Debate resumed from the 5th November on motion by Mr. Chifley -
That the bill be now read a second time.
– Very few proposals which have come before this House have required more serious consideration than the present one, which relates to the banking system of this country. I would remind honorable members that as far back as 1936 the present Prime Minister (Mr. Chifley) who was not then a member of Parliament, but was a member of the Royal Commission on Banking and Monetary Systems, submitted a report in the course of which he stated -
Banking differs from any other form of business because any action, good or bad,by a banking system affects almost every phase of national life.
I am sure that we all agree with that statement. Some people think that nationalization of banking may be a good thing for the community, whilst others think otherwise. For that reason a little more light should be thrown on the subject. Stretching away before us are two main roads, and the time has come when we must decide on which one we are to travel. One road leads to social security, full employment, higher standards of living and a world of expanding opportunities. That is the road that we want to follow and those are things that we want. The other road leads to depression, periods of alternating booms. and slumps, insecurity, unemployment and trade stagnation. Those are the conditions that we want to avoid. The big problem is to ascertain how we can avoid times of needless hardships, and live and work under the best conditions. In democratic countries, the people- elect governments, generally for three years, to make and administer laws for the welfare of the people between elections. We in Australia expect the Parliament to ‘ take all necessary steps to safeguard the security of the people. We are agreed that not all the undesirable things that can happen necessarily arise from the actions of enemies outside Australia, because within a country there are always forces at work which can, and do, disturb our way of life, affect our chances of earning a livelihood, our opportunities, our liberties and our possessions. The electors say to the Government, in effect, “You have been elected for three years. We expect you to govern the country well. You must make the laws in the best interests of the community. What you can do will be limited by the Australian Constitution. If you pass laws which are not sanctioned by the Constitution any person in the community can have those laws contested in the High Court; and if he is not satisfied with the Court’s decision the matter can be referred to the Privy Council”. Since federation, that method of government has been followed in Australia, and it has proved to be satisfactory. Governments consisting of parties opposed to Labour have either been in control of both Houses of the Australian Parliament, or of the Senate, for nearly 40 years out of those 47 years. During that time no alteration of the parliamentary system was. sought, or mooted. The Constitution, which was drawn up by some of the greatest men of our land, and which has been approved by every Australian Government for nearly half a century, makes provision for a referendum only when it is desired to alter the Constitution to give greater powers to the
Commonwealth. Section 51 of the Constitution gives to the Commonwealth power to legislate with respect to banking. Apparently, those who framed the Constitution believed that if every time objection was raised against some proposed legislation a referendum should be held, governments would never be able to get on with the work that they were elected to do. Some one has wisely said, “There is only one lamp by which my feet are guided; that is the lamp of experience”. Let us, therefore, try to decide whether the private banking system, which the Government proposes to abolish, has worked for the benefit, or to the detriment of the community. What does the voice of experience say? Mr. Lloyd George, Britain’s Prime Minister in World War I., writing in the Financial Times, of London, three years after the end of that war said - “Half a dozen men at the top of five big English banks can upset the whole fabric of government finance”.
Two years earlier, speaking of the peace negotiations, he said - “The bankers set statesmen and journalists on one side, and issued their orders. They knew there were no appeals against their ruthless decree”.
William Jennings Bryan, one of the founders of the Democratic party of the United States of America, once said -
The money power presses upon the nation in time of peace and conspires against it in times of adversity. Money power denounces as public enemies all who question its methods or throw light upon the harm that it does.
But quotations from what great men of the past have said are of little value unless their statements are equally true in our time. Money systems do not belong to one locality; throughout the world the private trading banking system operates on somewhat the same principle. It has long been recognized that one of the most direct ways to capture control of a nation is by gaining control of its banking policy. When we elect members to the Parliament, and a government is formed, we expect that government to govern. A real government will recognize its duty to direct financial policy in such a way that the best interests of the people shall be served. No one has any right to take the control of a country out of the hands of a democratically elected government. The question may he asked “Did the private banks ever do that in Australia”? The reply is “Yes”. Let me quote from two of our daily newspapers on this subject. In the Melbourne Sun of the 13th October, 1924, the following paragraph appeared : -
The Bruce-Page Government in its selection of the Commonwealth Bank Board has just taken the bold step of converting the Commonwealth Bank into a bankers1 bank, or a. bank for bankers.
The power that the Commonwealth Bank Board exercised as servants of the private trading banks can be judged by the following statement which appeared in the Sydney Sun of a few days ago : -
The Commonwealth Bank Board has even been able to put Prime Ministers in their place.
It is worth noting that the time referred to was the early days of the depression, when Australia was borrowing no less a sum than £3,300,000 a month on the overseas market, mostly in Britain. At that time it was impossible for Australia to raise any long-term loans abroad. The result was that more and more short-term loans had constantly to be raised in order to pay interest on debts already incurred, or to repay amounts already borrowed. The Bruce-Page Government was defeated at the following elections, and the Scullin Government was formed in October, 1929, when the prices of the goods which we were able to export had fallen by many millions of pounds. All parties said that a depression in Australia was inevitable because of excessive borrowing overseas and the fall of world prices for those goods that we exported. When the depression came, people were thrown out of work. That was a natural result of the depression. The Scullin Government then asked the Commonwealth Bank to advance £6,000,000 for relief to farmers and £12,000,000 to provide work for 50,000 unemployed workers. The House knows that the Commonwealth Bank Board refused to advance the money, and that at the same time the private banks called in overdrafts and reduced the amounts advanced by way of loan. In .1932, nearly 600,000 Australians were out of work, and there was stagnation throughout the Commonwealth. Looking back on those days, every authority says that the Commonwealth Bank Board was wrong in not advancing money to the. Government at the beginning of the depression. Later on, of course, it was too late. An amount of £53,000,000 was raised and lent to the State governments. The Scullin Government was right, and the Commonwealth Bank Board, which was controlled by the private banks, was at least partly responsible for the severity of the depression in this country. It was to that incident which the Sydney Sunday Sun referred when it said that the Commonwealth Bank Board had even been able to put Prime Ministers in their place. One may ask, what will happen when another depression starts? If the private banking system is still in operation there must be a repetition of what happened during the last depression. The private banks have not altered their policies in the meantime. The ebb and flow of credit is still determined by two factors - first, by the need of the banks to protect themselves, and thus continue to function, and, secondly, by their desire to make profits. To make profits is, of course the reason why private trading banks keep their doors open. When another depression comes, if it does come, the banks will, in the normal way’ of business, again contract credit.When that happens, business will slow’ down, industries will close and, naturally, unemployment will increase. Under a system of nationalized banking, the Commonwealth Bank would not act in that way. If it applies the policy drawn up by the present Government, money for necessary works will be provided in time to prevent the spread of a depression. What happens overseas cannot exactly cause a depression in Australia, but it can bring to our shores the conditions out of which a depression can grow. It is important that some real plan should be made to meet such a situation. So far, only one plan has been put forward - that contained in the Government White Paper on full employment presented to the Parliament approximately three years ago. It provides, as honorable members know, for the employment of the people on necessary public works, if circumstances over which nobody has control prevent them from continuing in their ordinary jobs. Bad seasons, and fi decline of world prices, are beyond the control of anybody in Australia, but in planned economy the people can be provided with work until normal conditions are restored. Pull employment and social security can be maintained if money is made available for necessary national works. When we remember the shortage of goods in Australia, it is “evident that there is plenty of work for every one for many years to come. The last depression was not due to the fact “that there was no necessary work to be done, nor to the fact that there were not hundreds of thousands of willing workers to do the jobs, but because there was a shortage of money with which to pay wages and buy supplies.
As a matter of fact, there was, during the last depression, what some people call over-production, but what was actually under-consumption. Our people went without in a land of plenty. That absurd position arose because the banking system would not advance money to enable people to get on with their work. We must, in future, avoid booms and slumps. We must have orderly progress, and a banking system which will give proper service when and where it is needed. Experience in every period of the depression has shown that the private banks have not been able to do this. They have always expanded the national economy unduly, with the result that the day always comes when money has to be called in, and business restricted. The banks always look after their own interests, which are concerned with the making of profits and they do not concern themselves much with matters such as full employment and social security. The last depression taught us one valuable lesson, namely, that our economic policy must be linked with the social welfare of the people.
In the perplexing days ahead, in which another depression can arise, we must keep that fact in mind. We must prepare now to ensure that money is available with which to provide full employment should a depression develop. Judging from all the facts, there appears to only be one solution of the problem. Complete control of our financial system must be given into the hands of the elected representatives of the people. In that way only can money be made the servant of the nation. If, as we believe, effective government control will rid us of the ills to which I have just referred, nothing can be wrong with an . attempt to stabilize the issue and use of credit so that we may make of Australia a better place for Australians to live in. When all is said and done, government is finance, and the major part of finance consists, not in the massing of money, but in directing the commerce of the nation so that industries incessantly reshape themselves to meet consumer needs as expressed in market prices at home and abroad.
There is a great deal more in the banking question than meets the eye, and a great deal more than has so far been presented to us by the defenders of the private banks. It must be said that the anxiety of the defenders of the banks for the freedom of the people it is a little overdone. Freedom is most certainly involved, but it is the freed om,’not of the people, but of the banks, with which they are concerned when they conduct so fierce a campaign for the holding of a referendum.
The real question is not, who shall be my banker, but who shall be my ruler? It is a question of sovereignty. When the banks say that the power sought by the Government is too great for any government to exercise they have not the sense to see that it is the same power which they themselves have had for far too long. Banks have ruled at their pleasure when they control the nation’s credit, as they have done in the past, and certainly it is a great power. 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 lifeblood of the entire economic body. In this way, they grasp in their hands the very life of production so that no one dare breathe against their will. There is not the least doubt about the power which they wield, and in theory at least there can be no doubt that the power should reside in the sovereign state to he used for the common good, and not to be given into private hands to be used for private good. That must be clear to all of us. To allow the credit structure to remain in private hands is to give sovereign rights to the private banks and, certainly, that is immoral. It is nothing short of political suicide because no one dare breathe against their will. If one must choose between irresistible power residing in private hands responsible to no one but their shareholders, and power residing in the government responsible to the people who elect it, the choice, plainly enough, must be government control. There can be no alternative. Our democratic way of life will not be saved by leaving power with the banks, but quite the contrary. It will lead inevitably to one of two things; either a dictator promising freedom from want and suppressing every other liberty, or the hidden dictation of .the financial barons. G. E. Chesterton once said -
The people have to choose between accepting an acknowledged dictator, and accepting dictation which they dare not acknowledge. The process will have begun by giving power to people and ret using to give them their titles; it will have ended by giving power to people who refuse to give us their names.
The banking question, therefore, is not “Who shall be my banker”, but, “Who shall be my ruler?”. To that question there can be only . one answer - nationalization and security.
- I congratulate the honorable member for Newcastle (Mr.. Watkins) on the moderate, and for this debate unusual, fair-minded way in which he dealt with some aspects of this measure. Up till now we have heard almost without a break a continuous tirade of abuse of the trading banks from honorable members opposite^ and misrepresentations of the part1 which the trading banks have played in this country. I do not intend to defend the actions and history of the trading banks. Of course, we all know of things in the past of which the banks have no cause to be proud; but I believe that honorable members opposite who, as an excuse for supporting the measure, have told deliberate lies and made deliberate misrepresentation of the banks the main plank of their platform have done this measure a very great disservice. It is true that the banks have not ‘always pleased everybody by their conduct in this country, but, at least, we have had certain safeguards with respect to the banking system. The first of them is a certain freedom of choice, because, after ‘all, no bank has really been able to control its customers. Hitherto, any citizen dissatisfied with his bank has always had the right to say, “Very well, give me my account”, and walk across the street to another bank, or to the Commonwealth Bank. That choice has been a very powerful safeguard to the people up to the present; but it is now to be taken from them.
As has been pointed out by the Leader of the Opposition (Mr. Menzies), and other honorable members, a considerable and desirable degree of supervision over banking has, of course, been vested in the Australian Government as the result of the Banking Act passed in 1945. Whatever honorable members opposite may say about the private banks, or think about them, it is quite clear that their views are not the views of the people of. this country. After all, the Commonwealth Bank has been in existence for 40 years. For 40 years the people have had the choice of banking with the Commonwealth Bank, but, to-day, more people bank with the private trading banks than have ever banked with them before. That, of course, only means that the trading banks, whatever may be said against them by honorable members opposite, have won the confidence of the people of this country, and are supported by- them. As to the abuse in general by which honorable members opposite have sought to justify the destruction of the trading banks, it may suit some of them to act as mouthpieces in littering that abuse. I can only use that term for this form of abuse; and I say “mouthpieces” because honorable members opposite one after another have risen in their places and read speeches which have been prepared for them, and have made quotations ranging from Dante’s Inferno to Paradise Lost, with which they have displayed very little familiarity. They have foisted this abuse upon the Parliament and the people in speeches which, as has been perfectly obvious, they have not had the decency to prepare for themselves. It may suit them to do that and it may suit some people in this country to listen to that form of abuse, because it is never very difficult to get an audience when one is i trying to tear something down. But those who take part in that campaign, and those who listen, know that the things that have been said in this Parliament and outside against the trading banks will be used with equal lack of restraint by socialist planners against other institutions, and will be advanced as reasons why the Government should nationalize other organizations. To-day, the banks are under fire; to-morrow, what other institutions will be under fire? Insurance companies, land, farms, homes, traders, and every branch of society and industry in this country will, in their turn, come in for this form of abuse as an excuse why the Government should reach out and take control of them. If the charges made by honorable members opposite against the private banks are true, if it is said that the banks are inspired by the profit motive and they have exploited shortages and so on, then such charges can be equally applied to any other section of the community. Can it not be said with equal truth that the farmers are largely inspired by the profit motive? “Will it not be said, when it suits the Government to extend its policy of socialization, that retail traders are equally inspired by the profit motive, and that farmers profit by shortages, and so on? Of course, that will be so. We are asked to believe that that is a terrible thing in the case of the private banks; but if we stop to think for a second, cannot the same argument he applied to almost every section of the community? We need not have much doubt that this technique of tearing down an institution by distortion and abuse will be applied in respect of other branches of our national life, because these are the tactics of those who seek to reach out and grab something from the people and to extend the Government’s authority at the expense of the people. During the last ten years, and before the war, we had many examples throughout the world of such tactics.
This is a bill to socialize the banking system. I use the word “socialize” advisedly. It is not my word; it was used by the Minister for Post-war Reconstruction (Mr. Dedman) during his second-reading speech, and also by the Vice-President of the Executive Council (Mr. Scully), who last night referred to this proposal as one to socialize the banks. Although I take objection to the bill on far wider grounds than merely what are its obvious inherent defects there are some very unpleasant features which are to be found in its structure which are “ of even greater importance. It is a bill with a very strong compulsory, and what can only be taken as authoritarian totalitarian, flavour. It is a bill to compel some 20,000 employees of the trading banks to enter the Commonwealth Service, whether they wish to do so or not. It is a bill to compel 1,400,000 people in this country who do not wish to do so, to bank with the Commonwealth Bank. It is a bill to compel the private banks by threats of beggaring them or otherwise destroying them to fall into line with these proposals. It is a bill which proposes to place all the power, which those who hold the purse strings always possess, into the hands of the political party of the day - to-day the Labour party; to-morrow, perhaps the Liberal party; and the next day, who knows? It proposes to place in the hands of a political party greater powers than have ever been vested in any political party or government in any British country at any time in its history. It is obvious, of course, that there are grave disadvantages in such a proposal. Even honorable members opposite do not pretend that there are not. Apart from some of the things I have mentioned, this proposal has to be paid for. We have to provide over £100,000,000 to pay for it. What amazes me is that, although we can see its advantages, although some thousands of people have sent in petitions against it, no one can point to a single concrete advantage that this country will derive from its implementation.
During this debate the financial and economic depression of the twenties and ‘thirties has been trotted out by honorable members opposite. Whenever the Government is in trouble that good old stayer is brought out to run over the course. We have been told that if we socialize the banking system, the socialized bank will prevent the onset of another depression. What a lot of rot!’ It may be said with equal truth that the socialized bank will prevent another drought. In advancing that argument, honorable members opposite have spoken with tongue in cheek. When they are in difficulties they always go back to the. days of the financial and economic depression. To keep alive the memories of the bitterness of those times seems to be the prime object of not a few honorable members who support the Government. If we have to hark back to times of suffering and stress I prefer to go back to times of far greater suffering, to the days of the last two wars, during which we lost 100,000 men in far more terrible circumstances than prevailed during the financial and economic depression. When we take our minds back to those wars we cannot help remembering that those who gave their lives for their country died while fighting for the very freedoms which are threatened at the present time, fighting the nationalizers, the socializers, and people of that kind abroad. The truth is that while this country was asking men to fight and our fighting men were away from our shores a miserable brood of creatures here at home were assiduously spreading pernicious propaganda in favour of the very things against which our men were fighting. This bill to socialize the banks is the first instalment of these poisonous doctrines. That is the first ground on which I take objection to the bill.
What are the advantages to be gained by this proposal? What are we to achieve as the result of the socialization of banking ? We are told that the private banks have always been conducted for profit, and that the socialized bank is to be a people’s bank. Let us look honestly at these statements about the profit motive of the private banks. After all, what is despicable in it? Who is not inspired by the profit motive? It has been admitted that certain of the trade unions are inspired by the profit motive, and certainly when we were debating our own parliamentary allowances in this
House not long ago honorable members opposite showed no little indifference to the profit motive as it affects their own activities. Why then should it be so despicable in the case of the banks? Will ‘the new socialized bank not be operated for profit? It will be very interesting for the taxpayers and the people of this country if it is not. I want to say a word about that aspect because the honorable member for Werriwa (Mr. Lazzarini) dealt with it at some length during his speech. The honorable gentleman has been a member of the Government, and he has also written a book on banking and finance, and therefore must be regarded as a man with considerable knowledge of this sort of thing. He said definitely that the new monopoly bank will not be run for profit, and he developed some very interesting theories along those lines. He said that the primary object of the bank will be to lend money to the Government for nothing. That is very interesting. If a bank lends money to the Government for nothing, how can it pay anything to its unfortunate depositors ? Who will deposit money in a bank from which they will get no interest, knowing that their money will be handed to the Government to be used for socialistic experiments? That is what the honorable member said, and I assume that that is what he meant. If that be the case, it will very soon be the end, not only of interest but also of the people’s savings, thrift and everything else for which the banking institutions stand. It will be the final stopper to the very slim chances still left for people to accumulate money for any purpose, whether to acquire a home, a business or anything else. We have heard a good deal about the “people’s bank”. I seem to have heard the term “the people’s bank” in Germany before the war. There was also a lot of talk then about “the people’s car”, the “people’s roads”, and “the people’s army”. It is well to remember that there is a great, difference between the people controlling and owning something and the Government controlling and owning it. I should like to give an example of that because I think it is apposite to the way things are to be worked out . under this scheme. There are certain assets to which the people have an inalienable and an inherent right. They go to the beaches and the hills feeling that these are their own, that these are their birthright. They feel at home in these places. When they go into a government office how much at home are they? When pensioners go to collect their payments or taxpayers go into the Income Tax Office to pay their dues, how much do they feel at home? Do they feel a sense of ownership of those institutions? They do not. In fact, the people do not own these things at all; the Government owns and directs them. When our banking system has been nationalized or socialized, citizens will go into this great totalitarian bank on exactly the same footing as they go into the Income Tax Office or any other government-directed institution to-day.
I have spoken of the probable effect of this legislation upon thrift and saving. It will destroy the incentive to save in more ways than one, because after all, how are the private banks to be paid off by the Government? How can £100,000,000 be provided immediately to buy out shareholders and stockholders in the private banks? It can be provided only by one means, and that is by churning it out on the printing presses. It can be argued, of course, that the Government will be able to release a certain amount of credit against the assets that it will acquire, but that will not alter the position materially. What will happen is this : At least £100,000,000 that is not in circulation at present will suddenly be thrown into circulation, and no provision will be made to offset that great influx of capital. When great sums of money are produced out of nothing as this will be, it can only mean inflation. That will affect this country very much indeed, and in particular, it will affect those individuals on fixed pensions, wages and salaries who already are feeling the rising costs of inflation. Secondly, it will affect those people who have savings or insurance policies. These are the individuals who will be hardest hit if the private banks are bought out in the manner obviously intended by the Government. I remind honorable members opposite that a previous Labour Government endeavoured to embark upon a programme of inflation when Mr. E. G. Theodore was treasurer of this country. The fate of that administration should be a warning to this Government, and an indication of what will happen when the people of Victoria go to the polls on Saturday. I have tried to show how undemocratic this measure is, and how unfavorable it will be to the people when the nationalization of banking begins to operate. The manner in which the bill has been introduced into this Parliament is even more undemocratic. Many honorable members opposite are well aware that the majority of the people who elected them to this Parliament are very much opposed to this proposal. I take at random the Minister for Commerce and Agriculture (Mr. Pollard), the honorable member for Wannon (Mr. McLeod) and the honorable member for Wilmot (Mr. Duthie). These honorable members represent rural electorates. Can they say that the majority of their electors favour the nationalization of banking? Can they say that there is widespread support in their electorates for abolishing private banks with which the farmers and small traders have banked over the years, getting rid of the bank managers whom they know, and replacing them with officials of a Commonwealth service run by Commonwealth servants? The bill has been foisted upon this Parliament in an undemocratic manner. Many honorable members opposite know very well that their electors do not support it. There is further evidence of a lack of regard for the principles of democracy in the manner in which the Prime Minister (Mr. Chifley) has “put it, over” the members of his own Government. I remind the House that when this proposal was first announced, few members of the Government were even in this country, and therefore could not possibly have been consulted. However, when they came home they were forced to “toe the line” and support the bill. The attitude of one Minister in particular is worthy of special mention. I refer to the Minister for Post-war Reconstruction. Not long ago that honorable gentleman claimed that the ideal banking system for this country was a strong central bank under which the trading banks could function freely. When he returned from abroad and found that this ideal system was to be completely destroyed, he protested vigorously and stood up for his principles. Or did he? He did not waste a moment before rushing into print with a statement expressing complete support of the Government’s proposal, and in his speech in this debate, he had the effrontery to say that he welcomed the measure with elation and high enthusiasm. A more despicable role was never played by a responsible Minister nor was more cynical disregard for principles ever shown.
Only one honorable member opposite has made the slightest pretence of judging this bill on its merits. I refer to the honorable member for Reid (Mr. Lang). As usual, however, he will not act in accordance with his ‘beliefs. He has said, in effect, “I do not believe in this bill, but I shall support it”. On this issue he is having £l “each way”. Although he believes the measure to be wrong, he has the effrontery to support the Government. I have endeavoured to explain my objections to this measure. I am opposed to it both because of its contents, and because of the type of legislation that I feel certain it foreshadows. Since this Parliament assembled, we have had placed before us a series of bills that have greatly increased the authority of the Australian Government. This is the most important of them all. It will give to the Government complete control over the banking system. When it has been passed, the country may very well expect all other forms of control, authority and direction to follow rapidly.
.- 1 shall answer the criticism of the bill offered by the honorable member for Henty (Mr. Gullett) in the course of my speech, but first I shall refer to his statement about Australian servicemen having died in two wars for freedom. I point out to the honorable member that within ten years of the end of World War I., men who have won the Victoria Cross were selling shoelaces in the street?-, and thousands of ex-servicemen were walking the countryside looking for work. The same thing will happen again should another depression hit this country. This measure represents an endeavour to save the ex-servicemen, who kept this country a British possession from that fate. It is an insult to the memory of the men who fought and died in the two wars, including my own brother who died on the Burma railway, for an honorable member opposite to give the impression that these lives were sacrificed for freedom to be unemployed, freedom to starve, and freedom to be insecure.
I congratulate the Government on introducing this bill. It has my support, not merely because, as a Labour member, I subscribe to the Labour movement’s platform, but because of an intense conviction that the measure is in the best interests of the people of Australia. The conviction that credit should be controlled by the democratically elected government was developed in my mind before I joined the Labour movement, through a study of finance, economics, politics and the different forms of government, at the Melbourne University and since. My convictions on the matter before the House have also been formulated as a result of practical experience on the land as a wheat-farmer’s son during the tragic depression years. From the land I went to high schools before entering a university to train for the Methodist ministry, which I entered in 1934. For eight years after leaving the university I laboured as a minister among all sections of the people, always striving to keep myself abreast of economic, social, financial and political affairs, and seeking sincerely to base all decisions and convictions on Christian ethics. And, as a member of Parliament, I am trying to extend that ministry into wider fields. I can say that I have come from the plough via the pulpit into the Parliament. All my convictions on this matter are developed from that background.
I am firmly convinced that the Commonwealth Bank established 35 years ago has the administrative, technical and financial ability to handle the expanded business of banking when this bill becomes law. At the outset, I wish to deprecate the tactics of the Opposition and certain newspaper editorials, urged on by the private bank’! themselves, in trying to stampede and panic the people by appealing to the emotions instead of to history and reason. Members of this Parliament have been threatened, intimidated and insulted, along with citizens who refused to sign petitions. In one New South Wales country town the local curate refused to. sign the petition organized by the Bank of New South Wales. The manager rang his archdeacon, who remonstrated with his curate, even threatening to mention his action to the bishop. When the curate, whom I admire for his courage, dared his archdeacon to do this, the matter was dropped. In many instances bank managers have invited ‘ their customers into their offices. When they have sat down they have been asked, “Have you signed the petition?” When they have replied that they had not, they have been invited to sign it. Few would have the courage to refuse when their money is in the bank and the manager is their virtual ruler. Unable, even by the most ruthlessly organized campaign ever attempted, by the expenditure of thousands of pounds, the most blatant appeal to the fear complex ever tried to cause a run on the Commonwealth Bank, the Opposition and the private banks have resorted to even greater fantasies of emotionalism and fear stories, that I wonder even if they believe their own ridiculous statements themselves. The honorable member for Henty asked me whether I know that the majority of my constituents are not in favour of this legislation. I have received expressions of opinion, one way or another, from only one-seventh of my constituents. Am I to assume from that that the majority of them are against the measure? I have received from people only 50 written letters. All the rest were circulars and names on petitions. In the midst of all this hysteria and intimidation, the demand was for a referendum. How many people could have given a reasoned and considered judgment amid such clamour and misrepresentation? Was there a demand by farmers and others for a referendum in 1931 when prices, wages and pensions were slashed ? No ! Or when in 1924 the right honorable member for Cowper (Sir Earle Page) and the then Prime Minister, Mr. Bruce, turned the Commonwealth Bank into a bank for bankers? No! Or in 1912, when the Fisher Labour Government brought in the Commonwealth Bank Bill, which the Opposition and the press prophesied would ruin Australia and take away our freedom? No! Or in 1910, when the Australian Notes Act forbade the banks to make or issue their own notes. No! In the hysteria of 1911 and 1912, had a referendum been held, the Commonwealth Bank Bill would never have been passed. Yet, how many to-day would say that the Commonwealth Bank was a tragic mistake or an enemy of freedom? The great bulk of the violent opposition to-day come3 from the depositors and shareholders of the private trading banks, in which there are 1,250,000 depositors and 71,000 shareholders or .045 percent, of the population. On the other hand, there are with the Commonwealth Bank, Commonwealth Savings Bank and State savings banks no fewer than 5,618,000 depositors or four, to one. The amount of deposits is not the significant factor, as the Leader of the Australian Country party (Mr. Fadden) maintained; the significant factor is that 5,618,000 depositors have by-passed the private trading banks, though they have been here since 1819 and the Commonwealth Bank only since 1912. In it there are 3,815,000 depositors.
To-day, after 128 years, there are 2,167 branches of the nine private trading banks in Australia, plus 783 agencies, a total of 2,950 trading centres, with 1,250,000 depositors. After only 35 years there are 375 branches of the trading section of the Commonwealth Bank, plus two agencies, a total of 377 trading centres, with about 120,000 depositors. This gives 424 depositors to each branch of the private trading banks and 316 to each branch of the Commonwealth Bank, a great performance in a little less than a quarter of the life-time of the trading banks in Australia.
The public control of the nation’s credit, envisaged in this bill, has become a necessity for financial and economic survival because of the failure of the private financial system in the past. This measure is not revolutionary; it is to students of finance an evolutionary measure, and I venture- to prophesy that before 25 years have passed nearly every nation will have advanced far enough to see that control of finance and credit can no longer remain a private monopoly, but must, for financial and economic sanity, become a people’s monopoly. Ever since 1694, private banking institutions have issued the credit of the nations and dictated to governments, withholding or releasing credit at will, thus holding in their hands the destinies of the people. For 353 years, these institutions have had world ramifications, surrounded themselves with a holy of holies atmosphere, discouraged a study of money and finance among the common people, put out such false stories as “safe as a bank” and “banks lend only their depositors’ money”, but the workings of high and low finance, since the depression, have been studied by thousands of people who never worried before, or who were afraid to enter that holy of holies. Ever since 1694, the private banks have created credit on which they have charged interest to individuals and governments. Banks manufacture money. The Encyclopaedia Britannica, fourteenth edition, under “Banking and Credit” says -
Banks create credit. It is a mistake to suppose that bank credit is created to any important extent by the payment of money into banks. A loan made by a bank is a clear addition to the amount of money in the community.
Mr. K. G. Hawtrey, once assistant secretary to the British Treasury, in his book Trade Depression and the Way Out, said -
When a bank lends it creates money out of nothing.
Professor Soddy says -
The cheque system, itself beneficial, has enabled the banks continuously to create and destroy money at will. It is this power of private mint which imperils the future of scientific civilization, which makes politics a sorry farce and reduces Parliament to a sham.
Money, the medium of exchange of goods and services, the life-blood of distribution between producer and consumer, is of two kinds: (1) Cash, coins, notes, &c. ; (2) credit or cheque money. As about 90 percent, of the world’s industry and trade is now carried on with credit, it can be seen what a profitable industry the private banks have carried on for 353 years - creating credit by book entries in a ledger and charging the borrower up to 10 percent., and even 12 percent., interest. Credit manufacture became more profitable when it was discovered that a bank could lend safely even up to ten times the amount of its deposits. Money has been made a weapon for good or evil, boom or slump, in the hands of private banking institutions - a master of the people and governments instead of a servant.
This bill aims to -remove the control of this all-powerful means of exchange, this privilege of creating credit, from the hands of men who are not responsible to or elected by the people to a public authority elected by and responsible to the people. The private banking system, churning out enormous profits for a few people, has plunged the world into disaster time and time again. “Safe as a bank” has been a terrible misnomer. By periodic restriction of credit, calling in overdrafts, reckless lending in good times and panic withdrawals of credit in bad times, the banks have laid trails of ruin.Crimea
In 1825, a parliamentary commission in England proved that, in the panic of 1793, over 100 English banks failed and that, from 1810 to 1S17, 600 banks failed. In the panic of 1825, up to the time of the inquiry, 26 banks collapsed. In the great, panic of 1837-38 in America, more than 3,000 banks, practically every one in the country, closed their doors. In the stampede of 1S56, every bank in America put up its shutters and then, in 1893, in Australia, the banking system failed so disastrously that people lost their savings, citizens tramped the roads semi-starved, trade and commerce were at a standstill - all because, as King O’Malley said, “there was an absence of a good banking system and the cry of over-production when the tragedy was under-consumption”. In the past 150 years, the private banks, operating internationally, have failed the people on the following tragic occasions : - 1793/1810-17. 1825, 1837, 1847, 1857, 1866, 1878, 1893, 1920-21, 1930-35. There would have ‘ been another depression by 1941 had not war intervened, for unemployment in 1937 was about 7 percent., in 193S about S percent., in 1939 about 0 percent., and in 1940 over 10 percent., the actual figure ‘being over 240,000 out of work, with 87 percent, of those working averaging only £187 a year income.
