House of Representatives
3 December 1929

12^th Parliament · 1^st Session

QUESTION
- SUGAR EMBARGO
QUESTION
- RELIEF OF UNEMPLOYMENT
QUESTION
- ANGLO-EGYPTIAN TREATY
QUESTION
- COMMONWEALTH PUBLIC SERVICE
QUESTION
- PRIVY COUNCIL APPEALS
QUESTION
- REVENUE INCREASES
NORTH AUSTRALIA PASTORAL LANDS
COAL INDUSTRY
- Formal Motion for Adjournment
QUESTION
- TAXATION ADMINISTRATION
QUESTION
- DEFENCE LANDS
QUESTION
- AMALGAMATED WIRELESS (AUSTRALASIA) LIMITED
QUESTION
- RURAL CREDITS ADVANCES
QUESTION
- AUSTRALIAN ARMY MEDICAL CORPS
QUESTION
- NAVAL AND MILITARY COLLEGES
QUESTION
- REDISTRIBUTION OF ELECTORAL BOUNDARIES
QUESTION
- FEDERAL CAPITAL TERRITORY
QUESTION
- REPATRIATION COMMISSION
QUESTION
- ROYAL AUSTRALIAN NAVY
QUESTION
- CITIZEN FORCES
PAPERS
COMMONWEALTH BANK BILL
- Second Reading
ADJOURNMENT
- Coal Industry

Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and read prayers.

page 575

QUESTION

SUGAR EMBARGO

Mr MACKAY:
LILLEY, QUEENSLAND

– Has the attention of the Prime Minister been called to the statement reported to have been made recently by Mr.C.W. Frost, the selected Labour candidate in the by-election for Franklin, that -

The fruit industry certainly should be protected. They were paying more for their sugar and now there was a strong government in power, independent of Queensland votes in the House, therewas a good chance of getting the sugar bounty reviewed or eliminated.

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– I shall place the report on the table of the House for the perusal of honorable members.

page 576

COAL INDUSTRY

Formal Motion for Adjournment

Mr SPEAKER:

-(Hon. NormanMakin). - I have received from the honorable member for Hunter (Mr. James) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The critical position of the coal-mining industry in New South Wales.”

Five honorable members having risen in their places,

Question proposed.

Mr JAMES:
Hunter

.- I realize the importance of the step that I am taking, but I have a duty to my constituents and I intend to perform it.

Opposition Members. - Hear, hear !

Mr JAMES:

– I do not want any “ Hear hears “ from honorable members opposite. The dispute on the coal-fields is a matter of vital concern to my constituents. After about 10 months of bitter struggle, the miners on the Northern coal-fields have been forced by starvation, and by the spineless attitude of this Government in failing to support them, to submit to a reduction in wages. On the hustings the Labour party stood for no reduction in wages. I, as a member of it, from my place on the Opposition side of the chamber, a few months ago, criticized the Bruce-Page Government. I called Mr. Bruce and his followers the greatest traitors Australia has produced. But they were not. They at least were true to the class that sent them here. They did what theywere asked to do. This Government, on the other hand, has failed to carry out its promises. We cannot get away from that fact. The suffering people whom I repre sent have been used as a political football, and have been kicked by both sides. They have been used as pawns in the political game. They realize that now. I am quite aware that the step I am taking this afternoon may be the cause of my leaving this party, but I do not care whether that is so or not. I entered the party with honest, clean hands and, if necessary, I shall leave it with honest, clean hands and honest motives. The Government says it cannot do anything. If that is so, why did the members of it criticize the members of the previous Government ?

Mr Archdale Parkhill:

– Hear, hear !

Mr JAMES:

– I do- not require any “ Hear hears “ from the honorable member for Warringah. We know definitely where honorable members opposite stood, but the electors of Australia were misled about the stand of this party. The people whom I represent are to-day in the position of having to continue a helpless struggle. It would be hopeless for them to continue the fight, and I say to them from my place in this chamber, “ It is of no use for you to continue to struggle further.” My people were deserted by the party which proposed to protect them. Speeches were made by Labour members, myself included, from the benches opposite last session, of from fifteen minutes to sixty minutes duration, to the effect that the Bruce-Page Government had been guilty of cruel and callous actions in respect of the coalminers, in that it had not attempted to do anything to relieve the situation. A good deal was said about the breaking of awards. No one can deny that the coalowners have deliberately broken the awards. Yet this Government has said that it cannot do anything. It says that it has no constitutional power to act. I believe that if it had had the courage to resume the mines and open them and had allowed the coal-owners to test the constitutionality of its action, it would have caused the fall of the Bavin Government. It would have forced that Government to the country and the people would have rejected it, because they would not stand for the coal-owners starving the miners into submission. During the recent election campaign I spoke in five electorates and described the sufferings of my constituents. In four of those five electorates seats were won for the Labour party. The people realized that I had stood up and fought the BrucePage Government. But now the chickens are coming home to roost. What has this Government done? It has not done any more than the Bruce-Page Government did. In these circumstances the members of it were not justified in criticising the previous Government. There was no need to encourage me to do it. I know full well that the people who listened to prominent members of the Labour party to-day have got to face the music. I know that some of them will be asked for their resignations. These people listened to the promises that were made on behalf of the Labour party and the promises appealed to them. Notwithstanding the suffering and poverty of the poor, unfortunate coal-miners they provided £1,000 for the purpose of assisting to fight the election campaign in New South Wales. It is now apparent that that money was got practically under false pretences, because nothing has been done to help the miners.

I have heard a lot in this House about extremism. I have never been an extremist, and have never preached an extreme policy. I have always been a member of the rank and file of the Labour party. I have never held an official position. I came direct from the rank and file to this chamber. I have always tried to combat the extreme elements in (the Miners Federation. There are a few extremists in that federation I admit, but they are not nearly so extreme as some honorable members of this House thought it necessary to be to secure election. I remember reading some time ago, in a book written by the present Minister for Health (Mr. Anstey), something to this effect: “If you desire to stop a man from being extreme, if you hear a man singing revolutionary songs outside your house, the best thing to do is not to stone him, nor to send for a policeman, but to bring him inside and give him a feed. If you put something in his pocket, his singing of revolutionary songs will become weaker, until it will cease altogether.”

That has proved to be true when applied to some members of this party, who have been brought inside the door and have had a feed and something put into their pockets. Their song of revolution and their militancy have become weaker, and we shall finally hoar them no more. I say further that this is a time when we should have strong men in the Labour party. I have here a poem which I have clipped from a newspaper, the sentiments of which can well be applied to the whole of those who sit on this side. It reads : -

Give its Men.

God give us men! A time like this demands

Strong wills, clear heads, true hearts, and ready hands;

Men whom the lust of office does not kill;

Men whom the spoils of office cannot buy;

Men who possess opinions, and a will;

Men who have honour; men who will not lie.

For while the rabble, with their narrow creeds,

Their large professions, and their little deeds,

Wrangle in selfish strife, Lo! Freedom sleeps,

Wrong rules the land, and waiting Justice weeps.

On the northern coal-fields of New South Wales justice weeps at the plight of the wives and children of the men who have had so long and bitter a struggle. Apparently, with the exception of myself, nobody on this side has the courage to stand up now as he stood up when he was in Opposition.

– It is not that which has actuated me. I am actuated by honest motives, and a desire to see that the people whom I represent are not crucified any further. Honorable memberswho sit on this side went through the coalfields with me, saw the poverty and suffering that exists there, and made speeches mentioning that the world looked on with horror when nations adopted the principle of the blockade, but that this food blockade on the miners and their children was infinitely worse. They then went throughout Australia advocating the cause of the miners. Why? Did they not wish the electors to believe that if Labour were returned to power that suffering would cease and there would be a resumption of work on a pre-stoppage basis? That is not what is now proposed. At 1 o’clock on the morning of the 22nd March last, I contributed to a debate that took place in this chamber. I was followed by the present Prime Minister (Mr. Scullin) who, in the course of his short speech, said -

A month has passed, and we have not had a further announcement on the subject. I suggest that a month is a long time for starving people to wait. The Prime Minister has repeatedly refused to acknowledge the responsibility of the Commonwealth to people who are in want. I tell him that if ever there was an occasion when the coffers of the Commonweal ti i should be opened it is now, for the purpose of granting relief to those 12,000 miners who, with their wives and families, are on the brink of starvation. I urge the Prime Minister to expedite the investigation into the industry.

As these miners have been used for political purposes, I ask this House to do something on’ their behalf. The Christmas sea- 30ii is fast approaching, and the least that we can do is to grant these starving women and children the sum of £25,000 to relieve them, from the distress from which they are suffering at the moment. There should not be a dissentient voice against that suggestion. I do not ask for this with a view to enabling the miners to continue the struggle. -E realize now- that it is a hopeless struggle) and their leaders ako know that it is useless to continue it. I am big enough to go back to them before the meetings take place and advise them riot to stand out any longer.

