19th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– Has the Minister representing the Minister for Supply considered importing galvanized roofing iron, and if so, what quantity is involved? If galvanized iron is imported, will its use bo restricted to home building, and will it be allocated on a pro rata basis to the States?
– I understand that the Minister for Supply has considered proposals for the importation of galvanized iron. I shall inquire of him what quantity is involved, and supply the information to the honorable senator as soon as possible.
– On the 27th April
asked a question without notice concerning the appointment of a committee to inquire into the cost of the Government road-transport fleet. The Minister for Supply has furnished the following reply : -
Moat, Mason and Moat, Cartage Contractors, Sydney; and Mr. W. J. Dyer, General Manager, City Motor Service Limited, Melbourne. ‘
– I wish to direct a question to the Minister representing the Prime Minister. During the general elections campaign the Prime Minister (Mr. Menzies) when Leader of the Opposition promised the people that if returned as the government at Canberra, he would put value back into the £1. I am not quoting from a press report or from a magazine or any pictorial. Unfortunately the statement to which I shall refer did not appear in the press, but was broadcast by one of the radio stations in Launceston. It was to the effect that the Prime Minister gave an assurance to business people, whom he addressed during the Easter recess at Launceston, that it was not the responsibility of the Government to put value back into the £1. Will the Leader of the Government in this chamber confirm or deny that the statement was made by the Prime Minister. If it was made, was it correct?
– The honorable senator’s question shows how difficult Standing Orders are. The honorable senator was not quoting from a newspaper report but from something which is much more unreliable - his own recollection. I did not hear the Prime Minister make that remark, if in fact he did make it, but if the honorable senator is really interested, I suggest that he ask one of his colleagues to ask the Prime Minister in another place. I am sure that the Prime Minister will be able to give a very satisfactory answer.
– Evading the question again.
– As the Minister for Trade and Customs has just informed the Senate that the Government’s economic and financial policy is excellent, will he also inform us whether the purchasing power of the £1 has increased as a result of that policy since the Government took office last December 1
– I have not recently read the statistics prepared by our economists, but I shall examine the matter and supply the honorable senator with the information that the latest statistics reveal if the honorable senator is not prepared to look up statistics himself.
– I direct a question to the Minister representing the Minister for Works and Housing. I understand that under the war service homes building programme, many contracts are let to private builders and the settlement payment is very protracted, sometimes running into months and causing financial embarrassment to quite a number of the private builders who build war service homes under contract. Will the Minister take up with the Minister for Works and Housing the question of expediting the settlement of these payments?
– I do not know of any instance in which a payment by a government has not been protracted. However, I shall discuss the matter with the Minister for Works and Housing, and let the honorable senator know the result of that discussion.
– Will the Minister representing the Minister for Air ascertain whether a statement can be made to allay public anxiety about the cause of several recent crashes of Royal Australian Air Force aircraft 1 They include thedestruction of a Royal Australian Air Force Catalina at Georgetown, Queensland, a Royal Australian Air Force aircraft at Mount Walker, near the Amberley aerodrome, Queensland, a Royal Australian Air Force aircraft at Rooty Hill, New South Wales, and a Royal Australian Air Force Wirraway training aircraft near Geelong, Victoria. These crashes have caused the loss, within a few weeks, of many fine young men of great skill and experience in the handling of aircraft, and I should like to know particularly whether there is any suspicion of sabotage.
– I shall refer the honorable senator’s question to the Minister for Air and obtain a reply as soon as possible.
– I shall bring the matter that the honorable senator has raised to the notice of the Minister for Health, and obtain a reply as soon as possible.
– In view of the statement by the Minister for Trade and Customs that the rationing of tea and butter will be abolished nest year, and perhaps” much sooner, has he considered withdrawing the subsidy on tea? If so, what precautions does he propose to take to prevent distributors from holding stocks of subsidized tea, which should be sold at 2s. 9d. per lb., until after rationing has been abolished and the subsidy is withdrawn, so that they may sell it at 5s. 6d. per lb., which will be the unsubsidized price ?
– I do not know what newspaper report the honorable senator has read but if he has based his question on some statement that he has read in a newspaper, I have been misreported. I have not said when butter and tea rationing will be lifted. With regard to the protection of the public against the possibility of exploitation by merchants who might be tempted to make a profit on stock already held by them by selling at an increased price, every precaution has been taken to ensure that that shall not happen. On a previous occasion there was an increase in the price and the merchants were made to declare what tea they had in stock at that time. They were then made to pay back to the Tea Control Board the difference represented by the increase. If and when there is an increase in the price of tea - and I am not in a position to state whether there will be an increase or not - the public will be protected because the Tea Control Board is the only importer of tea”. The” board in turn distributes to about 25 wholesalers and they deal with the” retailers who sell to the public. There would be nd difficulty in the Tea Control Board making all the” wholesale merchants declare what stocks they had in hand. The board probably has that information because the merchants get replenishments against coupons. The board could insist that the amount by which the price of tea was increased would be paid back to the board and the public would be protected. There is no prospect of the public being fleeced.
– My question, Which is addressed to the Minister for Trade and Customs, relates to butter rationing in this country. We learned recently that Great Britain no longer requires to import some foodstuffs from Australia on the same scale as previously. Can the Minister say whether the position of Great Britain, in relation to butter supplies is such that the people of Australia may now look forward to an easing of butter rationing in this country until it is considered appropriate to abolish it ?
– Butte] rationing was imposed on the Australian people in the first instance for the purpose of making more butter available” for Great Britain. I understand that the butter situation in Britain is now improving, and that greater supplies are coming from Holland and Denmark. Exports from this country and New Zealand have also improved.
– The butter ration in Britain has been increased by 1 of.. a week.
– As Senator Collings has said, the butter ration in Britain was recently increased from 4 oz”. to 5 oz. a week. The Australian Government is maintaining regular contact with the British Government. I believe that conditions in Britain are still such that the British people’ require from Australia as much butter” as they cai! get. I am certain that’ the Australian people are prepared to suffer the inconvenience of butter rationing for a little longer if they believe that by so doing they are giving practical help and assistance to our kinsfolk in Britain, especially at a time when it is important for us to show that we are prepared to stand shoulder to shoulder with them in times of sunshine as well as- in times of difficulty. The day may come when Britain will say,- “ Thank you very much for your sacrifices on our behalf, but we no longer require you to impose rationing upon yourselves. We are now receiving adequate supplies”. If and when that day arrives the real purpos’e for which butter rationing in this coun’try” was first imposed will have ceased to exist.
– Will the Minister for Trade and Customs have prepared and place before the Senate a statement showing the consumption per head of butter and margarine in Great Britain, New Zealand and Canada?
– The staff of my department is hard-worked. The information for which the honorable senator has asked is contained in publications that are available in the Parliamentary Library, and I can refer him to them, if he so desires. It is somewhat unreasonable to expect my staff to extract the information. If the honorable senator encounters any difficulty in extracting it, or if what he is searching for is not to be found in the library, I shall make it available to him if I can get it.
– Following upon the answer that I received from the Minister for Trade and Customs I now inform him that I desire that the office in charge of his department supply him with the information that would enable him to answer my previous question, if it is possible for that officer to do so. I have no desire to seek the information in the Library. I wish to have up-to-date information about the size of the fat ration, including butter and margarine, that the people of the United Kingdom receive as well as of the similar ration in Canada and New Zealand. If the Minister were to obtain that information from his department he would have the opportunity to give a fair answer to the question that I asked previously.
– I can let the honorable senator have an answer to his modified question to-morrow. In fact, I could give him an answer now, but the information in it would be from recollection only. However, as the honorable senator appears to wish to know the amount of fat ration including butter and margarine for ordinary domestic consumption in the United Kingdom, Canada and Australia, I shall be able to give him the information.
– And also in respect of New Zealand?
– Butter rationing is no longer in force in New Zealand.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
In view of the success of the dairy-farming industry in Sweden in making powdered butter, which, according to a report appearing in the press, can be stored indefinitely without becoming rancid, will the Minister institute inquiries re prospective supplies for use in the tropics and sub-tropics of Australia?
– The Minister for Commerce and Agriculture has supplied the following answer: -
From the limited information available in Australia the Swedish product referred to would appear to be u dried cream containing about 7s per cent, butter fat. This could be made in Australia if so desired. A product known as butter concentrate which contains over 90 per cent, of butter fat and which keeps in the tropics is now manufactured in Australia.
– Does the Minister for Trade and Customs agree that, in opening the Nineteenth Parliament, His Excellency, the Governor-General, said that the Government realized that the increasing cost of living accentuated the difficulties of age and widow pensioners? As the Governor-General’s Speech also indicated that the Government was closely investigating the matter, and believed that its economic and financial policy would result in an improvement of the purchasing power of the currency, thereby benefiting pensioners and other fixed income groups, will the Minister inform the Senate of the Government’s financial and economic policy? I should like to know also whether the application of that policy has improved the purchasing power of the currency since the 10th December last?
– I am rather astonished that any one of the honorable senator’s experience in this chamber should ask for a statement of policy in reply to a question. However, I shall take him into my confidence and assure him that the Government’s policy is excellent, and, I am sure, will satisfy the people.
– Will the Minister representing the Postmaster-General do whatever he can to increase the salaries paid to junior postal employees and to provide a living-away-from-home allowance for employees while they are away from home and undergoing training?
– I shall he pleased to bring the honorable senator’s representations to the notice of the PostmasterGeneral.
– In view of the declared policy of the present Government that it stands for free enterprise, will the Minister for Trade and Customs say whether it is in accordance with that policy that an individual who has built up a hire car business in Canberra, and is operating two vehicles, should be prevented by governmental action from disposing of that business, notwithstanding that the business is conducted from his private home and that the state of his wife’s health requires that he should do so?
– I am not aware of the circumstances to which the honorable senator has referred and I do not even know whether the licensing of hire cars or their sale is controlled directly by the Government or i3 a matter for the local authorities. However, I assure the honorable senator that it is not the policy or the desire of the Government to interfere unduly with private enterprise except insofar as the public good requires it.
– I preface a question to the Minister representing the Postmaster-General by saying that I asked a similar question of the previous PostmasterGeneral and was advised that a report was being obtained. The question relates to the provision of more adequate facilities for persons in country districts, and in the City of Melbourne, who desire to utilize the telephone system to make long-distance trunk calls. Can the Minister inform me whether it has yet been decided to improve those facilities?
– I shall be pleased to bring the matter to the notice of the
Postmaster-General, and I hope to let the honorable senator have a reply at an early date.
– Reference has been made from time to time to the threat presented to the hop-growing industry in Tasmania by the operation of prices control. Will the Minister representing the Minister for Commerce and Agriculture say whether it is not a fact that price fixing in that State is the sole responsibility of the Tasmanian Labour Government? Furthermore, as the rest of Australia is dependent upon the industry, will the Minister for Commerce and Agriculture inquire into the relationship between the price fixed for hops and the actual cost of production?
– This matter was raised by Senator Wright on the 27th April. Since then the Minister for Commerce and Agriculture has furnished the following information in answer to the honorable senator’s question : -
In consultation with the Minister for Agriculture of Tasmania, I arranged a conference which was held in Hobart in April. Representatives of the growers, Agriculture Departments of Tasmania, Victoria and New South Wales, the Tasmanian Prices Commissioner, and the Commonwealth Departments of Health, Trade and Customs and Commerce and Agriculture attended. Valuable results will follow the conference as production problems of the industry were discussed and they are now being examined in greater detail. It is intended to hold further discussions to establish the relevant facts.
– I ask the Minister representing the Minister for Commerce and Agriculture whether the reply that he has just given to Senator Wright is ako applicable to question No. 20 on the notice-paper, which stands in my name?
– If the reply is satisfactory I suggest that it will do. If the honorable senator does not consider that it is satisfactory, I shall supply him with another and more detailed reply to his question.
– Some weeks ago the Minister for Fuel, Shipping and Transport stated that coal from
Callide Valley in Queensland was to be made available for the production of gas and electricity in Melbourne. That statement was denied on behalf of the Premier of Victoria. Can the Minister now tell the Senate when the Callide Valley coal will arrive in Melbourne?
– -I cannot tell the honorable senator that, but I can advise him that the .first shipment of Callide Valley coal that went to Victoria was of poor quality. Nevertheless the Premier of Victoria has very generously agreed to take a further shipment. That information has been conveyed to the Minister of Mines in Queensland who has been requested to ask mine-owners to negotiate direct with the Victorian Government and to indicate the quantity, quality and the price of coal to be shipped.
– Can the Minister for Trade and Customs advise the Senate how much the cost of living has increased since the 10th December?
– If it has increased at all I know that it has not increased to anything like the degree to which it. increased in the declining days of the Chifley Government.
– In view of the extra dollars involved in the purchase of «petrol that was released from rationing in accordance with the election promise of the Government parties, and of the fact that only a limited amount of dollars are available to Australia for purchases overseas, will the Minister for Trade and Customs give me an assurance that the vitally urgent supply of spare parts for motor vehicles and tractors and of other urgently needed commodities will pot be reduced as a result of an increased expenditure of dollars on petrol?
– Th« honorable senator is apparently unaware of the arrangements in connexion with what we call our dollar budget. Petrol finance is something apart from the general dollar budgetary position, and the purchase of petrol has not interfered .a$ all -with the purchase of commodities for -which dollars :are allocated..
asked the Minister representing the Minister for the Interior, upon notice-^
– The .Minister for the Interior has supplied the following answers : -
– I have to inform the Senate that the following changes have been made in regard to the officers in attendance in the Senate chamber : - A new position of Second Clerk-Assistant has been created, and Mr. W. I. Emerton has been promoted thereto. He will be succeeded as Usher pf the Black .Rod and Clerk of Committees by Mr. J, JJ. Odgers.
Debate resumed from the 16th May, 1950 (vide page 2616), on motion by Senator SPOONER -
That the bill be now read a second time.
– This is a bill to repeal the Banking Act 1947 and to amend the Commonwealth Bank Act 1945-1948. Its introduction, is in my opinion, just one more round in the long fight between the crusty-backed tories- and the Labour party on this issue. In the latter part of the last century Labour party candidates contested an election for the New South Wales Parliament on the issue that a Commonwealth Bank should be established. Mr. King O’Malley was elected as an Independent to the first Commonwealth Parliament in 1901, after he had advocated on the public platform the establishment of a Commonwealth Bank. It was not until July, 1908, that he joined the Labour party because he had by then realized that he could make no progress as an Independent against the forces opposed to the establishment of a Commonwealth Bank. Ever since the bank was established in 1911, there has been a series of moves and counter-moves in connexion with it. The Labour party has struggled for its retention and extension ; the parties opposed to Labour have tried to restrict its operation, and to defeat the purpose for which it was established. After the first world war, the private bankers and the greedy profiteers who had made hay, not while the sun shone, but while the land was darkened by the clouds of war, came out of their funk holes, and pressed for the establishment of a board to control the Commonwealth Bank. It was during one of the most hopeless and dithering regimes that we have ever had in Australia - that of the Bruce-Page Governments - that the Bank Board was appointed, and began to apply a policy that was in keeping with the world’s decaying economy of that day. Australia passed through a boom, and then slid into a slump, during which the Commonwealth Bank Board exerted its influence against the Scullin Government, which was trying to miti gate the effects of the depression. The board, and those who supported it, succeeded in defeating the Scullin Government. During the depth of the depression, the Commonwealth Bank Board issued a report in 1932 from which I quote the following sentence: -
The board clearly indicates that any further amounts required for public works will not be financed by the bank, but must be obtained from the market.
The effect of the Commonwealth Bank Act 1945 is to ensure that it shall be the duty of the Commonwealth Bank, within the limits of its powers, to apply a monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers under the act in such a manner as, in the opinion of the bank, will best contribute to the stability of the currency, the maintenance of full employment, and the economic prosperity and welfare of the people of Australia. That is the key note of democracy. This bill, which seeks to amend the Banking Act 1945, is redundant and has no economic purpose. It is completely political and plans to interfere with an organization which has done magnificent work under the able management of the present Governor of the bank, Dr. Coombs, his predecessor, the Advisory Council and a competent staff. Honorable senators on the opposite side have agreed that the Commonwealth Bank is efficient.
I have before me a report of the Commonwealth Bank for the year ended the 30th June, 1949. The profit and loss account shows that the net profit for that period, including the note issue department and the savings bank, was £7,683,000 after making provision for contingencies. This profit compared with £7,175.000 in 1948 showed an increase of over £500,000. Of the aggregate profit, £5,576,000 was paid to the Commonwealth Treasury and of that amount £4,460,000 went to Consolidated Revenue and £1,116,000 to the National Debt Sinking Fund. Thus the profits of the Commonwealth Bank went back to the people who, indirectly, are shareholders. In addition, £600,660 was paid to certain States, and the balance of £1.507.000 was credited to capital and reserve funds of the bank and the savings bank as provided by law. Those activities clearly show the bill now before the Senate to be completely unnecessary. By the introduction of the bank board, the Government hopes to interfere with a highly efficient organization. It also plans to put its “ stooges “ in the General Banking Division of the Commonwealth Bank. Supporters of the Government admit that many features of the bank are desirable and provision is made in the bill for the expansion of certain avenues of business, but the General Banking Division of the bank operates in active competition with the private banks and the whole pattern of the Government’s scheme is to change the attack that was made previously on the private banks. At one time there were numerous calls for a referendum. Catch-cries alleged interference with private enterprise and the stifling of competition. Now the Government proposes to reverse its tactics by establishing a bank board so that it can stifle the competition of the Commonwealth Bank.