In an endeavour to stop the rot, the Labour Government in 1910 brought down the Australian Notes Bill, which prohibited private banks issuing their own bank-notes and vested the authority to print and issue our £10, £1 and 10s. notes, &c, in the Government - a national authority. There was a hue and cry throughout Australia as there is to-day. “Fisher’s Flimsies” would ruin Australia, it was said. Sir John Quick, when representing the division of Bendigo, said, according to Hansard on the 12th August, 1910 -
This bill involves a leap in the dark and 1 think it will lead to trouble, dangers and disasters undreamt of and unexpected by its framers.
Mr. L. Atkinson, the honorable member for Wilmot, said on the 19th August, 1910 -
The change will probably create great inconvenience and leave us open to grave dangers which always attend State issues of paper money.
Mr. Bruce Smith, who represented the division of Parkes, said On the 23rd August, 1910-
We are undertaking a function which is in the estimation of a considerable number, dangerous and unnecessary.
The fears were absolutely groundless, and these speeches illustrate what always happens when a progressive move is made. Vested interests fought Christ’s new order 1940 years ago. They have been doing so ever since.
Years ago, the government of the day assumed the right to mint coins for the people. The private minter of coins became a counterfeiter and was liable to punishment. In 1910 in Australia, the government took over the issue of bank notes, and the private note manufacturer became a counterfeiter. In 1945 a further stage was reached and to-day, in 1947, the bill before the House represents the final stage in this long evolutionary process, which all nations will eventually reach - that is, a bill to prohibit the private manufacture of credit, our most important and most powerful method of exchange, and to place that responsibility under public control through the people’s elected government. Henceforth; the private manufacturer of bank credit will be a counterfeiter. The establishment of the Commonwealth Bank in 1912 was another evolutionary measure in line with government control over coinage and paper currency. Its creation by the Fisher Government from the plans of King O’Malley was bitterly fought by the then Opposition and by the press, but the Commonwealth Bank financed World War I. by providing £350,000,000, saved primary producers millions of pounds in interest charges, and cushioned the depression of 1920-21 by nearly £20,000,000 before it was strangled as a competitor of the private banks by the Bruce-Page Government in 1924, When, according to the Sydney Sun, “it became a bank for bankers”, with a bank board under private bank domination and control.
Consequently when the great depression hit us in 1930, the Commonwealth Bank was impotent to cushion the effects of the financial hold-up. The real rulers of Australia were, not the Scullin Government, but the financiers outside Parliament, who were subject to no one but their shareholders, who demanded that, where the people’s welfare and their profits clashed, the profits must come first. The then Prime Minister, Mr. Scullin, needed £19,000,000 from the Commonwealth Bank Board to alleviate unemployment and to give the wheat farmers over 4s. a bushel, but the board said, “No”. As in Britain, so in Australia the financial interests seemed determined to throw out the Labour government, by cutting off its lifeblood - credit. To-day in Victoria we see the same process in operation - a Legislative Council elected by 30 percent, of the people and an instrument in the hands of outside banking interests refusing supply, or credit, and forcing .a Labour government, with a record of two years of splendid administration, to go to the country. No greater example of immorality in politics, no worse illustration of political pickpocketing, has ever been known than that in recent weeks of the Liberal-Country party plot, backed by financial1 interests in Victoria.
To-day, the banks and the Opposition are trying desperately to whitewash the part played by private banks during the period of the depression - 1930-35 - but facts and personal experiences cannot be by-passed. People’s memories, though dulled a little by the present conditions of prosperity, will recall bitter experiences. In the years 1924-29, the banks advanced money recklessly, always trying to make hay while the going was good. Then, on the 29th October, 1929, came the financial crash on Wall-street, because some one had panicked and started to sell out. Farmers and business men, working on credit or mortgage, suddenly had a blackout as overdrafts were called up, demands for the payment of debts rolled in, mortgages were foreclosed, and credit was contracted. The vital life-blood, money or purchasing power, dried up. Industry could not sell its production. Primary producers saw prices go into a tailspin, and men were thrown out of work. This meant less money with which to buy the production of factories and farms. Pensions were also slashed, thus further reducing purchasing power. The honorable member for Henty (Mr. Gullett) said that the pensions would be severely affected under the government banking proposals. That is a ridiculous statement, when we remember how pensions were slashed during the financial and economic depression approximately fifteen years ago. Pensions were slashed by the government of the day, which was forced into that position by the refusal of the Commonwealth Bank Board to provide a loan of £18,000,000. Under the Government’s banking proposals, pensions will be safer than ever they were before.
The banks blame the fall in overseas prices for the financial and economic depression. I ask: Who determines the level of prices in the United States of America or Great Britain? Obviously, the consumers in those countries buy our products only if they have the necessary purchasing power. If they have this taken away from them or it is refused, they simply cannot buy our products. The demand is controlled by the amount of money or purchasing power in the pockets of the consumers. Whoever controls the supply of money determines how much we shall buy from overseas, how much other people will buy from us.
That is the story. The financial interests were responsible for the fall in prices in the United States of America, and, consequently, for the reduction of the prices of Australian primary products.
– Were Australian banks responsible for that?
– They share the guilt, as the Royal Commission on Monetary and Banking Systems stated.
– The royal commission did not arrive at that conclusion.
– The Australian banks must accept some of the guilt for what happened during the financial and economic depression. After October, 1929, which ushered in D-day or depression clay, millions of American consumers were stripped financially naked within two years. No wonder prices fell ! The banking system is to blame for that, by lending recklessly in the boom years and then panicking and foreclosing on Farmers and business men. It was as if the jugular vein had been severed, for as blood is to our body for physical health, so is finance or purchasing power to our nation and our people for economic health. What happened? The banks do not like being reminded of their financial dictatorship, but we will not let them forget it. In the United States of America during 1931, no fewer than 2,000 banks had to close their doors. In this so-called mighty citadel of free enterprise, 28,000 business firms went bankrupt, 39 percent, of the largest corporations lost money, and half the major railroads were subject to receivership. By January, 1931, wheat was selling at the lowest price in 250 years, and textiles were down 32 percent.
– Who prepared, this speech for the honorable member?
– I prepared it. I have not any representatives of the private banks looking after my interests as have members of the Opposition. In October, 1929, 2,000,000’ persons were unemployed in the United States of America; in 1930, 4,000,000 persons; in 1932, 7,000,000 persons and in 1935, 13,000,000 persons. The pay-rolls of those in employment in factories dropped by 54 percent., and in the agricultural industries by 57 percent. In fact common purchasing power was reduced by 80 billion dollars, nearly as much as America spent in World War I.
The tidal wave of poverty and misery rolled over Europe and, indeed, most of the world. Germany soon had 6,000,000 unemployed, as American financiers withdrew credits and called in overdrafts from German industry financed under the Dawes Plan of 1924. Fifteen nations went off the gold standard, and Hitlerism was born in the resultant despair, misery and poverty. By the end of 1931, the United States of America was importing less than one-third as much as in 1928. That meant unemployment in the tin mines of Malaya, the silk mills of Japan, the rubber groves of Java, the coffee plantations in Brazil, English woollen mills, German dye works, Czechoslovakian glove factories, Italian felt looms and Australian shearing sheds. By the end of 1932, over 14,000,000 persons were out of work in Europe. These facts can be verified in Lewis Brown’s book, Something Went Wrong, which was written in 1942. I give this rapid survey of world conditions at that time, because there are still some who refuse to believe that the depression did so much damage. With the “lid off” in America in 1947, with the sky the limit, and with reckless lending, another depression is inevitable in that country within two years, and, then, Heaven help -the nation that has not control of its own finances and internal economy. For 200 years, uncoordinated, unplanned privately financed economies have been characterized by booms and slumps. It will happen again in such countries.
In Australia in the depression, 750,000 persons were out of work. Debt-ridden farmers found that interest charges on overdrafts which had been advanced in the boom years “ate up” 200 bushels of wheat compared with 100 bushels before the depression. The word “mortgage” recovered its original meaning - “death-grip”. Food was piled high in warehouses and silos, but 2,000,000 people throughout the world died from starvation in 1930-35. Wheat was dumped in the sea; oranges were piled high in California and allowed to rot; potatoes were dumped in the
Mr. Duthie. rivers, and armed guards were stationed’ to keep people from recovering, them so that they could eat them. Approximately 1,500,000 oranges were thrown into the Bay of Biscay, 5,000 head of cattle and pigs were slaughtered weekly in Denmark in 1933 and coffee was burnt and cotton ploughed under in other countries. All that occurred because financial interests bullied governments and withdrew credits.
I lived and worked on a wheat-farm in the Wimmera district during 1932 and 1933. A close relative of mine who farmed there in the period between 1910-40 paid £5,000 in interest to bankers and others on a farm originally costing £3,800. By 1932, he was paying nearly £200 interest a year. The position grew worse, and the local manager became a little Hitler, a tyrant who bullied the farmers into abject servility. “Our interest”, he thundered, “or we take over your machinery”. He did 1 Next year, the bank got a lien on the crop, and then on the horses and sheep. It even tried to collect the few shillings a week which the farmer’s wife was getting from the product of a few cows. If he wanted fertilizers, bags, oil, grease, or new machinery parts, he had to go cap in hand and beg the bank to let him have them. This is called “free enterprise”! This is called “freedom.” ! Members of the Opposition talk glibly about the loss of freedom of choice when this bill becomes law. What freedom of choice had the farmers with overdrafts? Do honorable members opposite believe that they could transfer their overdrafts from one bank to another?
– They can.
– They cannot do anything of the sort. Nothing that they can do’ will release the- death-grip of the private banks. Until the overdrafts are paid, they are the vassals of the bank. I have an overdraft with a private bank at the present time, and I should like to hear what that manager would say to me if 1 approached him and announced my intention to transfer the overdraft to another bank
Finally, my relative and his sons were virtu-ally working for the bank. He struggled on until 1940, but to-day he is a basic-wage worker who is buying another home, after helping to keep shareholders of the banks in comfort after 30 years of toil and sacrifice.
– He must have been a misfit.
– He was my father. Farmers were selling out at the rate of 28 a month in the Mallee and “Wimmera districts as this great financial dictatorship got control. Farmers who suffered and lost are betraying their own conscience if they will not realize that under government control of credit primary production will always be safeguarded from a repetition of those terrible years. The effects of the private banks’ preference for profits before the people’s welfare is revealed by the fact that in 1936 there were 2,750 deserted farms in Western Australia and 2,000 in Victoria, whilst from 1,500 to 1,700 farmers went through the South Australian bankruptcy court in a few years. While business men, workers and farmers, and especially their wives and families, were going through that Gethsemane, the private banks in Australia increased their assets by £35,000,000. The Commonwealth Year-Book reveals that between 1930 and 1935 about 195,793 insurance policies were forfeited and 1,113,156 industrial policies surrendered - a rake-off of £128,000,000 for the insurance companies! Not the elected government of the day, but the non-elected bankers, dictated the terms and conditions of life ; what we should wear, and eat and buy. Yet the Opposition has the effrontery to allege that this new measure will put us in bondage, crush our liberty, and result in our farms being taken over by the Commonwealth Bank. On the contrary, however, the aim of the Commonwealth Bank will be to keep finance circulating among producers and consumers. What a contrast to the semi-monopoly of private banks, which reduced their own numbers from 56 to 9 in 70 years. Their policy which is based on private gain rather than on a consideration of the public welfare, restricts credit just when it is needed and “sells you up”.
A royal commission to inquire into the wheat and wool industries was appointed by the Lyons Government in 1935. Its survey revealed that there were 41,S07 wheat-farmers and about 90,000 men engaged in the wool industry in Australia. Their total debts amounted to £288,000,000, and were made up as follows: -
An interest rate of 5 percent, on these amounts resulted in a.n annual interest bill of £14,000,000. Of the wheat harvest of 1935, which totalled approximately 135,000,000 bushels, 60,000,000 bushels, or ls. 3d. per bushel, went to pay the interest bill of the wheat-farmers, of whom, according to the commission, 60 percent, could not pay their way. To pay the wool-growers’ interest of £7,000,000 the wool of 21,000,000 sheep, out of a total of approximately 74,000,000 sheep was required. It was estimated that the total debt of all primary producers was £500,000,000. In Mr. Winston Churchill’s immortal phrase “Never was so much owed by so many to so few”. Altogether about 20,000 primary producers lost their holdings between 1930 and 1935.
In the face of those facts, which are unanswerable, members of the Opposition say the banks were blameless. Speaking on the Loan (Farmers’ Debt Adjustment) Bill in the House of Representatives in April, 1935, Mr. O. L. A. Abbott, who was then the United Australian party member for Gwydir, said -
Australian governments cannot continue indefinitely raising money from the taxpayers or borrowing it. The necessary effort must be made by all .who are concerned in the welfare of out primary producers. In those I include the great financial institutions, which have been singularly lacking in any definite assistance of a voluntary nature up to the present. After all, tile banks are simply business undertakings, conducted for profit. It is interesting to read what the Wool Committee said on this matter, in replying to the claim made by the financial institutions that they have greatly assisted the industry: The report says : “As middlemen they have for the most part built up reserves in prosperous years. What are the reserves for, except for a crisis? And how much more of a crisis are they reserving their undistributed profits for?”
Mr. Abbott commented ;
I have no desire to attack the financial institutions, but . I feel I should be lacking in my duty as a representative in this Parliament of primary producers if I did not say that a great deal of pressure is being put on men at present to go off the land. In other words these men are being put off the land by certain financial interests.
He then quoted a letter written by a private bank to a settler in the northwest of New South Wales. This is reported at pages 753 and 754 of Hansard, of the 4th April, 1935. That is the “form” of the Australian Country party and the Liberal party, who are now the voice of these institutions.
The power of money has been supreme; it has been a real dictator, as Sir Bertram Stevens admitted at Deniliquin on the 19th November, 1932, when he said: “We are prepared, as courageously as our bankers will allow, to get into the field of development”.
Instead of equating credit to production at all times, the private banking system has put production in a monetary strait-jacket. Winston Churchill once said : “What is physically possible should be financially possible”; but under the private control of credit it has been found to be impossible.
In this great country, a “People’s Bank”, such as the enlarged Commonwealth Bank will become, is essential. It will he unfettered and uninfluenced by international financiers, who know no country. It will be sympathetic to the basic financial needs of farmers, workers and businessmen. It will be concerned with service before profits. Backed by the great resources of our natural wealth, freed from political interference, as the Commonwealth Bank has been for 35 years, pledged to keep the lifeblood of credit circulating as a distributing force, and responsible only to the people through their elected representatives, the bank would enable Churchill’s words to be “clothed with flesh”, and would enable us to cushion the effects of a financial recession overseas. Furthermore, it would remove the menace of gambling with people’s lives, so characteristic of private finance.
My colleagues and I deny emphatically that this is communistically inspired legislation. It is purely incidental that Karl Marx’s ideas are complementary on this issue. As the honorable member for West Sydney (Mr. O’Connor) showed clearly in his splendid speech, Bishop Berkley advocated the nationalization of banking as far back as 1735, at least 115 years ‘before Marx was born. Adam Smith, who lived from 1723 to 1790, who wrote The Wealth of Nations, and was the apostle of laisser-faire, referred, in his writings, to people who advocated the national control of banking. That was half a century before Marx. Moreover, France introduced the nationalization of banking in 1848, that is, government control of credit. That was the year in which Marx and Engels wrote the Communist Manifesto, but at that time Marx was a political fugitive. He had been hunted out of France and Europe, and forced to live in London. France almost completely nationalized its banking system nineteen years before Marx wrote the first volume of Das Kapital, his biggest work. France’s banking system has earned the respect of the United States Monetary Commission, which has stated -
Its credit has come out stronger, firmer, more popular from all political crises, so much so that to-day it is truly . . . the bank of all the French people.
Did that act turn France into a Communist state? After 99 years under nationalized banking, France is no nearer being a Communist state than it was 50 years ago. Four other countries have nationalized their banking systems, and I understand that Holland is now doing so. Moreover, to infer that the Labour movement has kept silent on this issue is erroneous. During 1932-33, the right honorable member for Yarra (Mr. Scullin) the then Leader of the Opposition, made several public addresses in favour of nationalization, and included it in the policy speech which he made at Richmond, Melbourne, on the 5th January, 1933. Ex-senator Kneebone, while speaking in the Senate on the Central
Reserve Bank Bill on the 22nd April, 1931, remarked that he hoped -
This is a step towards the nationalization of banking.
Abraham Lincoln said -
The Government should create, issue and circulate all the currency needed to satisfy the spending power and the buying power of the consumers.
Professor Walter Murdoch, in an article in the Melbourne Herald on the 13th September, 1947, in reply to a question as to whether he believed in the nationalization of banking, said -
I do. Our money system - the regulation of the issue and recall of currency and credit on a national basis - is far too important, far too vital to the welfare of all of us, to be left to private profit-making firms.
A Tasmanian bank manager who is not an officer of the Commonwealth Bank wrote to me in September and stated -
Banking is not a productive industry. Money is only a medium of barter and should belong to the people. Why, then, should a privileged few make profit from those whose financial position necessitates the borrowing of money? … If private banks can afford to pay large dividends to their shareholders, and at the same time write down the value of their assets to a ridiculous figure, it is clear that either the staff is very much underpaid, and the award is a little under that of the Commonwealth Bank, or those obliged to borrow are being overcharged. The latter appear to contribute mostly to bank profits.
I might add here that the private banks offer people approximately 2 percent, for money on fixed deposit, but on money which they advance charge up to 10 percent, by way of overdraft. The letter continued -
Should the Commonwealth Government be able to reduce interest rates and be liberal in its advances to all producers, which no doubt is the motive for the present move, then the future should hold great possibilities. . . . Most private banks are managed efficiently and it should not be necessary to make alterations other than the Government being the sole owners and directing general policy.
That is, indeed, the purpose of the bill. A farmer wrote to a Tasmanian newspaper recently and stated -
The nationalization of banking appears to me to be a progressive and necessary step. Have we heard of a private bank making some of its profits available to relieve unemployment and assist farmers following climatic losses? I, and thousands not blinded by clever propaganda, are thankful that we now have a Government that will go forward with this progressive step; soon many who criticize now will then say, “Thank you, Ben Chifley”.
Thomas Jefferson, once the President of the United States of America, wrote -
I believe that banking institutions are more dangerous to our liberties than standing armies. . . . The issuing of money power should be taken from the banks and restored to the government and the people to whom it belongs.
I could quote Lloyd George, Gladstone, Lord Bryce, Richard McKenna, Bishop Burnett, and many other leaders in world thought to support the legislation now before us. Their views indicate the evolutionary nature of public control of banking.
What is the opinion of church leaders? Christ’s cleansing of the temple has been referred to. He overthrew their tables and accused the money-changers of turning the temple into a den of thieves. Money-changing was a profitable business. To-day the church is taking more interest in social, economic and political questions. It rightly maintains, however, that monetary reform, or stress on material things, will not of itself bring in a new order. A recovery of our moral and spiritual awareness, a new brotherhood of man based on love of God, is fundamental to any “new world”. However, church leaders have expressed their personal views on the subject of financial control. The late Dr. Le Fanu, Archbishop of Perth, on the 6th December, 1945, in reply to a circular from the National Bank opposing State control of banking, stated -
I am afraid it did not convince me . . The banks are so closely allied that they are virtually a monopoly, and I find it hard to see why they should be considered more disinterested than the popularly-elected representatives of the people in Parliament. . . The so-called freedom under which we have lived for the last 150 years or so has produced a civilization which, for poor people at any rate, is very far from Christian standards.
The Reverend W. Bottomley, of Melbourne, who publishes a church paper, The Beacon, in the course of an article in September, 1947, stated -
Nothing should be clearer than that the nation’s currency should be under the control of the people . . . the tragedies of the depression years were indicative of the bondage to privately controlled finance, to which the people were reduced. There is no criticism of local bank managers and employees whose general courtesy is well known. But they are not responsible for banking policy.
He regards this move as a vital step towards the brotherhood of man in the economic sphere.
The Eight Reverend Monsignor H. Devine, parish priest of Young, New South Wales, stated in his church paper in October this year -
The real question is not who shall be my bunker, but who shall be my ruler? It is a question of sovereignty. When the banks say that the power is too great to give to any government, they have not the wit to see that it is the power which they themselves have had too long. On this point, Pope Pius XI. 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”.
Monsignor Devine concludes - for to allow the credit structure to remain in private hands is to give sovereign rights to the banks and that is immoral.
Dr. W. Temple, the late Archbishop of Canterbury, when speaking at the Albert Hall, London, on the 28th September, 1942, said -
It should be the primary political principle that wherever you have something universally needed, but is governed by a monopoly, that monopoly should be taken over by the State. The issue of any new credit should be the function of a public authority.
The Pattern for Peace, which is a publication issued by the economic section of the Roman Catholic Church in 1943, stated -
We recommend that in the administration of credit the public interest alone should be considered, and that private profits through the dispensation of credit should be completely eliminated.
In 1945, the Methodist General Conference, under the “Economic Planning” section of its report, stated -
The present economic and monetary systems foster motives of gain and self-interest in a way that is contrary to the spirit and example of our Lord and are largely responsible for social conditions that are a denial of brotherhood.
We have been charged with communism, fascism and nazi-ism by the Opposition. We all know the implacable and bitter opposition of the Roman Catholic Church to communism. I ask honorable members, if the public control of credit, as proposed in this bill, is to usher in a Communist State, as Opposition members have monotonously echoed, would that church, or any of its members in the Labour party, support the bill for one single moment? If a Communist State were to be the outcome, they would not have a line of it; nor would I, or preachers of other churches, who see, as I do, a denial of God and a menace to Christian philosophy in atheistic; politically active Marxian communism. In the depression communism increased its hold because economic injustice was the seed-bed, as it was for naziism in Germany. The two philosophies of nazi-ism and communism flourish in despair, bitterness, unemployment, poverty and injustice. Therefore, any measure which is designed to safeguard the community against depressions, the birthplace for extremism, is surely a Christian measure, and anti-communistic.
This bill guarantees employees of trading banks full protection. Shareholders will receive just compensation and managers will be given the opportunity to continue in their banks. The 1,250,000 depositors, who at present deal with the trading banks, will be able to bank where they bank to-day, using the same facilities, receiving the same courtesy. A Federal Court of Claims is to be established to guarantee justice; and every single shilling now deposited in trading banks will, when this measure becomes operative, be as safe and as free from outside interference as it is to-day. This bill is the people’s safeguard against any future economic tyranny by a private financial dictatorship, and will give the government of the day the opportunity to introduce and maintain an ordered, secure economic system; something which was never possible under private financial domination.
Sitting suspended from 1248 to 2.15 p.m.
– In rising to discuss the second reading of the Banking Bill, which is now before the House, I have in mind that during the last week or two I have listened to honorable members on both sides of the House speak for and against the bill. 1 have been interested to note the trend of the debate from the initial speech of the Prime Minister (Mr. Chifley), when he introduced the bill to the speech of the honorable member for Wilmot (Mr. Duthie) just before the suspension of the sitting for luncheon today. Throughout the debate, Ministers and their supporters have attempted to misrepresent the facts and to make the people of Australia believe that certain things which happened in the past were brought about solely by the banking system in operation in Australia. They have then proceeded to argue that if the banking system were nationalized it would soon be a case of “God’s in His Heaven and all’s right with the world”. Before I conclude my speech, I hope to demonstrate the falsity of many of the arguments advanced by supporters of the Government’s proposal. I shall deal first with the remarks of the honorable member for Wilmot, because it has seldom been my lot to listen to a more specious and untruthful speech. In the early portion of it the honorable member said that banks created credit. He went on to say that a loan by a bank is a clear addition to the money in the community. I inform the honorable member that not only is it impossible for banks which are not banks of issue to create credit to an unlimited degree but also that it would be most dangerous for them to attempt to do so. Moreover, if the business of banking is conducted according to the laws relating to banking, and if, in addition, a strong central bank exists along the lines of the legislation passed by this Parliament in 1945, it is impossible for the banks to do what the honorable member has said.
– The honorable member for Wilmot knows that.
– Of course he does. He has read the report of the Royal Commission on Monetary and Banking Systems, and should, therefore, be acquainted with paragraphs 500, 501 and 502 of that report. However, I shall direct’ his attention to paragraph 500, portion of which reads -
The limit to the process of expanding advances and deposits is set by the necessity for keeping what, in the opinion of the banks, are adequate cash reserves. The amount of cash reserves which any bank will hold in proportion to its liabilities, is a matter decided in practice from its own experience as to the kind of demands made upon it in the pa3t and from its expectation as to the future.
The report goes on to describe the nature of the cash held by the banks, and then, in paragraph 502, it continues -
Apart from central bank action an increase in the cash reserves of the banks as a whole can come about only because the public holds less cash, or because cash reserves have conic into the system from outside, as when London funds increase.
I emphasize that that is the considered opinion of the Royal Commission on Monetary and Banking Systems. Yet this young gentleman from Wilmot-
– The honorable member must refer to another honorable member by the name of his constituency.
– The honorable member for Wilmot says that that is not so. He thereby denies a report signed without, reservation by the leader of his party. In trying to build up his specious case the honorable member referred to the people living in rural areas. If there is one section of the community which has shown hostility to the proposals of the Government it is that section consisting of dwellers in the rural areas of Australia. Country people, living their quiet, calm lives, are not so easily misled as are city dwellers. They can see more clearly the hidden motives lying behind the actions of governments. The people in the country districts of Australia have made up their minds concerning these proposals. Their attitude clearly demonstrates the truth expressed by that great democratic leader, Abraham Lincoln, when he said that although it might be possible to fool all of the people some of the time, and some of the people all the time, it is not possible to fool all the people all the time. Listening to the specious remarks of the honorable member for Wilmot, it seemed to me that he was little concerned as to their accuracy. The honorable member did not seem to be particularly careful of the foundations on which he based his arguments. For instance, he said that the French banking system was nationalized in 1848. As that was the year in which Karl Marx wrote Das Kapital, it would appear that the honorable member has absorbed many Marxian ideas. The Minister for Post-war Reconstruction (Mr. Dedman) also said that the banking system of Prance had been nationalized since the end of the war, and that the Leader of the Opposition (Mr. Menzies) was wrong when he said that that was not the case. I have before me the Journal Official de la Republique Francaise for the 3rd December, 1945, that is, the Government Gazette of France issued on that date. Under the heading “Lois“. I find decrees for the nationalization of the French banking system, signed by C. de Gaulle on the 2nd December, 1945, which show that not only was the French banking system not wholly nationalized, but also that only part of it was in any way nationalized. The banques d’affaires and the banks of long-term lending were not nationalized. Although they represented a large proportion of the French banking system, indeed, there was no proposal to nationalize them. They were, undoubtedly, subject to control, just as the legislation passed by this Parliament in 1945 subjected the trading banks of Australia to a measure of control. The honorable member for “Wilmot seems to believe that it is possible to fool all the people all the time. It cannot be done. In its attempt to mislead the people, the Government is heading towards a day of retribution, because no argument based on lies can forever succeed in convincing the people. The day of reckoning will come, and when it comes the Government, not the banking system, will be destroyed. I remind the House that two of its members have had a unique opportunity to study the banking system of Australia; the Prime Minister and I were members of the Royal Commission on Monetary and Banking Systems which took evidence from the early part of 1936 until the commission’s report was finalized, about August, 1937. As members of that royal commission, we had the opportunity to study the practical operations of die banking system in Australia. I am sure that the Prime Minister will agree that we have reason to be grateful to the then Prime Minister, Mr. Lyons, for the opportunity to serve on that commission. The honorable member for Indi (Mr. McEwen) pointed out that the Rural Credits Department of the Commonwealth Bank charged 3£ percent, interest on money advanced against, the rural products of Australia, and other Australian products, moving from the place of production to the place of consumption. That is what happens under national banking. That is the kind of benefit which the Commonwealth Bank conferred upon the people ! For many years before the war, I was shipping my own products from the land to Great Britain for sale at auction, and I paid 15s. percent, per annum on first-class paper discounted by the Bank of England. Compare that with 3i percent, charged by the Rural Credits Department of the Commonwealth Bank. Can any one say that there was anything in the action of that private bank inimical to the primary producers, when they were saving 2£ percent, on the money advanced on every consignment of goods moving from the Commonwealth of Australia? Yet’ this Government, which claims to represent the people, has the gross audacity to deny the benefits which primary producers have received from the private banks.
Every Government supporter has modelled his speech on that of the Prime Minister, except that some of them have out-Heroded Herod in four directions - first, by smearing the private banks and their actions during the depression, and praising the Commonwealth Bank; secondly, by alleging that the central’ control of the banking system would bebroken down unless the private banks were abolished; thirdly, by offering bribes to shareholders of the private banks and bank officers; and, fourthly,, by trying to offer assurances to the people who, they recognize, needed assuring. The Prime Minister’s speech distorts, conceals and falsifies facts. In. the section which, in the printed pamphlet containing the speech carries the heading, “Modern policy in banking”, the Prime Minister quoted paragraph 516- of the report of the Royal Commission on Monetary and Banking Systems -
The. general objective of an economic system for Australia should be to achieve the best use of our productive resources, both present and future. This means the fullest possible employment of people and resources under conditions that will provide the highest standard of living. It means, too, the reduction of fluctuations in general economic- activity. Since the monetary and banking system is an integral part of the economic system, its objective will be to assist with all. the means at its disposal in achieving these ends.
He commented upon this as follows: -
Those views as to the place and functions of money and banking in Australia were subscribed to by all members of the commission, even though there was some difference of opinion as to the ways of achieving them.
What he did not say - and in this he sought to mislead the people - was that the only difference of opinion was between himself and the other members of the commission. In the whole platoon of commissioners, the only one out of step was the right honorable gentleman himself. He might well have gone on to quote paragraph 517 of the report, which was signed by all the members of the commission except himself. It is as follows : -
The next question is, what kind of monetary and banking system will best achieve this objective? In our opinion this result in the present circumstances of Australia will be most likely to follow from a system of central banking in which trading banks and other financial institutions are integral parts of the system, with a central bank which regulates the volume of credit and currency.
That is what the royal commission thought on the subject - not what the Prime Minister tried to make us believe, when he suggested that there was a big difference of opinion among members- of the commission. We now come to that part of his speech which carries the heading “The Labour Views”, in which he says -
The Labour party has held further that since private banks are conducted primarily for profit and therefore) follow policies which in important respects run counter to the public interest, their business should be transferred to public ownership.
Let me now quote paragraph 561 of the report of the royal commission which was signed by the Prime Minister himself, in which it is stated -
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.
The right honorable gentleman now tries to make out that the trading-banks, because they are conducted for profit, have jeopardized the interests of the nation. I may not have the wisdom of the
Prime Minister, or some of the scintillating intellects of honorable, members opposite, but I have honesty of purpose and I do not go back on what I said some years ago, so that I may now inflict on the people of Australia something which is foreign to them and their way of life. The Prime Minister went on -
In the absence of control private banks can expand or contract the volume of their lending and so vary within wide limits the supply of money available to the public.
I quote from paragraph 516 of the report of the royal commission -
The limit to the process of expanding advances and deposits is set by the necessity for keeping what, in the opinion of the banks, are adequate cash reserves.
