproval of the immoral attitude taken up by the press on this legislation.

Only the most obstinate reactionary would -close his eyes to events in the United States of America and would say that planning is not essential. The Banking Act of 1945 made it possible for the Government to plan for full employment, to avoid inflation and to maintain a stable economy. It was on our guarantee that we would do those things that we were re-elected to power in September, 1946. Only the most obstinate would not agree that the most vital factor of full employment is public investment and expenditure. It was in that respect that the adverse decision of the High Court on the Banking Act was such a blow to the Government’s policy of full employment. Public investment and expenditure would not only offset the inevitable tendency to slumps in private business but would give impetus to private investment and the purchasing power of the people. Works such as housing, water conservation, irrigation, electrification, transport and communication, are planned. Sections 18 to 22 of the Banking Act were designed to ward off inflation. Had those sections been successfully challenged - and I am sure that the private banks would not have failed to follow up their success in respect of section 48 - the policy of full employment would have been torpedoed and sunk. The following extract from the pamphlet Winning England, published by the Christian Industrial Fellowship of the Church of England, shows what would be the result of an unplanned society : -

A world of people all wanting food, clothing, shelter and ordinary comforts, all possessing the physical power to produce the things they want, yet living in fear of want. Walking upon the Earth as legal trespassers; the Earth from which they could draw all they desire. The Earth is no longer the storehouse of mankind as a whole; it is the Dam/ security of bankers, the concession of the monopolist, and the dice of the speculator. The tokens wherewith rootless humanity is compensated for toiling have become at once instruments of their slavery and the secret weapons of their international masters - the make-weights that ever throw the balance of scales against just reward.

I agree with Carlyle that -

The saddest sight on this earth is the poverty of a man willing to work, anxious to work, and yet compelled to tramp the highways of our land, hungry and homeless because he can find no master who will hire him. And what can be said for an economic system that produces this fate for millions of our citizens?

I repeat that only the most obstinate people will claim that planning is not imperative in a modern society.

I have here the report of an address delivered by President Truman at a special session of the American Congress at which he sought authority to ration scarce commodities and impose controls of prices, wages and rents. In outlining his legislative programme he urged “the restoration of control over hire-purchase and the restraint of inflationary bank credit “. One of the objects of this bill is the restraint of inflationary bank credit which would result from a successful challenge of sections 18 to 22 of the Commonwealth Bank Act of 1945. The newspaper which reported President Truman’s address also contains the following paragraph: -

Senator Robert Taft, a candidate for Republican nomination for the Presidency, declared last night that President Truman’s proposal for a revival of partial wage, price, and rationing controls was “ a step towards a completely totalitarian nation “.

That sounds like an extract from the speech of an Opposition senator in this chamber. Throughout the world reactionary forces are trying to turn back the clock, thereby forcing the world into a position which must lead to further wars. That is the state of affairs now existing in countries where the minds of the people are confused by fears. Those fears have been fostered by vested interests, and are preventing the formulation of a just peace. For political purposes, vested interests are deliberately trying to create a state of uncertainty, because they know that once the economy of a country is planned their power to exploit the community and to create reserves of unemployed workers, which was part of the old system, will diminish or disappear. They know that unless they have a reserve of unemployed men and women on which they can draw, “they cannot create that fear among the ,people which will make them docile and ^reduce them to the level of animals whose only thought is for their own survival. This overpowering fear destroys interest in the richer things of life.”

During the last election campaign the Liberal party made a feature of its intention to lift prices control if returned to power. Its policy is the samp as that of reactionaries in the United States of America. Members of the Liberal party are linked with monopoly capitalism in other countries, and if given the opportunity they would adopt in Australia the same tactics which have resulted in ruin and chaos in the past. Measures to avoid the violent fluctuations which have occurred in other countries have been taken in Australia, but there is still fear in the minds of the people as to what may happen in the future, especially when they reflect on happenings in France, the United States of America and other countries. While the minds of the people are confused by fear they ask a number of pertinent questions. They want to know whether chronic mass unemployment and depression will return and, if so, why? There was no unemployment in war-time when people were engaged in making war materials, they want to know why there should be unemployment in times of peace. These questions can be answered only by saying that the Labour Government is determined to do whatever is constitutionally possible to avoid a recurrence of these evils. Those who are leading the (fight against this bill, the primary object of which is “ the expansion of the banking business of the Commonwealth as a publicly owned bank conducted in the interests of the people and not for private profit “ are, by the very nature of their attack, admitting that, in their opinion, private profit is more important than the interests of the people of Australia. The primary purpose of this measure is to provide the Australian Government with secure and adequate powers over credit policy so that it will be possible to continue full employment and maintain a high and rising standard of living. Should a matter of such national importance be left to those whose only interest in banking is the making of private profit? Those who attack this bill do so because they realize that the power they now wield will be taken from them when it becomes law, and they are determined not to lose that power without a fight. The long struggle for emancipation has passed through many stages. After passing through the stage of the feudal system a number of minor reforms were made, until adult franchise was won, trade unionism was established, which in turn led to a limitation of working hours, and the fixing of wages and conditions of employment. Other advances included the provision of safety precautions in industry, and the adoption of a universal franchise, which has led to political democracy.

We now move into the most important of all reforms, namely, the institution of economic democracy. This bill is one of the ways by which economic democracy can be implemented. The fundamental issue associated with this bill is a moral issue. No member of the Labour party stands to benefit personally from the passing of this measure. As stated by the Prime Minister, the party is activated solely ‘by humanitarian motives. It is the policy of the Labour movement to add to those achievements which have widened the horizon of human freedom. To quote Arthur Greenwood, in Why We Fight, the object is “ to assist in creating those essential conditions of civilized society in which alone the spirit of freedom in all its manifestations can thrive “. This measure will contribute to the foundation of a new order, on which, later, an edifice to give peace on earth and goodwill towards men may be built.


– I am opposed to this measure and I submit that the Government has not made out a case to warrant or excuse its introduction. Although I have listened to many of the speeches delivered in connexion with this bill and have read others supporting it, my attitude to-day is the same as that of a majority of the people of Victoria who recently expressed their view in the ballot box. The Minister for Munitions (Senator Armstrong) and Senator Grant, in eloquent speeches in support of the bill, dwelt at length on the shocking conditions which existed in the past in other countries. The Minister for Munitions went back a comparatively few years, but .Senator Grant gave the history of the sufferings of the people through the centuries. There is no doubt that this humanity of ours has been frightfully inhuman to itself. Man’s inhumanity to man has indeed made countless thousands mourn. I do not propose, even if I were able, to join issue with either of the honorable senators in the charges that they have made. I admit that there have been gross and great abuses ; but the point I make is that the remedy for the abuses which even now may continue does not lie in socialism of in socialization. The abolition or continuance of abuses is not a matter of laws and lawmakers. It is more a moral issue than a legal one. No matter what powers the Parliament may take unto itself to remove the abuses from the world, it is necessary first to remove evil from the heart of man, and that cannot be done by legislation. As one who acknowledges the Christian tradition and humbly professes Christian philosophy, I subscribe to and endorse wholeheartedly the proposition that the credit of a nation should be used in the interests of that nation. I submit, however, that the 1945 banking legislation confers upon the Government all the powers that are necessary adequately and completely to control credit, and that no real justification for this bill has been shown. This measure goes much farther than the 1945 legislation, because it destroys competition and it places in the hands of the state a complete monopoly of the banking instrument. The chief reason for my opposition to this measure is that it is designed to implement socialism, but merely because I am against socialism is no warrant for honorable senators opposite to say that I am quite happy with existing conditions. There is room for many and vast improvements in the conditions of the masses of our people; but socialism does not offer a remedy.

The Minister for Munitions referred to the encyclical Quadragesima Anno, and endeavoured from that source to draw some support for the proposition that this bill was envisaged in the general framework thereof; but the Minister, and many other honorable senators, know that in that same encyclical socialism is expressly condemned.

Before proceeding with the bill itself I wish to refer honorable senators to a few recent and very .authoritative references in condemnation of socialism. I do that because ray main objection to this measure is that it is an attempt to foist socialism on the country. I mention first Friedrich A. Hayek, a wellknown Austrian, wl-.o has had considerable experience of both fascism and nazi-ism at work. In regard to socialism he has this to say - and I commend his views to the earnest consideration of those who are socialistically minded -

Many socialists have the tragic illusion that by depriving private individuals of the power they possess in ah individualist system, and transferring this power to society, they thereby extinguish power. What they overlook is that by concentrating power it can he used in the service of a single plan, it is not merely transformed but infinitely heightened. By uniting in the hands pf some single body power formerly exercised independently by many, an amount of power is created infinitely greater than any that existed before, so much more far-reaching as almost to be different in kind.

And again -

Individualism, in contrast to socialism and all other forms of totalitarianism, is based on the respect of Christianity for the individual man and the belief that it is desirable that men should he free to develop their own individual gifts and benefits.

Senator Grant:

– What is the name of the gentleman who said that?


– I am glad that honorable senators are paying attention, because I regard the next passage as of particular importance -

To many who have watched the transition from socialism to fascism at close quarters the connexion between the two sytems has become increasingly obvious, but in the democracies the majority of people still believe that socialism and freedom can be combined. They do not realize that democratic socialism, the great utopia of the last few generations, is not only unachievable but that to strive for it produces something utterly different - the very destruction of freedom itself.

I come now to the comments of Mr. William J. .Smith, S.J., a well-known American industrialist. Dealing with the abolition of competition and the concentration of power in the hands of monopolies, he says -

Complete economic dictatorship by a relatively small number of men, whether in the name of the State or of rugged individualism or of one class of people, is the principle of conquest in action no matter what fancy title may be attached to it. . . Competition is an essential element of industry. It is not and cannot be the whole of industry.

Senator Grant:

– Who was the first authority to whom the honorable senator referred ?


– I shall tell the honorable senator.

Senator Nicholls

– Order! The honorable senator must not reply to interjections. All interjections are disorderly.


– The effect of this bill will be to place in the hands of whatever government may be in power complete control over every phase of activity that depends upon, or requires, banking facilities for its continuance or operations. That means that every phase of human industrial endeavour shall come under the control of that institutionwhich means, in this instance, that it is the State which controls finance. The Government, through the Treasurer, could decide that any city, town or suburb had enough butcher shops or baker shops or chemist shops or departmental stores, and, in the terms of this legislation, a direction could be given by the Treasurer that finan cial assistance must be refused all but one of each of those undertakings. There could be only one result, namely, that all but those which received the benefit of financial assistance would go out of business. That is a possibility that must be taken seriously. It could happen that a skilled artisan or tradesman, with good intelligence and commendable ambition, decided to set up on his own account, as has happened in a great many instances, to the advantage of the men themselves, and of the country. To implement such a decision a man would need capital. He would require banking facilities and financial accommodation, but it is possible that the Treasurer might say: “We have enough engineers, or enough men in that skilled occupation. You cannot get financial accommodation to give effect to that ambition of yours, laudable though it be. You will just stay put “. If that attitude were adopted the man would have no option but to “ stay put “. Again, organizations might desire to build schools, churches, hospitals, orphanages or cultural institutions of various kinds, and it could happen that the Treasurer of the day would say: “ We are not inclined to permit the building of these schools, or these churches or these hospitals, or these places of cultural encouragement, unless they are State-owned, managed and controlled “. There is nothing in this legislation to prevent that from happening. Pursuing the same line of thought, let me point out that government control of finance might be used to control housing development. This is important, when we bear in mind the remark made recently by a senior Minister to the effect that he did not like the idea of people owning their own homes because it tended to make a nation of “ little capitalists “. Supposing that idea were to spread among members of the government of the day, of whatever day it may be. People seeking finance, and endeavouring to give effect to that very desirable state of affairs in which every family would own the home in which it lived, would obviously be refused financial accommodation, should the feeling be abroad that to encourage the owning of homes by the people is to encourage the. creation of a nation of “ little capitalists “. Then, the family man without a home would, whether he liked it or not, be compelled to become a tenant of the State. If honorable senators opposite think it is highly desirable that we should all be tenants of the State I disagree, and I submit that a majority of the people of Australia would also disagree.

There is also another aspect to be considered : There are approximately 20,000 employees of trading banks. That means that 20,000 young Australians decided from time to time that banking should be their chosen career. Had they wished to be public servants, I have no doubt that, with their educational qualifications andattainments, and having regard to the rapidly expanding public payroll, they would have experienced no difficulty in getting government jobs. But no, they decided, as this is still a free country, that they preferred banking. The effect of this legislation will be to enable the Government to say : “ Hey, young fellow, you may think you are not going to be a public servant, but you have another think coming. We, the Government, have decided that you shall not work for private enterprise. You shall not pursue private banking as a career. You will do what you are told. You will become a public servant.” I do not intend to decry the Public Service as a career. We are very efficiently served by our regular public servants. The Public Service is a credit to the country and, as a career, is highly honorable and commendable, but my point is that those who enter it as a career should do so of their own accord. It comes to a day and an age when a government, claiming to represent the mass of the people, and to be guided and directed only by a spirit of humanitarianism and generosity, will dare to say to the employees of the private banks: “You will do what you are told. You have chosen banking as a profession, but we have decided otherwise. You will go where you are directed.” That will be an amazing state of affairs. Without quoting Mr. Winston Churchill exactly, let me paraphrase him by saying, God spare us from the day when nobody in this country matters for a thing unless he is associated as an officer of a militant union, or of a government bureaucrat.

Seeing that this Government consists largely of men who have been actively associated with trade unionism, it is very difficult to understand their enthusiasm for a measure of this kind, because it is common knowledge that the Communist members of trade unions are pledged to destroy trade unionism when, with the assistance of the unions, they have attained to power. I have not seen it seriously argued that trade unionism can live with communism. On the contrary, it is freely stated in the press, in books land from the platform, that Communists are pledged to destroy trade unionism. For their information, I refer honorable senators to the Communist party’s training manual for Australia. There the modus operandi for the destruction of trade unionism is described, and those who run may read. This bill represents the first stepping-stone to’ that goal. It will be remembered that Sharkey in his Outline of History of the Australian Communist Party said -

The growing influence of the Communist Party brought about the adoption ‘ of the socialization objective of the Australian Labour Party.

No attempt has been made until now, years after the socialization plank was written into the platform of the Labour party, to put it into operation. Apparently, in days gone by and until quite recently, the moderates of the Labour party have signed the party’s pledge always with the mental reservation that never in their lifetime would they be called upon actively to implement socialization. Those who insisted on it in 1921 were a mere handful, a harmless militant minority, whilst the moderates were in a majority; but, to-day, the militant minority has become so powerful as to control the moderate majority, and they have called upon the moderates to give effect to the party pledge. There may be some truth in the current rumour - honorable senators opposite will probably know better than I do - that this measure has been brought in with such great haste, immediately following the decision of the High Court, because a certain honorable member in the House of Representatives, who is known to be very keen on implementing Labour’s socialization plank, was likely to submit a motion for the purpose _ of discussing the advisability, or otherwise, of implementing that plank by nationalizing the private banks. Had that occurred, the Government would, indeed, have been placed in a very awkward predicament. That may be one reason why, out of a clear sky, this measure has been introduced.

Lenin, in 1917, wrote that the first step towards communism must be the nationalization of the banks. He wanted one huge State bank, declaring that such a. bank represented nine-tenths of the socialist apparatus. “What Lenin preached in 1917 the Communists urge to-day in 1947. Paragraph 5 of the Communist manifesto demands -

Centralization of credit in the hands of the State by means of a national bank with State capital and an exclusive monopoly.

We now witness the spectacle of a Labour government doing precisely what Lenin advocated in 1917, and what the Communists are now demanding shall be done. If this measure becomes law, woe betide the trade union movement in Australia. In that event the trade unionists in this country will suffer the fate of trade unionists in Germany, Italy and Russia. Australian trade unionists will gain cold comfort when they find that the funds which they have accumulated over many years in order to ameliorate their conditions have been frozen.

This measure seriously infringes the sovereignty of the States. It is some comfort to observe that some States, at least, have decided to appeal to the High Court in order to protect their sovereign rights. Once this measure becomes law the Commonwealth, with full control of finance in its hands, will be able to ride roughshod over the .States, because, like any other institution, the States require banking facilities in order to be able to carry on their activities. In order to show that it is not mere idle speculation to suppose that the Commonwealth will dictate to the States the policies they must pursue in respect of vital matters, I refer to a report published in the Brisbane Telegraph of the 17th November last, dealing with the refusal by the Queensland Premier, Mr. Hanlon, to submit to the Prime Minister’s dictation with respect to the constitution of the proposed board to control the coal-mining industry in Queensland. In this matter the Prime Minister has said, in effect, to Mr. Hanlon, “Do as I say, or you will not get any financial assistance for the purpose of developing the coal-mining industry in Queensland “. Shades of our State rights! The report to which 1 refer reads -

Mr. Chifley is believed to have told the miners’ representatives that the Federal Government had no constitutional power to force Mr. Hanlon to accept the Joint Commonwealth. New7 South Wales Coal Board as the controlling authority for the Queeusland coal-mining industry.

He is believed further to have indicated that Mr. Hanlon was fully entitled to adopt the stand he had against the extension of the board’s activities to Queensland, and to have decided himself to establish a purely Queensland board to control the industry in his State.

But while Mr. Hanlon maintained this attitude there was little likelihood that he would lie given financial assistance by the Commonwealth to rehabilitate and develop the industry in Queensland.

The conclusion to be drawn from that report is somewhat horrifying. After all, this money is not the Commonwealth’s money; it belongs to the people of the Commonwealth, and, regardless of whether the Commonwealth, or the central authority, looks with favour or disfavor upon a particular line of policy proposed by a State, if that money is to be wisely expended in the development of an industry, such dictatorial power should not be used. At present we enjoy certain constitutional rights which arc still protected; but once this measure becomes law - God forbid that it ever should- the sovereign rights of the States under the Constitution can be easily circumvented by the ruse on the part of the Commonwealth refusing to make finance available to the States. In that case the States will not be able to carry on, because, like any individual trader, or institution, the States must have finance.

What power in respect of banking is the Government now seeking that it does not already possess? I do not propose to repeat in detail what has been fully stated and debated in the House of Representatives. Briefly, the position is that under the Banking Act of 1945, the Treasurer already possesses all the powers which he now seeks under this bill except the power to expropriate the assets of the private banks, the power of socialization. He has complete control of the policy that shall be followed by the private banks, in respect of not only the amount of credit they may make available but also the direction in which that credit shall be made available. Through the Commonwealth Bank, he already possesses power to control the rate of interest that shall be charged by the private banks, and also control of all gold other than that used in manufacture. Through that institution the Treasurer also controls exchange. Indeed, he now has control of every conceivable aspect of credit, its issuance and destination. That control is held exclusively by the Commonwealth Bank. The only thing that this bill does is to destroy, the healthy, wholesome competition - at present controlled competition - now afforded the public by the private trading banks. At present, the Commonwealth, Bank may, by notice, require any bank, to furnish it with any information specified in the notice, and the information so supplied has to be verified by a statutory declaration. If the information is not supplied, the Commonwealth Bank has the power and authority to appoint one of its own officers to go into the private bank, and that institution has to make available to the official all its books, papers and records. I am emphasizing that there is no conceivable; avenue of control which is not now thoroughly and completely enjoyed by the Government under the Banking Act: of 1945. In addition, the private banks, are obliged to hand over at a nominal rate of interest all their increased assets; resulting from increased deposits accruing since 1939. I trust that these matters, will be considered by the people throughout the length and breadth of the land,, and that they will realize that the real; reason for the introduction of this bill has not been disclosed to the Senate, because the Government already has all the power that any government could require in regard to the control and direction of banking policy. The effect, of course, will be that this extra power will be exercised to force the people to deal with the Commonwealth Bank. In other words, the entire matter of choice will be eliminated. But apart from that, and the expropriation of the shareholdings of the private banks, which are the only things - and probably evil things - which will arise from this bill, the Government already enjoys complete and absolute powers.