The General Banking Division of the Commonwealth Bank has continued to expand. To the 30th June, 1949, deposits showed an increase. Loans and advances moved from £25,000,000 at the 30th June, 1948, to £39,000,000 at the 30th June, 1949. Housing loan advances included 3,100 new Credit Foncier loans. The Rural Credits Department advanced £3,500,000. Members of co-operative societies were assisted, and loans to them reached £217,000,000 compared with £181,650,000 the previous year. Those figures show a big expansion in housing loans and rural credits. Both are important features of the Australian economy. Loans were not high last year in the Mortgage Bank Department because of high prices for primary products and good seasonal conditions, but an aggregate amount of £731,000 was lent to 379 new borrowers. Those figures demonstrate that in the field where financial assistance is necessary, the Commonwealth Bank is carrying out its national functions. In the Industrial Finance Department there has been no abatement of the demand for financial assistance and during the year 25,306 advances totalling £13,979,000 were approved. Depositors’ balances in the Common- wealth Savings Bank increased by £17,000,000 and eleven branches were opened making 415 branches operative. The activities of the bank were infinitesimal in 1932 compared with present operations. Banking facilities are also available at agencies and special facilities have been provided for immigrants. I have drawn attention to this report because I wish to emphasize that the main point of the amendment of the Banking Act 1945 is the creation of a bank board. The proposed board will undoubtedly throttle the General Banking Division of the Commonwealth Bank as the Government intends it to do. The private banks were vigorous in their opposition to the Labour Government’s nationalization proposals, but their silence on this legislation is most noticeable. Clearly the Government has some ulterior motive in seeking to re-establish the Commonwealth Bank Board. Honorable senators opposite have failed to advance a reasonable argument in support of this interference with the present constitution of the Commonwealth Bank. The silence of Labour’s traditional opponents on this legislation makes them most suspect. There is no talk of a referendum now. In a democratic economy, the people should have full control over economic policy, including the expansion of credit, through their representatives in the Parliament. That is their undeniable right. The Government pretends that the establishment of the Commonwealth Bank Board will give to the Parliament control over the Commonwealth Bank’s policy, but, in a subtle back door way, this bill actually takes that right away from the Parliament. The provisions under which documents relating to a dispute between the Commonwealth Bank Board and the Treasurer shall be laid on the table of each House of the Parliament are a mere facade of democracy. What can we do when the documents are laid on the table in this chamber? We have not the power to do anything. We could debate the documents as we do a statement on international affairs, but we have no power to act.
The present Government parties have taken a complete somersault in their banking policy. They have opposed the Commonwealth Bank ever since its foundation, yet we now Lear them approving of it. The present constitution of the Commonwealth Bank was approved by the people of this country at the 1946 general election, and I am certain that when they are fully informed of this Government’s proposals and the issues are clarified, they will pass judgment on those who cashed in on the confusion that existed during the recent general election period. It is of the utmost importance that the resources of the Commonwealth Bank should be available to assist in the maintenance of full employment. As I have said, there is no talk of a referendum now <>n the proposal to re-establish the Commonwealth Bank Board, or on the Government’s interference generally with an efficient organization that has proved itself down the years. If ever there was a need for a slogan it exists now. Our slogan should be “Hands off the Commonwealth Bank “. The provisions of this legislation which make the Government the final authority in banking policy sound very fine, but the real reason behind the proposal to reconstitute the Commonwealth Bank Board is to prevent any future government from giving effect to its financial policy as circumstances prevailing at the time warrant or to hinder the application of that policy. We are enjoying a wave of prosperity at present, and the effect of this vital alteration of the constitution of the Commonwealth Bank may not be immediately noticeable, but any one who has any knowledge of economic cycles knows that inevitably the present boom period will be followed by a slump. The Commonwealth Bank as at present constituted would not make the mistakes that it made in the past under board control. I have already instanced the bank’s failure to assist a government in time of need. The board informed that Government -
In saying this the board clearly indicates that any further amounts required by public works would not be financed by the bank.
That was the attitude of the Commonwealth Bank in the last depression, and it must be completely reversed in the next depression.
– Who is going to bring the next depression?
– In the proposal to reconstitute the Commonwealth Bank
Board, and in the Government’s economic policy generally, are the seeds of a depression. I believe that a depression is on its way now, but it will not come quite the same way as the last depression came. The capacity of the Australian people to buy goods is fast diminishing. Since the lifting of prices control, the purchasing power of the Australian £1 has fallen rapidly, with the result that to-day, people earning up to £S a week are not able to buy the necessaries of life. Therefore it will not be long before factories and other producing organizations find that they are unable to sell their goods. For instance, in Launceston, Patons and Baldwins Limited have found it necessary to dismiss an entire shift because of the reduced sale of knitting wool at present prices. Knitting wool to-day is beyond the reach of wage-earners. The abolition of the shift meant that last week and the week before hundreds of people were thrown out of work. The honorable senator who interjected, and all her political colleagues must share the responsibility for that. They confused the people, by telling a pack of stories. They said that the States could control prices. We know now that people throughout the length and breadth of the country want prices control to be reintroduced, and that fact answers the interjection made by Senator Robertson a few moments ago about the identity of those who will create the next depression. The destruction of goods and materials in war-time inevitably creates a grievous shortage of goods during the aftermath of war. During war huge sums of money are circulated amongst the community. That has the effect of inflating the prices of goods and services, and the only way in which a nation’s economy can be controlled is by prices control.
In presenting this measure to the Parliament the Government has stated that it represents a step towards more democratic control of the Commonwealth Bank. However, as I have pointed out, the bill will not achieve anything of the kind, because it will replace control by the Government of the Commonwealth Bank by a system that provides merely for the presentation to the Parliament of certain reports and papers in a particular contingency. What jurisdiction the Parliament will have over the bank is not stated, and it would appear that the Parliament’s control of the bank will be confined to examining certain papers when they are laid on the table. In any event, we have never witnessed the introduction of a progressive financial policy by any anti-Labour Administration. If the anti-Labour parties that are now in office had really desired to effect some progressive reform in our financial system they could quite easily have done so under the existing legislation. However, they are not satisfied with that legislation. For the past three years they have been endeavouring to upset it. Their friends initiated proceedings against the Commonwealth in the High Court, and subsequently a very lengthy appeal was decided by the Privy Council. Some of the judgments given by the judges of both tribunals will undoubtedly come to be regarded as historic documents. The importance of the proper control of banking is that national policies of credit and full employment are associated with our banking system. The present trend in Tasmania, where, as I mentioned a few moments ago, supply is exceeding demand because of increased prices, causes us to think deeply of the similarity between present conditions and those which prevailed from 1930 to 1932. We know that a government may make or break a country by the wisdom or otherwise of its financial policy, and may even avert a depression.
The Government’s intention to appoint the present Governor of the Commonwealth Bank and certain public servants to the proposed board is more or less a sop to those who criticize the bill. The plain fact is that the seven “ additional “ members of the board - which, by the way, was to have been a small one - could become a fifth column. “Additional” members will undoubtedly be chosen from people with long banking experience. Although the bill provides that appointees to the proposed board must not be in the employ of a bank at the time of their appointment, there is nothing to prevent a person who has retired from a bank from being appointed. Persons who have had a lifetime’s experience of orthodox and outmoded methods of finance before they retired from banking will, therefore, be quite eligible for appointment, and if they are appointed to the proposed board they will undoubtedly endeavour to mould the board’s policy in accordance with their ideas. The cry of such people always is: “Hold your ground; protect your privileges. We know of the growing demand by the masses of the people, but let us protect our privileges and keep the people out”. That has been their theme down the years, “ Let us keep them out “. For that reason I have no hesitation in describing the appointees to the proposed board as potential fifth columnists. If we want to undermine our enemies we place stooges in their midst. It has been said many times that this bill represents a pay-off to the private banks for their support of the antiLabour parties-
– I rise to order. I object strongly to the honorable senator’s remarks.
The DEPUTY PRESIDENT (Senator Nicholls). - No point of order is involved. The honorable senator is speaking generally and is not reflecting on any individual.
– His reflection is offensive to me.
The DEPUTY PRESIDENT. - Order! No point of order is involved. Senator O’Byrne will continue his remarks.
– This measure is designed to repay those who assisted in the campaign against the nationalization of banking and in the recent Commonwealth election campaign, who hoped that if the anti-Labour parties got into power they would be able to attack what Labour had done during its term of office. There is no greater difference of policy between the political parties opposite and Labour than that which exists on banking, and the control of the Commonwealth Bank. The vital principle involved is the principle of liaison between the people’s representatives in the Parliament and the Commonwealth Bank. By means of the measure, the Government is endeavouring to drive a wedge between the Commonwealth Bank and the Parliament. If it were passed, the Commonwealth Bank would become the instrument of the private banks.
Before the bank nationalization legislation was introduced, many persons tended to forget that, through the years, some private banks had been engaged in establishing a banking monopoly. There were 21 private banks in Australia in 1917, but by 1931 the number had been reduced to nine, and a small group of private banks had what was in effect a monopoly of the general banking business of this country. Between 1917 and 1931, twelve banks were absorbed by other banks. Three were absorbed by the Bank of New South Wales, one by the Commercial Bank of Australia Limited, four by the National Bank of Australasia Limited, three by the E. S. & A. Bank Limited, and one by the Commercial Banking Company of Sydney Limited. A fairly substantial monopolistic ring of private bankers was formed. The growth of that monopoly called for very strong action. It could be countered only by extending the activities of the Commonwealth Bank. As I have already said, the bank has been allowed to extend its activities only when it has been under the control of a Governor. The history of the bank shows clearly that its activities have expanded under the control of a Governor, and contracted under the control of a board or stooges. For that reason, the slogan of members of the Labour party in the Senate and the House of Representatives and of the persons who voted for the Labour party at the last general election, comprising almost 50 per cent, of the population, is, “Hands off the Commonwealth Bank”.
Why does the Government wish to alter the present system of control of the bank, except for political reasons? Honorable senators opposite have not advanced a reasonable argument in support of the proposed alteration.
– We do not like one-man control. It is a form of dictatorship.
– I have heard that record very often. In what way does the 1945 banking legislation warrant alteration ? It has been praised by honorable senators opposite. It led to the strengthening of the Commonwealth
Bank, and the results of that strengthening have also been praised. Honorable senators opposite have not pointed to any basic weaknesses in the legislation. They have indulged only in airy phrases such as “ dictatorship “ and “ one-man control “. In the House of Representatives the Prime Minister has used similar terms. They do not mean a thing. The defects of the present system of Commonwealth Bank administration exist only in the minds of the members of the present Government parties and have no foundation in fact.
The present Governor of the Commonwealth Bank, Dr. Coombs, has been the subject of praise and criticism. If this bill is passed, his duties will be more or less those of chairman of the Commonwealth Rank Board. In my opinion, the services of a man of the ability, experience and vision of Dr. Coombs are far too valuable to be utilized only in the position of chairman of a board.
– Does the honorable senator consider that we should replace him?
– I do not. I think that he should be kept in his present position. He is carrying out his duties in a highly efficient manner. I have yet to hear a valid argument advanced by honorable senators opposite in support of their contention that the present system of control of the Commonwealth Rank should be altered.
In my opinion, the Commonwealth Bank should be permitted, in certain circumstances, to make interest free loans for certain purposes, such as developmental projects, and loans at an extremely low rate of interest for housing schemes and other useful projects.
– Has not the honorable senator heard of the proposals of the Treasurer (Mr. Fadden) for advancing national development along those lines ?
– I have heard about rabbits and houses from the Minister for National Development (Mr. Casey), but I have not yet heard much about low rates of interest. I should be interested to hear Government supporters argue that private banks exist for any purpose other than’ the pursuit of profit.
If they exist only for that purpose, they would not be eager to reduce their interest rates, because by so doing they would reduce their profits.. How would they regard a reduction of interest rates by the Commonwealth Bank ?
– The Commonwealth Bank controls interest rates.
– It should continue to do so, but we have no guarantee that it will. If a Commonwealth Bank Board is established, the Parliament will lose all contact with the Commonwealth Bank other than that afforded by the tabling of papers. If control of interest rates by the Commonwealth Bank were abandoned, the private banks would increase their profits by increasing interest rates, and the Commonwealth Bank would be forced to do the same thing*. I hope that that will not occur.
In my opinion, the case that has been presented by the Government in an attempt to justify the introduction of this measure is a case presented by guilty men. Honorable senators opposite realize that the present Government parties will not remain in power for very long, and they wish to do whatever they can to throttle any progressive financial measures that may be introduced by a Labour government. That is, quite clearly, the background to this measure. I do not propose to beat about the bush. That is the real reason for the introduction of this bill. The Government does not want any extra power for itself, because the 1 945 banking legislation, as it stands at present, gives it more power than it will ever need to use. It hopes that, while it is temporarily in office, it will be able to throttle, restrict and frustrate the financial policy of future governments. I consider that no further argument is required to show that the bill is unnecessary. Honorable senators should realize that the repeal of the 1947 legislation is not necessary to prevent the nationalization of banking because that legislation has been practically invalidated by the decisions of the High Court and the Privy Council. In fact it has been described as a “ dead horse “. I am prepared to say that I shall live to see the day when the banks will be nationalized. I am still a young man. The present measure however is just one of the early skirmishes in the battle for control of the country’s finances. The nationalization of banking is a vital policy of the Labour movement to which that movement has adhered all through its history. It is a policy with which people who have an interest in the perpetuation of democracy must agree. 1. quote once again the saying’ that “ Government is finance, and finance is government “. A wedge cannot be driven between the two if democracy is to bp perpetuated. We on this side of the chamber have no regrets about, and are not ashamed of, any legislation that we introduced during our term of office. We tried to the best of our ability to improve the welfare and standards of living of the people. We believe that in view of the decisions of the High Court and the Privy Council the private banks should be allowed to continue their operations but we believe also that the Commonwealth Bank should be given fuller scope for expansion. We believe also that the board system of control of that bank hap shown in the past that the board ha* not been capable of conforming with the policy of a government of the day. That was particularly so in the years 1930 and 1931 when a Labour government wa.< in office. A subsequent Labour administration was able to prove that under the system of control by a governor the Commonwealth Bank was able to strengthen and expand its activities.
I sum up my remarks by saying that I consider that the provision designed to re-institute the board system deals with a matter of vital principle. That principle is the “ to be or not to be “ of economic democracy. The re-institution of the Commonwealth Bank Board would be a retrograde step. The board system failed in the past and, to judge it on it? record, just as we judge a racehorse on its form, we should not try that system again. I hope that this measure will bc defeated. It will be defeated. I hope also that the people of Australia will make it their business to study the implications of the interference by the Government with the conduct of the Commonwealth Bank. I am quite certain that people throughout the length and breadth of the land who are interested not only in their own welfare but also in that of their children, will ensure that the old shellbacks and diehards keep right out of the field of activities of the Commonwealth Bank. If this measure were to be passed we should have turned the clock back to times that should have gone forever. 1 am certain that the destiny of Australia is very much safer under a longsighted policy than it will be under a policy established by retrogressive measures, such as the present bill, that are not in the best interests of the people.
.- Senator O’Byrne has gone to great lengths in an endeavour to establish a case against the re-institution of the board system of control of the Commonwealth Bank. He complained that we are not providing for the holding of a referendum on that issue. In direct answer to him I say that a very effective referendum on the issue was held on the 10th December last, when the present Government was returned to office with an absolute majority in both Houses of the Parliament. I use the words “ in both Houses”, because the majority of new senators who were elected at that election belong to the Government parties. The Government that the honorable senator supported itself refused, and continued to refuse, to hold a referendum on the question of the nationalization of banking although such a referendum was consistently asked for by the people. The honorable senator himself refused the holding of that referendum when he supported the Chifley Government. It is quite obvious that the honorable senator’s heart was not in many of the statements that he made to-day, because he stumbled and struggled through his speech, making very heavy weather of it. He indulged in the same old stories that we have been hearing from the Labour party for many years and that he and his colleagues indulged in during the last general election campaign. Many of his statements were indicative of a miserable and suspicious mind. He indulged in the use of such terms as “ stooges “, “ fifth column “, “ pay-off “, and of other innuendoes that are such base suggestions that a decent person can afford to ignore them. I hope to be able to explode again many of the arguments of the honorable senator.
One of the main matters with which the present Prime Minister (Mr.
Menzies) dealt in his policy speech immediately prior to the last general election was a proposal to provide for banking reform as is embodied in this measure. The Prime Minister said then that if the Liberal and Australian Country parties were returned to office they would repeal the Banking Act 1947, and I understand that the Opposition, excluding Senator O’Byrne, generally accepts the expressed will of the people in that matter. That is not to say that honorable senators opposite disavow their policy with respect to the nationalization of banking. They do not disagree with nationalization, but a majority of them at least accept the opinion of the people on that matter as a definite mandate to the present Government. That is quite logical and proper.
– The people did not give the Government a mandate on any particular matter.
– The honorable senator who has just interjected should go to sleep again. As I was about to say before I was rudely interrupted by an honorable senator who is generally asleep, it is quite logical for the Opposition to take that attitude. They are pledged to socialism. Indeed, every honorable senator opposite has signed a pledge providing for the socialization of the means of production, distribution and exchange.
– The honorable senator also signed it.
– I did not.
– Yes, you did.
– I undertake that I shall resign my seat if Senator Hendrickson can prove that I signed that pledge, provided that he will agree to resign his seat if he cannot prove it.
– The honorable senator would never have been a member of the Labour party if he had not signed that pledge.
– The honorable senator, as usual, is quite wrong. Honorable senators opposite support socialization and yet agree to the repeal of the Banking Act as giving expression to the people’s will. There is nothing inconsistent in that. I believe that every honorable senator, indeed, every one in the community should have the right the express his beliefs. This is still a free country. We believe in the expression of beliefs so long as those expressions are not of a subversive or revolutionary character. In a democratic country that is as it should be. Whilst some honorable senators opposite believe in socialization, they were prepared to accept the verdict of the people on the 10th December last. In his policy speech, the Prime Minister stated further -
We propose to set up under control of Parliament a small board of directors of the Commonwealth Bank, of which the Governor of the bank will be chairman.
If honorable senators opposite accept the first proposal as representing the will of the people, how in the name of fortune can they reject the second? The people expressed themselves in favour of both proposals. To be consistent, honorable senators must reject both or accept both.
– They do not want a Commonwealth Bank Board.
– Senator Ward is still a socialist, as is Senator Cameron.
– We all are.
– Then why object to being called socialists? Only the other day, when I referred to the honorable senator as a socialist, his leader objected. I know he was wrong, and now out of the honorable senator’s own mouth I have been proved right. I admire Senator Cameron, who has declared that he is a socialist. At the conference of the Labour party in Melbourne recently, he said -
I make no apology for my socialistic beliefs. I pay a tribute to Mr. Chifley for not backing down op this issue.
Senator Ward is also honest in admitting that he is a socialist. It is true that the present Leader of the Opposition in the House of Representatives (Mr. Chifley) did not back down. Speaking to the Macquarie district council of the Labour party in March last, the right honorable gentleman, referring to the Commonwealth elections, said -
Socialism versus capitalism was the real issue. It was a straight-out battle between these two great forces. We played for pretty hig stakes, but ours was the first attempt to bring real Labour policy into effect.
That statement is proof that the Labour party to-day still stands for socialization.
The DEPUTY PRESIDENT. - The honorable senator must connect his remarks with the bill.