I was interested to hear the honorable member for Perth (Mr. Burke) refer in the most glowing terms to the report of the McMillan Committee on finance and industry, published in 1931. In order that honorable members may realize that this is a most admirable document, and not one to be treated lightly, I remind them that the honorable member for Perth said that it was the most authoritive body ever assembled in the British Empire. In paragraph 96, which appears at page 44 of the official report, the committee has this to say about the creation and control of credit -
The Bank of England, as the Central Bank; is in complete control of the creation of the cash base of the country, subject to such restrictions upon- the issue of legal tender money and the obligation to meet the demands for the export of gold-
Mr. Ernest Bevin, the present Secretary of Foreign Affairs in the Attlee Government, was one of the signatories to that particular section. Under the Banking- Act of 1945, the Government has greater power than was ever exercised by the Bank of England, because nalder that act the Government is not restricted as to the note issue: There is no limit to the value of the note issue in Australia - no limit but the sky, and we have heard that eminent medical authority the honorable member for Denison (Dr. Gaha),, say that if he had his way he would issue notes and credit to the value of £400,000,000. I expected that, as other honorable members opposite had quoted from the classics, including the honorable member for Lilley (Mr. Hadley) who quoted from Dante’s Divine Comedy, and the honorable member for Hunter (Mr. James) who, in his rich, rolling voice quoted from Milton’s epic, Paradise Lost, the honorable member for Denison would have given us a quotation from the Australian classic, Bow McDougall Topped the Score. I come now to the statement made by the Prime Minister, which was greatly elaborated this morning by the honorable member for Wilmot, in which the right honorable gentleman said -
To go some years back it is correct to say that the banks fed the boom and promoted unsound development in the ‘twenties.
I was struck by that remark by the Prime Minister, because I thought that he, at least, among honorable members opposite would be accurate; but statistical table No. 21 contained in the report of the Royal Commission on Monetary and Banking Systems shows that the statement is not only incorrect, but entirely wrong. The honorable member for Perth quoted from the evidence given by Sir Alfred Davidson before the royal commission, and, apparently, agreed with Sir Alfred’s view that the banks should not expand their credit in excess of 90 percent of their deposits. The royal commission reported that the ratio of advances and discounts to total deposits was 68.9 percent as at the 30th June, 1920, and that within the ten-year period commencing from that year advances and discounts did not exceed 90 percent, in spite of the high price received for wool at that time. Of the total advances made by the trading banks in this country approximately 50 percent. are made to rural industries, and the position of the wool industry has the greatest influence on those advances, because the value of wool exports represents from 40 percent. to 50 percent. of the total value of our exports. I have taken from the statistics details of wool production and wool prices from 1920 to 1929, when the much maligned private banks, honorable members opposite allege, cut down the credit of their rural clients in those years; and I have found that when the price of wool fell10d. per 1b. in 1929, the immediate response of the banks was to increase the ratio of advances and discounts to total deposits to S8.6 percent., which was the highest figure recorded in that respect in that period of ten years, and for many years before 1920. That is the authoritative answer to the lies put out by honorable members opposite in this debate. In view of the valuable information contained in table 21 furnished in the report of the Royal Commission on Monetary and Banking Systems, I ask for leave to incorporate it in Hansard.
– Is leave granted ?
Leave not granted.
– As an example of the false statements made by the Prime Minister, I quote the following: -
When the depression came, the banks as a whole restricted new lending and called in advances.
I again consult table 21 contained in the report of the Royal Commission on Monetary and Banking Systems. I point out that all of the tables contained in that report are in respect of periods ended as at the 30th June in each year. I find in that table that advances and discounts of the trading banks in 1929 amounted to £267,832,000, representing 88.6 percent, of the banks’ total deposits, and that in the following year the private banks strained themselves to the utmost and increased their total advances and discounts to £284,2S3,000, representing 99.7 percent. of their total deposits. The Prime Minister stated -
The effect of this was to accentuate the contraction of business and unemployment in those years. They (the private banks) helped but little in recovery during the ‘thirties.
The royal commission, in paragraph 565 of its report, to which the right honorable gentleman subscribed, stated -
By the end of 1931, the liquid position of the banks had been restored. After the middle of 1932, they were granting advances more freely, and after the middle of 1933, they adopted an active lending policy.
Let us look at the action taken by the Bank of New South Wales. The Royal Commission on Monetary and Banking Systems stated in paragraph 554 of its report, which also was signed by the Prime Minister -
In the belated movement of the official exchange rate to 130 in January, 1931, the initiative was taken by the Bank of New South Wales.
And the commission, in paragraph 551 of its report, said -
The movement in the exchange rate in January, 1931, was one of the major contributions of monetary policy to recovery in Australia.
What did it do? It raised the income of primary producers, who were then receiving very low prices for their products, by 30 percent. But did the Scullin Government give the primary producers any aid when they were fighting for that assistance? It did not give them the slightest aid. At that time, I wrote many letters which were published in the press throughout Australia in an endeavour to get the Scullin Government to give the exchange assistance to the rural interests ; but that government sat “pat” and did nothing to help us. I did not try to force the exchange rate. That government subscribed to the view of Sir Robert Gibson, whom honorable members opposite condemn to-day. The Scullin Government was so pleased with his deflationary actions that it re-appointed him as Governor of the Commonwealth Bank for a further period of seven years. The portion of the Prime Minister’s speech, headed “The Labour View”, is cast in the same mould as the remainder of his speech, which is designed to lead the people to believe that the banks were responsible for the onslaught and continuance of the depression.
– So they were.
– The honorable member for Herbert (Mr. Edmonds) who, in his opinion, has complete knowledge so far as our financial system is concerned, says that the banks were responsible for the onslaught of the depression. That view was repeated by Mr. Clarey who is now president of the Australian Council of Trades Unions.
– A good man.
– Yes; and, perhaps, if he expressed a good opinion of me, the honorable member would not think that I am as bad as he seems to believe. I shall read two letters which Mr. Clarey wrote to me when he was secretary of the Federated Storemen and Packers Union of Australia. In those days he made no charge that the banks were in any way responsible for the depression. These letters cover a period of three years, and I am sure that no honorable member opposite would be so disloyal to the president of the Australian Council of Trades Unions as to suggest that what he said in these letters did not represent his true opinions during that period. Writing to me in December, 1930, he said -
I would have been very sorry indeed to have missed the knowledge that the article was appearing,–
That was an article I wrote which was published in the Australian Quarterly - as I believe myself that the unequal distribution of the world’s gold supplies is to a very large extent the major cause of the present world-wide depression.
By 1933, this streamlined moderate and present president of the Australian Council of Trades Unions had not altered his views, because he write to me from Unity Hall, Melbourne, as follows : -
Thanks very much indeed for your very interesting paper, read before the New South Wales branch of the Economic Society. I read it through with a great deal of interest and was amazed to find the large range of ground that you were able to cover in a very clear and concise manner.
– He was only “kidding”.
– We shall see whether he was only “kidding”. The letter continued -
I strongly agree with your conclusion that the safe policy for Australia should be to raise export prices to a parity with internal costs and internal price levels.
The very policy that the Scullin Government and the Government now occupying the treasury bench, which set themselves up as the shapers of the destiny of the men, women and children of this country, opposed with all their might. He continued -
I think any other policy–
And he says this without reservation or qualification - would make confusion worse confounded. The great difficulty, of course, is to get the mass of people to understand what is essential for recovery. The individual is all the time acting from his own standpoint, irrespective of the fact that his individual action may, in the end, defeat itself by paralyzing the whole structure of society. There are quite a large number of people here to whom I would like to hand a copy of your paper. If you could spare me, say, about a dozen of them, I would greatly appreciate it.
The policy of this Government is not to put before the people reasoned arguments in support of the case for the nationalization of banking, but by distorting evidence and ‘facts to cloud the hidden purposes of this measure. As the Government has not told the truth about thi9 proposal, there must be other and very forcible reasons why it has been introduced. During this debate we have heard many complaints about Sir Robert Gibson, who has been termed the archfiend, the financial conservative; but he was the beloved of the Scullin Government, which re-appointed him for a further period of seven years. Sitting before me on the Government benches is the Minister for Labour and National Service (Mr. Holloway), an old stalwart of the Labour movement, who, when Sir Robert Gibson’s reappointment was made lashed his tongue to the top of his mouth in order to keep silent. “We come now to the Prime Minister’s second-reading speech, wherein the right honorable gentleman mentioned various ways in which the people are to be helped by facilities to be provided by the monopoly bank. There is no mention in the speech, however, of the provision of a small loans department in the new bank. This is one of the matters upon which the royal commission heard evidence, after which it strongly recommended that such a branch be established by the Commonwealth Bank. Did the Commonwealth Bank establish these facilities for small borrowers, the little men, the men who wanted a loan of £100 or less to furnish a home, the widow who wanted a small loan to enable her to retain a few sticks of furniture, of which otherwise she might be deprived? No; it was left to the Bank of New South Wales and the Bank of Australasia, and, later, to the Rural Bank in New South Wales to provide these facilities. The establishment of small loans departments was a feature of the banking system in Canada and the United States of America, but not of the great Commonwealth Bank. The Prime Minister did not mention it in his speech, because, no doubt, it does not come within the ideas of the London school of economics, the trained economists, from whom we suffer to-day, just as we do from the Bathurst burr and other pests in this country. The right honorable gentleman said that other facilities were available for such borrowers. There was always “Old Uncle” around the corner with his three brass balls, who charged only 48 percent, for the accommodation. In effect, the Prime Minister said to these people, “Go to the pawnshops; I do not propose to establish facilities for small borrowers”.
I am running short of time, which seems to be unfortunate. I shall conclude by mentioning one or two other matters in the Prime Minister’s second reading speech. The right honorable gentleman said -
Moreover, there fan be no doubt that the bank should be more than a mere moneylender.
I agree with that statement, and it certainly was. During the course of World War II., I saw what the Commonwealth Bank did with information which it received as the result of the censorship. Quoting from a financial document relating to the uses of the censorship which was released to newspapers throughout the Commonwealth by the Attorney-General, the Sydney Morning Herald of the 16th June, 1944, said -
The officer in charge of Exchange Control, Commonwealth Bank, Sydney, Mr. Rusden, said that the Commonwealth Bank was selected to administer regulations now consolidated into National Security (Exchange) Regulations. …
Mr. Rusden said that Mr. Ettleson, Controller of Post and Telegraph Censorship, said that it would be of advantage to the bank to make a list of its requirements, and instructions were drawn up for issue to district censors.
Among other things in these interesting instructions as to what was wanted was the statement that any remarks concerning banking or anything else which were in the interests of good government, should be extracted from letters and sent to the Commonwealth . Bank for its ‘ instruction. Mr. Rusden said that the bank did not require from the censorship information on matters other than exchange control, and did not receive such information. He went on to say that he would qualify that by saying that as the war progressed, and mainly under advice from the United Kingdom about the desirability of extending information for the purposes of economic warfare, the bank included in instructions referred to the Post and Telegraph Censorship, Mr. Ettleson, certain general headings. In earlier instructions there appeared the phrase “in the interests of good government in Australia or would be helpful in banking, finance and exchange control in this country”. Mr. Rusden said that these terms were too wide. They were amended in April or May, 1944, after the Parliamentary Committee on Censorship had been appointed. However, the bank did not discover, until a month had elapsed after the appointment of the parliamentary committee, that the terms were too wide. Was it discovered because of a fear that we were likely to tell the people what was going on behind the mask of censorship, and how their secret information was being dealt with? Do honorable members not think that a similar misuse of information will take place when the monopoly bank is established? In answer to me, Mr. Rusden said that he could not remember whether the words “in the interests of good government in Australia, or would be helpful in banking, finance and exchange control in this country“ were his own, but he added -
I cannot see how I can avoid taking the responsibility for them.
Under those instructions, the secret formula of Moulded Products Proprietary Limited was extracted from a letter and handed to its competitors working for a government department. That was one leakage. Another was the letter written by Mr. Goode, general manager of the Union Bank of Australia Limited, which was quoted by the Minister for Post-war Reconstruction and accordingly must have been extracted from the Commonwealth mails, because we know that the extract bore a number which we believe to have been the number of the Commonwealth censor responsible for making the extraction.
The first plank in the platform of the Australian Labour party and in the 1934 programme of the “Victorian Communist party are identical. One says,”The nationalization of banking”; the other says”The revolutionary appropriation of the banks“. They are one and the same. The influence behind the Government to-day is that of the Communist party about the activities of which there has been so much discussion in this chamber. We have seen the influence of that party in the electorate of the Prime Minister. The branch of the Australian Labour party at Katoomba, in the Prime Minister’s electorate was so riddled with communism that they had to destroy it and recreate another in its place in order to purge the Labour movement of the vilest elements this country has ever seen.
In his second-reading speech, the Prime Minister stated that regional appeal courts would be set up to hear the claims of applicants for advances who had been unable to secure accommodation from local hank managers. I do not know what brilliant brain, bred in London and fostered in the libraries of this country, was responsible for that thought, but as one with a knowledge of the requirements of a rural electorate - no doubt you, too, Mr. Speaker, having galloped across the prairies of Balmain, mustering stock, know this - I know that if a farmer who sought finance to buy a lot of young weaners was refused that accommodation by his local bank manager, by the time he had had his application dealt with by the distant application appeals committee, the young weaners would be old “gummies”. We, on the land, have always been warned against three things - fast women, slow horses, and old ewes. Now there is a fourth, and farmers are saying, “Beware of Chifley”.
The conception of this bill could be called Napoleonic. In one fell swoop it sets out to conquer the entire banking world of the Commonwealth of Australia.
Government Members. - Hear, hear !
– Honorable members opposite say, “Hear, hear” ; let them say “Hear, hear” to my next remark: The conception of the bill is Napoleonic, but with this one exception - Napoleon retreated from Moscow, whereas this Government’s strategy is to make a headlong advance into the arms of its associates coming from Moscow to welcome it. In the London Daily Telegraph, of the 23rd October, there was published a report of a statement made by one of Soviet Russia’s four highest Communists at the Comintern conference in “Warsaw, in which he enumerated the countries of the world that were completely under Communist control or largely under Communist domination. One of them was Vietnam, or French Indo-China, and the other was Indonesia. I hardly need remind the House that to the Government of Indonesia - the country in which some of the worst atrocities have been committed on Australians - this Australian Government, under the influence of the Communist controlled Waterside Workers Federation led by Mr. Healy, has bowed its head.
– Order ! The honorable member must relate his remarks to the bill.
– We on this side of the House shall fight this measure by all the democratic means available to us, not only now, but also right through to the next elections. We shall wage a holy war against it. I say to the ‘Government,” You shall not cruelty Australians upon the cross of socialism. This crown of thorns shall not be pressed down upon the brows of the Australian people.”
.- We have just heard a most extraordinary contribution to this debate by the honorable member for New England (Mr. Abbott). The manner in which he delivered his speech reminded one of the saying that a lot of noise makes little sense. The honorable member dealt at some length with his membership of the’ Royal Commission on the Monetary and Banking Systems. I draw the attention of honorable members to the following extract from the honorable gentleman’s minority report : -
The results which follow from the Australian .practice are, that whenever the hanks find their cash reserves being depleted, they put up the rate of interest on their advances in order, as one banker put it, “to warn their customers”, and they must call on their borrowers to reduce their advances. Both actions impose n strain on the community which causes shocks throughout the whole economic structure.
– What is wrong with that?
– The honorable member for Gippsland (Mr. Bowden) asks, “What is wrong with that?” What is wrong with it is that in his minority report he said one thing and to-day he said something quite different. Like other honorable members on this side of the chamber, I have been searching for a reason for this organized opposition to this bill. Honorable members opposite have spoken of the telegrams, letters and petitions that they have received protesting against this legislation. Petitions have been presented to the Parliament, ending with a prayer. I, too, have received petitions from a number of my electors. No doubt they were organized, but they did not end with a prayer and I was not asked, as the honorable member for Lang, to present the petitions to the Government.
We have heard some extraordinary statements from honorable members opposite in regard to this bill. The Leader of the Opposition (Mr. Menzies) said it would create a servile state in Australia, and would regiment the working class people. But he knows very well that Australians are the happiest people in the world, and are completely lacking in servility. The honorable member for Wentworth (Mr. Harrison), as usual, attributed Communist influences to every member on this side of the House.
– I am not far wrong, either.
– We, on this side of the chamber, have taken our political lives in our hands to cleanse Australia of communism. That is more than the honorable member for Wentworth has been prepared to do. If that is his only argument on behalf of the cause that he espouses, it is indeed poor. We have no affiliations with communism. If the party to which I belong had any affiliations with communism, I and every member on this side would leave it to-morrow. Indeed, the people take very little notice of the honorable member for Wentworth and his colleagues when they indulge in exaggerated talk about communism. Neither do the people overseas take any notice of them, although they are ready to decry this country for political ends at every opportunity. I think the Leader of the Opposition and his supporters and the private banks know that the agitation against this bill cannot affect the issue. Looking for a reason for the organized opposition to the measure, I can reach only the conclusion that its purpose is to influence the courts of this country and overseas. I warn the Opposition that the Australian people have not too much confidence in the courts when they see political decisions by them on matters of this kind. Most of the men who will be deciding this matter in the court served in this Parliament or in some other Parliament not as members of the Labour movement, but as its bitter opponents. If they are to carry their bitterness into their decision on the case that will result from the passage of this legislation, the whole system of justice in Australia will be wrecked.
– The honorable member is anticipating.
Mir. Menzies. - There is no justification for that statement.
– I have every justification for making the statement, and I am not anticipating. I am issuing a warning, that if members of the court allow political considerations to influence them, justice will not be so respected as hitherto. In the many years in which I have been associated with (he Labour movement nationalization of banking has always been in the forefront of its programme. In 1934, when I entered the Commonwealth Parliament, the election was fought principally on the question of the nationalization of finance. We were then in the depth of the depression with thousands of men on the dole. When the nation was imperilled a great many of them were members of the first battalions’ to sail overseas, because they could not get a. job in Australia. They achieved fame in North Africa, but before they left Australia they and their families were living below the breadline. They donned uniforms to ensure that their families should receive sustenance. Those are facts. They have been repeated more than once in this House without being contradicted.
– I flatly contradict them.
– The honorable member will have his opportunity to do so.
– I should like to move the adjournment of the House on that matter.
– The honorable member can do so if he desires.
– Order !
– The private banks have served a purpose for many years in this country, but I am one of those who traded with a private bank long before the Commonwealth Bank was established.
– The honorable member still banks with a private bank?
– Yes, and I believe that the bank is pleased to have my business.
– What is the honorable member grumbling about, then?
– Order !
– I am also pleased to have accommodation from the private banks occasionally. But that is no reason why I should not look to Australia’s future, and ensure that the banking system shall be under the control of the nation’s Parliament. That is why I support the’ bill. The Prime Minister (Mr. Chifley) has given a definite assurance that every officer of the private banks will be taken over by the Commonwealth Bank. In that respect the Commonwealth Bank will not be like the Bank of England which, when adding machines were installed, dismissed 340 people. Whatever happens in connexion with this matter, the Prime Minister has given the assurance that the Government shall find a place for every officer of the private banks in this country.
– Under better conditions.
– Yes. The officers of the private banks have never approached industrial courts for improved conditions without quoting the conditions of the employees of the Commonwealth Bank in support of their applications. Recently, I notice, the private banks have given their employees a little extra assistance, but only because this legislation has been introduced- In the years in which I and many of my colleagues have been members of this Parliament, Australia passed through a period of depression which showed that the private banking system of this country would not help us in another calamity. In the last depression thousands of men were thrown out of work. Many men who had prosperous businesses lost them because the private banks called up overdrafts or demanded that they be reduced. At that time I was engaged in business in an industrial area, where I came in contact with many employers. Such men came to me daily and asked me, “What has your bank done with you? My bank has asked me to reduce my overdraft”. Some of these men were ruined financially. One, in particular, is now drawing the age pension. Before the depression be had a property which I estimated to be worth about £30,000. He had an overdraft of £3,700 with the Sydney office of a private bank. He was asked to reduce it. He searched Sydney unsuccessfully in an endeavour to secure a fixed mortgage on his property. The banks and the private investors had ceased to provide accommodation. Eventually the bank which had granted him an overdraft took over his property. All that he could salvage from the wreck was slightly over £150. His life savings of £30,000 were lost. If another depression should occur in this country, I am sure that the private banks again would not give very much assistance to the people. It would remain for the Commonwealth Bank, under the direction of whatever government might be in power, to save the country. I am sure that the Opposition parties have no desire to see this country thrown once again into the throes of economic depression. The honorable member for New England, who was a member of the Royal Commission on Monetary and Banking Systems, signed a report containing the following statement : -
The organization of these banks on a profitmaking basis may be accepted as part of such a system provided that their charges for service to .the community are reasonable.
I do not know what the honorable member would consider to be a reasonable charge. Perhaps he would regard 6 percent, or 7 percent, as a fair rate.
– The same rate as the honorable member makes on his beer prices.
– I have been more successful in that line of business than the honorable member has been as a farmer. Furthermore, anything that I have was mot given to me, as the honorable member’s property was given to him. That report also stated -
It may be in the interest of any trading bank, influenced by considerations of profit and liquidity, ‘to expand or contract credit at a time when the general interest requires different action. It is not to be expected that a. trading bank will take action entirely opposed to its own interest.
In spite of those statements, to which the honorable member subscribed, he to-day attempted, roaring like the proverbial bull, to influence this House with entirely contradictory assertions.
The Prime Minister made a comprehensive speech when he introduced this bill. He explained every clause in simple language, and I am satisfied that the people of Australia, having heard that explanation, are in favour of the measure. Many cases of severe hardship occurred during the depression, particularly in New South Wales. In order to illustrate the sort of treatment that was meted out to some unfortunate ‘ citizens in those days, I refer to the sufferings of Mr. Gordon Wilkins, a former member of the Country party, which he represented in the Parliament of New South Wales. This man, who has since died, served in the army during World War I. He lost a leg at Gallipoli and returned to his home town to engage in business. He started a business at Bathurst in 1932, where he remained until 1935.
– Who was this?
– The late Mr. Gordon Wilkins, a “digger” like the honorable member. I quote from a speech which Mr. Wilkins made at Mudgee. He said -
Twenty-two years ago, I left the Wellington district to do my bit for Australia, and after three years on the other side, came back minus a leg. Still a young man, I set on a new battle, the battle of life to provide a home and living for myself and family. I received a pension of £2 10s. a week. Remember that, because I propose to tell you what can happen to a soldier’s pension when the banks get a grip on a man. Well, it was a big fight, but by dint of hard work I managed to build up a prosperous business in my home town.
By 1930, I had assets worth almost £30,000 and I was looking forward to comparative comfort. My liabilities were £14,000. But the farm was paying well, prices were satisfactory, and I was quite satisfied of my solvency.
I had a property of 1,035 acres in the Wellington district, freehold and CP. title of which 400 acres was under wheat, 10 acres under lucerne and the balance all excellent grazing country. It was valued at £5 10s. an acre, and on it I had a comfortable little home. In Wellington itself I built up a large garage, one of the largest in the central west. The building and the plant was valued at £5,800, while from September, 1923, to September, 1929, I cleared over £800 in commissions alone. I was paying £50 a week in wages and was one of the largest employers in the town.
I am quoting this speech because I have noticed that many honorable members opposite served in the fighting forces during World War I. and World War II. and are now proud to wear the badges of ex-servicemen. These statements by the late Mr. Wilkins are a warning of what the private banks might do to them in similar circumstances. Mr. Wilkins continued -
Then with the depression, sales fell off. Like other good employers I was anxious to keep my employees, even if it meant losing money. Many of them wore fellow diggers.
I felt I had an obligation to them, as they had put their trust in me, and like so many of you, thought that the depression would be over in a matter of months. So I borrowed everything that I could to keep my business going.
It was, after all, only the old digger spirit of a man keeping his chin up.
I went to my bank manager. Previously he had urged me to accept an overdraft, so that I might extend my business. By 1930, that overdraft amounted to approximately £2,500 but it was well covered by my assets. But now the depression was on us and the bank was a different proposition. It slogged me day after day. I realized on everything I could and in spite of conditions reduced the overdraft to £2,000. The overdraft was secured by mortgage on the land and buildings, and, in addition, was supported by a guarantee of £1,000 entered into by two guarantors, being jointly and severally liable. This was what is known as a “personal covenant”.
In 1931, the Lang Government introduced its Moratorium Act-
The .honorable member for Reid (Mr. Lang) will remember this very well - and the bank found itself unable to foreclose or call up the securities. The Moratorium Act did away with the “personal covenant”, and freed both my co-guarantor and myself from the guarantee. But in spite of the Moratorium I still kept my interest payments going. I did not want to evade any obligation and like so many others was particularly proud of the fact that my word was my bond.
I went into voluntary liquidation in February, 1932.
So the bank came in and took possession of the land and buildings under its power of mortgage. It cleaned me up. From that time on the bank collected all the rents. I had lost my business, but there still remained the matter of the £1,000 guarantee under the “personal covenant”.
I was still satisfied that all the party propaganda that was coming up from Sydney was the truth.
He referred to the propaganda of the United Australia party, which was the predecessor of the Liberal party.
– He referred also to the Gauntry party.
– That is so. The statement continues -
I was still satisfied that the banks would give me a fair go and as soon as the crisis was over would allow me to get back to where f was before.
About the middle of 1932, Mr. Martin, Minister of Justice in the Stevens-Bruxner Government, brought down a bill to amend the Moratorium Act. On reading it I discovered that, if it was carried it might mean that the bank could penalize me for not having accepted the benefit of the Moratorium Act the previous year. I was not the only one affected. There were other members of the Government also disturbed over its possible effects.
Honorable members will note that this United Australia party-United Country party Government introduced a bill to abolish the moratorium, the purpose of which had been to save thousands of people throughout New South Wales from financial ruin. The statement continues -
After discussing it with other members of the Country party as well us the United Australia party, wo felt that something would have to be done to protect the interests of the farmers and country business men who would be affected
I ask honorable members not to forget that Mr. Wilkins was then a member of the Legislative Assembly of New South Wales and a supporter of the Country party. He said -
So I went to Mr. Martin and told him that I could not support the bill in its present form and that for the first time I would be forced to cross the floor and vote against him. He was very disturbed and told me he would enquire into what I had told him. I put all the facts of my own position before Mr. Martin, told him that I was prepared to meet my obligations to the bank providing I was given t,line and consideration, but that this bill would put me in an impossible position.
As a storm was brewing among members of the Country party, as well as the United Australia party, Mr. Martin agreed to make inquiries.
He then came to me next day and said: “I have gone fully into the matter Dick and I have the assurance of the associated banks that no guarantor who is brought back under the provisions of the bill will suffer any hardship. In fact, they will be treated sympathetically and justly on the merits of each case. So on this assurance, I went into the House and voted for the bill and against the amendments to protect the “personal covenant”.
I only wanted time to pay and consideration, find I felt that after such an assurance I would obtain it.
Yet the bill was no sooner operative than my co-guarantor and myself received notices from the bank’s solicitor calling up the guarantee. They had a legal weapon and they proceeded to flog me with it. I make no excuse. I was a member of the Parliament that passed the bill. I had helped to give the banks the whip and they were using it.
After my co-guarantor came to me and asked me the meaning of the notice since I had given him an assurance that we would be protected under the bill, T went straight to the Minister of Justice, Mr. Martin.
He promised me that he would see the representatives of the banks and try to make some arrangement. He did not deny that he had given me an assurance before I voted for the bill. That the measure was only intended to cover certain wealthy men whom it was declared were evading their obligations.
To my surprise, I received a letter from the Minister in which he declared: “To my mind, it is clear that something must be done and at once. In my judgment, you are both liable under the guarantee, but the thing is to make the best arrangement possible under all the circumstances”.
After many interviews, the Minister notified me that he had interviewed the bank on my behalf and had concluded an arrangement.
It was agreed that I was to pay £100 a year off the guarantee and also pay current interest in the balance of the debt. I figured the interest out at approximately £125 a year, which meant that I was forced to pay £225 a year. I told the Minister of Justice, Mr. Martin, that with the rent and my military pension of £2 10s. a week, I could just about do it.
After the property had been seized, including the agricultural implements, the garage and its equipment, and his war pension of £2 10s. a week had been appropriated as a guarantee for payment, his position failed to improve. The depression continued, and eventually the bank insisted on getting its pound of flesh and demanded compound interest on the debt. The debt had almost doubled itself in eight and a half years. The bank then wrote to him and said that it would accept £100 a year until the debt was paid off and that in the meantime compound interest would be charged on the balance. The letter continues -
We were in a vicious circle and the bank was putting in the boot. So much for the promise made on behalf of the Associated Banks to the Minister of Justice.
Later it not only seized the farm, the garage and the rest of the unfortunate man’s property, but it also took his military pension - and he was a one-legged digger !
– Where is the digger now ?
– I hope he is in heaven.
– The honorable member ought to be ashamed of himself.
– This man, who went away to fight for his country, became a member of Parliament; but, unlike the honorable member for the Northern Territory (Mr. Blain), he did not show his gold pass to the Japanese in order to get special treatment.
– I rise to order. I should like the honorable member for Lang (Mr. Mulcahy) to repeat the remark he just made, because I believe that it was offensive. I should like to know exactly what he said about the Japanese and myself.
– It is entirely a matter for the honorable member for Lang whether he repeats it, irrespective of whether the remark was offensive or not.
– The honorable member for the Northern Territory need not bother to interject-
Mr. Blain interjecting,
– Order ! The honorable member for the Northern Territory will remain silent. It is a matter for the honorable member for Lang to decide whether he repeats the remark or not.
– I understand that the honorable member for Lang said that I showed my gold pass to the Japanese in order to get special treatment. 1 showed my gold pass to the Japanese to save my life, otherwise I should have been treated as a secret service man and shot. It is disgraceful that an honorable member should make such an allegation.
– If the honorable member for the Northern Territory comes back I shall have more to say about the honorable member and the Japanese.
– And I shall have more to say about the honorable member for Lang.
– Order ! I do not think that the honorable member for the Northern Territory has refrained from interjecting while any honorable member has been speaking in this debate. I am very tolerant in my attitude towards him for a good reason.
– I do not want to be insulted in that manner, sir.
– If the remark of the honorable member for Lang was insulting, the honorable member for the Northern Territory did not ask for an apology.
– The private banking system of Australia could have saved thousands of lives during the depression had it wanted to do so. We know that during that period thousands of children were suffering from malnutrition. Many of them were homeless and went without food and clothing while there was plenty in the land. During that period the private banking system of this country failed completely, whereas it might have saved Australia. Honorable members opposite say that this proposal has never been placed before the electors. During the general elections of 1931 and 1934 the nationalization of banking was almost the only issue contested in New South Wales. To-day the people of New South Wales, and, I believe, of Australia, are looking forward to the introduction of a system of banking that will save them in any future depression which may occur.
– On behalf of the people of my electorate, and on behalf of the people throughout Australia who contend that the Government has no mandate to introduce this measure, it is my duty to make an emphatic protest against the bill. I protest particularly on behalf of the people of Tasmania, because a recent
Gallup poll shows that 77 percent, of them are opposed to the Government’s proposal. They have not even been permitted to express their disapproval through a referendum. As the Leader of the Opposition (Mr. Menzies) said, this bill cuts right across the freedom of choice of the individual, and represents the first giant stride towards a socialized super state. It is, perhaps, the forerunner of the creation of a single, supreme economic council.
The previous speaker the honorable member for Lang (Mr. Mulcahy) said that people had. no confidence hi the justices of the High Court I regard that as an attempt to engineer distrust in the community so as to destroy the principal institution erected by the people for the protection of the people. Then he made a statement similar to that made by Mr. Barry, Minister for Housing in the Victorian Government, who said that men enlisted in the recent war in order to get jobs. That is a deliberate insult to ex-servicemen. While he was reading the long report from which he quoted, he said that the statements contained in it should be regarded by ex-service members of the Opposition parties as a warning of what might happen to them in the future. But, as the honorable member for Capricornia (Mr. Davidson) said, we shall take our chance on that, and we would rather take our chance on the trading banks than on the monopoly bank which the Government proposes to create. I am disgusted with the statement made by the honorable member for Lang that the honorable member for the Northern Territory ‘ (Mr. Blain) showed his gold pass to the Japs in order to obtain preferential treatment.