After the passage of the Banking Bill of 1945, the Prime Minister and his followers declared throughout the length and breadth of the country that the wings of the private banks had been clipped, that the Government had complete control over those institutions and that the Government had ample power and authority so to control monetary policy and the credit of the country as to prevent a recurrence of the experience of the1930’s. Only two years ago, the Prime Minister is reported as having said -

The Government is convinced that active competition by the Commonwealth Bank with the trading banks and other financial institutions will ensure that banking services are supplied adequately and cheaply.

Summarizing his attitude towards the Banking Act of 1945, the Prime Minister said -

Accordingly, the Government has decided to assume the powers which are necessary over banking policy to assist it in maintaining the national economic health and prosperity.

There is no doubt that those words reflected the attitude of the Labour party at that time. In the same year, the Minister for Post-war Reconstruction (Mr. Dedman), who is a senior member of Cabinet, said -

I consider the structure of the banking system ought to be a central bank under which there should be various banks that undertake trading activities, which is better fitted for this country than any one bank monopolizing the whole field.

What has really transpired between 1945 and now to justify, warrant or excuse the Government for introducing this revolutionary measure? I submit that no reason has been given. Indeed, the only reason that can be inferred is that the Government is power-drunk. How true are the words of Lord Acton -

Power always corrupts. Absolute power corrupts absolutely.

Surely there is only one reason why the Government is grasping for this extra power. That reason is not to enable the

Government to control the private banks, because it already completely controls them. Nor is the reason to authorize the Government to monopolize the credit and economy of the nation in order to combat any tendency towards another financial and economic depression, because it has claimed, and rightly so, that it already possesses that power. The Government introduced this bill before attempting to obtain, by way of a referendum, the opinion of the people regarding it. Some honorable senators have stated that the nationalization of banking has been a part of the policy of the Labour party for 26 years, and, therefore, the Government was justified in introducing this bill in order to give effect to that policy. But would it not have been the correct, decent and proper thing for the Government to indicate to the people at the elections in 1946 that it contemplated introducing this legislation?

After the late Mr. John Curtin became Prime Minister, he assured the people that while he remained in office, no attempt would be made to implement the policy of socialization. He fought the elections in 1943 on that policy and on being returned to office he faithfully kept that promise. After his unfortunate death, Mr. Chifley became Prime Minister, and he gave an assurance that the Government would not make any serious or substantial departure from Mr. Curtin’s policy. The Prime Minister observed that promise until he announced, without warning, his intention to introduce this revolutionary piece of socialist legislation. This change of policy indicates how far leaders of the Labour party to-day have drifted from the idealism which inspired the founders of the Labour movement. Where, I ask, is the devotion of the leaders of the Labour party to-day to the principle of the referendum ? If I am correctly informed, the referendum is one of the pet planks of the platform of the Labour party. This is an admirable opportunity for the leaders of the Labour party, sensitive to their obligations to the people, who are their masters, to ask them for a mandate to nationalize the banks. But the leaders of the Labour party to-day are power drunk, and, in their attitude towards electors, are contemptuous and arrogant. At the first whisper or sign of any objection to this bill, they should have asked the people for a mandate. They would not do so. They have tie greatest contempt for the people. In their opinion, the people are merely the “mugs” who sent them here. How far, indeed, have the leaders of the Labour party to-day drifted away from the people! How far, indeed, have they travelled away from the observance of those political niceties and decencies which characterize any good democracy!

In expressing my opposition to the bill, I emphasize that a scheme of control of banking, completely removed from party political interference, embodying adequate safeguards for the personal, political and economic liberty of the individual, and in respect of which the people have given an informed and specific mandate, may be sponsored with justification. However, that is not the position with this bill. This legislation contemplates party political control of banking policy. No adequate safeguards have been provided, and the people have not been consulted about or informed upon the subject. Definitely, they have not given any mandate for the introduction of the bill. The Government has claimed that the enactment of this measure is necessary. I remind honorable senators of the observation of the famous statesman who declared : “ Necessity is the excuse of tyrants; it is the creed of slaves “. Australia owes a great deal of gratitude to the electors of Victoria, because, on behalf of a free people, they have seen through the dressings and drapery wrapped around the Government’s proposal, and realized the real significance of the measure, namely that the Government is prepared to discharge completely the role of tyrant. The people in Victoria, in the name of all free citizens, indicated emphatically that they were not . prepared meekly to mumble the creed of slavery.

It has been claimed by leaders of the Australian Labour party that their party is the only one which is concerned with the rights and interests of the mass of the Australian people. That is an arrogant and unjustifiable’ assertion, and if the Government continues to pursue the path of socialism the country will undoubtedly lose a lot of liberties which it at present enjoys.

Senator Grant:

– The honorable senator knows that the Government cannot, because of the Constitution, socialize Australia, so why does he repeat that assertion ?


– Order ! Honorable senators supporting the Government have had, or will have, an opportunity to speak, and they should control their present excitement, for which I cannot perceive any justification. Every member of the Senate will have an opportunity to speak, and honorable senators must control their feelings until they receive the call. I desire to hear Senator O’sullivan and, in any case, it is the duty of honorable senators to listen to the exposition of other points of view. I do not propose entirely to prevent honorable senators from interjecting, and I realize that before I became President I myself interjected. However, in this instance it appears that some honorable senators are attempting to prevent Senator O’Sullivan from speaking. He is endeavouring to expound his point of of view, which he is quite entitled to do under the Standing Orders, and it is only fair that he should be accorded a reasonable hearing.


– Frequent references have been made by protagonists of this bill to the “ wickedness “ of the banks. I assure honorable senators that I hold no -brief for the banks, and I hold no shares in any of them. The only association I have had with the banks has been through the ordinary, intercourse one has with them in practice, which has been, in my case, perfectly cordial and harmonious. Throughout my professional career I have come in contact with bank managers in the country and in the cities, and I must say quite frankly that I have not found them to be the monsters which they have been painted by the honorable senators opposite. To me they appeared to be decent, helpful fellows who were kindly and considerate in their dealings with people, and such as one encounters in any walk of life. I know that in country towns considerable personal friendshipexists between bankers and their cus tomers, which indicates that bank officers must devote considerable care and attention to the affairs of their customers. Because of that experience I consider that the criticisms made of them by some honorable senators opposite are certainly not justified.

Senator Ward:

– What -about the case of the late Lieutenant Wilkins ?


– I thank the honorable senator for reminding me of that, because I had intended to deal with a remark made by Senator -Sandford in the course of his speech to the effect that the pension of the late Lieutenant Wilkins was taken from him. However, the legal position is that a military pension is inalienable, and cannot be assigned. The law of the land provides that it cannot be garnisheed or taken in judgment. For verification of my statement I refer any honorable senator who may be ignorant of the fact to the Minister for Health (Senator MeKenna). Therefore, the assertion that Lieutenant Wilkins’s pension was seized is obviously a fairytale. Every Australian will be affected by this measure, and I do not think that extravagant statements made by honorable senators on either side of the chamber will assist the debate. For that reason I propose to be moderate, accurate and practical in any remarks which I make, and if honorable senators opposite do not agree with the, point of view which I express, I trust that they will at least concede me the merit of being sincere, because I make the same concession to them in respect of their contentions.

It has been claimed that the history of trading banks in Australia supports the contention that in prosperous times they make advances too freely and in bad times they contract credit far too readily. However, the Prime Minister (Mr. Chifley), who was a member of the Royal Commission on Monetary and Banking Systems, did not subscribe to that contention, and I think that some honorable senators opposite would be well advised to accept his viewpoint. Suggestions have been made that the banks, by selling up properties on which they had advanced money, made huge profits. The Minister for Health can -correct me if I am wrong, but, by no stretch of imagination will the law permit a mortgagee to make profit out of a realization. The maximum which a mortgagee can obtain is the repayment of the amount advanced, with interest accrued, and the cost of the sale. When a realization exceeds the amount owing and the cost incurred in the realization, the surplus is returned to the borrower. What I have just said is something that is generally known, so that it is idle for honorable senators opposite to rely upon criticisms which have no substance and cannot be supported by fact. Arguments of that kind certainly do not avail their cause. I understand that no statistics are available to indicate the total number of foreclosures which took place during the depression, but I happened to read recently the statement of a manager of a trading bank in Victoria, who was a member of the Victorian Rehabilitation Commission. He declared that during the depression no farmer was evicted from his farm by the bank by whom he was employed, no workman was evicted from his home, and no homes were sold up. Yet, he pointed out, the Victorian Savings Bank, which had found it necessary to realize on properties to the value of £17,442 in 1929, foreclosed on properties to the value of £198,628 in 1931. The point I am. making is that State or Commonwealth owned and controlled banks work under a much stricter set of rules and regulations than applies to the ordinary trading banks, whereas the trading banks depend on goodwill and are anxious to be well thought of and to compete for business. A State department has not that urge. It has no flexibility. It has a bureaucratic approach to such matters. It is not that the manager of one is more hard hearted than the manager of the other, but State owned and controlled banks are impersonal. It does not matter whether the party in power is Labour or anti-Labour, the point is that that is typical of government owned and controlled institutions. There is a lack of the human approach to matters that characterizes commercial institutions. The leaders of the Labour party to-day have the audacity to imply that they and only they are imbued with sublime altruism and humanitarianism. I appeal to Labour senators to abandon the materialistic and barren road of socialism and to give expression to their professions of humanity in the rich pastures of Christian justice and charity.

Senator AMOUR:
New South Wales

– In all the years of my association with the great Australian Labour party, I have never approached with such pride and pleasure a vote on a measure for advanced social legislation as I approach the vote on the second and third readings of the Banking Bill, which will ensure the security of all the social legislation that has been and will be enacted by the Labour Government.

SenatorO’Sullivan made the extraordinary statement that he favoured the Banking Act of 1945. He is out of step with the leader of his party, the Leader of the Opposition in the House of Representatives (Mr. Menzies), who has been asked by the press to say where he stands in respect of that act, but has not done so. The Leader of the Australian Country party (Mr. Fadden) made clear the attitude of his party when he said, “ Every one knows that we moved an amendment to the Banking Bill “. Yet, with the full knowledge of his leader’s attitude, the honorable senator says that he is wholly in favour of that act. He said that under it the Government had all the power it needed to do what it desired to do to stave off a depression. He also said that the Prime Minister (Mr. Chifley) ought to have stated in his policy speech before the last general elections that this bill would be brought down. But what were the circumstances? As a lawyer, Senator O’Sullivan knows that the act was successfully challenged in the High Court by the Melbourne City Council, and that, had there been sufficient time between the High Court’s decision and the introduction of this bill, sections 18 to 22 would have been attacked in the High Court. In fact, the whole act would have been attacked. The Government, led by the great “ Ben “ Chifley, however, ensured that sufficient time should not elapse, and, consequently, the private banks and their puppets were denied the right of approaching the High Court inorder to abolish all the remainder of the 1945 act.. Senator O’Sullivan also said that he deprecated what had been said about the Wilkins pension case. He claimed

That the Minister for Health (Senator McKenna) would agree that no one could attach a pension and that to do so would be a contravention of the provisions of the Australian Soldiers’ Repatriation Act. The honorable gentleman knows, however, as well as I do, that the late Lieutenant Wilkins some years ago made a statement;, which the private banks have not denied, that a private bank took his pension. He signed a form and the bank took it over.

Senator Cooper:

– It drew the pension as his agent.

Senator AMOUR:

– Thanks for the information. It was an agent, all right. It took not only his pension, but also his garage and farm. Senator O’Sullivan also said that a mortgagee could not derive more than his rights from a property and that no one walked off a farm in the depression. The honorable gentleman ought to know that if a man had paid a deposit on a house, a farm or a factory, and had raised the balance of the purchase money on mortgage from a bank or a mortgage company, the Government of New South Wales, which was of the same political colour as is the honorable gentleman, instructed that the property be revalued. The revaluation reduced the price at which the property was purchased, and destroyed the equity of the purchaser. When it foreclosed, the bank ensured that the mortgagee had no equity and that the only equitywas an amount sufficient to cover the mortgagee’s debt to it. That state of affairs was allowed by the then antiLabour Government of New South Wales.

Senator Rankin said that this legislation meant conscription of the people. She said that the people would be told what they could do and where they could go. She was referring to bank officers and the depositors. Did any one ever tell the honorable senator the story of the depression when homes were broken up, because, if fathers were working, their unemployed sons and daughters were unable to get the dole if they remained in their parents’ homes, and had, therefore, to leave home and wander from place to place for the dole or starve? They would go to the police station in one town, and receive an issue of food and have to go to another place twenty Or more miles away to get more. Did she learn how landlords evicted tenants, and banks foreclosed on homes, farms and factories, thereby putting the people on their feet to walk in search of shelter with their families? That was the freedom extended by the banks and governments to them. Medical officers Stated then that 80 per cent. of the children attending State schools were Suffering from malnutrition. I do not know whether the honorable senator knows of those things or has seen, as I have, Australian people begging for food and little children cold and hungry, with distracted mothers driven to desperation because they could not give their offspring the food, clothing and warmth that all mothers want their children to enjoy. We are supposed to be Christians, but could any one tell me that there is any Christianity in a state of society that allows conditions like that to exist?

The Leader of the Opposition (Senator Cooper) said that the bill would greatly affect the primary producers because an alteration would be made in the exchange rate of 25 per cent., which is the difference between the value of the Australian £1 and the £1 sterling. He claimed that the primary producers secured the advantage of the exchange rate, but the graziers send their wool to various firms for disposal and they are notified when their wool is to be sold. The price paid by the wool buyer is paid to the growers, less freight, cartage, commission and other incidental charges. So, where and when do the producers get the advantage of the exchange rate? The rake-off goes to the banks, the pastoral companies and the woolbrokers. I do not propose now to weary the Senate with the story about wheat, which is a different matter.

It will be remembered that when the Labour party established the Commonwealth Bank the private banks violently Opposed its creation. Sir Joseph Cook, the then leader of the anti-Labour forces, prophesying the future of the Commonwealth Bank, said -

So far as the great struggling masses outside are concerned this is another piece of Dead Sea fruit that the Government are offering them.

In those days, in order to defeat the Government’s proposal, the representatives of the capitalists’ interests manifested a previously non-existent concern for the struggling masses. The then Labour Attorney-General, the right honorable member for North Sydney (Mr. “W. M. Hughes), showed up the hypocrisy of the opponents of the creation of the bank when he said -

Whenever it is proposed to tax the rich nian, there goes out a wail from members opposite, not on behalf of the rich man, but on behalf of the poor man, who is told to beware of the Labour party.

He added -

Is it the little man who provides the powder and shot for these attacks? No, it is the man with plenty of money, against whom the legislation is directed.

The trading banks are adopting the same tactics to-day and, in order to achieve their end, are spending thousands of pounds and making every effort to arouse public opinion against proposals for monetary reform. Monetary reform was opposed by the Conservatives when Sir Joseph Cook led them. Taking a long view and being fully aware of the villainous financial relationship between the Conservative party and the bankers, he said -

Those who will benefit from the proposed bank will be the capitalists who are engaged in trading concerns and as speculators. The people will ask for bread, and the Labour party will give them bricks, and the banks will do nothing to increase their welfare.

Sir Joseph Cook anticipated the BrucePage regime, which gave effect in 1923 to what he had anticipated and said in 1911 in appointing a board to administer the Commonwealth Bank. In 1931, the people asked for bread, but it was not the Labour party that gave them bricks ; it was the capitalists and the speculators, who, in refusing credit to the governments, refused bread to the people. In 1945; the Labour Government made an honest attempt to rectify the position by abolishing the Commonwealth Bank Board and extending the operations of the Commonweatlh Bank to enable it to compete against the trading banks. It also required the private banks to pay into the Commonwealth Bank all excess deposits over the 1939 deposits with those banks and, in addition, semi-government authorities had to transact their businesswith the Commonwealth Bank. During the election campaign, the Leader of the Opposition in the House of Representatives (Mr. Menzies) said that if theparties in opposition were returned with a majority, and were commissioned to form a government, his first act would beto amend the 1945 legislation and reappoint the Commonwealth Bank Board. In other words, he would place the bank in the hands of capitalists and speculators. Fortunately for the people of Australia, the right honorable gentleman was not called upon to form a government and, therefore, the banks had to find other means of achieving their purpose. As they had failed to gain control of the Parliament, they looked around to find a puppet to attack section 48 of the Banking Act of 1945 and were successful. It is history that they were prepared to attack the validity of sections 18 to 22 of that act and, indeed, the whole of it. The Government, however, did not accept the decision of the High Court in relation to section 48 of that legislation, as it believed that section 51 (xiii) of the Commonwealth Constitution gave the Commonwealth control over banking. It, therefore, decided to introduce this legislation which has been attacked by the banks, the press, and the Opposition. They attacked it because they are in the pay of the bankers, as is evident from the fact that directors of banks are also directors of newspapers, and that contributions are made by banks and newspapers to the funds of the parties now in opposition.

Honorable senators opposite have complained that this bill is being rushed through the Parliament, but they know that the nationalization or banking has, for the last 40 years, been the policy of the men and women who have constituted the Australian Labour party. The first move to give effect to that policy was made 36 years ago, when the Commonwealth Bank was established. At that time, the right honorable member for North Sydney (Mr. Hughes) was Prime Minister in a Labour government. History records that, much against his will, the great Labour stalwart9 of that day forced through caucus a motion to establish the bank. As I have said, the second move was made in 1923 by the Bruce-Page Government, when it handed over the Commonwealth Bank to the control of the private banks by the creation of a board consisting of capitalists and speculators. The third move took place in 1945, when legislation which has since been bitterly attacked by the press, the bankers, and the Opposition, was passed by the Parliament. Honorable senators will recall that the right honorable member for Cowper (Sir Earle Page), speaking in the House of Representatives, said that before the fight in relation to the control of banking was finished, blood would flow more freely in Australia than it was flowing in India at the time he was speaking. In saying that, the right honorable gentleman was merely repeating what Mr. Heffer, manager of the Bank of New South Wales, had said regarding this legislation. Those who oppose this bill call themselves democrats, but they are fascists at heart. If a Labour man had uttered such words, every newspaper in Australia would have condemned him and demanded that action would be taken against him. There is, however, no demand by the newspapers for action to be taken against these people, notwithstanding that they are prepared to start a civil war in this country. If a member of the Communist party had made a similar statement there would have been an outcry in this country and a clamour by members of the Opposition for the deportation of the individual concerned, or his confinement in a penal institution. Apparently the right honorable member for Cowper and the assistant manager of the Bank of New South Wales can make these utterances with immunity. They can incite the Australian people to violence just as the “ New Guard “ leaders did in 1931. Apparently the remarks of these two gentlemen can be taken as the start of a campaign by another “ new guard “. I am reminded of a dreadful thing that a responsible newspaper of this country did when the honorable member for Reid (Mr. Lang) was Premier of New South Wales. The Sydney Daily Telegraph published a cartoon showing Mr. Lang’s head on the body of a dog and bearing a caption “ Shoot the mad thing “. The cartoon was printed again on the following day. So far as I am aware, it was the first time in a democratic country that a newspaper had advocated the assassination of a public man. When the right honorable member for Cowper and Mr. Heffer make these inflammatory utterances, they aline themselves with Hitler, Mussolini and all the other forces that have arrayed themselves against democracy.