– I shall endeavour to do so. The only point of disagreement between the Opposition and the Government appears to be over the decision of the Government to reappoint a Commonwealth Bank Board. Unfortunately, the Opposition has presented the activities of the previous bank board in a distorted way. Honorable senators opposite have claimed that the board was responsible for the depression of some years ago. I remind them that, in 1937, the trade unions of Australia used the splendid recovery that we had made from the depression as the basis of an application to the Commonwealth Arbitration Court for a prosperity loading on wages. The original bank board was established in 1924, and it handled the depression of 1930-1932 so effectively that Australia was the last country to be affected by the depression, and one of the first to emerge from it. The board financed Australia’s war effort, and controlled all financial activities connected with the prosecution of the war. The economic depression was world wide. When it hit Australia, a Labour Government was in office, and Mr. Scullin was Prime Minister. However, I do not blame him for the depression. I do not blame any government for it. I am fairer than some honorable senators opposite, who are willing to blame any one for the depression but themselves. I say that the depression was world wide, and the economic position of Australia during that time was the result of circumstances over which no government had any control. The depression was caused by the collapse of overseas prices for our exports, with the consequent collapse of our export industries.
I believe that the re-appointment of a Commonwealth Bank Board will not adversely affect the operations of the bank. Indeed, I believe that it will give those operations a fillip, and will tend to increase the activities of the bank. It will assist in the expansion and development of Australia. In addition, the people will have far more confidence in the bank when they know that it is being controlled by a board of experts instead of by one man.
When the Commonwealth Bank was first established, it was not intended that it should become a monopoly, but that it should enter into free and fair competition with the trading banks. Responsible Labour leaders in the past declared against socialization, and in favour of competition. Andrew Fisher, when introducing the measure in 1911 for the establishment of the Commonwealth Bank, said -
The Commonwealth Bank is not to displace the trading banks but. to compete with them.
Mr. Scullin, in 1931, stated;
We will free the Commonwealth Bank so that it can compete actively as a trading bank with other trading banks.
Again, in 1934, he said -
The bank will be free to enter- into a policy of vigorous competition with private banks.
Ho one objects to that. Mr. John Curtin, speaking in 1943, said -
The Labour Party will not socialize any industry during the war. The Commonwealth Bank will not be a monopoly; it will compete with the private banks as it was always intended to do.
Those are the words of past leaders of the party to which honorable senators opposite belong. It was left to the last Labour or socialist Government, led by Mr. Chifley, who was bitten by the socialist bug, to adopt a similar objective to that; of the Communist party, in relation to the socialization of industry: Admittedly, the methods to be applied are different.
– I rise to a point of order. I object to the statement that the leader of the Labour party, Mr. Chifley, adopted a policy similar to that’ of the Communist party, and I ask that the statement be withdrawn.
The DEPUTY PRESIDENT”. - The Leader of the Opposition (“Senator Ashley) has objected to the statement made by Senator Guy,, and has asked, that it be withdrawn.
Senator- GUY. - I shall alter the>. wording, and- say that the Labour party adopted the same objective, aa tha Communist party;
The DEPUTY PRESIDENT. - The honorable senator must withdraw the words without qualification.
– Very well, I withdraw them. In any case, I prefer to accept the statements of Labour leaders of the past rather than those of the men who lead the Labour party to-day. I believe that there should be free and fair competition between the Commonwealth Bank and the trading banks. Such competition would be very helpful to all concerned. Senator O’Byrne spoke of the wonderful success of the Commonwealth Bank, and said that since its establishment it had earned quite a lot of money for the Treasury. It is true that it has earned about ?85,000,000 for the Commonwealth Treasury since it was established. We all agree that the Commonwealth Bank, has done a very good job. However, I point out that during the three yearperiod from 1947 to 1949, while the bank was under the control of one man, the total profits amounted to just about ?17,000,000, but of that amount no less than ?13,000,000 represented profits from the note issue. During that period, the net profits of the bank, including the Commonwealth Savings Bank, but excluding the note issue, amounted to about ?4,000,000. In the same period, the trading banks paid to the Commonwealth Treasury in taxes more than ?11,000,000. Thus, while the Commonwealth Bank earned for the Treasury about ?4,000,000, the trading banks paid approximately ?11,000,000 in taxes, in addition to which trading bank dividends were taxed in the hands of the shareholders. It will be seen, therefore, that during the period of three years while the Commonwealth Bank was under the control of one man, the Treasury received much more as a result of the operations of the trading banks than it did from the Common: wealth Bank. If there is to be free and fair competition in banking; the Commonwealth Bank should pay taxes on the same basis as do the trading banks. For one thing, municipalities provide services for the Commonwealth Bank for which it does not. pay. I realize that, all profits earned by the Commonwealth Bank go to the Treasury, but. I believe that, all government trading enterprises- should be liable to taxation on the same basis as are private firms. That would tend to promote the efficiency of government enterprises, and only then could it be claimed that there was fair and free competition between government and private enterprise.
The people of Australia must be protected from dictators whether they be political, financial or industrial. Under the Commonwealth Bank Act 1945, the Chifley Government appointed a dictator to control the Commonwealth Bank. Admittedly he was answerable to the Treasurer. Honorable senators opposite have great imagination. They have already indicated who is to be appointed to the new bank board and Senator O’Byrne has told us that stooges are to be appointed. He should be the last to suggest that, and he knows to what I refer. Honorable senators opposite have drawn on their imaginations to forecast what policy the Commonwealth Bank Board will pursue and the consequences that will follow. They appear to have worked themselves into a state of frenzy over the figments of their imaginations and their faulty reading of the history of the banking of this country ; or is it only make believe ? All honorable senators realize that honorable senators on the Opposition side have to make a show for their outside supporters. They have not progressed beyond that stage where they think that all the Opposition has to do is to oppose legislation and employ delaying tactics. “Why should the Opposition in this chamber try to dictate to the Government? Politically, the majority of the Opposition is the result of an election held some years ago. At the election of senators last year, the people of Australia returned 23 supporters of the Government and only nineteen of the Opposition. What view should prevail - the view expressed by the people only a few months ago or the view expressed several years ago? The majority of the Opposition in this chamber do not represent the popular vote as decided on the 10th December last. Indeed, it was claimed that the law was deliberately designed to keep a certain party in control of this chamber notwithstanding that the people rejected the government of the day.
– That was put up by the honorable senator and his colleagues.
– The legislation introduced recently provides only for a double dissolution. Fifteen Opposition senators did not face the electors in December last, and they were determined to keep control of this chamber by hook or by crook. Supporters of the Labour party claim that the will of the people should prevail. If they believe that, they should accept the expressed will of the people which was given on the 10th December because the Government had an unmistakable mandate to put this legislation on the statute-book. I am not giving away any secret when I suggest that the Government might have to ask the people for another mandate.
Honorable senators interjecting,
The DEPUTY PRESIDENT. - Order ! Honorable senators must cease interjecting. There is too much of it. I am trying to hear Senator Guy to ascertain if he is complying with the Standing Orders.
– Unfortunately the banks have always been targets for attack by the socialists, who stand for socialization of credit and industry. I remind honorable senators that when attempts were made to tamper with the currency in 1930 and Australia’s name was being besmirched by the Australian Government through default in interest payments, the people of this country rose in their wrath and swept that government from the treasury bench and elected a new government which righted Australia in the eyes of other nations and restored confidence.
The Opposition has endeavoured to create an impression that this bill is at variance with the recommendations of the Royal Commission on Monetary and Banking Systems when, in fact, that commission recommended the establishment of the board or, to be more correct, the continuation of the board. No business of any magnitude is controlled by one man. There is always a board of directors. Yet Opposition senators would retain a one-man control system in the Commonwealth Bank which influences the entire financial affairs of Australia. The
Socialist Government in Great Britain, led by Mr. Attlee, retained an independent board of directors to administer the nationalized Bank of England. Honorable senators opposite prefer not to believe that it is possible to find disinterested and able men for such a task outside official circles. They do a grave injustice to their fellow-countrymen. The vital fact remains that the people supported the bank board against the Scullin Government years ago. Honorable senators opposite conveniently ignore the fact that in the 1931 elections, which were fought largely on the financial policy of the Labour party, Labour lost 28 seats out of 46. They are gluttons for punishment.
Control of a central bank by a board is not an innovation. The only countries that do not have boards to control their central banks are Russia and the Communistcontrolled countries. Yet that is the method advocated by honorable senators opposite in spite of the expressed will of the people. Everybody is out of step except the Australian socialists! The socialized Bank of England under the socialist Government has a board of eighteen directors. The Australian Government proposes a board of ten for the Commonwealth Bank. The reserve bank of New Zealand has a board of nine directors and eleven directors control the Bank of Canada. The reserve bank of India has a board of fourteen members. The South African Reserve Bank has eleven directors on its board, the Bank of France has twelve and the Central Bank of Eire is controlled by a governor and thirteen directors. The banks of Portugal, Rumania, Finland and many other countries are controlled by boards of directors.
– What does that prove?
– It proves that the honorable senator is a long way behind the times. Honorable senators on the opposite side of the chamber have complained that the Commonwealth Bank Board did not issue unlimited credit some years ago. I remind honorable senators of the attitude of the Labour Prime Minister in those days, Mr. Scullin, who said in reply to his own party’s request to create credit of £20,000,000-^-
To create credit for £20 million for loan work is unsound, and I expect the banks to refuse to do so. Such a proposal means permanent inflation which could not be checked as is implied, and would demand further inflation. All this talk about creating credit and inflation is most damaging. Since inflation was suggested, efforts are being made by men in England to withdraw their money from Australia as they would lose by payment in the depreciated currency. Depreciation of currency would decrease values of savings banks deposits, property would increase in price - there would be a rush to sell bonds for investment in property and financial panic may result.
Those are not my words. They are the words of the former Labour leader when some members of his own party were urging him to provide unlimited credit. I agree with the views of Mr. Scullin. The unlimited use of bank credit would definitely lower the value of money, raise prices, and affect the poorer section of the community much more than those in better circumstances. The late Mr. E. G. Theodore, when Premier of Queensland before he became the Federal Treasurer, said -
Australia should make every effort to maintain a pound money basis. The world has many salutary lessons of confusion caused by unstable money. Trade is paralysed, commodity prices soar sky-high, wage standards are lost and national bankruptcy ensues.
I have quoted the words of former Labour leaders and I would prefer to accept the views of Labour men like Andrew Fisher and King O’Malley to those of some Labour leaders to-day. Some honorable senators on the opposite side of the chamber complain about the attitude of Sir Robert Gibson, but the Labour government of the day re-appointed him governor of the bank as soon as his term had expired. The financial advisers of the Opposition to-day are well off the beam. They have not a constructive thought compared with the leaders that they had a few years ago. I believe that I have demonstrated quite clearly that disastrous effects would follow a policy of unlimited credit.
Quite a number of honorable senators on the Opposition side complain bitterly that banking employees took part in the recent federal election. Surely those men had a perfect right to defend themselves Their banks were to be closed and their jobs were at stake. There was no other way. They could defend themselves only by taking part in the federal election campaign. Honorable senators have not heard Senator O’Byrne or other senators on the Opposition side objecting to Australian Workers Union organizers and other union employees going from door to door canvassing for the labour party. They cannot have it both ways. If honorable senators object to bank employees participating in the general election campaign, they must object to the union organizers whose jobs were not at stake doing the same. Even funds from Communist-controlled unions were used to assist them. The Communist how-to-vote card in Tasmania instructed the electors to give their first and second votes to the Communist candidates, their third, fourth, fifth, sixth and seventh votes to the Labour candidates, and the remainder to the Liberal party candidates and indepenents. I had the honour to be No. 12 on the card, and I took that as a great compliment. I have before me another pamphlet which states -
The Australian Communist Party calls on all democrats to support and fight for this policy.
In Denison for the Communist Candidate Vote 1, M. A. Bound on May 6th, and then the Labour team in order o( preference.
What is the use of honorable senators opposite saying that they do not get support from the Communist party? I say definitely that they receive support from the trade unions generally, including the Communist-controlled unions.
.- The speech to which we have just listened is of the kind that can be turned on like a tap when defence is required of vested interests, including tho private banking institution. However, although I have heard the speech before many times, I propose to deal with one or two points that Senator Guy made. His outstanding point of course, was that even he appreciates Labour men when they are dead. During the last federal election campaign, I addressed a meeting at Ipswich in Queensland. At the conclusion of my remarks. an old gentleman rose to move a vote of thanks. He said, “ Forty years ago in this town, we put up for election to the Commonwealth Parliament, a man named Andrew Fisher. At that time the newspapers were full oi scurrilous cartoons about him- One depicted him as a tiger, restlessly pacing up and down behind the bara of a cage. The caption was, ‘ Don’t let this socialist tiger free ! ‘ But the socialist tiger not only got free, but he won the election, and every seat in the Senate. To-day, this man who was so much maligned when I was a boy, is held in the greatest esteem. People say : ‘ What a pity it is that there are not more men like Andrew Fisher in the Labour movement’”. It was the same story when John Curtin died - when alive, maligned; when dead, revered. Mention has been made in this debate of Mr. E. G. Theodore, who was Treasurer of the Commonwealth when the Scullin Government was in office. He top was maligned during his political life, and it was extraordinary indeed to read in the newspapers when he died recently the glowing tributes to his virtues. So it will be, I am sure, of present-day Labour leaders such as Mr. Chifley and Dr. Evatt, whose only crime is that they are in the public life of this country and have its interests at heart. They are good men and the day will come when the story that we have heard from Senator Guy to-night will be repeated.
The honorable senator made a great song about the fact that boards control banks throughout the world. That is not the point at issue. The board proposed by the Government in this legislation will be completely removed from the control of the Parliament. Before I finish my speech, I hope to prove that assertion completely. The one-man control about which Senator Guy said much, has never existed. Dr. Coombs was never the sole controller of the Commonwealth Bank under Labour’s administration. He was directly under the control of the Treasurer, who in turn was under the control of Cabinet, and of the Labour party. That was a completely democratic system. It is strange to look back over the years and see what one might describe as the eternal fight between the forces of progress, and the forces that go under the name of Conservatives. Incidently, it is interesting to note that the dictionary definition of “ conservative “ is “ against any change “. That is epitomized in the two forces in the public life of this country, one of which is the Labour movement, which hag had only one name throughout its history.
– We want to bring about a change.
– The honorable senator was a member of the Labour party for some time, and he should not interject because I may say something about that. He was a member of the Labour party for a comparatively short time, and left it for its good. Throughout the years, this fight against conservatism has been carried on by only one party in the political life of this country. Speeches such as that made by Senator Guy to-day, can be turned on at will to impede proper social progress. The most important block in the path of progress ; the most effective bar to the proper distribution of wealth in this country, is our financial system. I do not say that lightly. I say it in- the full knowledge that, throughout history, that system has been the great barrier between governments and the people. Thomas Jefferson, one of the great Presidents of the United States of America, is recorded as having said -
Already they have raised up a money aristocracy that hae set the government at defiance. The issuing power should he taken from the Banks and restored to the people to whom it properly belongs.
That was the situation in Jefferson’s time, and it is the situation that has existed right up to the present time. Pope Pius XI., speaking of control of national credit, said -
This power becomes particularly irresistible when exercised by those, who, because they hold and control money, are able to govern credit and determine its allotment, for that reason supplying so to speak, the life-blood of the entire economic body, and grasping, as it were, in their hands, the very soul of production so that no one dare breathe against their will.
The end of the struggle is not yet; but if the bank is stronger than the sword or sceptre of popular sovereignty, the end will be the end of democracy.
That has been the fight of the Labour movement down the years. We have always appreciated the fundamental necessity that the monetary policy of a nation must be controlled by its Government. Some one must control it. Do not think for a moment that it ever goo* uncontrolled. Labour’s fight has always been for national control. It may be interesting to examine briefly the history of the Commonwealth Bank. In 1905, part of the platform of the Australian Labour party was the establishment of a Commonwealth bank. In 1911, the Fisher Government passed legislation with only minor amendments setting up this great institution. Provision was made for a capital of £1,000,000, but only £10,000 was called upon to launch the bank. The £1,000,000 was never needed. That shows what a profitable business banking really is. Ever since its establishment, the bank has made substantial profits which have been returned to the various governments, and through them to the people. In 1912, the bank opened its doors with a staff of twelve, including the Governor, two typists, and a messenger. The bank was barely two years old when World War I. started and its staff numbered only 250. However, it immediately assumed leadership in the banking field, and guaranteed the private banks against any failure on their part to cope with the immense financial problems that existed in those days. During the war years, the Commonwealth Bank financed commodity pools, to the amount of £437,000,000. It handled war loans amounting to £250,000,000 at a cost of only 5s. 7d. per £100, which was approximately oneeighth of the cost of such loans had they been floated in London. By comparison, loans floated by the State governments between 1910 and 1915 cost £2 7s. Id. per cent. The story of the Commonwealth Bank’s service to this country during World War II. is too well known to be recapitulated in detail by me now. However, I point out that, in those years, the Commonwealth Bank raised loans totalling £1,166,684,000 at a cost of 5s. per cent., and financed purchases of Australian produce and of tea, coffee and jute of a total value of £510,000,000. It also made available rural credits amounting to £61,000,000, and financed exporters to the tune of £168,000,000. That job was done by the people’s bank. I do not think that the private banks could have done it. Even if they could, the cost to this community would have been so great that every member of it would have carried the burden until he died and then passed it on to posterity. An effort to stop the expansion of the Commonwealth Bank was made in 1924, by the then United Australia party, Nationalist party, or Liberal party Government - I do not know what honorable senators opposite called themselves in those days. The present tragic Minister for Health (Sir Earle Page) was then the “tragic Treasurer” of the Commonwealth. His method of halting the bank’s progress was to change control of the bank al the death of the Governor, Sir Denison Miller, who had guided it so successfully through its difficult early years, and to hand the institution over to a newly constituted Commonwealth Bank Board. We all know who the members of that board were, and we know what interest they had in problems of the great mass of the Australian people., They represented the private banks, insurance companies, and trustee companies. The Commonwealth bank was controlled by a board until 1941, when, under the wartime banking control regulations, the first real steps were taken towards giving legal power to the Commonwealth Bank to become a great central bank. In 1945, the bank was formally constituted as a central bank, and at that point it was, in my opinion, at the height of its efficiency. It was invested with all the legal authority necessary to enable it to do its job for the people of this country. To-day we have heard from Senator Guy what a wonderful institution the Commonwealth Bank has been down the years, but the honorable senator would have to be a spell-binder or a Franquin to convince anybody that the Commonwealth Bank Board was anything but a board of directors appointed from the private banks for the sole purpose of safeguarding the interest of those banks. The members of that board wanted to retard as much as possible the progress of that bank. I can prove that quite simply by demonstrating the progress made by that bank before it was shackled. In 1920 there were 32 trading bank branches and by 1925 that number had increased to 70, and nine additional savings bank branches had been opened. However, between 1925 and 1930 the number of trading branches increased by only eighteen. That was the progress made under the former Commonwealth Bank Board. I repeat that in five years only eighteen more branches and one additional savings bank branch were established. However, under the regime of the Scullin Government the number of trading bank branches increased from 88 to 261. That is a story of expansion and real progress. During that period savings bank branches also increased from 79 to 96, making a grand total of 289 branches of the Commonwealth Bank and the Commonwealth Savings Bank, compared with 96 in 1930. Consider the stagnation that followed during the period from 1932 to 1939 under an anti-Labour administration, when the defenders of the private trading banks again controlled the government of the country. During that period the number of trading bank branches increased from 261 to 275; in other words, only fourteen additional branches were opened in seven years, or two new branches a year. That is the “ progress “ made under the control of the bank board and an anti-Labour government. In fact, it was stagnation and the murder of a great institution. In the meantime Labour had again assumed office, and the number of branches of the bank increased in 1949 to 415, with sub-branches, branches in London, at airports and in the migration centres. At last the bank had shaken itself free of the bonds that bound it, and its energies had been unleashed. The people’s bank had been allowed to compete with the trading banks. During the long period in which the bank was controlled by a board, branch managers were under definite instructions from the board that they were not to compete with private trading banks. That board was composed of bedstead manufacturers, representatives of the tobacco trust, private banking institutions, the Union Trustee Company, the graziers of Australia and the polo players. However, we must give those gentlemen credit for at least one thing, which is that they did their job well. The present Government has now set out to do its job. We know the story of the last Commonwealth election campaign. Whilst the banks were, in my opinion, quite entitled to fight at the last election, because this is a democracy and every one who has a point of view is entitled to express his opinion, and to influence others to agree with him, the private banks went a lot farther. They importuned their employees to go out and do a job against Labour. Lists were sent out from the head offices of the banks to be completed by branch managers showing the names of those who volunteered to help the banks. “We know what would happen to the men who did not put their names down. When Labour candidates were addressing meetings during the election campaign they noticed that there were always three or four of the local bank officers on hand to interject. It reminded me of the early days of fascism in Europe, when young men were sent to trade union meetings to deny the trade unionists the right of free speech.
