19th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Gordon Brown) took the chair at 11 a.m., and read prayers.
A disallowed question having been asked.
– Disallowed questions are not recorded in Hansard. The proceedings are being broadcast, but I shall make an order -that this question be not included in the re-broadcast to-night.
– But what can be done about the press? So far as the newspapers are concerned, the damage has already been . done, but the injury to Senator Morrow would be reduced in some measure if the question were withdrawn.
– I have done my best. I have disallowed the question, and. have ordered that it be not rebroadcast to-night. Senator Ashley has asked that the question bc withdrawn. How can it be withdrawn when it has been already disallowed? The newspapers, of course, will publish the question if they see fit.
– It would be a cowardly attitude to adopt.
-In view of persistent rumours and statements in the press that Hitler still lives, will the AttorneyGeneral arrange to have the bill that is now under discussion in another place broadcast to the world and so remove all possible doubt from the minds of the people ?
- Mr. President, I suggest that that is a question which might well be expunged from the record. It has nothing to do with the public affairs of the community.
– I desire to ask a question of the Leader of the Government in the Senate. By way of explanation, I point out that, before the last election, candidates who now sit behind the Government in both Houses of the Parliament, stumped Australia condemning the bureaucracy in Canberra, and the size of the Commonwealth Public Service? Is ‘ it a fact that it will require an additional 2,000 officers to administer the Communist Party Dissolution Bill when it becomes law?
– I am amazed that a man of the experience of Senator Eraser should ask such a question about legislation at present before the House of Representatives Nevertheless, I assure him that when the legislation is placed on the statute-book, it will be very effective, and will be very economically administered.
Admission to Galleries
– Is the Leader pf the ^Government in the Senate aware that it is necessary for senators’ wives to obtain an entry card twice every day to secure entry into the galleries of the House of Representatives 1 ‘ As this is undue restriction, will the Minister give consideration to securing for wives of senators an entry card for the full period of their stay?
– I . was not aware of the limitation or restriction to which the honorable senator has referred. I know that because of the increased number of members in the House of
Representatives, it is not as easy to get tickets for admission as hitherto. I understand that members of the House of Representatives are. entitled to two tickets, which brings the numbers up to more than 240, and I think that there are under 200 seats. Mr. Speaker has control of the House of Representatives!, and I suggest with due respect that Mr. President might take the matter up with Mr. Speaker to see that wives of senators are given whatever facilities may be readily available to them.
– I undertake to see Mr. Speaker and endeavour to make some arrangement. I shall report to the Senate later.
– Can the Minister representing the Minister for Commerce and Agriculture state when it is expected that the inquiry into costs of potato production in Tasmania will commence? In view of the urgency of some action being taken to restore the potato market before the next planting time in August and September, will the Minister inform the Senate how long the inquiry is expected to take and the methods that will be adopted.
– The honorable member for Franklin (Mr. Falkinder), who is the Parliamentary Secretary to the Minister for Commerce and Agriculture (Mr. McEwen) announced yesterday in a press statement that, following a visit to Tasmania by an officer of the Bureau of Agricultural Economics, and discussions with officials of the Tasmanian Department of Agriculture, the Tasmanian farmers Federation, and the Tasmanian Potato Marketing Board, the bureau would undertake an investigation of various aspects of potato production in the main potato-growing districts of Tasmania. It is proposed to visit a representative selectionof farmers and to include in the inquiry a detailed examination of trends and acreage. The information collected will be available for consideration by the Australian Agricultural Council. It is proposed that a report shall be made as quickly as possible. If Senator Wright wants further details, I shall obtain them for him if he will place his question on the noticepaper.
– For the informa tion of the Senate, I again point out that during question time, I give preference to honorable senators who have not already asked a question. This will save honorable senators who have already asked one question from rising repeatedly to secure the call again whilst other honorable senators have not yet had an opportunity to ask a question.
– Is the Minister representing the Minister for Supply aware of an application by a Mr. Rieck for financial assistance to explore possible oil-bearing deposits in the Lake Frome district of South Australia? Will the Government consider making money available to investigate Mr.Rieck’s claims that oil may be found in that area ?
– I shall bring the honorable senator’s question to the notice of the Minister for Supply and obtain a reply as soonas possible.
– Yesterday, Mr.
President, you replied to a question that I had asked some time ago about restroom facilities for female workers in Parliament House. In view of the obvious need for such facilities, which at present are provided only for shift workers such as refreshment room attendants and Hansard typists, and then only inadequately, will you undertake to bring the matter to the notice of the Joint House Department with a view to having a rest-room made available in the near future?
– In view of the large number of questions that have been asked bymembers of the Opposition on the subject of putting value back in the £1, will the Minister representing the Prime Minister inform the Senate whether the recent statement by a distinguished statesman represents the views of the Government? That statement is as follows: - “Under devaluation-
– I rise to order. Surely the honorable senator is not permitted to read from a quotation when asking a question? Honorable senators on this side hare been prevented from doing so. I submit that, your ruling should apply to honorable senators on both sides.
– I was about to call the honorable senator to order. Questions must be questions and not quotations. The honorable senator may ask the Minister whether he has seen a particular quotation and then direct a question to the Minister based on that quotation, as I have told him before. It is quite wrong, when asking questions without notice, to give information, to quote from newspapers or to read quotations.
– Would you, sir, inform the Senate under what standing order you prohibit the quotation of matter from any publication other than a newspaper? I submit that your attitude is not supported by the Standing Orders.
– Order ! The President has certain powers, and he must interpret the Standing Orders with common sense. My ruling now - and the honorable senator can disagree with it if he wishes - is that it is not in order to quote from newspapers, and from statements when questions are being asked.
– With respect, I understand that I am being asked a question by Senator Wright, about whether I have seen a particular newspaper report-
– No, the official report of the House of Commons.
– Unless I know to what report the, honorable senator is referring I would not know whether I had read it or not.
– Order ‘ I have tried to show from the chair the manner in which honorable senators may ask questions. Only a week or so ago I pointed out to an honorable senator that if he had framed his question differently it would have been quite in order. In this instance Senator Wright may ask the Minister whether he has noticed thai in a particular report a certain statement was made, and so come to the point of his question, but he must not quote from the report. I rule now - and the honorable senator may disagree with the ruling if he wishes - that it is not permissible to quote from newspapers, hooks or periodicals when asking questions. That should be simple enough for a schoolboy to understand.
– Accepting that indication, may I now put my question in a form conformable with your ruling? I ask the Minister representing the Prime Minister whether his attention has been drawn to a statement made by the Prime Minister of the United Kingdom,, on the subject of putting value back in the £1, to this effect - -
– I rise to order.
– Order! I must first hear what the honorable senator has to say before I can rule on it.
– I ask the Minister whether his attention has been drawn to a statement by the Prime Minister of the United Kingdom to this effect: “ Under devaluation, no country-
– Order! If the honorable senator is reading from the book that he is holding his question is not in order.
– I move-
That the ruling of the President be dissented from.
– I second the motion of dissent.
– If the honorable senators who have moved and seconded the motion require an immediate determination they must move accordingly, otherwise the matter will stand over to the next day of sitting.
– I do not desire the matter to be dealt with immediately, because I prefer to have a considered debate on the point that I have raised.
– The debate will be adjourned to the next day of sitting.
– On the 27th April Senator Murray asked whether discussions were about to take place in London between Commonwealth High Commissioners and the “ Big Three “ Foreign Ministers on the draft proposals for the formulation of an early Japanese peace treaty, and whether the Australian Government would endeavour to have whale factory ships, whale chasers and tankers built in Japan for Australia as part of war reparations.
In reply to the honorable senator’s question, the Prime Minister has informed me that on the 1st May, under the direction of British Commonwealth High Commissioners, a working party of officials in London began to discuss the steps that might be taken to call a peace conference on Japan. In the Far Eastern Commission and elsewhere, Australia has pressed its claims for the allocation of Japanese whaling vessels as reparations, but without success, The honorable senator is doubtless aware of a statement by the Chairman of the Far Eastern Commission - an American - on the 12th May, 1947, that no more reparations would be taken from Japan. The question of reparations and of Japan’s shipbuilding capacity will, however, be reviewed in London.
– Will the Minister for Social Services say what progress, if any, has been made in the discussions between the Australian Government and the United Kingdom Government regarding a reciprocal agreement for the payment of pensions and social services in both countries?
– -Recently the discussions were advanced to an appreciable degree when some United Kingdom delegates to a conference in New Zealand visited Australia. I should not like to forecast what the result of the discussions will be. I am hopeful that an agreement will be reached, but I must qualify that statement by saying that the matter is so technical and complicated that it would be over-optimistic to expect an agreement to be reached quickly. I hope that some arrangement will be made before the ends of 19o0, but that is a hope rather than a firm expectation.
– I direct the attention of the Minister for Social Servicesto a press report to the effect that a deputation of pensioners waited upon him in. Sydney and that he assured them that in the next budget provision would bemade for an increase of age and invalid pensions by 7s. 6d. a week. In view of the statements that have been made by members of the Government, I ask the Minister whether he will confirm that report.
– I did not assure the . deputation that provision would be made in the next budget for an increase of pensions. I said that I hoped there would be an increase. Although I believe that there will be an increase, I am not in a position to assure the honorablesenator that that will be so. I did not authorize, either directly or indirectly, the newspaper statement about a proposed increase of 7s. 6d. a week. The contents of that statement were only surmise.
– Was the report entirely incorrect ?
– I did not say that. It was entirely newspaper surmise. As I have stated previously, I have no intention of anticipating a decision in this matter.
– I ask the Minister representing the Minister for Commerce and Agriculture whether it is a fact, as reported in the press, that cornsacks for the handling of this year’s harvest may be in short supply ? If that be so, will the Minister inform the Senate of the action that is being taken by the Department of Commerce and Agriculture to ensure that an ample supply of cornsacks will be available so that there will be no loss of an essentia] product?
– Unfortunately, there was a shortage of cornsacks. 1 cannot say, speaking from memory, to what degree it has been alleviated. If the honorable senator will place his question upon the notice-paper, I shall bring it to the notice of the Minister for Commerce and Agriculture.
– Some time ago I directed to the Minister representing the Minister for Civil Aviation a question regarding air travel concessions for blinded ex-servicemen. Will the Minister secure an answer to the question?
– As local governing authorities, primary producers, and industrialists are at present unable to purchase from dollar areas all of the machinery required for the maintenance and development of undertakings in this country, will the Minister representing the Treasurer consider subsidizing the gold-mining industry in order to stimulate production? Will he also consider the raising of a dollar loan to enable the procurement of all machinery necessary from dollar areas?
– The matters raised by the honorable senator involve considerations of high government policy. However, I shall bring them to the notice of the Treasurer and ascertain whether he is prepared to furnish the honorable senator with replies.
– Will the Minister representing the Minister for Works and Housing inform the Senate how many applicants in South Australia for assistance to purchase homes under the war service homes scheme have been approved? Is it a fact that applicants for timber-framed houses, erected by the South Australian Government Housing Trust, meeting all the requirements of that body, are refused by the War Service Homes Commission in that State?
– I answered a somewhat similar question asked by an honorable senator opposite yesterday.
However, if the honorable senator will place his question on the notice-paper I shall obtain the information sought.
– In view of the long distances that many employees have to travel to and from their work every day, with the Minister representing the Treasurer consider allowing travelling expenses as a deduction for income tax purposes ?
– Although I shall place the honorable senator’s representations before the Treasurer, I do not consider that this is a matter that shouldbe dealt with by means of question and answer. All aspects of this matter must be considered in order to obtain an overall picture. I shall ask the Treasurer to reply direct to the honorable senator.
– Is the Minister forRepatriation aware that during the last five or six years trainees under the Commonwealth reconstruction training scheme have experienced great financial difficulties because of the serious decline of the value of the Australian £1 ? If so, will he consider increasing allowances payable to such trainees?
-Representations have been made by trainees’ organizations for the payment of increased allowances because of the extra costs that have been incurred by trainees owing to the rising cost of living. A thorough investigation of the matter is being carried out.
– Including the position in relation to tools of trade?
– Any proposed increase will relate only to the cost of providing university, technical and other types of training in respect of which trainees receive a cost of living allowance. I understand that representations have also been made for additional assistance to trainees in connexion with the cost of equipment. As the honorable senator is aware, one allowance is made for equipment and another for books. At present it is not permissible for a trainee to apply both allowances, totalling £30, for the purchase of equipment only or books. However, this aspect of the matter is receiving further attention.
– Will the Minister representing the Treasurer inform the Senate whether it is a fact, as was stated by an Opposition senator yesterday, that during the recent war the public failed to subscribe a war loan?
– I rise to order. The honorable senator is referring to a matter that will be the subject of debate in connexion with thebanking legislation.
– It is a question of public interest.
– I did not refer to the debate.
– Under what Standing Order does the honorable senator raise a point of order?
– An honorable senator may not at question time ask a question relating to an aspect of a matter that will be covered in debate on a measure before the Senate. However, the honorable senator would be in order asking whether certain war loans had been subscribed.
– In order to satisfy the whim of the Leader of the Opposition-
– Order ! The honorable senator must ask his question.
– Can the Minister representing the Treasurer say whether, during the first world war, the public of Australia failed to subscribe to war loans, and that the government of the day was compelled to increase the rate of interest from 6 per cent. to 8 per cent? Is it a fact that the rate of interest at that time never exceeded 6 per cent.?
– The question was not unexpected. I have here information concerning the date of issue and the rate of interest of war loans during the 1914-18 war. The highest rate of interest was 6 per cent. in September, 1920. In September, 1921, a 6 per cent. loan was issued at £96, giving an effective rate of 6¼ per cent. All other war loans carried interest at4½ per cent., except one in 1918 and another in 1919, on which 5 per cent. interest was paid. In general, it may be said that the rate of interest on war loans for the 1914-18 war was 4½ per cent.
– I desire to make a personal explanation. Yesterday afternoon, the subject-matter of the question that has just been answered was discussed by an honorable senator speaking on this side of the chamber. I realized that there was some discrepancy, and asked the Minister for Social Services (Senator Spooner) if I might check the figures with one of his officers. I obtained the information, and passed it on to the honorable senator who had spoken, so that he might correct the statement he had already made. I think the Minister for Social Services took an unfair advantage in using as he did the information which had been obtained at my suggestion.
– I desire to make a personal explanation.
Leave not granted.
– Will the Minis ter for Trade and Customs say whether new ration books for butter and tea will be issued by his department when the present books are out of date?
SenatorO’ SULLIVAN.- The Department of Trade and Customs is being very efficiently administered.
Motion(by Senator O’Sullivan) - by leave - agreed to -
That leave of absence for four weeks be granted to Senator Simmonds on account of ill health.
Debate resumed from the 10th May (vide page 2343), on motion by Senator Spooner -
That the bill be now read a second time.
– In the course of my remarks last night, I referred to interest rates paid on loans raised by the Commonwealth during World War I. Honorable senators will recall that I said that I was relying on my memory. Since last night, I have had an opportunity to discover the facts, and I find that interest rates from 1915 to 1921 were as follows: -
I have no desire to mislead the Senate, or to misrepresent the position. I was, as I have said, relying on my memory, and I find that my memory was at fault. However, it was not altogether at fault when I said that, about that time, the rate of interest charged by the trading banks ranged from 6 per cent. to 8 per cent. TheRoyal Commission on Banking and Monetary Systems stated in its report that the function of the Commonwealth Bank, as a central bank, was to regulate the aggregate volume of credit and currency in the interests of the community, and that during the depression, the credit base was expanded by the use of treasury bills to a size that was not consistent with a desirable credit policy. The report also showed that since 1929, the credit policy of the Commonwealth Bank Board had been to prevent the credit base from being increased more than was essential to meet an immediate emergency. It stated that the central banking authority was responsible for the regulation and control of credit, and that the trading banks were responsible for the distribution of that credit.
In its report the royal commission gave particulars of advances that had been made by the trading banks of Australia between 1928 and 1935. These figures are interesting because they show the advances made by the trading banks during the period of the depression which I place between 1930 and the end of 1933. The report shows that from 1928 the trading banks, advances amounted to £A910,200,000. In 1929 the advances increased to £Al,014,600,000 and in 1930 they totalled £A1,032,800,000. In 1931, which was one of the deep periods of the depression, the trading banks’ advances fell to £955,400,000 and in 1932 there was a further drop to £913,100,000. The economy of the country was showing signs of becoming more sound in 1933 and the trading banks started to increase their advances again. The total of advances rose to £935,500,000 in that year. There was an increase to £956,600,000 in 1934 and in 1935 the total had gone to £1,016,000,000. I place these figures before honorable senators because it has been said that the provision of a Commonwealth Bank Board would be in the best interests of the people and that it would take the Commonwealth Bank away from the dominance of any one man. The figures show that despite all the protestations that can be made, the trading banks in fact reduced advances during the depression compared with preceding and subsequent years.
Dealing with interest rates on advances made by the banks, the report of the royal commission shows that, before 1931, 77 per cent. of the advances carried interest at from 7 to 8 per cent., the predominant rate being 7½ per cent. I hope that I have made the position clear to the Senate in respect of my remarks last night. I stated then that the interest charges for war loans during World War I. had ranged between 6 and 8 per cent. My memory had slipped to the extent that instead of applying to war loans, the rate that I quoted had applied in respect of the rates of interest charged by the private trading banks for advances during that period. Before 1931 there wasa predominant rate of 7½ per cent. for 77 per cent. of the advances made by the trading banks. It was not uncommon at that time for ordinary citizens to pay 7, 8, 9 and even 12 to 15 per cent. for accommodation. The commission’s report indicates that between 1931 and 1935,83 per cent. of advances made by the private banks carried from 5 to 5½ per cent. interest, the predominant rate being 5 per cent. After December, 1936, the predominant rate for advances was from 5¼ to 5½ per cent. In the period when the Labour Government was in control of this country until the last general election, money raised for the purposes of war carried no more than 3£ per cent. That is vastly different from the interest charged on advances prior to 1931 when the predominant rate was 7£ per cent. I hope that the Senate is satisfied with the explanation that I have made.
In his speech on the Commonwealth Bank Bill 1945, as reported on page 789, volume 181 of Hansard, Mr. Fadden, who was not then Treasurer, said -
When he made that statement he referred to the special amounts being placed in the war-time deposits of the Commonwealth Bank and referred to them as a powerful weapon in the hands of the private banks’ greatest competitor, tie made an important point of that. He said that the Commonwealth Bank, of its own volition, or at the instigation of the Government, could deprive the trading banks of new business. Those were rather tall statements. It is apparent to me, and I am sure to other honorable senators, that the right honorable gentleman must have changed his views since he made those remarks in 1945, because the bill now before the Senate does not propose to alter the .provisions under which funds of the trading banks are lodged in special accounts with the Commonwealth Bank. Apparently this principle was regarded as dangerous by the right honorable gentleman only because it was propounded by a Labour government. It was a heinous scheme by which the funds of the private banks could be used to their own detriment. However, as I have said, that provision is not being eliminated by this bill. Obviously the present Government is unable to find very much wrong with the 1945 legislation. In fact, the Minister in hi3 second-reading speech indicated that the Government is satisfied that the broad purposes of monetary and banking policy are being achieved. It is also satisfied that harmony and co-operation exist between the Commonwealth Bank and the private trading banks, and that the general pattern of control by the
Commonwealth Bank over the banking: system and the broad structure of the Commonwealth Bank should be preserved. The only important change that this measure proposes is the substitution of” board control for the present system of control. It is rather strange that, although on an earlier occasion the Treasurer referred to the special deposits system as a .powerful weapon in the hands* of the Commonwealth Bank, he is now claiming that to ensure that excessiveprofits would not be made by the private banks he secured an undertaking from the banks in 1941 that they would cooperate by depositing surplus investible funds with the Commonwealth Bank.. Apparently the Treasurer now also holds the view that the pattern of central bankprivate bank relationship now embodied in legislation does not differ in essentialsfrom the arrangements that he made in 1941. Therefore, despite the strongcriticism of Labour’s banking proposals,, the Government does not intend to interfere with them to any substantial degree. In addition, as I have pointed out, theTreasurer claims that he was the father of this satisfactory arrangement between the private trading banks and the Commonwealth Bank in regard to special deposits.
The Minister, in his second-reading speech, said that the determination of monetary and banking policy should be a collective responsibility, and that ultimate responsibility should rest upon the elected representatives of the people. I do not know what is meant by collective responsibility. The Commonwealth has always been responsible for the activities of the Commonwealth Bank. If the bank hae owed money to anybody, the Commonwealth itself has been the gilt-edged security for that debt. After all, the real owners of the bank are the people of Australia, and any profits made by that institution go into the coffers of the Commonwealth of Australia. Commonwealth Bank profits amounting to more than £84,000,000 have been used to repay Commonwealth debts, to increase the capital of the bank, and for other similar purposes. Proposed section 9a places a responsiblity on the bank to inform the Government of its monetary and banking policy from time to time. There is nothing wrong with that. In fact, I think that a similar provision appears in the 1945 act. The proposed section goes on to say that, in the event of a difference of opinion between the Government and the bank, the Treasurer and the Commonwealth Bank Board shall endeavour to reach an agreement. If they are unable to reach an agreement, the board shall forthwith furnish to the Treasurer a statement in relation to the matter on which the difference of opinion has arisen. The Treasurer may then submit a recommendation to the GovernorGeneral, who, on the advice of the Federal Executive Council, may, by order, determine the policy to be adopted by the bank, and the bank shall give effect to that order. What I should like to know is where the elected representatives of the people come into the picture. In the event of a difference of opinion in relation to policy which cannot be resolved by the Treasurer and the board, the decision of the Government will be communicated to the bank. In other words the Government will take full responsibility for any decision that it may make in respect of policy. That is quite correct, and is consistent with the existing legislation; but I cannot see where the elected representatives of the people come into the matter.