One of the leaders of the fight against this measure is Mr. L. J. McConnan, the general manager of the National Bank of Australasia Limited, who apparently is the spokesman for the private banks. This gentleman, I recall, was very loud in his protests against the 1945 banking legislation. On the 10th November, 1944, he sent a letter to every customer of his bank, regardless of the size of his account, stating -

As the threatened permanent political control of banks is a matter which is likely to have an effect upon your personal financial affairs, I enclose for your guidance, a copy of the statement on the subject issued by this bank. Please do not hesitate to communicate with me if you want further information.

To-day a similar campaign has been organized. Letters are being sent out by the banks urging people to write to their federal member and ask him to urge the holding of a referendum. Some enthusiastic people are doing as they are reques ted.

Sitting suspended from 6 to 8 p.m.

Senator AMOUR:

– I have here a document issued by the Citizens Rights Committee, of Rylstone, dated September, 1947. It is as follows : -

The above committee was formed at a public meeting recently held in Rylstone, and is strongly opposed to the nationalization of banking, against which it is determined to fight.

If you are also opposed to the proposal, please forward the attached letter to your local member without delay. Yours faithfully, J. A. McLachlan, Secretary.

The lower part of the document is detachable, and on it there is a printed communication purporting to come from the elector to his parliamentary representative. The name of the member was printed as F. F. Williams, Parliament House, Canberra, but the first “F.” of the initials is crossed out, and the letter “ T. “ -written over it. The body of the communication is as follows : -

I am strongly opposed to the proposal of the Federal Government to nationalize the trading banks. Please make this protest personally, and convey it to the Prime Minister.

That is how the opponents of the banking proposals have attempted to organize opposition to them. They have tried to catch the unwary, and have asked them to write letters of protest to their federal member. I may say that very few wrote to me, and I did not reply to those who did. Most of the people must have known my views on the subject.

The Leader of the Australian Country party (Mr. Fadden) strongly criticized the bill on the ground that the Commonwealth Bank would not be able to find the money to take over the assets of the trading banks, but those who know the history of the Commonwealth Bank are quite prepared to disregard his warnings. When the Commonwealth Bank was only six years old, and after four years of war, it had already provided £437,000,000 to maintain the members of our armed forces on the water, in the air, and in the field, and for the handling of commodity pools during the war. The net profit on the note issue, since it was taken over by the bank, has amounted to £38,370,000. Of this amount, £35,805,000 has been paid into the Treasury. The proposal to establish the Commonwealth Bank was criticized by the same kind of people, namely, bankers, newspaperowners and conservatives, as have criticized the present bill. They referred to the Commonwealth Bank notes as “ Fisher’s flimsies “, yet the taking over of the note issue by the Commonwealth Bank has saved the taxpayers of Australia £35,805,000, and has prevented a small number of people, the directors and shareholders of private banks, from adding that amount to their profits. It is no wonder they squeal.

The Prime Minister, in his speech on the 9th August, 1943, told the people that just as money had been found for war, so it would be found for peace. As an Australian, I am proud to support this bill. I speak as one of many thousands who suffered the humiliating’ experience dur- ing the depression of having to join a queue to draw the dole in order to keep my wife and family alive. This legislation will ensure that Australians shall never have to humiliate themselves’ in that way again. They will never have to line up and ask some official for just enough food to keep body and soul together. Money was found for war, and had the war lasted another year, hundreds of millions of pounds would have been found to wage it. Thus, there is little justification for the criticism of the Leader of the Australian Country party that the Commonwealth Bank will not be able to find the money with which to take over the assets of the trading banks. As I have said, money w:as found for war, and the bill will make it certain that we shall find money for peace.

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

– In speaking to the motion for the second reading of the bill, I concede at once that the Government’s proposal to nationalize the trading banks was drastic, and I acknowledge that it was embarked upon with dramatic suddenness. Because of those factors it came as something of a shock to the people of Australia. I believe that to be true, not so much because there was anything wrong with the proposal to nationalize the banks, as that it was a proposal which altered- the established order. Moreover, the people did not know exactly what were its implications. The Postmaster-General (Senator Cameron), pointed out that legislation of this type customarily passes through three phases : The first is one of uncompromising hostility; the second is tolerant criticism, in the light of reasonable discussion and argument; and finally, in the light of complete success, there is unqualified and unanimous approval. He pointed out that the Commonwealth Bank, which has been so much an issue in this debate, went through exactly those three phases. I believe that in his analysis of the situation the Postmaster-General spoke a profound truth.

Reformers are always the outcasts of to-day, even though they may be the heroes of a somewhat distant to-morrow. It is true of nearly all of us that we dislike change just because it is change, just because it alters the established order of things. The great majority of people are conservatively minded. I have only to glance back over the pages of history in order to demonstrate this fact beyond question. Let us look at the field of science. In Galileo’s day, it was held as an established fact that the earth was flat. He made the discovery that the earth was round. He had the temerity to announce his discovery to the world, and he was in very great danger of being burnt at the stake as a heretic. Now, every one accepts the fact that the earth is round. It has become an established fact, and every schoolboy can give half a dozen reasons in proof if it. Let us now consider medicine. When Louis Pasteur advanced the germ theory of disease, he was derided and ridiculed by every member of the medical profession, yet in due time he came to be applauded by the very men who had at first opposed him, and his germ theory is now accepted as an established fact. Let me bring the Senate more up to date, and refer to what happened in England in the early part of the last century. At that time there was a great controversy regarding criminal law reform and the establishment of a metropolitan police force. Many honorable senators remember the difficulties which confronted Sir Robert Peel when he proposed the establishment of a. metropolitan police force throughout England. The matter was so controversial that it was referred to a parliamentary committee; and in 1822 that committee reported as follows : -

It is difficult to reconcile an effective system of police with that perfect freedom of action and exemption from interference which are the great privileges and blessing of society in this country; and Your Committee think that the forfeiture or curtailment of such advantages would be too great a sacrifice for improvements in police, or facilities in detection of crime, however desirable in themselves if abstractedly considered.

Need I do more than quote to the Senate -the immediate comment of Charles Reith, -who wrote The Police Idea -

Not even city aldermen, in their opposition to Pitt, had ever displayed such bigotry and blindness, or carried absurdity to such extremes in argument.

How very similar to us are the phrases that were expressed in 1822 in relation to what is, of course, a very necessary and desirable system, the police force. The argument that the establishment of a police force would destroy perfect freedom of action and would mean interference with the liberty of the subject was as untrue then as are the same allegations that are made to-day regarding the nationalization of banking. Let me bring the Senate up to more modern times. I take it that every one has seen persons, particularly fairly elderly ones, using the telephone for the first time. He approaches the telephone as if it were an atomic bomb due to explode at any second. But the telephone is a perfectly harmless instrument designed for the convenience of mankind. All this emphasizes the point I stated earlier that we are naturally conservative and dislike any change whatever in the established order. We revolt against change, not because it is bad but because it is new.

I wonder just how many people inside and outside of the chamber who have voiced very strong opposition to the nationalization of banking have reached their conclusions in the light of calm, cold reasoning; and how many of them object to the proposal because it disturbs their established, order, because it disturbs what they are familiar with and what they know. The Government, frankly, expected all these reactions; to this drastic proposal it expected violent opposition. That occasioned no surprise to the Government; but what, in fact, did surprise it was the diseased ingenuity with which opponents of this measure, particularly in this Parliament, proceeded to imagine all kinds of flaws and horrors hidden in the bill and its purposes.

It would take me a long time to review them all, but I propose in the time available to review some of them. The first I mention is the question of socialisation. It has been said, I believe, by every member of the Opposition parties, certainly by every member of the Opposition in this chamber, that this measure will permit complete socialization. It has been said that it will mean taking the people’s homes and their businesses, and that it will mean the nationalization ]of all industry. I say deliberately that that is most untruthful and fantastic.

In the first place, there is no vestige of power under the Constitution for any federal government to do any one of those things. In the next place, that argument advanced in this chamber and in the press of this country completely ignores two very important official statements. I refer to the statement made by the Prime Minister (Mr. Chifley) when he introduced the bill, and also to the speech with which the Leader of the Senate (Senator Ashley) started this measure on its course in this chamber. I ask the Senate to take particular notice of this passage from the Prime Minister’s utterance -

The proposal to take over the banks is being condemned in some quarters in recklessly extravagant terms; all kinds of hidden purposes are being wrongly ascribed to it from the same source. The simple truth is this - the reasons and motives for this measure and the uses to which it can and will be applied are no more and no less than I have stated.

My colleague, the Leader of the Senate, also, in the course of his speech, made a very brief but potent reference to the same subject. He said -

It has been said that this bill has been designed to give the Government full control over all industry and that it is the first step in a full-scale programme of socialization. The truth is that the measure proposes the transfer of a. vital public utility to public ownership - and has no aim beyond this.

I invite those who have been dealing with the Government’s proposals to face frankly up to those two statements, to consider their implications and to deal with them in argument. I invite also the leader writers of the press of this country to take those two statements and weigh them, and tell the people of this country just what they mean. They mean no more than this: That the purposes of this bill are to transfer private banking to the Commonwealth Bank - the people’s bank - to expand the facilities of the Commonwealth Bank, to prohibit private banking, and, finally, to oblige the Commonwealth Bank to act without discrimination and to provide full and adequate facilities in the banking sphere and to preserve secrecy between customer and banker. They, and they alone, are the purposes of this bill. I repeat that the bill will not enable anything to be nationalized or socialized. Those are two very clear and explicit statements on thepart of the Government, and there is noroom for misunderstanding of them except on the part of those people who do not want to understand. I say again that if” the Government decided to nationalize, orsocialize, any other sphere of activity,., and there is precious little that it can. do in that way, it will do it in the open; it will do it in this Parliament.

Let me pass on to what has been said about the Federal Court of Claims. Thebill proposes to set up a Federal Court of” Claims comprised of three judges, at least, whose duty it will be to assesscompensation payable under the bill. I say at once that the need for a court of that nature has always been felt. It ha3 been under consideration for a period of years, that some court should be established of that type which would relievethe High Court and the Supreme Courts of the States of the onerous work of considering compensation claims, involving,, as this work does, the weighing of evidenceover long periods, and, necessarily, longdelays. In deciding to set up the Federal Court of Claims the Government had’ regard to the need to deal with compensation claims that would arise, and” in doing this it is following aprecedent set in both Canada and the United States of America, wheresimilar courts, for exactly similar purposes, have been set up. In the Inderal Court of Claims there will always bemore than enough work for one judge,, because the court is obliged not only todeal with claims arising under this bill, but it also has to give consideration toclaims for compensation arising under other federal statutes. It is not necessary that new judges be appointed. Otherfederal judges, the bill provides, maybe appointed; and, in fact, it should be well known to every one who takes an. intelligent interest in the affairs of thiscountry that that kind of practice hasbeen observed for a considerable period. The President of the Commonwealth’ Arbitration Court, for a long time,, was in fact, a justice of the High Court of Australia. The Judge in Bankruptcy, Mr. Justice Lukin, for many years, too, was a Judge of the Arbitration Court, holding two offices in two courts at the one time. The

Federal Court of Claims will be a specialist court for specialized purposes only, and it is highly desirable that, in a court of this specialist nature, there should be consistency in the application of its principles.

It has been said that the opportunity will be taken by this Government to appoint judges to that court, that there will be very little work for them to do, that presently they will be transferred to the High Court, and that that is a means of packing the High Court. That is an allegation which, I regret to say, has been made in the course of the debate on this bill in this Parliament. The suggestion is, of course, that the judges who would be appointed in that way would be subservient to the will of the government of the day. I wonder whether people who say those things really know what they are saying, whether they really understand the implication of the utterances, and whether they really understand that they are offering the grossest insult to a large number of people.

One of the persons who spoke in that strain is not only a member of this Parliament, but also a member of the legal profession, and has the distinction of being a king’s counsel. I refer to the honorable member for Warringah (Mr. Spender). I say, very deliberately, that those who proffered that insult, proffered it in the first place to the occupant of the office of Commonwealth Attorney-General, because he initiates any recommendation for an appointment to the High Court. Secondly, it is an insult to Cabinet, which is the executive government that makes the appointment. And as judges can be appointed only from amongst other judges or barristers of five years’ standing, it is a complete and foul insult to everybody in those categories. It says, in effect, that these men will demean themselves to be false to their oath, and will obey the behest of the ephemeral government of the day. Utterances of that kind betray no appreciation at all of the judicial mind, and of the agonies it suffers so that it may do abstract justice, and find the truth. It shows no appreciation whatsoever for the anxious zeal with which every judge in the British Commonwealth of Nations seeks to find out the traditions of the British judiciary, to uphold those traditions and to pass them On untarnished, no matter at what cost to himself. It betrays, too, a complete lack of knowledge of the honorable traditions of the legal profession itself. That slander does no credit to the person who uttered it. I suggest that it does least credit to a person who has the distinction qf being a king’s counsel.

Everybody should know that the Government is at liberty, under the Constitution, to appoint an unlimited number of justices to the High Court. Let us examine the record of this Government during its six or seven years of office. Two years ago it appointed one justice of the High Court. I am pointing out to the Senate that, if this Government ever had the thought, which it never has had, that it would pack the High Court, it would have sought the opportunity before the elections in 1943, before its fate was in the hands of the electors. It would have sought the opportunity again in 1946, before it had to go to the people, and it could have achieved its purpose, and would have achieved it long before this. On behalf of every member of the Government, I most strongly resent the suggestions which have been made in this matter. The Government has appointed one justice of the High Court. That was done in order to fill a vacancy which was allowed to drift on during the financial and economic depression, to enable the court to keep pace with the work which was offering. Whom did the Government appoint? Sir William Webb was then Chief Justice of Queensland - a judge who had had 21 years of honorable service in that court. Before he was elevated to the Supreme Court of Queensland he had been Public Defender, Crown Solicitor and Solicitor-General. He had represented Queensland abroad before the Privy Council, and had served on sugar commissions and other boards. He had had a most distinguished career in the Public Service and in law. That is, the type of appointment which this Government is disposed to make, if the need arises.

I now propose to examine another matter which has been in issue. A major pOint was made by opponents of this bill, particularly the Leader of the Opposition in the House of Representatives (Mr.

Menzies), that sections18 to 22 of the Banking Act 1945 were not in issue during the recent proceedings in the High Court instituted by the Melbourne City Council. The Leader of the Opposition was very vehement about this. He claimed that there had been the grossest misrepresentation on the part of the Prime Minister in suggesting that those sections which required the transfer of the surplus investable funds of private banks to the Commonwealth Bank were under attack. The right honorable gentleman, if I remember aright, said that sections 18 to 22 of the act were never in issue; that the Melbourne City Council argued for their validity by reason of the fact that it was contended that those sections are taxing sections; that you cannot have taxing sections in a bill with other provisions; and that, therefore, all the other provisions of the bill failed and only sections 18 to 22 stood.For those reasons, the right honorable gentleman asked: How could there be any attack upon sections18 to 22 of the act? I shall examine that contention. It provokes me to an analogy. Let us imagine that the right honorable gentleman is walking through a hall, on the wall of which hangs a grand picture showing clouds, mountains, a river, trees, a house, sheep, cattle, all sorts of other objects, and a small dog in the bottom right-hand corner. He stops before the picture, and, with confident advocacy, says, “Mr. Speaker, this is a picture of a dog That is true as far as it goes, but it is only 1 per cent. of the truth, and so was the statement that sections 18 to 22 were not under attack. I have in my hand the exact document which was used in the case before the High Court. It includes a statement of claim lodged by the Melbourne City Council. Paragraph 12 reads -

The Banking Act 1945-

I emphasize those words - oralternately, section 48 thereof, is beyond the powers of the Parliament of the Commonwealth of Australia, contrary to the provisions of the Constitution of the Commonwealth and is void.

I pass to paragraph 13, which is the only one that the Leader of the Opposition saw -

Alternatively to paragraph 12 hereof, sections 18-22 of the Banking Act 1945 constitute a law imposing taxation and by reason thereof and of section 55 of the Constitution, section 48 of the said Act is of no effect.

All that boils down to three simple propositions. First, the whole of the Banking Act 1945 is invalid and contrary to the Constitution. Secondly, if that is not so, section 48 is invalid. Thirdly, if that is not so, all the provisions of the act except sections 18 to 22 are invalid. What a different story the whole truth is I If there were any doubt that the whole of the act was under fire in the statement of claim presented by the Melbourne City Council, let me refer briefly to two letters. One was written by the Commonwealth Solicitor-General to the solicitors for the Melbourne City Council, pointing out that the whole act was under challenge, and asking to what particular points the attack was directed. The answer is very revealing. It reads - . . the particular provisions of the Constitution which it will be contended are infringed by the Banking Act 1945 or alternatively section 48 thereof, are matters of legal argument and it is not customary to give particulars in advance of what legal argument will be put to the court.

In short, the Commonwealth was told that the whole act was under fire, including sections 18 to 22, and that it must be prepared to face up to the consequences.

I propose now to discuss clause 23, which deals with taxation. To do justice to this provision I should be obliged to spendabout an hour in tracing the theme through all its intricacies. I propose, however, to dispose of it by mentioning its broad principles. First of all, I shall explain the real situation in regard to the trading banks functioning in this country. When this bill was introduced there were eight banks registered in Australia, three incorporated in the United Kingdom and three foreign banks, the Chinese, New Zealandand French banks, making fourteen trading banks in all. That number has since been reduced to 13, and I hope that no significance attaches to that number. Two of the Australian banks have since amalgamated, so that the total number of trading banks is now thirteen. The, provision which is so strenuously objected to is that which provides that where the business of a trading bank is taken over voluntarily no tax will be levied on the shareholders, but the shareholders will be liable for tax if the bank’s business is taken over compulsorily. Let us deal, first, with the eight Australian banks, which are now reduced to seven. Clause 23 does not apply to those banks at all, because we shall not be acquiring the businesses of those banks; all that the Commonwealth Bank will acquire is the shares at present held by the shareholders. The banks will continue to function as private companies, so that clause 23 will have no application whatever to seven of the thirteen banks concerned. The three foreign banks enter into this matter only very slightly. In the first place they are small, and, in the second place, I have no doubt that they will be taken over as a matter of amicable arrangement between the governments concerned, because in the case of the French and New Zealand banks the governments of those countries own all the shares, and two-thirds of the shares of the Chinese bank are owned by the Chinese Government. When they are taken over and compensation is paid there will be no resident shareholders, so that the matter of taxing shareholders will not arise.

Honorable senators will realize, therefore, that eleven out of the thirteen trading banks will not be concerned by the taxation provision, so that clause affects broadly only the three English banks, which are registered in England, where the majority of their shareholders reside. People have asked, what is to happen when the business of those banks is taken over? The acquisition of those banks will involve the taking over of their liabilities as well as their assets. In the first place, the greater part o+” the compensation paid, irrespective of whether those banks are acquired voluntarily or compulsorily, will not be subject to tax because profit which accrues as the result of the sale of capital assets is not taxable. What field is left for taxation? It will be very narrow, and will embrace only profit made on the trading stocks of the banks, which would include any profit made on securities purchased for re-sale, amounts received in excess of that ‘allowed for taxation-depreciated assets, and any interest accrued, irrespective of whether it is shown in interest suspense accounts or nOt’. I think that I have narrowed the application of clause 23 to a very small compass. Broadly speaking, the only people affected will be the shareholders of the three English banks, and only the “ tail-end “ of the compensation payable to them will be affected. Any honorable senator who heard the violent and extravagant comments made in the House of Representatives in regard to this clause by opponents of the bill, will realize that a mountain has been made out of a molehill.