– Do not squeal so much. Labour men have been squealing ever since they have been defeated.
– What I am saying should be recorded because it is important. Bank clerks went from door to door and started rumours by asking householders such questions as the following : - “ Do you know what happened to that poor woman who went to the Commonwealth Bank to draw £20 ? The man at the Commonwealth Bank would not give it to her until she told him what she wanted it for”. That was the type of propaganda that made working people think that there was something sinister
– That is quite true.
– If the honorable senator can mention any teller of the Commonwealth Bank who ever asked any depositor why he wanted to withdraw money then he will be the first man to substantiate that rumour. Indeed, I challenge him now to do so. Apparently the banks’ propaganda was so effective that even people like Senator Mattner believed it. Certainly the fact that he believes it is no compliment to his mental ability, but it is a tribute to the effectiveness of the banks’ propaganda. As I have said, bank clerks went from door to door instilling fear into the people. The employees were paid to do the job. They were able to take time off to go from door to door in every country town endeavouring to frighten the people.
– Did not the union organizers do the same?
– Not at all. If there was one factor more than another that influenced the people during the recent election campaign it was fear. Housewives who opened their doors to listen to bank clerks were so filled with fear that they voted against Labour. Fear is the most desperate of all human emotions. When fear is instilled into a person, reason goes out; and it cannot be denied that the banks did a great job by sending their clerks to instil into working men and women a fear that was completely unwarranted. I am reminded of a famous message to the United States Congress by the late President Roosevelt, which expresses my point much more eloquently than could any poor words of mine. His message was -
Their weapon is the weapon of fear. I have said the only thing we have to fear is fear itself.
That is as true to-day as it was when it was uttered in 1933. His message continued -
But the fear which they instil to-day is not a natural fear, a normal fear, but a synthetic, manufactured, poisonous fear that is being spread subtly, insidiously and cleverly by the very same people who cried in other days. “Save us; save us lest we perish”.
In Australia the men who instilled that fear into the people at the recent election came on their knees to Labour at the beginning of the war, when the people whom they had elected had failed them and their assets were in danger. Then they gave John Curtin an overwhelming vote. But the fear has passed now. The Japanese have returned to their homeland, and the vested interests have got into their stride again.
– The honorable senator thinks that the danger has passed?
– I said that the people about whom I have been speaking think that the danger has passed. They were so short-sighted that they could not recognize danger until it actually confronted them during the war, and even now they are so shortsighted that they cannot foresee the dangers of to-morrow until they are actually upon them. Senator O’Byrne dealt with the great danger to-day, which is that we shall not he able to maintain, full employment and thereby avoid the onset of the next depression. If we cannot avoid that depression, we must soften the blow of its incidence as much as possible. Only last week I read in a newspaper the report of an address delivered by Colin Clark, special adviser to the Queensland Government, who is internationally known as an economist. The report stated - “ Powerful forces were ranged against full employment,” Mr. Clark declared. These interests wanted a return to unemployment to preserve “ industrial discipline “. Specious arguments were advanced for some unemployment, but to create unemployment was one of the most vicious offences against society. Mr. Clark warned that Australia faced serious economic changes in. the next few years.
At the same conference at which Mr. Clark spoke, Dr. Ryan said that there had been a noticeable hardening of the intransigent attitude of certain employer groups since the last election. The report of his remarks continued -
The attitude of such groups was: “We are on top now and we’ll put the boot in.” They made no distinction between the subversive minority and the overwhelming majority of decent, loyal Australian workers. Dr. Ryan said that when employer groups’ adopted a high-handed attitude, when they refused to make any concessions to decent labor lenders, or even to negotiate with them, they betrayed a selfishness and’ a lack of realism which made them almost as dangerous as the communists. The heart of the problem of industrial unrest lay in the fact that the Australian worker, no matter how well off,, had. no responsibility in industry, no share in ownership or management.
It is evident that to-day there is a strong drive to establish a pool of unemployed. The present full employment does not. satisfy many of the captains of industry or many honorable senators opposite. I propose to read an extract of a statement made by Colonel Baldwin, a former United States military attache, in the course of an address that he delivered in Melbourne last October. The report of his remarks stated -
Apparent pegging of American unemployment at its current level of 6 per cent, has1 infused new spirit into the American worker. The slackness that grew from so-called full employment had vanished. With their eyes on the 6 per cent., the 04 per cent, of workers in jobs were on their toes. The fi per cent, level in unemployment would probably be found to be “ideal*.
The’ drive to establish sc. pool of unemployed in this country can succeed only if the Commonwealth Bank is divorced from, its function of being the people’s bank,, so that it can once again become a bankers5 bank. Honorable senators opposite wonder why we are, to use their word, quibbling about the establishment of a Commonwealth Bank Board. We say that the action of the Government in proposing to establish a board1 of the kind for which provision is made in this bill, is a “ pay-off “ to the private trading banks, through whose efforts it is now in office. It is proposed that the board shall consist of five Commonwealth public servants, three of whom are specified in the bill and two of whom have been named by the Treasurer, and five persons from outside. They are the mystery men. It may be that they will comprise a fifth column. The Secretary to the Department of the Treasury, who is to be a member of the board, will obey the directions that are given to him by the Treasurer. He will not be appointed to the board as a man of independent mind who will weigh the pros and cons of any problem that arises. If he receives a direction from the Treasurer, he must obey it. If a Minister gives the head of a department for which he is responsible a directive on policy, the head of the department must obey it, irrespective of whether he believes it to be foolish and unworkable.
– The Secretary of the Department of the Treasury is a. member of the present Advisory Council.
– That interjection is not relevant to the point that I am discussing. The five outside members of the board and the member who will automatically follow directions given to him by the Treasurer, could, if they joined together, prevent deadlocks from occurring in the board. If the Governor of the Commonwealth Bank disagreed with them,, they could prevent the Governor’s point of view from being put to the Treasurer and to the Parliament. There are many questions upon which the Government must make a decision soon. There is talk in the City of Sydney of a strong move for the increase of interest rates, and pressure is being brought to bear upon the Government, especially by newspaper interests, for an appreciation of the Australian pound. Those are matters with which a Commonwealth Bank Board of the kind that is proposed could and would deal.
The Commonwealth Bank is the pride of this country and the envy of other countries. It was born in the mind of the Labour party, which has, through the years, encouraged and assisted its development. Despite the temporary check to its progress as a result of antiLabour governments placing a board in charge of its affairs, it did a great job for Australia and, under the present system of control, is doing a magnificent job. Now it is proposed suddenly to change that system of control, for the reasons that I have put before the Senate. There are things that the Government wishes to do that cannot be done under the present system, and therefore it is proposed to alter the system. I am certain that the Opposition would not object to a proposal to establish a board consisting of five public servants. “We object, not to a board as such but to a board of a kind that will remove from the Parliament any say in the control of the affairs of the Commonwealth Bank.
The ridiculous proposal has been made that, if a disagreement occurs between the Treasurer and the board - and I say that disagreements will not occur - a paper setting out the pros and cons of the dispute will be tabled in each House of the Parliament. That procedure would be quite useless, because by the time the paper was tabled the dispute would have been decided. The Governor-General in Council would already have instructed the Commonwealth Bank and its board as, to the policy that should be adopted.
– That can. be done to-day.
– That _ is right. It is proposed that a paper setting out the whole story shall be tabled afterwards.
Senator Spooner interjecting,
– The Minister for Social Services (Senator Spooner) will have an opportunity to reply to the debate.
I have already stated that Ministers should set an example and refrain from interjecting.
– I am convinced that the present system of control of the Commonwealth Bank should not be altered. This is a national issue. We must safeguard the prosperity that we now enjoy. As Senator O’byrne said, some signs of a depression, I do not know of what severity, are to be seen. Owing to the inability of the Government to put the value back into the £1 and the great increase of prices that has occurred during the six months that it has been in power, the commodities that the people need have become almost too expensive for them. Bread, milk and cheese are all very dear, and even tea is in doubt. The £1 now is worth much less than it was on the 10th December last year. One cause of a depression is a shortage of goods, and such a shortage can be created artificially. Goods may be available, but it may be beyond the capacity of the people to purchase them, with the result that they are left in the factories and in the shops. A depression could occur in this country if goods were available in abundance but we could not afford to buy them, even though we were enjoying a nominal high standard of living. There are signs of trouble in the economic field. I appeal to the Government to use the strength and weight of the Commonwealth Bank to prevent a recurrence of the cataclysm of 1930 and 1931.. That must be avoided at all costs. One way in which to avoid it is to permit the Commonwealth Bank to continue under the present system of control, backed by a wise government.
– Although this measure is perfectly straightforward and is designed to strengthen the Commonwealth Bank by re-introducing board control, it has been attacked by members of the Opposition in lengthy and repetitive speeches. The second- read ing debate could have been completed in a minimum of time, but we have witnessed the spectacle of honorable senators opposite speaking at great length upon matters that have already been discussed many times.
– Speaking with great wisdom.
– I differ from Senator Armstrong regarding the wisdom of the statements made by the Opposition. The only conclusion to which 1 can come is that honorable senators opposite are attempting deliberately to delay the legislative programme of the Government. As a new member of the Senate, I have been dismayed by those delaying tactics, because I realize that they are being used for political motives and not to further the best interests of this country. The same tactics were used by the Opposition when the bill dealing with child endowment was before the Senate. Unless the Australian Council of Trades Unions uses its influence with the political side of the Labour movement, it is doubtful whether the people of Australia will be paid endowment for the first child in every family. I hope that saner counsels will prevail. The Opposition is using the tactics of delay and obstruction only to obstruct the legislative programme of the Government.
– The honorable senator has been put up to stone-wall.
– I have risen, not to stone-wall, but to deal with the bill, which is in complete conformity with the policy that was put before the people at the last general election by the Liberal party and the Australian Country party. We told the electors quite clearly that, if returned, we should repeal the Banking Act 1947 and re-introduce board control of the Commonwealth Bank. I can understand why the Opposition has made but few references to the clause of this bill relating to the repeal of the Banking Act 1947. It must make honorable senators opposite squirm in their seats to know that their plan to nationalize banking in this country has been thwarted - I hope for all time. The Labour party regards the nationalization of banking as a panacea. The Privy Council ruled that many sections of the 1947 act were invalid. At the last general election the people showed in no uncertain manner that they disapproved of it, and as a result the Labour party is in opposition in the Parliament.
One feature of the debate that I do not regard as being very uplifting has been the constant references by honorable senators opposite to gentlemen who acted as they thought best to combat the pernicious doctrine of bank nationalization. They have been called “stooges”. I do not know what meaning the dictionary ascribes to that word, but I know that the Opposition used it in a derogatory sense. Those men acted purely and simply in their own interests. Unquestionably, they were members of banking ins’titutions. They were employees of banks who realized the danger inherent in nationalization of banking.
– All that was finished before the general election.
– The election was fought on that issue, among others. We recognized the 1947 banking legislation for what it really was - the spear-head of socialism in this country. I consider that the campaign of those bank officers was on as high a plane as the Labour party’s campaign. Honorable senators opposite have made damaging statements against those gentlemen. I refer to them as “ gentlemen “ because they were gentlemen. My experience with the bank officers who were engaged on that work convinced me that they were men of the highest standards, and I know that other honorable members on this side of the chamber support me in that view. The terms that honorable senators opposite have used in relation to those people - “ lies “ and “ misrepresentation “ - are unworthy of senators and should never have been uttered. They were worthy men and their efforts were fortified by the fact that the people of Australia supported them when they expressed their opinions at the last general election. In any event, the repeal of the Banking Act 1947 is embodied in this measure and will, I hope, mean the end of the socialization programme of the Labour party as far as banking is concerned. Honorable members opposite have occupied a great deal of the Senate’s time with references to the economic depression of the early 1930’s. They have lauded themselves in respect of the establishment of the Commonwealth Bank by a Labour administration. I am willing to give the Labour party due credit for establishing that bank. I do not desire to be niggardly in that respect because the Commonwealth Bank is a very great institution and I give the Labour party credit for establishing it. Honorable senators opposite view with suspicion our proposal to re-establish the Commonwealth Bank Board. They have made many attacks on the Government parties which, they say, intend to sabotage the Commonwealth Bank in the interests of the private banking institutions. Nothing is farther from the truth. “We have heard a great deal from the Opposition about how Australia was thrown to the wolves during the depression, the implication of course being that the board that then controlled the Commonwealth Bank under the chairmanship of Sir Robert Gibson had acted in the interests of the private financial institutions and that the depression was deliberately and wantonly forced upon the people. I qualify that statement to a curtain extent, because a few honorable senators opposite have been fair in their approach to this matter. I refer to Senator Katz and Senator ^Flaherty, who deserve credit for the moderate manner in which they approached this problem.
– t shall have to watch myself.
– In the main the charges levelled by honorable senators opposite cannot be substantiated. I do not doubt for a moment that mistakes have been made in the past. We probably could have, at times adopted some other course with different results, but the mistakes were made in good faith. Nobody is infallible. We do not claim that the board that we propose to establish will be infallible. But we must acknowledge the fact that the Commonwealth Bank Board as it was constituted in the years of the depression acted as it thought right in the interests of the people.
– It allowed 300,000 people to starve.
– Arguments r-.an be advanced in defence of its actions as well as against them. As a matter of fact, history has not made very clear what was the right policy for the board to have followed. We know that, whilst on one hand there might have been some mitigation of the depression conditions that prevailed at that time-
– There could have been.
– I qualify the honorable senator’s assertion by repeating that there might have been. But we also know on the other hand that Australia was one of the first countries of the world to emerge from the slough of the depression as a result of the board’s actions.
– It should never have entered the depression.
– The honorable senator may say that, but I shall quote to him some statements that will prove that he is entirely wide of the mark. Honorable senators should not make such assertive statements in connexion with difficult financial problems. Are they so well versed in finance that they can lay down the law regarding it? I do not profess to be an authority on economics. I always seek the wisdom of the established authorities. Some of the authorities that I shall quote would not be challenged by even honorable senators opposite. The first authority is the Royal Commission on Monetary and Banking Systems. We have heard a great deal about the influence that was exercised by the trading banks upon the Commonwealth Bank Board, which is alleged to have brought about the depression -
– That has never been said.
– It has been implied. I shall now read to the Senate a statement made by that royal commission, which is as follows: -
There is no justification for the view that the trading banks, in order to enlarge their profits, deliberately expanded credit to produce a boom and then contracted so as to produce a depression.
– That is merely an opinion.
– It is a considered opinion. The royal commission went thoroughly into the subject and had the advice of the best financial authorities in the country.
– Mr. Chifley approved of that report.
– Mr. Chifley did not approve of it. Who were the members of that bank board?
– The honorable senator should hold his peace. I am making this speech, and I intend to keep to the course of my argument. Here is another quotation, this time from Professor Copland, who is considered to be an authority on economics.
– It all depends upon who is paying him. He is like the lawyers.
– Professor Copland said in 1931 -
Advances are even now higher than they were in 1927 and 1928 before, the depression. This fact should dispose of the common fallacy that credit has been severely contracted, and that banks have accentuated the difficulties of the depression by enforcing a restrictive policy.
I could go on to quote a further statement by Professor Copland. Those are extracts taken from the subject-matter that has been published from time to time and they are authoritative. They come from the report of the banking commission in the first place and from Professor Copland’s book, What Have the Banks Done?
– What document is the honorable senator quoting from?
– That has nothing to do with the honorable senator. If he wishes to check up he can do so later on.
– Is the book a Liberal party production?
– It may be.
– I ask that the document from which the honorable senator is quoting be tabled at the end of his speech.
– I have no objection to that. It may not do the Opposition any good, but at least it will do no harm.
– Is not the whole financial world in agreement that the bank board’s policy was wrong?
– I did not catch the honorable senator’s question, so I shall continue with my quotation from Professor Copland’s book, in which he said -
It is not too much to say that the banking policy of Australia was really more enlightened than that of almost any country.
I shall now offer some quotations in relation to the remarks by honorable senators opposite about the depression. The former Labour Prime Minister, Mr. Scullin, presiding at a conference of Commonwealth and State Ministers on the 6th February, 1931, at Canberra said -
The general causes underlying the position confronting Australia are so well known as to need only the briefest reference. In part, they are world-wide in their operation; in part, they are of Australia’s own making. The general fall in prices, a movement entirely beyond the nation’s control, has brought about a world depression of unexampled severity.
– Why did prices fall ?
– If the honorable senator will listen he will hear. The quotation continues -
The world depression in itself ranks as a major disaster in most countries. Australia, as a trading country, is bearing a full share of its paralysing effects. Simultaneously, other misfortunes of equal severity have come upon us. The fall in prices has been much heavier in the case of raw materials and foodstuffs than in regard to other goods. Thus, the position of countries like Australia which depend for their prosperity upon the export of raw materials and foodstuffs is much worse than that of manufacturing countries. Our plight is probably the worst of all since Australia has almost the highest net value of exports, per head of the population, of any country in the world.