– I shall take up the matter on the adjournment this evening.
– I shall leave that to the honorable member for the Northern Territory. As one who, in World War 11., was overseas for more than four years, I always thought that it was the proud boast of the average Australian overseas that the people of this country are among the most individualistic in the world, and enjoy more freedom than the inhabitants of most other countries. But what is happening now? There are not only those who are prepared to take our freedom from us; there are also those who are prepared to give it away. In our midst are people who have no pride in Australia’s great heritage, and are >devoid of one of the greatest characteristics of the true Australian. “We are tending towards a state of affairs in which the only freedom we shall enjoy will be compulsory freedom. One of my constituents recently made a statement which was indicative of the attitude of the average country man. After I had addressed a meeting, he rose and said -
I do not want to ask a question, but what I want to toll you is this: Our ancestors started in this little outback place over 150 years ago, and our families have remained in the district ever since. We have carved out our own living in the hills, and we have established our own businesses. It would appear, however, that the time is coming when the Government will tell us what we shall do. I want you to know that we are not going to stand for it.
Are Australian people, possessing the characteristics which I have mentioned, prepared to submit to the establishment of a system which is in operation in only two countries in the world to-day, namely, Argentina and Russia? The day of the planners has arrived. The Minister for Post-war Reconstruction (Mr. Dedman) made that clear in his now famous statement that be did not believe in people owning their own homes, because that would make them “little capitalists”. In other words, the Government does not believe in private ownership. It prefers to plan the lives of the people, spend their money, tell them what they shall produce and how and when to produce it, until the people eventually become little marionettes at the end of the planners’ fingers. As the Leader of the Opposition rightly said in his speech on this bill, “It is not the first time in history that small men have been corrupted by great power”. The average man wants to know how this bill will affect him. In my electorate the average man is the orchardist, the zinc worker, the wheat-farmer, the wool-grower, the hop-picker, the timber worker, the waterside worker, the fisherman, the man in a small business, or office, or shop. Let us consider the position which will face a person conducting, say, a small carrying business in the average provincial town. Let us suppose that he wants a loan from the monopoly bank to increase or expand his service, or to tide him over a temporary financial difficulty. Or let us suppose that a “man wants a loan to establish a carrying service. Is he to be told, “You will not be granted a loan to increase or expand your business because we believe that you are already doing enough” or “You cannot start out in this business because we think that there are sufficient carriers in the area already” ? In other words, those in control of the monopoly bank will be able to say to applicants for financial assistance, “Enough” or “Too many”. What will happen then? I emphasize that the decision of the bank will affect every person in the community. If a man is prevented from expanding his carrying business, or another man is prevented from engaging in that business, the people in outback districts will not be given a service they need. The storekeeper will suffer, and other people also, because the effect will be cumulative and will spread throughout the community. What will be the position of the fisherman who is refused a loan to buy nets or a new vessel? The first effect will be that there will be fewer fish for sale. In my electorate there are a number of sawmills which provide timber for fruit cases and houses. Should saw-milling operations be restricted by these planners, the fruit industry will be adversely affected, and homes for the people will be held up, or not provided at all. What will be the position of the private builder of homes? Is he to be told that the Government intends to build houses in the future and that he will not be allowed to build them. Already the rate of production of houses by governmental authorities is notoriously slow. What do honorable members think is the attitude of the farming community to a proposal which they believe is the forerunner of a system of nationalization of land? In this connexion I propose to read an extract from a speech on the Address-in-Reply to the Governor-General’s Speech delivered in this House on the 29th September, 1943, by the honorable member for Hume (Mr. Fuller). As reported in Hansard, the honorable member said -
However, a national parliament which lacks control of finance and land is not an effective instrument of government. I submit that the Commonwealth Parliament should assume supreme control of land and all other national resources, including money. Founded on the nation’s wealth and national resources, the Commonwealth Bank is the key to national progress. It follows that the national wealth becomes the bank’s capital asset.
By a decree of the Commonwealth, all land, whether alienated or not, should be taken out of the control of the States and placed under the control of the National Parliament to be held in trust for the people on one title only - perpetual lease.
In Argentina, where there is a banking system similar to that proposed by the Government, the farming community is more heavily taxed than any other section of the community. Moreover, through the nationalized banks, the breeder of cattle receives a fixed low price for his export cattle, notwithstanding that the same beasts are sold in London at inflated world prices. The Government, however, not the breeder, receives the extra profits. Figures cited in the United States of America showed that at one period the man who raised the cattle was paid only 50 dollars for a beast for which the Government received 175 dollars. What better treatment can the farmers of Australia expect under a nationalized system of banking, or from a government which believes in the nationalization of land? They will be told, as farmers in Western Australia were told, that they must not grow certain crops, and the assistance which they are likely to receive will depend largely upon the degree to which they follow the advice of the experts in the employ of the Government. In the Labour party in Tasmania there are men who advocate a 40-hour week for farmers. With such a system in operation a type of cow which gives milk only five days a week will have to be bred. Moreover, a government which nationalizes farms will soon proceed to nationalize orchards. Fruit-growing is a major industry in my electorate. And what about industrial conscription? In my electorate there are 3,000 workers in the zinc industry alone, as well as a large number of employees in the mills which produce Australian newsprint. I believe that industrial conscription is the aim of the Labour party in Australia, as in Britain. It is sufficient to say that, at the present time, the British Labour party has introduced industrial conscription - largely because of the emergency - but I believe that the general aim of the British Labour party and of the Australian Labour party is industrial conscription. This Government does not believe in military conscription, but it believes in industrial conscription, as the honorable member- for Herbert (Mr. Edmonds) admitted in answer to a question by the honorable member for Darwin (Dame Enid Lyons) . Some Labour supporters admit it, while others do not. Recent legislation introduced by the Government proves this to be a fact, as instanced by the legislation controlling waterside employment. The power was refused by the people in. 1944-
– I think the honorable member should now come back to the bill.
– If this bill is passed–
– It is a “sitter”.
– Yes, I recognize that it is a “sitter”. There is no doubt that it will be passed. When this bill is passed, what will be the next industry to he nationalized? Labour Ministers and spokesmen have indicated that they believe in the nationalization of coalmining, of the iron and steel industry, of land, and of broadcasting - and once broadcasting is nationalized-
– The honorable member should return to the Banking Bill.
– But the Banking Bill relates to nationalization.
– The honorable member is giving a general dissertation on the nationalization of activities which have nothing to do with the subject-matter of the bill.
– I rise to order. Surely it is relevant, when discussing a bill of this kind, to point out that it can provide the basis for the general socialization of industry. Surely it is relevant to point out the consequences which can flow from such legislation, and to refer to other measures which can be founded upon it. If that is not relevant, then I have devoted a large part of my life to the study of relevancy in vain.
– The honorable member for Franklin is entitled to make a passing reference to subjects other than those referred to in the bill; but he is not to embark upon a general discussion on the nationalization of industries and activities which have no relation to the subject before the House.
– If the Government nationalizes broadcasting, as various members of the Government believe it should, it is possible that some day it will nationalize the press, and then where would we be?
– The honorable member is attempting to defy the ruling of the Chair. I ask him to keep to the bill before the House.
– Keep on using the word “banking” every now and then.
– Last night, the honorable member for Warringah (Mr. Spender) made a very important point. Clause 50 of the bill refers to Part XIII of the Commonwealth Bank Act 1945, which provides that the Government may dismiss employees on a month’s notice, without appeal, if they are declared surplus. The Prime Minister (Mr. Chifley) said that employees of the private banks were completely protected under this legislation. How can that be if, under clause 169 of the Banking Act 1945, the Government may dismiss them without right of appeal? We know that the Minister for Post-war Reconstruction made that now famous - or infamous - statement, that the banking business of the Commonwealth could be carried on with 5,000 fewer employees. The Postmaster-General (Senator Cameron) said he would he prepared to take any dismissed bank officials into his department. That is a fine idea ! It may mean that they would be employed in running errands or licking stamps.
This bill provides directly that the Government shall exercise control over banking. Therefore, we are entitled to ask how government control affects the average person. We know that with government control, as represented by a government department, there are numerous forms to be filled in, and countless questions to be answered. In such a department there is an atmosphere entirely different from that found in a private business. There is a rigidity, an inflexibility, a slowness which is characteristic of government departments. As the honorable member for Indi (Mr. McEwen) said, one may well become a number in a queue, as one can become at the )resent time in the Commonwealth Bank. The Government had all the power it could need under the 1945 act. The only additional power conferred by this proposed legislation is to give the Government control over the individual. A great deal has been talked about the depression.
– ‘The honorable member is too young to know about it.
– Listening to honorable members opposite, one would think that they were the only persons who had been through the depression. Let me quote one personal experience. During all the depression years, my father was an invalid, and unable to work. I am sure many government members had an easier time during the depression than I had. Let it not be forgotten that in 1934, and again in 1937, when the experiences of the depression were still fresh in the minds of the people, the Labour party was rejected by them purely on the banking issue, as the honorable member for Lang admitted, and the people put their trust in non-Labour governments. Therefore, it is evident that the people did not believe that the depression was the fault of the trading banks.
The Prime Minister said that there was no competition between the trading banks. Surely, as the Leader of the Opposition said, it is no solution of the problem to abolish the trading banks, so that there can be no possibility of competition. Of course, there is no competition in rates of interest and credits, because the Banking Act of 1945 gives control over those matters entirely to the Commonwealth Bank, but there is keen competition among the trading banks as regards the service which they offer to the public. They must compete in service in order to keep their business alive. As a result of this competition, the people get efficient, quick and capable service from the trading banks.
The Prime Minister also said that the private trading banks operated for profit. Is that -so heinous a crime? The figures show that the profits of the trading banks are not excessive, anyhow, and let us remember that profits are made in every field of industry. If it is a crime to make a profit, as the Prime Minister suggests, are we to take that as a warning that some day the Labour party will put into effect that plank of its platform which provides for the nationalization of all industry. What about the small man who works for himself and makes a small profit? Is that a crime? Apparently, in the view of the Prime Minister, it is a crime; and for that reason the Government, under this measure, intends to take the one power which it does not possess under the 1945 act, namely, power over the individual, that is, the man who makes a small profit. What will be the position of the States when this measure is passed, find the super-state is established? All power is gradually being assumed by this Federal Government. The powers of the State parliaments are slowly, but surely, ebbing away. What will be the position of a small State like Tasmania, which now has only five representatives in this chamber, when all States shall be obliged to go, cap in hand, to this Government for finance ? Labour “yes” men in the States are prepared to give all power to this Government. That is why they support this measure.
Much has been said in this debate concerning communism. I take the following from a report published in the Melbourne Herald on the 5th September last -
TORONTO, Thursday. - So soon as Australian banks were nationalized “iron and steel will quickly follow”, declared the Minister for Public Works in Victoria (Mr. Kennelly), addressing the Labour Conference here to-day. Mr. Kennelly said the Australian Labour party was “the mouthpiece of the unions nothing more, nothing less. What the unions want, we. as a political party - as far as is practical- do. Our aim is to give those who produce a fair share of what they produce”.
That statement, coming from a State Labour Minister, can be accepted as an authoritative expression of the Labour view. Mr. Kennelly’s statement that the
Labour party is the mouth-piece of the unions deserves examination. First, I ask who leads the major unions in this country? Their leaders are Thornton, Miles, Healy, Wright, Brown, Elliott and Williams. Who are these men? They are members of the Communist party, avowedly, and members of the Communist party executive. Is it unfair, then, to say, when these men are Communists, and a State Labour Minister says the Labour party is the mouth-piece of the unions, that there must be a Communist tinge in legislation put through this Parliament? I leave it at that.
The honorable member for Wilmot (Mr. Duthie) made several peculiar statements. He said that his argument was based on Christian ethics. I wonder if he ties up that statement with that made by the Minister for Labour and National Service (Mr. Holloway), that communism is based on the teachings of Christ. The honorable member for Wilmot harked back to 1694. After all, this is 1947. I cannot see the relevancy of references to events in the seventeenth century. The honorable member also said that France had nationalized its banking system. That statement is not correct. In France, four banks have been nationalized, and are now operated as a central bank; but there are many trading bank? still in operation in that country, and the present set-up there is comparable with the banking system now existing in Australia. The honorable member also made the extraordinary statement that France, having nationalized its banking system, over 90 years ago, was no nearer communism. I can only ask the honorable member whether he reads the newspapers.
This legislation really places us at the crossroads. If it be not passed we can proceed along a level and sensible road : but if it be passed, as, no doubt, it will be, then we take a distinct turning to the left. What concrete advantage will the Government gain by enacting this legislation? Already, under the Banking Act of 1945, it possesses all the powers it requires to control the banking system. That fact cannot be refuted. I understand that we fought the recent war against national socialism. What else is this measure in principle? The Minister for Labour in New Zealand, Mr. Walter
Nash, had this to say about the nationalization of banks -
At the 1943 Labour Conference there has been some argument in our party about taking over the trading banks. Personally, I think these banks are doing a better job than we can make of it.
The Prime Minister might well follow that advice. In conclusion, on behalf of the free people of Australia, I enter a protest against this bill.
. In effect, he merely put up “Aunt Sallies” and then proceeded systematically to knock them over. He said that under this measure the Government sought to impose industrial conscription, just as the Labour Government in Great Britain had imposed industrial conscription upon its people. The honorable member has forgotten that the conditions which exist in Great Britain to-day have been brought about as the result of the part played by Great Britain in the recent war. Great Britain is now mobilizing the whole of its resources to fight the battle of peace, just as it organized its resources to fight the battle against the Fascists and Nazis. The honorable member said that the power of the States was slowly ebbing away, and that this Government was increasing its power to a corresponding degree. He forgets that the powers of this Parliament are defined under the Constitution, which leaves residual powers to the States, and that under the Constitution this Parliament can obtain only such additional powers as are expressly granted to it by the people at a referendum. The honorable member for New England (Mr. Abbott), to whose speech I listened with interest, ranted about the “Corns.” as he has done on previous occasions. Indeed, I fear that he is developing a “Com.” phobia. He said that speeches made by honorable members supporting the Government were misleading and confusing the people. During the past ten weeks, in the newspapers and in pamphlets and other forms of propaganda, those who oppose this legislation have been endeavouring to mislead and confuse the people, and have circulated lying statements about the Government’s proposal to nationalize the private trading banks.
The announcement of the Prime Minister (Mr. Chifley) that he proposed to ask the Parliamentary Labour party to authorize the Government to draft this measure was the signal for the opening in the press and over the radio of one of the greatest campaigns of vile propaganda that has ever been indulged in. Not one logical argument has been advanced either in the press advertisements or in the broadcast statements of those opposing the nationalization of the banking system. The opposition to the measure has largely consisted of stories about socialism, communism or some other “ism”. A stream of frenzied words has issued from those whose sole purpose is to keep the financial high priests safe in their lucrative trade. They want the people to remain for ever in the dark as to the mysteries and intricacies of banking and finance ; they do not want the people to know how the private banking system operates. They have poured forth a stream of invective against the majority of the elected representatives of this country for daring to seek to control the nation’s credit in the interests, not of a few privileged company and bank directors, but of the people as a whole. I ask the intelligent section of the electorate to study the propaganda poured out in the press, in pamphlets, and over the radio by those who so viciously and so vigorously oppose the Government’s policy of nationalizing banking. They will see how specious are the arguments advanced by the antagonists of this proposal. Honorable members opposite have brought out of captivity the old socialistic tiger in their efforts to confuse the people. As a child after World War I., I remember how frequently the old socialistic tiger was led on to the stage by those who sought to prove that members of the Labour party aimed to introduce socialism overnight. In their attempts to stir up the people against this proposal, honorable members opposite and those who support them have endeavoured to play upon the fears of the people. The honorable member for Franklin asked, “If this bill be passed, where are my sawmillers, my farmers and little business men to get accommodation?” Honorable members opposite are assiduously engaged in a campaign which, to use a colloquialism, is designed to “put the wind up” the business community, the farmers, and the workers. They and the wealthy financial interests which they represent are prepared to go to any lengths to prevent this legislation from being given effect. They have threatened to use the public platform, to use the ballot-box, to use the democratic instrument, and, if necessary, to use the Nazi instrument of physical force in their fight against the nationalization of banking. They say that this measure will result in a curtailment of the liberties of the subject. In some instances the propaganda poured out by the private banks has obviously been concocted by the most inexperienced writers. For instance, the banks claim that if this bill becomes law the Government will have vast powers over industry and substantial control over the individual. If that be true, then the banks themselves tacitly admit that at present they exercise those vast powers. In effect, they say, “We enjoy these powers to-day. Why should the Parliament challenge our right to continue to exercise them? The propaganda poured out by anti-Labour forces is a reminder that the private banks exert a baneful influence over the life of every citizen. Every industry, every mining venture, every pastoral and agricultural worker is the slave of the present banking system. The nationalization of banking will result in the smashing of the monopoly of the private banks and the releasing of the grip of a handful of private individuals on the economic life of Australia. As the result of this measure, power will be taken from the hands of a few wealthy exploiters and will be vested in the Parliament, which is democratically elected by the people. Nationalization will benefit the worker because it will give to the Government full control of the credit and the financial resources of the nation. It will combat future unemployment arising from new economic or industrial crises. It will benefit the primary producers because sufficient financial resources will be made available to enable the Government in time of crisis to implement a wise policy of rural debt adjustment. Above all, it will permit a scaling down of interest rates until they represent only the cost of the issuance of loans. The small business man will benefit too, because nationalization will remove the control of our banking system from the group of private monopolists who up to the present have been able to withhold finance from undertakings which would challenge their own sources of income. With the passage of this measure, the power to restrict competition in this manner will be gone. The Industrial Finance Department of the Commonwealth Bank is already proving of great assistance to small business undertakings.
– The honorable member for New England says, “Oh” ! We know that he was a member of the Royal Commission on Banking and Monetary Systems, because he kept telling us about it this afternoon. He claims to know all about banking, but his speech to-day did not reveal a very wide knowledge of the subject. The Industrial Finance Department of the Commonwealth Bank has played a most important part in the rehabilitation of many ex-servicemen. In fact, I myself have taken many returned soldiers to that bank. It has also facilitated the establishment of industries in country .towns, where previously there were no industrial undertakings because of the lack of financial accommodation. To-day, loans are made not against huge assets or securities but purely and simply on the security of the assets to be purchased by the individual concerned.
There has been a howl and a scream from the Opposition about the banking monopoly that will be created by this measure. It is alleged that this monopoly will be an influence for evil; but there is no suggestion that control of our entire banking system by a few directors, as at present, is an influence for evil. Public ownership of the banking system, we are told, will mean the destruction of personal freedom, individual liberty, and initiative. In effect, the protests that are being- made against this bill are protests against the transference, of the banking monopoly from private to public ownership. Opposition speakers have made much of the fact that there are 71.000 shareholders in the private trading banks; but it cannot be denied that control of these institutions is actually in the hands of a few individuals. If the people do not like the Labour Government’s banking policy, they can deal with members of the Labour party at the next elections; but if the people do not like the policy of the few directors who now control the private banks, they have no redress whatever. The Opposition believes that private banks, competing with one another, are preferable to one publicly owned institution not subject to competition. How much competition is there between the private banks? To-day there are nine trading banks in this country, but the proposed amalgamation of the Queensland National Bank Limited and the National Bank of Australasia Limited, and of the Union Bank of Australia Limited and the Commercial Bank of Australia Limited would reduce that number to seven. In the ‘nineties of last century there were more than 50 private banks in this country. As this number has been reduced over the years, competition has become less and less. The following statement was published in the Bankers Magazine with regard to amalgamations : -
Most of the banks operating in Australia and New Zealand a.re of considerable size, hut the union of two of the largest makes us wonder whether we are not merely seeing the first step in the process of further amalgamations mid whether the smaller banks will not feel impelled to throw in their lot with one or another of their massive competitors.
Obviously, the bankers believe that the Australian people are ripe for further exploitation. They want to take advantage of the favorable economic conditions now prevailing. They want also to reduce the possibility of a serious challenge to :he trading bank section of the Commonwealth Bank. The honorable member for New England referred to the slow progress of the trading bank section of the Commonwealth Bank, but he did not explain that this was due largely to the policy of the Commonwealth Bank, dictated by the representatives of the private banks. The instruction was that the Commonwealth Bank was not to accept accounts from the private trading banks, and was not to chase new business. In other words, the Commonwealth Bank was crucified in the interest of the private trading banks of this country. It is only since this Government amended the Commonwealth Bank Act in 1945 that that institution has been in a position to offer real competition to the private trading banks. The act now contains a compulsory provision that the Commonwealth Bank shall seek new business.
The fact that there are 71,000 shareholders in the private trading banks would indicate that one person in every 100 of the population of this country had a financial interest in the trading banks, but I remind the House that 25,000, or approximately one-third, of the shareholders live outside Australia.
– What about the breweries ?
– Order! If the honorable member for New England (Mr. Abbott) does not cease interjecting, I shall name him.
– Another statement that has been made to bolster up the Opposition’s case is that the average shareholding in the private banks is only about £500. In answer to those who try to create the impression that the “little people” of Australia and not the “big” control the private banking institutions, I say that at the time of the Royal Commission on Monetary and Banking Systems it was shown that 12 percent, of the shareholders with a. shareholding of £1,000 or more in six Australian banks controlled 61 percent, of the capital.
Nationalization of the Australian banking system will remove it from the hands of private monopolists, free it from foreign influences and convert it into a wholly Australian-owned and controlled system, functioning in the interest of. not the shareholders or the wealthy directors, but the whole Australian community. History gives us an interesting insight into the private banking institutions.
It interesting to note that the royal commission made, to use a. term frequently used in this chamber, only a passing reference to one of the greatest calamities that ever hit Australia. - the bank smash of 1893. The general managers of the trading banks, in their evidence before the commission, also made only passing references to that calamity, which caused so much stagnation and ruin in Australia.
– That will be nothing to the tragedy of the smash that will come.
– The honorable member for Barker is a tragedy, but I am dealing with the tragedy of 1S93. As it has been dealt with by other speakers, I do not need to make reference to it at great length. I make a passing reference to it, however, because it reveals the damage that was done and how the development of Australia retrogressed. The failure of the private banks in 1893 seriously retarded the progress of Australia for many years. It was an economic and financial setback of great magnitude and its effects were grievously felt for years after by this young country, which was just beginning to find its feet and develop. The private banks have a lot to answer for in having destroyed confidence at a critical stage of our development. The failure of the banking system at that time unquestionably arrested the steady progress of the country and we had painfully to rebuild from the wreckage for which the private banks were responsible. Thousands of depositors were ruined. They had no security whatever.
The Leader of the Opposition said that the private trading banks have 1,500,000 depositors whose deposits amount to about £650,000,000. He made very much of that in order to make a case as he thought, against nationalization. What he stated was, in effect, a case for nationalization, because the case he made out had the opposite effect to that which he wished it to have, as I shall easily prove. ‘ Let us go back to the bank smash of 1893, which indicated just bow little security the trading banks’ depositors had. The 1,500,000 depositors in the private trading hanks have £650,000,000 on deposit, but what is their security? If a business recession follows the present boom, it is most likely that the security of the depositors of the private trading banks to-day will be as nebulous as was the security of the depositors Who lost their deposits in the bank crash of 1893. In other words, this measure is born of lessons learned the hard way. It is devised to alleviate distress and, above all, to provide security for all sections of the Australian community.
I now come to the charges of opponents of the bill that its inevitable result will be a dictatorship in Australia. The private trading banks and their satellites ought to be the last to talk about dictatorship. They have failed to tell the people that the Commonwealth Constitution makes it utterly impossible for any would-be dictator to achieve his ambitions whether he be from the right, the left or the centre of the political life of Australia. If he tried to defy the Constitution, the people would rise in rebellion. No one could constitutionally impose a dictatorship on Australia. The Parliament will go to the people in about two years’ time and I forecast that, as in 1943 and 1946, Labour will be returned with a “thumping” majority. I repeat that the private trading bankers ought to be the last people to talk about dictatorship. In the late 1920’s the “Big Four”, the representatives of the British bankers, came to Australia to tell us how to do tilings. They came primarily, of course, to ensure the protection of their investments in Australia. They were followed in July, 1930, by .Sir Otto Niemeyer.
– Who was appointed by the Scullin Government.
– He is at it again!
– Order !
– He was a director of the privately owned Bank of England. He laid down a policy for Australia which the Commonwealth Tear-Book referred to as a severe deflationary policy. Every man, woman and child in Australia felt the effect of that dictated policy. It has been suggested in this debate that the private trading banks were not responsible for the depression. The depression that began in 1929 was not. the result of action by ordinary men and women. It resulted from action taken by the world financiers, which had repercussions in Australia. If honorable members refer to the report of the Royal Commission on Monetary and Banking Systems, they will find that the commission stated that the private trading banks played a part that did nothing to relieve the position and that the deflationary policy that they applied accentuated the deplorable effects of the international slump.
– That is untrue.
– Order ! Opposition members have the opportunity of speaking at the proper time.
– The honorable member for Wentworth has a loud voice. I now refer to the matter of the special accounts in the Commonwealth Bank raised by the Leader of the Australian Country party (Mr. Fadden). One reason for the vicious fight against this measure is that the private trading banks have on deposit with the Commonwealth Bank in the special accounts just on £300,000,000. Let us see how those special deposits came about. During the war, when Australia was fighting desperately for survival, the Government wanted money urgently to carry on the affairs of the nation, to pay service men and women, to pay for all war services, and to pay contractors and so on. What happened? The Treasury applied to the Commonwealth Bank for, say, £20,000,000 worth of credits against treasury-bills - I O U’s. The Commonwealth Bank discounted the I O U’s, credited the amounts appropriately in its books to the different departments, and notified the paying officers of the departments, who then issued cheques drawn on the bank. Those cheques were satisfied by the issue of Australian bank notes. The next step in the process was the spending of the money by the recipients, so that it passed into the hands of the landlord, the grocer, the butcher, and so on. When those notes were issued, no fresh assets were created as a result. They represented nothing more than paper wealth. They passed into the hands of the traders, who banked them. If 95 percent, of commercial banking in Australia is transacted by the trading banks, as they claim, it is obvious that the paper tokens issued by the Government get into the private banking system.
In ordinary circumstances, the trading banks, having such large “funds” for investment, naturally, and inevitably, would lend them out through the medium of overdrafts. However, the Curtin Labour Government wisely gazetted certain National Security Regulations under which the trading banks were compelled to deposit such funds in special accounts with the Commonwealth Bank. This provision was subsequently confirmed by the Banking Act of 1945. During the war, the issue of these new notes was tantamount to creating an inflationary condition, because of the financial demands of war. Under the private banking system, the banks treated that paper as wealth when it came into their hands from the depositors. They regarded a £1 note as being as good as a sovereign, but they were forced to deposit those tokens in special accounts with the Commonwealth Bank. They are now taking preliminary steps in the direction of forcing the Australian Government to permit the withdrawal of this so-called wealth from those accounts. The section of the Banking Act which established the principle whereby the trading banks are obliged to place their surplus investable funds in special accounts was challenged in the Melbourne City Council case, but, during the hearing in the High Court, that issue was dropped. It would be interesting to know what went on behind
I he scenes. Clearly, the private hanks decided that the issue could wait until another day.
If the banks should secure a favorable verdict from the High Court when they next attempt to compel the Government to hand over those funds, they will have an amount of £300,000,000 at their disposal. Expanding this sum “in accordance with normal good banking practice”, they would force us into the throes of the wildest and most vicious form of inflation. “Chinese inflation” would not compare with it. However, let us be a little more charitable, and assume that the banks would not pump this amount of £300,000,000 into the community by granting overdrafts indiscriminately. Let us assume that they would do the patriotic thing - which would appeal to the general public - and take out Commonwealth bonds to the value of £300,000,000. Drawing interest at 3 percent, they would have an annual income of £9,000,000 from that source, which they would continue to draw for all time. In other words, if this bill does nothing else, it will save the taxpayers of Australia, on that transaction alone, an annual expenditure of £9,000,000. Honorable members opposite, with the exception of the Leader of the Australian Country party (Mr. Fadden), have failed to mention the special accounts in the Commonwealth Bank. Even he did not refer to the annual interest bill of £9,000,000 which would be charged against the people of Australia if those accounts were unfrozen. I emphasize that £9,000,000 would be the minimum annual charge resulting from the transaction.
I deal now with the subject of freedom, which has been mentioned frequently in this debate. In this connexion, the views of a man who is well known to honorable members opposite, a grazier from Western Queensland, not a member of the Australian Labour party or a trade union secretary, are of special significance. This gentleman was awarded the Victoria Cross during World War I. Incidentally, the honorable member for Gippsland (Mr. Bowden) was his commanding officer and recommended him for the award. He is Major Towner, of Kaloola in the Longreach district. He wrote a letter which was published in the Longreach Leader, a newspaper which circulates in Western Queensland. Major Towner stated -
To date the newspapers have only printed a one-eyed view on the question of the nationalization of the banks. In the physical plane, a person with one eye has a distorted vision, so also in the financial plane. Twice within my short life the banking system under private control has badly failed this country. The first period was in 1S93, when many of the line men who pioneered the west of Queens- laud lost their holdings. The banking system failed them at a. time when they most needed help. Included in those who wore forced from their stations were the late Sir J. P. Bell, Donald Wallace of “Terrick” and Carbine fame, the Govatt brothers, J. Tolson of “Aramac” and “Corinda” stations. Berkel man and Lambert of “Listowel Downs” and many others too numerous to mention.
The second period in which the private banking system failed was during the depression after World War I., in which for a few years in this country, a land having all the material wealth needed to make man happy, was reduced to a state of chaos. In this period the sole controller of the Commonwealth Bank was Sir Robert Gibson, a very able furniture manufacturer, but apparently knowing little about the science of banking, he refused the Government’s request to release the small amount of £18,000,000 to tide the country over this difficult period.
He then quoted Bernard Shaw -
The bank managers themselves do not necessarily understand their business. They are not theorists; they are practitioners and routiners. The ‘bankers themselves often know no more of the theory than the managers, and less of the practice. Those who fully comprehend what they are doing know that banking could be quite easily nationalized by a Bank Purchase Act like the ‘Land Purchase Act which got rid of the old Irish landlords. If a run on the national banks started, the Government could at once declare a state of national emergency and ration drafts, just as it now rations eggs in war-time. The simpletons would have to behave sensibly instead of ruining themselves and the banks in an ignorant panic. They would have government security for every farthing of their deposits and ‘be able to borrow from the bank at a cost price to extend their businesses, whence now they can borrow nothing less than scores of thousands at a discount, but as the enormous present profits of banking would then cease and its correspondingly enormous benefits be communized the bankers take good care that banking shall remain a mystery.
I repeat that the letter expressed the views not of a Labour man, but of a humble grazier in western Queensland.
To sum up, nationalization of banks should be supported for these reasons -
I address my final words to ex-servicemen, who are being told by opponents of the bill that the nationalization of banking will interfere with their freedom, and deprive them of everything for which they fought on foreign battlefields. What those opponents of the bill have not said is that the nationalization of banking will ensure to ex-servicemen, and to every man, woman and child in Australia, freedom which they do not enjoy at the moment. We have only to consider the letter which the then Chairman of the Commonwealth Bank Board, Sir Robert Gibson wrote to a former Treasurer, Mr. E. G. Theodore, telling him that, as a condition precedent to the Commonwealth Bank Board granting financial assistance to the Scullin Government, that government must agree to slash salaries, wages and invalid, old-age and war pensions.