– The M has not explained the difference between the compensation to be paid to shareholders of English banks which make a voluntary arrangement with the Commonwealth and those which do not.

Senator McKENNA:

– I am indebted to the honorable senator for having men- tioned a matter which might have escaped me. Very delicate questions arise for determination as to whether tax is payable or not, and the honorable senator knows that considerable delay must necessarily take place in determining assessments in those matters. If any of the three English banks agree to negotiate for their acquisition on a voluntary basis, a broad assessment will be made, without going into any detail, of the amount of tax involved. That will be one of the factors that will enter into negotiations between the trading bank concerned, on the one hand, and the Commonwealth Bank, on the other, and I have no doubt that it will ultimately have the effect of reducing the amount of compensation payable. In the case of an English bank whose business and assets are acquired compulsorily, the matter of taxation will be one for the competent tribunal, the Federal Court of Claims, to determine. In short, clause 23, speaking in very broad terms and without attempting to cover the position in detail, will do no more than to put the shareholders of English banks which make a voluntary agreement with the Commonwealth Bank in the same position as the shareholders of Australian trading banks. Coming back to Australian trading banks for a moment, let me add that the present law provides that their shareholders are not subject to tax unless they are dealers in shares. I think, therefore, that I can claim to have reduced criticism of clause 23 to its proper perspective.

Allegations have been made that the Commonwealth Bank is a terrible creature; that if one goes to one of its branches to withdraw one’s money, one is asked questions as to the reason for the withdrawal and what one proposes to do with the money. The belief that such questions were asked was a very wide one, and was held in every capital city in Australia. Who started it I do not know, but I took the trouble to ascertain from the Governor of the Commonwealth Bank, Mr. Armitage, the real position. I referred to him complaints that have been made to me, andthe reply which I obtained from him is very clear. In the course of a letter dated the 11th October, 1947, he stated -

It is inconceivable to me that the circumstances as related are correct. While the bank’s instructions to branches set out that, in the interests of depositors, they should be encouraged to accept bank cheques in payment of large withdrawals in view of the risk of loss of cash by theft or otherwise, it is stressed that these transactions should be handled in such a manner as to avoid giving depositors an impression that the bank is seeking to pry into their private affairs.

I have a further letter written by him after reference to the Hobart manager, in which he gives an unqualified denial to the statement. That is one part of the propaganda against this measure that I have pleasure in “scotching”.

Senator Grant:

– It will be repeated, nevertheless.

Senator McKENNA:

– But not with the same spirit, I should think.

Senator Cooper:

– But it will be repeated.

Senator McKENNA:

– A great deal has been said to the effect that accounts of customers of the Commonwealth Bank will be open to inspection by members of the Parliament and public servants. Apart from the fact that clause 11 c prohibits anything of the kind, it has always been the law that there is a complete contract of secrecy between the banker and the customer. It is not a matter of law made by the Australian Parliament; it is a matter of the general law of the country. There are certain exceptions.

A bank is free to disclose the details of a customer’s account when it learns from banking transactions that he has been trading with the enemy. It is necessary that a bank should give information to the Official Receiver in Bankruptcy or a committee in lunacy. Again, a bank has to be free to disclose a customer’s affairs when it sues for recovery of a loan. Disclosure may also be made with the consent of the customer. Those are the only circumstances in which there is possibility of disclosure by any bank, including the Commonwealth Bank, of a customer’s affairs. Since its inception in 1911 the Commonwealth Bank has not disclosed the slightest details of the affairs of any of its customers except in pursuance of the law. Not very long ago, and not in this country, a bank that was so unwise as to disclose that a customer’s cheque had been paid to a bookmaker was mulcted in heavy damages. The Senate and the people of Australia need not have the faintest misgivings about the preservationof secrecy by the Commonwealth Bank as between itself and its customers when it is the national bank.

A great deal has been said about the activity or inactivity of the Commonwealth Bank. It is necessary to remember that, until the legislation of 1945 was passed, the Commonwealth Bank was prohibited from embarking in the general banking field. What has happened since then ? The number of its general banking accounts has increased by 54,876 in two years. It has established 118 new branches for general banking business. It has given wide discretion to the branch managers in the amount of loans that they may grant. Any branch of a reasonable size in a capital city may advance up to £6,500 in one sum without reference to the head office. Moreover, chief State officers have been appointed in each State to deal with matters in those States on the spot, without reference to the head office.

In the time I have left, I wish to speak on the subject of what the ordinary man will get, or may hope for, from this legislation. I wonder if the people realize how much nationalization there is to-day in Australia, and why there is so much of it. I need only refer to water supply, health services, hospitals, tramways, railways, education, electricity services, postal services, the police and other like services - one could enumerate many more.

Senatoro’sullivan. - There is no monopoly in education. It is controlled by the State, but the State has no monopoly.

Senator McKENNA:

– There is not a monopoly, but there are national schools throughout the country. The reason for that degree of nationalization is that it is dangerous to the social well-being of the community to allow essential public services to be in private hands for private profit. That principle has been applauded by every responsible body in Australia. I say that the control of banking, currency, credit and exchange should be nationalized, first, because they provide a vital national service, secondly, because they are of the greatest national importance, and, thirdly, because the power given by control of them transcends the power of government. Let me pause to refer to three things. Many honorable senators have talked about what haphened to the Scullin Government and about how the Commonwealth Bank, which was then a banker’s bank, under the Commonwealth Bank Board, dictated to the democratically elected Government of Australia the conditions upon which it should operate. It demanded that it reduce wages and social services as a prerequisite to the bank’s helping to relieve unemployment. If a bank, or any collection of banks, can talk to a government in those terms, who rules the country - the Parliament or the banks? The answer is unquestionably “ The banks “. I have some knowledge of what then went on at Australian Loan Council meetings because of my close association with the late Albert Ogilvie, the then Premier of Tasmania. He did not once set out to attend a Loan Council meeting without saying to me, “ We are going to get £10,000,000. It does not matter if the Commonwealth and State Governments agree that £50,000,000 should be spent on defence or that so much should be spent on health services ; if the Commonwealth Bank says, ‘ £10,000,000 ! ‘ £10,000,000 it will be “. Again I ask who, under those conditions, rules the country - the banker or the Parliament?

Finally, let me refer to Victoria. My friends opposite point to Victoria with great jubilation. What happened there was that the banks affected by this legislation, operating through their strategically placed agent in the Legislative Council, Sir Frank Clarke, who is vicechairman of the National Bank of Australasia Limited, dragooned it into throwing out of office the government of the day, not on a controversy that affected the State or on any controversy between the Legislative Council and the Legislative Assembly. On an issue that did not concern that Parliament, and about which it could do nothing, the Legislative Council threw the Government of Victoria to the people. I am not concerned at this stage with what happened to that Government because it does not affect my point. I repeat that the Government of Victoria was thrown out of office by the banks. If proof of that statement were wanted, one has only to examine the stupid action of the banks when they sought to usurp the functions of the Government and to pay the public servants whom they prevented the Government from paying. And so the question arises : Do the people want the parliaments of this country to rule, or do they want the bankers to rule?

Let us survey the position of the banks. Let us look at them coldly and calmly. Until a little while ago, there were eight trading banks registered in Australia; to-day there are seven. Those banks have about 70,000 shareholders, who change every day with every transaction on the share market. The shareholders may attend regular meetings of the banks, or their annual meetings if they so desire, but many of them do not do so. It is true that they have certain rights in relation to the election of directors, but what control have they of the policy followed by the directors whom they elect ? In respect of three of the largest banks operating in Australia - the Union Bank of Australia, the English Scottish and Australian Bank Limited and the Bank of Australasia - which are registered in England, whose directors are in England, and the great bulk of whose shareholders are there, the Australians have little or no control. Yet those three banks hold one-third of the total assets of the banks trading in Australia. What control have the people of this country over the policy of the directors of those banks? What control over the policy followed by those directors have any of the depositors with those banks? I drive that point home. The latest returns show that the eleven banks operating in Australia have assets totalling £839,000,000, but only £71,000,000 of that amount represents shareholders’ funds. What is the position of those directors in relation to their shareholders? They have, by law and their charters, a solemn obligation to no one but their shareholders. If they depart from a policy directed towards protecting the interests of their shareholders, they are likely to be brought before the courts. That is true even when they act in the interests of the nation. If the interests of the nation conflict with the interests of their shareholders, they must consider their shareholders first. And so the pertinent question arises : who should control the monetary and banking policy of this country? Should that policy be controlled by the 70,000 shareholders of the private banks, or by the little groups of directors of those banks, or by the 7,500,000 shareholder.! in the Commonwealth Bank? It must be remembered that every person in this country has an interest in the Commonwealth Bank, which will be the national bank of this country when it takes over the complete control of banking.

The best argument that I have heard in favour of the nationalization of banking was supplied by a banker. I quote from a report in the Australian and New Zealand Banking Record of July, 1943, from an address to the Constitutional Club in Victoria by Mr. L. J. McConnan, on the 21st June, 1943. At that time he was chairman of the associated banks of Victoria, a position which he probably still holds. It is significant that although the banks profess to be surprised at the introduction of this legislation, Mr. McConnan’s address was entitled, “ The Threatened Nationalization of the Trading Banks “. It is evident, therefore, that they foresaw this legislation, because as far back as 1943 they declaimed against it. From beginning to end of that address Mr. McConnan claimed that the banks had a great national responsibility, and that their function was to discharge a vital national service. He claimed, too, that the staffs of the banks discharged a vital national service. One has only to ponder for a moment to come to the conclusion that no private institution should be discharging a vital national service. Matters of vital importance should be in the hands of parliaments and the people and not of shareholders or directors of private banks. That is the position in the abstract.

The Government considered the nationalization of banking in 1945, but decided against it then for a number of reasons. War-time controls had proved that complete control could be taken over the policies of the private trading banks, and it was decided to perpetuate that control in permanent legislation. The Government did not proceed with the nationalization of the banks then because it was convinced that the necessary control could be obtained by means of legislation. Despite opposition by the Liberal party and the Australian Country party and other opposing forces, that legislation in a form completely satisfactory to us was passed. Later, it was approved by the people at a general election. The Government was content to rest on that legislation, but what happened later? Is that legislation as complete as we thought, it was in 1945? Already one section of that act - a vital section - has been declared to be invalid. That is the power to compel States and municipalities and State instrumentalities to do their banking business with the people’s bank. In short, that section required authorities handling the people’s money in a public way to bank with the people’s bank. That power no longer exists, because the section providing for it has been found to be unconstitutional.

The Government had regard to the fact that the whole act was under threat, and also to the disturbed economic position of countries outside Australia. It realized that Australia could not escape the repercussions of happenings abroad, but that much could be done to cushion their effects if it had complete power over monetary and banking policy in a broad sense, ‘although not in matters of detail. It also had regard to the fact that when the various private trading banks were required in 1945 to transfer their surplus investable funds to the Commonwealth Bank, they wrote letters in almost identical terms stating that, having regard to their duties to their shareholders - not to the nation or to their depositors, mark you - they would comply with the legislation only because they had to do so, but that they would do so grudgingly. In those letters was the implication that at the first opportunity which presented itself after the war they would break that control. The Government thought that it would be recreant to its trust if it refused to face the position frankly or to act without delay. It has acted.

I regret that I have spoken for so long, but there are still some matters with which I should like to deal. I may be able to refer to them in committee.

In conclusion, I say that, regardless of what happens to this bill, either in this Parliament or elsewhere, the idea underlying it will live, because it is a democratic ideal and gives to all the people a say as to the stabilization of their own economy, and as to whether there shall be full employment or not. It is founded in truth and in justice to the people, the banks, their shareholders and depositors and, indeed, to every one in the community. As the Prime Minister eloquently said in his concluding remarks on the second reading of the bill in the House of Representatives, it is founded in a love of humanity and of this country. For those reasons this legislation will live, come what may. I regard the measure as a vast and progressive move, and I cannot imagine anything that could give a greater stimulus to the democratic development of this country in its march towards nationhood.

Senator SHEEHAN:

– It is with pleasure that I support the bill. In doing so, I desire to refer to some of the objections to it which have been voiced. The present generation accepts the present banking system as something that has always existed, whereas we know that the present system of banking has developed over the years. When we refer to the associated banks as private banks, we do not describe them correctly, because they are purely and simply joint stock banks. Private banks ceased to exist in England many years ago. They represented the original system of banking which operated in England and other countries, whereby private individuals took upon themselves the right to establish a bank. As trade developed those institutions proved ineffective, and so to-day we have our trading banks. Some people have tha idea that a trading bank is something like a fairy godmother. When one listens to the objections to this measure raised by the opponents of bank nationalization, one would imagine that any person, although completely without tangible assets, can secure financial assistance from a trading bank. But anybody who has had any experience of banking at all knows that this is not so. The trading banks exist to liquidate assets, and not to act as fairy godmothers to the community. The more tangible the assets that a customer can produce, the better will be his opportunity of receiving the financial accommodation that he desires. Slowly but surely the banking system developed to what it is to-day. A new atmosphere was created when a Labour government proposed the establishment of the Commonwealth Bank more than 30 years ago. The proposal was severely criticized, and even ridiculed, but that attitude was not peculiar to this country. When it was proposed that the activities of the greatBank of England should be extended to the provinces, the move was bitterly assailed by those who were then controlling the banking system of the United Kingdom. They fought the scheme every inch of the way. Eventually, however, the Bank of England became the predominant banking institution in Great Britain, and, to-day, it is the central bank, not only of Britain, but also of the Empire. The Commonwealth Bank has progressed in a similar manner. Despite the criticism by the opponents of national banking and government control of the national credit, the Commonwealth Bank slowly, but surely, established its position in the economic life of Australia. There were strong objections in some quarters when the present Government of the United Kingdom nationalized the Bank of England, and so the opposition to the nationalization of banking in this country is not unexpected.

Previous speakers have emphasized that those who control the credit of a nation hold in their hands the economic life of that nation. One of the most prominent figures in the campaign against this measure is Mr. L. J. McConnan, chairman of the associated banks, and general manager of the National Bank of Australasia Limited. Mr. McConnan has uttered some of the plainest truths that have been heard in this controversy. He has said, for instance, that vast powers rest in those who control the monetary and financial system of a country. I agree with that view wholeheartedly. Th? question that arises, therefore, is whether it is advisable that these great powers should repose in the hands of a few people who are responsible to no one but themselves. I ask those who own shares in the trading banks how often they have been consulted when the policy of those banks has been under discussion by the directors. How often have the shareholders had an opportunity to elect directors? “What opportunity have they had themselves to nominate as directors? .1 ask the depositors whether they have had any say in determining the rates of interest that they should receive for their deposits? Have they had any say in the formulation of the policy of the bank? I ask those individuals in the community who were depositors in. the private banks prior to the depression years, and whose requests for financial assistance were rejected during the depression, whether they received any special consideration because of the fact that they had been depositors. It is plain to us that this great power of which Mr. McConnan has spoken should be in the hands of the people themselves, through their elected representatives in the Parliament, rather than in the hands of a select group of private individuals. Only if the banking system is controlled by the people themselves will they be able to ensure that it shall operate in the interests of the community in general, and not of a few privileged individuals. We are told that the right of the banks to create credit in times of prosperity and contract credit in times of economic adversity, should not be interfered with ; but I venture to suggest that that is one of the very things that a government, charged with the responsibility of safeguarding the welfare of a community, should be able to do.

Some members of this chamber will recall that, just prior to the war, when members of the Labour party, then in opposition, sought from the then Government the allocation of £250,000 to alleviate distress among the unemployed of this country, the then Leader of the Senate, Senator McLeay, terminated the debate in the early hours of the morning. He said that honorable senators who supported the proposal were wasting not only their own time but also the time of the Government, because it was impossible t’> provide £250,000 for the relief of unemployment. Not many months later, however, war broke out, and, within a very short space of time, our expenditure had increased to £1,500,000 a day. We have no regrets about that expenditure; the situation demanded it. But I put it to the Senate that if it was possible, under the stress of war, for the government of the day to provide that colossal sum of money, surely our demand for £250,000 for the relief of unemployment only a few months earlier could not be regarded as excessive. Apparently, members of tha Opposition forget those days. They are beginning to think that the present prosperity ever was and ever will be. When we look around us there are signs that civilization is disintegrating. France is on the verge of civil war. Frantic efforts are being made by the nations which emerged victoriously from the war to rebuild society, but the task seems to be almost impossible. The United States of America is the richest country in the world to-day, so far as money is concerned. It suffered no war damage, but was able to expand its industries while the war was in progress; yet President Truman found it necessary the other day to call a special session of Congress to devise measures to prevent the collapse of the nation’s economy. He said that it was necessary to reimpose economic controls or chaos would result.

It has been argued that the banks are not responsible for economic depressions. Perhaps they are not. However, when the depression hit the United States of

Am erica, the privatebanking institutions were the first to collapse. They were unable to adjust themselves to the economic situation. They can get along very well while conditions are prosperous, but they are of no help to the nation in times of depression. We have seen what happened in the past, and there are signs that the same thing may happen again. Who would deny us the right to take measures to forestall such an occurrence? During the war, when the world’s markets were closed to us, largely because of a shortage of shipping, the government of the day told the primary producers to go on producing, and that it would be responsible for the sale of their products. Some of those who suffered at the hands of the private banks during the depression are now apt to forget their experience, and to behave as if the present era of prosperity and high prices will continue for ever. Perhaps they are mistaken. I hope that conditions will remain prosperous, hut it behoves us to be wise in our day and generation. We must provide for the future. At the outbreak of the war, the Government issued National Security Regulations enabling it to control the credit and finances of the nation, and so was able to finance production, as the following quotation shows : -

The task of financing primary production in the war years fell largely on the Commonwealth Bank, which provided the necessary funds and did what it could to assist the various authorities set up by the Government in the way of handling documents and assisting to make all necessary financial arrangements.

The following statistics of commodity advances made during the period 1st July, 1939, to 30th June, 1947, are impressive: -

Those are official figures, and they show how a Labour government was able to utilize the resources of the nation to foster national production. What would have happened if the Government had been in the same position as the Scullin

Government was during the depression, and had to go cap in hand to the private banks for financial accommodation ? Many countries are in a serious economic position to-day, hut we should not refuse to send them food simply because they are not in a position to pay cash on the nail. Nevertheless, our export industries must be financed, and this can be done by utilizing the financial resources of the Country, through the Commonwealth Bank.

It has been stated in this debate that the bill represents a step towards communism. It has been suggested that the electors of Victoria voted against the Cain Government because the Commonwealth Government’s banking proposal represented a measure of socialism. I ask honorable senators, and all thinking people who are taking an interest in this question, which is most likely to foster communism - full employment, or unemployment and starvation? If the Labour Government is destroyed, and replaced by a reactionary government which will listen to the financiers in their opposition to measures for the economic rehabilitation of the country, it is likely that conditions will be created that will make the growth of communism possible. Honorable senators opposite talk of fighting communism, but they never get beyond fighting it with their mouths. They are not prepared to take any action to make the people happy and contented. Communism developed in Russia because of the terrible economic conditions which prevailed there. It did not begin in October, 1917. It began long before that, because of the kind of government which existed in Russia, under which the people - the common people, as they are called - knew not where to turn for help. Reference has been made to the opposition of certain people to this measure on religious grounds. I recall that when the Parliament was considering the banking legislation in 1945 the same arguments were advanced. Honorable senators will remember what the Primate of Australia, the late Archbishop Le Fanu, said on that occasion in a letter published in his official church organ. He wrote -

My dear People,

I have had a circular from theNational Bank of Australasia Limited, which I suppose many people have had. It is protesting rather too violently, I think, against the control of banking affairs by the State. I am afraid the circular did not convince me. The banks are so closely allied to each other that they are virtually a monopoly, and I find it hard to see why they shouldbe considered more disinterested than the popularly elected representatives of the people in Parliament.