Sitting suspended from 6 to 8 p.m.
– Prior to the suspension of the sitting I had dealt with the delaying tactics of the Opposition, the proposed repeal of the 1947 banking legislation, and the charges that have been made by the Opposition about the responsibility for the depression. I have cited authorities that no honorable senator could contest. At any rate I am not prepared to pit my general and economic knowledge against that of persons who have had a vast experience in these matters. Surely honorable senators opposite have no right to pit their puny economic knowledge in these matters against the authorities that I have cited. In any case, most of them are only halfbaked.
– Which ones?
– The ones that the Opposition have raised during the debate. The depression was inescapable so far as Australia was concerned.
– What rot !
– I shall cite another authority, Mr. Davidson, said to be one of the greatest financial authorities in this country who was, at one stage, the general manager of the Bank of New South Wales. He likened this country to a toad beneath the harrow when he averred that all we in this country could do was to avoid the spikes. We have never lacked initiative, and I hope that we never shall. I believe that his contention was correct. Although we did not successfully avoid all the spikes, we did relatively well and emerged from the depression earlier than did most other countries. In fact, Australia’s recovery was nothing short of remarkable.
– In spite of the bank board?
– There were 250,000 persons unemployed in this country in 1939.
– As I stated at the outset, this measure is perfectly straightforward. The Opposition has complained that its motive is to reduce the efficacy of the Commonwealth Bank. As I have already said, nothing is further from the truth. The Government has no quarrel with the 1945 legislation, except that it does not believe in one-man control. I shall review, briefly, the events that preceded that legislation. It was based on an agreement between the Commonwealth Bank and the private banks in 1941.
– That is not true.
– I assure the Senate that that agreement formed the basis of the 1945 legislation. There was an arrangement between the Commonwealth Bank and the private trading banks prior to the advent of the Curtin administration. During its regime the basic elements of the 1941 agreement were embodied in the national security legislation. That cannot be disputed. I shall not challenge any of the main principles of the 1945 measure, because my political life does not date back very far.
At the time I was fully aware of the implications of the measure and supported it almost completely. Its main function was to make the Commonwealth Bank the central bank in this country, which was highly desirable. The Commonwealth Bank was also empowered to control the credit policy of this country.
– Does the honorable senator agree with that?
– I entirely agree with it. It also added to the Commonwealth Bank the function of controlling the advance policies of the trading banks, with which I agree. By that legislation the Commonwealth Bank was compelled to give effect to the policy of the Treasurer. However, no provision was made for reference to the Parliament of any issue on which the Governor of the bank and the Treasurer of the day could not agree.
– Except that the Parliament should prevail. The honorable senator should read the provisions again.
– The bill before the chamber proposes to reinstitute board control. As was indicated in the Minister’s second-reading speech,_a panel of men of proved knowledge and experience shall be appointed to decide the financial policy of the Commonwealth Bank. No Treasurer would lightly sweep aside a policy decision made by a board of independent experts.
– Has the honorable senator read the 1911 legislation?
– I have not read that measure-
– The honorable senator would be well advised to do so.
– I probably shall read it in my spare time, because I am always eager to learn. Under the measure before the chamber it is provided that where there is a disagreement the matter must be referred to the Parliament. That is the cardinal point at issue. In simple terms, it is a choice between one-man control and board control-
– And parliamentary control.
– That is so. I am all in favour of hoard control plus parliamentary control.
– What did the Scullin Government do in 1929-30?
– We are dealing with events in 1950, not those of the ‘thirties.
– Labour will see to it that the conditions of those days shall not return to this country.
– Control is far safer in the hands of a board than in the hands of one man. It is imperative that the elected representatives of the people should have the opportunity to review any conflict between the board and the Treasurer. That is very important. The Opposition expressed concern about the constitution of the board. Although honorable senators opposite are apparently perfectly satisfied with the first five of the proposed personnel, they do not accept the Government’s assurance that the other five appointees will be men of experience and independence, in no way connected with the trading banks of this country.
– Experienced in what way?
– I merely repeat the assurance that is embodied in the bill. We shall appoint men experienced in the banking business, but not connected with banks. Many suggestions have been made about the identity of the other five appointees. The absurd suggestion has been made that Professor Hytten will be appointed to the board. That is almost laughable. It has also been suggested, either in this chamber or in another place, that the honorable member for Mackellar (Mr. Wentworth) will be appointed. I point out that adequate safeguards are provided in this measure. The appointees will be free from sectional interests and unassociated with other banks. The Government assures the Opposition that those men will be chosen in the light of their experience and knowledge. They will be men able to give a balanced judgment in relation to important matters. I support Senator McCallum’s contention that this measure conforms with the recommendations contained in paragraph 575 of the report of the Royal Commission on Banking and Monetary Systems in relation to board control. This aspect of the matter has been mentioned previously by the Attorney-General (Senator Spicer). With few exceptions, board control has been accepted the world over as the best method of business management. The Commonwealth Bank is a very great institution. The Opposition has not a monopoly in the matter of regard for it. We are just as anxious to strengthen the Commonwealth Bank in every way possible as are honorable senators opposite, and this bill is designed to achieve that end.
– In what way is it not functioning properly now ?
– I do not deny that the bank has functioned well in the past, but that does not prove that it cannot function better in the future, and we intend that it shall. It can do better only if it is placed under the control of a hoard. Other provisions of the bill are also designed to extend the influence and operations of the Commonwealth Bank. For instance, the bill provides for an extension of the activities of the General Banking Division, the Rural Credits Department, as well as the Mortgage Bank Department, and the Industrial Finance Department.
– How are they to be improved?
– Over a period of five years, it is proposed to increase by £5,000,000 the capital at the disposal of those departments.
– The capital is there now.
– The honorable senator says so, but I am not prepared to take his word for that. In my opinion, the Commonwealth Bank is the greatest institution of its kind in Australia, and I hope it will always be so. I shall do nothing to destroy its influence or its power for good.
– Senator Hannaford quoted from a book in support of his argument. I move -
That the document quoted from by Senator Hannaford during his speech be laid upon the Table.
– I rise to a point of order. The standing order regarding this matter mentions a document. I do not profess to know what rulings have been made on the point, hut I do not think that the standing order relates to a book. Something can he said for the point of view that the standing order refers only to a situation in which an honorable senator quotes from a letter, for instance. In such a case, it would be proper to move that the letter be tabled. I find it difficult to believe that if an honorable senator were quoting from a precious book, the Senate could order him to lay it on the table, so that it would come into the possession of the Senate, and, presumably, might remain there. I am not taking this point in order to try to prevent the tabling of the matter from which Senator Hannaford quoted. We shall be glad to provide as many copies as may be required. I merely suggest that the standing order does not properly apply to a book.
– Some years ago, I quoted from a book in the course of a debate, and the Attorney-General (Senator Spicer), and the late Senator Leckie, were responsible for requiring me to table the book.
– The relevant standing order is No. 364, which states that a document quoted from by a senator, not a Minister of the Crown, may be ordered by the Senate to be laid on the table. Senator Ashley said that Senator Hannaford quoted from a book. I do not know whether it was a book or a paper. Apparently, he quoted from printed matter of some kind. If an honorable senator quotes from a book or a prepared document, and the Senate orders that the book or document be laid on the table, then it must be laid on the table.
– I have no objection.
– Then it will be laid on the table.
Question resolved in the affirmative.
– I lay on the table the following document: -
The Case against Socialist Labour.
– Before I embark on a discussion of the specific provisions of the bill, I wish to make some comment on state ments made by Government supporters, and I propose to controvert several of them. Senator Hannaford complained of the delaying tactics, as he called them, of the Opposition. The honorable senator must have a very short memory, or he is ill-informed. When the bill was first presented to this chamber by courtesy of the Opposition - and I emphasize that it was by courtesy of the Opposition - .we allowed it to be carried straight through to the second-reading stage without delay. If we had wished to delay its passage we could have held up the first reading for a day, and we could have delayed it further when it came to the second-reading stage.
– There was an arrangement about that.
– Yes, and the existence of such an arrangement refutes the charge that the Opposition has delayed the bill. When Senator Hannaford has been in the Senate a little longer he will realize that it is not only the right of every honorable senator to speak on the business that comes before the Senate, but also his duty to do so if he has a contribution to make to the debate. I refute with all the emphasis I can command the suggestion of Senator Hannaford, or any other Government supporter, that the Opposition is delaying, or has sought to delay, the bill.
Both the Attorney-General (Senator Spicer) and Senator Hannaford said that this bill was in accord with the policy placed before the electors by the Government parties during the election campaign. To that claim I give the flattest contradiction, and I do so for three reasons. I quote the following from a print of the joint opposition policy speech delivered by the present Prime Minister (Mr. Menzies) : -
A bank board of experienced and independent men would afford a guarantee that no policy would be lightly swept aside by the political head of the Treasury.
What did the people understand by the word “independent”? They understood, I am sure, that it referred to men who had no other god to serve but the bank; men who would be able to devote their time wholly to the service of the country, through the bank. There is not one word in the policy speech to indicate that persons outside the Public Service, or the service of the bank, would be imported into the bank in order to sit on the board. I venture to say that if any honorable senator who supports the Government can point to one word that conveys specifically to the people of Australia the idea that outside interests were to be imported into the management of the bank, the Government will have no further cause to complain of efforts by the Opposition to delay the passage of the bill.
– How does the honorable senator define the word “independent “ ?
– An independent man would be one with no other interest to serve than that of his immediate employer - in this instance, the Commonwealth Bank. In this measure, the Government has re-written a provision that the Labour Government wrote into the Commonwealth Bank Act 1945 providing that the Governor and the Deputy Governor of the bank shall vacate office if they take any other paid employment whatsoever. That’ safeguard has been thrown to the winds, and it is now proposed to import into the management of the Commonwealth Bank the champions of the private banks and of private enterprise.
– Would the honorable senator prescribe the same test of independence in the case of senators?
– Senator Wright knows the answer to that question. If not, he should. So much for the first count. I now come to the second. The present Prime Minister, in the joint policy speech of the Government parties, also said -
We therefore propose to Bet up under control by Parliament a small board of directors of the Commonwealth Bank.
By no stretch of imagination could any one regard a board of ten as a small board.
– It could not be called a big one.
– Indeed, it could. A board of ten would be an unwieldy board. Dr. Jones, of Melbourne, when criticizing a proposal to appoint a colossal board to deal with the subject of mental hygiene, quoted the following line from Gilbert and Sullivan’s The Gondoliers: -
When every one is somebody, then no one’s anybody.
That can be applied to the proposed Commonwealth Bank Board, which would have so many members that they would get in one another’s way. A board of ten would be unwieldy. If a board is to be appointed, it should be a small one. When the question of a Commonwealth Bank Board was under consideration in 1945, the present Treasurer (Mr. Fadden), in his capacity as leader of the Australian Country party, moved an amendment to the Commonwealth Bank Bill that the board should consist of the Governor of the bank, the Secretary to the Treasury, and six other members. And then the right honorable gentleman let the cat out of the bag, because he added that the six other members should be appointed from among those who had been actively engaged in agriculture, commerce, finance and industry.
– Experienced men are needed.
– My point is that the Treasurer, at that time, wanted a board of eight members. Now, the Government calls a board of ten a small board. On this point, the Government has broken its election pledge.
I come now to the third point on which I cite the Government for running away from its election pledge. In the same speech the Prime Minister said -
To provide some much needed check to inflation of currency, we shall restore parliamentary control over the Commonwealth note issue.
That was the most arrant nonsense and humbug. Even the most elementary student of economics knows that the note issue has nothing to do with conditioning inflation or deflation, and that it is a mere indication of a trend in the community under either of those heads. In their second-reading speeches the AttorneyGeneral and the Treasurer have thrown away completely the point to which I have referred. Will any member of the Government deny that? Having committed a schoolboy economic howler, they have reconsidered their policy speech, and discarded it. In his second-reading speech the Minister for Social Services (Senator Spooner) said -
The Government has decided that further statutory provision in respect of the note issue is not necessary.
That is clear abnegation of the pledge. The Minister went on to say what he should have known .in the beginning and something that is known to the .most elementary student of economics - lt is clear that in Australia to-day, as in other modern communities, the note issue is an indicator of the general credit situation rather than a means of controlling credit.
So I cite the Government for running away from its election pledges on the three counts .that I have indicated.
I shall now refer to the AttorneyGeneral and I have no hesitation in saying that I heard more inaccurate statements in his speech last week while the proceedings of this Senate were being broadcast than I have heard in any speech in this chamber for a considerable period, I realize that I shall have to justify that statement.
– Or try to do so ! -Senator McKENNA. - There will be no difficulty about the endeavour or the success. The Attorney-General referred, first, to the case of the Melbourne City Council against the Commonwealth in 1947 relating to the requirements in the Bank Act that the municipalities should bank with the Commonwealth Bank. That provision was vetoed in the High Court, and referring to that decision the Attorney-General said -
Within, at the most, forty-eight hours of the announcement, “the then Prime Minister, without consulting his party, announced that the Banks would be nationalized. Cabinet was not meeting. The decision of the High Court was announced on a Thursday morning and it was reported in the press on Saturday afternoon that the then Prime Minister had decided that the banking structure of this nation was to be nationalized. It was an excellent example of one-man control. The Prime Minister acted without the approval of the party of which he was leader and further that decision was made without first seeking approval of Cabinet. let me review those statements and state the facts. As one who was privy to the decision in all its stages and as one of the few Ministers who was in the confidence of the former Treasurer (Mr. Chifley) before he made his recommendation to Cabinet, let me inform the Senate that the decision was made by Cabinet on the recommendation of the Prime Minister of that time who was also Treasurer.
– The decision of the court was announced on the 13th August, 1947. The decision of the Cabinet was announced on the 16th August, 1947. The terms of the decision were communicated to all Australia in these words -
Cabinet to-day authorized the AttorneyGeneral (Dr. Evatt) and myself to prepare legislation for submission to the Federal Parliamentary Labour Party for the nationalization of banking other than State banks with proper -protection for the shareholders, borrowers and starts of the private banks.
– At that stage there was no party approval.
– If the honorable senator will listen carefully and bring his mind to bear on what I am saying, the instruction was to the Treasurer of the day (Mr. Chifley) and the AttorneyGeneral (Dr. Evatt) to prepare legislation for submission to the Federal Parliamentary labour party.
– Was that the first announcement ?
– Yes, it was.
– Was it published in that form?
– In exactly that form. The honorable senator can check the newspapers of that time if he wishes to do so. Further, the party met and considered the matter and made a decision on the 16th December, 1947. To illustrate the democratic procedures in the Labour party, I shall explain that as far back as May, 1947, just before the Parliament broke up for the winter recess, the Federal Parliamentary Labour party authorized the Cabinet, in which it had complete confidence, to take whatever steps were necessary following upon the announcement of the High Court’s decision which was expected about that time. Instead of acting on that blank cheque, the Cabinet and the Prime Minister followed the democratic procedure that I have outlined, and I say that the statements by the present Attorney-General were wholly false in every particular. There was not one grain of truth in them.
I do not suggest for one .moment that the Minister made those false statements deliberately. I rather suggest that he had been reading literature of the type that Senator Hannaford has been reading in the Senate to-day. The book that the honorable senator has tabled at the instance of Senator Ashley was signed by himself at the top for identification purposes and is The Case against Socialist Labour. It is prepared by the federal secretariat of the Liberal party of Australia. An honorable senator has remarked that there is nothing at all wrong with that. All I can say is that I strongly suspect that the Attorney-General must have been reading literature of that type or he would never have fallen into such error. I invite the Attorney-General to acknowledge his error, either now or at some other more appropriate occasion in the course of this debate, and withdraw the statement that he has made on wholly false information picturing Labour’s Leader, Mr. Chifley, as a totalitarian dictator. If the Minister accepts my suggestion and withdraws his statement, he will be in excellent company from his own viewpoint, because the Prime Minister has recently had to withdraw publicly statements that he had made which were damaging to the reputation of certain people in this community.
There were three main reasons why the Labour Government embarked on an attempt to nationalize the banking system of Australia. In the first place, the Labour party believed, as it still believes, that it had the right policy for Australia, and that an institution so vital to the economy and the lives of the people of Australia as is the Commonwealth Bank should not rest in the hands of any private members or organizations, no matter how responsible they might be, but should rest in the National Parliament in the ultimate analysis. That was the first main reason and I do not propose to develop it now.
The second reason was the attack made by the Melbourne City Council against the 1945 banking legislation. One honorable senator on the Government side of the chamber intimated that only one setcon of that act was under attack, and in fact the Leader of the Australian Country party, in the course of his separate policy speech, said, referring to Mr. Chifley- . . his statement was deliberately intended to mislead. The 1945 bank act was challenged but in one pert only.
I have referred before in this Senate to the statement of claim that was filed in that case. It plainly launched an attack against the whole of the 1945 banking legislation. It attacked section 48 which required municipalities to bank with the people’s bank. Let me quote clause 12 of the statement of claim filed by the Melbourne City Council.
– “Where is that to be found in Hansard i
– It is to be found in Hansard of the 24th November, 1947, at page 2528. If the honorable senator is not happy about that, I refer him to Volume 74 of the Commonwealth Law Reports at page 34, where the statement of claim is particularized so far as the relevant sections are concerned.
– Did any point in the case turn on it?
– Ultimately the matter was discussed solely on section 48. As to whether it was unchallenged or not, paragraph 12 stated -
The Banking Act 1945 or, alternatively, section 48 thereof, is beyond the powers of the Commonwealth of Australia, contrary to the provisions of the Constitution of the Commonwealth and is void.
Paragraph 13 of the statement of claim stated - . . alternatively to paragraph 12 hereof, sections 18-22 of the Banking Act 1945 constitute a law imposing taxation and by reason thereof and of section 55 of the Constitution, section 48 of the said Act is of no effect.
Pursuant to that clause, the argument advanced to the court was that sections 18-22 were allegedly taxation provisions and all other clauses in the bill failed. That is not the only count on which I rest. If there was any doubt about it, it was resolved when the Solicitor-General of the day wrote to the solicitors of the Melbourne City Council pointing out that the whole act was under challenge and asking on what particular points the attack was to be directed. I invite honorable senators to listen to the answer from the solicitors -
The particular provisions of the Constitution which it will be contended are infringed by the Banking Act 1945 or alternatively section 48 thereof are matters of legal argument and it is not customary to give particulars in advance of what legal argument will be put to the Court.
So when the Commonwealth went to the High Court, it had to face up to the fact that the whole act was challenged.