The bill provides that the Treasurer shall lay before each House of the Parliament within fifteen sitting days of that House after the Treasurer has informed the bank of the policy that has been determined, a copy of the order determining the policy, a statement by the Government in relation to the matter on which the difference of opinion has arisen, and a copy of the statement furnished to the Treasurer hy the board. But if the Parliament is not sitting, how is the difficulty to be overcome? The AttorneyGeneral said yesterday that in such a contingency the Government would have both Houses of the Parliament called together. I point out now that that cannot bc done in fifteen minutes. Members of the Parliament are scattered throughout Australia and they cannot be brought together at a moment’s notice. Furthermoe, as j. pointed out last night, if a difference o opinion occurs between the Government and the bank on a matter of policy, even after the board has submitted to the Treasurer a statement of its views, the Treasurer has informed the bank of the policy adopted by the Government, and the. Treasurer ha3 laid before each House of the Parliament the prescribed documents concerning the matter, all that the Parliament could do would be to discuss the matter. The Attorney-General said that, it would be competent for a member of the Parliament to move that the Government had lost the confidence of the Parliament. But where would that get us? I should like the Government to explain the exact position of the Parliament in the event of a serious difference of opinion arising between the Treasurer and the proposed board. Whilst the bill contains elaborate machinery to ensure that the Parliament shall be informed of all matters relative to any disagreement between the bank and the Treasurer, it does not contain any specific power for the Parliament to intervene and assert its will. How are the elected representative? of the people to determine a matter when they are not invested with jurisdiction to do so? I repeat that there is no specificprovision in the bill to ensure that when a dispute occurs between the bank and the Treasurer the dispute will be resolved by the Parliament. All we have is the bare statement of the Attorney-General that the Parliament could carry a motion of no confidence in the Government. [Extension of time granted.] I do not even know whether it would be possible to amend the bill to authorize the Parliament to intervene in the event of a disagreement between the Government and the bank on a matter of policy. However, I shall not pursue that aspect of the matter any further at this stage.
I pass now to the composition of the proposed board, which will include ten members. The speeches made by the leaders of the anti-Labour parties during the recent election campaign indicated that a small board would be appointed to control the Commonwealth Bank. It i.c not clear what number of members the anti-Labour parties envisaged. The won1 “ small “ could mean one member, or ten. or twenty members, according to one’’ interpretation of the word. I do not know what they had in mind when they used the word, but I interpret it to mean merely a few people, and it is significant that the former bank board consisted of only eight members. Why is it necessary to increase the membership of the new board to ten members ?
– To obtain more wisdom.
– I know it is often stated that there is wisdom in numbers, but the important point for us to consider is in what direction the wisdom of the proposed board will be exercised on matters of policy. The mere proposal that another board should be established makes me recall our bitter experience of the former Commonwealth Bank Board, a matter to which I referred last night. That board wasin complete sympathy with the private trading banks, whose policy was to restrict credit during the depression, and it refused even to provide financial assistance for the government of the day at a time of grave national need unless the government agreed to reduce wages and social services. The reductions that were made in obedience to its demands paved the way for employers generally to move the Commonwealth Arbitration Court to reduce wages and living standards throughout Australia. For that reason I am most anxious to know who the “ outside “ members ofthe proposed bank board will be. Of course, we already know five of the gentlemen who will be appointed to the board.
– Does the honorable senator object to any of those individuals ?
– I do not object to any of those five gentlemen, but I am concerned to know the identity of the other five gentlemen tobe appointed to the board.
– We will not follow the example set bya Labour administration and appoint Communists to the board.
– I think that the Minister’s remark was facetious, but, in any case, it was unjustified. Let us discus this legislation on a higher level than communism. Who will be the five “ additional “ members of the board ? We know that the members of the former board were selected ostensibly to represent commerce, finance, agriculture and other interests in the community. It has been said that the present proposals of the Government are in accordance with a recommendation of the Royal Commission on Banking and Monetary Systems, insofar as the bill provides that none of the appointees to the board shall be associated in any way with the private banks. However, that prohibition does not throw any light on the identity of the individuals who will be appointed to the additional seats on the board. I think that it is only right that the Government should give some indication of the identity of the men who will becomethe custodians of the bank, more so since the bank is the property of the people of Australia and not of a small group of shareholders. If it incurs losses, those losses must be borne by the Australian taxpayers. The five independent members of the board may be - I do not intend to be disrespectful - nondescripts. We do not know who they will be. Unless we know their names and find out all about them, how can we determine whether they are in any way associated with the banking or commercial life of this country?
– The honorable senator might suggest some good names.
– I might be able to do that, but I do not propose to do so at this stage.
– They might be women. They would not be nondescripts.
– Women have their rightful place in public affairs. I have no objection to women being appointed to the board, provided we know who they are and have some knowledge of their associations and their activities in public life. We have a right to know the persons who will be appointed to the board. If the board is established and five persons of whom we know nothing at the moment are appointed to it, it will be possible for the Treasurer to shirk responsibility in relation to disputes between the bank and the Government. He will be able to say that any decision that is made is the decision of the board, and to leave it at that.
Although I agree with the measure in general, I, like other honorable senators on this side of the chamber, am not prepared at this stage to agree to legislation that provides for the establishment of a Commonwealth Bank Board.
Between 1911 and 1924, the bank was under the direction of a governor. During that period it grew and developed. By 1924, the Commonwealth Savings Bank and the Commonwealth Bank had developed to such a degree that they had become, from the viewpoint of competition, somewhat of a danger to the private trading banks. Then the government of the day said, in effect, “ We cannot allow this to continue. We must protect the vested interests of this country. We shall establish a board to conduct the affairs of the Commonwealth Bank”, and the board was established. C have referred to some of the happenings since the establishment of the board. Then, by the Commonwealth Bank Act 1945, the board was abolished and we reverted to the system of control of the bank by a governor, with an advisory council to assist him. As I understand it, this measure provides for the abolition of the council. Despite all the criticism in which honorable senators opposite have indulged, the fact is that since 1945 the activities of the Commonwealth Bank have had to be extended to meet the requirements of the Australian people. I do not want the people’s bank again to be frustrated and denied the right to compete with the private banks, but I fear that that is the motive that has actuated the Government in introducing legislation designed to place the people’s bank again under the -control of a Commonwealth Bank Board.
– This bill, which provides, among other things, for the repeal of the Banking Act 1947 and amendment of the Commonwealth Bank Act 1945-1948, is the people’s answer to a socialist plan to nationalize the banking system of Australia by the establishment of a giant government monopoly bank. Let us not overlook the tremendous significance of this measure. The repeal of the Banking Act 1947 will on a deadly blow to totalitarian and those who believe in the socialist order of society, because the socialist state cannot function other than on the basis of a nationalized banking system. Lenin, the defunct hero of the Bolshevik revolution in Russia, made use of the following words on a famous occasion: -
We are al] agreed that the first steps towards communism must be such measures as the nationalization of the banks. We cannot at once nationalize small concerns with one or two wage-earners. Through nationalization of banks, they may be tied hand and foot.
The day on which this bill is passed will be a day of victory and a day on which the joy bells may ring for those of us in the community who stand four-square against the invasion of our civil rights and liberties by persons who advocate a banking system under which the State would control all the .banks. A system of that kind would provide a base for the socialist order of society, which is the Communist order of society.
It is important to state that this measure does not provide for the repeal of the Banking Act 1945. Having regard to the fact that that act contains some drastic provisions, it is difficult to follow the reasoning of the Leader of the Opposition (Senator Ashley) and his supporters when they complain of the nature of this hill. The Banking Act 1945 makes provision for complete control and supervission of the trading banks of Australia. It provides that the rates of interest in respect of money deposited with and borrowed from the private banks shall be controlled. It provides also for control of the classes of loans that may he made and transactions by trading hanks with organizations and persons outside Australia. The surplus funds of the trading banks are controlled, and they cannot buy Government securities or shares without the consent of the Commonwealth Bank. The profits of the trading banks are dependent entirely upon the operations in which the Commonwealth Bank will permit them to indulge. In our very fine and sound banking system, the requisite control and supervision of the trading banks is provided for by the 1945 banking legislation. Indeed, I suggest that those banks are more than fully controlled. That very effective control should surely be satisfactory to the Leader of the Opposition.
When the present Leader of the Opposition in the House of Representative (Mr. Chifley) set out on his campaign to monopolize banking and centre banking facilities in the Commonwealth Bank he actually by-passed the policy of the Australian Labour party on banking. Admittedly, of course, the objective of the Labour party is the socialization of the means of production, distribution and exchange, and I suppose he could claim that he was acting in terms of that objective. But at the time that the right honorable gentleman initiated his campaign to monopolize the banking system of Australia the actual banking policy of his party was to expand the Commonwealth Bank’s business as a trading bank, with branches in all suitable centres, by vigorously competing with the private banking establishments. That should have guided him in the matter. The policy of the Australian Labour party at that time did not .provide for the compulsory acquisition of the trading banks. Therefore, the right honorable gentleman acted in defiance of the party’s policy in relation to banking. Although there may be some objectors to the old-time policy of the Australian Labour party towards banking, at least we are able to understand what the Labour party stood for prior to September, 1948, when it altered that policy in favour of the complete nationalization of the banking system of Australia. The Labour party has departed in many respects from the ways of democracy in the manner in which it handles many things to-day. The democratic approach to the banking problem is to leave the decision about where, when, and with whom people shall bank, entirely to their own free choice. People who have money to deposit in the banks are themselves the best judges of what system suits them.. Why should a few fanatics, with the idea of effecting a radical change in the social order, seek to direct the free people of this country with whom they shall bank? Surely a democratic solution of the hanking problem lies along those lines. If Labour considered that the Commonwealth Bank could offer to the people more attractive banking facilities than the trading banks, the great change could be accomplished by proving to the people who use banking facilities that they could gain something by transferring their accounts to the Commonwealth Bank. The whole problem could be solved overnight, in a democratic way, by preserving the individual choice of the people, because people have their preferences in such matters. The records of the banking institutions in Australia show that there is no desire on the part of the patrons of the banks - mostly wageearners, in point of numbers - to transfer their accounts from the trading banks to the Commonwealth Bank.
I shall cite some comparative figures to show how the people feel in matters of this kind. Up to the 30th June, 1947, the total advances made by the Commonwealth Bank approximated £21,500,000. while those of the nine trading banks amounted to £289,500,000. That show? the great confidence placed by the people of this country in the private banking system. The great bulk of the advances were made through the channel? of the associated trading banks. At the 31st July, 1947, the total deposits in the Commonwealth Bank amounted to £56,000,000, whereas in the trading hanks the total deposits amounted to £632,500,000. The proof of the pudding is in the eating, and it is obvious that a great majority of Australians prefer to give their business to the trading banks. If the Commonwealth Bank enjoyed a monopoly, as the Labour party desires, nearly 1,500,000 Australians, most of them wage-earners, would be deprived of the right to choose their own bank. Where, then, would be our much-vaunted freedom? Why interfere with a system that is giving complete satisfaction, and providing a competitive service? During the depression, I was living in the Goondiwindi district on the southern border of Queensland.
– The honorable senator was not carrying his swag.
– No, but I had been brought up the hard way. I was not born with a silver spoon in my mouth. I started behind scratch, and had no social influence to help me. I had to battle to get along, although I never got down to carrying my swag, and I hope I shall never have to carry it. At Goondiwindi during the depression several men of my acquaintance sought financial accommodation from, one of the trading hanks, only to have their applications rejected. They then put the same proposition to one of the other trading banks. The applications were submitted to the head office and in due course, instructions came back that they were to be accommodated. There was a risk, but the bank was prepared to take it.
– What banks were i involved ?
– I do not want to set up one bank against another by stating names. It is sufficient to say that one bank gave the accommodation after another had refused it. The men concerned battled along, heavily in debt, against the situation created by low prices for primary products. To-day, however, they are “sitting pretty”, to use the vernacular. They have made good because of the help given them by a bank that was prepared to take a chance. They owe their present position to the competitive system of banking under which, if one bank rejects a man’s application, he can go across the street and apply to another bank. Under that system, the clients get all the benefit of competition, but under the monopoly system, beloved of the Leader of t’ie Opposition and his supporters, there would be one giant bank, and no competition. The branch manager of the monopoly bank would always be afraid that if he took a chance with a client, and it did not come off, so that the bank was involved in loss, he would get into trouble. He might be reduced in status, or even dismissed, if the loss were a heavy one. Thus, the inclination of a manager who had no competitors would be to avoid taking risks. Moreover, he might be a man with prejudices. He might not like the old school tie won by an applicant, or he might object to the colour of the man’s hair, and for some such reason as that refuse his application.
It is customary for members of the Labour party to argue with great gusto that the trading banks caused the last depression. In Queensland, for the last 20 years, we have had to listen to the cry that the trading banks and Arthur Moore, who was then Premier, between them caused the depression. I have heard honorable senators opposite arguing that the trading banks made huge profits during the depression out of the distresses of the people. Such an argument is entirely false because, in fact, the banks shared in the losses sustained by all of us during the depression between 1929 and 1932. Far from making great profits, during the depression the banks lost money. The aggregate profits of all banks declined from £4,409,000 in 1930 to £2,963,000 in 1931, and to £1,8S0,000 in 1932. The profit on shareholders’ funds of the Australian trading banks in 1929 was 7.2 per cent., but by 1933 it had fallen to 2.9 per cent. In the same period, profits of 177 companies representative of all phases of industry only fell from 8.2 per cent to 4.1 per cent. Thus, the effect on the banks was more severe than on other forms of trade and industry. In addition, the banks had to face losses caused by the big drop in the value of supporting security. Land is worth only what it can produce, and when the value of primary products fell, the value of the land, which was the security on which the banks had. advanced money, also fell. Why should the banks have wanted to cause or aggravate the depression when they themselves lost so heavily by it? We would say that a farmer was mentally unsound if he put a match to his wheat crop just, when it was ripe for harvest. Then why should the banks want to provoke an economic depression, seeing that it involved them in such heavy losses? The argument that the banks were in some way responsible for the depression will not bear examination, and I cannot understand why it has been put forward and repeated by persons who are otherwise intelligent. It is certain that the depression did not originate in Australia, so that it could not have been the result of action taken by any Australian bank or government. So far as Australia is concerned, the depression was the result of two factors - the serious decline in the value of our exportable commodities, particularly wool, wheat and dairy produce; and the cessation, of overseas lending because of the prevailing world-wide economic conditions. Those factors, in combination, caused a tremendous loss of our national income, and we felt the effect as we would feel a blizzard sweeping in from the Antarctic. It is time we heard the last of that story about the depression being caused by the trading banks, or by any particular government. Whatever kind of government was in power at the time of the depression has been charged by its political opponents with having caused the depression. I have always claimed, however, from the public platform and elsewhere, that the conditions which caused the depression were beyond the control of any government in Australia. I have always felt sorry for the Labour Prime Minister, Mr. Scullin, who was in office during the early part of the depression. Whether the right or the wrong policy was applied at that time, it is too late to consider now. The milk has been spilt, but it is only fair to point out that the Premiers plan represented the combined political wisdom of all the governments in power in Australia during the depression. Labour governments, as well as those opposed to Labour, all signed on the dotted line, and committed themselves to the Premiers plan. Therefore, it ill-becomes any political party to argue now that a government representing its political opponents was responsible for the depression, which had such disastrous effects.
Sitting suspended from 12.^-5 to 2.15 p.m.
– Before the sitting was suspended I was referring to the depression and I conclude my reference to that period by saying that it is easy to be wise after the event. Looking back on the decisions made during those grim days, we can at least come to the conclusion that whether the scheme propounded at the time was based rightly or wrongly, it laid the foundations for the subsequent recovery of the Australian economy. The methods that were applied were drastic, but they set in train the forces which enabled Australia to build -and expand its economy to the point of success, that is enjoyed to-day.
The bill before the Senate provides for the creation of a board of ten to direct central bank policies and manage the Commonwealth Bank. It is difficult to follow the logic of the Leader of the Opposition in the Senate who stands solidly for the principle of one-man control of a gigantic banking institution like the Commonwealth Bank. I could not discover one sound and sensible reason for that advocacy in the speeches of the Leader of the Opposition or subsequent speakers. Surely a board of experienced men representing a good cross-section of the community is better equipped to govern, the bank than is one individual, no matter how efficient he may be and how sound his knowledge of banking principles.
– The Commonwealth Bank has carried on very well under that system for many years.
– The honorable senator may think so, but perhaps the bank succeeded in spite of the control. The Commonwealth. Bank has grown into a tremendous institution. It is a people’s bank of which all Australians should be proud, but the success of an institution does not rest entirely with the governor. Credit must be given to the subordinates who are able to attract business and expand it by their courtesy and efficiency. I do not condemn the work of the Governor, Dr. Coombs, but I remind honorable senators that, he has had the support of an advisory council. Would it not be more logical and tend towards greater efficiency if the body which is known as the advisory council were to share in the responsibilities and burdens of the bank?
– The advisory council makes the recommendations.
– Yes, but making recommendations is different from sharing the responsibility. If men share responsibility, there is a stabilizing influence and they take a deeper interest because they are responsible for their actions. An adviser does not have to accept that responsibility. He merely submits advice and then his work is finished. The Governor then has to reach a final decision. Is it not merely the difference between Tweedledum and Tweedledee? The Leader of the Opposition would be satisfied with the Governor and an advisory council to manage the Commonwealth Bank. What is the diference between that arrangement and thiappointment of nine men who could act with the Governor on an equal footing and share in the responsibilities and the decisions that have to he made? If the argument of the Leader of the Opposition were sound, surely every private bank would have not a board of directors but a governor, and the same principle would he accepted by the wholesale and retail houses and every phase of commerce. Experience has shown that shareholders are not prepared to entrust their companies entirely to one individual. They appoint a board of directors and the board shares responsibilities in the conduct of the organization. Two heads are better than one even if they are sheeps beads. On a visit to Victoria I once visited Parliament House where in the mosaic on the floor of the lobby [ saw the words, “In the multitude of counsellors there is safety “. That is why honorable senators gather in this chamber. They exchange ideas and learn something from each other.
– That is why the Senate was enlarged.
– Big business houses and banking institutions all apply the principle of a board of directors to guide their undertakings. The Leader of the Opposition in another place is a mem-‘ !>er of the board of directors of the National Advocate at Bathurst. I believe that comparatively small undertaking has a board of seven directors. That is an example of the same principle in action. How can a body of sensible men object to the common-sense provision of a board to direct a great organization like the Commonwealth Bank? I can find only one reason and that goes back to the stupid adherence of Labour party members to the tradition of one-man control. Thirty-six years ago the Commonwealth Bank was started with Sir Denison Miller as Governor, and because he was appointed by a Labour administration, members of the Labour party have adhered blindly to that tradition in spite of the vast changes that have occurred in the meantime. The bank was in its infancy in those days and one man could govern it. Now the Commonwealth Bank is like a mighty oak tree. It has spreatenfold and is dealing in all the major activities of a central bank organization including the ramifications of a mortgage bank, a rural bank and a savings bank. More than one man’s direction is required to govern the bank efficiently and direct i! policy.
– What is wrong with the present management?
– I give credit where it is due and I have nothing against Dr. Coombs, but the honorable senator’s interjection reminds me of one point. I do not pose as an authority on these matters and there may be a sound explanation, but I remind honorable senators that Dr. Coombs agreed to the freezing of approximately £500,000,000 of surplus funds overseas. He also agreed that those funds should attract an interest rate of -) per cent. Side by side with that, on approximately £400,000,000 borrowed from overseas, Australia is called upon to find an average interest rate of approximately 3f per cent, plus 25 per cent, exchange on the outstanding loan. Dr. Coombs might be able to give a good answer to satisfy my query on that point, but I have not heard of the Commonwealth Bank under Dr. Coombs buying Australian bonds when they are on the market. Those points raise the query whether the wisdom of one man may be as sound as many of his supporters believe.
– Would the honorable senator agree that Dr. Coombs was doing the right thing if he bought the bonds?
– Reasons can always be adduced in favour of that, course, but I am not here to condemn Dr. Coombs. I simply pose that question. If I had the facts and figures I might say that Dr. Coombs is right, but I would be more content if I knew that that decision on the freezing of funds had been made by a number of men who agreed that that was the correct policy. It has been said that it is Government policy. I will not go deeply into that. If it is Government policy, it appears to me that Dr. Coombs has been willing to carry out the directions of the Government in that respect. If that is the case, he cannot bc charged with having done the wrong thing. I mention these points in passing because Senator Ward raised the question by interjection. One comes back to the point that the board system is without doubt the only efficient one. It strengthens the position of the Governor of the bank. The board shares his burdens and helps him to make sound decisions. In the board room, the various problems would then be examined.
– The board failed to assist this country during the depression.
– I would not say that the board failed. A stiffer stand by the Scullin Government might have produced more definite results. After all, the whip is held by the Government. I have no doubt that the bank board had its reasons for what it did in those days, but the final decision rested with the Prime Minister. It is strange that while honorable senators opposite support the principle of board control in the marketing of various primary products including wool, wheat, and apples and pears, they oppose- the application of that principle to an institution that is charged with grave responsibilities in connexion with the internal finances of this country, and our overseas financial relationships.. They believe that this great institution should be under the sole control of one man. That view is entirely illogical and wrong. I am at a loss to understand how the Leader of the Opposition can make a vital issue of the restoration of board control. I could understand him putting up a case against it, but he has said that his party regards the proposal as vital, and that the Opposition will make a stand against it.