Unfortunately, Archbishop Le Fanu is now not with us to give the same message to his people as he did on that occasion.

Another argument advanced against the measure is that once the control of credit is placed in the hands of theGovernment, business people will be unable to obtain the accommodation they require. For instance, Senator O’Sullivan argued that any citizen who desired to become something more than an ordinary “ wageplug”, who wished to become a business magnate, would have no chance under this measure of achieving that ambition. Possibly, the honorable senator and those who think like him are unaware of the fact that under the Banking Act of 1945 the Government established a special department of the Commonwealth Bank with the object of assisting and encouraging small industrialists. I wonder whether those who say that when the Commonwealth Bank is the only bank in this country industrialists will not receive the consideration to which they are entitled, realize that at present, through the interlocking of directorates, the few who are directors of the private trading banks can, and do, ensure that no financial accommodation is made available to any persons who desire to set up in business which would compete with those in which they are interested. That is the real struggle. That is the real opposition on the part of the financial interests to this measure. They do not wish to lose the control they now exercise over finance. However, when this controversy was at its height I read the following interesting article in the Melbourne Herald of the 28th October last : -

page 2536



Three Investigating Prospects Here

Three British business men who have come to Australia to plan the “ investment of millions here “, sailed for Sydney last night in the Orion.

They aim to multiply Australia’s steel production and are here to survey market conditions and supplies of raw materials available. Mr. Allen Macbeth, director of Guest,

Keem and Nettlefolds Limited, of London and Birmingham,said his company was prepared to invest “ no less than £5,000,000 here “. The Honorable H. C. H. Bathurst and Mr. E. C. Lysaght, co-directors of John Lysaght Limited (England), said their plans to expandmanufacture of flat rolled steel products in Aus- tralia would be limited onlyby the supply of raw materials. The capital expenditure would run into millions of pounds.

Those industrialists expressed noconcern about the possibility of not being able to obtain financial accommodation in this country -

Mr. Macbeth said his company wished to expand its small plant in Melbourne to manufacture a wider range of products, but did not wish to compete with Australiancompanies by making articles already produced here. He also intended to recommend production in Australia to feed the vast markets opening to the north and north-west of Australia.

Are those shrewd business men, who are prepared to invest millions of pounds in this country, afraid of the nationalization of the banking system? That statement was published in the Melbourne Herald when the people of Victoria were experiencing the full blast of the campaign in opposition to the Government’s proposal. In the same edition of that newspaper under the heading, “ Party Leaders State Their Cases “, the statement by the Leader of the Country party in Victoria was headed. “Liberties in Grave Danger “. The great industrialists to whom I have referred did not believe that their liberties were in danger, nor that any funds which they invested in this country were likely to be dissipated because of the nationalization of banking’. I wonder whether members of the Australian Country party remember that their present deputy leader, the honorable member for Indi (Mr. McEwen), speaking in the House of Representatives in November, 1935, urged that a royal commission be appointed to investigate the banking system of this country. At that time, members of the Australian Country party were clamouring for reforms of the kind which are embodied in this measure.

The proposition now before us is simple. If we pay attention to economic conditions in not only Australia but also other countries, we shall see that the opposition to this measure is based on the principle of playing upon the fears of the average human being. The recent Victorian State election was fought on trickery. The greatest fraud in the history of politics in that State was then perpetrated on the people of Victoria. They “fell” for that fraud, because of fear. Those who oppose this measure know that every human being under stress of fear is likely to do things which in normal times he, or she, would not do. Thus opponents of this measure are working upon the fear complex of the people.

I appeal to all reasonable citizens simply to take note of the conditions of those people who are most opposed to the measure. One reads in the daily press that the values of shares are increasing, investments are rising and government loans are over-subscribed. Where is the need for fear ? Why should the people be afraid of this proposal? I wholeheartedly support the measure. I believe that, once it becomes the law of the land, people who, to-day, are somewhat afraid of it will realize that their fears were not well founded, that their opposition arose simply from the fact that, as all ordinary people do, they detest any change of this kind. However, once this change has been made, they will realize that their fears and protests were unfounded. I sincerely trust that the measure when it becomes law will stand whatever test is applied to it; that it will enable us to face the future with every confidence and that this nation, at least, -will be enabled to withstand any economic storm that may descend upon it in years to come.

Senator MORROW:

– Early in my life, I realized that political science was similar to any other science, in that if one desired to become versed in it, one had to study it. During my life, I have taken action to make myself conversant with the elementary principles of political science. I do not pose as o professor of political science, but I do believe that it is necessary for one to study economics if one desires to serve with distinction in the Parliament of the Commonwealth. I have listened with great interest, in the Senate and the House of Representatives, to the speeches of cultured men and learned men, and I am disappointed with some of their utterances. They have been able to bandy words, giving to them a different meaning from the generally accepted meaning, principally for the purpose of befogging the minds of the electors. They have deliberately distorted and misrepresented the truth for the purpose of deceiving the people. I have heard it said deliberately that the Banking Bill is a revolutionary measure, that the Labour Government is trying to introduce socialism, and that it is socializing industry. Now, what arrant nonsense and hypocrisy those statements are! In the first place, this bill is not revolutionary. It represents only another stage in the evolution of capitalism. It has no relation at all to a revolutionary situation, or to socialism. The words “ democracy “ and “ freedom “ have been bandied around to such a degree, and with so many variations of implication, that one could he excused for not knowing their true meaning.

I propose to examine briefly the history of world banking. The banking system has not always existed, just as ;capitalism has not always existed. In fact, capitalism is a comparatively young system. It was introduced in the latter part of the fifteenth century, after the overthrow of the feudal states. Honorable senators, -who have studied this subject, will know that feudalism was based upon the lords of the manors, and the people were tied to the soil. When merchant capitalism was introduced, the people were compelled to look for employment, and their services were engaged by the merchant capitalists. In order to finance various institutions, it was necessary to have money circulating, and the capitalists of the time were the financiers. They charged interest rates up to 28 per cent, on the money which they lent for the purpose of financing industry. One, William Paterson, who was alleged to have been, at one stage in his career, a buccaneer and a pirate, although there is ;no strong evidence in history to support this theory, saw further than the rest of : the people, and suggested the formation of a bank. A.s the result of his advocacy, the Bank of England was founded in 1694. It was said at the time that the Hank of England, if created, would serve in the interests of the republic, and not the interests of the monarchy. However, the Bank of England, when established, succeeded in reducing interest rates from 28 per cent, to 8 per cent. At that time, this financial institution played a most important role in the capitalist system.

While capitalism was progressing and was able to secure markets unemployment was unknown. In fact, not until markets became restricted did unemployment occur. Capitalism developed into three divisions, namely, the land-owners, and the factory owners producing the requirements of the people, the merchants selling the goods, and the bankers lending money. To-day, the bankers are glorified pawnbrokers, but they possess more authority than the ordinary pawnbroker has, because they can play with a nation’s finances.

As the banks developed, they became entwined with the State, because certain people- who were connected with the State were also connected with the banks. In the Dresden Bank, in Germany, two executives of the State, one envoy, and one private secretary were members of the board. In Great Britain, Mr. Reginald McKenna, chairman of directors of the Midland Bank, was at one time Chancellor of the Exchequer and first Lord of the Admiralty. Sir Josiah Stamp, a director of the Bank of England, was a member of the Economic Advisory Council. In the United States of America, a number of senators and members of the House of Representatives were closely associated with banks. In Japan, the Emperor held large interests in the banks and big monopolies. Thus, the State became entwined with the banking system. In Australia, Sir Frank Clarke, who is a director of big pastoral companies, including Goldsbrough Mort and Company Limited, is a director of a private bank, and a member of the Legislative Council of Victoria.

As the State became entwined with the banks, these financial institutions tended to become a monopoly. For example, in the United States of America in 1921 there were 30,560 private banks. In 1929, the number was reduced to 25,100, and in 1936 it was 15,752. In Japan, in 1914, the number of private banks was 2,155; in 1921, 2,009; in 1929, 1,001; and in 1935, 563. At one period in Australia, there were more than 50 banks, but, to-day, the number has been reduced to eight. So, the banks are approaching monopoly control. Opponents of this bill ask what will become of the present employees of the private banks when they are transferred to the service of the Commonwealth Bank. In reply, I ask: What became of the surplus staff of the private banks in the past? Did the bank directors care whether redundant employees were dismissed? Did the private banks pay to those employees a pension ? Did they look after them? No. They said to their employees, “ You go about your business and get a job elsewhere “. As the number of banks decreased, so the number of bank employees decreased, and that situation would have continued until the number of banks was reduced to one. That one great private bank would then have controlled the entire banking system. Does any honorable senator imagine that the directors of that bank would have cared about the employees of the banks which it had absorbed? They would not have cared one iota. The trend disclosed by Australian trading banks to amalgamate is reflected in the history of the older trading banks of England. In 1900 five major trading banks in England held 27 per cent, of the money deposited in joint stock banks; in 1908 they held 32.4 per cent. ; in 1924, 72.4 per cent., and in 1936, 74.6 per cent. At that time the five great banks were obviously exercising a virtual monopoly over banking.

The propaganda circulated by the trading banks in this country has been very considerable and has included all sorts of untruths. . Members of the Liberal party and the Australian Country party have supported their assertions, which have also been echoed in the press. The Leader of the Opposition (.Senator Cooper) made the statement that only two banking systems in the world had been nationalized, namely, those of Argentina and Russia, and he endeavoured to link up the ideology of those two countries. Of course, nothing could be farther from the truth. If the honorable gentleman did not realize that he was making a misstatement it would be lamentable; but he does know the real position, and he was obviously attempting to mislead the people. In Argentina the banking system has not been nationalized, and forty private banks operate in that country to-day.

Even the central bank in that country has not been wholly nationalized. According to Mr. Meyer, a research officer who investigated the banking system of that country, only 50 per cent, of the shares of the central bank of Argentina are held by the government of that country, and forty other banks are operating. Therefore, the assertion of the Leader of the Opposition is incorrect. It has been said that the banking system of Russia has been nationalized, but that is not so because we know that it has been socialized, which is a vastly different thing. It has also been asserted that Lenin said: “If we nationalize the banks we shall be able to bind the workers hand and foot “. Such a statement is obviously ridiculous, but it cannot be allowed to pass unchallenged. At the time when Lenin is alleged to have made that statement I was a student of political economy, and I remember the statement which he actually made. In an article entitled “ The Threatening Catastrophe and How to Fight Against It”, which he published in 1917, at the time when Russia was evolving from a semi-feudal state, he wrote -

If we reach the state of State capitalism we shall do very well.

In order to reach that stage he considered it necessary that certain steps should be taken. The article reads -

The banks, as we know, are the principal nerve centres of the whole capitalist economic system. To talk about “ regulating economic life “ and at the same time to evade the question of the nationalization of the banks is either to betray the most profound ignorance or to deceive the “ common people “ by florid words and grandiloquent promises with the deliberate intention of not fulfilling these promises.

The nationalization of the banks, which would not deprive a single “owner” of a single farthing, presents absolutely no technical or cultural difficulties whatsoever, and is being delayed exclusively because of the vile greed of an insignificant handful of rich men. If the nationalization of the hanks is so often confused with the confiscation of private property, it is the bourgeois press, whose interest it is to deceive the public, that is responsible for the dissemination of this confusion of ideas.

The ownership of the capital wielded by and concentrated in the banks is certified by printed and written certificates called shares, bonds, bills, receipts, &c. Not a single one of these certificates would disappear or be altered if the banks were nationalized, i.e., if all the banks were amalgamated into a single State bank. Whoever owned fifteen roubles on a savings account would continue to be the owner of fifteen roubles after the nationalization of the banks; and whoever had 15,000,000 roubles would continue after the nationalization of the banks to have 15,000,000 roubles in the form of shares, bonds, bills, commercial certificates and the like.

The advantages from the nationalization of the banks to the whole people, and especially - not the workers ( for the workers have little to do with banks) but - to the mass of peasants and small industrialists, would be enormous. The saving in labour would be gigantic, and assuming that the State would retain the former number of bank employees, nationalization would signify a highly important step towards making the use of the banks universal, towards increasing the number of their branches, the accessibility of their operations, &c. The accessibility and the easy terms of credits, precisely for the small owners, for the peasantry, would increase immensely.

For the first time the State would be in a position first to survey all the chief monetary operations, which would be unconcealed, then to control them, then to regulate economic life, and finally to obtain millions and billions for large State transactions without paying the capitalist gentlemen sky-high “commissions “ for their “ services That is the reason - and the only reason - why all the capitalists, all the bourgeois professors, the whole bourgeoisie, and all those who serve them, foam at the mouth and are prepared to fight the nationalization of the banks and invent a thousand excuses to prevent the adoption of this most easy essential measure.

I have quoted Lenin’s words at length in order to make it plain that attempts are being made by enlightened and allegedly honorable opponents of the bill to mislead the people. Unfortunately, most people are not politically conscious, which is a tragedy, because they are apt to be misled by false propaganda.

Senator O’sullivan said, “ Tell us what power (his bill will confer on the Government that it does not now enjoy?” As I understand the Government’s proposal, it will remove the power which the private banking institutions at present enjoy and transfer it to the Commonwealth Bank for the benefit of the people. The real advantage of this proposal will be apparent in the event of a recession. I wish to make it quite clear that I do not believe that the banks cause depressions. The real cause of depressions is the private ownership of the means of production and distribution, but once a recession begins the banks invariably accelerate its progress. As soon as a slump occurs money advanced is recalled, which has a snowball effect. In no time We have wide-spread unemployment. However, the bill does not directly concern the mass of working people; in reality, it represents a stage in the struggle between monopoly capitalism and the middle classes. Certainly the workers will benefit indirectly, because if the middle class prosper then there is ample employment available for the workers. The attitude adopted by many members of the middle class is difficult to understand because they are supporting the monopoly capitalists, who are their natural enemies, against whom they are continually fighting. Industries are getting into fewer and fewer hands, and the “ little men “ are being pushed back into the ranks of the workers. The Government is trying to help the middle class, but it will not accept help. What a tragedy! I think, however, that when this bill becomes law and it operates much more smoothly than its opponents would lead the people to believe it will, the middle class will realize that, after all, the Government has done something to help it. Even then we shall still have millionaires. Broken Hill Proprietary Company Limited will continue to be a monopoly. Other monopolies will continue. We shall still have a great army of men on the basic wage struggling for better conditions. That state of affairs will last as long as capitalism lasts.

We are not trying to socialize industry. In the first place, we have not the power to socialize industry. All we propose now is that the control of banking shall be vested in the Commonwealth Bank, as is provided for in the Constitution. People should learn the Constitution at school before they qualify on reaching their majority as voters. It is not sufficiently known. We hear the word “ democracy “ bandied about, but there is no such thing as democracy in Australia. We have six States and six State governments and parliaments. In five of those parliaments there are upper houses, four of which are elected on a restricted franchise. Those upper houses can nullify legislation brought before them by the lower houses that are elected on adult suffrage. They can veto the legislation that the people have elected the governments to enact.

Senator HARRIS:

– That happened in Victoria.

Senator Grant:

– And in New South Wale9 last week.

Senator MORROW:

– Yes. What happened in Victoria has been fully and ably explained by the Minister for Health (Senator McKenna). Look at the limitations imposed on the Australian Parliament by the Constitution. Our Constitution was framed in the interests of monopolies and combines. The Australian Government may not, unless for defence purposes, compete in any commercial undertaking with private enterprise. The National Parliament cannot give effect to the will of the people. The Labour party’s platform contains a plank advocating the social ownership of the means of production, distribution and exchange. The people know that, and yet, when they elect us to power, we cannot give vent to their feelings and introduce the legislation they require. This legislation has been described as revolutionary, but it is not ; it is a step in the evolution of capitalism in the direct interests of, not the working class, but the middle class. The working class will derive only indirect benefit. I support the bill. I think “ democracy “ has an altogether different meaning from that generally given to it in Australia.

Senator Grant:

– And “ freedom “ too.

Senator MORROW:

– Yes, and “ freedom “ too. B. Malinowski, writing in Freedom and Civilization, in 1944, defines “democracy” thus -

Democracy gives, first, freedom and scone for the formation of purposes; the freedom of forming opinions, that is, educational freedom and freedom of conscience; freedom of speech, or the right to decide by resort to experience, to deliberate in public and to combine. Democracy secondly gives freedom of opportunities, of instrumentalities and of action, for the translation of collective purposes into organized collective behaviour. Here freedom is political and economic; it is the means of action, the exercise of authority necessary to action and the delegation of such authority. For effective action, instrumentalities are necessary, in the sense of securing means, apparatus and the access to raw material. Thirdly, democracy gives the freedom of enjoyment, through an equitable distribution of tasks, of rewards, and of rights to power, wealth and privilege.

Thus democracy can be defined as a cultural system devised so as to allow the fullest opportunities to the individual and to the group to determine its purposes, to organize and implement them, and to carry out the activities upon which they are intent. A modern democracy has also the duty to guarantee to its members an equitable distribution of rewards, the full enjoyment of recreation, the privileges of knowledge and the arts, and of all that constitutes the spiritual prerogatives of contemporary man. . . .

We can sum up the main aspects of democracy as follows: -

No centralized power which dictates all aspects of life.

Distribution of influence to those who do the work.

No accumulated monopolies.

Banking and the private ownership of the means of production are dictating to the majority. The minority is dictating to the majority through its organizations. I hope the bill will be passed. I commend the Government for having taken a progressive step that ought to have been taken years ago. “ Socialism “ is another word that has been bandied around. It is unfortunately misunderstood. “ Socialism “ does not mean “nationalization”. All it means is that the people shall own and control the means of production of this nation. Who are more entitled to control the means of production than those who are producers? Under existing conditions, a man who works and produces useful commodities receives only about onequarter of the value of his production. A system which is so inequitable should not be allowed to continue. Unless the people of this country are prepared to work for socialism they will not get anywhere. On the contrary, under capitalism, conditions will progressively become worse; there will be booms followed by depressions, and there will be wars. The on!way to avaid such happenings is to prepare the people for an ideology which will provide justice for all, namely, socialism.

Senator FINLAY:
South Australia

– So much has been said during the last three weeks about the banking system that one has difficulty in breaking new ground, hut the subject under consideration is of such grave importance to the well-being of the people of Australia that I should be neglecting my duty as an elected representative of the people of South Australia if I did not record my views on this bill. Since a Labour government first came into office, attempts have been made to find some excuse for stirring up the people against its continuance in office, but all such attempts have failed lamentably. However, when the Prime Minister (Mr. Chifley) announced that the Government would give effect to that plank of Labour’s platform which provides for the nationalization of banking, the greatest flood of propaganda ever known in this country was let loose on the people. That was because the legislation would interfere with the privileges enjoyed by that section of the community which, iri the past, has controlled the destinies of governments. So great has been thevolume of propaganda against the Government’s proposals that ex-servicemen and workers generally may be excused for believing that this legislation has been designed to rob them of their homes, and their savings, and to make them destitute. Unfortunately, that propaganda stampeded the people of Victoria into turning a Labour government out of office. I have never known such a vicious campaign against any legislative proposal in this country, but I am certain that, in the long run, it will fail, just as previous propaganda directed against measures designed for the benefit of the masses of the people has failed.