I wish it to be understood quite clearly that, although I have criticized the Government of which I am a member, I have no intention of crossing the floor of this House. I would never join any of the parties that sit opposite. There is no honorable member there who appeals to me. I may be a lone figure, yet even if I am kicked out of this party I shall join no other over there. But when politicians go on the hustings and say they can do something in the interests of suffering miners I defy any person to attempt to deprive me of the opportunity to say that they should at least stand up to their professions. It would have been far better for this Government to test the legality of taking over the mines and working them. Far better would it have been to die fighting than to go down without a fight.

In conclusion, I hope that the Government will take to heart this criticism that [ am levelling against them, and that, on any future occasion when they go on the hustings, they will not make rash promises. We frequently find that promises are made but are not fulfilled. I have not made a personal attack upon any member of my party. I believe that every one of them is as guilty as are our leaders. They used the coal position, they used the sufferings of these people, to get them where they are to-day; yet we find that, having landed the job, they are not prepared to take any action in fulfilment of their promises.

Mr McNeill:

– The honorable member should speak for himself.

Mr JAMES:

– I am speaking for myself. I know full well that there was not one speaker in the Labour cause who did not mention the prosecution of John Brown, or the position on the northern coal-fields of New South Wales, during the recent election campaign. Those subjects were the genesis of that election. The prosecution of John Brown could not be dissociated from the withdrawal of the Commonwealth from the arbitration field. We all knew that the award of the miners stood, so long as the Federal Arbitration Court was retained. In my opinion, behind the mind of the ex-Prime Minister (Mr. Bruce), when he brought down the bill for the abolition of that court, was a desire to get rid of the miners’ award, so that the Bavin Government’s proposals could be put into operation. While the award stood, the miners had to be paid in accordance with it; therefore, it was considered necessary by the late Government that the award should be removed. The election was held, but the award still stands. We claim to-day to be upholders of law and order, and yet we allow the mine-owners wilfully to break the conditions of that award, and by starving women and children to force the miners to accept a reduction in wages. That is the position, in a nutshell, so far as the Labour party is concerned. We have fallen down on the job. We have not carried out our promises to bring about a resumption of operations in the industry on a pre-stop basis. It is no use our telling the people in the future that we can do a certain thing, because they will not believe us. Look at the effect that our inaction will have on the Labour party in New South Wales. Our party will soon be seeking the suffrages of the people in that State. The State Government has power to cancel the leases of the mine-owners. Again, Labour candidates will tell the people that they will bring about a resumption of operations on pre-stop conditions, if they are returned to power; but the people will disbelieve them, because it was said by members of the party in this House that, if they were returned to power, work would be resumed on the basis of the conditions that obtained prior to the cessation of operations. I invite those honorable members who have some knowledge of the constitutional position, to answer a question. If certain ferocious animals were protected by law, and honorable members saw them devouring helpless women and children, or submitting them to a process of starvation, would they hesitate to take up a rifle and shoot those animals, regardless of the law ? No ; they would not. Then, I say that the Government should have proceeded to carry out its promise to bring about a resumption of work in the coal industry. That would have forced the owners to contest the constitutionality of its action. It would, no doubt, have been defeated in the High Court; but the party would, at least, have carried out its pledge to the best of its ability. It would have shown that its promises had been made in” all honesty of purpose.

Mr SCULLIN:
Prime Minis.ister · Yarra · ALP

– The honorable member for Hunter (Mr. James) has taken the responsibility of moving the adjournment of the House at this stage.

Mr Watkins:

– That is the right of every honorable member.

Mr SCULLIN:

Mr SCULLIN:

– I asked the members of the deputation whether I was correct in assuming that they did not want the prosecution to be proceeded with. I invited every member of it, including the honorable member for Hunter, to express his opinion, and not one of them urged that the prosecution be renewed. I shall now tell honorable members why they did not wish it, and it was a sound reason. They said, and I agreed with them, that no useful purpose could be served by launching another prosecution. They said that it would only hold up the proceedings. I know what the Deputy Leader of the Opposition (Mr. Gullett) will say. He will say that that was the same reason advanced by Mr. Bruce for withdrawing the prosecution. It does not lie with honorable members opposite, however, to make that easy retort, because their Government turned down the same argument when it was urged as a reason for withdrawing prosecutions against unionists. We are not in that indefensible position. We have never refused to listen to reason, nor pressed on with a prosecution inspite of the arguments advanced against it. We come into court with clean hands on this question. No proposition put up to this Government by the miners has been turned down. Some wild suggestions have been made in irresponsible quarters, but never by the responsible leaders of the miners. Suggestions have been made that we should seize the mines, whether or not we had constitutional power to do so. We were urged to seize them, acquire them, or take them over; all those terms were used at different times. I now wish to tell the people of Australia, through this Parliament, that so long as I am Leader of the Government, we shall not act in any matter unconstitutionally, nor shall we administer the law against one side and not against another in any dispute. We have throughout this dispute followed the path of conciliation. We have called conferences. We have taken every step possible to achieve peace, and I challenge the Opposition to say that we have done wrong. When members of the Opposition stand up in glee to support a motion for the adjournment of this House, and comment on the fact that only three on the Government side supported the motion, my answer to them is that honorable members who sit behind the Government have a sense of responsibility to the country. They know that the greatest struggle that has ever taken place on the coal-fields has reached a crucial stage, and that this Parliament ought not to butt into the negotiations in such a way as to destroy what chance of peace exists. Whatever regret I may have, and it is a very keen regret, that the men have been forced to compromise on the question of wages, as Leader of the Labour party in this country, and as a unionist, I stand behind the leaders of the miners in the action they have taken.

Mr GULLETT:
Henty

.- The Prime Minister (Mr. Scullin) apologized for the honorable member for Hunter (Mr. James) because of the feeling he introduced into this debate. He indicated that the honorable member for Hunter was deserving of the sympathy of this House. In my opinion’ those who really deserve the sympathy of the House are the members of the Government. I doubt whether the members of any other Government since this Parliament began have ever been placed in a. more degrading position than that in which the present Ministers find themselves in to-day. First, there was the extraordinary spectacle which this chamber presented when the honorable member for Hunter (Mr. James) rose to move the adjournment. He was supported from those richly filled benches behind the Government by only two honorable members, and those two, significently enough, represent coal-mining constituencies. It was the more extraordinary when we recall that when the honorable member rose to move a similar motion from this side of the House, every other honorable member of his party rose to support him. I rejoice that we on this side of the House were able to give him his opportunity. I am exceedingly pleased about it, not because I wish to embarrass honorable members on the other side, but because we, on this side of the House, learned during the last Par liament greatly to respect the honorable member for Hunter. Although he attacked us bitterly week after week, we came to have a complete trust in his sincerity, and we supported gladly to-day his motion for adjournment.

I do not quarrel with the Government in not openly opposing the tentative settlement on the Northern coalfields; we were ourselves working towards a settlement on those lines nine or ten months ago. We accepted the figures which Mr. Bavin depended on. We believed that a reduction in hewing rates was inevitable, and. we sought to bring it about by a contribution of Commonwealth money which would effect a reduction in the price of coal. Knowing that we had nothing to offer to the northern miners we made no false promises to them ; we were honest throughout. As was stated by us and as events have proved, the Commonwealth Government is powerless to do anything for the miners. But members of the present Ministry have not the political honesty to say so. On the contrary, they have exploited the unfortunate, workless, starving people on the northern fields, as no body of necessitous persons has ever been exploited before in an Australian election. The Prime Minister has stated that no extravagant promises were made to the northern miners, and that he will abide by constitutional practice. But what of the speech made by the present Treasurer (Mr. Theodore) at Muswellbrook, and reported in the Sydney Morning Herald of the 7th October?

Mr Scullin:

– What did the last Government say about Walsh and Johnson in a previous election campaign?

Mr GULLETT:

– Whatever was said by us we made no attempt to exploit starving people. I quote from the Sydney Morning Herald -

Mr. Theodore said that if Labour were returned, the mines on the northern coal-fields would be reopened in a fortnight. Asked how he would do this he said that the Commonwealth Parliament had sufficient power to bring about a resumption of work. The mere fact that a Labour Government was in office would soon move the owners to open the mines.

To-day the Prime Minister speaks of the constitutional limitations of this Parliament. At the conference of mine-owners and representatives of the miners, which the Treasurer convened immediately after he assumed office, the honorable gentleman frankly admitted that he had no policy orproposals to put before the delegates. The last Ministry at no time exploited the miners. If it failed them, it did so honestly. It never believed that the Commonwealth, with its present constitutional powers, had anything to offer to them. Representatives of the last Ministry did not approach the unfortunate miners, who, according to the honorable member for Hunter, are literally starving, and despicably wheedle £1,000 from them, their women and children, to spend on the election campaign. The Treasurer said that a Labour Government would open the mines within a fortnight of accepting office. Two months have elapsed and the Government has failed to do anything, and if the mines are reopened it will be upon almost the same terms as were available to the miners nine months ago.