-Order! The Minister has exhausted his time.
- During this debate, honorable members opposite have delivered more speeches which ignored the relevant facts associated with the bill than I thought possible. For my part, I am extremely proud to be associated with the Labour Government which is implementing, in this legislation, the most important and most sacred plank of the platform of the Australian Labour party. I congratulate the Prime Minister (Mr. Chifley) on being the first of all the members of the Parliamentary Labour party to have the signal honour of implementing this most important plank. Bankers and their satellites, anti-Labour political spokes men and the press complain that proposals for the nationalization of banking came like a bolt from the blue. They protest that this scheme was hatched overnight by this tyrannical socialist Prime Minister. However, those complaints are based upon false premises. The Labour party appreciated the grave need for this measure as long ago as 1908. At the fourth Federal Conference of the Australian Labour party, Mr. King O’Malley successfully moved a resolution for the establishment of the Commonwealth Bank, with the ultimate objective of the complete nationalization of the Australian banking system. Three years later, the Fisher Government implemented it, and established the Commonwealth Bank. The right honorable member for North Sydney (Mr. Hughes), in his characteristic style, boasted, in his second-reading speech on this bill, that he had been the Attorney-General who had drafted the conditions governing the establishment of the first Commonwealth Bank. He stated then that the institution was not to be a competitive bank. Statements of that kind by the right honorable member are not unusual, because he is the greatest political contortionist that this country has ever seen. He has performed more political somersaults than any other man who has ever taken part in Australian politics. He has been a member of more political parties, led more political parties and “ratted” on more political parties than any other Australian politician.
When the legislation which established the Commonwealth Bank was being debated in this Parliament, members of the Fisher Government did not hesitate to point out that the ultimate objective was the complete nationalization of banking. The Labour party has never deviated one inch from that cardinal principle which the fourth Federal Conference of the Australian Labour party adopted, nearly 40 years ago. So far as I am concerned, that is the complete answer to members of the Opposition who protest that the nationalization of banking is not part of the policy of the Australian Labour party. They should be ashamed to mention the name “Australian Labour party”. What do they know about its policy? All they know is that the policy of the two political parties to which they belong is to do everything - and no depths must be too low for them to sink - in order to destroy the great .and grand Australian Labour party. That is as much as they know about it.
The phrase “nationalization of banking” has, undoubtedly, been used as a catchcry by its opponents, who include the press, the bankers and their satellites, and others who are responsible for flooding the country with stupid pamphlets, propaganda, letters and telegrams. Members of the Opposition, who are their political spokesmen in this House, have used the phrase in an endeavour to excite the people into believing that the nationalization of banking is a tyrannical, Communist outrage.
– So it is.
– What rot.
– While the honorable member for Wentworth (Mr. Harrison) is obeying the instructions of his masters, who are the bankers and vested interests, I grant that he is doing a fairly good, although not a very effective, job. He knows that the nationalization of banking is not a tyrannical Communist outrage. After the people have seen exactly what will happen under the bill, they will realize that it is not a tyrannical Communist outrage. Indeed, they will recognize that it means good order and prosperity in Australia. A simple and honest conception of the nationalization of banking implies nothing more nor less than a. merger of the present trading banks with the Commonwealth Bank into an extensive, nationally owned banking and credit service designed to operate in the interests of the whole community instead of a small coterie. Those who have criticized this measure have failed, and failed miserably, to prove that the nationalization of banking is unethical. They have, therefore, concentrated their attack principally on the political aspects of the Government’s proposal. To that end members of the Opposition and the press have endeavoured to create a feeling of fear in the people by suggesting that the nationalized banking system is to be dominated by politicians.
I desire to refer to some of the utterances of the honorable member for Corangamite (Mr. McDonald). When I first entered this Parliament, I was told privately that, although honorable members fought like Kilkenny cats inside the House, they mingled quite freely outside it, and that amongst them there were good and bad fellows. I do not intend to mention the names, of honorable members who were mentioned as good or bad fellows except to say that the name of the honorable member for Corangamite
Mr. Blain interjecting,
– Order! The honorable member for the Northern Territory (Mr. Blain) has been in trouble once to-day, and I warn him to cease interjecting.
– In the course of his speech the honorable member for Corangamite made the malicious and filthy insinuation that when this bill becomes law and the trading banks have become nationalized, the Ministers of the Government - and he used the word “Ministers” and pointed to the Ministers in the House - would get their hands into the funds and help themselves to them. A statement of that kind made by an honorable member of any party is a tragedy and degrades the dignity of the Parliament.
– I think that the honorable member’s remarks distort what was actually said.
– Order ! The honorable member for Indi (Mr. McEwen) has already spoken on the bill.
– The honorable member for Indi says–
– Order ! The honorable member must address the Chair.
– If my statement is a distortion of what was said, I can assure the House that I made it in good faith, because my recollection is that the honorable member for Corangamite made the remark I have mentioned and pointed to Ministers seated in the House. It is quite clear from the tactics resorted to by members of the Opposition that they have no real argument to put forward, and that their only recourse is to attempt to frighten the people into believing that something will happen which will not, and could not possibly, occur. Those who have opposed the bill have striven strenuously and feverishly to create the impression that when the banks are nationalized the Commonwealth Bank will be dominated by politicians. Of course, they deliberately refrained from mentioning that the present system of private banking supplies a striking example of political control. The boards of directors which control the trading banks consist now of politicians and their friends, and those politicians are, in the main, of a particularly vicious anti-labour and antiworking class type. When honorable members opposite speak of “political control” they overlook the fact that trading banks are at present under almost complete political control.
Supporters of the Government have pointed out that in the first place the creation of the Commonwealth Bank aroused the most bitter opposition from certain people; but that later, when a tory government appointed a board of conservatives to control the Commonwealth Bank, the very people who had so bitterly opposed the creation of that bank chose to regard it as a bulwark against what they termed “socialist aggression”. To-day we hear the same infantile arguments advanced against the present proposal. Opponents of the Government contend that a publicly owned institution must necessarily be one administered by politicians. I cannot understand why it should be assumed that a responsible national government, elected by the people of Australia and answerable to them, should not administer a national bank with the same success as has attended the efforts of the directors of private trading banks. Surely the Government can be trusted to appoint directors who will be at least as competent to conduct the admittedly complex business of banking as the directors appointed to control the destinies of private banks. If the Australian Government can be trusted to appoint the members of the High Court, about whom quite a lot has been said lately, why should it be assumed that it cannot be trusted to appoint officers who will administer the national bank at least as capably as the gentlemen the Government has appointed to the High Court have fulfilled their functions?
Even before the bill was introduced into this House, members of the Opposition, the press, bankers and their spokesmen embarked on a campaign to convince the people that the nationalization of banking would deprive them of their freedom and their liberty. Statements of that kind are so utterly stupid that ordinarily they would not justify even a passing reference. Moreover, the allegations which are now being made by members of the Opposition have all been made before. They are, in fact, merely a repetition of what members of the Opposition said when the Banking Bill was introduced in 1945, and even in 1911, when the measure to establish the Commonwealth Bank was debated. A great deal of discussion took place in this House in 1945, in the course of which members of the Opposition asserted most emphatically that the freedom and liberty of the people would be lost for ever if that bill became law. That bill did become law, and the people have certainly not lost their freedom or their liberty. Furthermore, the Government which enacted that legislation went before the people of Australia at the general elections last year, and the people showed unmistakably that they were not afraid that their liberty or their freedom would be destroyed. As we are all aware, they returned that Government with a substantial majority. If there was any need for an answer to those stupid assertions, the people themselves provided it.
The way in which the Government’s proposal has been exploited by the Opposition is reflected in the number of letters and telegrams which we on this side have received. We do not know what communications have reached honorable members opposite because they do not say very much about them. Last night, the Minister for Labour and National Service (Mr. Holloway) made reference to a telegram when the honorable member for Moreton (Mr. Francis) interjected to ask why the Minister did not read it. On a number of occasions during recent weeks the honorable member for Moreton has presented petitions against the Government’s banking proposals, and has referred to the numerous communications which he has received from electors on the subject. I ask him now why he did not read the letter in which he was notified of the unanimous decision of members of the boilermakers union at Ipswich workshops favouring the nationalization of banking.
– I told the House what one locomotive driver thought of the proposal.
– Yells and bellows have come from the Opposition, and there have been many references in the press demanding a referendum on this subject. Other honorable members on this side, who are more capable of dealing with the subject than I am, have referred to the many changes of policy by the parties opposite when they were in power. Previous governments did not ask the electors to sanction every change that they introduced. On this occasion wo have a good idea of what the people think. The Opposition says that the Government has not a mandate for this legislation, but is it not a fact that when the electors returned the Chifley Government to office at the last general elections support of Labour’s policy was implicit in their decision? During the election campaign tory candidates went to great lengths to tell the people of the catastrophe in the form of socialism that would occur if they returned the Labour Government, but despite all their attempts at intimidation the people put the Government back on the treasury bench, thereby showing that they did not fear socialism so much as a return to the conditions which they had experienced under tory rule. At the ballot-box the people gave to the Labour Government a mandate to proceed with the implementation of its platform, a major plank of which is the complete nationalization of the banking system. Despite all the outcry on the part of those opposed to this measure, there can be no escape from that fact.
Honorable members opposite persist in saying that no mention of nationalization of banking was made by Government candidates during the election campaign, but anybody who knows anything at all about politics knows that that objective has been included in the Labour party’s policy for many years. Honorable members will recall that at a recent “Forum of the Air” discussion of this subject the hall was “stacked” by opponents of the proposal, who were instructed not to let speakers in support of the nationalization of banking have a fair hearing. On that occasion the Liberal panjandrum, frequently referred to as “Bengal Casey”, said that the Prime Minister, knowing that many Australians who voted Labour would not vote for socialism, deliberately omitted any reference to the nationalization of banking from his election speeches. Like many other statements which have emanated from Opposition benches, that charge is utterly without foundation. The people who voted for Labour candidates at the last elections knew that for 40 years the nationalization of banking was included in Labour’s policy and when they voted for Labour they voted for the implementation of that integral part of the party’s programme. I was present at the Brisbane Town Hall when the Prime Minister told a packed and enthusiastic audience that if Labour were returned, the Commonwealth Bank would no longer be under the control of six or seven business men selected by the Commonwealth Treasurer because they were his friends, but would he converted into an instrument which would control the monetary policy of the nation under the direction of servants of the people. On that occasion the right honorable gentleman said -
It is to the maintenance of an economic balance, in which lies the true welfare of alt our people, that the Labour party is pledged, and upon the policies to ensure that maintenance the Government takes its stand at this general election.
Will honorable members opposite still say that the Prime Minister did not make any mention of the ultimate nationalization of banking during the election campaign? His speech, on the occasion referred to, certainly left nothing to the imagination.
Opposition members have had a good deal to say about letters, telegrams, and petitions against the Government’s banking proposals, and they have tried to convey the impression that the bulk of the people are opposed to this measure. On one occasion the honorable member for Swan (Mr. Hamilton) majestically approached the table, carrying with him a nicely bound document in perfect condition, which he said contained strong protests against these proposals. Does he expect members of the Parliament to believe that that was a genuine petition from electors in his State? Well, they may have “kidded” themselves into the belief that they have convinced somebody, but they do not convince me, anyway. They say that a majority of the people are opposed to this measure, and, in justification of that statement, they point to the fact that they have presented petitions bearing signatures allegedly numbering 100,000. For the purposes of debate, let us assume that the 100,000 signatures are genuine. They still represent only 1.00,000 persons, but there are another 3,900,000 electors left. Therefore, how can they claim that the petitioners who object to the proposals represent a majority of the people? I received 3,000 letters and telegrams. Am I to assume that the 3,000 persons who sent those communications reflect the true feeling of the 73,500 persons on the roll in my electorate, or am I to adopt the attitude that if I do not present the petitions, if I completely ignore the letters and telegrams, I am in agreement with a majority of the constituents in my electorate, to the number of more than 70,000, who have accepted the principle of this bill, and have indicated their acceptance by not registering any protest against it? Let us examine the methods followed by those who have organized this protest. I have here two bundles of envelopes. They are unopened, and they are not going to be opened. I shall say why. I have here in my hand one bundle. All the envelopes are exactly the same, they bear the same post mark, and every one is addressed in the same handwriting. T do not claim to be such a genius as some honorable members opposite, but I have a bit of intelligence. If I were to accept these letters as genuine protests, and acknowledge them, I should be just as silly as the people who sent them. The other bundle of envelopes bear typewritten addresses, admittedly, but they ail bear the same postmark, and all the envelopes are the same. They will be not opened either, and for the same reason. Any one who treats his elected member in the way in which the senders of those letters have treated me deserves the treatment which he receives from me.
– And the honorable member calls himself democratic.
– I do not call myself a lunatic, at any rate. I have here a letter posted to me by a constituent in the Ingham district. It is a roneoed letter,, which was sent to the lady by the Bank of New South Wales, and the accompanying letter was as follows : -
We feel certain that you are opposed to the Labour Government’s proposal to nationalize banking, and, if you are, please sign the attached letter and forward it to your federal member.
As a matter of fact, she sent it to me without signing it, and then honorable members opposite get up and talk about protests! It is no wonder they are on the Opposition benches if this is an example of their ability to organize.
Much has been said in this debate about the depression, its effects and what caused it. The Leader of the Opposition (Mr. Menzies) expressed his opinion as to what created the depression. In a democratic country such as Australia is, with a democratic government such as we have, I suppose everybody is entitled to his opinion. My own opinion is that the depression was created by the financial monopolists, not only in this country, but throughout the whole world. It was created for the express purpose of enabling them to attack the wages and conditions of the workers of the world.
– Oh !
– The ‘ honorable member may laugh. His bosses, the bankers, tell him that he must laugh at such expressions of opinion. r know what happened in Queensland during the depression, and I do not say that such things were confined to Queensland. In 1929, right at the nadir of the depression, during the regime of the Bruce-Page Government, an attempt was made in this chamber to destroy the arbitration system. The result of that endeavour was the overthrow of the Bruce-Page Government. Some members, at least, who ordinarily supported that Government, had enough decency not to allow the arbitration system to go by the board. However, in Queensland, there was a government called the Moore-Barnes Government. It was in office only three years, and everybody now refers to it as the “MooreBlight” Government. The Government -of Queensland had the numbers, and it -did, in fact, attack the arbitration system. Many of the awards were taken out of the jurisdiction of the Arbitration Court, it eliminated from the Conciliation and Arbitration Act all those sections which might operate to the” advantage of the workers.
– The honorable member must connect his remarks with the bill.
– -That was in the depths of the depression, and the workers of Queensland could not get jobs. They could not even get food for themselves, their wives and their children, except by going to a police station where the dole was dished out to them. The Moore Government advertised that £1,000,000 would be made available in order to provide 10,000 jobs, with the result that unemployed men came from the southern States, looking for the jobs. When they arrived, no work was available, and already many thousands were on the dole. Single men could not, under the Government’s regulations, draw the dole twice consecutively in the same district. They could draw their 6s. worth of rations, but in order to draw a further ration, they had to move on to the next town. How they got to the next town was not the concern of the Government, or of those who were holding up the finances of the country. The result was that police courts were filled daily with persons who had “jumped the rattler” in order to reach the next town to obtain food to keep body and soul together. The honorable member for Fremantle (Mr. Beazley) said that as a school teacher he had noticed in the physique of children, coming under his charge the effects of malnutrition caused by conditions which prevailed during the depression. Even to-day, many school teachers still tell of children who. during the depression, were obliged to go to school without their lunches because their parents had not the wherewithal to provide them. All that suffering was caused, because that was what financial monopolists desired to happen in this country.
Honorable members opposite say that this measure will establish a government monopoly bank. It will be a monopoly bank. There can be no argument about that. The power of a monopoly in finance and banking is too great to be left in the hands of private institutions, whose principal object is to make profits for their shareholders. That system ultimately works to the detriment of the men, women and children of a nation.
.- I bitterly oppose this measure. I have no brief for the private banks. Those organizations are sufficiently strong to defend themselves. Therefore, I am not particularly worried about them. I know that in the past, private banks have made mistakes and have done things of which they have no reason to be proud. However, they have not the rotten record of the great industrial unions of this country. They never attempted to destroy our war effort, as the Ironworkers Federation, under the control and direction of Thornton, a. well-known Communist, endeavoured to do. They did not do as the coal-miners did. The coalminers refused to produce coal that was urgently required, not only for our own use, but also for the production of munitions for our defence forces who were fighting for their own and our liberty, for the Empire and for everything that we hold dear. The private banks did not do as the wharf labourers did. The waterside workers refused to allow food and medical supplies to be loaded on ships to be transported to our allies and to members of our own defence forces who were suffering in Japanese prison camps. I was surprised that the honorable member for Lang (Mr. Mulcahy) should refer as he did to the honorable member for the Northern Territory (Mr. Blain).
– I am able to look after myself, and shall do so in good time.
– I was astounded to hear the remarks made by the honorable member for Lang about the honorable member for the Northern Territory, who has served in defence of this country in two wars, and with other members of the 8th Division suffered in prison camps at the hands of a brutal and foul enemy.
Those remarks were unworthy of the honorable member for Lang.
The Prime Minister (Mr. Chifley) stated that the majority of the people are in favour of the nationalization of banking. I do not believe that; and I am perfectly certain that honorable members opposite, in their hearts, know that that is not true. Petitions protesting against nationalization of banking, which have been presented to the Parliament and to the Prime Minister, bear the signatures of hundreds of thousands of electors. Over 17,000 residents in my electorate have signed petitions of protest. The honorable member for Herbert (Mr. Edmonds) said that those petitions were “put up” by various interests. I examined very carefully every petition which I was asked to present, and they were 100 percent. genuine. Not more than 1 percent. of the signatories reside outside my electorate. However, those persons are Australian citizens, and they have a perfect right to voice their protests in that way. The honorable member for Herbert asked why honorable members on this side had not read out in this chamber the letters which we have received on the subject. In addition to receiving petitions signed by over 17,000 residents in my electorate, I have received approximately 500 letters and telegrams, and for the benefit of the honorable member I shall read a number of them. I received the following letter from the Bendigo Master Builders Association : -
Please find enclosed signed papers stating the policy of the above association members towards the proposal to nationalize banks.
If this association can help in any way please instruct. -Rex W. Streader, Hon. Secretary.
From the Pyramid Hill branch of the Sailors, Soldiers and Airmen’s Association of Victoria I received the following letter : -
Enclosed is a copy of resolution which has been forwarded to our head office and later to the Prime Minister re nationalization of banking. I know there is not any necessity to stress the great importance of your opposition to this move and we trust that when the honorable Prime Minister notes the storm of disapproval throughout the Commonwealth to the contemplated action of his Ministers that he will reconsider this proposal and that it is wiped out and we have our confidence in you to do your utmost towards achieving this. -
Yours sincerely. - D. E. McIvor.
The Bendigo Chamber of Commerce and Industries wrote to me as follows: -
I have been instructed to convey to you that at a meeting of our chamber held this week, members were perturbed by the Government’s proposal to nationalize the trading banks of Australia and the following resolution was unanimously carried: - “That the Bendigo Chamber of Commerce unreservedly is opposed to the Government’s proposed nationalization of trading banks, as it interferes with the freedom of the individual.It would be appreciated if you, sir, would take all steps to oppose this measure in the House. - Thomas, Secretary.
I received the following telegram from the Stanhope-G-irgarre branch of the Australian Primary Producers Union: -
Stanhope-Girgarre Branch Australian Primary Producers Union strongly protest bank nationalization. Demand referendum on question. - (Signed) A. Enders.
The residents of Echuca Village wrote to me as follows: -
We, the undersigned, being residents of the Echuca Village district and members of your constituency, hereby emphatically protest against the proposals of the Government to nationalize banking. Such a step would, in our opinion, be unwarranted and contrary to the wishes of the majority of the people of this country. We demand that you do everything in your power to obtain a referendum on this issue so that a decision of the people may thus be obtained.
The next letter which is typical of many which I have received is from the secretary of the shire of Bet Bet. It reads as follows : -
At a meeting of my council held on 17th instant an emphatic protest was lodged against the proposal of the Government to nationalize banking without a direct mandate from the people.
The council feel that before taking any further action the Government should hold a referendum on the matter and my council would be pleased if you would make every effort to have this brought into effect.
The next letter is from the Bamawm and District Fruit Growers Association, and it reads -
The members of the above association have requested me to communicate with you expressing their concern of the proposed nationalization of the banks, and to urge you to do your utmost to prevent such a fatality.
I have also received a longer communication from the Graziers Association; but as a copy of it has been sent to most honorable members I do not propose to read it. It is in somewhat similar terms. These represent a fair cross-section of the letters I have received on this subject, which number approximately 500. Of the total, about 40 or 50 were roneoed and may have been supplied to the senders by the private banks. All of the others were hand written or typed and were signed by people whom I know personally, and there can be no doubt about their authenticity.
It was said during the course of this debate by the honorable member for Herbert (Mr. Edmonds) that Sir Otto Niemeyer and three other gentlemen came to Australia during the economic and financial depression and dictated the economic and financial policy which he thought this country should pursue. I remind honorable members that he came here at the express invitation of the then Prime Minister, the right honorable member for Yarra (Mr. Scullin), at a time when Labour governments were in office in a majority of the States. The policy laid down by Sir Otto Niemeyer should, in my opinion, never have been accepted in any circumstances. The Australian Government of the day, however, did not have the courage to say to the people: “We have no intention of repudiating our debts; we shall carry on and fight the depression”. The depression was not confined to Australia ; it was world-wide. It was not brought about in this country by the private banks or the financial institutions. It was brought about because of the calamitously low prices in the world’s markets upon which we had to sell our primary products. Thus, we were forced to adopt lower standards of living, as indeed was every other country. The United States of America was possibly in a worse position; it certainly took rauch longer to recover than we did. Hundreds of banks there closed their doors. The only bank to close in Australia was the State Savings Bank of New South Wales.
-. - Two banks in Queensland were closed.
– The failure of the State Savings Bank of New South Wales was largely politically engineered. At that time the private banks certainly did attempt to control the people, but only by following a policy which would enable our people to survive the depression. The money which the banks had to lend belonged to their depositors. They had to pursue a policy which would keep them solvent, otherwise they would have lost the money of their depositors in current accounts or on fixed deposit. Had that happened the first people to blame them would be those who are now trying to assassinate the private banks. The money used by the banks in the conduct of their business is not the money of their shareholders - that is a relatively small amount - it consists of funds which the Australian people entrust to the care of the banks, either to obtain interest or for safe custody. The banks have no authority to lend money to any one who asks for it. They must be satisfied of the standing and soundness of the borrower, otherwise their business would fail.
The honorable member for Lang said that the Bank of England had dismissed 300 members of its staff after some new adding machines had been installed. I remind him that the Bank of England is nationalized; it is the central bank of the Government of Great Britain and the man whom the present British Labour Government is keeping in office as manager of that bank is no less a person than the so-called infamous Sir Otto Niemeyer, so often quoted by honorable members opposite. The socialist United Kingdom Government which has seen fit to retain him in that capacity is the same socialist government as that which controls the Bank of England which dismissed 300 of its employees.
The Prime Minister has said that in no circumstances will the officials of private banks lose their rights to promotion and employment as the result of this proposal, but that all will be absorbed in the Commonwealth Bank Service when the bank is established as the sole banking institution in Australia. But the Minister for Post-war Reconstruction (Mr. Dedman) told a different story. He said that 5,000 people now employed in the private banks were surplus to requirements. These, he said’, should be provided with other jobs, in which they would be more usefully employed. The honorable gentleman has a habit of making statements of that kind, which are embarrassing to the Government. The officers of the private banks, whose living is vitally affected by this proposal, do not believe that they will be treated better by the monopoly bank than they are now treated by the private banks, nor do they believe that they will all be engaged in the Commonwealth Bank Service when the change-over is effected. I have received a letter from Mr. J. E. Stubbs, chairman of the Bendigo and District Banks Staff Campaign Committee, which reads as follows : -
Re Nationalization of Banking.
We hand you herewith a copy of a resolution passed unanimously at a meeting of all officers of the Associated Trading Banks in Bendigo and Eaglehawk, in the above connexion, for presentation to the right honorable the Prime Minister of Australia.
The resolution reads -
That this meeting of the entire staffs of the trading banks in Bendigo and Eaglehawk unanimously views with deep concern the Commonwealth Government’s proposal to nationalize banking.
As citizens of Australia, we strongly protest against the proposal for these reasons -
Because the question of nationalization of banking was not brought before the electors of Australia at the last general election, and therefore the Government is not considered to have a mandate for such legislation.
It is a decided step towards depriving the individual of his personal liberty.
It would bo an undoubted injustice to the staffs of the trading banks, but even a greater injustice to them as citizens of Australia.
We, therefore, demand that a referendum should be held, to enable the people of Australia to register their decision on this matter.
We also resolve to resist the proposals by all means possible, both collectively and as individual Australians.
That this resolution be forwarded immediately to the Prime Minister through our federal member.
So, the people whose living is threatened by this legislation mistrust the intentions of the Government, in spite of the Prime Minister’s assurance that their status shall not be prejudiced. The PostmasterGeneral (Senator Cameron) has said that his organization will be able to absorb any bank employees who may lose their jobs as the result of nationalization. No doubt that is true, but if a government official is to be empowered to tell the 5,000 members of the staffs of the associated banks where they are to work, and what jobs they are to do, we shall be harking back many hundreds of years, to the days when most human beings had no rights; when the masterdecided what they were to do, and wherethey were to go. In the city of Bendigo there are eight banks. Obviously theeight bank managers will not be employed as managers if this measure becomes law. Similarly, senior officerssuch as tellers cannot hope for jobs equal in status to the ones that they now hold. In fact, they will be extremely lucky if they are paid anything like their present salaries.
The people of this country are not in. favour of the nationalization of banking. They demand the right to deposit their money wherever they please; the right to deal with the bank managers that they know and trust - men who are prepared to assist them to carry on their undertakings, and who in the past havestood behind those engaged in the canning industry, the wool industry, the wheat industry and in fact all primary industries. The managers ofthe private banks have always been prepared to give consideration to the personalities and characters of their clients. This bill will force business men to put their money into the Commonwealth Bank, and to depend upon that bank for assistance. I had brought to my notice recently the case of a manwho applied to a government bank in March for an advance to buy feed for his stock. The drought broke early in August, and by that time half of hissheep were dead. The lambs that had survived had been fattened and sold before the bank decided that the man- could have the money to buy stock feed. That will be the story of every primary producer when competition has been eliminated by this measure. Men who may be good at figures, but who have no knowledge of primary production and donot understand the industries with which they will be dealing, will be appointed - probably by the Public Service Board. Many of them, no doubt, will hold views similar to those of the Minister for Postwar Reconstruction, who believes thefarming community of. Australia should bow to him and permit him to say what should be grown.
Sitting suspended from 6 to 8 p.m.
– The people of Australia are neither satisfied nor prepared to hand over their destiny, interest, :a.nd money-
– How does the honorsable member know?
– Because I have been (associated with a great number of them. People in favour of this legislation are as scarce as hens’ teeth. The Minister for the Navy (Mr. Riordan) said that, ;as Prime Minister, the late Mr. Curtin, in order to prevent inflation, had ensured that the private trading banks should not be allowed to put great sums of money on the market, but he failed to mention that the Leader of the Australian Country party (Mr. Fadden), as Treasurer in the Menzies Government, entered into an agreement with the private trading banks to achieve that result, by enforcing with regulations the arrangement that had been made. The late Mr. Curtin built on the foundations laid by the Leader of the Australian Country party, as he did in a great number of instances, particularly on the financial side. The Minister for the Navy said that the Treasury was saving £9,000,000 under that agreement, but the private banks could not have invested their money in loans because they were not allowed, to without the permission of the Commonwealth Bank.
– Under a regulation of the Menzies Government.
– Yes. That regulation was brought down by the Menzies Government. With only one bank opera ting, it would be open to any official of that bank, and, I have no doubt, any Commonwealth Minister, to get information to which they would not otherwise be entitled.
– What rot!
– It would be open for any Commonwealth Minister to do as the Minister for Lands and Water Supply in the Victorian Government did. When Mr. John McDonald, a member of the Opposition in Victoria, was criticizing soldier settlement in Victoria in the Legislative Assembly, the Minister for Lands and Water Supply said, “Well, I had a good look at your account with the Soldier Settlement Board“. Why did he have a good look at it? To see whether there was anything that he could use for party political purposes against Mr. McDonald, and for no other reason.
– That is the Labour standard.
– Yes. That shows the form of Labour men. If they get complete control of the finances of Australia and one belongs to the right party and knows the right persons it will be easy to get finance and, under the controls that this Government intends to hold on to as long as it can, it will be extremely easy to get supplies. In Bendigo there is a factory of which two men, the late Senator Keane and Senator Hendrickson, who was Senator Keane’s private secretary, were the main owners, although their names did not appear too prominently. But every one in Bendigo is aware of the facts.
– Is there anything wrong with that?
– Wait till I finish. When there was a sugar shortage and cordial firms that had been operating in Bendigo for two and three generations could not get sugar, there was a 30-bag- high stack containing tons of sugar in the factory owned by the late Senator Keane and Senator Hendrickson, who were using the opportunity of running under the necks of oldestablished firms and taking their customers from them. I am satisfied that I can prove that that is correctThat will be repeated if the Government gets away with this proposal. We all know what has been done under the control system. Many people have benefited greatly by exploitation of the black market. Some of them are men who have been appointed to positions by the Government. Do honorable members opposite deny that people like the communistic trade union secretaries will get into positions of benefit under this proposal?
– You said that you were going to take their money and freeze their funds.
– I said nothing of the kind.
– Your colleagues did.
– That may happen, too, but I did not say that it would.
– Order !
– I am satisfied that if the Labour Government gets control of finance, many of the people that I have mentioned will get “cushy” jobs. We know their form. Mr. Miles, president of the Communists, said in 1940, when we were at war and our soldiers were fighting and dying in North Africa -
Should England become involved in war against Russia, Australian Communists will side with Russia and will do everything in their power to ensure her victory.
When the Government controls finances, the Communists will be able to get information that they are not entitled to, and that information will be used for treacherous purposes just as they would have been treacherous had we gone to war against Russia. Without any doubt, if this bill becomes law there will be unfairness. People will have no opportunity of going anywhere but to the Commonwealth Bank to deposit or borrow money. People will have to trade with it under the conditions that it sees fit to lay down. The Prime Minister, in moving the second reading of this ‘bill, said -
The Government must have absolute control of monetary policy to implement its full employment policy and for defence against monetary disturbances originating overseas. This control has been threatened by the High Court decision. Therefore the Government must nationalize the banks.
The Government denies that it intends to nationalize other than the private trading banks. Government supporters claim that nationalization of the banking system has been in their programme for 25 years. Also in their programme for that time have been proposals for the nationalization of industry, production, distribution and exchange. If the Government claims that nationalization of banking is included in the Labour party’s policy, it must also claim that the other schemes which I have mentioned are in that policy. The honorable member for Hume (Mr. Puller) recently made the following declaration : -
I appeal to this Parliament to make a beginning now; delay will be fatal. Any loss of time in changing over from war-time to pence-time activities would assuredly result in dislocation and chaos, whilst unemployment would become an almost insoluble problem. By a decree of the Commonwealth, all land, whether alienated or not, should be taken out of the control of the States and placed under the control of the National Parliament, to be held in trust for the people on one title only - perpetual lease.
– That is the way people hold land in Queensland to-day.