Let us consider what has happened during the last two decades. Honorable senators will agree that a system which has permitted two wars and a depression to occur in that period needs remedying. I honestly believe that the nationalization of banking will prevent further depressions by providing full employment for our people. I was one of manythousands of servicemen who believed that World War I. was a war to save the world for democracy. We were promised a new order, and assured that never again would the people of Australia have to make the sacrifices that they were called upon to make during that war. After the return of the troops from abroad, all kinds of assurances were given that a system of preference in employment would be faithfully observed. Homes were provided for ex-servicemen, the rate of interest being from 4 per cent, to 4i per cent, per annum. For a few years everything seemed to run smoothly, and the result was that ex-servicemen were lulled into the belief that they had, indeed, a stake in this country. They were content to plod along, believing that all the promises made to them would be fulfilled. But hardly had they settled down into civilian life, and had perhaps married and begun to rear a family, than there was a period of depression. Many thousands of ex-servicemen were thrown out of employment.

The depression which started in 1930 grew progressively worse, until not only ex-servicemen but also workers of all kinds, were affected. There was no longer any preference to ex-servicemen. They, as well as others, were thrown out of employment. Many of them lost their homes in which they had invested their war gratuities and their life’s savings. It is true that some of them were allowed to continue in occupation of their homes. Those from whom they had borrowed money said, in effect, “Do not worry. We shall see that after this depression is over arrangements will be made whereby it will be possible for you to meet your payments “. What they did, however, was to add the accumulated arrears of rent to the capital cost of the home. That added cost bore interest at 4-J per cent. Many of those ex-servicemen had grown up sons who had never known what it was to be paid for a day’s work. Unfortunately many suffered from malnutrition. So things continued until once again the dogs of war broke loose. Youths who were physically fit for war service were called up and put into camps. Others voluntarily offered their services. The first job that many of them had was a job as a soldier fighting for his country. The promises made in 1914-18 were again made. They were told that if they were successful in their fight for freedom they would enjoy the fruits of a new order - full employment, better educational facilities, better homes, and so on. The war in which they fought has ended in victory for the Allies. What is the position of these men? The Government has entered into commitments involving the expenditure of many millions of pounds in a determination to give effect to a policy of full employment.

The successful operation of this and other legislation will mean that, instead of the profits going into the pockets of private bankers, they will be paid to the people’s bank, and be used in the interests of all the people. It also will provide, we hope, the finance necessary to ensure that homes now being purchased by ex-servicemen shall not be lost to them through unemployment and the consequent lack of money. If this legislation does only that it will have been worthwhile. The ex-servicemen of World War II. must not be forced to endure the hardships that were the lot of their fathers after the 1914-18 conflict. Just as the soldiers of World War I. saved their money in the hope of reestablishing themselves on their return to civil life, so the servicemen of the last war endeavoured, by accumulating their funds, to secure a new start in life. Are they to believe the propaganda that the press and the banks are disseminating to-day that this legislation is likely to deprive them of their rights? Will they not look back to the events after World War I. and realize that whatever the nationalization of banking may mean, conditions could not be worse than they were on that occasion? Surely the exserviceman will argue that if the state of affairs in the ‘twenties was such that his father, after rendering service to his country on the battlefield, lost his home and his employment, and lived to see his son fight the war over again, something must be done to prevent a repetition of these things in the future. It is apparent that those ex-servicemen who, through their organizations, have criticized the nationalization of banking have not examined the proposal very deeply at all. This measure will ensure to them the financial backing that is necessary for their re-establishment in civil life and will enable the fulfilment of the promises made to them while they were fighting for their country. And what is true of the soldier is true also of the worker.

I regret very much indeed that some workers, once they have accumulated a small bank balance, become little capitalists. I should like them also to learn the lessons of the past. When the last depression struck this country, many working people had moderate bank accounts that they had built up through hard work and thrift; but they found that they were ineligible for the dole until their savings had been exhausted. No man or woman was able to obtain unemployment relief payments if he or she had money in the bank. I heard many people say at that time, “ Never again shall I save money. When I am working again, I shall live a day at a time, because I realize that if another depression occurs I shall not be able to obtain assistance until my savings are exhausted “. But most people have short memories, and once again we are enjoying a period of prosperity - unfortunately it seems that a war is needed to make a country prosperous. The savings of the people of this country have increased by many millions of pounds, and to those individuals who have accumulated bank reserves I say, “ Guard them jealously. Do not take the risks that were taken during the period from 1920 onwards “. This Government, which has subscribed to the Atlantic Charter, has pledged itself to do everything possible to provide full employment for the people of this country. It is doing its utmost to create the new order that was promised to servicemen and civilians alike during the war years.

I ask the people of this country to cast their minds back over the last five years, ignoring the horrors that our opponents predict should this measure become law, and see what is in the mind of the Government in bringing forward this proposal. Through its comprehensive social services scheme the Government is taking care of Australian citizens to-day from the cradle to the grave. No longer can people say that they cannot afford to raise families. No longer need anybody fear sickness because of inability to pay hospital and medical charges. No longer need people be afraid of the landlord’s knock on the door on Monday morning because of unemployment or sickness on the part of the family breadwinner. There is a steady flow of revenue into every home sufficient to provide the absolute necessaries of life. These are the benefits that have been brought to the people of this country by Labour during the last five years. For its social services programme the Government is committed to an annual expenditure of not less than £80,000,000. What would the people of this country think of a government, pledged to full employment and to social services, that placed in jeopardy the means of obtaining finance to meet these commitments? The Senate should not lose sight of the fact that in the days of the Scullin Government when a mere £18,000,000 was required to tide the people over the worst of the depression, that money was not available unless certain harsh conditions were observed. I say in all sincerity that if the people of Australia are prepared to allow money to govern this country as it has been governed in the past through the private financial institutions, then we deserve all that is coming our way.

Labour is holding the torch. It is showing the people of Australia how to get rid of this iniquitous system; how we can, by the nationalization of banking, create credits for the people generally and not for the shareholders. I do not think the present position need be analysed any further to convince exservicemen and working people generally of the merits of this proposal; I ask the people of this country whether they can point to one promise that the Labour party has made but has not honoured faithfully. If any one is able to, I should like him to write and tell me of one promise which the Labour Government has not fulfilled. The word of the Government has been its bond, and so the people should be prepared to accept the assurances of the Prime Minister regarding the nationalization of banking. When the people have become reconciled to the new system they will say, “ Thank God for that ; it is a pity we did not have a Ben Chifley years ago “.

I should rather see the Labour Government go down at the next elections fighting for this principle than have it defeated because it had not the courage to give effect to the policy on which it was elected. When our opponents say that the Government has no mandate for its banking proposals they are merely attempting to fool the people. Those who know the history of the Labour party know that the nationalization of banking has, for a long time, been one of the planks of its platform. Wewere forced to introduce this measure hurriedly because there was a fear that the Banking Act of 1945 would not prove effective to give the Government the necessary control over finance to put Labour’s policy into operation. The decision of the High Court on the banking legislation may well prove to have been a blessing in disguise, in that it was responsible for bringing the issue to a head. An electrical atmosphere has been created, and for months past the fears of the people have been fanned by the newspapers, and by those who have the money to fight the issue. However, there is little left for them to do. Just as the campaigns of the opponents of Labour have failed in the past, so will this one fail. A lot of water will run under the bridge before the 1949 elections. If my support of the bill means my defeat at the next elections, I shall gladly “ take it on the chin “. Should the Government be put out of office, I know that before many years the people would again return the Labour party to reintroduce the legislation which is now being so bitterly opposed. I give my whole-hearted support and my blessing to the bill.

Senator COOKE:
Western Australia

– Whenever legislation is introduced by this Government to improve the economic and social conditions of a majority of the people, it is attacked by the Opposition, because it tends to restrict the privileges of a minority whose privileges, irrespective of the national welfare, must remain sacrosanct. The objections which have been advanced to this measure are in no particular different from those which were advanced to the Commonwealth Bank Bill of 1910. There have been the same emotional outbursts, the same threats, and the same attempts to engender fear in the hearts of the people. The same extravagant reference to democracy and freedom were made when the Commonwealth Bank Bill of 1945 was before the Parliament - the legislation which the Opposition is pledged to destroy. Now, strangely enough, Senator O’Sullivan commends the Banking Bill of 1945, and asks what reason there is for the present bill, in view of the presence of the 1945 act on the statute-book. The difference between this bill and the 1945 act is that the bill cures the complaint ; the previous measure merely treated the symptoms. But was the Opposition prepared to accept the 1945 legislation? I do not speak only of the Opposition members of the Parliament, but of the great money power which was affected by that legislation. If they had accepted the banking legislation of 1945 this bill might never have been introduced.

This is a democratic measure, which aims to introduce a sound, just and ordered system of banking and/or issuance of credit within a democratic and Christian state, for the good order and welfare of the Australian people, and the elimination of the ungodly struggle and intrigue for profit on behalf of shareholders by those who control the present monetary system, and to permit any profit that does accrue under the national banking system to be used in the interests of the entire community. When this legislation comes into force, the profits earned by the Commonwealth Bank will be used for the benefit of the Australian people, to promote their industrial, economic and physical welfare and to widen their cultural opportunities.

The bill is not an attack on the officials of the private trading banks, but on a system which has repeatedly failed to meet the requirements of humanity, and forced on society conditions of such misery and degradation as to provide a fertile breeding ground for communism, atheism and foreign ideologies. It is under such conditions, when people willing and able to work are denied the chance to work, and are forced to see their children starving, that communism is able to thrive. The private control of money and credit, which, according to our opponents, has conferred such benefits on the community, has denied the people the right to eat the food which they themselves produce. Honorable members who argue that the private banks have served humanity well are guilty of hypocrisy. They have done no such thing. The private banking system has damaged the morals of the people and the morale of the nation; yet its supporters defend it in the name of freedom and democracy. However, not at any stage in the debate. either here or in the House of Representatives, has any member of the Opposition stated what is democratic or free about the private banking system as we know it. The reason is obvious. It is impossible for them to produce an argument in support of a case which they state so flamboyantly.

The present banking system is opposed to democracy; it makes a mockery of freedom. That persons who are not answerable to the people, controlling banking and credit, can impinge on the liberty of the citizens is undeniable. For that reason alone,, a law should be enacted to provide that economic duress shall not be allowed to private persons over the State or over any other person, or group of persons. The questi 011 that the Government is concerned with is whether this great power and right should rest with a coterie of persons inside and outside Australia, with many personal and international interests and’ with no democratic appointment, who form a finance corporation, or bank, operating for profit, which can pursue a. policy which restricts both the individual and the nation without giving account to the people of the nation, or with a democratically appointed government answerable to the whole of the people-,, at least trienially, operating through a national bank, and bound- to work within, the Constitution approved by the -people.

Senator RANKIN:

-tended that this measure- was a “ red herring “. That argument sounded rather strange. because when we read’ history we see how the people have been fooled for generation after generation by “ red herring “ tactics, used by defenders of private bankers trading in credit for private profit. That credit -and banking practices have been the medium by which democratic government has been destroyed or supergoverned is beyond doubt. In order to substantiate that statement, I shall quote the opinions of world renowned persons and publications, extending from the earliest records of history. In 1890, when the private banks in the United States of America adopted the tactics of which we see evidence on the part of private banks in this country at present, at & time when the people were losing con fidence in them and they realized their need to strengthen their hold on the nation, an article was published in the United States Bankers’ Magazine from which I take the following.: -

We must proceed with caution; and guard well every move made, for the lower order of people are already showing signs of restless commotion.

Prudence will, therefore, dictate a policy ot apparently yielding to the popular will, until all of our plans are so fad- consummated that we can declare our designs without fear of any organized resistance.

The Farmers’ Alliance and the Knights of Labour organizations in the United States of America should be carefully watched by our trusted men-, and we must take immediate steps to control these organizations in our interests or disrupt them.

The coming Omaha convention, to be held on 4th July, our men must attend and direct its movements, or else there will be set on foot such antagonism to our designs as may require force to overcome. . This, at the present time, would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination and legislation.

The courts- must be called to our aid. Debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

Where, through a process of law, the common people have lost their homes, they will be “more tractable and easily governed through the influence of the strong arm. of government, applied by central power of impartial wealth, under the control of leading financiers.

The truth is. well known among our principal mcn, now engaged’ in forming an imperialism of capital to govern the worl’d1. While they aire- doing- this, the people must he kept in. a condition of political- antagonism.

The- question, of tariff reform must be- urged through, the organization, known, as the Democratic party, and the question of protection and reciprocity must be forced to view through the- Republican party.

By thus dividing the voters, we can get them to expend their energies in fighting over the questions of no importance to- us, the bankers, except as teachers to lead the common herd. Thus by discreet actions we can secure all that has been, so generously planned and successfully accomplished.

That was prior to the world depression of the ‘nineties. Let us compare that attitude with that of the private banks in the last world depression, when they contracted credit in this country, called in overdrafts and deliberately raised interest rates. That policy of deflation did more than anything else to accentuate the depression. We remember the misery and poverty of the depression. It is claimed that the private banks made advances in those years. They certainly made advances; they made advances to farmers who had sown good crops and reaped them, but the fact remains that the farmers were unable to meet their interest commitments to the private banks, let alone their commitments to ordinary tradesmen. Advances were then made by the banks to cover the interest debt of farmers, with the result that the farmers got further into debt. I cite those facts not as a challenge to the personnel or employees of the private banks but as a challenge to the present financial system in this country.

Never will the people forget the ultimatum which the trading banks issued to the Government in 1924, when they demanded the right to draw Commonwealth notes to any extent they wished. The Government refused, and the banks immediately called in overdrafts, refused new credit, placed a boycott on industrial expansion and caused a general economic slow-down. In August, 1924, the wool councils were informed by the banks that credit for wool sales could not be supplied, and the price of wool slumped. They adopted the policy of “ hold-up “ men. On the 9th October of the same year a metropolitan newspaper reported that bank credit was unprocurable “no matter the security offered “. On the 11th October, the Bruce-Page Government went into secret session with the associated banks, and three days later the newspapers reported that the Government had given way on all points and conceded to the associated hanks the “right to draw “ another £10,000,000 of Commonwealth notes. The daily press of the 14th October, made the following incidental admissions -

The associated banks have won a victory and dictated their own terms.

The associated banks have demonstrated their power.

It might be said that the banks do not enjoy that power to-day, but members of the Opposition in- this chamber have told us that if the Opposition parties are returned to office they will revert to that system. If this measure does nothing else, it will forever avoid the revival of that system and will protect the people of this country against a recurrence of the conditions which they were forced to endure during the depression. Opponents of this measure, inside and outside the Parliament, have described the Government’s proposal to bring money under control of the Government as an “ ism “. They describe this legislation as socialism and communism. But even Plato, when he established a currency for the Hellenic race, laid down that the State must control finance. He provided that any private citizen who went abroad must, on his return, hand over any foreign currency he possessed to the State, in return foi- which he would receive the equivalent in local currency. Therefore, the control of finance by the nation did not start as an “ ism “. Sir Basil Blackett, a director of the Bank of England, stated -

When it is remembered that kings and governments have, throughout the ages, insisted with jealous care on their prerogative of issuing money and controlling currency within their jurisdiction, it is somewhat strange to find modern States accepting as axiomatic a limitation of their sovereignty in the sphere of money, so far-reaching in ite effect on their powers, and on the daily life of their citizens, as is involved in their agreeing to conform in all circumstances to a standard of value over which they have no control.

Strange, but true, from a man who had completed his banking career, and was thinking on national lines. In 1790, Meyer Rothschild, a wise and clever man, stated his attitude thus -

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

Rothschild knew what was the real power. The late Lord Tweedsmuir said -

There is a great and potent world which the governments do not control. That is the world of finance, the men who guide the ebb and flow of money. With them rests the decision whether they will make that river a beneficent flood to quicken life, or a dead glacier which freezes wherever it moves, or a torrent of burning lava to submerge and destroy. The men who control that river have the ultimate word.

He realized how little the law means, in regard to the national economy, to men like Rothschild, who controlled the monetary and credit system of a country. The law meant not a thing to them. Abraham Lincoln fought, just as our Ben Chifley is fighting, agains-t the indecencies of this system, and he waa assassinated. Although acclaimed a great man, he was not successful in reforming the monetary system. He was responsible to a large degree for the abolition of physical slavery, but we are now making an endeavour, I arn proud to say, to abolish economic slavery in our own country. Abraham Lincoln said -

The government should create, issue, and circulate all the currency to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of the government, but it is the government’s greatest creative opportunity. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master, and will become the servant of humanity. Democracy will rise superior to the money power.

A great democrat expressed that view of what democracy stands for. It is not the opinion of a great hypocrite, who had never been a democrat, but who declares that the Government, under this legislation, is challenging democracy. Thomas Jefferson, another great American statesman, saw clearly the degree to which the monetary system in the United States of America was prostituted by those who controlled it. He said -

I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing (of money) power should be taken from the banks, and restored to the government and to the people to whom it belongs.

If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the corporations that will grow up around them will deprive the people of all their property, until their children will wake up homeless on the continent their fathers conquered.

  1. ask honorable senators: What are we struggling for? What are we trying to obtain for the people? Our object is to obtain for them homes at a low capital cost, water conservation, efficient and adequate hospitalization, protection for our farm lands from erosion, irrigation and a host of necessary developmental works at a low rate of interest approximating 2 per cent. We hope to be able to provide money for cultural development, education, essential public requirements and other projects from which revenue cannot be expected, at a rate of interest corresponding to the cost of issuance, if this be possible.

The nationalization of banking is worth fighting for. Approximately 400 people in Western Australia, representing about one-tenth of 1 per cent, of the people who voted at the last elections - .and notall of them voted for me - threatened me in various ways because I support this bill. Most of the communications were telegrams and letters sponsored by the banks - personal letters were few. I replied to some of them and learned that the documents had been signed at a social function - the signing had been organized by a bank manager. I am satisfied that these protests do not represent the popular demand of the people of Australia, as is claimed by the Opposition. These protests have been promoted by these “ nationally minded “ people who oppose the bill. Even before this measure was introduced, the opponents of monetary reform and progress were rushing around the country urging people at social functions to protest against it. However, these protests have not had the slightest effect upon the Prime Minister or the Government. The London Fm.ancia.1 Times, on the 26th September, 1921, adopted the same attitude towards the government of the day as these puny Australians are adopting against this bill. I do not say that every person who has opposed this bill is a puny Australian, because many people have been misled an this issue. However, the Financial Times gave this cheeky piece of advice to the Lloyd George Government -

Whoever may be the indiscreet Minister who revives the money-trust bogy at a moment when the Government has most need to be polite to the banks, should be put through an elementary course of instruction in fact as well as manners. Does he, do his colleagues, realize that half a dozen men at the top of the five big banks could upset the whole fabric of government finance by refraining from renewing treasury-bills?

It is obvious that the private banks do not desire to retain power over money and credit solely for the purpose of assisting governments. They want this power in order that they may destroy governments.

Assertions are now being widely made that the present banking legislation confers upon the Australian Government all the authority that it requires to control the issue of credit. In other words, the Commonwealth Bank and the private banks are now working under a satisfactory arrangement. In war-time the arrangement was doubtless satisfactory, and banking controls during that period were effective. During World War II., I attended conferences of workers, manufacturers and financiers in Melbourne, which were summoned by the former Prime Minister, the late Mr. John. Curtin. These conferences were held after the Labour Government had taken office, and we had to reorientate our affairs orbe overwhelmed by the enemy. At these conferences some of the representatives of the financiers said, “ Save our assets. We do not want any profit. The Government can have all of it “. During war-time they did co-operate with the Government, and, under its direction, success attended Australian industry.