I was amused by the Prime Minister’s explanations of the reasons why his party unanimously, I understand, decided not to prosecute John Brown.

Mr Scullin:

– I did not say that.

Mr Riordan:

– We did not decide anything of the sort.

Mr GULLETT:

– The reasons which, according to the Prime Minister, actuated his party in not prosecuting John Brown, are identically the reasons which prompted the last Government to withdraw the prosecution of that gentleman. To-day the present Government is in exactly the same position as was its predecessors. Nothing would have preprevented the Government from relaunching the prosecution at any time during the last five or six weeks, and bringing John Brown to justice, if it had wished to do so.

The honorable member for Hunter has my sympathy. I am glad that members of the Opposition were able to give the honorable member an opportunity to put the case of the miners before the House. Without our support he would have been gagged by the members of his own party.

Mr LAZZARINI:
Werriwa

.- Perhaps the most unfortunate feature of this motion is the opportunity it has afforded members of the Opposition to make paltry political capital out of the trouble in the coal-mining industry. The honorable member for Hunter (Mr. James), in moving the motion, has not exceeded his rights and privileges, but it is a strange anomaly that to-day he is supported by honorable members who stood loyally behind the last Government, which, in alliance with the Bavin Government of New South Wales, deliberately sought to destroy the economic conditions of the worker. They were prepared to do anything and everything to beat the miners and other workers into economic subjection. To-day those honorable members, by professing sympathy with the miners, are exploiting politically an unfortunate situation. TheDeputy Leader of the Opposition referred to the suffering of the women and children. That was mere exploitation; he and his supporters do not want the mines to be re-opened; neither does Mr. Bavin. Had Jack Lang been Premier of New South Wales the mines would have been opened long ago. The present trouble has been caused by the policy of Mr. Bavin, who was supported in every way by the last Prime Minister.

I regret the attitude of this Government. I realize the difficulties of the position; but if the Government owes a duty to anybody it is to the workers. Members of the Labour party declared repeatedly in this Parliament and on the hustings that the mine-owners had no justification for their action. The fact that the officials of the Miners Federation asked for a conference with the owners is beside the question. According to our bold utterances in Opposition and on the public platform, the mine-owners had no case, and the Government should have acted accordingly. If immediately after assuming office it had boldly declared that it would stand to the death behind the miners, as Mr. Bavin and Mr. Bruce showed plainly that they stood to the death behind the mine-owners, a psychology would have been created which would have led to the re-opening of the mines. The timidity of the Government has permitted the trouble to continue. If the Government does not represent the workers it represents nobody. Surely an uncompromising declaration of its policy should have been made. It is quite true, as the Prime Minister has said, that he and the Treasurer have met the miners and the mine-owners in conference. But so did Mr. Bruce; under the auspices of his Government, conference after conference was held. The very conditions mentioned by the Prime Minister to-day were thoroughly explored for nine weary months, and nothing was done. But we, sitting in Opposition at the time, challenged the assertion of the Government of the day that the Commonwealth authority was powerless, and we declared in this House and on the hustings definitely and clearly that if we were elected to office the mines would he re-opened. For my own part, although representing a mining constituency, and although three-fifths of my election meetings were held in mining centres, I did not on one occasion promise that the mines would be re-opened if Labour attained office. At one meeting the , chairman, who was a prominent official of the South Coast Miners Association, prevented two_ miners from asking me a question on that subject, because lie said that no undertaking could he given. But I was told when the vote of confidence in me was moved, that a definite promise had been gratuitously given on behalf of the Labour party that the mines would be re-opened. Men, women and children who had been down in the depths of economic hell for five or six months were buoyed up by this promise; it was like a gleam of sunshine through the economic mist, and they were inspired to work energetically and enthusiastically for the return of labour candidates. They achieved a wonderful victory; Labour is in office, but if the mines are re-opened it will be upon conditions that the miners could have had on the very first day of the lockout.

Mr Curtin:

– No; they were asked to accept a reduction of ls. per ton.

Mr LAZZARINI:

– The difference between the ls. and the 9d. now offered could have been the subject of negotiation. If they accept the conditions which are now recommended to them, they will be surrendering a fundamental principle of industrial unionism; they will be agreeing to victimization by the employers, which was not one of the conditions of the proposals first made to the miners. It is not too late for the Government to save the situation. Let it pass through this Parliament before Christmas a bill for a referendum to give to the Commonwealth Parliament complete industrial powers, promising that if those powers are granted the dispute in the mining industry will be settled as it should be. Some months will have to elapse before a referendum can be taken, but despite what the miners may be saying to-day in their disappointment, they still trust this Government, and if the Prime Minister will give an undertaking to put into operation that plank of our platform which provides for seeking fuller industrial powers for the Commonwealth Parliament, I believe that the mines will be re-opened almost immediately.

If the Government asked for the power to take these mines away from the avaricious mine-owners, who not only are exploiting the miners to-day, but exploited the country to the extent of between £7,000,000 and £10,000,000 during the war years, I believe that it would be given it. A move of the nature I have suggested would be acclaimed by the miners everywhere. Let me assure honorable members opposite that these men still believe in this Government; but it would be wise for the Prime Minister to make provision before Christmas for the taking of the proposed referendum early in the new year. The Prime Minister has stated that many wild proposals had been made, but none had been accepted. I submit that the proposal that I have made is sound and worthy of acceptance.

One other thing that should be done is to terminate the investigation of that abomination, called a royal commission, which is at present inquiring into the coal industry in Sydney. It is nothing but a frame-up between the Bruce-Page Government and the Bavin Government. Its object is to prevent the people from learning the true history of coal-mining in Australia. Its investigations are a travesty upon justice. The commission, it is well known, allowed Mr. John Brown to include in his statement of the costs of hewing coal the expense of upkeep of three mines which had not worked -for twelve months. He was also permitted to include in his figures a considerable amount for old rusty trucks, which had been in disuse for years. For every reason, the present royal commission should be terminated, and a body in which the public would have confidence set up in its place to make a speedy inquiry into the true position of the industry, the cost of production, the extent of the profits, and the degree to which stock has been watered and capital inflated.

If, coincident with the making of such an inquiry, a referendum were held with the object of obtaining full industrial powers for the Commonwealth, the miners would accept the conditions which had been laid down, because they would know that the situation could only last for three or four months. It is high time that the Government took over the coal-mines and worked them as a national asset for the benefit of the nation. Naturally, the coalminers are disappointed that their nine months’ struggle has been fruitless, and in their present state of mind they may pass certainresolutions; but their heart is sound - as sound as ever it was. I beseech and implore the Prime Minister to take action along the lines I have suggested. If he does so, the well-being of the coal industry will be assured. The coal-miners know that the Government is composed of earnest-minded men, who will be strong and capable enough to do what is necessary to cure the country of the economic dry rot from which it is suffering, and to bring in an era of prosperity; but I ask that speedy action should be taken to this end.

Mr BERNARD CORSER:
Wide Bay

– The honorable member for Werriwa (Mr. Lazzarini) has tried to find excuses for the failure of the Government to restore harmony in the coalmining industry, but the object of the honorable member for Hunter (Mr. James), in introducing this discussion, was to condemn the Government for having broken its election pledges and to get something done immediately to relieve the distress of the miners and their wives and children. By assuring us that the heart of the miners was still sound, the previous speaker made it quite clear that he was more concerned about how the miners would cast their votes in the future than about relieving their distress at present. It cannot be gainsaid that every member of the Labour party opposite who was a member of the last Parliament must bear responsibility in no small degree for the continuation of the coal dispute, for they have not fulfilled the promises which they made. They led the miners to believe that it was only necessary to place a Labour Government in office to restore peace in the industry. During the last Parliament, the Federal Parliamentary Labour party, through its secretary, Mr. Norman Makin, forwarded to the unions concerned, the following motion -

This meeting of the Federal Parliamentary Labour party congratulates the rank and file of the miners and timber workers on their splendid unity against the general attack on wages and hours.

It is strange, therefore, that within the first week of the assumption of office by this Government, the timber workers of New South Wales were advised to accept the increased hours proposed in the Lukin award. Now we find that the coal-miners have been called upon to accept a reduction of their wages. This does not seem to indicate a fulfilment of the promises made to the electors by the Labour party during the last election.

At a meeting in the Sydney Town Hall on the 18th February last, the present Treasurer (Mr. Theodore), moved the following motion -

That this meeting condemns any increase in the working hours and any lowering of the wages and conditions of the workers in the Commonwealth and pledges itself to support the timber workers in the present fight.

– I did not.

Dr EARLE PAGE:

Mr Prowse:

– What power did the last Government have more than this one?