I believe that I have clearly established that the board system is the best. I come now to the arguments that have been advanced by Opposition senators about the procedure that this bill proposes should be taken in the event of a disagreement between the bank board and the Treasurer. Obviously such a disagreement would be vital only if it were on a major policy issue, gravely concerning the welfare of the Australian people. Clearly such a dispute would be passed from the Treasurer to the Executive Government, and finally to both Houses of the Parliament. Senator Nash claimed that the Parliament would not have an opportunity to express its will in relation to such a dispute. If he were to study the bill carefully, he would see that it is on the right lines. It provides that in the event of a dispute which cannot be settled bv the bank board and the Treasurer, the Treasurer shall refer the matter to the Governor-General in Council. Then, if no solution can be found at that stage, the documents relating to the dispute will be tabled in both Houses of the Parliament. Clearly in such circumstances, there would be the greatest possible eagerness amongst the members of both Houses to get to grips with the problem. The ordinary machinery of the Senate would be adequate to deal with the matter. Let us assume, for instance, that a dispute occurred between the bank board and the Treasurer during the currency of the present Parliament, and that the documents relating to the disagreement were finally tabled in both Houses. The Labour party, having a majority in this chamber could carry a motion expressing disagreement with the action of the Government, or relating in some other way to the tabled documents. The Senate could also have the chairman of the hoard brought to the bar of the Senate as was done in 1931.
– And what did he say then?
– I was not here, and I am afraid that I cannot give a verbatim account of what transpired. I believe, however, that the Senate has all the machinery necessary to deal adequately with such a situation. If the Senate expressed disagreement with the Government’s actions, the Government could be forced to go to the people. The Labour party with its majority in this chamber could carry a vote of no confidence in the Government. That would leave any self-respecting government with no option but to seek a double dissolution, and to go to the country on the issues involved in the dispute with the bank board.
– And in the meantime the bank board would carry on merrily.
– It could not carry on while its policy was in dispute with the- executive government of the country. No bank board would dare to do that. If Ihe board were to defy the executive government in that way I for one would demand the heads of every member of th.: board.
– The bill specifically provides that the board shall obey the order.
– Exactly. Senator Wright reminds me that the bill contains a provision that the bank board must obey an order of the executive government. Otherwise, an intolerable position would arise.
– There would be no order.
– Apparently the honorable senator is looking for trouble. He is putting up aunt sallys to be knocked down. AsI have said, a vote of no confidence in the Government by the Senate would result in an election at which the disputed banking policy would be the issue, and the will of the people would prevail. I am speaking, of course, of major issues involving the welfare of the people of this country. Honorable senators may rest assured that the bill provides every safeguard to ensure that democracy shall be the guiding principle in the bank board’s administration. The bill removes the threat of a nationalized banking system, and that is a matter of vital importance to the well being of this country. Secondly, it establishes a board of control consisting of men thoroughly experienced in the fields of banking, finance, trade and commerce, with Parliament itself as the final arbiter. Thirdly, the bill maintains the controls over the trading banks provided in the 1945 legislation. Those controls are most drastic, and surely should be satisfactory to the most ardent would-be reformer of our banking system, except, of course, the socialist “ whole-hogger “.
.- This is one of the most important measures that have been brought before this Parliament. I regret that Senator Maher was subjected to so many interjections in the course of his speech, because in dealing with a subject such as this, honorable senators have to be most careful of their words lest, at some future date, their utterances be used against them.
– To incriminate them.
– That has been done. I propose to refer briefly at the outset to the history of the Commonwealth Bank. It was significant that, on the first occasion on which Labour had a majority in both Houses of Parliament, it introduced legislation to constitute the Com monwealth Bank. Ever since then, and even in this year, 1950, Labour has been derided for that action. When the bank was established in 1911, cartoons calculated to ridicule the new institution were published in newspapers and magazines, and pasted on boardings. I have a copy of one of them before me now. The central figure is Mr. King O’Malley, who is regarded as the founder of the bank. Talking to him is a group of ordinary labouring fellows, with bowyangs tied just under their knees. The conversation is as follows: -
Workers: Here we are, Mr. O’Malley, bright and early, eager to be your first customers.
Banker O’Malley: Certainly, gentlemen, what do you want
Workers (unanimously): A nice big overdraft please.
– On what date was that cartoon published?
-Some time in 1911. The Minister may have it from the library if he wishes. I shall give another example of the methods that they used to frighten the poor workers and the businessmen of Australia. A cartoon was published depicting two men wearing masks waiting for a banker who was coming down the street. The two masked men were identified as King O’Malley and Andrew Fisher, and underneath the cartoon was a caption which depicted O’Malley saying to Fisher, “What a haul we can get here! We must grab this, because the proceeds of the last raid are gone “. That is the way in which the reactionaries of that time attacked the Commonwealth Bank. To listen to the speeches made by honorable senators opposite now one would imagine that they were responsible for the establishment of the Commonwealth Bank and were really concerned to uphold the principles of that institution.
I propose to deal briefly now with a statement made by Senator Maher, who has just spoken in the debate. Towards the close of his speech, when he was referring to the chairman of the former board of the Commonwealth Bank, he said that that gentleman, who was Sir Robert Gibson, resisted the power of the government. Honorable senators ought to recall what Sir Robert Gibson actually said to the government of the day.
Indeed, his actual words could not be broadcast, because the broadcasting authorities to-day would not permit them to go over the air. Senator Maher said that if the Opposition in this chamber voted against the bill the people would have the final 9ay. Do I understand him to mean by that expression that the present Government proposes to submit this matter of the control of the Commonwealth Bank to a referendum of the people? Not on your life! If this matter is ultimately referred to the people by way of referendum the real issues will be obscured, because about half a dozen other proposals will also be placed before the people at the same time. The honorable senator said that the profits of the banks slumped during the depression, but I am afraid that he cannot have given too much attention to the bank’s activities during and immediately after the depression. Whilst it is true that the profits of the banks did slump during the depression, the fact is that the banks seized thousands of farms throughout Australia and closed businesses everywhere, so that after the depression they were able to realize on the assets on which they had foreclosed, and so received two or three times the amount that they had advanced in the first place.
– Does the honorable senator remember the moratorium?
– The moratorium came later. The government of that time had to go cap-in-hand to the board of the Commonwealth Bank to obtain finance to carry on the business of government. Of course, the ramifications of the banks extend throughout the whole civilized world, and Sir Otto Niemeyer and his colleagues who came to Australia insisted that the government should reduce the national standard of living-
– Who invited them here?
– I shall deal with that matter presently. In one State our overseas friends actually caused a run on a savings bank and it had to close its doors. I do not suggest that the depression was due to the machinations of any trading bank, nor would any one who has given even five minutes’ study to the history of events during the depression say so. Nevertheless, we all know that when something happened in Wall-street its repercussions were felt in Australia and in the United Kingdom within three or four days. In reviewing the history of financial control in Australia and the operation of the present system, I do not view the matter merely as a member of the Australian Labour party, nor do I adopt the outlook of the Liberal party. The plain fact is that when the economy of one country collapses that collapse has repercussions throughout the world. We all recall that during the depression many of the major industrial concerns in the United States became insolvent, and a long procession of powerful industrial magnates in that country committed suicide. They had realized too late the logic of Labour’s gospel of security for all. Honorable senators opposite are wont to compare our trading banks to those of the United States of America, but we know that the trading banks of Australia are superior to those of the United States, and although from time to time we may criticize a particular Australian trading bank, it cannot be denied that we have a wonderful banking system. The point that I make now is that the efficiency of our banking system is largely attributable to the establishment, and the subsequent operations of, the Commonwealth Bank, and that is why members of the Australian Labour party advocate that that institution should continue to exercise its functions without unfair restriction.
In the course of this debate a lot has been said about exchange rates. I remember that during the depression when the exchange rate between our currency and that of the United Kingdom was more or les9 determined by the trading banks, and one particular trading bank was endeavouring to obtain a monopoly of exchange business, the Commonwealth Bank had to intervene. It fixed the exchange rate at 12^ per cent., and the rate remained at that percentage until the influence of the war and of world conditions generally caused it to be altered to its present rate, which is exactly double that which was originally fixed by the Commonwealth Bank.
Senator Maher charged members of the Opposition with having accused the hanks of creating depressions. We make no such assertion. What we say is that the hanking system in Australia, as in all other countries, is merely the result of the action of economic forces and the operation of the capitalist system. We do not contend that the trading banks are attacking the interests of Australia; what we say is that the shareholders of the banks are only concerned with making profits, and if their profit-making operations interfere with the national welfare, then it is just bad luck for the community. Of course, the present members of the Australian Labour party do not claim that they were responsible for the establishment of the Commonwealth Bank. Our political predecessors who struggled from 1905 until 1913 to establish the bank deserve all the credit for it. Since its establishment, the bank has made total profits of approximately £ S0,000,000, and it has been the backbone of the national economy. We know perfectly well that unless we have a sound economy we cannot hope to progress and to capture markets overseas. For that reason Labour is most anxious that our banking system should continue to function on sound lines.
When referring to the proposed bank board, Senator Maher likened the Commonwealth Bank to an ordinary trading bank. I point out to him that an ordinary trading bank is financed by its shareholders and is controlled by a board of directors elected by the shareholders, although the actual administration of the bank rests in the hands of the general manager. Nominally, the general manager merely administers the policy laid down for him by his directors. The Commonwealth Bank is not financed by a board of directors, but is the people’s bank, and it functions, not to make profit, but in the national interest. The Opposition desires that the methods under which the Commonwealth Bank has operated so successfully in the past should continue to apply, and I do not think that even Senator Maher or his colleagues would criticize the administration of the bank under its present Governor. Honorable senators opposite have said that we are not opposing the repeal of the Banking Act 1947, although we were responsible for it. They have said that we did not submit it to the people, but they do not propose to submit the proposal for its repeal to the people. They do not intend to submit any banking legislation to the people. It is interesting to note that even honorable senators opposite change their views. Dealing with the Commonwealth Bank Act 1945, Senator Mattner made the following statement: -
This bill may be best described as a botch, because it is definitely confusing to honest, thrifty aud progressive citizens who wish to know about banks and their functions. The progeny of this measure will be paper money - by caucus out of printing press. I shall not traverse the history of banking or discuss the views propounded by monetary theorists, as honorable senators have already had to listen for hours to almost every known theory.
Although Senator Mattner made that comment upon the Commonwealth Bank Act 1945 some years ago, to-day the party to which he belongs has agreed that, with the exception of the provisions relating to the Commonwealth Bank Board, it should be allowed to remain on the statute-book. Five years ago the present Government parties ridiculed’ that measure, but now they are endorsing it almost entirely.
The following passage appears upon page 623 of the Official Year Book -
The Banking Act 1945 is the first comprehensive piece of legislation passed by the Commonwealth Parliament under its power to legislate with respect to banking. Except for war-time regulations, earlier Commonwealth legislation in relation to banking was limited in its effect and related only to certain phases of banking. The most important constituents of the earlier legislation were the Bank Notes Tax Act 1910 designed to stop the issue of bank notes by the trading banks.
We have had experience of the private trading banks issuing their own bank notes. Very often they were not worth even the paper on which they were printed. On almost every occasion on which the Labour party has introduced legislation to protect the people, it has been subjected to ridicule by its opponents. It was a Labour government that made it possible for the Commonwealth Bank to issue the £1 notes that are now used by all persons in the community, but ridicule was heaped upon it by its opponents in the Parliament. They coined the phrase “ Fisher’s flimsies “. The Labour party has had to suffer ridicule of that kind, but it can take pride in what it has done.
Honorable senators opposite have repeatedly said that the private trading banks wish to be allowed to carry on as previously and that they are not afraid of competition, yet we continually read of proposed amalgamations. The private trading banks have made profits during the last few years, notwithstanding that we have had the Commonwealth’ Bank to protect the interests of the people. At an annual general meeting of the Union Bank of Australia Limited, held in London on the 30th January, the chairman of the bank said -
It is essential for the cost structure to be kept within limits which will permit a reasonable basis of competition with overseas countries.
Later in his speech, he dealt with another phase of our economy. I believe that it is mainly due to the control exercised by the Commonwealth Bank that we have been able to accumulate large funds overseas. The chairman of the bank to which I have referred also said -
The gross figure of Australia’s international currency reserves rose very sharply during the year and, at the 30th June, 1949, amounted to £A.450,000,000.
In view of the present high values of commodities, the probability of a greater fall in export than in import prices in the event of a decline in world trade, the unstable nature of part of the capital inflow, and the need for goods for replacement and expansion, the level of external funds is not perhaps unduly high.
One can read the same thing in almost every report issued by an Australian bank. Turning to competition between private banks, I remind the Senate that the Union Bank of Australia Limited and the Bank of Australasia have delayed their merger owing to the introduction of this legislation. The Sydney Morning Herald of the 1st February published a letter in which the following passage appeared: -
The objection of staff to amalgamation is similar to nationalization, because the opportunity of advancement to branch managerial and executive positions is considerably reduced. The Australian Government, which, no doubt, claims a franchise for the maintenance of free enterprise, particularly in the banking industry, should resist strenuously any move of the few remaining banks towards amalgamating unless they can show it is in the public interest.
At one time there were approximately 40 banks in Australia, but now there are less than nine. I understand that seven of them have no intention to amalgamate with other banks.
The Labour party believes that by objecting to some of the provisions in this bill it is acting in the best interests of the Australian people. I believe that all honorable senators are convinced that we can have good living conditions only if we have a sound banking policy. In my opinion, the Commonwealth Bank has played no mean part in securing the improved amenities and living conditions that our people now enjoy and in establishing full employment.
– Has the honorable senator thought about the high value of our wool ? Does he not consider that that is the principal cause of our prosperity?
– The value of wool now is no greater than it was twenty years ago. It is the price of wool that has increased, not its value. Wool is no more essential to-day than it was twenty years ago. The increase of wool prices has led to a certain degree of prosperity, but it must be borne in mind that the increased prices received for our wool from overseas countries are causing an increase of prices in this country. That is one of the problems with which we are confronted. The Minister for Social Services (Senator ‘Spooner), as a member of the Cabinet, knows that one of the problems that is troubling the Government is the cost of commodities imported from overseas. I have no doubt that the exchange rate is exercising the minds of those who are charged with the responsibility of governing this country. I do not envy them their task, because they know that if they interfere with the present exchange rate and appreciate the Australian pound to parity with the pound sterling, thus depriving exporters of the advantage of the present difference of 25 per cent., the Government is doomed. Every student of political economy knows the troubles with which governments are faced. The British Government, the Indian Government, and the American Government are confronted with huge problems. Banking is a matter that is causing the Australian Government a headache at the present time. The Opposition is trying to give a lead. What does it matter to me, as an individual, whether the Commonwealth Bank is controlled by a Governor or by some government nominees together with five nondescripts? All that I am interested in is the welfare of the people of this country. The Government has threatened us that if we do not agree to this measure in its entirety, it will go to the people. It is trying to frighten us. The Banking Act 1947 was held by the High Court of Australia and the Privy Council to be invalid.
– Only some portions of it.
– Outside the Parliament, honorable senators opposite did not say that only a small portion of it was held to be invalid. They are now saying that we have dropped that measure. Why have we done so ? As a representative of the electors of Victoria, I desire only to represent the views of those electors. Nationalization of banking was a part of the policy of the Australian Labour party, and it was returned to office in 1946. Labour would not attempt to influence the electors by forcing that issue through the Parliament. The position is precisely the same in this chamber to-day.
– In other words, Labour accepts the will of the people?
– We did in that instance, although it was not put directly to them. The Liberal party and the Australian Country party will not put anything of a beneficial character direct to the people by referendum. As honorable senators are well aware, a considerable amount of propaganda is disseminated by the press of this country. Both the Melbourne Herald and the Sun Pictorial have a daily circulation - except Sundays -of about 430,000. In addition the people are frightened by propaganda that is broadcast over the radio networks, and by men who go from door to door telling them all of the lies imaginable. That has happened not only in the metropolitan area in Victoria but also in large country areas. Notwithstanding that propaganda, Labour was only 40,000 votes down in a poll of over 1,250,000 persons.
– Did not the honorable senator himself go around seeking votes?
– I did not go from door to door, although I should not be surprised to learn that the honorable senator who has just interjected did so. Honorable senators opposite hired men at £2 a day to go from door to door spreading propaganda. In addition they had the large banking institutions behind them* I support the attitude of the Labour party in this matter, and I remind the Senate that in days gone by Senator Guy was just as “ hot “ on this side of the chamber as he now is on the Government side. I think that I have known the honorable senator for longer than hae any other member of this chamber. I knew him when he was on the right side of the political fence which separates us at present.
Before concluding my remarks I should like to point out that when Senator Maher was speaking during this debate T only asked him a question on one occasion. T suggest that the deliberations in this chamber would be improved if honorable senators were to refrain from interjecting. There is no denying that the provisions, of this measure will affect every member of the community. Whether Labour gets all that it wants or not, and irrespective of whether the Government gets what it desires, we should all co-operate in order to make this measure workable not only by the Commonwealth Bank and all other banking institutions but also by every man, woman and child in the community.
– I have heard some very fine contributions to this debate, particularly by members of the Opposition. They have explained the position clearly. I support most of the statements that they have made. Last night Senator O’Flaherty made a wonderful contribution to the debate, for which I congratulate him. In addition to giving factual evidence he regaled the Senate with an educational talk which should have influenced any person who was prepared to think and reason the matter out for himself. The matter of banking is troubling a lot of people, particularly people who have only a small amount of money. Many people are concerned to-day, although the present system looks after those who have money. Prior to the introduction of capitalism, hanks had not played a very important part in the community, because feudalism existed at that time. That system was based upon the lord of the manor and the serfs tied to the soil. In order that they may live on the land they paid a certain amount to the lord of the manor. When capitalism replaced feudalism, which had out-lived its useful ness, another system was ushered in-
– Why does the honorable senator want to restore it?
– The Government “wants to introduce something in this bin which has been tried before and has failed. Capitalism came into existence early in the fifteenth century. People “realized that in order to carry on production it was necessary to introduce money as a medium of exchange. In order that the people might have money to invest in industries, it was necessary for them to borrow. One William Paterson, who was a buccaneer and pirate - such people still exist to-day - started off in England in 1694. He realized that a wonderful future was assured in banking. This pirate was at that time lending money at 28 per cent, interest, because people in industry required capital to produce commodities for sale at a profit. Once he centralized his lending activities he was able to defeat other people who were lending money, and to reduce the interest rate to 8 per cent., because he had a greater turnover. That principle was introduced to stabilize the system known as capitalism. During the early stages of capitalism, while it was developing industries and finding markets for its production, there was no trouble. It assisted every one, particularly the workers, because it released them from their ties to the land. They then became free people. Since the industrial revolution and the harnessing of steam, the workers have been sent to factories and tied there. Factories were developed considerably. The workers had only their labour to sell, for which they received in return only sufficient money to keep them from day to day. I am reminded of a conversation I heard recently. One man asked another: “What do you go to work for ? “, to which the person addressed replied, “ I go to work to earn some money to buy some food to eat to make me strong enough to go to work “. The working people went along all right until the productivity of industry became so great in all countries that markets began to get more scarce. Consequently, the banking institutions had to play a more important part. Many banks were established throughout the world. In this country alone there were about 50 banking institutions. While the industrialists had markets for their commodities banks were prosperous, but immediately the markets collapsed, they had to cut down expenses. This was done by amalgamating various banks. As Senator Katz has pointed out, there are now only nine private banking institutions in this country and a further amalgamation is pending. By this means the banks are able to retain their huge profits and remain buoyant. Banking is now playing a very important part in the lives of the people. Senator Maher cited an alleged statement by Lenin for the purpose of misleading the people of this country. The honorable senator knows very well that communism is very unpopular in this country. If he could connect Lenin with communism and then with the Labour party he thought that he could discredit the Labour party. He alleged that Lenin had said “ We are all agreed that the first steps . . . must be . . the nationalization of the banks “ - which the Labour party tried to do - “through nationalization of banks, they may be tied hand and foot”. That statement is not true and should be corrected. I shall cite a statement on the matter, and should be glad if Senator Maher would indicate where the words that he cited appear in the statement.
– I rise to order. I submit that the honorable senator should inform the Senate what book he intends to quote from. I would then seek your ruling, Mr. Deputy President, whether a quotation from that book would be in order.
The DEPUTY PRESIDENT (Senator Nicholls). - The honorable senator will be in order provided that he deals with the matter under discussion.
– The statement reads -
The banks, as we know, are the principal nerve centres o£ 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 if 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 f nl filling 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. ff the nationalization of the banks 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, etc. 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 reasonarid 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.
That is Lenin’s statement, which has been twisted in an attempt to support the charge that the Labour party is connected in some way with communism. Honorable senators should be honest and quote matter accurately, instead of making garbled and untrue statements, which is the worst form of deception that any one can indulge in.
– From what book has the honorable senator been quoting?
– I do not interject when others are speaking, and honorable senators opposite should not hurl interjections across the chamber. Proceedings in this chamber should be conducted in a dignified and orderly way. I expect the same courtesy to be extended to me as I extend to others. Honorable senators who will not extend such courtesy are not fit to be here.
– All I asked for was the name of the book from which the honorable senator quoted.
– Last night, Senator O’Flaherty explained how most of the big industrial enterprises in Australia were interlocked. That is the stage which capitalism has now reached. First we had laisser-faire capitalism ; now we have monopoly capitalism, and that is the last stage of capitalism. People do not change systems - the systems negate themselves, and are succeeded by something else. Men and women do not make revolutions. I refer to the natural turning of the social wheel, although honorable senators opposite profess to believe that when one speaks of revolution one has in mind bloody revolution. Actually, revolutions are produced by evolution. We are now approaching a stage when capitalism is about to negate itself, although attempts are being made to keep it alive with new infusions of capital.