The third reason I give for the attempt at nationalization was the fact that when in 1945 the various private trading banks of Australia were called upon to deposit their surplus investible funds with the Commonwealth Bank pursuant to the Banking Act 1945, they complied certainly, but each one of them wrote a letter protesting against the requirements and reserving all its rights as to the validity of the law which required it to do so. These are the factors that influence the mind of the government of the day, and I say quite frankly that had the 1945 legislation, of which the present Government parties so whole-heartedly approve, except for the substitution of board control for control by the Government, been left unassailed, no attempt would have been made to nationalize the banks. The attempt at nationalization bore very good fruit for the Labour party. It did much to focus thought on the need for parliamentary control, the need to establish the Commonwealth Bank as a statutory central bank, the need to control the advances policy of the banks, the need to regulate interest rates, and, above all, the need to confer ultimate authority on the Parliament of the nation through the government of the day. The arguments that developed in this community - and they were fierce - following the attempt at bank nationalization, educated the Australian people, and even educated the Opposition of the day which is now the Government. Honorable senators opposite are to-day giving to the 1945 banking legislation all the blessings in the world, except that they want to substitute board control for control by the Government.
– The honorable senator must feel rather flattered.
– Yes, we are very happy. Our only regret is that the present Government parties did not see the light a little earlier and thus save a great deal of litigation with consequent detriment to the lawyers of the country. To show the compete conversion of the Government parties, let me remind the senator of what their leader, the present Prime Minister, said in 1945 when Labour’s banking legislation was before the House of Representatives. On the 21st March, 1945, the right honorable gentleman described the whole bill as reactionary and unsound. He approves of it to-day. He also said that it would weaken the central bank; but this Government is leaving the 1945 legislation substantially as it stands. He said that there was a chance that the bill would destroy the currency; yet we find no amendments in this measure on that subject. The then Deputy Leader of the Opposition (Mr. Fadden) who now, as Commonwealth Treasurer approves of 99^ per cent, of the 1945 legislation, said on the 22nd March, 1945, that the Commonwealth Bank Bill was a revolutionary measure, a sentence of death on the private banks, that it would have an adverse effect on overseas operations, and could only lead to instability and lack of confidence. Those were the statements of the present day leaders of the Government. They simply serve to show how right Labour’s banking policy was. Even in the annual speeches with which the general managers and chairmen of directors of the various banks are wont to afflict shareholders, one frequently reads the statement : “ Of course, there must be parliamentary control of banking and monetary policy “. The conversion of all classes in this community is now almost complete. The pity is that that canversion did not take place in 1945.
In the course of this debate there have been several facetious references to lawyers and their ability to make black appear white. Before passing from bank nationalization, I wish to refer to the decision of the Privy Council, and to furnish to the Senate a classic example of black being made white. Section 92 of the Constitution provides that trade, commerce and intercourse between the States shall be absolutely free. Those are very wide terms, and the broad effect of legal decisions, so far as I can assess them, is that whilst trade, commerce and intercourse between the States cannot be prohibited or restricted, they can be regulated. The difficulty of course is to determine at any stage what is prohibition, what is restriction, and what is mere regulation. The Privy Council addressed itself to that matter because the key section of the Bank Nationalization Act 1947, section 47, prohibited the private banks from engaging in banking operations after a certain date. I propose to read a few brief extracts from the Privy Council judgment which I consider to be informative, and I am sure will be interesting to the Senate. Their Lordships said -
It is generally recognized that the expression “ free “ in sec. 92, though emphasised by the accompanying “ absolutely “, yet must receive some qualification. It was, indeed, common ground in the present case that the conception of freedom of trade, Commerce and intercourse in a community regu lated by law pre-supposes some degree of restriction upon the individual. As long ago as 1916, in Duncan v. State of Queensland, (1915) 22 C.L.R. 556 at p. 573, Sir Samuel Griffith, C.J., said -
But the word “ free “ does not mean extra legem, any more than freedom means anarchy. We boast of being an absolutely free people, but that does not mean that we are not subject to law (22 A.L.R. 473).
Andthrough all the subsequent cases” in which sec.92 has been discussed, the problem hasbeen to define the qualification of that which in the Constitution is left unqualified. In this labyrinth there is no golden thread. But it seems that two general propositions may be accepted: (1) that regulation of trade, commerce and intercourse among the States is compatible with its absolute freedom, and (2) that sec. 92 is violated only when a legislative or executive act operates to restrict such trade, commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which may fairly be regarded as remote. In the application of these general propositions, in deter- mining whether an enactment is regulatory or something more, or whether a restriction is direct or only remote or incidental, there cannot fail to be differences of opinion.
I invite the Senate to note the following passage in particular: -
The problem to be solved will often be not so much legal as political, social, or economic, yet it must be solved by a court of law.
I have no doubt that many honorable senators and citizens of this country will be astonished to learn that, in dealing with a problem at a high legal level, the Privy Council, the highest tribunal in our judicial system, acknowledged that it must have regard to considerations that are political, social and economic. Proceeding with their judgment, Their Lordships said -
Yet about this, as about every other proposition in this field, a reservation must be made. For theirLordships do not intend to lay it down that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged on its own facts and in its own setting at time and circumstance, . . .
Again I ask honorable senators to take particular note of this portion of the judgment-
That cannot relate to banking, because banking has already been excluded from the possibility of monopoly - . . and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that interstate trade, commerce and intercourse thus prohibited and thus monopolised remained absolutely free.
The point I wish tomake to the Senate after reading those extracts is that there, quite plainly, is a question of the qualification of the unqualified. There is complete prohibition, in the view of Their Lordships, of something that is to be absolutely free, and if my facetious friends in the Senate wish to carry the matter one stage further, they will see that that is an instance of black being white and white being black.
The bill has three main purposes; I am concerned mainly with only one of them. Clause 3 repeals the Banking Act of 1947. As a result of the decisionsof both theHigh Court and the Privy Council, that act has been completely emasculated. Those decisions say most plainly that the nationalization of banking in this country is not possible. We accept them. Therefore we offer no objection to the repeal of an act that is now merely a shell. The second purpose of the bill is to replace control by the Governor with control by & board. I shall deal with that proposal at some length in the time that remains at my disposal. The third purpose of the bill relates to the capital of the bank. I am very interested in that matter, but I do not propose to say anything about it to-night. What I have to say will better be reserved for the committee stage. I merely warn the Minister for Social Services that Ishall be seeking much information on the effect of the various provisions, and the reasons for the changes that they effect.
The Attorney-General (Senator Spicer) advanced no specific argument in favour of the proposal to re-establish the Commonwealth Bank Board. The only argument of any substance that I could find when listening to him was that the re-establishment of the board had been promised in the joint policy speech of the leaders of the present Government parties. The Minister said, in- his second-reading speech -
In reviewing the 1045 banking legislation
A review which has resulted in leaving that legislation almost intact - and in the preparation of this bill, the Government has been deeply conscious of its responsibilities to the people, and particularly of the fact that these responsibilities require -
The Minister then proceeded to praise the work of the bank under the control of the Governor. He 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 o thieved.
In view of those statements, what is the
Mason for the proposed change? The Minister has acknowledged quite frankly that it is unwise to have frequent and violent changes. He has acknowledged also that the bank is operating very well under the Governor and has done so for five years. “Why then does the Government wish to interfere with the bank? I think that the Minister refuted his own argument. If any further justification of that criticism is required, let me refer him to that portion of his speech in which, not content with praising the Governor, he pointed out the iniquities of boards. He -aid -
When the board was established in 1924, the technique of central banking had not been developed in Australia. Even among the older central banks in Europe, central banking policy and technique had not been fully developed and. in any case, their, experience was hardly applicable to Australian conditions. In these circumstances, the board, of necessity, had to feel its way and no doubt, on looking back. it is possible to see how the work of the board could have been improved.
Has any honorable senator ever known a Minister to adopt a more absurd position in presenting a measure ? The bank, under the control of the Governor, is doing excellent work, with which the Government is satisfied. It admits, too, that boards have not done a job, but yet contends that we must have a board instead of a governor, to control the bank. That is the substance of its argument, and I have never heard a more absurd proposition. The Minister’s speech continued -
With the passage of time many of the board’s difficulties wore overcome.
This is important with regard tn experience, because the Minister went on to say -
The members developed knowledge and understanding of the problems with which they had to deal. Knowledge in relation to these problems hud been built up-
Where did he find that knowledge? and a growing body of expert technical advice was available from the bank’s staff.
I ask the Minister to tell me when he replies where, outside the Commonwealth Bank itself, which is the central bank of Australia, and outside the Public Service particularly the Treasury, he is going to find any one with any experience of central banking ? Where is he going to find any one with practical experience of it? He might find a few books like this one which has been tabled by Senator Hannaford. He might find some one with theoretical knowledge of central banking : but where, outside the Commonwealth Bank and the Commonwealth Public Service, particularly the Treasury, can he find one person who knows anything about the practice of central banking; Are we to go through the old process ot waiting until they “ develop knowledge “. and their “ knowledge is built up “, when, as the Minister has himself acknowledged, a complete fund of knowledge is already available in the minds of men in the Commonwealth Bank, who have no other interest to serve except the bank and this nation?
Let us consider the position of the bank to-day. The Governor is vested with full authority, and next to him is an advisory council. That council was provided by legislation introduced by Labour in 1929. The council consists of the Governor, th,
Deputy Governor, the Secretary to the Treasury, an officer of the Treasury and two more officers of the Commonwealth Bank - Professor Melville and Mr. Armstrong, who is the head of the Industrial Finance Section of that institution. That council has made a most conspicuous success of its job. Its members are brilliant men and experts,and they are at the Governor’s side to advise him on any matter that arises. They read the cables and they are in complete touch with all overseas happenings that may affect money and exchange. In the course of the argument that he put forward a week ago the Attorney-General made no reference to the Advisory Council.
– I did. I pointed out that its function was purely advisory, and that it took no responsibility for decisions.
– That is so, but my point is that in the Advisory Council the Governor of the bank has available to him at all times an expert body that is able to tender the best advice. I accept the Minister’s assurance that he did mention the Advisory Council in the course of his remarks, but I record my disappointment that he did not make plain the fact that I have just mentioned. Over the Governor of the bank and the Advisory Council is the Treasurer, who is responsible to his Government, which, in turn, answers to the Parliament, which it ultimately responsible to the people.
– Is the Treasurer an expert ?
– The Treasurer is responsible to the Parliament elected by the people, and he has at his side men who are experts. I pay tribute to them. They are completely disinterested. They amaze one with their knowledge of international affairs generally and particularly of the monetary and economic aspects of overseas happenings. They are experts whose whole lives are devoted to their jobs, and they function solely in the interests of the country. They give expert and independent advice to the Treasurer. Indeed, because of the existence of those expert advisers, the Treasurer would be a very dull man if he could not see the light.
-Would that not be equally true of the members of the proposed board?
– Whilst I cannot detect any sound principle underlying the Government’s proposal to establish a board, there are two very simple but important principles which underlie our proposal for control of the bank to be vested in a governor assisted by an advisory council. The first of those principles is that only experts should be entrusted with this all-important task. Because of the importance to the national economy of the sound functioning of the Commonwealth Bank, which is second only in importance to the National Parliament, we cannot place in charge of that institution, with all its diverse activities - its rural credits, mortgage bank and industrial finance departments, overseas functions and connexions and function as a central bank - individuals who are amateurs. That is the first principle which Labour applies to this matter. There must be expert control and management–
– How are the members of the proposed board to be expert if they are not connected with banking ?
– That is the difficulty which confronts the Senate. If we search for experts outside the Commonwealth Bank even Senator Hannaford acknowledges that we would have to seek them in the field of private banking. That would mean that we should have togo right into the camp of the private trading banks, and that is the milk in the coco-nut. Now let me consider the proposals of the Government.I shall refer first of all to proposed new section 23, which is contained in clause 10 of the bill. I come directly to the kernel of the Government’s proposals and the height of our objection to them. Sub-section (1.) of proposed new section 23 provides -
The Commonwealth Bank Board shall consist of -
the Secretary to the Department of the Treasury ; and
seven other members who shall be appointed by the Governor-General in accordance with the succeeding provisions of this section.
The three permanent officials who will be appointed to the proposed board are expert and completely independent individuals; and then we come to the seven other members who are to be appointed. Proposed new sub-section (2.) throws some light upon them. It states -
Of the seven members appointed tinder paragraph (d) of the last preceeding subsection, at least five shall be persons who are not officers of the Bank or of the Public Service of the Commonwealth.
That sub-section provides, in effect, that apart from the Governor of the bank, the Deputy Governor and the Secretary to the Treasury, of the persons to be appointed five cannot be drawn from the completely independent sources, which are the Public Service and the Commonwealth Bank itself. Listen again to the wording of the sub-section -
In fact, the whole seven appointees may come from outside. Anticipating the objections raised by the Opposition, the Government has stated that two of the seven appointees will be Professor Melville, who is the economist of the Commonwealth Bank, and Dr.Roland Wilson, the Commonwealth Statistician and economic adviser to the Government, who are both men of the highest character and ability, and of whom no one in this country can have anything but the highest opinion.
– Why should not the same opinion be entertained of the other five persons who will be appointed?
– Why will not the Minister tell us their names?
– The real answer is, I suppose, that we do not know ourselves.
– If that is the reason why, then I shall make the task easy for the Government. Do not name the five gentlemen who will be appointed, but give us a list of, say, fifteen names from whom the five appointees will be chosen. Letus have a look at the type of person whom you propose to place in charge at this great national institu tion. Is the Government ashamed of the persons whom it contemplates appointing to the board?
– The previous Labour Government never disclosed the names of prospective appointees.
– I am addressing my requests to the Minister in charge of the bill. The reason why the Government is not prepared to disclose the identity of the probable appointees is completely obvious. It knows that those individuals must be chosen from commercial, agricultural and other sectional interests. One very sinister and significant feature of the Government’s proposals is that the five secret appointees will not all be appointed for five years. One of them will retire after the board has functioned for twelve months, and one more after each succeeding twelve months. Let us consider the tenure of membership of Professor Melville and Dr. Roland Wilson. They will be taken care of by proposed new sub-section (3.), which provides - (3.) A member appointed under paragraph (d) of sub-section (1.) of this section who is an officer of the Bank or of the Public Service of the Commonwealth shall hold office during the pleasure of the Governor -General.
Dr. Roland Wilson and Professor Melville may hold office for only a minute, because their tenure of office will be subject to the whim of the government of the day. It is all very well for this Government to toss us the names of those two gentlemen and to suggest that the other five appointments will be men of similar calibre; the point is that the Government has a string on Dr. Roland Wilson and Professor Melville, and in one minute it can whisk them from the scene and replace them with two more “ unknowns “. I put it very strongly to the Senate that there are very sinister reasons underlying the provisions of the proposed new section 23, and I warn the Senate to be on its guard.
– Does the honorable senator deny that the previous Labour Government passed legislation in similar form in relation to the appointment of public servants?
– We may have done so, but let as consider whatthe
Government has done on this occasion. Having provided for the appointment of seven members of the board, it proceeds immediately to vary their tenu.es of office. Hie sacred five are to be appointed for terms of from one to five years, but the two independent members, the men with expert knowledge, are to have the sword of Damocles hanging over their heads for every minute of the” day. We on this side of the chamber believe that, under this Government, they would be on the scene for a very short time, and would speedily be replaced by persons who represent sectional interests.
I turn now to proposed new section 26, which reads as follows: -
A person who is a director or employee of a corporation (other than the Bank) the business nf which is wholly or mainly that of banking shall not be capable of appointment, or of continuing to act, as a member of the Hoard.
A man may not be appointed to the board if he is a director or employee, but he may cease to-day to occupy such a position and be appointed to the board to-morrow. There is no provision that he shall not have been a director or employee for, say, a period of one year prior to the appointment. There can be an immediate severance of his connexion with a banking business and an immediate taking up of a position on the Commonwealth Bank Board, and that will not be a contravention of the provision.
– That is the intention of the Government.
– i do not know that. The Government knows its own intentions. I suspect that that is its intention, because Government spokesmen are unw illing to tell us the names or backgrounds of the persons that the Government has in mind.
A significant feature of this proposed new section is that although it provides that a person who is a director or an employee of a private bank cannot be appointed to the board, there is no provision designed to prevent large shareholders in private trading banks from being appointed. From time to time bank shareholders are discovered in the most extraordinary places. Honorable senators have a very vivid recollection of where some of them were discovered.
– In the Victorian Legislative Council.
– Yes, and elsewhere.
– To what does the honorable senator refer?
– The AttorneyGeneral knows perfectly well to what I refer.
– The honorable senator should be ashamed to bring it up.
– Senator O’Flaherty, in a very excellent speech, exposed the interlocking of bank directorates with almost every phase of industry in this country, so much so that I am prepared to defy any member of the Government to point to any successful and distinguished man who is conspicuous in any sphere of industry, but has nol some line running back to the private banks.
– Do directorships disqualify socialist members in the same way?
– If Senator Wright is seeking a legal opinion, I decline to proffer it to him now, but if he approaches me in my private capacity and pays me a substantial fee I shall be very happy to oblige him. I say for the information of the honorable senator that because I am devoting the whole of my time to my parliamentary duties, my private income is suffering. If he cared to supplement it in the way that I have suggested, it would be an excellent gesture. I congratulate Senator O’Flaherty upon his speech, the preparation of which must have necessitated much effort and research.
I say firmly that we do not want on the board that will control this great national institution persons whose public duty and private interest may conflict. That is something that should be avoided. Members of the Commonwealth Bank Board will have access to confidential and advance information, supplied by banks throughout the world regarding currency movements. If a member of the board has private interests, he will be subjected to a great temptation to take advantage of such information for his own gain or the gain of his fellows. That is an aspect of the matter that must not be overlooked.
Senator Hannaford said that the persons appointed to the board will be men of wide knowledge and experience. The Minister for Social Services (Senator Spooner), in his second-reading speech, said the same thing, but he was very careful not to specify the nature of the knowledge and experience. Will they be men with wide knowledge and experience of, for instance, bedstead manufacture, motor-car salesmanship, money lending, and bookmaking? The Minister did not particularize. If ever a government put itself in a false position, it is this Government, which proposes to appoint a board consisting of ten members, to say to the two top men that if they engage in ally other employment they must vacate their offices, and to say to the other seven members, “ You can run loose in industry and make what you like as long as you toddle along now and then and direct this great institution “. [Extension of time granted.] I thank the Senate for its courtesy. I am astonished that time has passed so quickly.
– It has not passed quickly for us.
– I was thinking of myself. I have no illusions about the effect of my speech upon honorable senators opposite.
The rural members of the Government parties could not have been very happy when they read that a conference of the Australian Wheat Growers Federation, held in Perth as recently as the 14th April, expressed its strong opposition to the establishment of a board similar to the board that controlled the affairs of the Commonwealth Bank previously. I direct attention to that fact by way of friendly warning to the rural members of the Government parties.