Mr WATKINS:

– I did not say that the last Government had the power, but it refused to take it. We were promised a constitutional session, and we were merely given a constitutional commission. This commission spent its time examining people all over the country who did not know anything of the Constitution. I can say this much for the present Government: it did meet the miners’ representatives; it did call a conference in an effort to achieve a settlement; and a settlement was arrived at which, unfortunately, was a bad one from the point of view of the miners. Whether the Government could have done as the Bruce-Page Government did in connexion with other industries, and flout the Constitution in order to carry out its will, is a matter for the Government itself to consider. I maintain, however, that it was wrong to promise things which it could not carry out, and thus mislead the people. For us who know the facts of the situation, it is almost sufficient to make us shed tears when we reflect upon the settlement that has been reached. We in Australia are living like prodigals in a land of plenty; but the proper way to rectify things is not to insist upon a reduction of wages, and to force the acceptance of such terms by economic pressure. Any attempt to do that will only recoil upon all governments, both State and Federal. I regret that the leaders of the Labour party made the promises to which I refer. I do not blame them for not keeping promises which were really impossible of fulfilment, but they should have known that before making them. We know our constitutional limitations; we know that we have not the power to do the things which were promised. To-day, however, the people are desirous of giving this Parliament supreme power to deal with disputes of this kind. The Government would be well advised to take the advice of the honorable mem ber for Werriwa (Mr. Lazzarini), and submit to the people for their approval a proposal that the Commonwealth Parliament should have power to legislate on all important industrial matters.

Mr GARDNER:
Robertson

.- I congratulate the honorable member for Hunter on moving this motion. I think that he rather resented the support he obtained from this side of this House, but he would not have had an opportunity to state his case had it not been for the assistance of honorable members of the Opposition. I agree that the Government is probably in a more humiliating position than any other Commonwealth Government ever found itself in. The Government, however, cannot blame the honorable member for Werriwa nor the honorable member for Hunter for condemning the making of promises which could not be kept. A very distinguished member of the Government, an ex-Premier of Queensland, the present Federal Treasurer and aspirant for the position of Prime Minister, came into my own electorate and told the people that if a Labour government were returned to power the mines would be opened in a fortnight. Such a statement is not in keeping with his responsibility as a public man, and it is no wonder he has remained silent on this matter. We cannot believe that so prominent a man, and one so well informed on public affairs, could really have believed what he said. Fortunately, not many people in my electorate believed him, and I was returned by a comfortable majority. The only action taken by this Government to settle the coal dispute has been to hold a conference and to refrain from prosecuting John Brown. Both those things were done by the last Government, and the reason advanced by Mr. Scullin for not prosecuting John Brown was the same reason as Mr. Bruce advanced. I should like to see more evidence of sincerity on the part of members of the Government in their dealings with industrial matters.It is a pity that trade unionism has become so closely allied with politics. It would be better for the workers if it had been otherwise. I do not think that the attack of the honorable member for Newcastle on the Premier of New South Wales was justified. Mr. Bavin suggested that the parties should abide by the finding of the royal commission. There was to be a reduction, not only of wages, but also of profits. Moreover, the steel works in Newcastle were to reduce the price of their commodities, which would result in an increase in employment throughout the district.

Debate interrupted under Standing Order 119.

page 592

QUESTION

TAXATION ADMINISTRATION

Mr CROUCH:
CORANGAMITE, VICTORIA

asked the Treasurer, upon notice -

Has the amalgamation of the Federal and State Income Tax Offices led to economy without loss of efficiency?
Is there any reason why the State officers who collect probate duties should not also collect the federal deceased persons’ estate duties, and why these officers should not be similarly amalgamated?

Mr THEODORE:
ALP

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

Yes.
Yes. The provisions of the various State laws on the subject are so diverse that any one form which could be devised to enable the whole of the information required by the various acts to be supplied would be so complicated as to defeat its own ends. The suggested amalgamation would necessitate the establishment in each State of a staff, expert not only in the State act, but in the acts of all other States and the Commonwealth estate duty. A much larger staff would be required than is now required. The suggestion would be more expensive than the existing arrangement.

page 592

QUESTION

DEFENCE LANDS

Sale of Sand

Mr TULLY:
through Mr. Curtin

asked the Minister for Defence, upon notice -

Is it a fact that the practice of getting sand by carriers from the George’s river (Liverpool manoeuvre area) has been suspended?
Is it a fact that at no time was sand sold to carriers?
Is it a fact that the Commonwealth at no time claimed the sand in the George’s river ?
Is it a fact that only a trespass fee was charged to carriers?
Will he cause an inquiry to be made into this matter in order to discover the real reason for preventing carriers from taking sand from George’s river at Liverpool Manoeuvre area?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

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

Yes; in cases in which trespass on Commonwealth land was involved.
Yes; except for small quantities from Commonwealth land.
Yes.
Yes.
The damage by cartage across Commonwealth lands cost more to repair than the amount received from carriers. Proposals for sale of sand from Commonwealth property or licences to trespass to recover sand from river are now under consideration.

page 592

QUESTION

AMALGAMATED WIRELESS (AUSTRALASIA) LIMITED

Mr CROUCH:

asked the PostmasterGeneral, upon notice -

What amounthas the Commonwealth paid into Amalgamated Wireless (Australasia) Limited?
What directors represent the Commonwealth; when were they appointed and last re-appointed, and by whom?
What salaries are paid to the directors?
Has the Commonwealth received any profit from its investment, and, if not, why?
Has the parent company in England paid dividends, and what proportion of its expenses are paid by the Australian company?
Are the balance-sheets and reports of the company available to members of this House?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

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

The Commonwealth has contributed £350,000 14s. towards the capital of the Amalgamated Wireless (Australasia) Limited.
Sir George Mason Allard, Sir William Vicars, and Senator J. D. Millen. Sir George Mason Allard and Sir William Vicars were appointed in 1922 by the Government of the day, and Senator Millen was appointed in 1924 on the death of Mr. J. Stinson who had previously been a Government director.
Each of the Government directors receives £300 per annum, with the exceptionof Sir George Mason Allard who, as chairman, receives £500 per annum.
The Commonwealth has received £48,528 in dividends.
The Amalgamated Wireless (Australasia). Limited, is an independent Australian company. There is no parent company in England.
The company publishes annual reports and balance-sheets, which can be made available for perusal by honorable members.

page 593

QUESTION

RURAL CREDITS ADVANCES

Mr FRANCIS:

asked the Treasurer, upon notice -

What amount was advanced under the Rural Credits Department of the Commonwealth Bank in each of the years 1926-27, 1927-28, and 1928-29?
What primary products were assisted in each year, and what amount was advanced in respect of such products in each year?
What sums, if any, were advanced in the year 1928-29 for the erection of warehouses or storage facilities for primary products?

Mr THEODORE:
ALP

– The information is being obtained and will be furnished as soon as possible.

page 593

QUESTION

AUSTRALIAN ARMY MEDICAL CORPS

War Gratuities

Mr CROUCH:

asked the Treasurer, upon notice -

Were war gratuity bonds paid to members of the Australian Army Medical Corps?
Did Mr. A. E. Mansfield, No. 19,332, Army Medical Corps, enlist 29th March, 1916, serve until August, 1916, and receive a £5 gratuity bond ?
Did he again enlist 20th September, 1917, serve for 315 days, and receive medals and the Australian Imperial Force Badge of Service?
Has he received a gratuity for his later service; and, if not, why not?
Have others in similar positions to Mr. Mansfield received gratuity bonds?

Mr THEODORE:
ALP

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

War gratuities were paid under the War Gratuity Acts to members of the Australian Army Medical Corps, Australian Imperial Forces.
A. E. Mansfield enlisted in the Australian Imperial Forces on 1st May, 1916, and was discharged, medically unfit, on 15th August, 1916. He received a war gratuity of £5 7s. in respect of this service.
A. E. Mansfield enlisted again on 20th September, 1917, and was discharged on 8th March, 1918. He received the British War Medal, Victory Medal and Australian Imperial Forces Badge of Service.
Ex-Private Mansfield did not receive a war gratuity in respect of the second period of service. He was found unfit for active servicebut fit for duty as a hospital ship orderly, and he was enlisted for that purpose. The prescribed authority under the War Gratuity Acts, the final arbiter in regard to war gratuity claims, has ruled that exPrivate Mansfield’s services did not warrant the payment of a war gratuity.
A few members were paid war gratuities in error in the early stages of the administration of the grant.

page 593

QUESTION

NAVAL AND MILITARY COLLEGES

Dr. MALONEY (through Mr. C.

Riley) asked the Minister for Defence, upon notice -

With reference to the particulars asked for on the 19th September, 1928, by the honorable member for Melbourne (Mr. Maloney), will the Minister, from the information that is in his department, bring such particulars up to date as requested in the following questions: -

What was the annual cost of the Naval College at Jervis Bay for the last financial year ?