– I rise to a point of order. I submit that the honorable senator is not discussing the bill.
The DEPUTY PRESIDENT.- Senator Morrow will be in order if he connects his remarks with the bill.
– I realize that what I am saying is hurting supporters of the Government. Those whom they represent do not want the people to hear the truth. I am stating scientific truths. Every student of political history knows that what I say is correct. To-day, we are- living under a system of monopoly capitalism, which is using the -banks to a greater degree than ever before. Consequently, it is necessary that the people themselves should exercise the greatest possible measure of control over the banks. We object to placing the Commonwealth Bank under the control of a board, not because we favour one-man control of the bank, but because we object to the bank being controlled by outside interests. We have no objection to a board as such. Indeed, the bank is already controlled by what corresponds more or less to a board. When the Commonwealth Bank was established in 1911, it was controlled by a governor, who did a very good job. However, in 1925, when the representatives of the bankers got into power, legislation was passed placing the Commonwealth Bank under the control of a board, upon which the trading banks were indirectly represented. After that, persons who approached the Commonwealth Bank for financial accommodation were told to go to the trading banks. The Commonwealth Bank Board drove business away from the Commonwealth Bank to the trading banks. That is a matter of history. The late John Curtin was one of those who applied for a loan to the Commonwealth Bank, and was told to go to a private bank.
– That was because his security was not good enough.
– It had nothing to do with security. His application was refused because it was not the policy of the Commonwealth Bank Board to encourage the trading activities of the bank.
– I happen to know the true story of what happened.
– It was the policy of the Commonwealth Bank Board to put business in the way of the private banks, which had indirect representation on the board itself. The Labour Government that recently went out of office abolished the bank board by regulations, subsequently confirmed by legislation, and the operations of the Commonwealth Bank expanded so rapidly as to become a. nightmare to the trading banks, which saw themselves faced with oblivion. They spent money hand-over-fist to defeat the Labour Government, and the Prime Minister (Mr. Menzies), who is their mouthpiece, is now putting their policy into effect. Under pretence of introducing a democratic form of control of the- Commonwealth Bank, it is proposed to appoint a bank board of ten. We have been told who five of the members will be, but we do not know who the other five are to be, although it is claimed that they will be impartial, and will not represen specific interests. It is wrong to say that they will be impartial. There is no such thing a3 an impartial man, because every one is biased to some degree. We know that the five outside members who are to be appointed to the board will be there to do the bidding of the trading banks. We already have had experience of what is likely to happen, and the man who gets caught twice with the same trick is a fool, because he will not learn. Thi’ Attorney-General (Senator Spicer “i twitted the Labour party with being unable to learn, but we have learned from experience, and that is why we object to what the Government is now proposing to do. As I have said, the operations of the Commonwealth Bank expanded s.-‘ quickly after the board was abolished that the trading banks became frightened. They spent much money on the election campaign in order to defeat the Labour Government. I know that in Tasmania they took certain of their employees off their ordinary work, and sent them through the country to tell the women that if the Labour Government were returned they would lose their savings, and their homes would be taken away from them. Those bank officers were paid their ordinary wages, plus living and travelling expenses. Influenced by such threats the women became hysterical. The bank? also bought time over the commercial radio stations, so that bank managers might give addresses to the people under the title, “ I am your banker “. Th;’ banks would not spend all that money for nothing, and this bill is the pay-off. Last year, the Commonwealth Bank made n profit of about £6,000,000, of which £2,500,000 was made out of customers’ accounts. If the trading banks are able to get back half of that business they will be well repaid for what they spent on the election campaign.
Frequent reference has been made during this debate to the depression. Senator Maher claimed that the labour party blamed the banks for the depression, but again he has got his facts garbled. Economic depressions are created by the system under which we are living to-day - the capitalist system. Depressions are the direct result of under-consumption. The workers get back in wages only a little over one-third of the value of the goods they produce. Consequently, all the goods produced cannot be sold, and some of them go into stock.When the accumulation reaches a certain point, unemployment and economic depression follow. We are on the verge of a depression now. As has been pointed out, the United States of America is able to produce 75 per cent. of the world’s requirements in goods. Already, there are great accumulations of goods in the United States of America and an attempt is being made to remedy the situation by giving goods away, and even by burning them. The United States of America has stored about 2,000,000 lb. of butter and millions of pounds of food which is going bad. When the Government tried to give the food to unemployed persons they would not eat it. There are 15,000,000 unemployed and semi-unemployed in the United States. That country is producing so much that it is seeking markets overseas for its goods. Its workers are receiving only about one-third of the value of the goods they are producing. A depression is working up again-
– The honorable senator is worse than Jeremiah and his lamentations.
– The depression is on the horizon. There are 46,000,000 unemployed in the world. Australia is practically the only country that has no unemployed.
– What are the unemployment figures for Russia?
– I have not those figures, but I do know that on the 1st
March the cost of living was reduced in Russia by 25 per cent. People there are being put into production and the more they produce the more they get. I am pleased that Australia is practically the only country that has no unemployed. We can thank the Labour Government for that state of affairs because it kept the people at work through the Commonwealth Bank system. This does not suit honorable senators opposite. They want to see one person in every eight unemployed. If Australia gets a Commonwealth Bank Board working in the interests of the private banks, the banks will call the tune and there will be one person in every eight out of work. Honorable senators on this side of the chamber have no objection to boards provided that the boards are democratic. The present arrangement is equivalent to a board with a Governor. The members of the Parliament are the Board of Directors. The Parliament can direct the Governor on policy unless that policy conflicts with the internal working of capitalism overseas. Honorable senators opposite want to hand the Commonwealth Bank over to a board which really would be subject to no control from Parliament. The bill contains camouflage to mislead the people, but actually it has no merit at all. The Senate has been told by Senator Maher that the people resented the former Labour Government’s policy of nationalization. The policy of the Labour party is quite open. Anybody can buy a printed copy of it for 1s.It aims at the nationalization of banking, credit, and insurance, and I stand by it.
– And nationalization of exchange?
– The honorable senator clearly is misinformed about the nationalization of exchange. I was not talking about exchange. Because of its policy, the Labour party decided to nationalize the banks when its opponents in the Parliament made it difficult for the Banking Act 1945 to operate. Had the Labour Government been able to do that, the people would have been better off. They will not realize that in the near future, but it will be obvious to them in two or three years. Honorable senators on this side of the chamber do not say that the banks make depressions, but they believe that the banks intensify them. Once a depression begins to he felt, the banks call up overdrafts whether the persons concerned can afford to pay them or not. They direct a man to sell his sheep-
– I have never heard of such a case in my State.
– I can tell the honorable senator of cases that occurred in Cloncurry and all over Queensland. I will not give names publicly, but I can cite cases. A man who once had £300,000 in the bank at Cloncurry, had only £3 a week when he died -because the banks took his land. In Winton, a man who at one time could write a cheque for £10,000 was reduced to having to submit his orders for meat, bread and groceries to the bank manager, who said that he could not have certain goods. I can tell the honorable senator all about events in Queensland at that time-
The DEPUTY PRESIDENT. - Order! I suggest that the honorable senator refrain from replying to interjections.
– A crisis is developing and the Commonwealth Bank will play an important part in cushioning the effects if it is left free. The Commonwealth Bank will not prevent a crisis, but if control of the bank is handed to the private hanks or their nominees on the proposed board, the situation that existed during the depression will be repeated. The people who are selling their wool at high prices to-day will probably have to hand their holdings to the bankers. In north-west Queensland most of them are controlled by the banka. Some might get out of trouble because they have received high prices during this period of prosperity. Banks do not cause depressions but they intensify them. When a man is forced by the bank to put his 9heep on the market to get a few pounds to pay an overdraft, he finds ten or eleven others are in the same position, and there is such a glut of sheep that prices fall. That is the pattern. A depression comes, down go the prices further and if a man cannot meet the demands of the hanks, he comes under their control and has to work for them on a reduced wage. In 1931 many persons were unemployed and the then Treasurer, Mr. Theodore, asked for £18,000,000 from the Commonwealth Bank Board, which was set up by the Nationalist Government of the day. Most of the men on that board had connexions with hig industries. Some were previously associated with banks, and immediately the board was dismissed, they went back to their jobs. When the board received that application from the Treasurer for £18,000,000 it replied-
Subject to adequate and equitable reduction in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively cooperate with the trading banks and the Governments of Australia in sustaining industry and restoring employment.
What do honorable senators think of that? Those members were put on the hoard by the interests of the trading banks-
– They were murderers.
– That is true. The depression created suffering. People went insane. Many committed suicide. To-day the country is suffering from lack of man-power because at that time people could not find employment or get sufficient food for their children. All that was brought about by the Commonwealth Bank Board. The Attorney-General 6aid yesterday that members of the Labour party would never learn. Honorable senators on this side of the chamber have learnt by bitter experience and we hope that such happenings will not occur again. We are not advocating one-man control of the Commonwealth Bank. We are advocating one-man administration under the control of the representatives of the people in this Parliament.
Honorable senators opposite talk of democracy, but when honorable senators on this side of the chamber try to put democracy into operation, Government supporters want fascism. In the depression the Commonwealth Bank Board agreed to co-operate with the governments provided the sufferings of the people were increased, and members of the Labour party would be traitors if they did not take cognizance of that experience. Honorable senators should not agree to a a board such, as the bill proposes. There should be direct control under Parliament and the Governor of the bank should be the administrator. That is all that honorable senators on this side of the chamber are seeking. I have heard it suggested that the word “ socialism “ should be dropped. I have not dropped it. I still stand by the objectives of socialism. Why? Because I know that capitalism is dying. It will not be able to feed the people in the near future. The depression is coming quickly. It will be followed by a slump and then by war. Are we going to see another war? Capitalism is dying and to keep it alive desperate measures are being tried. The next progressive step is socialism. If we are prepared to work and fight for socialism, there will be no sufferings or over-production. People will receive full value for their labour. They will be paid more and the quantity and quality of production will improve. They will be able to buy back the goods that they have produced and when there is over-production, prices will be reduced.
– Provided they are left alive by the Stalins and the Lenins.
– Our friends all talk about Stalins and Lenins. Let us talk about Australia. Never mind that claptrap.
The DEPUTY PRESIDENT. - Order ! The honorable senator must confine his remarks to the matter that is under discussion.
-An interjection puts one off the track. I am sorry if I have offended. Sometimes I am annoyed by the “ red herrings “ drawn across the trail by interjections. They have no merit in them. The sooner the people of this country take a more direct interest in Australia’s political economy, and cease to be hoodwinked by the few individuals who control big business and are entwined with monopoly capitalism, the better it will be for all of us. The Minister in his second-reading speech said -
In respect of central banking operations and otherwise, the Commonwealth Bank and the other banks have achieved a considerable measure of harmony and co-operation, and the Government is satisfied that the broad purposes of monetary and banking policy are being achieved.
In view of that admission why does the Government want to change the present system which it concedes to be working admirably? I know why. This bill is the pay-off to the bankers who secured the Government’s election to office. The private trading banks regard their present profits as insufficient. I shall support the amendment that will be moved by the Opposition at a later stage.
– The purpose of this measure is to repeal the Banking Act of 1947 and to restore the iniquitous system of board control of the Commonwealth Bank, which will place the welfare of the people of this country in the hands of a few individuals. The Labour party has always prided itself on its financial! policy, and upon its consistency in politics. Much time, thought and effort have been put into the formulation of that policy. To the Labour party, the most important feature of the bill is the proposal that the Commonwealth Bank Board should be reconstituted. The issue, therefore, is whether the finances and prosperity of this country should be put in the hands of a group of political appointees, most of whom so far have not been named. Judging by past experience, the board will act as a curb on national progress. Experience is by far the best teacher, and we all know that the previous bank board was not able to protect the people of this country from the disastrous effects of the depression of 1929- 32. During those years this country stagnated. We believe that the system of control established by the Labour Government has been of immeasurable benefit to the Australian people, and that the abandonment of that form of control will be a retrograde step, paving the way for the re-appearance in this country of unemployment and distress. I propose to remind honorable senators of what has happened in other countries where financial and banking policy has been allowed to get into the hands of private financial institutions. When the German invasion of Czechoslovakia was imminent, the gold reserve of that country was taken to the United Kingdom, and placed in the vaults of the Bank of England. After the Nazis had overrun Czechoslovakia, they applied to the Bank of International Settlement, on which the Bank of England was represented, for the return of the gold. The gold was returned to Germany at the direction of the representative of the Bank of England. When this action was questioned in the House of Commons, the explanation given was that representatives of the Bank of England were in no way responsible to the Government. Similarly the Commonwealth Bank Board will be in no way responsible to the Government, and, not being responsible to the Government, it will not be responsible to the people.
Honorable senators opposite have claimed repeatedly that the Labour Government’s financial policy was a one-man policy, dictated by the then Prime Minister (Mr. Chifley). That is completely untrue. Before legislation was introduced into the Parliament, it was debated freely by members of the Labour party. Labour’s policy, therefore, was the policy of the party. That policy was expressed through Labour representatives in the Parliament, and therefore it was the people’s policy. The reconstruction of the bank board will mean that financial policy will be taken out of the hands of the people, and placed in the hands of outside financial institutions. I am particularly interested in the portion of the bill dealing with the composition of the board. It provides that the board shall consist of the Governor, Deputy Governor, the Secretary to the Treasury, and several others, five of whom I am convinced will owe allegiance to the private financial institutions of this country. I say that quite seriously because T have made an examination of the affiliations of the men who were appointed to the previous bank board by anti-Labour governments. For instance there was Sir John Garvan, managing director of the Mutual Life and Citizens Assurance Company Limited. Others included Mr. R. S. Drummond, a wheat-grower and investor, of Lockhart, New South Wales, and manager of the New South Wales compulsory wheat pool, Sir Samuel Hordern, governing director of Anthony Hordern and Sons Limited, a director of the Per- petual Trustee Company Limited of New South Wales, and a director of the Royal Insurance Company Limited, and J. Mackenzie Lees, who had been chairman of the associated banks in Queensland, and general manager of the Bank of Queensland Limited. A one-time chairman of the bank board, Sir Robert Gibson, was also director of a number of companies. Another member of the board was Mr. R. W. B. McComas, a merchant, and also the proprietor of William Haughton and Company, a large wool exporting company. I mention those names to show that in the past, the bank board consisted largely of men who had financial and business interests. Their job was not merely to attend meetings and determine minor policy matters. It was to protect the financial interests that they represented. One can readily imagine the attitude that would be adopted by say a director of a private bank who was a member of the Commonwealth Bank Board. Would the interests of Australia be paramount in his mind? Obviously they would not. In 1934, Sir Claude Reading was appointed chairman of the Commonwealth Bank Board. He had been in the service of the Union Bank of Australia Limited for six years, and had been a member of the Commonwealth Bank Board since 1927. He had also been deputy chairman of the British Tobacco Company (Australia) Limited from 1928 to 1934, and a director of British-Australasian Tobacco Company Proprietary Limited from 1912 to 1934, and of W. D. and H. 0. Wills (Australia) Limited from 1912 to 1934.
It is obvious that the bank board is to be reconstituted to repay the private financial institutions in this country for the support that they gave to the present Government parties during the election campaign. The previous bank board was able to dictate wage rates during the depression. It enforced a reduction ‘ of pensions. It stipulated what social services should be paid. The board proposed in this legislation will be able to take similar action in the future. In thf parly 1930’s, the Commonwealth Bank Boa I’d was able even to instruct the heads of our defence services to effect certain economies which necessarily reduced our military establishments, a.nd therefore our capacity for defence. I remember quite well when many of our naval vessels were relegated to the fleet reserve because of the reduction of defence expenditure on the Navy. The bank board was able also to enforce a reduction of the retiring age in the Public Service, and in the defence service. Many commissioned officers, warrant officers, and noncommissioned officers, were compulsorily retired long before they were due to retire in the ordinary way. The defence services of this country never recovered from the blows that they suffered in those days. At the outbreak of World War II., our Navy, Army and Air Force were deficient in modern weapons, simply because six or seven years earlier the Commonwealth Bank Board had been able to insist upon the curtailment of defence expenditure. When something is working well, it should be left alone. When a motor car is running efficiently and giving good service, why bother to lift the bonnet, remove this or that part, and replace it with something else ? That kind of tinkering only invites inefficiency, and perhaps an ultimate breakdown. The haste with which this measure has been introduced into the Parliament suggests that the Government is under pressure from outside interests. Honorable senators opposite must realize, as any thoughtful person realizes, that the Commonwealth Bank is at present functioning well in the interests of this country. Its expansion in recent years has been remarkable, and has excited the envy and jealousy of the trading banks. I believe that the introduction of the bill is nothing more than the pay-off to the banks for their financial assistance and the general support that they have given to the antiLabour parties.
The Attorney-General (‘Senator Spicer) gave an elaborate account of the progress of the Commonwealth Bank, and I think that the progress of that institution is the greatest argument that can be advanced for leaving it alone. The Attorney-General praised Sir Denison Miller for the fine job he did as the first Governor of the bank and pointed to the soundness of the foundations that he laid. However, I remind the honorable senator rhat there was another governor of the
Commonwealth Bank, who has not deserved so well of Australia. That was Sir Robert Gibson, who had been a bedstead manufacturer, and who refused aid to the Scullin Government during the depression. As an indication of the point of view of Sir Robert Gibson I propose to read a letter that he sent in his capacity of chairman of the Commonwealth Bank Board to the Honorable E. G. Theodore, who was Treasurer in the Scullin Administration.
– Is that the gentleman who was mixed up in the Mungana scandal?
– He died a wealthy man so he must certainly have known about finance. Portion of the letter written by Sir Robert Gibson, which is dated the 2nd April, 1931, reads as follows : -
The Bank Board has given serious consideration to the question of financial assistance, present and future, required by the various Governments, as submitted to the meeting of the board this week. The increasing demands which are falling on the bank, arising from the continuous drift of Government finances, which have become accentuated through the action of the New South Wales Government, and the inability of the Victorian Government to obtain further assistance from the Associated Banks, have made it necessary for the board to give consideration to the ultimate capacity of the bank to continue to finance the Governments of Australia.
It now becomes the unpleasant duty of the board to advise the Loan Council that a point is being reached beyond which it would be impossible for the bank to provide further assistance for the Governments in the future.
The board has carefully reviewed the position nf the bank as of the present, and the position which can be anticipated in the light of existing and future conditions, and haying regard to these, it has arrived at a forecast of the probable limits to which the bank can go in providing Governments’ financial assistance, unless there is a definite change for the better in the financial position in the future, a possibility which there is no justification for anticipating at present.
For the information of the Loan Council J attach hereto figures representing the progressive development of the bank’s assistance to the Governments of Australia at various dates up to and including the situation as at this date.
I am further to advise you that, as this bank is the banker of the following Governments, and as the board feels under obligation as their bankers to inform them of the position, I am forwarding a copy of this communication to the Treasurer of each of the Governments concerned for their information and such action as they may deem it advisable to take, namely: - Victoria, South Australia, Queensland, Western Australia, Tasmania.
I shall be obliged if you, as Treasurer of the Commonwealth of Australia, will also accept this communication as applying in the same way.
It was that intimation from Sir Robert Gibson which precipitated the depression with its terrible sufferings. Because our memories of the depression and of the former bank board’s attitude are so bitter, and because we fear that the establishment of another board may lead to a repetition of the happenings of 1931, we distrust the proposal of the present Government to place the control of the bank again under a board. For the information of honorable senators I shall read portion of the reply written by the then Treasurer to the communication that he had received from Sir Robert Gibson. After pointing out the position in which The board was placing the Government, and indicating the effect which the board’s request would have on the community, Mr. Theodore went on to state -
In February last I submitted to the Commonwealth Bank Board comprehensive proposals which had been adopted by the Government as a means to ease the financial stringency and assist the nation towards budgetary stability. The co-operation of the bank in giving effect to these proposals was sought by the Government, but was refused by the bank. The board now intimates to the Government that it will not provide financial accommodation to the Commonwealth or the State Governments beyond a point which will be reached in a week or two. The attitude of the board throughout the recent negotiations, and as disclosed in the letter now referred to, can only be regarded by the Commonwealth Government as an attempt on the part of the bank to arrogate to itself a supremacy over the Government in the determination of the financial policy of the Commonwealth, a supremacy which, I am sure, was never contemplated by the framers of the Australian Constitution, and has never been sanctioned by the Australian people.
That was the view held by Labour at that time, and that is still the view held by Labour. The national bank should be responsible to the people through their elected representatives and should not be under the domination of some outside individuals. Mr. Theodore’s reply continued -
In financial matters, as in all other aspect of public policy, the Government is responsible to the electorate, and not to the banks, and this responsibility cannot be renounced by the Government except at the risk of grave danger to the democratic principles of the nation. The control of the public purse has heretofore always been regarded as an essential prerogative of the people, a prerogative which i.* exorcised not by the banking institutions but by the people’s representatives in Parliament. The Government will not be a party to any attempt by the bank board, or any other authority, to subvert this principle.
That is the principle for which the Opposition is fighting now.
Let me contrast the views held by the anti-Labour parties at that time with those which they profess now. It is apparent that there is no consistency whatever in the two sets of views. For instance, in .1935, the then honorable member for Echuca (Mr. McEwen), who is now the Minister for Commerce and Agriculture, and who was then a supporter of the anti-Labour Administration of that time, moved the following motion in the House of Representatives -
That this House is of the opinion that it idesirable to appoint a Royal Commission to . . report upon the operation of the Australian banking and monetary systems . . .