– That is not so. At any rate, if I were in the honorable member’s place, I should not point to Queensland as an example of the success of nationalization. A government of that State expended £6,000,000 on the nationalization of the meat industry, flour mills, station properties and many other things. The scheme became rather expensive, and the Labour Government decided to abandon its nationalization policy. It managed to rescue only £500,000 from its investment of £6,000,000. The people of Queensland have “had” nationalization. They want no more of it. They are quits satisfied now to allow private enterprise to conduct their industries.
– An anti-Labour governmen lost more money on the Australian Commonwealth Line of Steamers.
– The reason why that line of steamships had to be sold was that the maritime unions made it impossible for the line to carry on. On every possible pretext, no matter how trivial, they went out on strike. They dictated to the line and to the country.
I notice that the Vice-President of the Executive Council (Mr. Scully) is smiling, and I am reminded that we have experienced socialization as the result of his activities. When he was Minister for Commerce and Agriculture, he took advantage of economic controls which were then in force to impose a tax on the people of Australia for five years, at a rate varying between £1,800,000 and £3,000,000 a year, in order that his fellow, conspirators in New Zealand might provide the people of that country with a cheap loaf. He denied in this House, even more often than Peter denied his Master, that he had made any agreement with the Government of New Zealand, although the agreement was then nearly twelve months old.
– ‘Order ! This has nothing to do with the Banking Bill.
– It might not havehad much to do with banking, but it certainly was a taste of nationalization,. which the people of Australia, particularly the wheat-growers, did not relish very much. If the Government claims that nationalization of banking has always been a part of the Labour party’s policy, then it must logically go on and nationalize transport, insurance, the steel industry, the coal industry, and finally the ownership of land. The president of the Australian Council of Trades Unions in South Australia declared, about a month ago, that the Australian Labour party would not be satisfied until the land which the occupiers had filched from the people was returned to the people and the occupiers were forced to pay the full 20s. in the £l on its rental value. Why? So that some loafers could get “flash” social services.
If these people are allowed to have their way they will employ a “brains trust” to direct the affairs of Australia. They will certainty need one. They will appoint men like Copland, who said that he had a great admiration for the peasantry in the north of France, and in Belgium and Holland. A member of this House once asked him this question: “Do you not think that, if we adopted your policy, we should reduce the Australian farming community to the level of a peasantry?” He replied: “In my opinion they should never have been anything else”.
– I do not think he said that.
– I say that he did. He made the statement in front of witnesses.
– Where ?
– In a train going to Albury.
– The honorable member would not remember.
– I remember many things that the Minister has said. Unfortunately for him, my memory is good. I repeat that the Government will employ men like Copland and like the man who went abroad to bargain with the Americans on trade agreements and who said, before leaving Australia, that he was sure the time had come when Empire preferences must be abandoned. He made that statement publicly as he was leaving to bargain with American business men, possibly the toughest bargainers in the world.
– Who was that?
- Dr. Coombs, “the boy wonder”. It was like a man in a poker school showing his opponents that he held a couple of aces before starting to bid. In fact, he threw his “aces” away and did not even show them. Those are the kind of people who will be able to control the affairs of the people if this measure is enacted.
The Prime Minister said that when the monopoly bank was working properly it would make available the services of engineers, agriculturists and other experts to assist people engaged in industries. I remind the right honorable gentleman that Australia has done well under the existing banking system. It has made tremendous advances in the last 130 years; I doubt whether any other country has made greater advances in that period. Experts of the kind I have described will be in charge of the country’s affairs when the Commonwealth Bank has a complete monopoly. They will have complete information regarding the businesses and the properties of individuals and possibly, before granting loans to applicants, they will enforce a condition that the borrower must do as he is directed, that he must grow wheat or engage in dairying irrespective of his own wishes. The Minister for Post-war Reconstruction has tried to force the ideas of his “brains trust” on the Government of Victoria, and probably on other State governments as well. He tried to tell the Government of Victoria what it must do if it wished to secure assistance from this Government in settling ex-servicemen on the land. Apparently he overlooked the fact that this job is the responsibility of the Australian Government, because it accepted the volunteers and conscripted the other men whom it sent into the field during the war at the risk of their lives and health. These advisers will demand, as the Minister demanded of the State governments, that the ex-servicemen who settle on the land be brought under control. Some primary producers will be told to grow wheat, others will be told to grow fruit, and yet again, others will be told to grow rice, and so on. The Minister for Post-war Reconstruction demanded that the Government of Victoria should accept that principle. To its credit, even the Gain Government refused to accept the principle. Eventually, the Minister was compelled to give way, and allow the State government to put into effect its own policy.
The Minister also demanded that before any money was expended on raising the Hume dam, the Commonwealth should be given control of the forests of Victoria and New South Wales in the Murray Valley. I remind the House that these are sovereign States, and have their own rights and powers. In the circumstances, it is rank impertinence on the part of any Minister to demand that they should hand over to the Australian Government powers which the people have given to them. The people do not want the nationalization of banking. They want the right to be able to make up their cwn minds as to where they will transact their banking business. They want to continue to possess the freedom which they have enjoyed in the past. They do not want “snoopers” poking their noses into their business. They do not want people who will use the information that they gain from snooping to the detriment of Australia and its citizens, to have the opportunity which this bill will provide for them.
– The honorable member for Denison (Dr. Gaha) made an important point when he showed that, while the basic wage has risen by 33 percent, since 1939, the cost of building a home has doubled in the same time. To those who fear communism or any other “ism”, he rightly showed that an effective insurance of democracy is to enable people to own and live in their own homes. The Banking Bill is specially important to those persons who are interested in having a place of their own to live in, and having it at a cost which they can afford.
The relationship between banking and housing costs is very clear. It has been a development of recent times that a man must devote a lifetime of effort in order to obtain the ownership of a house. If he starts as a young man and pays a substan tial part of his wages in instalments every week, he may ‘be able to hope to acquire the deeds of that house and say, “This is mine” just before he shuffles off this mortal coil. By the time he can become the owner he is worn out, and the house is on its way to being worn out. More than one half of the huge sum that he has paid in instalments throughout the whole of his working life, eventually to gain the ownership of the home, is not the cost of building the house but interest payments. He has paid more than double the contract price, and the financiers have taken more from him than the suppliers of bricks and timber, the builder, and all the men who worked on the construction of the house. These charges are far too great. Every one who contemplates buying his own house on instalments knows that fact only too well from his own investigation. The small income earners can never hope to buy their own homes except on the instalment plan.
The difficulty has been to decide what to do about it. The Commonwealth Bank, since the shackles were struck from it, and the Commonwealth Government have been the greatest factors in reducing interest rates in this country. The Royal Commission on Monetary and Banking Systems found that the private banks did not compete against each other regarding interest rates, but operated an agreement to keep those rates as high as possible. Surely it does not require abstruse calculations to see that the way in which to lower interest rates for housing, and housing costs, is to ensure that the credit of this nation shall be operated for use, and not for the profit of private bankers.
Of course, there are hundreds of thousands of Australians to-day whose ambitions do not soar so high as homeownership. They are very modest in their seeking. They would be more than content just to have a habitable place in which to live - a reasonable shelter for themselves and .their children. Many thousands cannot get even that. They also have a vital concern in the Banking Bill. Who needs to be told to-day the basic cause of the housing shortage in this country ? Who would deny what the real cause of that tragic position is? A contributing factor was the cessation of building in Australia from the time that.
Japan entered World War II. until the conflict ended. The people can under. I stand that. They realize that the dc- mands of war production had to come I first. But to-day’s shortages of houses in j Australia cannot be laid even mainly at 1 the door of Avar conditions. Australia [lacked at least 150,000 decent habitations on the day before World War II. began. That was because in the years before the ! war, when the private banks controlled and operated the credit of this nation and the Leader of the Opposition (Mr. Menzies) and his friends constituted the Government of this country, credit was withheld, essential advances were refused, and the trickle which was made available for housing was provided at interest rates that were too high. There cannot be any argument about that because the facts are on record.
Even at those rates, housing advances were not sufficiently profitable for the greed of private financiers. They preferred to finance the building of hotels and cinema palaces. They withheld the money needed for great housing projects in this country. They reckoned, and rightly from their own point of view, that with so large an army of totally unemployed people in this country, and so large an army also of people whose employment was insecure or part-time, they could not be sure of enough rent, and getting it every week, to enable them to gain the high return that they insisted upon for their money. From their viewpoint, they were right, because it was a part of the crazy pattern of the private control of credit in the years before World War TI. that hundreds of thousands of useful workers were always kept idle, while on every hand useful work was waiting’ to be done. They included tens of thousands of brickmakers. tilemakers, bricklayers, carpenters and building tradesmen of all kinds. Those men wanted to make the materials out of which houses could be constructed. They wanted to build houses. Every day, they pressed for the opportunity to do their work. The people of Australia were in need of houses, but they were refused houses to live in, and the workers were refused the chance to build those houses. The legacy of that condition is with us to-day.
It is now claimed that the private banks have served this nation well.
Those who say that must think that the people of Australia have short memories, or are easily deluded. The acute housing shortage in Australia to-day is an indictment of the private banks and their operation of the credit system of the country in the years before the war. Very many of the families which need housing accommodation to-day have been deprived of it because of the policy of anti-Labour governments and the mismanagement of the financial and credit system of this country by private banking institutions. The acute housing shortage in this country to-day supplies the best illustration of the injurious nature of control of credit by profitseeking private institutions, something which must never be permitted to recur. In the last two years, in an era of full employment and shortage of materials, rigorous attacks have been made on the housing problem by Labour governments, with finance from the public banking system. It has been, fashionable to sneer at this effort. However, it is not possible for them to sneer any longer, because it is evident from the number of houses under construction that a successful attempt is being made, under Government direction and with public control of the nation’s credit facilities, to overcome the problem. I emphasize that the money and the credit which have made this huge building programme possible have been supplied, not by the trading banks, but by the publicly owned banks. The vital consideration which should be borne in mind by those who are seeking houses to-day is that if the organized campaign against the Government’s proposal succeeds and the Government is ultimately defeated, we shall return to the former chaotic state of affairs and they will be as far from attaining homes of their own as ever.
Before I develop that point, I wish to emphasize that those who are crying out so loudly about the dangers of communism should be the first to realize that the surest way to encourage lawless and violent forces in the community is to return to the conditions which cause men to abandon hope in democracy and turn, in despair, to undemocratic courses. There can be no doubt of the real issue involved in this debate. It is not a matter of choosing between passing this bill or allowing the former state of affairs to continue; the choice is between the present measure and reverting to depression conditions. Members of the Opposition aspire to displace the Government so that they can establish one of their own to implement their policy. There can be no doubt as to the nature of that policy, because the Leader of the Opposition made it quite clear in the speech which he delivered on this measure. What were the principal factors operating in this country during the last depression? The first was the serious decline of the prices of our export products. The second was the control of the Commonwealth Bank by a board composed principally of representatives of private financial institutions, a. board which was removed entirely from any control by the government. The third factor in that situation was the measure of deflation deliberately forced upon the people. The possibility of another slump overseas is real and cannot be ignored. The Leader of the Opposition has indicated quite clearly the policy which he intends to pursue if he again attains office. He is pledged to re-establish two of the factors which I have outlined as being responsible for the depression. He has undertaken to restore control of the Commonwealth Bank to a Commonwealth Bank board, and to make that board entirely independent of control by the government of the day. Furthermore, he said quite plainly in his speech on this bill - which, I think, he will live to regret - that if he again becomes the head of a government which encounters a recurrence of the conditions which precipitated the depression, he will complete the vicious circle by once again deliberately imposing a deflation on the nation. I do not need to remind honorable members of the misery and suffering caused by the deflation forced by the private hanks, and by their representatives on the Commonwealth Bank Board during the depression.
The Leader of the Opposition remarked that the rest of the world admired the steps taken in Australia at the time of the depression to restore the national economy, but that since then many people had succumbed to false propaganda. He argued: “After all, what was the alternative?” I think that that question shows quite clearly that he has learned nothing from the lessons of the depression. He cannot perceive any alternative, and he stated quite openly that he is prepared to place the control of the nation’s credit in the hands of private institutions. We do not need to be reminded that private institutions operate the country’s finances for their own gain. For that reason I emphasize the significance of his statements that, should a slump occur, with a repetition of the conditions of the early ‘thirties, he intends to reproduce the very factors which accentuated the last depression and retarded for so long the recovery of the country’s economy. He proposes to introduce a deliberate plan of deflation, under which wages and salaries will be reduced, and aire and invalid pensions and social services curtailed. The execution of such a plan must, of course, reduce the purchasing power of the community, so that there will not be a sufficient market for the products of primary and secondary industry. Such a policy must lead, inevitably, to a recurrence of the conditions which resulted in 700,000 men and women being unable to obtain useful employment, or, in many instances, even the bare means of subsistence.
– That is a deliberate distortion of the right honorable gentleman’s statement.
– The report of the speech of the Leader of the Opposition is available to support my contention. The honorable member for Warringah (Mr. Spender) said that there is no need for urgency in regard to this proposal. He could not see any necessity for the Government to take this step now, and he stated that we could very well afford to let the matter stand over. He believes that we are all far too concerned with what happened during the last depression, and he thinks that we ought to forget it. But if the honorable member represented hundreds of thousands of men, women and children who suffered during that depression, as members on this side of the House do, he would not choose to forget it; on the contrary, he would be determined to ensure that there should be no repetition of it.
The honorable member for Warringah and other honorable members on the Opposition benches have been at great pains to assure the people of Australia that the banking legislation passed by this Parliament in 1945 is perfectly secure against all legal challenge. Two years ago, however, when that legislation was being discussed in the Parliament, they did all that they could to defeat it, and to-day they would wipe it from the statute-book if they were able. The position is similar to that of a man who has erected a wall to protect his family against the assaults of robbers and thieves because he has had previous experience of their operations. Having built what he believes is a secure wall of protection for them, he sees a hole kicked in it by the very thieves and robbers who have broken through before. When he proceeds to say, “I will build a better and stronger wall, and will make it secure against all attack”, the thieves and robbers come along and say, “Don’t he in a hurry. There is no urgency. Although in our first attempt we easily kicked a hole in the wall, we could not kick any further holes in it if we tried. There is no need for you to make it stronger. Remain perfectly calm and unworried”. But even while they speak they have their feet poised for the next kick, which will be delivered when they believe that the time is opportune for them to break through and despoil that family. That is a state of affairs with which the Government is faced in connexion with the 1945 legislation. It would be foolish to accept the assurances of those who wish to see that wall destroyed that it is sound and strong, and that the one kick that they have given it i9 the only kick that they will deliver against it. Even if the legal opinion of some people is that the remaining provisions of the 1945 legislation are secure against challenge, it is interesting to reflect on how legal opinions, even those of eminent lawyers on the opposite side of the chamber, can be so diametrically opposed as they are in relation to certain aspects of this measure.
That was demonstrated clearly by the honorable member for Warringah during his contribution to the debate.
He spoke of the dangers and flaws that he saw in those provisions of this measure which are designed to protect the rights of the employees of private banks. Although I know that the honorable member for Warringah and the Leader of the Opposition have had their disagreements in the past, and may have them again in the future, I think that there is one point upon which the Leader of the Opposition would willingly agree, and on which the honorable member for Warringah would be compelled to agree, namely, that the Leader of the Opposition has the more brilliant and keen legal mind. The right honorable gentleman, having thoroughly analysed the bill in all its provisions, as was his duty, and having brought the full measure of his undoubted legal ability to bear upon every clause of it, as he was required to do, before he discussed it in this House, delivered a speech which contained no reference to any possibility of legal flaws in those provisions in which the honorable member for Warringah detected weaknesses. That leads to the conclusion either that the Leader of the Opposition, despite his legal knowledge and brilliance, does not share the view of the honorable member for Warringah that there are legal weaknesses in the bill, or - a thing which is incredible - that the Leader of the Opposition, having recognized the flaw, takes no steps to protect the interests of the employees of private banks.
As the existence of the publication known as the Bankers’ Journal has been denied in this House, I assure the House that I hold a copy of it in my hand, because I wish to quote from it. It is the official organ of the Australian Bank Officials Association, and it shows clearly that the bank officials for whom it speaks, having thoroughly examined this legislation, are prepared to accept it as giving satisfactory protection to them. I shall read an illuminating passage from the journal. It consists of some remarks made by Mr. T. D. Gaunson, the Victorian branch president, who presided at a meeting of the private bank officials. As an attempt is still being made in some places to assert that the great flood of telegrams, letters and other communications which reach honorable members is the spontaneous expression of the indignation and resentment of Australian citizens, the remarks of Mr. Gaunson, when speaking to his fellow bank officers, have a special significance. The report states -
Our loyalty to our employers was not in doubt. ‘J he fact that the Victorian staffs of the trading banks had obtained 50 percent, of the 000,000 names on petitions demanding a referendum on the nationalization of banking, added to the thousands of letters of protest to members of both Houses of Parliament, was ample proof to the whole of Australia of the loyalty of bank officers to their employers.
Having made that frank admission of the way in which this allegedly spontaneous expression of public opinion was obtained, he went on to say that, despite their loyalty to their employers, the association and. its members had to protect the interests of the association as a whole. After a long debate, a motion, “That this meeting . . . expresses its grave concern against the undemocratic proposal of the present Government to nationalize the trading banks, and instructs the association to take all possible steps to actively oppose this legislation”, was lost. A further motion was then moved, “That this meeting of bank officers affirms its confidence in the Executive, and makes known publicly its opposition as private members to the nationalization of banking and to any further suggestion of socialization of industry”. That motion also was lost. Subsequently the following motion was carried, “That this meeting expresses its full confidence in the Executive to date, ,and has full confidence in it to protect members in the future”. That motion was carried after the general president of the association in Australia, Mr. J. H. O. Paterson, had told the meeting that he and his fellow officers had discussed the the matter with the Prime Minister for many hours, had obtained for themselves an interpretation of the Government’s proposals in this legislation, and were satisfied with the explanations and interpretations given to them.
The Leader of the Opposition has issued a call to engage in a “second battle for Australia”. In this peaceful land, calling men to the banner he unfolds, he chooses to speak in military terms of war and of victory. It may be that we are indeed engaged, whether we choose it or not, in a decisive struggle,fateful to the future way of life of the Australian people. The freedom-loving Australian, who loves his country also, may well pause to study the array of forces underneath the banner which the Leader of the Opposition has. raised before rushing to his side. As he does so, he will see that the right honorable gentleman, who now proclaims himself a national war leader in this second battle for Australia, is the very game right honorable gentleman who had himself appointed to the task of national war leader in the first battle for Australia, and who failed in that task– who brought, not unity but disunity, and then abdicated his position when the nation stood in deadly peril, with the Japanese poised to attack us. Other hands took up the task, and. carried it through. But while the freedom-loving Australian may hesitate to entrust his destinies to thi? strange war leader, he will note those who have been so quick to range themselves under his banner, and that will increase his doubts. Amongst those who are foremost in the battle against this bill, in this second battle for Australia, are some who are not Australians at all.
They are the directors of those private banks which claim the right to dominate the Australian Government, and which do not even have their own head offices on Australian soil. With them are those large shareholders in the private banks, owning 30 percent, of the total shares, who do not even reside in this country, and yet ask to be made the custodians of Australian freedom. Ranged with the Leader of the Opposition, too, are those daily newspapers which have always, as their records show, opposed - and bitterly and viciously fought. - every step down the years towards the enlargement of personal freedom and economic security in this land - newspapers which, just as they now try to block public ownership of banking tried most bitterly to block adult suffrage, legislative council reform, oldage pensions, child endowment, and even the most miserable measure of unemployment relief. This applies not to every newspaper, but it applies to some of th? oldest and most powerful of them.
If the freedom-loving Australian still lias any doubt left that bis place is not in that army, he may look from the recruiting sergeant for Kooyong to the banner which floats above his army of privilege, the banner which records its battle dishonours in the depression through which came all its leaders safely without having missed one dinner or one cigar, but in which were inflicted 700,000 economic casualties on the Australian people. Factories, farms, shops and businesses in every State were laid desolate, just as surely as they would have been by an explosive bomb, and the experience left on the mothers and ill-nurtured children of those years the injuries of malnutrition which they bear as scars until this day. Freedom ! It is a glorious thing. Men did indeed fight and die for it, and would again - but not the freedom of which the opponents of this measure prate - freedom for the few to exploit the many, to enrich themselves while the people are impoverished. This bill is a measure to ensure freedom from the private financial thraldom which has economically enslaved the Australian people in the past. T quote from Roosevelt’s second inaugural address delivered on the 20th January, 1937, when he said -
T see a United States which can demonstrate that, under democratic methods of government, national wealth can bi> translated into a spreading volume of human comforts hitherto unknown - and the lowe-it standards of living can he raised far above the level ofmere subsistence.
But here is the challenge to our democracy: In this nation I see tens of millions of its citizens - a substantial part of its whole population - who at this very moment are denied the greater part of what the very lowest standards of to-day call the necessities of life.
I see millions of families trying to live on incomes so meagre that the pall of family disaster hangs over them day by day.
I see millions whose daily lives in city and on farm continue under conditions labelled indecent by a so-called polite society half a century ago.
I see millions denied education, recreation, and the opportunity to better the lot of themselves and their children.
I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions.
T see one-third of a nation ill-housed, ill-clad, ill-nourished. But it is not in despair that 1 paint you that picture. I paint it for you in hope - because the nation, seeing and understanding the injustice of it, proposes to paint it out.
That is what Roosevelt saw. Similarly, the people of Australia have seen that picture as a living reality in this land, and they, having seen what can be accomplished by public control of credit, even in the holocaust of war, have vowed that that picture shall never again be seen in Australia. They have been roused to vow that it shall be proved untrue that only by a mighty shedding of human blood can economic security, and a minimum of frugal comfort be provided for the people. I see this bill as a means of banishing for ever the possibility that a representative of private finance can truthfully say of the elected government of the nation: “I stood over them with a whip to-day. I have whipped them into carrying out my instructions”, meaning instructions to lower the living standards of the whole people. I see this bill as ushering in a brighter day in which the spectre of undeserved poverty will be banished from Australian homes and Australian men -will be truly free to carry on useful work to produce. wealth which will provide higher living standards for all; when they will be free from constant fear for the security of their loved ones, free to develop their human dignity and personality, and free to decide their own destinies through their own elected Parliament. For these reasons I support the bill.
.- I am the last member of the Opposition to speak in the second-reading debate on this bill, which provides for the nationalization of banking in Australia. I am the last, because every other honorable member on this side of the House has exercised to the full his right to declare himself on this vital measure. The very fact that all honorable members of the Opposition who could speak have spoken, underlines the decisive character of this legislation. They recognize it for what it is - the mostrevolutionary change for hundreds of years in the commercial practice of an English-speaking people, and an unwarranted atack on their present rights. It has aroused widespread resentment, and the damage now done can never be wholly repaired. So,. I ask myself, at this late stage in the debate, what is the ease which the Government has put forward which justifies the bitterness and dissension
Which it has wilfully created? I could scarcely hope for a more typical expression of the Government’s case than that just given to us by the honorable member for Eden-Monaro (Mr. Fraser)’. His Speech sums up the Government’s case, because he managed to bring together in the time in which he spoke the principal arguments which members of his party and the Prime Minister (Mr. Chifley) have brought forward.
The Government’s’ case comes down to three basic propositions : First, it fears a depression, and believes that the last depression was caused, or aggravated, by failures in the banking system; secondly, it believes that its powers under the Banking Act of 1945 are not adequate; and, thirdly, it sees in this banking legislation the most important act in the programme of socialization, to which every member supporting the Govern ment has given his sworn pledge. I believe that every honorable member opposite will agree that that is a fair summing up, in a few words, of the principal arguments that they have brought forward. It was quite obvious in the speech just delivered that this depression complex was uppermost in the mind of that speaker, as it has been uppermost in the mind of most of the honorable members supporting the Government. They have a depression complex; and it has given them a banking fixation. They have a depression complex, because they are smarting still under the defeats which a people, whose minds were fresh with the events of those days, gave to them in 1931, 1934 and 1937. They have never got out of their minds the rebuffs they got at the hands of the Australian electors, and that has given them this fixation. They had to find a scapegoat somewhere.
It is true, as the honorable member for Eden-Monaro said, that the cause of the depression was the disastrous fall in prices throughout the world. I shall deal in detail later with that aspect. And another cause was the cessation of overseas borrowing. But that was not sufficient to meet the political rebuffs they had sustained; they had to find a political answer. It was no good saying that the depression happened throughout the world, that it happened because of a fall in prices of our exportable products ; they had to find a scapegoat. They could not blame the government of the day, because the government of the day was their own government. So they had to find something else. They blamed the banking institutions, and they blamed them in defiance of the statements made at that time by their own leaders and spokesmen, and despite the evidence and findings of the Royal Commission on Monetary and Banking Systems in 1937, years after the events of the depression when that commission was able to study calmly what happened at that time. But that does not matter. The propaganda goes on. Hitler has not lived in vain. He taught them that if they repeat the same rotten, dirty lie often enough some people will believe it. That is the truth about this depression story. There can be few instances in the history of the Commonwealth of a more despicable role in political events than this attempt to capitalize, for party political purposes, the wretchedness, misery and loss which this country, in common with other countries, suffered in the depression. “We have had that right through this debate, and it goes on in the hope that people will believe it. Well, if Government supporters want the depression story, let as have it once and for all, and get it out of the system. It has gone on poisoning political relations in this country for long enough.
Much as I regret, in a debate of this kind, to have to go back into the past, I propose to do so, because the Government has relied almost entirely on its depression story for its case. It is fashionable for the Prime Minister and his supporters to say that towards the end of 1929 it had become clear that Australia was entering a depression. I am sure that that statement has a familiar ring in the ears of honorable members opposite. They have heard their Prime Minister make it. If he can say it now, he is saying it with that wisdom which comes so easily after the event; because he certainly did not say it at that time, nor did the Scullin Government, of which he was a member, and a supporter in this
Parliament, say it at that time. Indeed, the Governor-General’s Speech, prepared by the Scullin Government in 1929, stated -
The existing difficulties are seasonal in character.
– And this was towards the end of 1929.
– Yes, in November. The Speech continued -
There is no reason to believe that a continuance of these conditions is likely, and there should be a return to normal prosperity in the coming year.
We all know what happened in the next year, 1930, and in the year following. The right honorable member for Yarra (Mr. Scullin), who was then Prime Minister, called a conference of Commonwealth and State Ministers in Melbourne and, later, in Canberra, in February of 1931. I propose to quote a few of his remarks. I am not tearing them out of their context. Honorable members opposite can check the statements at their leisure, and if the opportunity occurs at the committee stage they can challenge what I am saying. I am quoting fairly what the right honorable gentleman himself told the people and the State Premiers at that time. He left them in no doubt as to what were the causes of the depression. 1 quote from the official report of the conference of Commonwealth and State Ministers held in the places mentioned in February, 1931, in the second year of his term of office -
Never has a conference of Commonwealth and State Ministers been called in a time of graver economic trouble; never has a conference been asked to assume graver responsibilities. The causes underlying the position confronting Australia are so wellknown 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. 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 effect. Simultaneously, other misfortunes of equal severity have come upon us. The fall in prices have 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. Her exports are mostly wool and wheat, with butter and base metals occupying a secondary position. Of these commodities, wool, wheat and base metals have declined in value nearly 50 percent, below the prices of 1928-29,-
Not anything that the banks were doing inside Australia, but what was happening to our export values outside Australia - and the prices in that year were not very different from the average of the previous seven years.
There was an interesting comment in the same official document as to what the banks were doing in this matter, and an official paper was presented for the information and consideration of the Premiers at that conference. Lest any one should imagine that that was not a representative conference, honorable members opposite, if their memories are not now as fresh as they were then, may be interested to know that of the six State governments at that time three were Nationalist and three were Labour, whilst the Government in this Parliament was a Labour Government. So, the report was presented to this conference made up of those governments. It was signed, not by any political supporter, not by some spokesman for some vested interest, but by the four permanent heads of the treasury departments in Victoria, Queensland, Western Australia and Tasmania, and advising those who signed the report were three professors of economics.
– Who were they?
– Professor Bridgen, Professor Hytten and Professor Shand. Two of those gentlemen, I believe, have subsequently been employed in the service of the Australian Government. Under the heading “Banks and Industry” the Treasury officers say -
Our private and national difficulties are sometimes attributed to a policy of deflation deliberately pursued by the banks, involving a refusal to employ their loanable funds.
They refer then to the fall in export prices and the difficulties that it created, and they say -
But openings in commerce and industry for the profitable use of deposits are few. Turnovers are very sluggish.
Despite that they say in the paragraph that the banks had extended their cheque currencies. They go on to say -
The action of the banks in supporting private customers may be more accurately described as an effort to check deflation.
Not to create it -
By the creation of additional “cheque currency” they have put a brake on the fall of Australian prices. Yet the subsequent continuance in other lands of the fall in prices and the lose of business confidence in Australia have, despite the action of the banks, resulted in falling Australian prices. The added credit cannot he put to active and profitable use in industry. The Australian banks are thus concerned equally with the rest of the community in the restoration of confidence.
Honorable members will recall the emphasis laid by the right honorable member for Yarra at that time on the need for getting confidence back into the Australian economy, confidence which had been shaken not merely by the disastrous fall in prices overseas, but also by the actions of some of the State governments, particularly the Government of New South Wales, then led by the honorable member for Reid (Mr. Lang). Ear from the banks failing to make finance available to governments, these departmental officers, in advising their own Premiers, said -
In the eighteen months from the 30th June, 1029, to the 31st December, 1930, advances by the banks to Australian governments plus treasury bills, rose from £5,500,000 to £53,000;000.
If monetary measures of that kind alone could have saved Australia at the time, there would have been no great difficulty about it; but everybody knows that throughout the world the central banks were trying unsuccessfully by the use of purely monetary measures to get industry going, to restore activity and production. In Germany, the all-powerful Reichsbank, with perhaps as much power as the Australian Government seeks under this measure, was unable to avert a disastrous collapse, nor were the central control banks in other parts of the world able to do so. With the events of that time vivid in their minds, the people of Australia rejected the Labour governments and turned to those which could restore confidence. So successful were the anti-Labour governments that by 1937 the trade union movement, led by its present spokesman, approached the Commonwealth Arbitration Court and asked for a prosperity loading on the basic wage. I do not need to quote any representative of the private banks, any representative of the Nationalist or Liberal parties or any representative of outside politics; I shall quote the words of the present dictator of the trade union movement on this point, Mr. P. J. Clarey, who, by virtue of his office of President of the Australian Council of Trades Unions, is virtual dictator of the Labour movement in Australia at the present time. Mr. Clarey was one of the Labour leaders who addressed the court and here are his words -
In the period 1933 and 1934 we noticed an emergence from the crisis with a stabilization of prices. During this period confidence returned and the tendency was towards an extension of capital facilities with values rising and unemployment decreasing. The period from 1935 to 1937 shows practically the most spectacular recovery ever witnessed.
Ever witnessed ! -
Normality was regained. There was a general adjustment to stabilized conditions, with greatly increased capital expansion. There was a balancing of government budgets and repeal of financial emergency legislation with respect to wages and social services. There was a general rise in the prices of exportable commodities and a gradual regression of unemployment to pre-depression figures. It was noticeable also that wholesale and retail prices were rising. The case of trade unions was essentially that of a comparison of present with past conditions.
A comparison of the present with past conditions! The conditions under governments formed by the parties on this side of the House restoring confidence, co-operating with the private banks, making full use for the purposes of the Government and of industry of the finances of the banks, and in that way bringing the most spectacular recovery, to repeat the words of Mr. Clarey, ever witnessed!
– Did they get their prosperity loading?
– I thank the honorable member for his interjection. They did. At least the court recognized that there had been this recovery and, as the honorable member should know, the loading has been called a prosperity loading to this very day. I have taken some time to tell the story of the financial and economic depression, because the Government has rested its case upon it.