How many scholars attended during such year?

What is the total number of teachers, officials and employees engaged in connexion with such naval college?

What is the total cost of this institution to date?

How many scholars have graduated through the college to date?

How many of such graduates are at present in the Commonwealth Service?

What was the annual cost of the Military College at Duntroon for the last financial year?

How many scholars attended during such year?

What is the total number of teachers, officials and employees engaged in connexion with such military college?

What is the total cost of this institution to date?

How many scholars have graduated through the college to date?

How many of such graduates areat present in the Commonwealth Service?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions arc as follow : -

£64,752.
Seven civilian masters. The naval complement is fourteen officers and 104 petty officers and men. There are 22 temporary civilian employees.
£936,726.
£52,778.
Teachers, 10; other Government employees, 88.

309 Australians,60 New Zealanders.
1. 42 made the supreme sacrifice in the war of 1914-18.

page 594

QUESTION

REDISTRIBUTION OF ELECTORAL BOUNDARIES

Mr MACKAY:

asked the Minister for Home Affairs, upon notice -

Whether he will supply a list of Commonwealth Electoral Divisions in each State where the enrolments are in excess of the quota specified by the Electoral Act?
Is it a fact, that a redistribution of electoral boundaries is contemplated in the near future ?

Mr BLAKELEY:

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

The information is contained in the attached statement.
The matter is under consideration.

page 595

QUESTION

FEDERAL CAPITAL TERRITORY

Medical Treatment of ex-Soldiers.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Minister for Repatriation, upon notice -

. To what State are returned soldiers living in Canberra attached for medical examination and/or treatment ?
Is such medical treatment available in Canberra; if so, where?
If no medical treatment is available in the Federal Capital Territory, will provision be made for such treatment?

Mr ANSTEY:
Minister for Health · BOURKE, VICTORIA · ALP

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

New South Wales. 2 and 3. Treatment is available for returned soldiers, resident in Canberra, for disabilities arising out of their war service, as under: -
1. as out-patients at the Repatriation Local Medical Officer’s surgery;
2. as out-patients at the Canberra Hospital ;
3. as indoor patients at their own home, where it is impossible to transfer them to hospital; or it is impossible on account of their illnesses for them to attend for treatment at the local medical officer’s surgery :
4. in some cases, as indoor patients at the Canberra Hospital;
5. in other cases at the Repatriation General Hospital, or other institution in the Sydney area.

page 595

QUESTION

REPATRIATION COMMISSION

Transfer to Canberra

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Minister for Repatriation, upon notice -

When is it expected that the Repatriation Commission will be transferred to Canberra?

Mr ANSTEY:
ALP

– No date has been decided.

page 595

QUESTION

ROYAL AUSTRALIAN NAVY

Oil Supplies

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– On the 28th November, the honorable member for Reid (Mr. Coleman) asked the following questions, without notice -

Will the Minister for Defence take steps to ascertain whether the Navy Department made a contract with the Shell Oil Company, in January, 1929, to supply oil fuel to meet fleet requirements, whether that contract expires in December next, and whether oil is not being delivered under it in overseas and foreign ships, with Asiatic and other foreign crews? Further, will he give consideration to ensuring that the products of the Commonwealth Oil

RefineriesLimited, , in which the Commonwealth has a controlling interest, are utilized for defence purposes?

I am now in a position to inform the honorable member that -

Tenders were invited in October, 1928, for supplies of oil fuel for the Navy. The Commonwealth Oil Refineries tendered for Fremantle only, and their tender was accepted. The Shell Oil Company’s tender was accepted for Sydney, Brisbane and Adelaide (there was no restriction as to the crews to be employed on their ships). The Commonwealth Oil Refineries have a contract for suppty of oil fuel at Melbourne, which expires on 31st December, 1929. Fresh tenders are being invited for supplies for 1930, and a tender from the Commonwealth Oil Refineries will receive full consideration.

page 596

QUESTION

CITIZEN FORCES

Withdrawal of South Australian Equipment

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– On the 21st November, the honorable member for Adelaide (Mr. Yates), asked the following questions : -

Is it a fact that the locks and bolts of all rifles and Lewis guns, together with ammunition, were collected and locked away in the Keswick Military Barracks, in South Australia, in accordance with issued orders, a few days prior to the recent federal election ?
If so, who issued such orders, and what was their intention ?

I am now in a position to inform the honorable member that -

Three outlying units were ordered to return bolts and rifles and Lewis guns not required for home . training, to the Ordnance Stores, Keswick Barracks. Ammunition is not stored at the drill halls.
The orders were issued by the Commandant, 4th District Base, who informed the Chief of the General Staff in general terms of the action taken. It is understood that the intention of the order was purely precautionary.

page 596

PAPERS

The following papers were presented : -

Customs Act - Proclamations prohibiting the Exportation (except under cetain conditions) of -

Flour (dated 27th November, 1929).

Stud Sheep (dated 27th November, 1929).

Lands Acquisition Act - Land acquired at Ourimbah, New South Wales - For Postal purposes.

Public Service Act - Appointment of D. S. Bull, Department of Trade and Customs.

page 596

COMMONWEALTH BANK BILL

Second Reading

Debate resumed from 28th November (vide page 430), on motion by Mr. Theodore -

That the bill now be read a second time.

Dr EARLE PAGE:
Cowper

.- The bill, though short, contains proposals that may materially affect the future prosperity and stability of Australia. Therefore it should not be dealt with in a casual, offhand and hurried fashion; all interests and factors concerned should receive the fullest and most exhaustive consideration, and sufficient time should be allowed the House to make a wise decision. I have already indicated the course which I think should be adopted by giving contingent notice of my intention to move, after the second-reading is carried, that the bill be referred to a select committee to inquire especially into the probable effect which the embargo on the free export of gold will have on the maintenance of the gold standard in Australia. The Treasurer (Mr. Theodore) described a few of the symptoms of the existing conditions, but did not attempt to get down to root causes in order that he might make an accurate diagnosis. We are entitled to hear his diagnosis before we accept his prescription ; treatment without an accurate diagnosis may do more harm than good. The Commonwealth and the States owe about £520,000,000 in Great Britain, and the comments which have already appeared in the newspapers in the Old Country convey the impression of financial authorities there that these proposals are likely to be injurious rather than beneficial. The Financial Times is reported in the Argus of Saturday last as having described one passage in the Treasurer’s speech as carrying a threat of direct official interference in financial matters which definitely accords with the socialistic view that banking policy is a national matter, and as such should be directed by the Government, but that journal added, “ this is likely to be viewed elsewhere with considerable misgiving.” The Financial News, whilst agreeing that the concentration of gold in the vaults of the Com- monwealth Bank is in full accordance with modern principles, says -

Everybody agrees that the concentration of gold in the hands of the Commonwealth Bank is a highly desirable development, in full accordance with modern principles. What is open to criticism is the Ministry’s intention to take power to suspend the free export of gold, or, at least, to reserve the right to veto any gold shipment of which it disapproves. . . . Adverse conditions will not last for over; in fact, there is reason to hope that there will be a change for the better In- fore long, so that it would bo a very shortsighted policy to take emergency measures of a nature that would react permanently on thu country’s credit.

Therefore, I think the House would he wise to accept my proposal to refer the bill to a select committee. The outstanding feature of Australia’s position to-day is the huge excess of imports, and the deficiency of exports, with resultant exchange difficulties. One potent cause of the excess of imports is the relatively high price level in Australia, especially in relation to what are usually described as basic wage articles. The Commonwealth Statistician estimates that the prices of these articles are 23-J per cent, higher than are the prices in Great Britain. High price levels attract imports, which in turn make the tariff ineffective, and the decisions of the Arbitration Court valueless as a means of improving the standard of living. Another result is the added difficulty of producing competitively those commodities which must be sold in the markets of the Old World at the lower prices obtaining there. Thus we find ourselves in a vicious circle. The burden of high prices in respect of basic wage commodities discourages the production of exportable commodities. When less wealth is produced, less money is deposited in the banks. If we continue spending on a high level, bank advances become disproportionate to the deposits. According to the annual statement published in the Banking and InsuranceRecord on Friday last, bank advances increased last year by £30,000,000, while the deposits increased by only £10,000,000. The safe proportion of deposits to advances is roughly ten to eight, and on that basis the advances last year instead of being £30,000,000 should have been not more than £8,000,000.