He was suspicious of the activities of the members of the former Commonwealth Bank Board, and in April, 1935 he stated -
Many trained thinkers claim that our banking system, as it exists to-day, is either wholly or partly responsible for our present condition. Some believe that the system is fundamentally wrong, while others maintain that it has merely lagged behind our industrial progress. If it is wrong, the sooner we establish the right system, or improve the existing one, the better for us all. If, however, it is proved that the existing banking and financial system is not in any respect responsible for the .prevailing widespread want and unemployment, that fact should be established, so that we may relieve our banking institutions from the suspicion under which they now rest in the minds of so many people. We want to achieve the very best system possible, and as any banking system must depend for its efficiency on that intangible quantity, public confidence, the sooner the doubts of the people are set at rest the better. This problem cannot be solved by a decision of politicians; it must be investigated by trained experts in whom every one has confidence, and then we must accept their recommendations. We should not have been justified in our request for the appointment of a royal commission to investigate this matter had not such a large proportion of the electors indicated a desire for some radical change in our financial and banking system, or at least for an inquiry into that system.
Why should they desire to improve a system that was operating so successfully in the interests of vested interests? He continued -
The whole of life is evolutionary, and the financial system should progress along evolutionary lines. But the radical thought that has been so prominent in political circles during the last few years has acted as a deterrent to evolution with respect to this particular matter. The increasing strength of this radical thought has placed vested interests so much upon the defensive that they have been utterly stagnant in relation to any endeavour to improve this system, with the result that no progress has been made. 1 should say that radical proposals have engendered such a defensive habit of mind that there is no hope of evolution through political channels. Initiative has been curbed and does not provide a lead, and influence is exercised only in order to put restraint upon those who would exhibit enterprise. The inert power of resistance of nervous or selfish vested interests, and the mediums of propaganda which they control, have prevented a mandate from being received by those who have sufficiententerprise to act.
The ironical aspect is that a short time later the honorable gentleman sought leave to withdraw his motion. Undoubtedly the pressure exercised upon the anti-Labour government of that time by the financial interests had had its effect upon him, and he wanted to abandon the proposal. Subsequently, a proposal to discharge the motion from the noticepaper was carried on a party vote. As a result of his action - probably as a reward for it - the honorable gentleman was invited to joint the Ministry shortly afterwards. The significance of that fact is that the honorable gentleman is now a senior Minister in the present Government.
I repeat that the establishment of another board will undoubtedly leave the way open for a repetition of the disastrous consequences of board control to which I have already referred. In support of my contention I refer honorable senators to paragraph 157 of the report of the Royal Commission on Banking and Monetary Systems, page 69, on which the following statement appears : -
The Commonwealth Bank has taken the view that its central bank activities are of paramount importance, and that its development as a central bank should go hand in hand with some limitation of its trading activities.
The policy of the bank in those days was to restrict competition by the Commonwealth Bank with the private trading banks and to concentrate on the savings bank side of that undertaking’s activities. The paragraph from which I have been quoting continues -
Since 1930, at least, it has not been a serious: competitor of the trading banks. Neither have the banks made much use of its trading activities for the purpose of expanding or contracting credit. . . The quarterly average figures of private advances before 1931 cannot be separated from advances to governments, but since that date they bear out the contention that the Commonwealth Bank has not pressed its trading activities.
Why? It is perfectly obvious that the trading banks, through their representatives on the Commonwealth Bank Board, restricted the activities of the national bank because it was interfering with their own profits. From its inception until now the Commonwealth Bank has made a profit of more than £64,000,000. That is all the more creditable when we remember that the bank started with practically no capital. Not only has it made large profits, but it has also rendered invaluable service to the community by restricting interest rates, making money available to home-builders, assisting the development of business enterprises of all kinds, and providing virile competition with the trading banks. It has discouraged the trading banks from arbitrarily withholding advances to deserving applicants. As an instance of the attitude adopted by the trading banks when the Commonwealth Bank was prevented by the former board from competing with private banks, I recall that a small organization with which I was connected, which was seeking funds to expand its activities, was refused an advance by the banks merely because they did not like the individuals concerned in the organization. Later, they were able to obtain finance from a large business organization. That is typical of the attitude of the banks when they do not have to meet the competition of the Commonwealth Bank.
The Commonwealth Bank has created financial stability and has given the people confidence in the financial control of this country. As honorable senators know, confidence in our banking system is necessary if the development of the nation is to proceed. The Commonwealth Bank has provided the life blood for expansion of trade and commerce. Any attempt to interfere with that bank, which has functioned so successfully without a board, would be a grave disservice to the country, and might bring about uncertainty in the minds of the people concerning our banking system. I do not propose now to dwell upon the effects of a state of uncertainty in the minds of the people concerning the banking system, because the anti-Labour parties know very well the effects that such a state of uncertainty can have on the people. “When the bank nationalization legislation was being debated in the Parliament, they created in the minds of the people a fear that their money would be lost. Many persons, very unwisely, withdrew their money from banks and hid it in odd corners of their houses from which, in some instances, it was stolen. I read a report in a local newspaper’ that a woman had had £640 stolen from her house. She had put the money in a tin. When she was asked why she had kept so much money in her house, she said that she withdrew it from her bank during the bank nationalization campaign because she was afraid that if she left it in the bank she ‘would lose it. I emphasize the point that I have already attempted to make with regard to confidence. If we have faith in an institution, then, in my opinion, we should leave it alone.
We are here to represent the people. Their health, education and happiness are of paramount importance. Their in ten” transcend all other interests, whether they be financial or political. I say in all seriousness that members of the Labour party are in closer contact with the people of Australia than are the members of a7other political party. Many of us have come up through the ranks, from workingclass families. We know how important it is that the people should have confidence in the future. We know how important it is to plan ahead for a stable economy and a stable government to provide freedom from fear, whether it be fear of poverty or of unemployment. We approve of the measure in general, but we emphatically reject the clauses that seek to establish a Commonwealth Bank Board. A sound banking policy means a sound community. When a country has a sound banking policy which can be used as a cushion against economic setbacks, or to stimulate trade and commerce, it i9 on the right track and should not be altered.
I shall conclude my remarks by quoting a statement made by Mr. Reginald McKenna, the chairman of one of thebiggest banks in the world and an ex-Chancellor of the Exchequer of Great Britain in a non-Labour government. He said -
The power to control the volume of money in the community, is, therefore, a power the exercise of which can cause untold suffering to the people.
Never was a more true or more profound statement made. It was not mad - by a member of the Labour party, but by a banker of renown. He continued -
Those 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.
I concur wholeheartedly with those sentiments. I believe that the establishment of a Commonwealth Bank Board would not be in the best interests of the people of Australia. I leave it at that.
– The Minister for Social Service5 (Senator Spooner), in his second-reading speech, said -
So far as the 1947 act is concerned, there is little that need be said. ‘Hie act is a violation of the principles for which this Government stands and we gave an undertaking to the people of Australia that we would repeal the act if we were returned to office.
It will be noticed that there was a very important omission from the speech. Nothing was said about the principles to which the Minister referred. What did he mean? In the absence of any explanation by the Minister, it is reasonable that an unsophisticated person like myself should place his own construction upon the statement, in the light of his experience and his reading. I should ?::y that what the Minister had in mind was that anti-Labour governments stand for the principle of private ownership and control of the means of production and of public utilities. Public utility can be owned by private persons either directly or indirectly. To take the widest view of the situation, as I see it, practically all of our public utilities are, directly or indirectly, owned by private persons. I do not think that that will he denied by the Minister.
In our experience, we find that economic interests govern actions. There are, of course, exceptions, but on the whole I think that is a correct statement. That is a fundamental fact with which we are always faced. The economic interests of the workers determine their attitude to all questions. The economic interests of employers determine their actions. As I have said, I believe that what the Minister had in mind when he referred to the principles for which this Government stands was the private ownership or control of the means of production and of public utilities. Public utilities can be controlled indirectly by private enterprise through the medium of loans and advances. The policy of the Victorian railways, the New South Wales railways and other railways is determined more by their financial obligations than by anything else. If it were not for their obligations to private lenders of money or bondholders, our railways would be much more up to date than they are at present. Similarly with the Postal Department, which, since federation, has been practically starved because of the obligation of governments to pay interest or reduce taxes. The profits of the department have been paid to Consolidated Revenue largely and have not been used to bring post offices up to date or to pay to employees of the department the wages and salaries to which they are entitled. As a result of depression budgets, which were mainly the instruments of anti-Labour governments, the department was in a desperate position when war broke out. Instead of all our telephone installations being ready and cables laid so that they could be used when we required them, that work had not been done. In every capital city there were manual telephone exchanges that should have been abolished years before and replaced by automatic exchanges. That work had not been done. Post offices that should have been demolished years ago because they were totally inadequate are still standing, simply because the actions of anti-Labour governments were determined by economic interests. One of their actions was to pay the profits made by the Postal Department to Consolidated Revenue, mainly in the interests of wealthy taxpayers, instead of using them to keep the department up to date. The economic interests of the people were responsible for the establishment of the Commonwealth Bank. Because of their very costly experience of private banks, particularly during 1893, it dawned upon the people and their representatives that something different from that which had been done previously had to be’ done, and it was decided to establish the Commonwealth Bank. The proposal was strongly opposed by anti-Labour governments, but eventually the bank was established by a Labour government.
Private banks have made colossal profits, particularly during the recent war. Despite what the Government was able to do in the direction of, as it were, applying a brake to the predatory actions of the private banks, they still made colossal profits. To-day their profits exceed those that they earned previously. The profits are distributed mainly to shareholders, but the profits of the Commonwealth Bank are used in the interests of the people generally. The Commonwealth Bank, from the time of its inception until 1949, made a profit considerably in excess of £80,000,000. That money has been used for national purposes. It has been used to increase the reserve fund of the bank, to increase the National Debt Sinking Fund, to retire some of the national debt, to pay off the debt on the trans-continental railway, to finance World War I. expenditure, and to finance the expenditure of £345,000,000 for World War II. at low interest rates. If the Government had had to rely on the private banks the national debt of this country would be considerably greater than it is to-day, and the interest payments would be considerably in excess of the present payments. The profits have been used to finance primary industries and all sorts of useful propositions, all in the interests of the people. If the Commonwealth Bank had not been in existence, and the private hanks had made those enormous profits, most of them would have found their way into the pockets of the private shareholders, and would have been spent on luxury travel and the erection of luxury offices and luxury residences. That is why, in every capital city of this country - I do not know of any exception - there exist on valuable sites palatial financial institutions. The same people also own palatial residences in suburbs such as Toorak in Melbourne and Potts Point in Sydney. Yet in other parts of cities dirty, filthy hovels that have been there for the last seventy or eighty years still exist. That is an expression in material form of the way in which profits have been utilized under private control of banking and monopilies. Obviously- such a state of affairs cannot continue indefinitely. If anybody is foolish enough to think that it can they are destined to be disillusioned. Beyond a certain point quantitative differences bring qualitative changes. That is an elementary illustration. As honorable senators know, when one more degree of heat is applied to boiling water it becomes steam. As Senator Morrow has pointed out, the evolutionary process ultimately becomes the revolutionary process. If we lack the capacity to understand the position, in the light that I have mentioned, reforms will, be achieved in an unconstitutional way by resort to violence. If there is a commonsense approach to the position that is developing at present, the necessary changes could be made with the least amount of friction and inconvenience, and everybody would be benefited. Unfortunately most people consider that the ideas of 100 years ago are beyond question. It requires something in the nature of a shock to induce them to adopt a different approach to the solution of problems. Prom that point of view wars act as accelerators. The effect of wars on the ideas of men 4nd institutions, particularly the stratified ideas represented by obsolete institutions, have an effect similar to that of an earthquake on the stratified earth’s surface. To-day, in every country in the world institutions are being challenged as never before. Honorable senators opposite hold the view that obsolete institutions, including banking institutions which were established many years ago, should be allowed to continueas in the past. It cannot be disputed that the profits of the Commonwealth Bank have been used much more advantageously in the interests of the peoplethan have the profits of the private- banks. I have mentioned two ways in which private control has been exercised’ - directly and indirectly. On the 25th November, 1938, the then Treasurer (Mr. Casey), attempted to establish a’ more effective indirect control of theCommonwealth Bank by introducing a bill to provide for the issuing of millions of pounds worth of debentures and inscribed stock. If that measure had become law the Commonwealth Bank would have been provided with probably £50,000,000 additional capital, which it did not want, and on which it would have been committed to pay millions of pounds of interest to private subscribers. I emphasize the words “ inscribed stock “. It is almost impossible to find out whoowns inscribed stock. Obviously the intention was that the private banks should acquire that inscribed stock. By now they would have received millions of pounds interest that need not have been paid. The fact that the Commonwealth Bank has been able to carry on since 1911 and earn a profit considerably in excessof £80,000,000 proves conclusively that there was no need to issue debentures or inscribed stock. In other words there was no necessity to borrow money. As a result of the criticism which took place both inside and outside the Parliament, the bill was very conveniently dropped. It was realized before very long that the scheme would be a means of private individuals obtaining a greater measure of control of the Commonwealth Bank. The profits would then have been reduced very considerably. In his second-reading speech the Minister said - the bank, under the board, was operating efficiently both in its central banking and trading banking activities and a satisfactory co-ordination of the bank’s policy with that of the Government had been achieved.
He was referring to the control by the board prior to 1939. Such had not been the case. There were many instances of the board restricting the activities of the Commonwealth Bank, mainly in the interests of the private banks.
As I have pointed out, war, being an accelerator, compelled the bank board to extend its activities until 194’5. The exigencies of war rather than the bank board constituted the driving force. At that time Australia’s position was desperate and money was needed urgently. In passing I should like to say that during the depression of the thirties, when money was needed just as urgently, the Commonwealth Bank refused to assist the government of the day. A request by the then Treasurer, Mr. Theodore, for’ credit of £1S,000,000 was refused. The then Governor of the Commonwealth Bank, Sir Robert Gibson, adopted a dictatorial attitude. When he was called to the bar of this chamber he told honorable senators that money would not be advanced, with the result that hundreds of thousands of workers in Australia lost their positions in the workshops, lost their homes, and their equities, and were compelled to work in return for the dole. That was simply because the bank board was not prepared to do in time of economic depression what it did in time of war. Here I may be excused for saying that, when the members of the bank board believed that they were in no danger of physical violence from the unemployed, they did not interest themselves in the slightest in the condition of the unemployed. On the other hand, when they knew that the whole country was threatened, and that they themselves were in danger of losing their possessions, and even lives, it became possible for the bank to assist the war effort.
As we know, under the Commonwealth Bank Act 1945, the Commonwealth Bank Board was replaced by an Advisory Council consisting of the Governor of the bank, Dr. Coombs ; the Deputy Governor ; the Secretary to the Treasury; the Commonwealth Statistician, Dr. Roland Wilson; and the manager of the Industrial Finance Department of the Commonwealth Bank, Mr. Armstrong. After that change was made, the bank greatly extended its activities, and the primary producers, in particular, have benefited under the new administration. So far as I can judge from speeches made here and in the House of Representatives, no one has anything to say against the present adminstration of the Commonwealth Bank. There has been no act of mal-administration to which attention can be directed. On the contrary, people who have had dealings with the bank have expressed themselves as being very satisfied with its administration, but because that administration has not been strictly in conformity with the principles to which Government spokesmen have directed attention, it has now become the policy of the Government to replace the Advisory Council by a hoard consisting of ten members. Some of them will be members of the present Advisory Council, men of established reputation because of their ability and trustworthiness, but five so-called independent members are to be appointed also. There is nothing in this bill, as there was in previous legislation of the kind, to say that those five members shall not be representatives of the private banks, or shareholders in them. That omission suggests to our minds that it is intended to appoint five men, who are either directly or indirectly concerned in advancing the interests of the trading banks. Economic interest governs action, and seeing that no names have been mentioned, it is reasonable to assume, in the light of experience, that the intention of the Government is as I have suggested. The Ministers have spoken about appointing independent men. There are no independent men. All men are more or less dependent. To speak of independent men is to use a figure of speech, just as we do when we speak of free men. There is no absolute freedom, all freedom being relative. When we speak of a free man, we mean a man who is free to speak within limits, and free to act within limits. No man is independent in the absolute sense. He must be dependent in some degree on other men for the position he occupies, whether he works in a factory or sits in this Parliament. For all practical purposes, members of Parliament are dependent on the electors.
When honorable senators opposite use such a word as “ independent “ without qualification they are apt to mislead. Those who do not cultivate the useful habit of reading statements closely and critically may be inclined to believe that there really are some independent people, but that is not so. As a very able politician once said, most people are either prisoners of phrases, or slaves of shibboleths. That is not only good alliteration ; it is also true. Those who say that there are independent persons are either the prisoners of a phrase or the slaves of a shibboleth, because they imply that people can be independent in the absolute sense, which is not true. Obviously, the five allegedly independent members of the Commonwealth Bank Board will be expected to give effect to the Government’s policy. Otherwise they would not be appointed. Thus, it is intended to appoint a board of ten members, five of whom can be relied upon absolutely to give effect to the policy of the Government which is to manage the Commonwealth Bank, and administer its affairs, mainly in the interests of the trading banks. There can be no doubt about that. When Senator Maher says that the board will make a common-sense approach to the problem, and judge cases on their merits, he does hot convince me.
I repeat that economic interest governs the actions of the individual and of the group. That is why there is a Labour party and an anti-Labour party. Because economic interest governs the action of the workers, there is among them growing resistance to exploitation through the medium of private institutions. Senator Morrow said he did not regard the private banks as being, wholly responsible for the exploitation of the workers. Neither do I, but the private banks play a very important part in the system of exploitation, and they certainly played a callous and brutal part during the ‘thirties. I can remember that, during the depression, when people in Sydney and elsewhere were badly fed, badly clothed and badly housed, in fact when they were living under semistarvation conditions, some of us urged that relief should be given to them at Christmas. There were mountains of food in the form of wheat rotting at the railway sidings. There were idlefactories and idle hands, but one might as well have appealed for help to a Chinese god as appeal to those who controlled the resources of the nation. We asked for help, but it was withheld, because the workers at that time were dispensable. They could not be employed at a profit. However, after the declaration of war, when the workers became indispensable almost overnight, money could be found, and it was found. Where before the workers were badly fed, clothed and housed, they were then given a reasonable sufficiency of the things that they needed. Moreover, when they volunteered to fight, they received free medical and dental attention in order to make them fit. The doctors, who held up the Chifley Government’s national medical scheme, were prepared during the war to do everything they could to assist the government, because they themselves were in danger. When they were no longer in danger, they were no longer prepared to help. That is why the Labour party is in existence, and that i? why it has a programme of social legislation that has been branded as socialism. I have defined socialism as a condition in which we all have freedom of access to the means by which we live. To-day, we have freedom of access, within limits, to those means. For example, whether a man is wealthy or has not a penny in his pocket, he enjoys the same freedom of access to the roads, to the public libraries and, for his children, to the schools. I have yet to learn that any supporter of the Government is courageous enough to try to deny to people and their children freedom of access to the utilities I have mentioned. The Labour Government proposed to nationalize the banks. There are two methods of nationalization. There is the method under which money is borrowed by governments for the. provision of such utilities as railways, water systems, town halls, &c. Interest would have to be paid to the bankers and financiers. But with another method, a nationalized institution, the position would be similar to that at the time when the Commonwealth Bank Board provided the money for the trans-continental railway and there was no commitment for interest or principal. When honorable senators opposite talk of socialization, one would imagine that there was to be some violent upheaval. One honorable senator suggested that a Socialist State was necessarily a slave State.
– The honorable senator was referring to Russia.
– I suppose that the honorable senator to whom I referred knows as much about Russia as I do, but the implication of his remark was that if we had socialism in Australia we would have a slave State. It would be nothing of the sort. It would mean equal freedom of access to the means by which we live, and there can be no objection to that. Honorable senators on this side of the chamber object to private monopoly control of services and the means of production. In such circumstances, access to those essentials is regulated by the wage or salary received, and the lower the wage the less the freedom. That is one of the reasons why the anti-Labour governments are eager to reduce the cost of production because, to the extent to which it is reduced, they reduce the freedom of access of the workers concerned to the means by which the workers live. Nationalization of the Commonwealth Bank that was proposed by the Labour Government in 1947 was designed to provide the people with wider and safer banking facilities. I can speak with authority on that bill, and assure honorable senators that the motive behind it was to give people a better and cheaper banking service. The people would not have had to pay high interest rates for money they borrowed. Interest would have been reduced to the cost of administration, but when the cost of banking is reduced to the cost of administration, there are no profits for the private shareholders who adhere as much as possible to the principle of something for nothing. The Labour Government proposed to provide facilities for persons who were sick or unemployed. That is the commonsense and, above all, the humanitarian approach to those problems. When I bear honorable senators refuse to approach the problem in that way, I doubt their sincerity. If they are sincere, I doubt their judgment and their know ledge of economics in relation to finance. If the position were otherwise, I am sure that there would not be that consistent hostility to those who differ from their views and to whom ulterior motives are attributed. In his second-reading speech the Minister for Social Services made this observation -
It is the Government’s view that the proposed composition of the board will result in balanced judgments by a body of men appropriately chosen for their various abilities and knowledge. Due integration with the Government’s general financial and economic policy is likely to result and, at the same time, the board is given an appropriate measure of independence.
– Who is to be the judge of the term “appropriate”?
– The Government. The aim would be to give effect to the Government’s policy. That policy would be to restrict the Commonwealth Bank’s activities in the interests of the private banks and to promote the interests of private shareholders.