The Government has also made an appeal in the course of this debate to those who think they may get something out of a politically controlled monopoly bank. There is almost a childlike belief that this government institution will treat them much more liberally and generously than have the financial institutions of the past. Those people may have a rude awakening. The facts of the past suggest otherwise. “When the Leader of the Opposition instanced Fascist Argentina and Communist Russia as the only two countries which had adopted the nationalization of banking, the Minister for Post-war Reconstruction (Mr. Dedman) asked, “What about the Bank of France?” As L understand the position in France, although the dominant banks have been nationalized, other banks operate there as well. France has not gone nearly as far as has Argentina or Russia in that respect. It is illuminating to notice that in France there has recently been a call for a deflationary policy. Here is a cable from Paris, dated the loth October, 1947-
As part of the French Government’s antiinflationary policy, all banks in France have been instructed to call in loans that are not justified in the national interest, the Paris correspondent of The Times reports.
The instruction has been issued by the Governor of the Bank of France (the State central bank), who is chairman of the Stateappointed National Credit Council.
The banks have been told to refuse further loans unless they are essential in the national interest.
F do not know what is regarded as “the national interest”. I strongly suspect that one government would have a very different view from another as to what is in the national interest. Here we have the very thing that honorable members opposite have been attacking, a bank in a period of difficulty calling in loans as part of a deflationary process. But we do not have to go as far away as France to find disillusionment for some of those rash optimists who think they will get a “hand-out” whenever they want it from the Government. We have the instances quoted by the honorable member for Wide Bay (Mr. Corser) of what hap pened with government instrumentalities in certain States, and as a Victorian I can say something about what was done by one of the government instrumentalities in that State during the depression years. I refer to the Credit Foncier Department of the State Savings Bank of Victoria. That institution is a very good bank, and the Credit Foncier Department, generally speaking, has functioned admirably. We do not want to see that bank tinkered with by some governmentcontrolled authority operating from Canberra. The figures that I am about, to cite prove that in time of crisis government institutions, bound by their inflexible rules, tend to be ruthless, whereas private banks, whose policy is bound up more intimately with the welfare of their customers, co-operate more generously. Repossessions by the Credit Foncier Department of the State Savings Bank of Victoria increased from approximately £17,000 in 1929 to approximately £19S,000 in 1931, an increase of considerably more than 1,000 percent. Individual advances fell from 4,964, amounting to more than £3,900,000 at the 30th June, 1930, to 926, amounting to approximately £658,000 at the 30th June, 1931. That trend, I believe, is inevitable in a government controlled institution. It must either do that, or, as I shall show later on, under political pressure - the Credit Foncier Department of the State Savings Bank of Victoria was not under the direct political pressure that this measure contemplates - go the opposite extreme of a disastrous policy involving heavy losses. So much for the first line of argument advanced by the Government - the old depression story and the belief that more favorable treatment will be accorded by a government bank.
The second line of government argument is that a nationalized banking system is needed for a central control of credit policy. We all agree that there should be a central control of credit policy. The Government will not find itself in conflict with us on that point. But the Government says that the 1945 legislation, which, originally, was claimed to be adequate, is not adequate any longer. To support this view, the Government uses a flimsy argument resting on the special accounts provisions. The honorable member for Eden-Monaro had something to say about “thieves and robbers”. I was very interested to hear him use that phrase. He used it as an analogy upon which to attach the Opposition. If there are any authorities on “thieves and robbers” in this House, they are amongst honorable members opposite. There are two recent instances of government action to which the phrase “thieves and robbers” might very well be applied. One of them relates to these special accounts provisions. As we know, the Government has frozen, through the trading banks, the deposits of private depositors with those banks amounting to approximately £2S0,000,000. When a private depositor puts his money into a private bank, he has some idea of the asset backing of that bank and he knows that it will conduct its affairs prudently; but when his deposits are taken from that bank and put into the Commonwealth Bank, the funds of which, because it is under government control, can be manipulated for political purposes by investment in government securities or extravagant government activities, he can have no such confidence. I shall show how disastrous this policy can prove, and what losses can be sustained when a crisis comes. As I have said, the argument advanced by the Government is that control is needed because of a challenge to the special accounts provisions of the 1945 legislation.
The Leader of the Opposition (Mr. Menzies) answered this argument most convincingly and effectively; but let us, for a moment, accept the Government’s case at its strongest, and assume that its argument is correct. Is it necessary to have these provisions to maintain control over credit policy? Of course it is not. No other country that is pursuing a central bank policy has found it necessary to go to this extreme. In the 1945 legislation, there are ‘ other provisions that strengthen the hand of the Commonwealth Bank. In the first place, it can direct the advance policy that the banks are to follow. If it says, “You are not to lend in this form of investment”, the private banks cannot do- it. Secondly, the trading banks cannot, without the consent of the Commonwealth Bank, seek additional investments in government and municipal securities or company shares. Their funds can be frozen by the control that the Commonwealth Bank exercises under the banking legislation of 1945. When we turn to central banks in other English-speaking countries, we find this contrast : The Bank of England conducts its central bank operations by requiring the English banks to maintain an 8 percent, ratio of cash balances to deposit liabilities. In Canada, banks are required to maintain a reserve of not less than 5 percent, with the Bank of Canada, and in Bank of Canada notes. Eight percent, in Britain, at least 5 percent, in Canada, but 40 percent, in this country ! So, I say, that the flimsy argument upon which the Government rests the whole of the technical side of its case, at least, vanishes at the most superficial examination.
Having found the arguments in favour of this legislation so unconvincing, can we turn to the arguments against it and find them equally unconvincing? I say that, in contrast to the weakness of the case that the Government has presented, some of the most powerful arguments that ever could be brought forward in a democratic country can be produced in support of our present financial system. Here I should like to make reference again to the report of the Royal Commission on Monetary and Banking Systems. That body made its report six or seven years after the beginning of the depression, and those who have studied the personnel of the commission will agree that it was a representative and well-balanced team. The chairman was Mr.. Justice Napier, at present Chief Justice of the Supreme Court of South Australia. It had a very distinguished and capable accountant in the person of Mr. E. V. Nixon, who was an Australian government adviser during the war years. It also included Professor Charles Mills, now the Director of the Commonwealth Office of Education, and a man who has done other work for this and other governments, the present Prime Minister (Mr. Chifley), Mr. Henry Arthur Pitt, who was Director of Finance in the Victorian Sub-treasury, and the present popular and responsible honorable member for New England (Mr. Abbott), a recognized authority on the wool industry.
– Did the honorable member say wool or “bull” ?
– I leave to the Minister the subject on which he himself is so notable an authority. The honorable member for New England is an authority on wool and the Minister for Air (Mr. Drakeford) is an authority on “bull”. I should like, despite the little while I have left, to quote the considered finding of that very responsible commission, because I believe that this is really the crux of the case against the Government’s proposal. The commissioners had all the facts before them. Honorable gentlemen opposite have glibly quoted from the commission’s report, but they have not come out with the crux of its finding on banking. This is it -
The view of the commission is that the most desirable banking system in the present circumstances of Australia is one which includes privately-owned trading banks. The system which we contemplate is one in which a strong central bank regulates the volume of credit, and pays some attention to its distribution. We are of opinion that the adoption of our recommendations will place the Commonwealth Bank in that position. We are satisfied to leave the distribution of credit to privately-owned trading banks, working for profit, but regulated in the manner indicated in our recommendations. A strong central bank, publicly owned, and not dominated by the desire to make profit, will exercise the necessary control over the activities of the trading banks, and the organization of these banks on a profit-making basis will conduce to efficiency, while the area of choice afforded to borrowers will be greater than if all banking were nationalized and brought under one control. We think that in this way the national interest will best be served.
The only dissentient from that finding was the Prime Minister. The odds were five to one against him, and I am prepared to say that if he would refer this proposal to the Australian people he would find the odds about the same when they registered their votes. That is one of the most powerful arguments against the Government’s proposal. Another is that undoubtedly we shall have a less stable financial structure if it is given effect. All our financial eggs will be in the one basket and an error of judgment could not be cushioned. An error of judgment on the part of the central bank could not be offset by the resources and combined strength of the trading banks, as to-day, when an error of judgment by a trading bank can be offset by the combined strength and resources of the other trading band the central bank. To put all our eggs in the one basket is dangerous. We have seen from our experience of the Agricultural Bank of Western Australia what happens when political control intrudes into the banking system. Fortunately, Western Australia is a small part of Australia, as far as population is concerned, and its influence does not extend very widely, but what happened in that State is an indication of what could happen on a. national scale if the same errors of judgment were committed by a monopolybank. There were two royal commissions into the operations of the Western, Australian Agricultural Bank. The second reported -
The financial position of the bank is alarming. For the last twenty years, in order to meet the commitments of the bank, the trustees have been drawing on capital and/or loan moneys to make up deficiencies . . . The accrued, actual and estimated contingent loss on account of ‘the Agricultural Bank and its allied ‘institutions is £12,304,000. . . The trustees, by their conduct, become heads of a department for carrying into effect a policy of land settlement dictated to them from time to time by Ministers in control of the Department of Lands and/or allegedly in control of the Agricultural Bank . . . If the allegation of the trustees that they were purely instruments for carrying out ministerial policy is correct, then political interference in the development policy and internal administration of the bank has had a disastrous effect on its control by the trustees.
The commission on that occasion made the following recommendation : -
All political interference in the management of the bank and the control of its policy must be abolished.
We have there an indication of what we may expect from monopolistic control, under which we shall lose the choice that each citizen can now exercise of the hank he will go to and the right of each citizen, if rejected by one bank, to go to another for assistance. That is an important right to end which would be an unwarranted deprivation. The Parliament of Canada, in 1944, rejected a proposal for the nationalization of the banks by 112 votes to 15. The Labour Government of New Zealand has rejected nationalization of banking, because it sees in it deprivation of the rights of the people and discrimination by governments in the handling of accounts, Mr. Walter Nash, Treasurer of New Zealand, pointed to this as one of the great weaknesses. He said -
There has been some argument in our party about taking over the trading banks. Personally, I think these banks are doing a better job than we can make of it.
Proceeding to deal with the function of the private banks in meeting the needs of customers and in providing them with freedom of movement by obtaining bank accommodation, Mr. Nash said -
Under the present system, customers who are dissatisfied with one bank can take their business to another bank. Under a Stateowned system they could not do this. The resistance of the trading banks to the importunities of borrowers who want to commit themselves beyond their resources is a valuable bulwark to any government.
But what are we to have here? - a vast banking monopoly with the State machine swallowing citizen after citizen and taking more and more from the job of producing something and putting them to the job of preventing something. In recent weeks we have had placed before us figures showing the way in which our bureaucracy has swollen. Now we are told that 20,000 bank officers are to be added to those numbers. The honorable member for Warringah (Mr. Spender) last night indicated how slender their tenure will be. If any of them were deemed to be in excess of the establishment required, they could be dismissed at a month’s notice. The employees of the Commonwealth Bank recognize that with an influx from the private banks if any of them are regarded as excess they can be dismissed. The Minister for Postwar Reconstruction (Mr. Dedman) not only lately but also during the war years, when he was trying to rationalize so many of our industries, said that he regarded in our banking institutions as surplus officers 6,000 employees. So we can expect; after all the sound and the fury has died down and the banks have been nationalized, that 6,000 employees will become redundant and liable to dismissal at a month’s notice.
This proposal opens up a whole cycle, because nationalization of banking is only the beginning, a most impor- tant beginning, but only the beginning. The official plan of the Labour party is set out in the party’s platform. The objective is successive nationalization of banking, insurance, monopolies, shipping, public health, wireless broadcasting, sugar refining and munitions. As they come in their turn and amalgamations take place in the State machine, more and more men will become redundant, and it will be a short step from the conscription of capital that this bill involves to conscription of labour that socialism inevitably involves. The Government of Great Britain in recent days has had to turn to conscription of labour. It has mustered the best excuses in the world to justify a policy that it said would never be adopted in time of peace.
The honorable member for EdenMonaro (Mr. Eraser) told us about the freedom that this measure will bring to the people of Australia. He told us that voters against the measure were nol genuine. However much it has shocked many Australians - and Victoria will tell him on Saturday just how many people in that State are shocked by it - it must have delighted his friends the Communists. He sneered against those who have lined themselves up with the Opposition. He pointed his finger and said, “Those who have lined themselves up under the banner that he has unfurled”. He has lined himself up with the Communists under the banner of the hammer and sickle. That is his banner. The Communist party is openly supporting the Government on this bill. Here is a comment which has just come from Washington, a warning - which has a peculiar relevance to Australia - that government control of banking invariably characterizes totalitarianism is contained in the United States’ official report on fascism and communism. The report points out that Nazi Germany, fascist Spain, and Italy and Communist Russia, through the control of banking, utilized the people’s savings for their own political purposes.
To-day, £400,000,000 of the £426,000,000 of the people’s savings deposited with the Commonwealth Savings Bank have been invested in Commonwealth securities* - securities to be used for political purposes, to further the socialist objectives that are so clearlylaid down in the platform of the Australian Labour party. No Government member can fairly claim that this proposal has ever been submitted to the people of Australia, or that it has the support of the people of Australia. Yet no opportunity will be given to the people to undo what is being done by this bill. “You cannot unscramble this egg” was the sneering remark made by the Minister for Information (Mr. Calwell) and endorsed in principle by his colleagues. In these circumstances, those who vote for this bill are not democrats. They are not even social democrats. They are social-Fascists or Communists. They can have their choice of terms. I say to them that the conclusion of the secondreading debate on this bill will not be the end of the fight. It will be but the beginning.
We do not need this measure to sustain progress and prosperity in this country. We know that the tested recipes are the best. If we can maintain public confidence and stimulate industry and production as we did after the depression mess that was aggravated by Labour leadership, if we can take the dead burden of an overweighted bureaucracy and the high taxation that goes with it from the shoulders of the Australian community and give the people a chance to stand on their own feet, then we shall progress and prosper in this country. If a depression should come to Australia within the next few years - and the depression complex of the Government is trying to bring it upon us - it will carry the label “Made in Australia”. It will be made by Chifley and his limited company. Rights and liberties are not always appreciated and. not always recognized until they are lost. Nearly 160 years ago when Australia was founded we were under government control. We had a long, hard struggle to establish our capacity and our right to maintain our own free democratic institutions and our free hanking institutions, but we eventually evolved to the stage of freedom which we knew just before the outbreak of war.’ The Labour party is putting the gears in reverse. It is so afraid of democracy that it will not give democracy a vote. I assure it, on behalf of the Opposition parties and all those who stand for freedom in Australia, that we shall go on fighting until our freedom is restored to us.
.- It is an interesting fact that both the first and the last Opposition speeches in this debate were characterized by the same mode of attack upon the democratic attitude of honorable members on this side of the House. I shall have something to say later concerning the general tone of the speech made by the honorable member for Fawkner (Mr. Holt), but I think that we should first consider his concluding remarks relative to democracy. Honorable members opposite have played battledore and shuttlecock in their discussion of “democracy” until I am forced to the conclusion that we should examine the position and ask, “Who are the democrats in this chamber?” What test can we apply to discover the true democrats? We might ask this question ‘posed by American publicity agents in a well-known series of advertisements - “What kind of democracy do you want?” I shall apply that test now. The honorable member for Wentworth (Mr. Harrison), who was so clamant in his charges that the Government is undemocratic, once banned a book. It was a classic book, but he was not aware of the fact. He did what Hitler did when he brought the “brown-out” to Europe. Is that the sort of democracy that honorable membersopposite want? The honorable member for Barker (Mr. Archie Cameron), who also was a protagonist for his own type of democracy, once closed a radio station. It was a Labour radio station. I remind him that Mussolini did likewise. Is that the sort of democracy that honorable members opposite want? I come now to another roaring democrat, who is just leaving the chamber. I refer to the honorable member for New England (Mr. Abbott). He finds the privileges of this House so democratic that he makes use oi them in order to discuss the highly ethical proposition whether or not a man was drunk 12,000 miles away from this chamber.
– Order! The honorable member must refer to the bill.
– My point is that the comments of honorable members opposite regarding the democratic outlook can be answered effectively only by applying their remarks on the bill to their own peculiar view of democracy. However, if you say that I must not continue in that vein, Mr. Deputy Speaker, I shall desist. It is such a diverting field, and there are so many chickens to shoot, that I thought you flight allow me to amuse myself a little longer in such lush pastures.
I return to the peroration of “the last of the Mohicans”, the honorable member for Fawkner, the hope of his side, who began and ended his speech on the same note as that which was struck by the Leader of the Opposition (Mr. Menzies). Both speeches were conditioned entirely by the publicity supplied by the banking organizations. Not one of their own ideas obtruded. From start to finish it was the banks, the banks and nothing but the banks. The honorable member for Fawkner said that he wanted to purge Australian politics of the word “depression”. That is exactly what this bill is intended to do! He said that he was sick and tired of hearing the word “depression”. That is quite natural in one who sits on the opposite side of the House. I remember an occasion when the honorable member said, in a spirit of high endeavour, “Let us have adventure in life; let us have enterprise”. By inference, he made the same statement in relation to the depression, a subject which he ‘swept aside. He jests at wounds who never felt a scar! The honorable gentleman’s political life, and, I am sure, the earlier part of his life, were not marred by the depression, as were the lives of so many decent workers in Australia. “We do not have to be romantic or melodramatic. We merely have to recite the hard facts of the dole queues and the police courts, of the children who suffered from rickets, of the “Happy Valleys”, with their hessian bags, in the cold and the wet. and of the sudden disaster that came upon a country unprepared for it, whose people thought they were protected. The honorable member talked about depression as something unpleasant that must be taken from his presence. Depression is unpleasant, and will always be so in the political economy of this country un h something is done to prevent it. That is being done by the Banking Bill. At the very least, this measure is putting into the hands of the Government a weapon with which to fight depression. In the past we had no such weapon. We were as defenceless as the banks, which claim that they should be left as they are, although they, too, were victims of the depression, simply because the profit motive made them helpless. The very depths of research have been plumbed in this debate. Time after time there have been brilliant speeches from this side of the House, indicating how deeply we feel on this issue. Time and time again, we have refuted the story of the Opposition, and have done it handsomely. Some honorable members on this side of the chamber, who seldom speak, have come forward during this debate and have made a more than notable contribution to it, because of the feeling that is within them. The solidity of the Labour party behind its leader is an indication that, on this legislation, we shall stand or fall, because we believe in it with the utmost sincerity. When matched against the spears of faith and the shield of integrity in this political issue, nonsensical stuff which has been fired at us by honorable members opposite is difficult to listen to. There has been so much cross-fire, and so much unworthy stuff spoken that I cannot waste time in dealing with it.
But there has been running side by side with what happens in this chamber a merciless campaign outside it. Despite the- fact that this Parliament is the most democratic institution in this country, because we have both an elected upper chamber and lower chamber, the honorable member for Fawkner said that the fight will not finish in this Parliament when the Banking Bill is passed. Is not that the story which the banks have been telling to the people in the hope of deluding them? Honorable members opposite claim that the Government did not receive a mandate for this bill, .and that the fight will not finish here. Have not the bankers planned the total destruction of the Banking Act of 1945? Does any one think that those bloodhounds of finance would have been satisfied when the High Court declared invalid section 48 of the Banking Act? Would not their tongues be slavering for sections IS to 22 of the ‘act? Would not they have their rabid eyes on the Commonwealth Bank itself, because that is the thing they are after. They want it maimed or they want it removed. The Commonwealth Bank is the bulwark of the people, and has built itself into their trust and faith. This is the institution which the private bankers fear, because they, and it, cannot exist in strength together. There is no doubt about that.
The Banking Act of 1945 was an extremely reasonable, undoubtedly democratic and fine piece of legislation. It allowed its opponent, the private banks, a sporting chance. If they would conform to its provisions, they could survive. If they could not compete with it, they must go out of existence. We said that without equivocation because, in banking, only the unchallengeable, irrefutable truth matters; and such was the pronouncement, not only of the leader of the parliamentary Labour party, but also the most humble member of it. With the passing of the banking legislation in 1945, the hounds of publicity and finance were unleashed. It was to be a struggle to the death. Then comes a quiet interpolation - the action of the Melbourne City Council doing the work of the trading banks. Is there any reason why a corporate body, an association of taxpayers in a city council, should suddenly be burned with zeal to attack the banking legislation? Is there any reason why aldermen, wearing their robes lined with rabbit fur, and their baubles and beads, should be suddenly impelled to attack this legislation? Was not some one whispering in their ears, and making certain insinuations about the Banking Act? It struck these Bumbles that it would be a good idea to test the validity of section 48. Of course, they did not propose to acquaint the citizens, and the taxpayers who ultimately had to foot the bill, that the banks’ were egging them on. But they reckoned without their host, the Prime Minister, who believes that the Labour party can never retreat. He believes that it must always advance. His party had received an over whelming mandate from the people in two elections, and, in the circumstances, it was nothing but an insult to the people of Australia that the mandate which they gave to the Government should be denied them. Instead of running away into a corner and saying, “We have lost section 48. What comes next?” The Government decided to act and this bill is the result. The most unpopular man in Australia is the one who performed this feat of legerdemain, the Lord Mayor of Melbourne, Councillor Connelly, which ricocheted against the Bumbles. His legal ermine was turned to sackcloth and ashes. He tackled something which was too big for him because the people of Australia are in favour of this legislation.
The simple story, without going into it deeply, is that there was never at any time a desire on the part of the private banks to co-operate in the manner envisaged by the banking legislation of 1945. As the honorable member for Fremantle (Mr. Beazley) pointed out, the letters which the Prime Minister quoted on this matter in his second-reading speech were not published in the press. That might have been ah accident. There are even poetical accidents. Some accidents are so gloriously accidental that they make news; and this may have been one of them. Unfortunately, because this was not done, the public did not know that the trading banks were not co-operating, but were holding every card up their sleeves. They were giving notice at that time that they proposed to use the processes of the law to the greatest possible degree in order to whittle down the Government’9 proposals for banking reform. They gave the Government a warning that they would te both passive and active resisters.
A cry has been raised that, before this bill is passed, the Government should ascertain, by way of referendum, the views of the people regarding it. The simple reason why the Government has not done so is that the bankers have not yet obeyed the mandate which the Labour party obtained from the people at the elections last year. The Labour Government was returned with a splendid and resounding majority to carry on the work which it had begun with the banking legislation of 1945. If there is any merit in this sudden desire to approach the people again, there must be merit in the contention that the banks should obey the mandate which the Government obtained from the people last year. Otherwise, what we are doing here is not government, but a rabble. The Government insists that it has a complete mandate to carry on with its proposals for banking reform. Therefore, _ the bank should obey it at least in principle, instead of suddenly demanding that the Government ascertain the views of the people. Thousands of pounds have been expended on the dissemination of false propaganda. Opponents of the bill have engaged in reckless extravagance, involving the bank shareholders’ money, in order to defeat something which the people are entirely resolved, by their vote of confidence in the Labour Government last year, to support.
The Prime Minister’s remarks in relation to banking were simple and fine. I may be paraphrasing parts of his speech when I say that he made it obvious that this banking reform should have been undertaken long ago. Further, he said that money should be lent for things which are not always good cash investments. Is not that an expression of the ideals of the new order? Did not we, during World War II., promise our service men and women a new order when they returned to civil life? This is the down payment on the new order. It is the desire to get away from conventional finance, and the corrupting and corroding influences of the private banks upon governments. The story has been told, and told again, in this House during the last three weeks, of the struggles of governments, private industry, institutions and corporations against the private banks at times when the employment potential of the country most urgently required financial assistance. Whimsically enough, when Smith’s Weekly was a newspaper, it referred in a most epigrammatical way to banks. It said that a “trading bank is a place, where they give you an umbrella on a fine day and recall it when it rains”. That in a nutshell is the whole tragic theory of financial and economic depressions.
Honorable members may talk with learned fluency about the graph of lending and investing and the like”, but to the simple hungry people outside this Parliament and to the service man and woman who are rehabilitating themselves after a disastrous war, these things sometimes go over their heads. The impact, however, knifes them to the heart. If we can tell our people that between them and an ugly economic depression, which must follow the trend of laissez-faire capitalism, there is an instrument in the hands of the Government which may be able to destroy the menace they will be content. They have at least a fiftyfifty chance in the battle. No matter how we look at it, the war has not changed the world or the nations. Nor has it changed capitalism. The cycle of capitalism is prosperity, temporary boom, recession, and economic depression. That is followed by great public works in order to provide facilities for a war in which millions of human being are slaughtered. Is there anything laudatory about that? Is there anything about it that could move the Opposition to a great feast of oratory in defence of it?
There is nothing to be said in condemnation about a trading bank as a trading bank. It is a victim of the depression, wedged in between tremendous forces over which it has no control. Because of the profit motive, it must be a victim of the depression, and, as such, it can no more help us in a depression than anything else that is caught in a vice. It is an ugly thing feeding on our own misery, because of its inability to help. The trading banks must try to make profits, and as their profit motive becomes the principal factor of their existence, they cannot do what the Government can do in relation to finance and development under nationalized banking. Therefore, this legislation is a move which is long overdue. It has not been unanticipated, and I, for one, feel very proud to be associated in a humble way with its accomplishment.
Another aspect I desire to touch on is the serviceman’s angle. The honorable member for Swan (Mr. Hamilton) recently expressed ‘ his concern for soldiers whose pensions, he maintained, were being attacked for various reasons. The honorable member for Lang (Mr. Mulcahy) referred to the case of Lieutenant Wilkins. The honorable member for the Northern Territory (Mr. Blain) interjected that it was tragic that a dead man’s story should be retold. For what little of that story I propose to tell I have the warrant of his brother, who is a personal friend of mine, and who is now employed by the Commonwealth Government in a capacity in which he is working directly for exservicemen as head of the Legal Service Bureau. The honorable member for Swan made a great to-do about some special payment demanded by the Government from an ex-serviceman whom he mentioned, which, he said, resulted in a deduction being made from that man’s pension while he was a trainee under rehabilitation. Of course, I consider that to be quite a wrong thing, but a member of the Government immediately undertook to investigate the complaint and to do anything possible to rectify any injustice. That, at least, indicates the willingness of the Government to do something for ex-servicemen. However, it was not so with the banks, when they had Lieutenant Wilkins in their hands. They refused to do anything whatever for him, and when he appealed to the right honorable member for North Sydney (Mr. Hughes), who was at one time Minister for Repatriation and at another time Attorney-General, the right honorable gentleman said that he could not do anything to implement the law made by this Parliament that an exserviceman’s pension was to be regarded as inviolate. There could be no more poignant or tragic recital than the concluding portion of the speech which Lieutenant Wilkins made during a Gwydir by-election campaign. He said -
From the beginning of 1934 the bank collected my war pension. I merely filled in my signature, the order, receipt and declaration, and they filled in the rest and collected the pension.
That is probably a prime example of the ineffably good service provided by the trading banks, about which we hear so much. One fills in something, and the bank provides something in return. In this case Wilkins filled in his pension form, and the bank, in return, made him bankrupt. He went on to say -
I went over to the other side, lost my leg, and yet the bank was quite prepared to accept the paltry £5 ls. a fortnight that my country was paying me. If there is any doubt on this matter, I invite the Minister for Repatriation, Mr. Hughes, to call for the official pension slips, where he will find all the details. Many of you farmers-
And he was then addressing the very men to whom the Opposition are appealing to-night to do the right thing by the banks! - have suffered at the hands of the banks, but, surely, you never thought that they would be so greedy as to take a man’s war pension. But as far as the bank was concerned, 1 was only an item in their ledger, and although it meant crucifying me, they were prepared to do it.
In view of Wilkins’s plain statement I am not only distressed, but amazed, at the effrontery of the propaganda which members of the Opposition are addressing to ex-servicemen to defend the banks. By some sort of odd mental process members of the Opposition appear to believe that freedom has some relation to money, and that liberty is related to their overdrafts; that the 5 and 6 percent, bonds of the banks have something to do with the “bonds of Empire”. Otherwise, I cannot understand the reason underlying their inducements to ex-servicemen to write to their members of Parliament imploring them to preserve their freedom. Surely, the adjustment of the financial mechanism of this country has nothing whatever to do with the liberty of the subject, nor with the freedom for which exservicemen fought. Many of the ex-servicemen to whom the Opposition is appealing were badly damaged by the war, and it is shameful to think that members of the Opposition should resort to this. But it goes farther than that. Some time ago the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, which represents the majority of exservicemen in this country, decided that the nationalization of banks was a political issue, and that as such it should not be regarded as a matter which concerned the league. Despite that clear decision, some sub-branches of the league have- been incited by some one or other to bombard their executive with resolutions opposing the Government’s proposal.
The line of argument adopted by some of the politically minded individuals who have adopted this course is this: “If Mr. Millhouse has ruled that this matter is a political one, does his ruling mean that it is party political? If it is not, why can we not discuss it? “While the final discussion in the league was proceeding at the meeting of the national executive held at Canberra last week the honorable member for Wimmera (Mr. Turnbull) endeavoured to embroil the executive of the league in this controversy. I pause to pay tribute to the sufferings and the soldier-like qualities of the honorable member, whom I esteem personally. However, the fact remains that he did endeavour to aggravate the situation for members of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia. Even the most ungenerous opponent of the Government will admit that 70 percent, of the members of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia are unionists, and at least 85 percent, are workers. Obviously, it is highly undesirable that they should be the victims of the machinations of a system which inflicted sufferings on ex-servicemen of the type undergone by Lieutenant Wilkins. The suggestion made by members of the Opposition, that ex-servicemen went overseas to fight for the banks, is not only a fantastic, but a diabolical one. I repudiate it with contempt, and I repudiate, too, the bright, skilful journalist who conceived the notion of implanting such a slogan in the minds of ex-servicemen. Alongside it, I place the footling slogan of the Leader of the Opposition that the fight for the banks is “the second battle for Australia”. Opponents of the Government who disseminate such propaganda are simply endeavouring to make ex-servicemen the victims of a cheap advertising racket. 1 hope that ex-servicemen will realize that. If any one seeks to divide the exservicemen in the community into two camps, by making a special appeal of that type to them, it is only fair to point out that very few ex-servicemen enlisted to fight for the existing order; rather did they enlist to fight for the establishment of a “new order”, in which the present banking system would have no part.
Another point made by members of the Opposition in their cunning appeal to ex-servicemen is the suggestion that those men desire that things should remain as they are. It is quite reasonable, of course, for any man who served during the war to say that he fought for the maintenance of the status quo ; but I do not think that many would. For verification of my contention, one has only to look at some of the soldiers who have become eminent because of their military records. I refer to Ruthven, Currie, Towner and Dwyer, all of whom were decorated with the Victoria Cross, and all of whom are members of the Australian Labour party, and active supporters of the Labour governments in their respective States. Those men are held in the highest esteem for their valour, because the decoration with which it was rewarded is recognized the world over as the highest award any army can confer. Messrs. Ruthven. Currie and Dwyer, all members of Parliament, have declared, in speeches and pamphlets, their desire to see the present proposals carried into effect. I think that is something which should be brought to the notice of many ex-servicemen who have not yet been able to gather in the political threads since their return from abroad, and who are now being subjected to a barrage of political propaganda by opponents of the Government. I commend to them th” views of the gentlemen I have mentioned as being those of representative soldiers, and I appeal to them not to be swayed by the sloppy slogans employed by opponents of nationalization.