The evil of deficient export production and adverse exchange can be overcome in several ways. We can work harder and produce more goods for export, and in that way counterbalance any loss in price value, or we can borrow money abroad to make up for the loss of revenue from exports. The third alternative is to redress the adverse trade balance by the export of gold. At the present time our people do not seem inclined to work harder than before, and the Treasurer has found that we cannot borrow in other countries on advantageous terms; consequently we are forced to adopt the third alternative of exporting gold. If the export of gold restricted the basis and volume of credit, as it would automatically if there were no governmental interference, the economic position would be automatically corrected, because contraction of credit would be followed by lower price levels with a consequently diminished attraction for imports and greater production for export. It is worthy of notice that f lulling prices have always benefited the workers more than rising wages. That was particularly apparent in 1922 when, despite the fact that the basic wage was reduced, the effective purchasing power of money became greater because of the diminution of prices. It is a well known “ economic fact that, when prices rise, wages lag slightly behind. On the other hand when prices fall wages are slower in accommodating themselves to the change, with the result that for a time at any rate they have greater purchasing power. Australia has never adjusted its economic position since the war, as many other countries were forced to do in the years 1920 to 1922. Two factors prevented us from getting down to bedrock ; the first was the artificial inflation caused by the issue of notes to pay the war gratuities given by Mr. Hughes; and the second was the Massy Greene tariff of 1920, which tended to raise the cost of commodities. Australia, like other countries, suffered a definite waste of capital during the four years of war, but while other countries have adjusted their positions accordingly, Australia has not done so to anything like the same extent.

Mr CROUCH:

– Waa not the last Government responsible for that?

Dr EARLE PAGE:

– The factors I have mentioned were not brought- into existence by any Government. The sooner we understand that economic problems cannot be resolved by political interference, the better for the community. I am not making a party political speech, but am trying to deal with the subject in the best interests of the country. The subject should be above party considerations, for it concerns, not this Government or that, nor this party or that, but the welfare of all the people. If we deal with it on sound lines the Commonwealth will advance, but if we deal with it unwisely we can never progress.

When the Chancellor of the British Exchequer (Mr. Phillip Snowden) discussed these issues in October, he pointed out how involved they were, and pleaded for an attentive hearing, so that he might make himself understood. I also wish to place the situation clearly before honorable members. In order to do so I propose to use one or two illustrations.

Let us assume that before the war “ a man or a nation had a capital of £10,000 invested at 7 per cent. His income was £700, and he lived at a certain standard of comfort within that income. As the result of the wastage caused by the war he lost £2,000 of his capital. If he still only received 7 per cent, from the remainder his income would be only £560 instead of £700. In those circumstances he could do one of three things. He could re-adjust hia standard of living to his smaller income; or he could work harder and use his capital more profitably and so possibly make the £8,000 earn 9 per cent, instead of 7 per cent., which would return him the same income as formerly; or he could continue to live under the old conditions at the rate of £700 a year by drawing upon his capital to the extent of £140 a year. The last-mentioned course would bring him into difficulties sooner or later.

I suggest that Australia has been following this course. She has been spending freely. Her low rate of interest has encouraged her people to indulge ‘ in luxuries which possibly they could not afford. Prices have been maintained at a high level and imports have been attracted to the country. The conditions have been such that it has been impossible, under our Arbitration Court system, to give wages the same purchasing power as formerly. Nominal increases have been granted, but they have not been affective. High prices under our tariff have also tended to discourage exports. Had we been wise we would have altered our policy, decreased our price levels by careful control of credit and discouraged the buying of luxuries and unnecessary goods from overseas.

The remedy proposed in the bill is co concentrate all the gold in Australia in the hands of the Commonwealth Bank and then use it as an export, with the object of correcting our adverse balance of trade. If we do no more than that we shall not remedy the position. The mere taking of the gold from several places and putting it into one place will be of no use if we continue to spend just as much as formerly. In addition to concentrating and using gold to correct trade balances, we ought to do something to correct the internal position.

I may be pardoned for employing a medical illustration to assist us to understand the position. The symptoms of a man suffering from diabetes are a tremendous hunger and thirst. A sufferer from this complaint desires to be eating and drinking all the time: and at the same time passes an abnormal quantity of sugar. The result is that he does not get any improvement in his health from his food, but day by day grows weaker and weaker. If he does nothing but eat and drink he can never hope to correct his disease, but * if he undergoes a course of internal treatment with the object of curing the cause of his disease, he will be able to retain the sugar in his body, and will gradually grow stronger.

I suggest that it will not be sufficient for us merely to deal with the symptoms of the economic disease from which we are suffering; we must get to the root of it. It is not sufficient for us to do only what the Treasurer suggested - and, however wise the idea may be, I disagree with the method be proposes to adopt in this regard - we must also attempt to correct our internal disorders. I believe that the only way this can be done is through the bank exchange rate. The speech of the British Chancellor of the Exchequer was so apt on this point that the Treasurer agreed to the suggestion that I made on Friday to reprint it for distribution among honorable members. Mr. Snowden dealt with several points that I wish to elaborate. He was putting, not only his private view, but also the official view of the British Treasury. In the course of his remarks he stated that for several years Great Britain had been steadily losing her gold. She was losing it to America because of the high rates that were being paid by speculators in New York. She was also losing it to Germany freely, because Germany was doing her best to rehabilitate her municipalities. Some of these municipalities were offering as much as 9 per cent, for the money that they needed, and the German Reserve Bank discount rate was 7 per cent. She was losing it also to France, because France was doing her best to call back the capital she had lost in overseas investments during her period of inflation. The operation of all these factors caused Great Britain to lose about £4)0,000,000 in gold lust year. The action taken to prevent further loss was to raise the bank rate. The British Chancellor went on to observe that the effect of action taken to correct a particular financial situation was not always what was expected, and added that the credit of the British Government stood just as high that day as it had stood before the bank rate was raised a week earlier.

It might have been expected, for instance, that an increase in the bank rate would adversely affect employment, but that was not the British experience. Mr. Snowden pointed out that three days before the bank rate was raised last February the number of registered unemployed was 1,369,000. Two months later it had dropped to 1,178,000, and it had continued to fall except for a slight seasonal increase in August. A week prior to the date of the Chancellor’s speech, the number of unemployed was 200,000 Jess than at any time since the bank rate was raised in February. He proceeded -

For five months before the bank rate was raised in February the volume of employment has been constant at 104. After the bank rate was raised, it began to rise, and had risen continuously up to the present time, standing last month at the index figure of 107.

Mr. Snowden went on to say that it might have been expected that the increased rate would affect export trade, but that had not been the case. His remarks under that heading were as follows : -

In February, the export of domestic production was £53,605,000 ; in August, the figure was £03,000,000. He did not wish to convey the impression that he had produced those figures to show that improvement was due to the rise in the bank rate. But, on the other hand, they showed that the disastrous results which were then foretold certainly did not appear to have been realized.

Another good effect of a higher bank rate was the discouragement of speculation.

Mr Theodore:

– “Where will all this discussion lead us?

Dr EARLE PAGE:

– My object in making these remarks is to urge the Government to let the bank rate and the exchange position settle themselves without any governmental interference.

Mr Theodore:

– There is no suggestion of interference.

Dr EARLE PAGE:

– I should like to see the bill passed in such a way that there could be no possibililty of political control over our trade or currency or gold reserves. There can be no doubt that the retention of our high price levels and low bank rate has encouraged importations and has led our people to spend more money on luxuries than should have been spent. Eighteen months ago, New Zealand was in a position something like our position of to-day. Last year, our bank advances increased by £30,000,000 and our deposits by only £10,000,000, which ratio is altogether out of proportion. In March, 1927, it was found that the advances by the New Zealand banks were seriously in excess of the deposits. The bank rate was then raised by -J per cent. The result was that by June, 1928, the deposits were £9,500,000 in excess of the advances. I submit that we could achieve the same desirable end by the same means; but it should be done by the banks without any government interference.

As I have already pointed out, the position in Australia is that the price of the British basic wage articles is 23£ per cent, above the price in Great Britain. “We have been indulging in very free spend- ing. It has been private as much as public spending, for the people have been buying luxuries. This has been one of the ill-effects of keeping our interest rate low when trade conditions were against us. But we cannot continue to regard with equanimity the fact that our bank deposits have diminished in proportion to our bank advances. There are three things that we can do to correct the situation. We can concentrate our gold; but, if the only result of our doing so is that we shall look upon it, and not use it, we shall be no better off. Some countries have collected as much gold as possible and not used it. If it is used to assist our national credit or our foreign monetary position, it undoubtedly will be of extreme value. Our position call also be assisted by exporting the gold if necessary, to ease our exchanges ; but with that export there ought to be an automatic contraction of both the basis and the volume of credit. If that course is followed, as it will be if there is no government interference, our position will be righted automatically. The only difficulty will be caused by those who are engaging in speculation or risky ventures. The effect on those sound industries which are essential to the progress of this country, and which provide the great bulk of the employment that is offering, will be to make available larger advances, because the higher rates offered for deposits will attract more money to the banks. The result should be a repetition of what has happened in England - an increased employment ratio in Australia. I admit that the stupendous tariff that has been put on by this Government in the last couple of weeks will have a tendency in the opposite direction, because automatically price levels will be kept up. It is a matter of history that for a couple of years after the imposition of tariffs on such a large scale the resultant higher price levels have tended to increase unemployment. In the year which followed upon the bringing down of the Massy Greene tariff, the unemployment percentage rose to 11.1, which was the highest in the history of Australia since federation. But leaving that aspect out of consideration, if what I have outlined is allowed to take place without government interference, we shall automatically right our position and be rendered capable of encouraging production and increasing employment.