– It would give the whole show away.
– I agree. Words have two meanings - one according to the dictionary and the other according to experience. If one spoke to a village lad about a village clock, he would think of a small clock. If one spoke to a boy in a town about a clock, he would think of a big clock like that above the Melbourne Town Hall. To a poor man, £200 would seem to be considerable wealth, but to a wealthy man it would mean very little. So when the Government uses the word “ appropriate “, it means the word in the sense of the Government’s point of view. No other meaning could be attached to it. In his speech, the Minister also stated -
With respect to the trading sections of the Commonwealth Bank, the policy of the Government, as announced by the Prime Minister, is that the bank’s trading activities will be continued in fair competition with the private banks.
– Who is to be the judge of fair competition?
– I was just going to explain that there is no fair competition. There can be only cut throat competition or co-operation. Throughout the commercial world, fair competition can be seen to consist of the greater absorbing the lesser. One finds, particularly as a result of the war, that private monopoly control of the means by which people live has been strengthened and extended as never before in the history of this country. Fundamentally that is the cause of all the trouble in the United States of America to-day. It is also the cause of the international friction. Senator Morrow referred to the position in the United States of America. The situation there is similar to that which existed in the depression, but it is worse. Mountains of food are stacked in enormous refrigerators on the one hand and on the other hand millions of workers are practically starving because the surplus production cannot be disposed of at a profit, l t is controlled mainly by privately-owned monopolies which include the banking monopolies in America. A similar position is developing in England and it has already developed in continental Europe, yet it is ignored by all except representatives of Labour and socialists. All other are shutting their eyes to it and hoping that something will happen to ease the situation.
At a peace conference that was held in Paris last year, the representative of the United States of America was asked whether his government preferred a depression or a war. The reply was that it would prefer another war. A war solves the problem temporarily. It overcomes unemployment and surplus production :i’nd, for all practical purposes, enables hig business to work at full capacity. In :i war all that surplus food would be distributed, the national debt would be increased enormously, and for the time being there would be no unemployment, just as there was none to speak of during the war in Australia. At present we are in a period of comparative peace and the machines of production are slowing down as they did in America. Suppose that in the near future the export trade collapsed, and that is more likely than not. What has the Government in mind in the direction of re-organizing the economy of this country?
– What about another war?
– That is not at nil unlikely.
– Tell us the solution.
– I shall. Let us assume that our markets overseas suddenly collapsed and that Australian industries could no longer maintain their present high level of employment. What would we do then? Would we allow the people of this country to starve? Would we tell thousands of workers that they could no longer have their jobs because they could not be profitably employed? Obviously to prevent such a catastrophe, our economy must be re-organized now. That re-organization would mean that the various branches of production would be controlled by boards responsible directly to the workers.
– Not boards, surely? The honorable senator must mean oneman control.
– I mean boards or commissions.
– Order! I hope that the honorable senator will connect his remarks with the bill.
– When the Labour Government decided to nationalize banking it had in mind a situation that may develop in this country at any time. It hoped to control banking so that instead of millions of pounds going into the pockets of those who do not need it and do not earn it, that money would be expended on vast national undertakings when private industry was unable to keep the workers employed. Such undertakings included of course the Snowy Mountains hydro-electric scheme, the estimated cost of which is approximately £200,000,000. We had in mind other similar works, commencement of which would have enabled this country to meet the crisis that would occur if our export markets collapsed and we were faced with the immediate problem of finding work for thousands of unemployed people. What can any government do in such circumstances unless it controls banking? I have before me some extracts from the report of the Royal Commission on Monetary and Banking Systems. Paragraph 516 of the report states -
The general objective of an economic system for Australia should be to achieve the best use of our productive resources, both present and future. Since the monetary and banking -system is an integral part of the economic system, its objective will be to assist with all the means at its disposal in achieving these ends.
Portion of paragraph 530 states -
The Federal Parliament is ultimately responsible for monetary policy, and the Government of the day is the executive of the Parliament.
Portion of paragraph 519 is as follows : -
The central bank should be the Commonwealth Bank, organized mainly in the form in which it exists at present. Because its sole -concern is the general public interest, the central bank should be publicly owned and controlled. [Extension of time granted.’] Portion of paragraph 538 states -
On their part, the trading banks and other financial institutions must co-operate with the -Commonwealth Bank. … In the end the responsibility must rest on the Commonwealth Bank to enforce its policy, and on the trading banks and other institutions to conform to the policy and to assist in carrying it out.
If that does not mean the nationalization of banking I should like to know what it does mean. The report stated in paragraph 504 -
Because of this power, too, the Commonwealth Bank . . . can lend to the Governments! or to others in a variety of ways, and it can even make money available to Go»*ernments or to others free of any charge.
Thus, in the event of another depression, the Government would be in a position to make money available to State Governments, municipal councils, primary producers and others. That view was confirmed later by Mr. T. W. Harris, who was the secretary of the royal commission. I know Mr. Harris as one of the ablest officers of the Treasury, and 1 was responsible for his appointment to the Aircraft Production Advisory Committee during the war. As a result of the work of Mr. Harris and some of his officers, more than £1,000,000 was recovered from contractors who had deliberately inflated their costs. Had more costing accountants been available that sum could probably have been increased to £2,000,000 or 63,000,000. Referring to the report of the royal commission, Mr. Harris said -
The statement in the paragraph mentioned (504) is to the effect that, as a matter of power, the Commonwealth Bank can make monies available to governments or to others on such terms as it chooses, even by way of a loan without interest, or- even without requiring either interest or repayment of principle.
Can honorable senators imagine the private banks doing anything like that? I remind the Senate that the Royal Commission on Monetary and Banking Systems was appointed by an antiLabour government. In the course of an exhaustive inquiry it took evidence from a large number of qualified witnesses. The report from which I have quoted was made after the fullest consideration of the evidence. It is clear from what I have said that if the royal commission did nothing else, it recommended the nationalization of banking and that is exactly what the Chifley Government attempted to do. However, by malicious misrepresentation and with the assistance of a press which consistently falsified reports members of the anti-Labour parties were able to persuade the people pf this country to reject the Labour Government. To-day, the Government claims that it has a mandate to hand control of the Commonwealth Bank .over to a board, members of which will include representatives of the private financial institutions. That is the reason for our determined opposition to this measure. During the election campaign, I addressed numerous meetings in the country districts of Victoria, Kew South Wales and South Australia. In the centres that I visited, 1 found that business people generally who were performing useful service in their own spheres of activity, lacked even the remotest idea of the major issues upon which the election was being fought. They believed quite sincerely that by nationalizing banking the Labour party would create a state of chaos in this country. It has been well said that there are occasions when we have to rely on the hard school of disillusionment to educate people when reasoning fails. It is the hard school of disillusionment that is educating most people to-day. The prices of commodities1 are still rising. Although the Government has pledged itself to put value back in the £1, whenever members of the Opposition have asked Ministers in this chamber what the Government proposes to do in order to restore the value of our currency the invariable answer is that the Government is “ giving consideration to the matter “. Senator Morrow has, very appropriately, directed the attention to the Government to the distinction between the price and the value of commodities. Actually, the real value of commodities, expressed in terms of gold, of labour, time, or of exchange, was never lower; but prices, because of the depreciation or the inflation of the currency, were never higher than they are now. Every increase of prices reduces the purchasing power of wages and salaries. The Commonwealth Court of Conciliation and Arbitration certainly fixes the wages which workers receive, but the employers have the right to determine the prices of the goods that the workers must purchase in order to live. Then honorable senators opposite wonder why the workers go on strike, and why production is not as high as they would like. Furthermore, the prices of many commodities include enormous interest charges, and the same remark applies to housing. Houses that were erected years ago have been capitalized over and over again by the extraction of high rents from unfortunate occupiers. The average worker does not understand the technique that permits this sort of thing to occur; all he understands is that the cost of living is getting higher and higher, while the purchasing power of his wages is getting lower and lower. People have to pay exorbitant rents for dirty, filthy hovels which should have been demolished years ago. However, if a worker buys a new house from a State housing commission, or some other instrumentality, he finds that the cost includes at least 25 per cent, profit for the builder, which is not represented by any outlay for materials or labour. Because of the need to relate wages to the cost of living, and in an endeavour to preserve economic equilibrium, the previous Labour Government tried to nationalize banking. Labour has not abandoned its principles. We also oppose the establishment of control of the Commonwealth Bank, by a board because we do not want the present economic disequilibrium to become any worse.
Spokesmen for the Government have endeavoured to bludgeon this measure through the Senate, but I point out to them that they must exercise fore- bearance, and at least endeavour to understand the reasons why members of the Opposition criticize the Government’s present proposal. We do not criticize this measure because we are mere theorists, hut because we are men. of sound practical knowledge of the problems of life. Experience without theory is blind ; theory without experience is futile. The most balanced members of this chamber are those who have a sound practical experience of the business of life; and those so endowed are to be found, not in the ranks of the Government supporters, but on the Opposition benches. If there were more men of practical knowledge and experience amongst the Government supporters, the Government would display a more humanitarian approach to legislative problems and we should hear less of the stupid, vicious criticism that members of the Labour party are little better than Communists and know little about the economic and social basis of the matters that we discuss from time to time. Members and supporters of the Governmentare elected to the Parliament to do the best they can for all the people; but the present Government is certainly not doing its best for the people when it proposes to hand over the people’s bank to the representatives of private financial interests, and as far as the Opposition has the power to do so, it will continue to emphasize that fact. Although the Government has a majority of the members of another place on its side, and undoubtedly has the money to monopolize practically all the commercial wireless stations, Labour is holding its own, despite the feverish activities of antiLabour canvassers at election time. The choice that now confronts the present anti-Labour Government is whether it will effect the necessary social reforms in a constitutional manner, or run the risk of violence. I think that one word describes all life’s problems, and that is- “ adjustment “. We are living in a world where economic conditions are continually changing. To-day we have monopoly ownership and control of the means of production, whereas years ago production was under individual control. In the changed economic circumstances, members of the anti-Labour parties cannot escape their responsibilities. Most of the industrial trouble that we experience to-day is caused by incompetent management. Under competent management strikes do not occur; and competent management means adjusting oneself as quickly and as economically as possible to changing economic conditions. One of the first steps that must be taken to bring our economy into line with economic realities is to nationalize banking. That is the reason why the Banking Act 1947 was introduced by the previous Labour Administration, and that is the reason why Labour opposes the present bill. The function of private banks is to attract money on fixed deposit at the lowest possible rate of interest, and to lend it out at the highest possible rate. That is the foundation of the profits made by trading banks. In order to make profits the private banks must either underpay their employees or overcharge those who borrow from them; there is no other way in which they can make profits. When we have regard to the profits that the private banks are making we can only conclude that they are the result of sheer robbery and that the system is a colossal racket from beginning to end. In this connexion I invite the attention of honorable senators to a passage from a book written by Mr. V.C. Vickers, who was a Governor of the Bank of England from 1910 to 1919, in which he states -
Banks create and issue paper credit, which they lend out at the highest rate of interest obtainable, operating on the principle of obtaining an enormous amount of wealth for nothing - mere paper.
I could cite a number of other authorities, including not only persons of high academic prestige, but also men who occupy responsible positions and have had considerable financial and economical experience, who are emphatic in their opinion that the trading banks have made millions of pounds out of mere paper.
Sitting suspended from 5.57 to 8 p.m.
– In the few minutes that remain to me, I shall refer to the future policy suggested by Mr. Vickers. It is in conformity with the policy of the Labour party. The passage that I am about to read is to be found at page 74 of Mr. Vicker’s book The Economic Tribulation. It reads as follows : -
Absolute. State control over all foreign lending; and the adoption of the general principle that our foreign trade should be so conducted as to preserve -
I commend the book to honorable senators. There is not a superfluous word in it. It was written by a man who was a governor of the Bank of England. He is well qualified to write upon this very important subject that we have now to consider and uponwhich we must come to a decision that will be in the best interests of the people of Australia.
– No greater deception of the people of Australia has been perpetrated than that which was recently perpetrated by the members of the present Government parties. The Government claims that it has a mandate to do certain things. The present Government parties were certainly returned after they had advocated many things and deceived most of the people temporarily. They told the people during the last general election campaign that, if they were not returned to power, the Chifley Government would nationalize the banks of this country, but they knew that the Constitution, the provisions of which the Labour party has always observed and honoured, does not empower the Australian Government to do that. They .knew that many sections of the Banking Act 1947 had been declared to be invalid. They knew also that had it not been for the threats made from time to time by the private banks, the Banking Act 1945 would have been considered to be adequate to meet the requirements of this country both in regard to post-war reconstruction and future development.
The Government has said that, by providing in this measure for the repeal of the Banking Act 1947, it is implementing its mandate, but honorable senators opposite know that that act is a dead letter.
– A dead horse.
– Anyhow, it is dead. That Avas not the bribe that influenced the private banks. Those- banks were not interested in defending themselves against nationalization, because they knew then that there was no need to fear nationalization; they were interested in trying to preserve their selfish interests so that they could continue to make profits, to the detriment of the people generally, and stultify the development of this country by refusing to extend credit when an extension of credit was needed and by extending credit when it was unnecessary to do so. It may be said that, to some degree, this bill is a pay-off to the private banks for their action in sending their young employees round the country to canvass the electors, not on the banking issue, which was hardly discussed by them, but on general political issues. They were told to say things for which they well knew the Government would not take respon sibility. Mr. Lonnie, a defeated Labour party candidate and a returned serviceman, suffered the distressing experience of discovering that one of these young men was wearing a returned serviceman’s badge, undated, of the 1914-1S war, although it was obvious from his age that he had no right to wear it. Some of these canvassers had been told to wear returned servicemen’s badges if they were obtainable, irrespective of whether it was legitimate for them to do so. Those activities were engaged in because it was alleged that there was a possibility that the banks would be nationalized, but all well-informed persons in this country knew quite well that, under the Constitution, it was not possible to do so. They knew that the Labour party had never tried to evade the provisions of the Constitution and that it was fighting only to protect the 1945 legislation that had served this country so well and which was playing such an important part in its development.
A large proportion of the arguments that the present Government parties used to obtain their alleged mandate related to socialism. For twelve months John Henry Austral and other stooges continually told lies to the. people of this country in order to create a certain impression. The banking community understood the position, and was not deceived. It would have voted in the way in which it did, even if that propaganda had not been indulged in. But there were a great many persons who were wretchedly deceived by those dishonest tactics. “What, is the attitude of the present Government parties to socialism? According to the West Australian, the present Prime Minister (Mr. Menzies), when speaking to the people of South Australia in a Labour stronghold in Adelaide on 23rd November last year said - and this shows the duplicity of the man and his party - that Mr. Chifley had told the electors at a meeting in Hobart that socialism would be applied only where a business monopoly was exploiting the people. Mr. Menzies wenton to say -
That also is our policy. We stand for freedom and not for exploitation. If I can be shown some monopoly business exploiting the people, then I, as leader of a non-socialist party, would not hesitate to socialize it tomorrow morning.
That was a lie. It shows the duplicity-
– I rise to order. 1 am personally offended at hearing a statement by my leader described as a lie.
– I ask Senator Cooke to continue his remarks.
– It is obvious that i hat statement was made, because it was ;i statement of a kind that would be–
– I rise to order. Am 1 to understand, Mr. President, that you do not intend to ask Senator Cooke to withdraw his remark?
– I have not done so because Senator McCallum did not ask for the statement to be withdrawn.
– I ask for it to be withdrawn, on the ground that it is an insult to this chamber.
– I do not regard it as an insult to the chamber. If a statement is made that an honorable senator regards as a personal affront, he has the right to ask that it be withdrawn. Senator McCallum did not ask foi- a withdrawal of the statement to which he referred. Therefore I called upon Senator Cooke to continue his remarks.
– I ask for a withdrawal of the statement.
– I ask Senator McCallum, through you, Mr. President, to say what statement of mine he objects to. May I be permitted to complete the sentence that I was making when Senator McCallum rose to order?
– I object to the word “ lie “ as applied to the Prime Munster.
– I ask Senator Cooke to repeat his statement, so that I may decide whether or not it is unparliamentary.
– I stated that when the present Prime Minister was speaking in a Labour stronghold he made a statement that was distinctly different from those that he had made in regard to socialization of the banks. He referred to the fact that Mr. Chifley, speaking at Hobart, had told the electors that socialism would be applied only where a business monopoly was exploiting people. He then said -
That also is our policy. We stand for freedom and not for exploitation. If I can he shown some monopoly business exploiting the people, then I, as leader of a non-socialist party, would not hesitate to socialize it tomorrow morning.
I said that that statement was evidently a lie. I made that remark because the right honorable gentleman had said on one occasion that he would oppose socialism, and on another occasion, when speaking to the workers and not to the bankers, that he would socialize industries overnight. I go further and say it is untrue-
– I rise to order. Senator Cooke is not repeating what he said previously. He is making an explanation.
– We do not want a discussion upon this matter. Senator Cooke referred to a statement of the present Prime Minister as a “ lie “. That was hardly a parliamentary expression. Senator McCallum, as a member of the party of which the Prime Minister is the leader, is offended at the remark, and I understand that he has asked for it to be withdrawn. I point out that Standing Order 418 provides -
No Senator shall use offensive words against either House of Parliament or any Member of such House. . . .
I think that it would be quite parliamentary to say that the statement was untrue, but to say that it was a lie was unparliamentary. I therefore ask Senator Cooke to withdraw that remark.
– In deference to you, Mr. President, I withdraw the word “ lie “. It referred to the sentence, of course. If I were permitted to say what I thought of the Prime Minister I should use a personal pronoun. However, I have not used a personal pronoun. I say further that that statement was definitely untrue and false. It was in contradiction to two other statements that the right honorable gentleman made when addressing people whom he wished to convince that he was anti-socialist. Honorable senators may have it whichever way they like, that is, they may accept as being the truth of the position either the statement that the right honorable gentleman made to the bankers and other people by whom he is being financed, or his statement to the workers that he was trying to deceive. Those statements were thoroughly contradictory, and are indicative of the calibre of the right honorable gentleman. The bill before the Senate is intended to amend the banking legislation of 1945. Honorable senators opposite have stated that this is an innocuous measure which will not affect anybody very much and that it seeks merely to replace the Governor of the Commonwealth Bank by a board. Since a Labour administration established this great national bank, which served the country so well during the periods of two world wars - though it failed to do so during the depression - there has been an underlying, insidious and bad influence exercised by members of the Liberal party - or the Nationalist party or United Australia party, as it has been variously called in the past - and members of the Australian Country party, with the object of destroying the efficiency of this great national institution.
The Commonwealth Bank was established by a Labour administration in 1911, after Mr. King O’Malley had convinced the Labour caucus on the 5th October that year that the country had failed to progress as it should have done. There had been a bank smash, which brought near ruin to many people, and efforts to rehabilitate the country had failed. The country was, in fact, at that time overloaded with debt, as a result of overseas borrowing, and it was in pawn to some other countries of the world. Since the establishment of the Commonwealth Bank private interests have done their best to stultify its progress. Although they have not succeeded in doing so to an appreciable degree, they have hindered its growth. For that they must be condemned. It is of no use our denying, merely to satisfy our ego, that we are behind in development. Anti-Labour governments sabotaged the activities of the Commonwealth Bank until 1923. However, the Governor of the bank, Sir Denison Miller, was possessed of great knowledge and capacity, and the saboteurs were frightened to challenge him openly. Although, on three occasions, Labour endeavoured to amend the original legislation in order to protect the bank from sabotage, it did. not have the power to do so. In 1923. following Sir Denison Miller’s death, the anti-Labour government that was then in office passed amending legislation to constitute a board of directors to control the Commonwealth Bank. The banking legislation was further amended by Labour in 1945, following which great improvements were made in the banking structure of Australia. That legislation will not be seriously disturbed by the measure now before the Senate, apart from the fact that a bank board is to bp re-established to do the bidding of the Government. From time to time the parties that honorable senators opposite support have been prepared to sabotage the Commonwealth Bank, in the interests of people who have financed election campaigns on their behalf, and who were responsible for the defeat of the government of this country at a time when the people were in dire need, and thousands of Australian children were starving. It is of no use for honorable senators who support the Government to refer to undernourished children in Australia and the declining birth-rate, because members of the Australian Labour party well remember the time when the former Commonwealth Bank Board, which was appointed by a non-Labour government, prevented the government of the day from providing food to feed hungry children.