I shall now refer briefly to the position of banking in Canada. The banking structure in that dominion consists of a government bank operating with private banks. When the private banks’ fear of losing their assets was removed, the Canadian Government appointed a royal commission to discover the precise line-up. It was found that the position in Canada in peace time was very little different from that in Australia in peace time, in that the directors and shareholders of commercial banks were, in the main, associated with the administration of heavy industry and with most of the cartels and combines existing in that country. They were charged with the duty of obtaining a maximum profit both for their bank and for their own business interests and concerns. These people required large credit accommodation, and they drew on a credit required from their own favoured commercial bank, which, in turn, could so order its policy as to regulate the issuance of credit, &c, to persons, companies and others who, by virtue of their expansion, may have become a challenge to the sovereignty of the control of the persons with whom the banks were associated, and so, by keeping intact a close circle of reciprocal privilege, were able to control the greater portion of the credit required in the nation, within the confines of commercially-run banks, to the detriment of the nation’s progress. Mr. Graham Towers, who was the Governor of the Bank of Canada, in evidence before the royal commission, showed that such a system was open to abuse. He was asked the following question : -

Twelve per cent. of the money in use in Canada is issued by the Government, through the Mint and the Bank of Canada, and83 per cent. issued by the merchant banks of Canada on the reserves issued by the Bank of Canada ?

Mr. Towers replied, “Yes”. Then this question was put to him -

But if the issue of currency and money is a high prerogative of government, then that high prerogativehas been transferred to the extent of 88 per cent. from the Government to the merchant banking system?

Mr. Towers replied, “ Yes “. Such authorities are not so ignorant as to attempt to mislead when they say that a government bank, unless it possesses complete power in regard to the issuance of credit, would not mean one whit more than it meant in 1931, when the nation urgently required the government bank to protect it from the effects of the financial and economic depression. When the bank was converted in 1924 to a “ bankers’ ‘bank “ no suggestion was made then by members of the present Opposition parties that a referendum should be taken. The anti-Labour Government which enacted that shameful measure was taking away from the people their bank, an action which denuded the Government of all real power in the realm of finance and left this country at the mercy of the private and international! financiers.

It is the duty of the Government to preserve the integrity of the State in safeguarding its territory, not merely against hostile armies, but, what is no less dangerous, against the peaceful penetration of foreign capitalists and finance syndicates of a national and international character to prevent essential services, including the distribution of credit, finance and real wealth, coming under the controls of groups foreign to the State, groups inside the State, but outside the direction of democratic government. That is undemocratic. Forces within the State and its citizens may lose freedom no less real by military conquest than by economic conquest. During the American Civil War, Abraham Lincoln remarked; “I have two great enemies: the southern army in front of me, and the financial institutions in the rear. Of the two, the one in the rear is my greater foe “. Reducing the matter to one of simple justice and the necessity for establishing a sound basis for economic government, the bill will satisfy commutive justice by providing reasonable compensation for those who are entitled to compensation. It will satisfy the requirements of legal justice by complying with the Australian Constitution, and it proposes to assert the Government’s right to distributive justice, which binds it not merely to seek a common good in exercising its public functions, but also to distribute its conditions equitably among the members of the state in order that the people shall not again suffer because of the manipulation of finance.

The present Government does not desire another half century of depression, war and misery, devoid of any real national progress or cultural development, nor does it desire that the strivings of the people towards a better order should be frustrated. Under the present financial system it is not possible to implement any real scheme of social advancement. The provision of adequate educational and hospital facilities requires complete freedom of action by the Government. During the war years the Australian Labour party and its great leader, the former Prime Minister, the late Mr. Curtin, devoted all its energies to the successful1 prosecution of the war. Although that effort was such that it cost Mr. Curtin his life, he never lost sight of Labour’s real aim. During the war he established a fund to enable a decent social order to be created when peace came. In attempting to effect a real improvement in the lot of the community the Government is: simply carrying out its war-time policy as enunciated by Mr. Curtin. We want to see Australia fulfil its real destiny. Adequate social services must be provided, and the country must be properly developed. Vast schemes of water conservation, comprehensive measures to combat soil erosion and large-scale schemes for land development must be implemented.

Areas at present under cultivation must be not only maintained, but also improved. The good taken out of the land must be replaced. Under the present system, farmers are obliged to drag out of the soil everything it has, but they cannot afford to replace any of its value. That cannot continue. The country must be saved ; it is our heritage ; and the only way we can realize our destiny is by approaching our problems in the proper way. That involves the expenditure of large sums of money and the existence of an adequate financial system, something which is impossible while private banks continue to dominate our economy.

Private banking institutions, by means of carefully devised plans to produce inflation and deflation, booms and slumps, direct their efforts to the accumulation of profits for a privileged minority. That system permits large private combines and monopolies to absorb the greater part of the nation’s wealth and assets. The object of the present legislation is to remove control of finance from vested interests and place it in the Government, which was the objective envisaged in the Constitution. The real business of banking should be to ensure that its policy is directed to the benefit, not of privileged individuals, but to the whole of the people of the nation, and that its profits are used to benefit the people. While the present system continues that cannot happen. No country has ever progressed under such conditions. A great deal requires to be done in this country if it is to fulfil its destiny. Members of the Australian Labour party are determined that the people of this country shall continue not only to hold their country, but also to improve it, and to obtain from its improvement that to which the people are entitled. Furthermore, we owe it to the men who fought for this country to fulfil the promises which we made to them. In doing that we shall be demonstrating our loyalty and our courage in peace, as we did in war. I support the measure and I commend the Prime Minister (Mr. Chifley) not only for his sincerity, but also for the forthright manner in which he has introduced this measure, and, like every other member of the Australian Labour party, I stand solidly behind him.

Senator KATZ:

.- I welcome the introduction of this measure, particularly since it has been brought forward during the first few months of my membership of the Senate. It is, perhaps, the most momentous measure which has ever been introduced in this chamber. I think that it will be generally admitted that during the war and its aftermath Labour has been able to secure the stabilization of our economy. During the war that was made possible by the introduction of special war-time regulations, and now, in time of peace, the Government proposes to continue its stabilization safeguards. If that can be achieved, it is something which will benefit every member of the community. I listened carefully to the debate which took place on this measure in the House of Representatives, and I suppose that no bill has ever been more thoroughly discussed than the present one. The debate in this chamber has been conducted on a very high plane, and must be, at least, equal to that which has taken place on any previous measure. I think that even honorable senators opposite will agree that the speech of the Minister for Health and Social Services (Senator McKenna) was worthy of the parliament of any country. Because of the importance of the debate, I purposely refrained from interjecting while members of the Opposition were speaking. However, before proceeding to deal with the bill, I must comment on one remark made by the Leader of the Opposition (Senator Cooper). He alleged that the people of Australia endorsed the Premiers plan. I point out to him some of the consequences of that plan. It wrecked the Scullin Government, it disorganized the Labour movement for many years, and it destroyed governments in Victoria. Furthermore, it put a brake on the Labour movement, which was forced to enact measures opposed to its fundamental policy. Because of that plan it was obliged to reduce wages, lower standards of living and curtail even pensions for the aged.

The first matter with which I propose to deal is one which was mentioned not only by the Leader of the Opposition and his supporters, but also by opponents of the bill in the House of Representatives. It also figured prominently in the daily press. “When, in support of their contention that this proposal should be the subject of a referendum, Opposition members say to us, “ But you took two referendums previously “, I point out to the Leader of the Opposition and his deputy that they were taken, for reasons that I need not go into, while the National Security Act wa9 still in operation. In both the House of Representatives and the Senate, the Opposition parties have been presenting petitions demanding a referendum which they have backed up with speeches demanding one, but not one Opposition member has stated that the Opposition parties would obey the decision of the people at a referendum. In my opinion, in the event of a vote in favour of this proposal, the Opposition parties would do as they have already done, even before this legislation has been passed, and challenge it in the High Court on the ground that the referendum was invalid, because, as the Constitution already provided for the Australian Parliament to pass laws for the control of banking in Australia, there was no constitutional provision for the holding of a referendum on the subject and the Parliament was the sole authority to decide whether legislation to control banking should be passed.

The Opposition parties are trying to delude the people into believing that they oppose the bill not on behalf of the private bankers, whom they claim not to represent, but in defence of the interests of the bank clerks. But how have thu interests represented by the Opposition parties protected the bank clerks? On behalf of the Labour movement, inside and outside the Parliament, the Prime Minister (Mr. Chifley) has given the assurance that employees of the private banks will not lose their positions or privileges after those banks have been nationalized. That assurance was given first to the Labour party and then to the public in the House of Representatives when the Prime Minister made his second-reading speech. It is well known that certain private banks have entered into secret undertakings with certain employees to grant them superannuation rights in addition to those provided for in the superannuation schemes established by the banks’ regulations. The Prime Minister gave an undertaking that those secret undertakings would be safeguarded and that the employees affected would receive from the Commonwealth Bank the same consideration as they had been guaranteed under the secret arrangements with their existing employers. The presentation of petitions seems to be a mania with the Opposition parties and the private banks. I had something to do with the bank clerks in 1919, when they were compelled by their employers to sign petitions addressed to the Commonwealth Court of Conciliation and Arbitration praying that it would not register the Bank Officers Association as an industrial organization. The signatures of hundreds of employees were placed on those petitions in the National Bank, the Bank of Australasia, the Bank of New South Wales, the Bank of London, which was then in existence, the Commercial Bank and the Bank of Victoria. The employees did not dare to refuse to sign. The opponents of the registration of the association as an industrial organization were represented before the court by Sir Hayden Starke, now a justice of the High Court, and Mr. Stanley Lewis, then one of the ablest barristers in Australia, who were instructed by the banks’ solicitors, Moule, Hamilton, andDerham. If a bank clerk earning £3 or £3 10s. a week dared to assert his manhood and marry, he was instantly dismissed. That is how the interests of bank clerks were protected in those days. The bank clerks of Australia have a lot to thank the Labour party for. When the Commonwealth Arbitration Court made an award for the bank clerks, it was not observed by the banks, and an industrial inspector appointed under the Commonwealth Conciliation and Arbitration Act subsequently got for hundreds of bank clerks money that the hanks had denied to them in refusing to obey the award. I also remember a case that was heard by the Industrial Commission of New South Wales, to which the bank clerks had gone for a State award. The man primarily responsible for the approach to the court was sacked by the bank that employed him and victimised by the other hanks, in that he could not get another job in any bank in New South Wales. He appealed to the court against his dismissal. and I must say that the court concerned, the Indust rial Commission of New South Wales, not the High Court of Australia, upheld his appeal and ordered his reinstatement. He was reinstated. I mention those matters only to show the falsity of the claims of the Liberal party and the Australian Country party, which are financed by the private banking institutions, that they represent the interests of the bank clerks.

We have a Prime Minister whose one objective is a stabilized economy. I challenge honorable senators opposite to name one country as prosperous as Australia is to-day. If they point the finger at the United States of America and say, “ It is a wealthy country “, I say that alongside its wealth is an ever-growing army of unemployed. Who would have thought in the depression years, which I do not wish to dwell on, as they have been sufficiently debated, that within 20 years the Sydney Morning Herald would, as it did on Saturday, carry 67 columns of “ Situations Vacant “ advertisements imploring the people to take a job? To-day, advertisements seeking women employees state that morning and afternoon tea will be provided, and that during rest periods they can listen to the radio, and all sorts of similar conditions. How different are things to-day from what they were in the early 1930’s ! At that time over the entrances to many establishments were big notices reading “ Keep out. This means you “, or “ No hands wanted”. There is to-day almost full employment throughout Australia, and for that state of affairs the present Government is largely responsible.

The financial columns of our daily newspapers afford further evidence of Australia’s prosperity. Whether one picks up the Sydney Morning Herald, or the Daily Telegraph or the Melbourne Herald or the Adelaide Advertiser, or whether the newspaper is published on Monday or Saturday or any other day of the week, the story is the same. I shall read from a newspaper in my hand some of the headings - “Highest profit for 27 years”. “Buckley and Nunn has record sales”. “ Best profit since 1920”. “ Highest sales in the company’s history “. “Earning rate of11¾ per cent. on shareholders’ funds “. “ Maintenance of 8 per cent, dividend rate “. “ Shares gain more ground “. . “ New Broken Hill shares up “. “ Peter’s record profit. A record consolidated profit, twice that of pre-war,, is shown by Peters Ice Cream (Victoria) Limited and its subsidiary for the year ended 30th June

  1. . Dividend has been lifted from 12 to 15 per cent. . . . This is the highest dividend rate ever declared by the company “.

Australia is oozing with prosperity. The same story is told in every State. Yet the Opposition says that under a Labour government the people will lose their savings. They are trying to frighten the people to-day just as they did in 1930. I remember a big picture on a hoarding showing a woman at the wash tub. Underneath it. were the words, “ Don’t vote Labour, they will confiscate your savings “. On this occasion the Opposition is finding some difficulty because the bill provides that the banks shall be fully compensated for their assets.

Recently, the National Bank of Australasia Limited issued a balance-sheet which is worth analysing. It shows that after making provision for £317,000 for taxes the profits for the year amounted to £421,951. However, I am not so greatly concerned with the profits and dividends paid by the bank as with the statement that the assets of the bank are valued at £105,098,000, an increase of about £8,000,000 for the year. I wonder whether in stating its assets at so large a sum the bank is looking ahead and will submit its balance-sheet to the Federal Court of Claims as evidence of the value of its assets?

I wish now to refer to the influence of the press. The Labour movement which has made it possible for a Labour government to occupy the treasury bench is the most marvellous movement in the history of the world. Those who control the private banks of Australia control most of the newspapers. In Victoria each week approximately 6,000,000 copies of various newspapers are printed. In New South Wales the circulation is about 7,500,000 newspapers a week. In other words, more than 13,000,000 newspapers containing articles antagonistic to the Labour party are published each week in those two States. That means that the readers of those newspapers read every day propaganda directed towards creating fear that the people’s savings will be taken from them. That kind of thing has been going on for years, but in spite of it, Labour has triumphed at the polls; the Opposition in this chamber has almost been swept away. Considering the opposition which the Labour party has had to face its members should be proud of its majority. The late Dr. Maloney, who represented the electorate of Melbourne in the House of Representatives for many years, started his working life as a bank clerk. I remember that he used to tell us that his friends often said to him in those days that he worked in the “ lighthouse “. This meant the bank offices in Collins-street which were lighted night after night throughout the year to enable the staff to work overtime. There was then no arbitration court or bank officers association, and Dr. Maloney and his colleagues were not paid overtime, although on occasions they received ls. for tea money. Dr. Maloney lived to a great age and he earned the respect of all who knew him. At his death it was revealed that he had made provision to assist the “ down-and-outs “ who were out of work. The “ Little Doctor “ rendered a great service, not only to the Labour movement, but also to humanity.

I support the bill primarily because I am a Labour man, but also because my studies of world movements show that whenever there has been a crisis the banks have failed. On the very day on which World War I. began many banks in Great Britain shut their doors and kept them closed for four days. The only institution which could open their doors was the Government of the United Kingdom. In every crisis the people must rely on the Government to get them out of their predicament. When this bill becomes law we shall be able to make provision for the unemployed. Who would have thought in my young days that a married couple, whilst owning their own home, could each receive a pension of 37s. 6d. a week, and, in addition, each earn £1 a week, making a total remuneration of £5 15s. a week? Whoever imagined that the Commonwealth Government would provide free hospital treatment, and that a wager earner going into hospital would receive an allowance? We have done these things and I believe that if this Government continues in office its achievements will be greater still. There need be no fear complex in the community. The people of Victoria did not vote upon the issue of bank nationalization. The Cain Labour Government did more in its two years of office than the anti-Labour parties had done in the 95 years in which they occupied the treasury bench. The Cain Government went to the people on its record, and its spokesmen did not mention bank nationalization at all. Its opponents, however, had vast financial resources at their disposal and they were able to persuade the people to vote the Labour Government out of office. Similarly, huge sums of money were expended in order to induce a negative vote on the Commonwealth Government’s referendum proposals in 1944. On that occasion, a certain organization was unable to expend all the money that was available to it; however, what happened to. the balance is no- concern of mine.

In a few minutes the Senate will vote upon the second reading of this measure. I am pleased, indeed, to have had an opportunity to pay my tribute to the wisdom and courage of the Government in introducing the bill. I regard my participation in the making of this legislation as one of the. most enlightened acts in my life.

Senator HARRIS:

– It gives me great pleasure- to speak on this measure as a representative of the electors of Western Australia. I, too, have received many letters and telegrams regarding the proposals now before us, and I have examined the signatures with Senator Nash. Most of the letters are obviously the work of the trading banks because they have the same wording and are written on the same type of paper. The majority of the signatures are those of females. Of the remainder, we have been unable to trace quite a number on the electoral rolls. There are also many signatures of men engaged in professional occupations. We have been informed in these letters that if we support this measure we shall be dealt with at the next elections. I am aware of the manner in which the signa tures to these letters have been collected by the banks in New South Wales at least. A bank officer sits in a doorway of a bank at a little table and invites all the women going past on the footpath to sign a letter. His boss usually stands over him. while he does this. In Parramatta, I asked three ladies if they knew what they were signing and they said that they did not. I have no fear of the threats that the letters contain. I can guess what number was placed opposite my name on the ballot papers by professional men at the last elections, so I am not worried about their votes. The possible hostility of bank officers does not worry me either, because I think that a large majority of them have changed their views about this measure. A week before the bill was presented to this Parliament photographs appeared in the newspapers of a gathering of 10,000 or 15,000- bank officers, in the Sydney domain to protest against the nationalization of banking. The secretary of the organization - I suppose that, like the secretary of the Seamen’s Union when the Bruce-Page Government sold the Australian Commonwealth Line of Steamers, he was in the pocket of the bankers’ - took a vote. and in the whole crowd only about four or five people supported the Government’s proposal. However, since the Prime Minister announced the Government’s intention in regard to the absorption of the staffs of the trading banks, there has been quite a different outlook on the part of the majority of these people. I have heard some wonderful news in Melbourne in regard to the attitude of the bank employees towards this bill. Apparently they are not as much under the thumb of the bankers as one might believe.

The object of this measure is to empower the Commonwealth to take over the banking businesses at present conducted in Australia by the trading banks. I have supported the nationalization of banking for the last twenty years. The principle is not new to the Labour movement. It has been on the platform of the Labour party for at least twenty years. I remember supporting it at a Labour congress in Perth twenty years ago; and now there is a Labour government with a .majority in both Houses. and this bill will go through the Parliament. There can be no shadow of doubt about that. The private banks are doomed, and soon they will be gone. They will never return. When the Commonwealth Government, in 1911, established the Commonwealth Bank there was no referendum. When the Bruce-Page Government sold the Australian Commonwealth Line of Steamers and the Commonwealth Woollen Mills, there was no referendum. I shall have something to say about that later on, in order to show what traitors those people were who boasted of their services to Australia.

I have been looking through the debates on the Commonwealth Bank Bill of 1911, and I have noticed that the same tactics were used then by the Opposition as are being used now. The Opposition had all the bankers behind them, just as they have now. They had the press lined up against the Government, but the government of the day pressed on with that legislation. The Prime Minister, Mr. Andrew Fisher, when speaking on the bill, on the 15th November, 1911, had not gone very far when the then honorable member for Parramatta, Sir Joseph Cook, interjected, “ Sovereigns for every one “. Members of the Opposition are saying almost the same thing to-day. Mr. Fisher replied to him in these words -

I may say at once that this Government will not be responsible for any such scheme as that of which he apparently approves. For over twenty years, to my own personal knowledge, the question of a State bank has been prominently before the people of Australia. The proposal has had the approval of at least one great party in every State, and those who are “contending for a State bank have, as circumstances have developed, proved their case. This will be a bank belonging to the people, and directly managed by the people’s own agents.