Let us now examine the methods that have been suggested by the Treasurer (Mr. Theodore). In the first place he intends that all gold shall come into the hands of the Commonwealth Bank. I am the more interested in this proposal of the honorable gentleman, because in the last Parliament and during the recent election campaign I was castigated for having attempted to make the Commonwealth Bank a central bank, or a bankers’ bank. If the Commonwealth Bank holds all the gold in Australia, and is the sole bank of issue, nothing can prevent it from being a central bank. Therefore, although the Treasurer is adopting different methods he is aiming at the same goal that I sought to reach. I desired to make the Commonwealth Bank a central bank by evolution and practice, not by compulsion. I anticipated that if we provided machinery that would enable it to function as a central bank, ultimately, and automatically it would do so with the goodwill of the other financial institutions in Australia. The Treasure]1 desires to take a short cut, and to bring about this condition of affairs by compulsion. It is on that ground that I join issue with him. In matters of defence the Labour party says that there shall be no compulsion, and that one volunteer is worth nine or ten pressed men. I venture to suggest that one financial agent who voluntarily comes forward to help our financial position is worth nine or ten pressed agents, and that one sovereign given voluntarily to the central reserve will be of very much greater value to the credit and trade of Australia than would one that was taken compulsorily from the people who own it. The effect of the arbitrary commandeering of gold and the prevention of its export except by the executive authority of the Treasurer, whatever may be the motives behind or the immediate result of such action, will tend to generate in the community and the world generally the fear of an attack upon the fundamental basis of our national credit, and will make it possible to tamper with the currency in a way that I do not think the honorable gentleman desires.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– It is a very dangerous power to give.

Dr EARLE PAGE:

– Very dangerous, indeed. The Labour party has frequently been blessed with good ideas; but has translated them into action in such a way that their value has been destroyed. When the ‘last Government considered the constitution of the Commonwealth Bank, it examined the whole position very carefully, and decided to create machinery that would enable that bank to function as a central bank and to leave evolution to do the rest. In the belief that, if the Commonwealth Savings Bank remained part and parcel of the general bank, fear might be entertained that certain of its funds might not be sufficiently liquid to be freely available, the two institutions were separated. If it will be advantageous to the trade of Australia to have a further re-arrangement of. the functions of the Commonwealth Bank into a central banking bank and a trading branch, and the Treasurer will come down with proposals to separate them, a great deal of my objection to the requisitioning of gold will disappear, and he will have my hearty support in any endeavour to place the measure on the statute-book. If it was made abundantly clear that the gold which is to flow into the coffers of the Commonwealth Bank when altered in such a way is to be ear-marked exclusively for trading purposes, and not to back up a further issue of notes, and that the control of the bank is to be non-political, we should be able to give the Treasurer some support. If he took action in that direction he would improve greatly the financial machinery of Australia, and improve it in the direction which experience proves as wise.

There is one point that the honorable gentleman should clear up. During the election campaign the honorable member for South Sydney (Mr. E. Riley) stated that one of the first acts of the Labour party if it were returned to power would be to give the present directors of the bank notice of the termination of their engagement. That statement was given wide publicity. When a judge has been appointed by one government, he does not vacate his office upon the accession to power of another government. The Government of which the present Commonwealth Treasurer was Premier appointed judges who still hold office despite the fact that another Government has come into power in Queensland. Public officials who are performing their duties satisfactorily should be absolutely free from political interference. The Treasurer should take an early opportuill’ Y to dissipate the impression caused by ihe statement of the honorable member fc” South Sydney.

The honorable gentleman has pointed to the English practice as a precedent for this proposal, and has urged that we should follow it as closely as possible. In Great Britain the £1 note has been made individually inconvertible, the object being to avoid the loss that results from the use of gold as a medium of ordinary currency in the hands of the people; but, if any person or institution has an amount of not less than £1,600 that he or it wishes to use for trading or industrial purposes, or to send abroad to stabilize his or its foreign monetary position, that value in gold can be procured from the Bank of England. To that extent, therefore, there is a convertible note in existence in the United Kingdom. That law was brought into force by the Gold Standard Act,. 1925. There is also in force the Currency and Bank Notes Act, 1928, which gives to the -Bank of England the power to lake possession of gold to an amount not exceeding £10,000, except as to any part thereof which is bona fide held for immediate export. Consequently there is a definite line of division between the proposals we are now discussing and the English practice. Foi the information of honorable members I shall read relevant sections that operate in England. The Gold Standard Act, 1925, enacts -

Unless and until His Majesty by proclamation otherwise directs -
1. The Bank of England, notwithstanding in any act, shall not be bound to pay any note of the bank (in this act referred to as “ a bank note”) in legal coin within the meaning of section C of the Bank of England Act, 1833, and bank notes shall not cease to be legal tender by reason that the bank do not continue to pay bank notes in such legal coin.
So long as the preceding sub-section remains in force, the Bank of ‘England shall be bound to sell to any person who makes a demand in that behalf at the head office of the bank during the office hours of the bank, and pays the purchase price in any legal tender, gold bullion at the price of three pounds, seventeen shillings and tenpence halfpenny per ounce troy of gold of the standard of fineness prescribed for gold coin by the Coinage Act, 1870, but only in the form of bars containing approximately four hundred ounces troy of fine gold.

The Currency and Bank Notes Act, 1928, contains following provision: -

II. (1) With a view to the concentration of the gold reserves and to the securing of economy in the use of gold, the following provisions of this section shall have effect so long as sub-section ( 1 ) of section one of the Gold Standard Act, 1925, remains in force.

Any person in the United Kingdom owning any gold coin or bullion to an amount exceeding ten thousand pounds in value shall, on being required so to do by notice in writing from the bank, forthwith furnish to the bank in writing particulars of the gold coin and bullion owned by that person, and shall, if so required by the bank, sell to the bank the whole or any part of the said coin or bullion, other than any part thereof which is bona fide held for immediate export or which is bona fide required for industrial purposes, on payment therefor by the bank, in the case of coin, of the nominal value thereof, and in the case of bullion, at the rate fixed in section four of the Bank Charter Act, 1844.

It will thus he seen that there is a fundamental difference between those provisions and the Treasurer’s proposal.

Mr Theodore:

– What is that fundamental difference?

Dr EARLE PAGE:

– Upon the presentation of notes to the value of £1,600 a person can obtain in England a bar of gold which can be exported immediately. In Australia, under this measure no export will be permitted except with the consent of the Treasurer. In England one does not need to obtain the consent of the Treasurer or of any other person. There, funds held for immediate export are specifically excluded from the authority to commandeer; whereas here authority to place an embargo on export has been specifically included in the measure.

Mr Theodore:

– The provision that enables the Bank of England to requisition gold except that held for immediate export, is intended to satisfy contracts previously entered into.

Dr EARLE PAGE:

– No. The Gold Standard Act of 1925 made the individual note inconvertible - the smallest quantity of gold changed being 400 oz. troy. The Currency and Bank Notes Act was passed in 1928, and if £40,000,000 of gold went out of Great Britain last year, a very free export of gold must. have been possible during that time. If we can ensure as free an exchange of gold as in England much of my opposition to the bill will disappear. If the Treasurer is acting exactly on all fours with what has been done in England, I suggest that, so “* far as possible, the actual text of the English act should be inserted in the present measure.

– It should be expressed plainly in the bill, because an embargo on gold export would strike a blow at the gold standard, and the. nonpolitical control of our banking machinery. So far as the Country party is concerned, we feel that free exchange is a matter of life and death to the great exporting interests of the Commonwealth, and, in my opinion, it has just as important an influence upon the general trade and commerce of the country. Our exporting interests are, to the extent of 96 per cent., concerned with primary industries, to which free exchange is vital. It is just as important to them as the air we breathe is essential to us. The bill should make it clear that the interests of those industries in this respect are amply safe-guarded.

– We have said nothing about the matter until to-day, and I am sure that honorable members will acquit me of having said anything of a partisanship nature. It is unworthy of the Minister for Home Affairs to impute this low motive. I trust that the Treasurer will accept my suggestion. I make it in no hostile spirit, but as a serious contribution to this discussion.

Sitting suspended from 6.11 to8 p.m.