The Attorney-General claimed that the tabling of papers in both Houses of the Parliament in the event of a dispute would give parliamentary control of the aspect of banking or monetary policy on which the dispute arose. He said, and I agree with him, that if a conflict occurred between the government of the day :nd the bank, it would be on an issue of outstanding interest and of paramount importance. It would be a cause celebre. It would certainly be in relation to an issue that had been considered very fully by the government of the day before the Treasurer committed it to a conflict with the Commonwealth Bank. It is certain that the Government would have consulted its supporters in the Parliament. If the government had a majority in both Houses of the Parliament, does anybody believe for one moment that, if Cabinet had made a decision that resulted in a conflict with the bank, there would be anything but complete support of the government’s action by the members of the government parties? It is unthinkable that the decisions would be reversed. If the government had a majority only in the House of Representatives, which is the position that exists to-day, does anybody imagine that it would resign if we were to pass a vote of no confidence in it? We could pass them all day long, and they would bc treated by the government as though they had never been passed. How will the tabling of papers permit any independent or adequate consideration of the position by the Parliament?
– Has not the honorable senator heard of motions of no confidence ?
– We would not waste our time by submitting a motion of no confidence in the Government. We are realistic enough to know that the Government would not be impressed - I think that is the appropriate word - by any motions of no confidence that we might carry.
The point that I am about to make will, I hope, expose the sinister effect of the provisions of this bill. If the bill is raped in its present form a conflict will l ever como to the surface. Let us consider again the composition of the board. If is to consist of the Governor of the bank, the Deputy Governor, and the Secretary to the Department of the Treasury. Let me pause there. The Secretary to the Department of the Treasury will conceive it to be his duty, very properly to put forward at meetings of the board, not his private view, but the view of the Treasurer of the day. What is likely to be the action of the five or seven allegedly independent members, with all their private interests ? They will wait to hear what the Secretary to the Department of the Treasury has to say, because they will know that he will express the view of the Treasurer. Being dependent upon the recommendation of the Treasurer for their appointment and continuance in office, they will come in blindly behind the Secretary, not only for that reason, but also for the very good reason that they will know that he is an expert in finance. If a board of the kind proposed in this bill is established, there will be a group of members who will always be in accord with the view of the Treasurer of the day. The Treasurer will, therefore, never be in conflict with the board. Quietly and insidiously, he will ensure that his view is accepted.
– Does the honorable senator realize that one of the independent members of the board must retire each year and that after some years the members of the board will have been elected by successive governments?
– Yes. I also realize that the fact that one of the independent members must retire each year means that a much tighter rein can be kept on the board. The members will watch their riding orders very carefully, especially the man who is next due for retirement. They will all know that their turn will come.
In the course of this debate a great deal has been said about the effects of the depression and the part that the private banks played in it. I do not propose to embark upon that topic beyond making the comment that even the Royal Commission on Monetary and Banking systems in Australia reported in 1937 that the effects of the depression could have been mitigated if the banks had adopted a more liberal advances policy. That report is now out of date; it is thirteen years old. I want to point to some very significant effects of the depression upon our economy. They account for the anxiety of the Labour party regarding the possibility of another depression, and the necessity for guarding against a repetition of what occurred between 1929 and 1934. I shall refer to some vital statistics. In the year 1928, just prior to the commencement of the depression, there were 134,000 births in Australia. By 1934, the annual birthrate had decreased to 109,000, and we did not again attain the 1928 level until 1941. Between 1928 and 1934 we lost, in effect, 25,000 children a year, because a depression was in progress. Let me translate that into terms of production. One hundred and twenty-seven thousand children over fifteen years of age went into employment in this country in 1939, that is children born prior to the depression. Ten years later, however, only 102,000 entered Australian industry. The children who should have been born in the depression years are just not there. It will take until 1958 to reach even the 1939 intake of young boys and girls to the industries of this country. I come now to a matter of great significance. When the 1945 legislation was being passed through the Parliament, and, again, when the 1947 banking legislation was being considered, Parliament House was inundated by representatives of the private trading banks. They filled the lobbies and the offices of the then Opposition, which now forms the Government. One encountered them also in the hotels of Canberra. But since the present measure has been before the Parliament I have not seen one bank officer in the lobbies, and I have not heard a word of protest from any representative of a trading bank.
– They are completely satisfied.
– The Leader of the Opposition (Senator Ashley) has supplied the complete answer. Under this measure there will be no relief for them in connexion with the matters that they have been most concerned about in the past. Although they will still be under governmental control, and will still be bound to deposit their surplus funds with the central bank as hitherto, they are happy because they realize that this measure will provide the way for sectional interests to take charge of this great national institution. Here is in fact sabotage of the Commonwealth Bank, none the better because it is camouflaged and insidious. The Minister has apologized for his boards. I think he should apologize also for this measure, which is designed to enable the Treasurer of the day to escape the political consequences of feeding his ideas into the proposed partisan board. I conclude by stressing that this is the attempted “ pay off “ to the trading banks of Australia for their political and financial support of the parties that now comprise the Government of this country during the last election campaign. This attempted sabotage of Australia’s greatest and most important institution will never come about so long as there is a Labour party to prevent it.
– In reference to a Privy Council matter dealing with banking, Senator McKenna has said that it should be judged on facts, time, and circumstances. That is the approach that must be made to this measure. It is unfortunate that in the process of discussing the bill the widest possible range of subjects has been entered upon. In their generosity, Government senators have listened to comments about matters far removed from the kernel of the matter before the Senate, in the hope that some light would be thrown upon the proposals that have been advanced by honorable senators opposite. Of course it is realized that honorable senators may address themselves to any matter before the Senate in their own way. I consider that we should adopt a straight line of attack on what is, in essence, a very simple matter. As honorable senators on the Government side of the chamber view this matter, there are two outstanding items. The first is the proposed repeal of the 1947 banking legislation. The second is the constitution of the proposed board. The 1947 legislation was a prelude to Labour’s intended nationalization of banking. As honorable senators know, it met a certain fate and is in the process of going out of existence by means of the bill before the Senate. I oppose any form of nationalization, particularly the measure to which I have referred specifically, because I have had a wide experience of the working of government departments. There is a limit to what a government department can do. The Commonwealth Bank can perform a great service to the community. However, if it were to operate purely as a government department, under a governor, it would have all of the characteristics and administrative flavour of a government department, limited in its capacity to the mind of the Government. We all know what a great institution the Commonwealth Bank is, and we are all proud of it. As Senator Hannaford has stated, a monopoly of pride in connexion with the Commonwealth Bank does not rest with one side of the chamber; it is shared by both sides. From a small beginning the bank grew on its merits. I shall not refer to a lot of extraneous matters. Many of us can recollect its early operations under the direction of Sir Denison Miller, and later under Mr. James Kell. During World War I. the Commonwealth Bank saved the people of this country millions of pounds in connexion with the raising of essential loans. It again performed a similar service to the community during World War II. Obviously honorable senators opposite who oppose this measure object to change. I point out that change in ourselves, our institutions, and the method of controlling instruments of service to the community is inevitable. The Opposition contends that there should be a sound relationship of the Commonwealth Bank to the Parliament. I believe that this measure ensures such a relationship. I listened very intently to Senator Cooke, who, in travelling completely around the compass, succeeded only in complicating what is really a simple issue. Not a thread of continuity was discernible in his address. The taboos and “ furphies “ that have been introduced by honorable senators opposite have nothing to do with the issue before us. Time and again they have said that the matter was purely political. After all, the whole of the Parliament is political, including everything that is discussed in this chamber and in another place. No arguments have been advanced to show in what particular way that slur against this measure could be justified. Reference has been made to the administration of past governments. During Senator Hannaford’s address, Senator Hendrickson referred, by interjection, to conditions that existed 30 years aero. Surely we should direct our deliberations to the conditions that now exist.
– Labour will not allow past conditions to recur in this country.
– I point out that the proposed board will be very different from the former board. Changes have been made in the light of present-day conditions. Senator O’Byrne declared that the private banks exist only for the pursuit of profit.What is wrong with that? Like any other private enterprise, they either make a profit and prosper, or incur a loss and fail. No changes are proposed in relation to the central banking function of the Commonwealth Bank, which has the power to control the profits of the private banks. Ample machinery exists in that connexion, and no suggestion has been made that the existing provisions should be changed. The Opposition has referred to supporters of the Government as guilty men. In my opinion the guilty men are those who have endeavoured to confuse the issue by introducing all sorts of extraneous matters into the debate, instead of confining their remarks to the essence of the measure before us, which is merely the establishment of a bank board. Many of the comments of honorable senators opposite have been irrelevant. Honorable senators on this side of the chamber could well have raised points of order about them. However, we refrained from doing so, in the hope that some useful contribution to the debate would ultimately be made by honorable senators opposite. Senator O’Byrne has said that complete nationalization could be achieved by retaining one bank only. Even in connexion with such every-day matters as the provision of bread in a community, honorable senators have witnessed the effects of the zoning system, under which one baker supplied all of the bread required in a particular zone. In many instances, although the bread supplied to them was not of good quality, the people concerned had no alternative but to accept it. Applied to banking, would the state of affairs that must accompany the existence of only one bank be any better?
– Is there anything wrong with the Postal Department?
– We are not at present discussing the efficiency of the Postal
Department. However, as it is the largest undertaking operated by the Commonwealth there might be a full debate on it at another time. Although in many ways it is an efficient organization I do not consider that it operates as an entirely perfect instrument. I am sure that honorable senators opposite will agree with that contention. The Postal Department is in the fortunate position of being able to raise its charges in order to balance its accounts. Senator Armstrong has said that one-man control of the Commonwealth Bank does not now exist. He referred to the relationship between the Governor of the bank, the Treasury, and the Cabinet. As matters stand, the Treasurer of the day can request the Governor of the bank to carry out a certain policy.
Those who argue that the present system is satisfactory, and that the Treasurer should continue to enjoy the power now vested in him, are inferentially expressing confidence in the present Government, and the present Treasurer. I am amazed at this sudden outburst of confidence in the present Administration. I should like to know how the honorable senator reconciles his position as director of several companies with his opposition to the appointment of a board that would control the Commonwealth Bank. Are we to assume that he really believes that the accepted system of company control is in some way defective, and should be varied? I believe, and I am sure that he also believes, that the method of board control of companies provides an effective mechanism of management for an enterprise in which shareholders are concerned. The Commonwealth Bank has the biggest list of shareholders in Australia; every Australian is a shareholder. Why should we notadopt for the Commonwealth Bank, which has more shareholders than any other concern, the same method of control as has proved itself in other fields?
The Commonwealth Bank Board which it is now proposed to appoint is a new kindofboard. The Minister for Social Services (SenatorSpooner), whointro- ducedthebill,said that the old bank board,whichwasabolished in 1945. had encountered certain difficulties. Some of its members, he said, had been too closely associated with the private banks. This bill provides that no member of the new board shall be a director of another bank. There has been much talk about the membership of the proposed board, but I am sure that, when the names are made public, the people will be well pleased.
The Leader of the Opposition (Senator Ashley) seemed to resent the fact that the trading; banks make profits, but he commended the Commonwealth Bank because, since its establishment, it had made profits totalling £85,000,000, which had gone back to the people. That money, he said, belonged to the people. T agree, but it came from them, and it had gone back to them.
– The private banks take profits from the people, but do not iri ve them back.
– The private banks pay taxes. If the honorable senator knows any method by which they can avoid doing so, his advice will be much in demand. The Commonwealth Bank discharges an important function as a central hank, and the need for a measure of government control is not disputed. Banking is a necessary and complicated operation which affects every one in the community. Banks render a multiplicity of services, ranging from that which it renders to the man who puts part of his wages into a savings bank, to that which it renders to the merchant who buys and sells goods through the facilities provided by his bank. The banks serve and touch everybody in the community.
– They “touch” them, all right!
– It would be very dangerous to place so complicated and so important a service in the hands of one man. He would need the knowledge of all the gods of Olympus, and the wisdom of all the savants of all the ages to discharge his duties properly. For such a task we need a composite mind, and that can be provided only by a board. When the Commonwealth Bank is under the control of one man, it is controlled in the same way as is a government department. We know that, with the growth of governmental activities, serious dis advantages are associated with the system of one-man control of government departments. Indeed, many of the questions asked in this Senate are directed towards this very problem. Those who suggest that the Commonwealth Bank should be under the control of one man, and treated as just another government department, fail to realize its broad and essential functions.
Clause 4 of the bill abolishes the present Advisory Council. There is no doubt that the members of the council are men of high calibre and specialized experience, but they are not permanent. They come and go. Some of them may occupy the position for only a few weeks before they are. replaced by others. Moreover, theessential weakness of the system is that I hey have no executive authority; they merely advise the Governor, who may consult one or two or more of them, then balance one opinion against the other, and form his own judgment, so that the existence of the Advisory Council does not modify the principle of one-man control. 1 hose who argue that it is better to have an advisory council than a board ignore the principle that where advice is offered there should be responsibility. Under the present system the Advisory Council has no responsibility.
Clause 7 of the bill, which proposes to repeal section 9 of the act and substitute another in its stead, gives the board great freedom of action, so that it will not be hampered or subjected to direction in the formulation of policy. It also provides that, in the case of a dispute between the board and the Treasurer, the dispute shall be brought before the elected representatives of the people in the Parliament. Moreover, the new section contains the important provision - which has not previously been commented upon, so far as I know - that the dispute shall be brought before the Parliament in a memorandum prepared, not by the Treasurer, but by the board. Once the matter is before the Parliament, the Treasurer may, of course, put his case, if he believes that the policy proposed by the board is contrary to the policy upon which the Government was elected. Honorable senators opposite may argu e that, by the time the dispute came before the Parliament the whole question would have been already decided, and finally dealt with. That is not so. When the dispute comes before the Parliament it will be publicly debated, and freely reported in the press. Senator McKenna said that if the Government of the day had a majority in both Houses nothing much would be achieved by bringing a dispute before the Parliament because the will of the Government would prevail. Surely the honorable senator must know that over and over again governments have reversed their policy, and amended or abandoned legislation, because of comments and criticism in the press. If the dispute were over a matter of importance - and only in such a case would it be pressed to the point of referring it to the Parliament - it would be. certain to receive wide publicity.
Senator McKenna said that the Secretary to the Treasury, who will be a member of the Commonwealth Bank Board, would have to do whatever the Treasurer told him. It is within my own knowledge that a former Treasurer once declared that when he wished to do a certain thing, the Treasury officials did not agree with him, and had offered other advice. Senator McKenna has implied that every departmental head is subject to political direction and would have to do what he was told or he would lose his job. He should know that public servants are protected by law, and that the political heads of their . departments cannot dispose of them at will. They are protected by the Public Service Board. The public servant has the right of appeal and is well protected. The political head of a department cannot dispose of his officers in the way that honorable senators on the Opposition side suggest. It is easy to use such arguments loosely, but they do not apply. I know a great deal about government departments because I have had more than five years’ experience in several of them.
The Leader of the Opposition (Senator Ashley) wanted to know what the bank had done that made it necessary for a board to be established. The need for a close contact between the Government and the operations of the bank is so vital that the technique of management and administration of 1950 is required and not the principles that applied in 1911 which are sought by Senator Hendrickson. It is ridiculous to suggest that there is any sound objection to a board of ten. Would honorable senators reduce the number to eight if they consider that ten are too many? To reduce the board by two would be a mere quibble. In my opinion a board of ten is small for such a vital institution with the largest shareholding in Australia. I would like to see it bigger. The strange thing about the arguments on this bill is that although objection was taken to ‘a board of ten on the ground that it was a big board, honorable senators on the opposite side had no objection to a Cabinet of eighteen being, as they say, the board. I take it, therefore, that their objection to the board of ten is only technical and that really they are not going to quibble about two members. After all the Governor has still considerable powers under this bill. A vote of five to five with a casting vote by the chairman is quite typical of similar boards.
All big enterprises have boards, each with a managing director. In this case the Governor of the bank is equivalent to a managing director. All companies limit the powers of their governor or managing director. The power of the Governor of the bank is limited in that the board has control. I am amazed at the strenuous objection of the Labour party to the board system. I invite honorable senators to consider the organization of the unions of this country. I am a strong believer in trade unions and belong to two of them myself. Does the secretary or the president run a union? No fear ! In New South Wales, the unions have a president or a secretary and a management committee and they have a certain interlocking, but in case there is any misdemeanour by the secretary, the union organization have a trades and labour council which might be termed a board-
Honorable senators interjecting,
– Order !
– I do not hear the interjectors, Mr. President, because I have made a rule never to interject. If honorable senators opposite return me the courtesy that I extend to them, I shall he pleased with that reciprocity. If they do not extend that courtesy, I name them as discourteous. I have never interrupted and I do not intend to start to do so. Groups of unions carry the hoard system even further. They have a parliament which is the Australian Council of Trades Unions. It is a very necessary organization and I am not criticizing it, hut in the operation of unionism which honorable senators opposite espouse and which I support, the unions have the equivalent of a board system. There one reaches a level similar to that of a bank board. I do not know whether the honorable senators on the other side would accept one-man control of all the unions of this country.
– There is no possible connexion between the two.
– There is a close analogy. The services supplied by the bank and by unions of this country are essential. I do not think that any reasonable person could object to a bank board for the national task that it has to do. Senator McKenna in dealing with the matter before the chamber referred to the second-reading speech of the Minister and he picked out a paragraph which he said meant violent and sudden changes in the operation of the bank. The fact is that it is not a violent change, and the mode of election of the board and the change of the personnel provide for a continuity that will avoid violent change. If the whole of the board went out concurrently, then it is conceivable that there could be a complete change in the board either by the government in office or the succeeding government, but the provision for one member to retire each year is a sound one and should allow reasonable continuity of policy. That is a method used by many authorities throughout the world. Local government authorities, particularly in Great Britain, adopt the principle for that purpose.
To say that there is no need for change merely because the Minister has said that there is a considerable measure of harmony and co-operation at present between the banks generally and the Commonwealth Bank carries no weight at all. No one denies that there is harmony. lt is proposed to introduce a better technique of management and a better way of reflecting the needs of the country. Senator McKenna referred to the Minister’s speech in which he said that the former board of the bank had to feel its way and find out just what the problems were under the expanding economy of Australia and of the Commonwealth Bank. The Minister went on to say -
To some extent its difficulties arose from the fact that the Governor of the bank was not chairman of the board. This tended to divide responsibility.
In the present bill, the method to be established does not separate the Governor from the board. He is to be the chairman of the board and that is correct.