Millions of pounds were spent by the trading banks of Australia not only to oppose Labour’s proposed nationalization of the trading banks, but also to endeavour to secure the election to office of a government that would be prepared to do their bidding. In 1924, when the former bank board bad been in control of the Commonwealth Bank for only twelve months, the antiLabour government then in office made a bold attempt to convert the Commonwealth Bank into a central bank. Although it did not totally succeed, during the following 21 years the hank did very little more than perform the functions .of a central bank. It was dominated by people who were protecting the interests of the private banks. The Commonwealth Bank Board failed utterly to serve the country. It allowed a situation to arise in which, although the farmers had produce to sell at low prices, and manufacturers also had an abundance of goods for sale, the workers were standing idly by unable to buy the goods that were available. The development of the Commonwealth Bank during the recent war proves conclusively that it can operate efficiently under direct control. During the period of 21 years to which I. have referred not only did the bank fail to develop, but it even slipped back. It was strangled and sabotaged. During that period if a person who was either engaged in industry in this country, or wished to engage in industry, applied to the Commonwealth Bank for a loan in order to develop his business or to effect improvements, as a result of which employment would be given to many artisans and administrative staff, he was invariably asked whether he had sought assistance from a trading bank. If he said that he had not done so his application was refused. On the other hand, if a trading bank had refused his application and he then sought assistance from the Commonwealth Bank he was told that as the trading bank did not approve of his application the Commonwealth Bank would not do so. The bank was dominated by the policy of a. board which was kept well in check by the government of the day. That state of affairs was not overcome until 1945. Circumstances in the interim bad changed the outlook of the people of this country. Although the bank had declined to advance credit to persons to enable them to utilize and develop our vast resources, immediately war broke out in 1939 there was a loosening-up. The directors of the private banks knew that they could not sustain a war effort on their own, any more than they had been able to rise to the occasion when extensive finance was required by this country previously. When war was declared the private banks realized that they had neither the capacity nor the desire to finance the nation’s war requirements, but whereas the artisans and men who worked with their hands might lose their right to live, other men might lose their assets. Thereupon the Commonwealth Bank assisted the people of this country with the approval of private banking interests. It is to the credit of the present Treasurer (Mr. Fadden) that he realized that exploitation had been carried on by the private banks during the previous nineteen years, and issued regulations and applied a policy to the Commonwealth Bank that showed in clear relief the policy that the hank had been operating in peace-time and early in the war in. a manner that was thoroughly unworthy of any government. Thereafter great projects were financed and this country was placed on a war basis. Money was provided to pay a vast army of men of eighteen years and nineteen years of age to enable them to go forward and fight for their honour and independence, which was very dear to them.’ Of course their women-folk were equally dear to them.
I remember well that a representative of “Western Australia, at the instigation of the late John Curtin, attended a nonparty conference in Melbourne. At that time things were looking very dark for big business. Its representatives, and the representatives of the workers came together on a common footing to confer about the best way to co-ordinate our activities to ensure that Australia would achieve an efficient war effort. At that time we were not thinking in terms of efficiency that would be good enough to prevent the invader from reaching Australia, but rather in terms of efficiency that would delay his getting here. The Government in office had disintegrated thoroughly, and Labour was called upon to gather up the strings and organize a co-ordinated war effort. At that time investors and business magnates stated that they did not want to earn interest on their money, but that they would cooperate fully to save their assets and this country. There was no argument then about whether extra production would mean increased taxation. The stake was too big, and for the time being the monied interests were prepared to forego their privileges. However, with the coming of peace, their attitude changed. The cry was raised that there was not enough profit in industry and that the banking system, which had served the country so well during the war, would have to be changed. We now hear stories from representatives of the private banks that production can be increased only if the margin of profit is increased. We are told that there must be an increased incentive if goods are to be produced for the benefit of the people of Australia, and of the war devastated countries whose people put their own bodies between us and the enemy that threatened to overwhelm the country. Having destroyed one side of the price structure which made for economic stability, those who support the Government have now set out to destroy the banking system developed by the Labour Government, and the bill now efore us is the first instalment of that programme. That was the lure held out to the trading banks to induce them to spend millions of pounds on the election campaign, and to promise their employees a bonus if a Liberal government were returned. They received their bonus all right, and so did the employees of the Commonwealth Bank. We are told that here is nothing to fear from a return to Che method of Commonwealth Bank control which operated in 1925. The Government claims that it received a mandate from the people to bring in this bill, but at the annual conference of the Australian Wheat Growers Federation, on the 15th April last, a resolution was carried opposing the appointment of a Commonwealth Bank Board similar to that previously in existence. Government supporters should not deceive themselves.
The Attorney-General (Senator Spicer) explained that the board is to cOnsiSt of ten members, five of whom are to be independent. Among the official members will be the Secretary to the Treasury, a very capable man, it is admitted. If there is a difference of opinion between the board and the Government, the Treasurer will confer with the board, and a report on the dispute is to be laid on the table of each House of the Parliament within fifteen sitting days. If the Parliament happens to be in session, the report will be tabled within fifteen days-, but if the Parliament is in recess months might elapse before it hears anything about the matter. However, that provision deals only with the negative side of policy, as it were. Let us consider the positive side. How are the trading banks to be rewarded for the money they laid out during the election campaign? That money was a good investment, I admit, but it must be recognized that the banks laid out a big stake. The simple fact is that, under the new arrangement, there will not be any disagreement between the bank board and the Treasurer. A Commonwealth Bank Board, appointed on the system that operated between 1925 and 1945, simply will not disagree with the Government. Such a board will at all times be willing to apply the policy that was applied in Australia during the depression, and who in the Government will be likely to object to that policy? Certainly not the Treasurer, the very man who was put into power by the trading banks themselves, yet he would have to object before the matter could come before the Parliament. Therein lies the danger to the nation. If it were provided that any proposal involving a change of banking policy should be reported to the Parliament, there would be some safeguard. Under the proposed system, the only person who can bring a dispute before the Parliament is the very one who is pledged to smash the Commonwealth Bank. The Attorney-General said that the dispute would have to be over something of great magnitude in order to cause the Treasurer to bring it before the Parliament. I agree that it would have to be something of extraordinary magnitude. The Treasurer would not be likely to disagree with the bank board regarding a policy which he has supported for the last 25 years.
During the election campaign, the parties that now support the Government promised that, if returned to power, they would prevent the nationalization of the trading banks. The promise was quite unnecessary because, under the Constitution, it is not possible to nationalize the banks. However, the Government parties did not tell the people before the election that they proposed to destroy the effectiveness of the Commonwealth Bank. There have been two general elections since the Commonwealth Bank Act was passed in 1945. During the 1945 election campaign, the true story about the Commonwealth Bank was told to the people, who learned of the big developmental plans that were in hand, and the rehabilitation schemes that were under way, many of which were already paid for. In that election, the present Government parties were crushingly defeated, and the Labour party was returned in full strength. In the election campaign last year, however, the Government parties deceived the people into believing that it was- possible to nationalize the trading banks, and that the Labour Government intended to do so.
The Commonwealth Bank has served the primary producers well, and I have referred to a resolution passed by the wheat growers- federation indicating that the growers do not wish the present method of control to be altered. In 1936,- according, to the publication, The Wheatgrower, there were 2,791 abandoned wheat properties in Western Australia in possession of the Agricultural Bank. In 1940, Mr. Dunstan, then Premier of Victoria, declared that there were 2,000 deserted wheat farms in Victoria. 3 should like to know the price which that land would bring now. The value was always in the land. What failed was- the monetary system. Mr. E. A. McLarty, a relative of the Premier of Western Australia, the Honorable D. R. McLarty, took a considerable part in deveiving the people in regard to price control, but he has deceived them to only a limited degree in regard to banking. He was managing trustee of the Agricultural Bank in Western Australia, and, giving evidence before, the Commonwealth Grants Commission, he attributed the troubles of the farmers to indiscriminate lending, high interest rates and overcapitalization. When the boom burst, the banks called up their overdrafts, which could be- done on demand in many cases. In doing so, they were acting upon a policy direction from head office. I know that it w.as hard for branch managers to see. their clients ruined, and in most instances the managers did their best to help. The trouble was at the top. A properly directed central bank could have extended credit facilities to meet such a situation as it did during war-time. During the depression, production was high and labour plentiful. There was plenty of real wealth, so that there was no reason why people should have been in want.
– Does the honorable senator believe that things would have been any better during the depression if Sir Robert Gibson had been Governor of the Commonwealth Bank, with authority to act on his own initiative?
– I am not thinking along the same lines as is the AttorneyGeneral. Even Professor Copland, in 1931, said that banking was more than mere finance and that it was a social function which should be controlled in the permanent -interests of the people. And in 1938, he said that no government could absolve itself from the ultimate responsibility for banking policy. When the: Commonwealth Bank is under the control of a governor, any dispute over policy must become a clear-cut issue (between the governor and the Treasurer ; hut when the bank is under the control of a board of ten members, a majority of whom have been appointed in the knowledge that they will support a particular policy, the Government can always avoid responsibility for that policy by. sheltering behind a majority decision of the board. In that way, the Treasurer and the Government will not have to take responsibility for decisions detrimental to the welfare of the people as a whole. The people will not realize until too late that credit is drying up, and that competition with the trading banks is’ ceasing.
When the. Commonwealth Bank was previously under the: control of a board, and the trading banks were unrestricted in their- operations, short-term loans to farmers were often called up on demand. The farmer was always struggling, and was kept to the pin of his collar by high interest rates. Because his income was low, due to poor prices and high interest rates, he was not able to put enough back into the land to maintain fertility, and prevent soil erosion. It was a disastrous policy for the farmers and it is easy to understand why men who starved in those times and are now living in affluence because of high prices, were so scared by their experiences of nearly a quarter of a century ago that they rise to-day to protest against the proposed bank board. It may be said that this is only a current opinion among a section of persons who did not understand the operation of business during the depression, or that it happened too long ago for them to remember, but what was the attitude of Mr. McEwen who is now a prominent Minister in the Australian Government? In April, 1935, Mr. McEwen was the deputy leader of the Australian Country party, and he moved the following motion in the House of Representatives : -
That this House is of the opinion that it is desirable to appoint a Royal Commission to take evidence in public and report upon -
1 ) The operation of the Australian banking and monetary systems, with particular reference as to whether the Commonwealth Bank is operating in its ordinary trading activities upon as fully competitive a basis as is compatible with sound financial practice; and
Whether it would be desirable to amend the Commonwealth Bank Act to direct that the Commonwealth Bank Board, when determining the exchange rate of Australian currency with respect to sterling, should confer with the Treasurer and give consideration to the need for maintaining Australia’s essential export industries.
That was a very well framed motion which showed the position from Mr. McEwen’s point of view. The motion was debated very briefly, and in April, 1935, during his speech, Mr. McEwen said -
There is, however, a doubt in the minds of an overwhelming majority of the electors in this country as to whether our banking and monetary system has kept pace with our social evolution and industrial progress.
In effect, that bore out my statement that the Commonwealth Bank had not served this country as it could have done to develop industry and promote social progress. Industry slumped and Australia was in a deplorable state when World War II. began. Mr. McEwen saw it clearly at that time. The policy of the Government was such that it would not have a Commonwealth instrumentality vieing for the money that sustains production and industry so that the country may be populated and work given to the people. It would have been idle in those times to implement the great immigration policy which the Labour Government put into effect. Large numbers of persons could not have been brought into the country, for there was nothing to offer them. There was only unemployment, devastation and misery. The banking system which had the power to revive the country was restrained by government policy, and the private bankers were not interested in or were not capable of meeting the position, for they were placing their money at high interest rates. They did not want competition in the lucrative side of the business which is the lending of money at big interest. When people are prosperous and can pay money into a bank, remove their liabilities and become free, the banking position is bad from the point of view of profit to the bank shareholders. The people have money to deposit for which the banks have to pay interest. The banks would prefer to have money on loan for which they receive interest.
For these reasons it is necessary to ensure that the policy of the Commonwealth Bank is controlled without any possibility of evading responsibility, and that the bank board cannot carry out a policy which would retard the country without Parliament knowing anything about it unless the Government was pleased, through the Treasurer, to report to Parliament that a disagreement on policy existed. Do honorable senators think that the Australian people should have faith in a Government which sat in power in this Parliament for 24 years in both Houses and yet permitted the Commonwealth Bank to carry on a deplorable policy? Would the Government report to the Parliament if the bank reverted to such a policy? Why should it do so? The answer is made more clear when it is shown that the private banking institutions were prepared to spend millions of pounds and send their servants canvassing into the country during the recent election campaign to malign the Labour Government of the day. Honorable senators on this side of the chamber have sound reason for saying that no member in the Senate or in another place could point to one example of inefficiency in tlie management of the Commonwealth Bank since the Banking Act 1945 became law. Instead they could quote innumerable occasions when the Commonwealth Bank helped the war effort, the export trade, the development of industry, the rehabilitation of ex-servicemen and the commencement of national development projects that would not have been possible for another five decades had it not been for the fact that the Commonwealth Bank was working satisfactorily.
Because of the Commonwealth Bank’s successful operation, the Labour Government was able to carry on those plans with confidence. The irrigation scheme in Western Australia that has been mentioned by Senator Scott is an example. A sum of ?2,500,000 was provided for that scheme which had been wanted for 25 years. That advance was a direct result of the efficient management of the Commonwealth Bank. The Snowy Mountains hydro-electric scheme had been talked about for nearly a century. During the war many people had bemoaned the fact that if the coal-fields and the power plants in Sydney had been knocked out, this country would have been finished. Yet for 25 years a government supporting a policy similar to that of the present Government held office and did nothing about the Snowy Mountains scheme. That government did nothing to enable the Commonwealth Bank to do what it achieved during the war and in the postwar years.
Members of the Labour party believe that a person who is’ appointed to a bank board may be a very fine individual, but unless he has divorced himself from every other occupation, interest or investment, he cannot be entirely independent of the banking system of the country. When the banking legislation of the Labour Government was before the High Court, it was pointed out by those who defended the legislation that one of the justices or his wife had interests in a bank. The point was not upheld. It was ruled that that connexion with banking was quite distinct and apart from the proceedings, and that the justice concerned would not be influenced. I am not saying that he was influenced. An opinion on that point can be formed by a perusal of certain of the submissions and the remarks of the learned justice during the hearing of the case, but that experience makes a very bad foundation for any statement that might come from the Government that persons appointed to this board will be free from any banking influence. No man who is connected with commerce in any large degree or with industry, finance, or insurance can say that he is independent of a banking system. In this connexion I quote the following passage from the Hansard report of the proceedings in the House of Representatives when Mr. John Curtin was speaking to the banking legislation introduced in 1945-
Mr. Nairn. Does the honorable membebelieve in political interference with the central reserve bank?
Mr. CURTIN. I believe in the bill as it stands, with proper provision for the appointment of a representative directorate to determine the policy of the bank.
Mr. Nairn. The honorable member has not answered my question. Does he believe in political interference with the bank?
Mr. CURTIN. If the honorable member expects mc to answer his question in the way that lie desires, he does an injustice to my intelligence. Honorable members opposite like to make their speeches in their own way, and then to put words in the mouths of honorable members on this side to quote against them. I believe in this hill. It has been brought down to help to improve the financial position of the nation. The control of the credit resources of the nation is inseparable from its well-being. It is fundamental to the success of our economic activities. Therefore, it should not be controlled exclusively by a group of men representing private and sectional interests. I insist that the national policy shall, if not wholly, at least substantially, control and influence the operation of the credit resources of this country.
It was obvious to Mr. Curtin then that board control was not satisfactory. It is mere pretence to suggest that the Treasurer is to report to the House any change in policy in the bank. What would be considered a change of policy? Would such changes refer to interest terms or the length of loans? Those thing? would never be put before the Parliament unless a point was reached where the bank board rebelled in a situation in which it considered that the bank was being stultified and challenged the Treasurer. Then the bank board might do something about it, but if the board went along sleepily and accepted the present Treasurer’s policy, which no doubt would be the same as that which was carried out for 25 years, the Parliament would hear nothing about it. Slow strangulation of the Commonwealth Bank would result and then those who financed the campaign which put this Government into office would get the big pay-off. I refer again to the speech made in 1935 by Mr. McEwen on banking. Following the remarks which I quoted a few moments ago the honorable gentleman went on to say -
There is not one of us who is not aghast at a condition of affairs in which production, increased beyond the dreams of our forefathers, exists side by side with dire want. Many of our people, even the very people who are producing in such abundance, are ill-fed and ill-clad.
The increasing strength of radical thought has placed vested interests so much upon the defensive that they have been utterly Stagnant in relation to any endeavour to improve the system. The inert powerof resistance of nervous or selfish vested interests, and the mediums of propaganda which they control, have prevented a mandate from being received by those who have sufficient enterprise to act.
I have no doubt that Mr. McEwen said these things sincerely believing them to be true. The government of the day was of the same political complexion as the present administration, although it bore a different name. It was prepared to accept the rotten situation that existed. What hope is there that this Government will resist an attempt by the proposed Commonwealth Bank Board to return control of the finances of this country to the private banks? I do not suggest that the sink will be drained immediately, but ultimately it will be emptied by the transfer of the national wealth to private interests. During Labour’s term of office, the policy of the Commonwealth Bank contributed substantially to Australia’s financial prosperity and independence. In November, 1935, Mr. McEwen sought leave to withdraw the motion, but leave was refused. Then he moved that the motion be discharged from the notice-paper. Debate on that question was gagged by the Lyons-Page Government, and the motion to discharge the item was carried on a party vote.
– He must have been got at.
-I do not suggest that. When the banks crack the whip they do so in a big way, butI do not agree that Mr. McEwen had been got at. I consider him to be an honorable man, and I believe that he made an honorable statement about banking. At that time many people in this country were starving, and there were vacant farms in almost every State. Thousands of young men had never had a job in their lives. The Government was afraid to refuse an inquiry, and so the Royal Commission on Monetary and Banking Systems was set up to cause a great rustling of papers, and ultimately to make a report. That was purely a delaying action. The report of the royal commission was made in 1935, but our banking system was allowed to lumber on until 1945 when Labour was able to put some of the main principles of the commission’s report into effect. In the meantime, of course, under anti-Labour governments, the people of this country had to endure considerable suffering, due not to the inefficiency in the Commonwealth Bank, but to the policy that was dictated to that bank. To-day, the Government refuses to disclose its policy.
– Order! The honorable senator’s time has expired.
Motion (by Senator Clothier) put -
That Senator Cooke be granted an extension of time for 30 minutes.
The Senate divided. (The President - Senator the Hon. Gordon Brown.)
Question so resolved in the affirmative.
No government can absolve itself from the responsibility of banking.
On the 29th August, 1938, the Sydney Morning Herald said -
It is inevitable in a federation that the Federal Government must be responsible ultimately for monetary policy as it is for defence.
I believe that to be true. However, it is not sufficient for monetary policy to be efficient and vigorous in war-time. Maladministration of banking policy in time of peace can reduce a country to such a state that it is an easy victim of an aggressive nation which has a more efficient economic system. We hear repeatedly from honorable senators opposite the assertion that the prosperity A this country is due to the high prices that are being received to-day for our primary products overseas. We are told that neither the Labour party nor the Commonwealth Bank can take credit for Australia’s financial buoyancy. That argument is just as shallow as many others that were put to the people during the election campaign. Without the assistance of the Commonwealth Bank, during the war our rural industries would have lagged seriously and perhaps would have been ruined. Up to September, 1945, the Commonwealth Bank had advanced a total of £425,458,000 to our primary industries. The result was that when the war ended and shipping and overseas markets became available, our export trade increased by leaps and bounds. To-day the people that the Government parties represent in this chamber are reaping the benefit of that expansion. The Commonwealth Bank advanced £164,7-10,000 to the wheat industry, and many more millions to the producers of meat, butter, cheese, eggs, apples and barley; yet honorable senators opposite have the hypocrisy to say that our present-day prosperity is in no wayattributable to the efficiency of our banking system! Could the private bankshave played the part that the Commonwealth Bank played in assisting our export industries? Obviously they could not have done so. In addition, £377,052,000 was handled under the special arrangements made for wool, and £9,893,000 in respect of sheepskins, bringing the grand total of credit advanced to £812,403,000. Those figures are taken from an official publication entitled Commonwealth Bank of Australia in the Second World War. In the face of such evidence, how can honorable senators opposite contend that the Commonwealth Bank is not responsible for the amazing expansion of our activities, primary and secondary, that has taken place, and for the sound condition of our financial and economic system to-day? When the wool pile was accumulating during the war, the Commonwealth Bank financed the purchase of the wool, so that it was kept off the world markets and a fair price was obtained for it. Millions of pounds were required to do that, and that money was advanced by the Commonwealth Bank. Does any honorable senator believe that a private trading bank would have provided that finance? On the contrary, we know that the English and American banks were desperately anxious to buy the wool pile so that they could traffic in it. If the Commonwealth Bank had not been able to finance payments to the growers for that enormous quantity of wool, it would have become the plaything of ininternational financiers, who would have exploited both the wool-growers of Australia and the starving and naked peoples . of the post-war world. The reason why the Commonwealth Bank was able to render such magnificent service was that Labour had freed if from the control of the former board, which represented the private financial institutions, and had laid down a sound policy for the bank’s operation. Had the bank followed the policy laid down by anti-Labour administrations that were in power for so long people overseas who needed our primary produce would have starved and our primary producers would have been robbed.
When the political parties opposite sought a mandate from the people at the recent general election to amend the banking legislation of this country they deceived the people inasmuch as they led them to believe that they proposed only to repeal the Banking Act 1947, which provided for the nationalization of banking. They did not tell the people that they also proposed to emasculate the 1945 legislation, by restoring control of the Commonwealth Bank to a board. They knew very well that, in any event, it was not possible for La’bour to nationalize the banks, even if it were returned to office, because the courts had already declared that nationalization was ultra vires the Commonwealth Constitution. Furthermore, let me remind supporters of the Government that whel their political parties went to the country at the 1946 election they made the Commonwealth Bank Act 1945 a vital issue, and declared that they would restore the control of the Commonwealth Bank by a board. At that election they were thoroughly thrashed, and it is clear that the people were not in favour of handing over the bank again to the control of a board. During the recent election campaign the anti-Labour parties cunningly evaded the real issues. Had they told the people that they proposed to destroy the 1945 legislation they would not have won the election. We all know that the banks and the private financial institutions spent colossal sums of money before and during the election campaign, and that an army of bank clerks canvassed the citizens of Australia endeavouring to influence them to vote against
Labour. Although the directors of the banks spent large sums of money on their campaign, in the long run it will be found that it will be the people of Australia who will pay for the defeat of Labour at that election.