I propose to refer now to the speech of the right honorable member for Cowper (Sir Earle Page), who boiled the British blood in our ears when he spoke of bloodshed in this country. It recalled to my mind something connected with the early days of Darwin, written by some one who may possibly have been a forebear of the honorable member for the Northern Territory. The gentleman who wrote this article said that if the Government used federation to provide old-age pensions for people in this country the streets of Darwin would run red with blood. That is just about as foolish as some of the statements made by the right honorable gentleman from Cowper, who comports himself in this House as a roaring lion, but behaves outside it as a most amiable and likeable fellow. He is a split personality - Dr. Page and Mr. Rage He jogs merrily up and down the country with his colleagues, the honorable members for New England (Mr. Abbott) and Richmond (Mr. Anthony), and they have become known as the “Three Black Crows”. Those “Three Black Crows” of the north of New South Wales are really a political farce* None of them has, in the whole course of the time he has spent in the north of New South Wales, seen anything hut smiling fields and flowing rivers, nor mingled with any one but successful pastoralists, dairy-farmers and banana-growers. Yet, they are the greatest calamity howlers in this House. The wheel is always broken, in New England, and it is never going to rain any more’ in Richmond. They bring a melancholy story from a Smiling and fertile land, the blight is upon Cowper and the worm is in the rose. Perhaps some of their own blight has fallen on the land.
When I hear honorable members opposite speak of the service rendered to different sections of the community by the trading hanks I am reminded again that Smith’s Weekly has told its readers that it is easy to borrow an umbrella when the sun is shining, but that it is taken away when the rains come. That was the experience of Mr. Mulhearn, now of Canterbury, who lived for many years in the Dorrigo district in the division of Cowper, where he had a valuable timber concession. Not having the requisite finance to carry out his timber-getting operations he applied to the local bank for an overdraft of £1,000. It was granted to him because the sun was shining at the time and prospects were good. Later, however, the depression came, and with it many difficulties. The tone of the correspondence which he received from the bank changed. The sun was no longer shining and the umbrella was called in. An inspector was sent by the bank to hi3 timber concession, which, as I have said, was a valuable one, well worth £1,000. After the inspector’s visit, Mr. Mulhearn received a letter from the bank which contained the following paragraph: -
Kindly note that a recent valuation of your property has seriously diminished our estimation of its worth and we cannot in future allow you a larger overdraft than £300 against same.
Thinking that the position would improve, Mr. Mulhearn continued to cut timber to be sent to the coast for shipment to Sydney for use in building the houses which the Liberal party of that day was trying to erect. A little later he received letter No. 2, in which he was told-
We have referred your account to the inspector and he states that he does not see his way to continue the advance over £300. Under the circumstances you must look for an outside loan as soon as possible.
There were six private banks in the town, and Mr. Mulhearn went to each of them in turn seeking financial assistance. He told me afterwards that their unanimity was most amazing in addition to being most depressing. He had thought that the banks were in active competition, but their unanimity disabused his mind of that hallucination. I do not know whether the managers of those six banks played bowls or golf together, or whether they met occasionally to have a drink. Mr. Mulhearn told them about the beautiful country in the district where he had his timber concession and what he could do if only he could get sufficient money to keep his tractors working. However, they were not impressed. Instead, they were unanimous in the view that to finance him would have been a risky proposition. In the words of the inspector, his business was “not worth a penny over £300”. Accordingly, he had to make financial adjustments. He had a talk with his bank manager and inquired from him whether he could not get a private loan. He approached the mayor of the town, a solicitor, who replied that he would like six days to consider the matter, but he thought it was possible that a private loan could be arranged, although he knew that times were bad. Later, however, . Mr. Mulhearn received a letter informing him that there was nothing doing. In the letter some mention was made of “stringency abroad” and for that reason the writer could not help him in any way. And so the trees on his property remained uncut, and his assets continued to diminish because of lack of assistance. Finally, Mr. Mulhearn received the following letter: -
Two months ago the inspector wrote instructing that your advance was to be called up. Last week I received a letter asking why his instructions had not been carried out. Under the circumstances I have no alternative but to pass his directions on.
Obviously the manager of the bank was showing signs of tension -
I must therefore ask you to get a private loan at once, and pay off the debt here, otherwise I am afraid I shall be instructed to realize under our mortgages.
Do not waste any time over it.
I ask honorable members to take special note of the words in that letter, “Don’t waste any time over it”. I do so because this man had been to various centres in the north coast district pleading for financial assistance to enable him to carry on. Thoroughly broken up by the treatment he received, he returned to Dorrigo, where a letter was awaiting him. It was written by the man to whom he had applied for a private loan. The writer confirmed our talk of even date” and enclosed abill for £6 6s. for professional costs.
Another point before I leave the right honorable member for Cowper tohis miseries. In his own excitable wayhe talked of gross bribery of shareholders on the part ofthe Prime Minister, and he indulged in a good deal of mum bojumbo about bringing an end to private banking and establishing a banking monopoly. His mention of bribery interested me, because I had seen a privately circulated letter for business men edited by Mr. Frank Browne, who is associated with “Things I hear”. Mr. Browne was once the Liberal candidate for the federal seat of Barton. On another occasion he was the Liberal candidate for the State seat of Bondi. By the process of effluxion of time, during which it would appear there was lack of appreciation of his merits, he became an independent candidate for the Vaucluse seat. On the 25th August, 1947, Mr. Browne, a journalist who enjoys the confidence of the Liberal party, and has on many occasions directed that party’s publicity, said -
The banks are taking a terrible risk if they are going to rely on public opinion and legal action to beat the banking grab. The first won’t count-
It is interesting to have that opinion - and if they are beaten in the second, it will be too late. The place to defeat the bill is on the floor of the House. It would need twelve men to cross the floor to bring this about.
– We are not for sale.
– The article continues -
If I were running the bank campaign entirely (which I am not)- evidently he had some part in it -
I’d see if I couldn’t get a quote.
I direct the attention of honorable members to those last word’s, “I’d see if I couldn’t get a quote”. That letter was published for private circulation chiefly among professional men in Sydney. Yet honorable members opposite charge the Prime Minister with bribery and corruption! Mr. Browne is a member of the Liberal party.
– He is not.
- Mr. Browne has informed me that he is a member of the Liberal party and has added that it only wanted the honorable member for Wentworth, and Mr. Spooner, to leave the party and he would be in control.
Another sinister thing in relation to this talk of “blood-shed” by the right honorable member for Cowper is the situation that has developed with many of the generals who have fought so valiantly for Australia. I make no reference now to the honorable and gallant member for Bendigo (Mr. Rankin), but only to something which has taken place outside the Parliament. These things must be mentioned. If, as the honorable member for Fawkner says, this is going to he a battle, then I am ready to join in. I refer to the strange action of the Chief Justice of Victoria, Sir John Herring, who left the Bench and repaired to a Rotary Club dinner recently, wherehe spoke of the need to be prepared to resist police States and super governments. The report of this speech is on the newspaper files. Without fear of the consequences, I say that if that speech was not an advertisement worthy of the commanderinchief of the new guard, I have not heard anything that sounds more like it, even from his deputy in this chamber. The same thing occurred in the case of Major-General Bennett, who said recently: “We should knock on everY door about the bank bill”. One would have thought that that old warrior would have learned to mind his own business. His remark was a direct invitation to people to do something in other than a democratic way. It had the smack of force about it in the way in which it was said. These old warriors, with the martial blood in their veins, are buying into the banking controversy, of which they know nothing, because they delight in rattling their sabres. Those statements come from persons who accuse the Labour party of being undemocratic!
As to the treatment of bank officers, of which we have heard a good deal, I congratulate the Prime Minister on giving to an under-privileged band of workers something which may well be described as the bank officers’ charter. Under this legislation the standards of bank clerks will ‘be raised. Those standards have been regrettably and lamentably low in the past. I remember the case of Rawson, the first organizer of the bank clerks, who tried to break the grip which the banks had on their employees. He was sacked out of hand, and was left for months without support, until he was reinstated by order of the Arbitration Court. During that time, the bank officers were so afraid to move, independently, that they asked the employees of the Government Savings Bank to plead for them, because they knew that no government, whether Liberal or Labour, would dare to take action, against the employees of a State institution on such grounds, lest the people deal with it. This man Rawson was boycotted until the free employees of a government savings bank - the men who, according to honorable members opposite, would be mere numbers or robots - approached the industrial Arbitration Court on his behalf, and to ensure that employees of the trading banks should obtain justice and a living wage.
I now come to the Victorian elections, and the implications therein on this measure. The Minister for Information (Mr. Calwell) referred to the curious position in Victoria in relation to banking, and to the position of “Sir Bank” Clarke. Nothing could be more undemocratic, nothing more calculated to rouse the anger of the Australian people, than what happened in Victoria. Whether we should ignore it altogether, and remain in our own political shell, I do not know; but I feel impelled to say that there is something wrong with a situation which permits a man to turn himself into a fuhrer. Nothing is so important as that this issue in relation to the Legislative Council in Victoria should be cleared up. One bright morning the people of that State woke up to find that a local fuhrer had presented them with a situation in which an election was unavoidable, and in which the State employees would not be paid for a fortnight; but if they went round to the back doors of the trading banks they could get a little money with which to carry on. Nothing so undemocratic has occurred in a British community for a long time. The House of Lords is a free and democratic institution compared with the Vic- .torian Legislative Council. It is an astounding thing that the members of the Legislative Council should dictate terms to the people of Victoria on matters regarding which their judgment does not matter at all.
The people want to know, more than anything else, whether this measure would help the country should another depression threaten, and I say that it certainly would. It will put into the hands of any government a club with which to boat back the terror. I was amazed at the light way in which the honorable member for Fawkner referred to the depression. I have been amused at the way in which the depression has been glossed over by members of the Opposition; but the depression is a scar which cannot be removed merely by wishing to be rid of it. The people who suffered during the depression have had to wait a long time to collect, but that time has now arrived. Et has taken another war to show that if things are left as they are the succession of”boom and bust” will go on. The honorable member for Fawkner shakes his head. I remember another honorable member for Fawkner who spoke of the notes issued by the Commonwealth Bank as “Fisher’s flimsies”. It reminds me that, in certain electorates, time certainly stands still. The entire support for this measure is linked with the people’s memories of the depression. We are asked by the Opposition not to mention the depression, because it is not relevant to the issue. The reason why the supporters of this measure range themselves so solidly behind the Government is that they know it is designed to slay something which, during the depression, kept them from sleeping at night; because they have not forgotten the misery and degradation of free citizens because of the depression which came on them overnight, and which sent them into the “happy valley”, to use that richly sardonic phrase by which Australians describe the lowest kind of shelter ; which put them on the dole, and broke down their health, so that when the boys heard the clarion call of battle at the beginning of the last war the number of rejects was 25 percent, higher than it should have been had we properly .fed our people all the time. The depression left mental scars on the people who grew up during that time and, more serious still, it further reduced the national birth-rate. The decline of the birth-rate during the depression years was heartbreaking. People would not bring into the world children whom they could not feed. Now we ar2 asking for men with muscle and imagination to come to Australia as migrants to develop the country. Surely we are not justified in asking the lowliest migrant to come here unless we can assure him of a measure of continuous prosperity, and such machinery of government as will join battle with the monster of depression in Australia. That machinery is to be found in this bill to nationalize the trading banks.
.- The only question to be considered in connexion with this bill is whether exploitation of the people is to be part of the new social order - whether, indeed, profit-sharing by the nation is to be substituted for profit exploitation of the nation. The bill is designed to repair, to strengthen and to integrate the Go=vernment’s financial authority. I appeal to the people and to the Parliament to exercise common sense, to view this measure without regard to vamped-up propaganda - ito view it calmly, rationally and without emotion. If the people do that, I am sure the decision which they reach in two years time will be in favour of the Government.
The honorable member for Wentworth (Mr. Harrison) said that this bill would destroy the Labour party. I give to that statement the lie direct. I have moved among- members of the Labour party in the State of New .South Wales and in two other States since the present banking proposals were first mooted, and everywhere I have seen evidence that the Labour party has secured a new lease of life. I believe that the Prime Minister’s announcement in regard to banking on the 16th August gave the people of Australia a realization of what is most important in government, namely, the sincerity of the legislature.
For myself, I would be happy to pass out of the public life of this country knowing only that, during the nine years I have been concerned with it, I supported and assisted in every way I could the passage of legislation of this kind. We do not profess that this legislation will benefit 100 percent, of the people of Australia. We are satisfied to benefit 90 percent, of the people - those who constitute the great mass of the population. I believe that the kind of campaign being carried on and fostered by the Opposition parties and its adherents, the bankers, who are the liberal contributors to their party funds at general elections and at other times, is designed to create fears in the minds of the people with regard to many false issues. The people might well ask themselves by whom is this campaign being waged and at what cost, because already more than £150,000 has been expended in order to combat and, if possible, prevent the passage of, this legislation. There have been appeals through the various agencies and sub-agencies of the banks and the Liberal party. I speak of such bodies as the People’s Union and the Sane Democracy League and other semipolitical bodies. There have been appeals marked by religious prejudice, political mendacity and physical intimidation which only they and the newspapers know of and know how to use.
First, when the announcement wa3 made that the Government intended to nationalize the banks, little was said *, but after a while the billboards carried appeals by religious sects. Clerical people who dabble in politics are of as many opinions in favour of the bill as against it. On this point I do not propose to delay the House except to say that Archbishop Le Fanu, the Anglican Primate in Australia in 1944, said -
It is quite true that the amount of regulation in Australia has increased markedly owing to war, but there is no doubt at all that a great deal of control in our private affairs will have to continue for many years, and that the so-called freedom under which wc have lived for the last 150 years or so has, as a matter of fact, provided a civilization which, for poor people at any rate-
They are the people for whom the Government speaks - was very far” away from Christian standards.
With regard to the political mendacity of the banks, I quote from an advertisement published in the Sydney Morning Herald of the 15th September last, the advertisement being one of a number of identical advertisements which appeared over the name of the People’s Union. It was as follows : -
A fair question Mr. Chifley! If you nationalize the trading banks and Mr. Menzies wins the next elections-
Which is as remote as the poles are apart - who will control all banking credit? It is obvious: You won’t take that risk will you, Mr. Chifley? You will abolish elections first. Wo challenge you to answer.
I shall give those gentlemen the answer for which they ask. It appears in section 28 of the Commonwealth of Australia Constitution Act, which provides that there can be no abolition of elections without a referendum, or an amendment of the Constitution by an appeal to the United Kingdom legislature to amend the act, because it is an Imperial Act; it reads -
Every House of Representatives shall continue for three years from the first meeting of the House, and no longer, but may be sooner dissolved by the Governor-General.
That advertisement constituted the purest and crassest piece of political mendacity that has been perpetrated in this country for many a long day.
With regard to the physical intimidation associated with the campaign against this legislation, those who listened to the Forum of the Air radio session, when this matter was debated, heard Mr. Stewart Fraser say that he had been warned. He said -
Let me tell you, first, that I have been warned, and most of the warnings came from friends, sane and sober citizens, with a sincere regard for my welfare. They heard that I’d been invited to take part in this Forum of the Air to-night and to oppose the Government’s banking proposals. My telephone ran hot for several days and they said, “Don’t do it, Fraser, don’t do it. You’ll be a marked man!”
A local bank manager at Randwick, which is situated in my electorate, addressed a public meeting, which was called by the private banks, and he, also, said that he had been warned not to speak at that meeting. I suggest to the House, and to the country, that the only warning that those gentlemen, and other gentlemen like them, received was a warning cf what would happen to them if they did not speak. Then, we have the right honorable member for Cowper (Sir Earle Page) and others, saying that blood would flow in this country. That is but another illustration of the physical intimidation which is being introduced into this campaign.
With respect to newspaper misrepresentation, I shall read briefly from a letter which was published in a Sydney newspaper with regard to certain publicity given to a government travelogue shown in a metropolitan theatre. That letter, which was signed, read -
Your “Town Talk” column indulges in a piece of flagrantly dishonest political propaganda in stating that a Western Australian Government travelogue, showing a shot of the Commonwealth Bank at Geraldton, brought forth sustained hisses from the audience. I was present with my wife at St. James Theatre on Saturday evening, and all we heard when the bank was shown were one or two isolated handclaps. My daughter and her young man were at Monday night’s screening and state that there was no demonstration either way when the bank building came on the screen. Why do newspapers have to stoop to such wilful fabrication? Are they bidden to do this mendacious and clumsy insinuation by their financial task-masters?
I mention these matters in order to point out to the House the false basis of the appeals being made to the people by opponents of this legislation, and the manner in which their campaign is being carried on. I turn now to the campaign that is being conducted in this House, because two distinct campaigns are being carried on against this measure, one in the country and the other in this Parliament. The Leader of the Opposition (Mr. Menzies), in his second-reading speech, did what seemed to me a series of remarkable things, unless they were connected closely with a very strong briefing a3 to the manner in which he should present the case for the banks in this Parliament. He produced a copy of the writ in the section 48 case. He i referred to the transcript of evidence in the High Court proceedings, and mentioned what the Chief Judge said by way of an aside. There is no doubt, as every honorable member in this House has been well aware, that so-called liaison officers of the banks have been present in this building during the whole course of this debate.
I shall now deal with certain statements made by the honorable member for Warringah (Mr. Spender), which should not be allowed to go unchallenged. First, he claimed that the draftsman, or the Attorney-General, or the Prime Minister, or the person at whose door he wished to lay the blame in respect of this matter, was negligent or culpable in that he did not provide for the repeal of the Banking Act of 1945. If the honorable member had looked closely at the bill, as he told us he did, he would have seen that clause 6 makes provision for the severability of all the provisions of the bill. Had a repeal clause been inserted, and the court held, in case of a challenge, that every portion of the bill was ultra vires except the repeal section, the Government would have been obliged to re-enact, for what it was worth, what was left of the 1945 act. I say that, with a due appreciation of the significance of that phrase. Therefore, there was no mishap, or slip, in leaving out a repeal section, because the Government was appreciative of the content of clause 6 and all that attached thereto. The honorable member then referred to the provisions of section 169 of the Commonwealth Bank Act For a lawyer and a King’s Counsel it is surprising that he ignored at least two important matters directly in point. One of them is that section 20 of the Commonwealth Public Service Act 1922- 1947 is a very similar provision to section 169 of the Commonwealth Bank Act. Both provide that where the services of an officer become redundant or otherwise superfluous provision is made for dispensing with that officer’s services. Section 20 of the Commonwealth Public Service Act reads -
If at any time the board finds that a greater number of officers of a particular classification is employed in any department or branch of a department than is necessary for the efficient working of that department or branch, any officer whom the board finds is in excess may be transferred to such other position of equal classification and salary in the Service as the officer is competent to fill, and if no such position is available the office may be transferred to a position of lower classification and salary. If no position is available for the officer the board may retire him from the Public Service.
Section 169 of the Commonwealth Bank Act at least gives such an employee one month’s notice. The point is that that provision is not only contained in this particular legislation; it is also common to all comparable pieces of legislation, and no one will deny that the Service of the Commonwealth constitutes a larger body of men than do the services of all the banks, including the private trading banks. But that is not the only point upon which the honorable gentleman snowed ignorance. The very point he raised had already been dealt with by the Prime Minister (Mr. Chifley) in his second-reading speech. Section 169 of the Commonwealth Bank Act is included in Part XIII. of the statute, and this is what the Prime Minister had to say in regard to that part of the act -
Under Part XIII. of the Commonwealth Bank Act promotion and disciplinary appeal boards have been constituted. Those hoards, which are under an independent chairman and include representatives of employees, are empowered to give final decisions on appeals relating, respectively, to the promotion and to the punishment, dismissal or reduction in status of officers. Such rights of appeal are not at present enjoyed by employees of the private banks.
The changed conditions of the expanded Commonwealth Bank Service will, of course, render it necessary to examine the provisions of the Commonwealth Bank Act.
The right honorable gentleman was referring particularly to Part XIII. as it related to the Commonwealth Bank Service. I accent his words for the benefit of the honorable member and of those who may have been caused some consternation by the irresponsible statements of the honorable member for Warringah. The right honorable gentleman continued -
Any amendments considered desirable to meet ‘ the position will be brought forward at an early date.
I submit these two points to rebut the statements made by the honorable member for Warringah.
The next point raised by the honorable member- and I am glad that he is in the chamber, because it is not often we see him here - was that sections 27 and 28 of the Banking Act of 1945 enabled the Government to control advance policies in regard to the applications of various individuals. I have before me the Hansard report of the debate in committee on those two sections of the Banking Act of 1945. I find that three attempts were made to amend those sections but in none of them was the voice of the honorable member raised, although, on turning back the pages, t find that he had spoken in the House on the day prior to that on which the debate in committee took place. The statement that the Government will control advance policy in respect of individual applications, is answered by the Prime Minister himself in the concluding portion of his second-reading speech, when he said -
It is timely to record that under section 0 of the Commonwealth Bank Act of 1945 the Government cannot interfere in the internal transactions of the bank. Its power is limited to the laying down where necessary of the broad lines of monetary and banking policy. 1 propose now to answer some questions which have been raised - some of them debatable, some mere assertions on the part of honorable members opposite, in respect of this bill. It was said by the Leader of the Opposition (Mr. Menzies), and others who followed him, that the bill was introduced without a mandate and was undemocratic. I ask the people of Australia to judge whether the action of the Upper House in Victoria was democratic when it refused supply to the elected government of the day, which unquestionably had a mandate to obtain supply.
– The people will answer that on Saturday, and the honorable member will get a shock, too.
– I am sufficiently confident of the good sense of the people of Victoria to believe that now they will show that they, too, understand that what was done by the Upper House was nol in the interests of democracy. The South Australian Government, which always poses as the champion of democracy, showed that it has no inhibitions in regard to spending the taxpayers’ money in pursuing a matter involving the interests of the private banks. That Government did not want to spend the people’s money on a referendum to reform the South Australian Upper House in such a way as to guarantee that its members would be returned on a popularly elective basis. To characterize the measure as “undemocratic” challenges the very meaning of the word. I propose to quote the words of a man whose position in the pages of history unquestionably has earned him the title of democrat, and I suggest that his words even on a banking matter should be accepted in preference to those of the Leader of the Opposition, or of the young pretender, or even of the old pretender, the Bengal tiger, who by comparison with this famous man scarcely knows how to spell the word “democracy”. I quote Abraham Lincoln -
The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of the consumer*. The taxpayer will be saved immense sums of interest, discounts, and exchange. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power.
The next argument that is put forward by the Opposition is that the bill is a challenge to the freedom of the people. But the only freedom that the people will lose by this measure is the freedom to starve; the freedom to be without homes; the freedom to be ill-clad, and indeed the freedom to be without medical attention. It was not until Labour became the governing party in this country that these important phases of the way of life of the citizens came to be recognized as a public responsibility. I challenge honorable members opposite to point to any action ever taken by a banker or a banking group to benefit the people cf this country. Were the banks responsible f6r the introduction of invalid and old-age pensions? Were they responsible for sustenance payments to tuberculosis sufferers, or for the provision of educational assistance? I need not go through the whole gamut of our social services; but again I ask : Can any member of this chamber tell me, and the people of this country, of any action taken by the private banks in the interests of the community generally?
Another argument advanced by honorable members opposite is that this bill will lead to communism. I suppose that when one is hard pressed for an argument one is likely to project anything forward as a possible reason why the bill should be defeated. But every intelligent member of this House, and every reasonable man in the country, knows that communism nurtures on widespread unemployment and discontent. This bill will avert unemployment and consequently it will avert communism. We have heard a lot of talk about communism, but I cannot recall any occasion on which any member of the Opposition, as an individual, or as a member of a government, has done anything to stem the alleged rising tide of communism in this country. There is only one way to stem that tide, if there be such a tide, and that is not to imprison the Communists or to confiscate their funds, but to ensure that every member of the community shall obtain a reasonable share of the wealth that is produced by the nation.
The honorable member for Wentworth made certain allegations in regard to tl]c preferential treatment that he considers would be accorded under a monopoly banking system. Every member of this House knows that industrialists and merchants who are directors of or substantial shareholders in the banks enjoy preferential treatment from those banks to-day. Not only do they receive this preferential treatment, but, as has been shown by the honorable member for Wentworth, they have access to information regarding the affairs of their competitors. I shall not weary the House by repeating the names of the individuals to whom I -am referring, but the honorable member for Wentworth knows them very well.
Another argument that has been advanced against this measure is that control of an individual’s money means control of his life. What an extraordinary proposition that is. Is it suggested that any member of the community may do whatever he pleases with his money today without proper regard for the generally -recognized social pattern? Is it suggested that his behaviour can be purely individual? That proposition was discarded many years ago. Another argument is that no man’s financial affairs will be safe from prying eyes. What a laugh that is. Any one who has had any relationship with the business community knows that there is a very well organized system of obtaining reports regarding the financial circumstances of any individual or organization. Honorable members opposite and their friends invariably resort to that system of obtaining information, and nobody cares very much whether the private affairs of individuals are safe from prying eyes or not. The Opposition would have the country believe that the Government’s aim is to abolish entirely, or in part, the institution of private property. If my friends on the Australian Country party benches wish to carry on their conversation, I shall be quite happy to let them have the “air”.
– Order! If the honorable member for Watson indicates who is causing the annoyance to him, I shall take action. This is an old game in a certain part of the House, and I shall have the microphones removed if it continues.
– It is not done intentionally.
– I am referring to the honorable member for Indi (Mr. McEwen), and he need not become indignant.
– Nothing is further from the Government’s mind than the abolition of private property; but in advancing that theory, the Opposition has endeavoured to connect the Government’s progressiveness with the activities and policies of a party that is foreign to the
Australian people, namely, the Communist party. Not only does the Communist party advocate the abolition of the right to private property, but also the overthrow, by revolutionary means, of the constitutionally elected government of the country, which is the very thing that the right honorable member for Cowper (Sir Earle Page) has advocated. Politics certainly makes strange bedfellows.
A further argument of the Opposition is that the 1945 legislation gives to the Government all the powers that it requires. Surely the Opposition and the people of this country do not think that the Government is so naive as to believe that the financial boodlers who have mismanaged this country’s financial affairs for such a long time would not have challenged the 1945 legislation had this bill not been introduced.
As I said in my opening remarks, the purpose of this bill is to repair, strengthen and integrate the Government’s financial authority. The fact is that since section 48 of the Banking Act, 1945, has been declared unconstitutional, no one can say with authority whether the rest of the act is constitutional. At the best its constitutionality is doubtful. But the money magnates, who do not hesitate to ruin people or to precipitate crises when they think that the Government is applying a policy contrary to their best interests - and they alone are the judges of their best interests - will seize the earliest opportunity to challenge this legislation. Whether they do it on their own behalf or whether it is done for them by their “stooges”, such as the Government of South Australia, is of no account. The fact remains that it is undeniable that a challenge has been issued before this legislation has been put on the statute-book. So how can we say with any certainty that if the legislation were dropped the 1945 act as a whole would not also be challenged ?
The real necessity for the legislation can be summed up in a few words. No one questions the fact that finance is government. It is trite to make that observation. No one oan question the fact that the control of finance and the regulation of credit are in the way of the operation of a key public utility. The Prime Minister, in making reference to this, said, “No service fits the description better of a public utility than banking”. He gives in the preceding paragraph his reasons for saying that. I do not propose, having regard to the short time at my disposal, to quote those remarks, but I commend to Opposition members, the House generally and the country, what the Prime Minister said about that matter. The Government’s task, and the task of any government, whatever its political colour may be, is to maintain a proper adjustment of the national economy, and that adjustment can he maintained only if the lending policy is determined by a definite relationship to the needs of all the classes in the community, with a close connexion with the maintenance of the economic welfare of all the people. I am not speaking of lending only to small groups, with no economic relationship to the welfare of all the people. I speak of all the classes of the community. Members of the Opposition have, time and time again, said that the lending policy .aims at controlling loans made to the. individual. That i9 not so, as all honorable members will realize if they have any real honesty. Under this legislation it will be possible to make a 100 percent, loan for housing, or any other purpose that the Government considers is in the economic interest of the mass of the people. It will be possible - and I suggest it will be done - for those 100 percent, loans to be made available at as low as 2 percent, or 1£ percent, interest. The £100,000,000 that is to be outlaid in purchasing the business and premises of the private trading banks is an insurance premium, a single premium paid once and for all that will guarantee a state of full employment in this country. Foi that reason, if for no other, the legislation is warranted. We have, time and time again, shown to the people of this country that the difference between the Labour party and all Opposition parties is that cur accent is on human values, on the rights of the “little” man, and on the problem that he has to tackle every day of having three meals, a bed to sleep in, with an extra blanket for winter, if he wants it, and a roof over his head. That is the problem that the Labour party is trying to solve, but it is not the problem that the Opposition parties are trying to solve.
To say that the Commonwealth Bank could have attracted more business to it than it has clone is to ignore the lack of competent staff, its inability to obtain competent staff in a period of full employment and its inability to obtain adequate premises. The fact of the matter is that the private trading banks themselves add nothing to the productive capacity of the nation. What they do is to merely provide a medium for their customers’ achievements and for their achievements they seek to claim the credit.
– Does that apply to the Commonwealth Bank, too?
– The honorable member knows what happens to the profits of the Commonwealth Bank. The Commonweal th Bank profits go one-half to reserves and one-half to the National Debt Sinking Fund. I think the people will appreciate in years to come the benefit they will have by reason of that fact, because the budgetary provision that will have to he made for interest on the national debt will be less and therefore the amount of money that will have to be raised by direct and indirect taxes will be also less. In conclusion, I refer to what I can only describe as the contemptuous attitude of the Leader of the Opposition in the statements he made about the 3,750,000 workers who have their savings in the Commonwealth Savings Bank. To him the financial salt of the earth is those who have accounts with the private trading banks. He ignores, for his own purposes and the purposes of his argument, that the largest financial factor that makes for the national economic potential is the accounts of the workers in the Commonwealth Savings Bank. The Leader of the Opposition really let his hair down when he made a reference in a sneering way to those people. The Opposition condemns this bill because it not only tends to but will stabilize the economy. That is an undesirable state of affairs from ohe point of view of the Opposition, because where there is a stable economy, there is no room for speculators and manipulators, who have always contributed to the funds of the Liberal party and its predecessors, whatever their names may have been. Their purpose is to keep the economy of the country unstable so that there shall be room for them to batten on the hard work of the people of this country. The Opposition and the banks have used every political trick in this campaign to defeat the Government’s proposal. “What they want to ensure is the continuance of the right to exploit under what is left of the capitalist economy. The banks are not concerned with lending to the people or with pursuing their policies for the benefit of the people. I repeat my challenge to honorable members opposite or to anybody else to state any occasion on which the banks have contributed anything which has been of such benefit to the people as, for example, the social legislation of this Government - and I point out that no social legislation of any real value has been put on the statute-book by any government other than a Labour government. While the private banks continue their policy of lending for profit, and not for need, there is a real necessity for their acquisition.
Finally, I answer the honorable member for Indi (Mr. McEwen), who asked why, if the Labour party was not responsible for what happened in the depth of the depression, the people did not support it at the elections in 1934 and 1937. That question raises many other interesting points which I do not propose to canvass in detail now. One of these, however, is the fact that the Labour party was split at those times. Indeed, in 1937 the Watson electorate, which I represent, could have been won for Labour had not Labour preferences been distributed to the Opposition candidate. Even though I was elected in 1940 on the preferences from two other Labour candidates, the fact is that the people were beginning to awaken to a realization that anti-Labour propaganda, which was made possible by the liberal outpouring of the funds of the supporters of the Opposition, was not in their best interests. World War II. really opened the eyes of the people, and at future elections this Government will be returned to power without question. This is a fine country, the greatest country on earth, and it will continue to be so while the Labour party is in power. This Government will never permit Australia to return to the state which prevailed in the bad old days. While countries overseas are struggling in the turmoil of economic upsets, we can truthfully say, with Moliere, “Nous avons change tout cela” - We have changed all that!
Debate (on motion by Mr. Drakeford) adjourned.