Those words are recorded at page 2644, volume 62, of Hansard. Mr. Glynn, who had secured the adjournment of the debate, resumed the discussion on the 21st November. His opening remarks were -

This is rather a dry bill, but its importance justifies one in coming to close touch with some of the questions which are raised by it. I may say at once that I am not going to approach it from the point of view of economic theories, such as the legitimate limits of State interference, because most, if not all. of those theories are based upon data which are imperfect in their scope, or, perhaps, in our apprehension of them. In legislation, dealing as we do with the somewhat complex affairs of social life, we are necessarily more or less faulty in our methods and in our means of accomplishing our desires. In public affairs, we are all, more or less, pragmatists, affected by the limitations imposed by birth or circumstances. The questions which we have to ask ourselves in regard to this bill are, “Isthe bank which it proposes to create necessary, is it expedient, and is it likely to be successful?

Despite bitter opposition from private interests, and many prophesies of failure, the Commonwealth Bank has proved tobe of great service to the nation, particularly during World War I. and in every succeeding year. I listened with interest to the speeches made in the House of Representatives on this bill, and I havenot been convinced that members of the Opposition proved their case against the nationalization of banking. They tried to prove that the scheme would be a. failure. They know, of course, that it will not fail. However, because the nationalization of banking will deprive the great financiers of large dividends, and because the Opposition parties are on the pay-roll of the banks, they are in duty bound to oppose the bill. Since the Government announced its intention to nationalize the private banks it has become abundantly clear that the bankers control the press and the anti-Labour governments and politicians. They are now making a great bid for the support of the workers, as they did before the recent elections in Victoria. Sir Frank Clarke is, I understand, the unofficial leader of the Legislative Council in Victoria, and he put the pressure on his own party, and on the Cain Government, in opposition to the nationalization of banking. We all know who Sir Frank Clarke is. He is vice-president of the National Bank of Australasia Limited, so what can we expect from such a man? He is also a director of a great number of big financial firms in Victoria, so that we may expect anything from him. When the Cain Government was defied by the Legislative Council, Sir Frank Clarke and his satellites tried to prove to the people that the nationalization of private banking would be detrimental to them.

The private banks have always been able to maintain control of anti-Labour governments and politicians. In 1931. the Lang Government of New South Wales introduced moratorium legislation for the purpose of protecting farmers and business men against the banks which sought to foreclose on them during the depression. The following year, unfortunately, the Lang Government was defeated, and the Stevens Government came into power. It immediately tried to amend the Moratorium Act, so as to leave the bankers free to do as they wished. The Stevens Government put on the “squeeze”. Mr. Stevens was approached by a number of members of the Country party in the New South Wales Parliament, who were perturbed about the amending legislation, because they would be financially embarrassed were the moratorium lifted. They feared that in that event they would find themselves in the grip of the banks. But they had to compromise with Mr. Stevens. They received an assurance from him that after that legislation was passed all of them would receive the protection they desired so long as they voted for the amendment. They did so. That legislation removed from the private banks the shackles of the Moratorium Act in that State and permitted them to carry on as they had done previously. Honorable senators are familiar with the experience of the late Lieutenant Gordon Wilkins. but the story will bear repeating. Lieutenant Wilkins had lost a. leg in World War I. He was a member of the Country party, and represented the Bathurst electorate in the New South Wales Parliament from 1932 to 1935. I shall let him recite the facts as they are recorded in the following report of a speech which he made at Mudgee at that time. He said -

Twenty-two years ago, I left the Wellington district to do my bit for Australia, and after three years on the other side, came back minus a leg. Still a young man, I set on a new battle, the battle of life to provide a home mid living for myself and family. I received a pension of £2 10s. a week. Remember that, because I. propose to tell you what can happen to a soldier’s pension when the banks get a grip on a man. Well, it was a big fight, but by dint of hard work T managed to build up a prosperous business in my home town.

By 19.30, I had assets worth almost £30,000 and I was looking forward to comparative comfort. My liabilities were £14,000. But the farm was paying well, prices were satisfactory, and 1 was quite satisfied of my solvency.

I had a property of 1,035 acres in the Wellington district. Freehold and’ CP. title of which 400 acres was under wheat, 10 acres under lucerne and the balance all excellent grazing country. It was valued at £5 10s. an acre, and on it I had a com.forta.ble little home. In Wellington itself I built up a huge garage, one of the largest in the central west. The building and the plant was valued at £5,S00, while from September, 1923, to September, 1929, I cleared over £800 in commissions alone. I was paying £50 a week in wages and was one of the largest employers in the town.

Then with the depression, sales fell off. Like other good employers 1 was anxious to keep my employees, even if it meant losing money. Many of them were fellow diggers.

I felt I had an obligation to them, as they had put their trust in me, and like so many of you, thought that the depression would be over in a matter of months. So I borrowed everything that I could to keep my business going.

It was. after all. only the old digger spirit of a man keeping his chin up.

I went to my bank manager. Previously he had urged me to accept an overdraft, so that I might extend my business. By 1930, that overdraft amounted to approximately £2,500 but it was well covered by my assets. But now the depression was on us and the bank was a different proposition. It slogged me day after day. I realized on everything I could and in spite of conditions reduced the overdraft to £2,000. The overdraft was secured by mortgage on the land and buildings, and, in addition, was supported by n guarantee of £1,000 entered into by two guarantors, being jointly and severalty liable. This was what is known as a “ personal covenant “.

In 1081, the Lang Government introduced its Moratorium Act, and the hank found itself unable to foreclose or call up the securities. The Moratorium Act did away with the “ personal covenant “, and freed both my co-guarantor and myself from the guarantee. But in spite of the moratorium I still kept my interest payments going. I did not want to evade any obligation and like so many others was particularly proud of the fact that my word was my bond.

I went into voluntary liquidation in February, 1932.

So the bank caine in and took possession of the land and buildings under its power of mortgage. It cleaned me up. From that time on the bank collected all the rents. I had lost my business, but there still remained the matter of the £1,000 guarantee under the “ personal covenant “.

I was still satisfied that all the party propaganda that was coming up from Sydney was the truth.

I was still satisfied that the banks would give me a fair go, and as soon as the crisis was over would allow me to get back to where 1 was before.

About the middle of 1932, Mr. Martin, Minister of Justice in the Stevens-Bruxner Government, brought down a bill to amend the Moratorium Act. On reading it I discovered that, if it was carried it might mean that the hank could penalize me for not having accepted the benefit of the Moratorium Act the previous year. I was not the only one affected. There were other members of the Government also disturbed over its possible effects.

After discussing it with other members of the Country party as well as the United Australia party, we felt that something would have to be done to protect the interests of the fanners and country business men who would be affected.

So I went to Mr. Martin and told him that 1 could not support the bill in its present form and that for the first time I would be forced to cross the floor and vote against him. He was very disturbed and told me he would inquire into what I had told him. I put all the facts of my own position before Mr. Martin, told him that 1 was prepared to meet my obligations to the bank providing I was given time and consideration, but that this bill would put me in an impossible position.

As a storm was brewing among members of the Country party, as well as the United Australia party, Mr. Martin agreed to make inquiries.

He then came to me next day and said: “I have gone fully into the matter, Dick, and I have the assurance of the associated banks that no guarantor who is brought back under the provisions of the bill will suffer any hardship. In fact, they will be treated sympathetically and justly on the merits of each case. So on this assurance, I went into the House and voted for the bill and against the amendments to protect the “ personal covenant “.

I only wanted time to pay and consideration, and I felt that after such an assurance I would obtain it.

Yet the bill was no sooner operative than my co-guarantor and myself received notices from the bank’s solicitor calling up the guarantee. They had a legal weapon and they proceeded to flog me with it. I make no excuse. I was a member of the Parliament that passed the bill. I had helped to give the banks the whip and they were using it.

After my co-guarantor came to me and asked me the meaning of the notice since I had given him an assurance that we would be protected under the bill, I went straight to the Minister of Justice, Mr. Martin.

He promised me that he would see the representatives of the banks and try to make some arrangement. He did not deny that he had given me an assurance before I voted for the bill. That the measure was only intended to cover certain wealthy men whom it was declared were evading their obligations.

To my surprise, I received a letter from the Minister in which he declared: “To my mind it is clear that something must be done and at once. In my judgment, you are both liable under the guarantee, but the thing is to make the best arrangement possible under all the circumstances “.

After many interviews, the Minister notified me that he had interviewed the bank on my behalf and had concluded an arrangement.

It was agreed that I was to pay£ 100 a year off the guarantee and also pay current interest on the balance of the debt. I figured the interest out at approximately £125 a year, which meant that I was forced to pay £225 a year. I told the Minister of Justice, Mr. Martin, that with the rent and my military pension of £2 10s. a week, I could just about do it.

Eventually the banks “ squeezed “ Lieutenant Wilkins. The particular bank in. question declared a dividend of 15 per cent. at that time; but, although LieutenantWilkins had done his best to meet his commitments, they relentlessly demanded satisfaction of the full debt. Lieutenant Wilkins continued -

Although I had paid to them by surrendering my war pension, and by other means, an amount of £398 when they issued the writ, they did not give me credit for one penny of that amount. The writ was for £1,730 3s.1d. plus legal costs. We objected to the account and the bank was then compelled to give us credit for the £398 collected by the bank through my pension vouchers and for the £600 that had already been paid by my coguarantor.

Lieutenant Wilkins was one victim of the private banks. He was a member of the Country party which, at that time, formed a coalition government with the Stevens Government in New South Wales. He was promised faithfully by the government that he would be protected provided he voted for the bill which lifted the moratorium.

Time will not permit me to explain fully all that I have in mind regarding this bill, but I desire to reply to several criticisms voiced by members of the Opposition. Senator Rankin referred to the result of the Victorian elections recently as an indication that the people were opposed to the nationalization of banking, and also asked what would become of the “ unfortunate employees of the private banks “. I assure her that she need not worry about those employees. They are looking after themselves, and will show at the right time just where they stand in regard to the nationalization of banks. The result of the Victorian elections plainly showed the people of Australia the grip which the banks, antiLabour politicians and the press exert. Never before in the history of Australia has so much money been spent in a campaign to spread false charges and misleading propaganda. On the eve of the elections, agents were sent to the poorer parts of many electorates, among invalid and aged pensioners, into hotels and wherever crowds were likely to be, and, in particular, they spoke with housewives, in an endeavour to persuade them to vote against the Labour Government. I know for a fact that the anti-Labour political parties and the private banks employed hundreds of men on this work. Their object was to poison the minds of the people by spreading the gospel on behalf of the hanks. These facts have been adduced by trade union secretaries and members of the Labour party. They obtained this information after the elections from men who had learned from their wives about this campaign.

Senator Amour:

– The newspapers will not report the honorable senator’s remarks.

Senator HARRIS:

– Of course not. My speech will not receive any publicity in the newspapers, but I am not concerned about that. Honorable senators should not forget that the recent elections in Victoria were noteworthy for the number of false statements which were made. However, the chickens will come home to roost. The people of Victoria and other States know the reputation of the Chifley Government for honesty and integrity. They have evidence of its efforts to look after the interests of the people as a whole, and not just one section. They realize that the Government, in introducing this legislation, honestly believes that it is acting in the best interests of Australia.

I intended to deal with other aspects of this bill, but my time has almost expired. I am gratified to have this opportunity to support the measure. There is no doubt that the Senate will pass it, and, even if the people do reject certain State governments at subsequent elections, the Labour party has never changed, its political colour or its name. The honesty of the party ever since its formation is well known, and, even if defeated, it will rise again. The people know that the Labour party has not in its ranks such traitors to the country as a former Prime Minister, Viscount Bruce.

Senator ASHLEY (New South WalesMinister for Supply and Shipping) press appreciation at the support which honorable senators have given to this bill, and the tolerant manner in which they have debated it. Speeches have been delivered in an atmosphere in keeping with the traditions of this chamber. The bill is a most important and contentious measure, and has provoked more opposition than any other legislation that I can remember in this country. However, we are fighting the same interests that the Labour party has fought for many years. When we realize the lucrative investment that banking is, we can readily understand why the private banks are waging such a fight against this bill. As early as 1817, when the Bank of New South Wales was established, the wealthy people were privileged and protected in the preserves of banking. Each share of the bank cost £100, and, at that period of our history, £100 was a fortune. We all can readily understand that only the wealthy could participate in the banking business. An indication of the profits which were derived by this institution in the first 35 years of its operation is the fact that the dividends which it declared were as high as 17½ per cent.

Opponents of this bill have complained that the abolition of the private banks will kill competition. I remind them that, in the early history of Australia, there was keen competition between private banks. Before the bank crash, in 1893, nine private banks had failed, and depositors had lost their money. During the general crash in 1893, fifteen banks closed, and their depositors either suffered losses or had to wait for their money. I have good reason to remember the financial disaster. My people lost their money in the Australian Joint Stock Bank, a branch of which was then established in Hay. Because of its name, one would assume that it would be a much sounder institution than the Bank of New South Wales, the Union Bank of Australia Limited, or any other private bank. My people, like many others, were compelled to wait many years to receive payment. By 1916 only 23 hanks were operating. Of the 58 banks originally operating 35 had disappeared because of forced liquidations and amalgamations of the surviving ones. To-day, as the Minister for Health and Social Services (Senator McKenna) pointed out, only seven Australian trading banks exist. Against the criticism of members of the Opposition that the Government’s proposal will result in the establishment of a monopoly, it is quite evident from the facts I have just mentioned that the present private banking system is rapidly transforming itself into a single bank monopoly.

The Leader of the Opposition (Senator Cooper) denied that the Bank of England has been nationalized on lines similar to those proposed for the trading banks by this bill. He said: “The Bank of England is still governed by a board of directors, and is in the position which the Commonwealth Bank occupied in 1945 “. Prior to the amendment of the Commonwealth Bank Act in 1945 the board of that bank was quite independent of the Government, and was not subject to any directions from the Government. Section 4 of the Bank of England Act 1946 provides -

The Treasury may from time to time give such directions to the Banks as, after consultation with the Governor of the Bank, they think necessary in the public interest.

Section 4 also provides that, if so authorized by the Treasury, the Bank of England may issue directions to any banker to give effect to any of its requests or recommendations. As the entire capital stock of the Bank of England has been vested in the British Treasury, and as the Treasury can direct the bank in policy matters, that bank has been nationalized as completely as it is proposed to nationalize the trading banks in Australia.

The Leader of the Opposition also suggested that a primary producer who resides at a great distance from a capital city will not be able to avail himself of banking facilities as readily as he can under the present system. However, I point out that the Government’s proposal envisages that the employees of trading banks who at present operate the country branches of those banks will continue to operate those branches. As an example, the present branches of trading banks in towns like Queanbeyan and Goulburn will continue to function as branches of the Commonwealth Bank. The contention that country customers will not receive the same consideration as they do at present is obviously unfounded, because the managers and staffs of country branches will continue to function. The real reason for the criticism of some opponents of the bill lies in their belief that they will not receive the same generous and considerate treatment which they say that they receive from particular branch managers of the present trading banks. They claim that certain bank officers are personally acquainted with their financial position, and that they derive some special benefit thereby. That contention disappears when one realizes that the country branches will continue to function. It has also been asserted that the removal of competition will mean that a person who is refused accommodation by a branch manager of the Commonwealth Bank will be deprived of any alternative opportunity to obtain an advance. .Such criticism overlooks the fact that special provision is made for the Creation of regional authorities to whom appeals can be made. In any case officers of the national bank are specifically charged by the bill with the duty of maintaining strict impartiality and avoiding all discrimination. Regional authorities will be constituted to enable any person who considers that he has not had reasonable treatment from a local manager to lodge an appeal. Those authorities will function throughout the length and breadth of the country, and they will determine appeals speedily: they will certainly not be concentrated in the capital cities. In developing the system of determining appeals emphasis will be laid on the necessity for dealing promptly with all cases submitted for consideration.

The Leader of the Opposition also alleged that some bank employees would either be transferred to other Commonwealth departments or be thrown out of employment. Senator Rankin went farther and contended that this legislation would impose industrial conscription on employees of private banks, who would be obliged to accept transfer to the Commonwealth Bank or leave the business of banking. However, I point out that they do not enjoy a great deal of liberty at present. For instance, they have to seek the permission of their banks in order to marry, which is one of the greatest impositions on one’s freedom which one can imagine. The bill specifically guarantees continuity of employment to employees of trading hanks, and provides that as soon as practicable after the business of their former hanks has been acquired by the Commonwealth Bank they must be appointed to equivalent positions in the permanent service of the Commonwealth Bank. As permanent members of the staff of the Commonwealth Bank they will enjoy as complete protection in regard to tenure of office as the present members of the staff of that bank. Indeed, they will enjoy greater security than they do at present as employees of trading banks. For one thing, when trading banks amalgamate, their employees have no guarantee of continuity of employment.

It is the Government’s intention that banking facilities in Australia should be expanded and extended to meet the demands of an expanding and progressive economy. There are, therefore, absolutely no grounds whatever for suggesting that bank officers will be thrown out of work or required to transfer to Commonwealth departments. Nor is it true to say that the legislation will impose industrial conscription on bank employees. The appointment to the Commonwealth Bank service of officers of a trading bank taken over by the Commonwealth Bank under this legislation will obviously not mean that all those employees will be transferred physically from one institution to the other. Except for promotions and other changes normal to the ordinary daytoday administration of banks, employees of trading banks will continue to do the jobs they were doing when the banks were taken over. In no case will their pay and general conditions of service be worsened; in many cases they will be improved. As members of the Commonwealth Bank service, they will enjoy security of tenure greater than that offered by the private banks; and they will have opened up to them opportunities for advancement that only a great national enterprise can offer. I think most of the points raised by the Opposition were answered by the Minister for Health (Senator McKenna) and other speakers. I appreciate the reception given to the bill, and I am confident that it will have as speedy a passage through committee as it has bad through the second-reading stage.

Tuesday,25 November, 1947

Question put -

That the bill be now read a second time.

The Senate divided. (The President - Senator the Hon. Gordon Brown.)

AYES: 23


Majority . . . . 20



Question so resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

page 2559


Motion (by Senatorashley) agreed to-

That the Senate,at its rising, adjourn to this day, at 3 p.m.

page 2559


The following papers were pre sented : -

Commonwealth Grants Commission Act -

Commonwealth Grants Commission - Fourteenth Report, 1947.

Commonwealth Public Service Act -

Appointments - Department -

Commerce and Agriculture - I. MacFarlane.

Works and Housing - A. 0. Dalton, D. M. DeMole, R. M. Kilpin, W. E. Kinsey, J. J. Meyer, S. G. J. Parker, L.S. Parkinson, D. J. Paterson, E. C. Paterson, E. J.. Walker, H. White.

Regulations - Statutory Rules 1947, No. 158.

Defence (Transitional Provisions) Act -

National Security (Industrial Property) Regulations -

Orders - Inventions and designs (9).

National Security (Rationing) Regulations -

Order- No. 146.

Lands Acquisition Act - Land acquired for - Department of Civil Aviation purposes - Southern Cross, Western Australia.

Postal purposes -

Narrandera, New South Wales.

Sydenham, Victoria.

Senate adjourned at 12.17 a.m. (Tuesday).

Cite as: Australia, Senate, Debates, 24 November 1947, viewed 22 October 2017, <>.