It has been said by honorable senators opposite that our national finances are bouyant, and that depressions are a thing of the past. Have honorable senators opposite learned nothing from the past? Do they know nothing of the bank smashes that occurred in the United States of America during the depression, when the government of that country had to meet the liabilities of the private banks? I invite the attention of all honorable senators to an important news item which appeared in the Daily Telegraph of the 3rd March last, under the heading “ Corps for Workless - Aid Plan in Senate “. It reads*-
Eleven United States senators have introduced a hill to re-establish the Civilian Conservation Corps.
That is a very nice name for an unemployed camp ! I recall that in Western Australia during the depression young boys of eighteen years of age were encamped at Wiluna, where they were earning a few shillings for a couple of days’ work a week. They were separated from their families and social amenities of all kinds, and were virtually reduced to degradation. If they left the camp to return to their homes they were told “to get back to the camp, otherwise they would not receive any sustenance payment. In every way they were ostracized. The report dealing with conditions in the United States of America that I was reading continues -
President Roosevelt set up the C.C.C. in the depths of the depression in the years between the world wars.
The Senate Bill proposes to put unemployed men to work on soil and forestry conservation, pay them £27 a month, with food and lodging. Senators estimate that 500.000 men between the ages of 17 and 23 are jobless in the United States, and without early prospect of getting jobs.
Senator Malone (Republican, Nevada), speaking on the bill in the Senate, said about fi.000.000 people in America were out of won;. He said the number only partly employed was probably 12,000,000. (Population of the United States is about 150,000,000.).
Latest available official statistics give the number of registered unemployed in January as 4,4SO,000. In January, 1U49, the number was 2,004,000. Last January’s total increased in February because of the coal strike, and because unusually severe weather slowed down the construction industries. Despite the increased number of unemployed, the number at work increased from 55,104,000 in January, 1949, to 50,947,000 last January.
Honorable senators must realize that although we are at present enjoying comparative prosperity, which is due very largely to the profitable contracts made by the previous Labour Government for the organized marketing of our wheat and other primary produce overseas, we cannot afford to ignore the possibility of a serious recession in overseas markets. Incidentally, I take the opportunity to emphasize the fact that the Government of the United States of America conceded a great deal to Australia, particularly in the negotiations which culminated in the International Wheat Agreement. Had the United States said : “ We do not want you in the wheat agreement “, that country would not have sustained any loss, because the United States has plenty of markets for its wheat, but we would have lost a great deal. The point I desire to make now is that it would not have been possible for a Labour Administration, or, for that matter, a government of any political colour, to obtain the finance necessary for such large overseas export schemes had it not been for the cooperation of the Commonwealth Bank. Had the bank still been under the control of a board that co-operation would certainly not have been forthcoming. Because of the importance of the matter, T repeat that whilst our present economy is buoyant, it is by no means secure; and if the Commonwealth Bank is again to be placed under control of a hoard we hav*. no assurance that that institution will continue to act as the mainstay of our national economy. As I said previously, the people of Australia were not told, and they certainly did not expect, that the present Government would interfere with the existing control of the Commonwealth Bank. The Labour party is convinced that the present control of the bank cannot be altered to advantage, and that the re-appointment of a board to direct the bank’s policy will enable the Government to evade its responsibility for the soundness of the national economy. Although the bill contains certain provisions designed allegedly to enable the Parliament to decide any major differences of opinion between the Government and the proposed board on matters of banking policy, the fact remains that the only chance the Parliament will have to review the activities of the proposed board will be when something has gone seriously amiss. The bank could be gradually but effectively strangled by the proposed board, acting in the interests of private financial concerns, and the Parliament would not be officially informed of the matter until the Treasurer chose to inform it of the fact that something had gone wrong. Since the present control of the bank cannot be improved, it is inevitable that the efficiency of that institution will suffer. The powerful financial institutions which financed the campaigns against Labour before and during the recent election want to restrict seriously the competitive activities of the bank, and if the proposed board is established, I have no doubt that those financial institutions will be adequately repaid for the money that they expended on their campaign. Indeed, it will probably show them the best return for their money that they have ever received. I consider that it is the duty of every honorable senator to analyse the position, and if he does so fairly I think that he must come to the conclusion that the re-establishment of a bank board must seriously retard the progress of the Commonwealth Bank, which will, in turn, adversely affect the development of this country.
– I support the bill for a number of reasons. It will give effect very definitely to the policy placed before the people of Australia by the Liberal party and the Australian Country party at the general election on the 10th December last. In spite of the contention of members of the Opposition that we have no mandate to do what the bill proposes, the fact remains that the case for amending the banking legislation was put before the people very clearly. We told the people of the country the conditions that existed. Without attempting to hoodwink them in any way, we told them that we would repeal the Banking Act 1947. Members of the Labour party said that there was no necessity to repeal that legislation because it was already a deadletter as the result of the decisions of the High Court and the Privy Council. Whilst there may have been some substance in that argument, we considered that it was too dangerous to leave the 1947 bill on the statute-book because it might provide an opportunity in the future for another hack-door attempt to nationalize the banks of Australia. We therefore made it very definite that no opportunity would be left to nationalize the banks if we were elected to office, and the result of the election indicated justas definitely that the people were opposed to nationalization and that they did not approve of the attempts made by Labour to take from the people their rights, including their freedom to trade with any one whom they desired. We therefore propose to honour our promise, first, by repealing the 1947 legislation. In addition, we are attempting to amend the Commonwealth Bank Act 1945. We said very definitely that that act would be amended, and that we would appoint a board to manage the Commonwealth Bank. The present bill provides that the policy of the Commonwealth Bank is to be decided by a board that will be appointed in accordance with its provisions. I say, therefore, in reply to the criticism that we have no mandate to do what we propose under this measure, that we have a very definite mandate from the people to do so. It has been claimed that the 1945 banking legislation was endorsed by the people at the 1946 general election because the Labour party was then returned to power, but it has also been said that the fact that we said during the 1949 general election that, if returned, we would establish a Commonwealth Bank Board, does not mean that we have a mandate to do so. I cannot fellow that argument. I admit that during the 1946 general election we said that, if returned, we should review the 1945 banking legislation, but at that time the people did not know how far the Labour party was prepared to go in regard to banking. At the 1946 general election it presented no definite policy and asked for an open cheque. It said, in effect, “Trust us, and we shall continue to govern the country in the way in which we think it should be governed “.
– It governed well.
– The people did not say so on the 10th December last year. After the 1946 general election, the Labour party did something for which it had no mandate. It introduced the Banking BiB 1947, which provided for the nationalization of private banks. I repeat that we have a mandate to amend the 1945 legislation in the way that is proposed in this bill.
We propose to do two things, first, to repeal the. Banking Act 1947 - an obnoxious measure that the people have refused,, in no uncertain manner, to supports - and secondly, to establish’ a Commonwealth Bank Board. I cannot accept the contention of honorable senators opposite that we have no mandate for the establishment of a board and that we are proposing to establish it at the instigation of the private banking institutions of this country in order to honour a promise that we made to them. Nothing is further from the truth than that. It has been alleged that we wish to smash the Commonwealth Bank. We have no intention to interfere in any way with the ordinary working of the bank. Indeed, we propose to give it an opportunity to provide increased facilities. Under the terms of this measure, a sum of money greater than that provided by the Labour party will be paid to the bank each year until a specified limit is reached. The Commonwealth Bank will, therefore, be able to extend its ordinary trading operations. Instead of trying to hamstring the bank, as has been suggested by the Opposition, we propose to give it an opportunity to extend its operations and make it an even greater institution than it now is.
If the Australian public believe that the arguments adduced by the Opposition in this debate are sound, they can have no other opinion of the members of the Liberal party and the Australian Country party in this Parliament than that they are a mob of robbers and deceivers of the community. Honorable senators opposite have said that we have set out deliberately to smash the Common-wealth Bank and to establish a board in order to hand over to private financial institutions the control of the bank. Nothing is further from the truth than that. Although the Commonwealth Bank Board could have been improved, it did some remarkably good work during its existence.
– Is the honorable senator referring to the old board ?
– Yes. It helped to finance World War I. If the chairman of that board was the dreadful individual that some honorable senators opposite would have us believe he was, why did a Labour government, in the depths of a depression, re-appoint him when his term of office expired?
– It was faced with a hostile Senate.
– The appointment of the chairman of the board was a matter for the Government. The Government that was in office then had an opportunity to drop him, but instead it re-appointed him so that he could continue to do the dreadful work that it has been alleged he did for some years previously. Let us consider some opinions of Sir Robert Gibson that have been expressed by nonpartisan writers. Dr. Jauncey, who, if he leans in any direction leans towards Labour, had this to say -
Sir Robert Gibson, as chairman of the board of directors of the bank, has played an important part in the finances of Australia during the depression. Acting conservatively, he has always had the welfare of Australia at heart. He has kept the bank in a sound financial condition. Believing central banking to bc the main purpose pf the Commonwealth Bank, Sir Robert Gibson has kept in close touch with leaders of the Bank of England. He has shown courage at times in defying the banking interests of Australia.
The statements that have been made about the Commonwealth Bank Board by honorable senators opposite are not established by the facts.
We propose to amend the Commonwealth Bank Act 1945 and to provide for the establishment of a new Commonwealth Bank Board. Much has been said about the proposed members of the board. Having listened to honorable senators opposite, one could be pardoned for assuming that it is proposed to establish the board only in order to deceive. The Government, having given the matter carefid consideration, is of opinion that the activities of the Commonwealth Bank have developed to such a degree that the bank should no longer be controlled by one person. As honorable senators have said, the Commonwealth Bank is the greatest financial institution in Australia. Surely the Opposition should not object to it being controlled by a board. Important industrial organizations do not leave the management of their affairs to one individual. When the Labour party was in power it established many boards. If it were consistent in its arguments, those boards would have been one-man boards, but they were not. The reason why they consisted of more than one man was that the Labour party realized that the opinions of a number of individuals were of greater value than the opinion of one individual. It is natural that if a board consists of a number of persons who have been trained in business operations, there will be greater stability in the management, control and policy of the organization for which it is responsible than there would be if the board consisted of only one man. That is the very definite view of the Government in relation to the proposed Commonwealth Bank Board. We have no desire or intention to do anything that will injure the Commonwealth Bank. It has an important function to perform. It has played, and will continue to play, an important part in the economy of this country.
The board will be responsible for formulating the policy of the bank. If a policy formulated by the board were contrary to the policy that the Government of the day considered should be adopted, and if there were a disagreement between the Treasurer and the board, provision is made in the bill to safeguard the position that would then arise. As the Attorney-General (Senator Spicer) has said, in the final analysis the policy of the bank is determined by the elected representatives of the people. Lf the board and the Treasurer disagree upon policy, a copy of the statement furnished to the Treasurer by tho board will be laid before each House of the Parliament, and the Parliament will have an opportunity to express its opinion on the matter. It is unlikely that there will be any disagreement except upon important issues. If the Labour party considered that the Treasurer, by adopting a policy different from that advocated by the board, had acted wrongly, would it not at the very first opportunity take action to ensure that the community at large was informed of the position and so embarrass the Government, if necessary by a censure motion, that the Government would have no alternative to going to the people? We have heard it said that there will never be a disagreement or a report back to the Treasurer. I wonder why honorable senators opposite have that idea? What do they seek to imply? Do they mean that the board that it is proposed to appoint will carry out a policy in accordance with the wishes of the trading banks, and that the Treasurer will then willingly agree with that policy? I do not for a moment think that honorable senators opposite believe that contention themselves. They are merely trying to raise an argument to justify their opposition. Only on major issues will there be a disagreement. In the last analysis any disagreement will be referred to the Parliament to be resolved. The Opposition seems to fear that there will be appointed to the proposed board men with sufficient power to decide upon a policy that will be detrimental to both the Commonwealth Bank and the community. One honorable senator opposite went to great lengths to endeavour to prove that no matter who was appointed to the proposed board he would be interlocked with every banking institution in Australia, and that anybody appointed would, in effect, be a representative of the private banks. I have never before heard anything so stupid. Can it be logically claimed that if directors appointed to the proposed board owned shares in various industrial companies in this country, those industries would be interlocked with the private banks, and that therefore the Commonwealth Bank would have to carry out the policy of the trading banks? That is a futile and stupid contention.
– Apparently the honorable senator has convinced himself to the contrary.
– The functions of the Commonwealth Bank will be continued. The bank’s ordinary operations will not be interfered with. It was established originally as an ordinary banking institution. As it became apparent that the bank could carry out other functions it was expanded. A Rural Credits Department was established by the present Minister for Health (Sir Earle Page), when he was Treasurer in a former non-Labour government, and has performed excellent work. It has assisted primary producers in. many ways by temporarily financing board that have been established to handle the marketing of their produce. Statements by the Opposition that that department of the bank has given hundreds of millions of pounds to the primary producers of this country are incorrect. In fact, quite the reverse is the case. I admit readily that wheat pools are financed temporarily by the Commonwealth Bank. However, although the bank makes first advances, ultimately that money has to be repaid as an ordinary banking operation. Wheat boards that were established under the previous Administration were ministerially controlled, and under ministerial direction wheat was sold at prices far below export parity. No less than £97,000,000 was contributed to the people of Australia by the wheat producers through boards that were established and administered by the former Labour Government. Honorable senators will recollect that at a time when the world parity price of wheat was about lis. a bushel, that commodity was sold to New Zealand by a Labour government for 5s. 9d. a bushel.
– In return for what?
– That was in return for an agreement in connexion with leather. However, only £35,000 worth of leather came into Australia as a result of that arrangement. Wheat has also been sold for home consumption and the feeding of poultry and stock in Australia at prices many shillings a bushel below export parity. The producers have been expected to accept prices 10s. and lis. a bushel lower than world parity. Yet honorable senators opposite claim that the primary producers of this country have received remittances from the Commonwealth Bank and the Government amounting to hundreds of millions of pounds! L agree that the primary producers of this country are better off to-day than ever previously. However, that is not due to the action of any government. No government is entitled to credit for the high prices at present being received for our primary produce.
– The farmers should have been left alone.
– I agree that they should have been left alone. I consider it unfair to ask the primary producers of Australia to subsidize New Zealand and every industry in Australia that uses wheat. That is the responsibility of the community as a whole. Although I had no intention to refer to this matter I could not allow to pass without challenge statements that the primary producers of this country are being subsidized to the extent of hundreds of millions of pounds.
The Rural Credits Department of the Commonwealth Bank was established by an anti-Labour government. It has been of tremendous assistance to the primary producers, and has expanded considerably. Honorable senators will agree that there must be a method of financing payments until the proceeds of sales of primary produce have been received. Although the Mortgage Bank Department of the Commonwealth Bank was established by a Labour administration it was originally contemplated in a measure that was prepared by the present Minister for National Development (Mr. Casey), who was Treasurer in a non-Labour government in 1938. Because of the outbreak of the war the measure was not proceeded with. However, it was available for succeeding governments.
– What about the Industrial Finance Department of the Commonwealth Bank?
– That department wasestablished by a Labour government, and has been of tremendous value to the community. Although I admit readily that the Commonwealth Bank has been of tremendous value to the people of Australia, and will continue to be of great value to them, I do not agree that thereplacement of the Governor of the bank by a board will adversely affect its operations. From its inception to June, 1949,. the trading section of the Commonwealth Bank had earned a profit of £19,000,000. The profit of the Note Issue Department during that period was £48,000,000, and the savings bank section earned a profit, of £17,000,000. In short, the bank earned a profit of approximately £84,000,000 in the period mentioned, lt is of interest tonote that the profits of the central and ordinary trading sections of the bank were approximately £11,000,000 duringthe period that a board controlled the bank, while the profit earned during the period that a board was not in control was approximately £9,000,000.
– But those profitswere in respect of different periods.
– There was a differenceof two years only. I am endeavouring to show that the operations of the bank, will not be adversely affected because of board control. During the last five years of the control of the former board therewas a period of great financial prosperity in this country, during which period theprofits should normally have been greater than at any other time. By establishing a board to control the Commonwealth Bank we shall only be following theexample of other countries in connexion with similar inatitutions. In CanadaSouth Africa and India, the central banks are under the control of boards. As the Attorney-General (Senator Spicer) pointed out, when the Labour Government in Great Britain nationalized the Bank of England in 1946. it retained the system of control by a board. The Government is merely honouring its promiseto the electors. The Labour party placed its policy before the people, and we placed ours. The people were the judges, and they chose our policy at the general election on the 10th December. They then declared that they wanted the Banking Act 1947 rescinded, and that they were agreable to the amendment of the Commonwealth Bank Act 1945 to provide for the restoration of the Commonwealth Bank Board. Ample safeguard’s have been provided, and the Government, far from hampering the Commonwealth Bank in its operations, proposes that those operations shall be extended, so that the bank will become a more useful institution than ever.
Debate (on motion by Senator O’Byrne). adjourned.
Motion (by Senator McLeay), agreed to -
That the Senate,at its rising, adjourn to Tuesday next, at 3 p.m.
Motion (by Senator McLeay), proposed -
That the Senate do now adjourn.
– I have received information from reliable sources which make. it clear that it is intended to remove the major part of the Adelaide mail branch, now situated at the General Post Office, to another site. It is proposed to erect a prefabricated building, single storey, of the Nissen hut type, with cement floor, on a block of land adjacent to Railway-terrace, Mile End, which is approximately two and a half miles distant from the General Post Office. I understand that it is to be a temporary building, and will be occupied for a period of five years, and that a shuttle motor service will be operated from the General Post Office to the new site. If this proposal is given effect, the headquarters of a large number of mail officers will be transferred from the General Post Office to Mile End. and whilst the new site may be nearer to the homes of a. small number of the workers, for the majority of them who live in the southern, eastern, northern and north-eastern suburbs, there will be double travelling time and higher fares. I understand that the mail branch section, which is to remain at the General Post Office, will consist of the city letter delivery section, the private boxes, posting facilities and registration section, whilst all the heavy work of primary and final sorting of both first and second-class mail matter will becarried on in the new building. It is complained that, after the change is made, the delivery of mail to the public will be considerably delayed. Although it has been estimated that the shuttle service will take only six minutes, business people have complained already that they fear a delay of half an hour in mail deliveries. Moreover, it has been estimated that an additional 50 to 60 men. will have to be employed, and that the added cost will be between £50,000 and £60,000 a year. Alternative suggestions have been. made. Officials have inspected a number of city buildings, only to find that they are not suitable for the purpose in view. I am informed, however, that the Postmaster-General’s Department owns a block of land in Currie-street, Adelaide, on the western side of Light Square, upon which a building could be erected. The block is only a little further removed from the main business centre of the city than is the General Post Office. I make strong representations to the Government to prepare now for the erection of a permanent building on a central site, rather than go, to the expense of erecting a temporary building in a suburb, as is proposed. I ask the Minister representing the Postmaster-General to have this matter investigated, so that adequate permanent facilities may be provided, instead of tinkering about with temporary accommodation. It should be possible to make a start on a permanent building now, and if temporary premises must be erected in the meantime, why not erect them within the square mile of Adelaide, rather than in a remote place two and a half miles distant, and almost entirely removed from passenger transport facilities? By using a central site, a large part of the estimated increased expenditure of £50,400 to £60,000 would &e saVed.
– I shall bring to the notice of the PostmasterGeneral (Mr. Anthony’) the matter mentioned by the honorable -senator.
On the 16th March, 1950, Senator Cooke, speaking on the motion for the Adjournment of the Senate, drew my attention to. the diet of patients at the Expatriation General Hospital, Hollywood, Western Australia. la my reply, I promised that I would make an immediate investigation of the matter. I -find that an independent survey of the catering arrangements at this hospital was made at the invitation of die Bepatriation Commission by catering officers ,of the Department of Labour and National Service some few months ago. The report submitted by these officers indicated thai the .catering arrangements, and the condition of the kitchen were quite satisfactory, except that some minor alterations were required. I quote the following extracts from the report : -
The standard <of service generally -was very good. Kitchen management- was of -a high standard and the flow of production was efficiently organized to allow a minimum of tine to elapse between the cooking and serving of meals.
Mentis are .pre-planned every week by the senior dietitian and provide a good variety of -dishes.
The quality of the meals served was excellent. An interesting feature of the food service in this hospital is the use of individual treys .to the .patients. .Each tray is equipped wish traycloth, salt and pepper shakers. This tray service involves very little, extra effort on the part of the serving staff but means a lot to the patients who often depend upon Hie attractive .presentation of a meal to whet their appetites. It is suggested that consideration could be given to the provision of Individual food covers to obviate temperature losses between the servery and the patient.
The standard of cleanliness throughout the kitchen block was good, and it waa obvious that all cooking equipment .was cleaned - regularly, and thoroughly. The use of kitchen garbage-cans with self-closing’ lids does much to overcome the menace of flies.
Adequate plant and equipment has been installed iu this kitchen with the exception of grilling facilities, and in this connexion it is recommended that two additional gas salamanders be purchased. The typo with the flue at the back should be most satisfactory as these could be installed on the present steel table with the existing salamanders on top. The legs of the table would need to be cut down to make the top set of grillers accessible. Most of the kitchen equipment is in a satisfactory condition hut Borne minor repairs are necessary.
The minor alterations to the kitchen, recommended by the catering officers, have been included in the plans for remodelling the kitchen already drawn up by the Department of Works and Housing. Negotiations are now being made for the early remodelling of the kitchen, including the laying of a new floor. The installation of the gas salamanders will be completed within a few weeks.
Question resolved in the affirmative.
Thi- following papers were presented: - (.and* -Acquisition Act - Land acquired for Postal purposes - Taverner’s Hill, Kew South Wales.
Seat of Government (Administration) Act - Notice of variation of plan of lay-out of City of Canberra and its environs, dated 4th May, 1950.
Senate adjourned at 10.13 .p.m.
Cite as: Australia, Senate, Debates, 11 May 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19500511_senate_19_207/>.