As one who may be called an expert in certain fields of service, I was interested in the statement by Senator McKenna that it was necessary to have experts governing these matters and that experts must come from within the government service. The essential thing is that appropriate men shall be obtained from within the government service as proposed in the bill and that in addition there shall be outside men -to create a balance. Government by experts is always dangerous government. The experts should always be balanced by laymen so that what I shall term the mind of the average fellow is expressed. If honorable senators do not subscribe to that view, all the members of the Parliament should retire because this is a law-making assembly. Honorable senators are making laws for the lawyers. “Would they like the lawyers to make the laws for them? With all respect to honorable senators on both sides of the chamber, it would be an unhappy state divorced from reality if that were the position. Experts are frequently divorced from reality. Therefore to suggest that only experts should be placed on this bank board denies a principle in which all should share, that there must be a balance. Senator McKenna spoke of the members who are to be elected to the board. There is no suggestion of mystery because five have not been named. The rotation proposed is a great advantage, but honorable senators opposite claim that this i9 only a sinister move. It is amazing how a straightforward and simple proposition can be invested with an aura of mystery. That seems to be the particular forte of honorable senators on the other side. They have said that anybody occupying a government position would hold it only at the pleasure of the Government. The normal practice in the Public Service of the Commonwealth and of the States has been followed. Officers hold their positions at the pleasure of the Governor-General in Council. I agree that we should take advantage of the services of experienced officials of the Public Service but the opinion that, once appointed to the Commonwealth Bank Board, a man should sever all other connexions cannot be supported. For instance, the specialists from the Public Service would soon cease to be specialists, because they would lose their contact with governmental operations. They would cease to have any value on the board as representatives of complex governmental machinery as against purely banking machinery. The proposal to appoint the three men named in the bill, and the other two that have been named in the Minister’s secondreading speech is most practical. .
References to the past have predominated in this debate ; but let us look forward. Judging by the remarks of honorable senators opposite, they hope soon to be back on the treasury bench. If their hopes are realized, they will be able to make whatever changes they believe should be made in this legislation. In other words the administration of the Commonwealth Bank proposed in this legislation will not be inflexible or unchangeable. The need for change according to circumstances is recognized in this measure. Honorable senators opposite have wasted many words telling the Senate that appointees to the Commonwealth Bank Board will be men who have or have had some political affinity with the present Government parties. That charge is most amusing when one remembers that the Labour Government appointed as conciliation commissioners, charged with the duty of deciding industrial issues, men who had been closely associated with the Labour movement.
– That is not correct.
– What about Mr. Blackburn ?
– I was referring to most of the appointees. I have no doubt that honorable senators opposite could name an odd one who was not in the category that J have mentioned. The issues now before the Senate are clear. The bill proposes to remove from the statute-book the Banking Act 1947, and to re-introduce for the Commonwealth Bank the best type of administrative control and policy direction that it is possible to have. I believe that the bank board will serve the peo de of this coun try, through the bank, in a most effective way. The specialists on the board will be balanced bv representatives of the outside community, who will cont:n”e their normal activities just as the Public Service members will continue theirs. The proposal must commend itself to any one who looks honestly at the problem of controlling this great bank of which we are all so proud. If honorable senators genuinely desire to see an efficient and capable organization, competent to deal with the problems with which it will be confronted, they must support the bill in its entirety.
Senator FRASER (Western Australia) [10.201. - I take this opportunity to say how disappointed I am as a Western Australian at the Government’s failure to include a representative of that State in the Cabinet. For the first time since 1904, Western Australia is without representation in the Cabinet. Lest I be charged with infringing; standing orders, I point out that my authority for linking this subject with banking is contained in the report of the Royal Commission on Monetary and Banking Systems. I propose to quote from that report, not the words of a Labour man, but the words of a former Australian Country party member of the House of Representative, Mr. J. P. Abbott. In his reservation to the commission’s report, Mr. Abbott said -
While I am generally in agreement with the recommendation that the limitation on the field of choice of directors of the Commonwealth Bank Board should be removed, I feel that the Government should appoint one director who is resident in the State of Western Australia. After listening to the evidence given in Perth I have come to the conclusion that the problems of that State are in many respects different from those in the Eastern States.
No State in the Commonwealth suffered more in the depression years than did Western Australia. The inclusion in the present Cabinet of such substantial representation of New South Wales and Victoria, to the total exclusion of Western Australia, is to be deplored, and, as I have said, is unprecedented. Surely amongst the Western Australian members of this Parliament there are men whose experience, perhaps in the State Parliament of Western Australia, has fitted them for Cabinet rank in this Government.
I come now to the bill before the Senate. Socialism was mentioned a few times by Senator Guy who is from Tasmania. I remind him that he once subscribed to the policy of socialism.
– That is not true.
– I say that he once subscribed to the policy of socialism.
– And I say that that is not true.
– The honorable senator was once a Labour member of this Parliament, and as such he must have subscribed to the policy of the Labour party as we on this side have done. Now, as a supporter of a Liberal-Country party Government, he is prepared to attack all members of the Labour party from its leader, Mr. Chifley, down to the humblest member of the rank and file. After all, there are certain ethics even in politics.
– I rise to order. Senator Fraser has said that 1 subscribed to the policy of socialism. I was never a member of the socialist party. The words are offensive to me, and I ask that they be withdrawn.
The PRE SI DENT (Senator the Hon. Gordon Brown). - Senator Guy says that the words used by Senator Fraser are offensive to him, and I ask Senator Fraser to withdraw them.
– I think that there must be a misunderstanding. I did. not say that .Senator Guy had been a socialist. Far from it; I said that he had been a member of the Labour party.
– The honorable senator’s statement was offensive to me, and I ask that it be withdrawn.
– What was offensive, Mr. President?
– Senator Guy says that words that you used were offensive to him, and you say that you did not use them. That places me in a quandary, and I ask Senator Guy to state the words to which he takes exception.
– That I have subscribed to a policy of socialism.
– Did you say, Senator Fraser, that Senator Guy had subscribed to a policy of socialism?
– No. What I said was that Senator Guy had been a member of the Labour party, and that if the Labour party to-day is a socialist party, its platform remains as it was in 1931.
- Senator Guy says that certain words were used by Senator Fraser. Senator Fraser says that he did not use the words. Senator Fraser says that what he said was that Senator Guy had been a member of the Labour party. Does Senator Guy ask that those words be withdrawn?
– I ask for the withdrawal of the words which I heard and took down, that I had subscribed to a policy of socialism.
- Senator Fraser says that he did not use those words. He cannot withdraw words that he did not use. Senator Fraser may proceed.
– I repeat that-
– I rise to order. I submit that Senator Fraser has not yet denied that he said that Senator Guy had subscribed to a policy of .socialism. The honorable senator will not deny that he said that.
– Senator Guy said that certain words were used by Senator Fraser. Senator Fraser denies having used those words. Therefore he cannot withdraw them.
– He will not deny having used them.
– I remind Senator Fraser that we are now discussing the Commonwealth Bank Bill. It would be wise, perhaps, if he refrained from saying too much about the party affiliations of honorable senators.
– I accept your suggestion, Mr. President, and I shall discuss the bill. Senator Hannaford stated to-day that an agreement with the private banks had been reached by the Fadden Government in 1941. That is not quite correct. It is true, as the Minister for Social Sendees (Senator Spooner) said in his second-reading speech, that certain arrangements were made with the associated banks at that time, but that was more or less a gentleman’s agreement.
– That is so.
– When the Labour Government came into power in 1941, it set itself the task of drafting National Security Regulations embodying the arrangements that had been made with the private banks.
– That bears out what I said.
– I repeat that all that the Fadden Government did in its six weeks of office in 1941 was to make a gentleman’s agreement with the banks. Senator McKenna was quite correct. 1 was a member of the first Curtin Administration, and I recollect the many bank officials who visited Parliament House while negotiations were going on with the Government. .We do not see them now because there is no necessity for them to come here. It is of no use for honorable senators opposite to say that we should not go back into the past. My mind involuntarily goes back to World War I., when the private trading banks made huge profits, because they were not subjected to any limitation or control. Those who borrowed money from then) on mortgages were even invited to borrow more money on further mortgages so that the banks could make more money. I Jo not think that that statement can be denied. Then during the depression, despite all the statements that have been made that the banks did not have anything to do with the depression, it must be obvious to any one that they did not assist the country to overcome its difficulties. Mention has been made of the part played by the Scullin Administration during the depression, and I shall quote from a book written in 1933 by Leslie Jauncey, Ph.D., in which he stated -
Labour was returned in October, 192!). The Scullin Government became heir to all the extravagances of previous governments, as well as having to face a world depression. The Labour Government enacted legislation giving the Commonwealth Bank power to control the gold of the country.
Incidentally, he mentioned the reduction effected by the Scullin Administration in defence expenditure. Labour has been twitted about the suspension of compulsory military training, but that was dictated by the need to exercise economy.
In 1924, the Bruce-Page Government established the Commonwealth Bank Board, and I propose now to review the personnel of that board in order to indicate the type of individuals to whom antiLabour governments are prepared to confide the financial affairs of this country. That board included the following gentlemen: - Mr. J. J. Garvin, managing director of the Mutual Life and Citizens Assurance Company Limited; Mr. R. S. Drummond, manager of the New South Wales compulsory wheat pool; Sir Samuel Hordern, governing director of Anthony Hordern and Sons Limited, the Permanent Trustee Company Limited, and the Royal Insurance Company Limited; Mr. J. Leeds, general manager of the Bank of Queensland Limited, and chairman of the associated banks of Australia; Sir Robert Gibson, director of many companies; Mr. R. B. H. McComas, woolgrower; Mr. J. H. Ashton, grazier; Sir Claude Reading, banker; and Mr. A. F. Bell, director of a trusteee company.
– Mr. Scullin reappointed Sir Robert Gibson to the board.
– I admit that Mr. Scullin re-appointed Sir Robert Gibson, but he probably had no alternative, because, as honorable senators opposite are aware, the Scullin Administration did not have a majority of supporters in the Senate.
– The Parliament did not appoint the members of the Commonwealth Bank Board.
– It is true that the appointment might have been made by the Executive Council. However, the point is that, whilst we know whom the previous governments appointed to control the Commonwealth Bank, we do not know whom the present Government proposes to appoint. All we know is that it is certain that the appointees will not be Labour men. In the course of his second-reading speech, the Minister said -
In respect of central banking operations and otherwise, the Commonwealth Bank and other banks have achieved a considerable measure of harmony and co-operation, and the Government is satisfied that the broad purposes of banking and monetary policy are being achieved.
In that statement, the Minister complimented the Governor of the Commonwealth Bank and the Advisory Council, and conceded that they had achieved remarkable success and had even obtained the co-operation of the trading banks. Yet it proposes to establish a board that will take away the power of the Governor of the Commonwealth Bank. Because of the occurrence of the recent war, the government of the day was able to override the former Commonwealth Bank Board on various matters, and it compelled the associated trading banks to do certain things. It told the private banks that a limitation would be placed on the profits that they made, and that all profits in excess of certain sums had to be placed in a special account with the Commonwealth Bank. As a member of the Government which imposed that restriction I have a very real appreciation of the reasons why it did so. Before the war our economy was still somewhat depressed and there were 300,000 people unemployed. The Curtin Administration realized that a lot of money would be circulated amongst the community because of the war, and in order to prevent inflation it determined to prevent the trading banks from amassing excessive profits that would be reinvested immediately. That decision was unpalatable to the banks, and because of the attitude that they adopted it became necessary for Labour to introduce the Commonwealth Bank Act 1945. The present Government has now seized the opportunity to introduce this bill in order to defeat that legislation. The real point is that during the recent election campaign the banking legislation of 1945 was not placed in the forefront of the antiLabour parties’ campaign. Although the Banking Act 1947 had been declared invalid some months before the election, the anti-Labour parties made it the spearhead of their attack on Labour during the campaign. I know that in the State ofWestern Australia which I represent many bank employees went around among the people telling them that if Labour were returned to office they would be deprived of their employment in the trading banks. I heard the speech made by Senator Maher, who said that people who had approached the Commonwealth Bank for financial accommodation were refused such accommodation by that institution and had had to go to a trading bank to obtain assistance. That is the sort of propaganda that was circulated by bank officers during the recent election campaign.
It is significant that a man’s views will change according to the fluctuation of his personal fortunes, and I propose now to read to the Senate the views expressed in 1935 by the present Minister for Commerce and Agriculture (Mr. McEwen) when he was merely a supporter of a previous anti-Labour administration. In fairness to the honorable gentleman I admit that he did not speak on the present bill when it was being debated in the House of Representatives, but since he is a member of the Government he must be taken to approve of the measure. However, on the 11th April, 1935, he submitted the following motion in the House of Representatives : -
That this House is of the opinion that it is desirable to appoint aroyal commission to take evidence in public and report upon 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.
In support ofhis motion the honorable member said -
I do not advocate the institution of an inquiry that might be used asthe basis of an attack on the banking institutions, nor doI wish to loose a tirade against the monetary and banking systems that obtain to-day. There is, however, a doubt inthe minds of an overwhelming majority of the electors of this country as to whether our banking and monetary systems have kept pace with our social evolution and industrial progress. It is necessary that an inquiry should be conducted by the very best brains available, by people who are uninfluenced by any pre-conceivod desire to nationalize everything, but yet are free from any undue reluctance to interfere with institutions which have demonstrated their ability to influence government policy, and to direct the whole course of our economic life. There is not one of us who is notaghast 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 verypeople who are producing in such abundance, areill-fed and ill-clad. Faced with this progressive efficiency of production, our firstthought turns to a reduction of working hours. But as that wouldhave such an adverse effect onthecosts of production of ourexporting industries we arc forced todismiss it as an immediate solution of our problems.Itiswrong thatmaximumefficiency of production should coincide with minimum purchasing power of our people. Any economic system which prevents us from achieving the greatest measure of industrial progress is detrimental to our social welfare. Many trained thinkers claim that our banking system, as it exists to-day, is either wholly or partlyresponsible forour present condition. Some believe that the system is fundamentally wrong, while others maintain that it has merelylagged behind ourindustrialprogress.
If it is wrong, the sooner we establish theright system, orimprove theexisting one. the better for us all. If, however, itis proved that the existing banking and financialsystem is not in any respect responsible for theprevailing widespread want and unemployment, that fact, should be established, so thatwe may relieve our banking institutions from the suspicion under whichthey now rest in the mind 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 thedoubts ofthepeople aresetat rest the better. This problem cannot he solved by a decision ofpoliticians; it must be investigated by. trained experts in whom every one hasconfidence, and thenwe mustaccepttheir recommendations. Weshould nothavebeen justified in ourrequest for the appointment of a royal commission to investigatethismatter bad not such alargeproportionofthes indicated a desire for some radical change in ourfinancial andbankingsystem, oratleast for aninquiry into thatsystem .. .
Isuggestthat we shouldinvestigate the question whether our national bank is acting on sufficiently competitive lines. I direct attention to thefirst Commonwealth Bank Act, passed in 1911,which sets out the purposes to be served by the nation’s bank. The intention of the Parliament that foundedthat institution was that itshould carry on the general business of banking; and no later Parliament has expressed a contrary intention. Thepolicy of the bankboard, however, either with orwithout the concurrence of theGovern ment. has been to refrain from full and normal competition with thetrading banks.
– That is ancient history.
SenatorFRASER. - I know the AttorneyGeneral does not like it, but it is the truth. We can learn much from past events. Although weknow that the Commonwealth Bank was stifled until the Commonwealth Bank Board was abolished, honorable senators opposite want to re-establish the board. The fact is that this Government was returned to office - not to power - with the assistance of the associated banks. I have a copy of a memorandum that was addressed by the general manager of the Union Bank of Australia Limited, Melbourne, to the chairman of the standing committee, Union Bank of Australia Limited, Cotham, Surrey, England.
– Does the honorable senator propose to read all of it?
SenatorFRASER. - The Minister for Trade and Customs will not be pleased when he hears what it contains. In 1941 or 1942 I was accused of obtaining it from the censorshipauthorities. This is the first occasion on which I have made use of it in the Parliament, and I wish to make it clear, as I did to the late Mr. Curtin, that I did not receive it from the censorship authorities. I deplore the fact that some members of the associated banks attributed dishonest motives to the Public Service of this country. The memorandum is dated the 5th November, 1941. I do not intend to read all of it. I shall content myself with quoting extracts from it. The first is as follows: -
With all this in mind, I had come to the conclusion that something definite must be done bythe Banks, but I was forestalled at a recent meeting of the Banks by Mr. McConnan (National Bank) making thesame proposition. His idea is that something in the nature of an expanded”Sound Finance League “ witha properly equippedstaff including a competent publicist and an economist of note should be heavily subsidized by the
Hanks. This body would publish articles and broadcast them through the Press everywhere, by radio, etc. It would enter into any controversy - newspaper or otherwise, and by extensive propaganda, endeavour to educate public opinion on sound lines. The idea is that it should be purely in the national interests - our selfish interest ls interlocked with this
The second extract reads -
Mr. Healy (Australasia) was opposed to the idea, and stated that our strength had always lain in our silence. This was obviously absurd, as our silence has been taken by many to be guilt or an absence of facts and arguments to rebut the allegations levelled against the Trading Banks, and such incursions into newspaper controversy as has been made by various General Managers has done more harm than good. Our silence otherwise has merely enabled the radical thinkers and politicians to do what they liked with us. We have been inert, and in a sense deserve what we have got, but even ut this late stage much can be done.
The third extract from the memorandum that I wish to read is as follows: -
The cost may be £20/£30,000 a year or even more, but spread among the Banks this is nothing if it means our survival as independent Trading Banks and the education of the electors on lines which we think are right. The money will be well spent [ shall conclude by reading, with the consent of the President, one further passage, ft is as follows : -
The organization necessary to parry out the scheme would need to be carefully designed. Directional publicity officers, journalists, lecturers, radio experts, and accomplished exponents of banking, all would find their place, in part or wholly, in such a scheme.
The cost would be virtually the price nt advertising, justified, not only in the interest nf the community, but also is preserving and increasing the business of the banks.
Above all, such a scheme skilfully carried out would build up a solid* spirit of public relationship few governments would venture to destroy. “ The prestige of the King rests upon one or both of two things - the Sovereign right of power and the hearts of the people.” The Future of the banks depends on one or both of two things - the good favour of government and the confidence of the people. Failing the former it must cultivate the latter.
I ask for leave to continue my remarks.
Leave granted ; debate adjourned.
Motion (by Senator O’SULLIVAN agreed to -
That the Senate, at its rising, adjourn to to-morrow, at 11 a.m.
The following papers were presented : -
Commonwealth Public Service Act - Appointments - Department -
Social Services - JI. S. McLelland.
Works and Housing - A. Fowlie, H. E. Pegrum.
Senate adjourned at 10.59 p.m.
Cite as: Australia, Senate, Debates, 17 May 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19500517_senate_19_207/>.