Mr CROUCH:
Corangamite

.- The right honorable member for Cowper (Dr. Earle Page) stated that most of our financial and commercial troubles commenced in 1923, and I asked him if he did not feel a great responsibility for what had happened. He replied that he was surprised that anybody should regard this matter from a party viewpoint; he was dealing with the economic situation purely in the interests of the Australian people. I repeat, however, that much of

– The depreciation of the pound note was, nevertheless, one-fourth, and on occasions during the war it was one-third. The proclamation restoring the gold standard in 1925 meant that although the Commonwealth had only received 13s. 6d. in the pound for the money borrowed overseas it had to redeem its loan at 20s., or an increase of 33 per cent. For every £100 borrowed the Commonwealth had to pay back £133, and, although the interest decreased from 6 per cent. to 5 per cent., the effect of deflation was to make it, in effect,6¼ per cent. A similar position arose after the Napoleonic wars, when

English currency depreciated to the extent of 22 per cent. Even the right honorable member for Cowper (Dr. Earle Page) will respect the opinion of Ricardo, who was a recognized financial authority and writer on political economy. Speaking in the House of Commons on the 12th June, 1822, he said -

If in the year 1819 the value ofthe currency had stood at 14s. for the pound note, which was the case in the year 1813, he should have thought that, on a balance of all the advantages and disadvantages of the case, it would have been as well to fix the currency at the then value, according to which most of the existing contracts had been made; but when the currency was within 5 percent. of its par value, he thought they had made the best selection in recurring to the old standard.

The same view is repeated in his Protection to Agriculture, where he approved the restoration of the old standard when gold was £4 2s. per standard ounce, but added that, if it had been £5 10s., “no measure could have been more inexpedient than to make so violent a change in all substituting engagements.” The meaning of that is that if the pound note had been within 5 or 10 per cent. of its proper value the disturbance of the economic and financial position of England through the return to the gold standard would not have been so serious, but as its value was only 14s. the deflation was disastrous to England. Similarly, the deflation of our currency has been disastrous to Australia. J. M. Keynes, in his Tract on Monetary Reform, said -

There should be no restoration of the gold standard unless the currency of a country is within 5 to 10 per cent. of its former value. . . The vast issues of war loans have swamped the pre-war holdings of fixed interestbearing stocks, and society has largely adjusted itself to the new situation. To restore the value of pre-war holdings by deflation means enhancing at the same time the value of war and post-war holdings, and thereby raising the total claims of the rentier class not only beyond what they are entitled to, but to an intolerable proportion of the total income of the community. Indeed, justice, rightly weighed, comes down on the other side. Much the greater proportion of the money contracts still outstanding were entered into when money was worth more nearly what it is worth now than what it was worth in 1913. Thus, in order to do justice to a minority of creditors, a great injustice would be done to a great majority of debtors.

This aspect of the matter has been admirably argued by Professor Irving Fisher.

We forget, he says, that not a]] contracts require the same adjustment in order to secure justice, and that while we are debating whether we ought to deflate to secure ideal justice for those who made contracts on old-price levels, new contracts are constantly being made at the new-price levels. An estimate of the volume of contracts now outstanding, classified according to their age, would show that some contracts are a day old, some are a month old, some are a year old, some are a decade old, and some are a century old, the great mass, however, being of very recent origin. Consequently, the average, or centre of gravity, of the total existing indebtedness is probably always somewhat near the present. Before the war, Professor Fisher estimated, very roughly, that contracts in the United States were on the average about one year old.

When, therefore) the depreciation of the currency lias lasted long enough for society to adjust itself to the new values, deflation is oven worse than inflation. Both are “ unjust “ and disappoint reasonable expectation. But whereas inflation, by easing the burden of national debt and stimulating enterprise, has a little to throw into the other side of the balance, deflation has nothing . . .

The ex-Treasurer admitted that contention. The honorable member for Angas (Mr. Parsons) asked him byinterjection what would be the effect on new loan issues if the Commonwealth notes were again inflated. With a great amount - I could almost say, in view of his past actions, “show” - of indignation, the ex-Treasurer said that inflation would be grossly unfair to this community, and would be an act of repudiation. But what of his act of 1925? Was that not an act of repudiation to the Commonwealth? Did he not raise the interest of the bond-holders to 6 per cent, or 6^ per cent.? Has not the Commonwealth rights as well as the bondholders? The ex-Treasurer, in sponsoring that act, had in mind the interests of the moneyed and propertied classes in the community, and he served them to the disadvantage of the Commonwealth. All who care to study this subject dispassionately and thoroughly must realize that the right honorable member made an immediate gift to the bond-holders of £133,000,000 when he caused the 1925 gazettal to be issued. In addition to that he increased the effective interest rate to 6^ per cent, although.it was generally supposed that it had been decreased to per cent. The right honorable gentleman altogether overlooked the interests of the producers, although he is a leader of the

Country party and claims to represent the farmers and men on the land generally. Let me quote Mr. Keynes again. He says -

Legislation is liable in these days of huge national debts expressed in legal tender money to overturn the balance so far in the interests of the rentier that the burden of taxation becomes intolerable on the productive classes in the community.

It means impoverishment to labour.

– I am quite prepared to take the ex-Treasurer’s word for that; but I suppose that the right honorable gentleman will admit that if a sinking fund is built up by this means and its money is invested, it will not he necessary to impose such heavy taxation, and if taxation is decreased the trading banks will benefit in common with other interests in the community. To this extent, therefore, the Commonwealth Bank is being used to serve the interests of its rivals. To indicate how small the capital of the Commonwealth Bank is, I give the following details of the capital of various banking institutions: -

The Bank of New Zealand serves a very small population, yet it has a capital of £10,300,000. With its small capital the Commonwealth Bank is expected to do our exchange business with the world. The bank should have been allowed to retain its profits until its capital had been built up to £10,000,000 or £15,000,000. The Bank of England has been able to make London the financial centre of the world because of the huge capital it has at its command. It was a sorry error for the last Government to cripple the Commonwealth Bank by robbing it of its funds. That a Treasurer of the Commonwealth should have been responsible for such an act is deplorable. The right honorable gentleman would have served the community well had he allowed the banks’ profits to accumulate. It cannot be expected that a puny bank with a yearly transferred capital will be able to do verymuch for us in the overseas markets.

I should like to ask now why the last Government permitted the trading banks to escape their fair share of taxation ? The Official Record of the Melbourne Stock Exchange for February, 1928, which is the most recent issue I have been able to obtain, shows without doubt that these institutions have been able to avoid paying their fair share of the expenses of government. The Record observes that these trading banks made profits ranging from 15 per cent, to 10 per cent. I quote the following from an article which is headed : “ Taxation on Dividends ; Substantial rebates allowed “ : -

Not the least of the advantages of the shares of public companies as a medium of investment is the exemption from taxation which applies in varying degrees to the dividends earned by such shares.

All dividends are exempt from State taxation in the hands of shareholders.

The exemptions under the Federal Act are of two kinds: -

Rebate allowable in respect of “ exAustralian “ profits.

The proportion of a dividend deemed to have been paid from profits earned outside Australia is exempt from federal taxation. This rebate attains very large proportions in some cases, and the value of this concession will be appreciated when it is remembered how very high are federal rates of taxation applicable to income from property. In other cases where the whole of the profits are earned outside Australia, such as in some Eastern tin companies, dividends are wholly exempt, notwithstanding the company is registered and the capital subscribed in Australia.

I should like the Treasurer to note the amount of exemption that some of the trading banks receive. I give the following figures to show the proportion of dividend which is exempt from federal income tax: -

The last-named bank pays a dividend of 15 per cent. on its ordinary shares. If I held 1,000 of its shares it would be necessary for me to return for income tax purposes not £150 but a little less than half that sum, because the bank gets the benefit of a rebate of 51.93 per cent. Other banks benefit to the following extent : -

Dr Earle Page:

– Is it not a fact that the basis of the federal Income Tax Act was laid down by a federal Labour Government ?

Mr CROUCH:

– I am not responsible for what a former Labour Government did. I am responsible to myself. I am here, and I stay here ; and I shall see that the present Government treats the private banks as they should be treated.

Let me analyse the position. How is it that the English, Scottish and Australian Bank, for example, escapes taxation on 44.2 per cent. of its profits? That bank has in Australia deposits totalling £33,318,045, whereas its deposits outside of Australia amount to only £1,454,623. Is it not remarkable that it is able to make 44 per cent. of its profits on £1,454,623 and only 56 per cent. on £33,318,045? It must be remembered that it has no branches in New Zealand. Let us take the case of the Commercial Banking Company of Sydney, which also has no branches in New Zealand. Its deposits total £54,420,876 in Australia, and £1,802,727 outside of Australia. Upon about one-fiftieth, or 2 per cent. of its external profits, it receives an exemption of 40 per cent.

Mr Yates:

– How do they get away with it?

Mr CROUCH:

– I do not know how they get away with it, and it is not my business to find out. The right honorable member for Cowper (Dr. Earle Page) blames some previous Labour Government. I do not care whose is the fault; I blame the ex-Treasurer for having failed to cure it. The private banks are using our gold reserve for exchange purposes in London, and say they are able to get 40 per cent. of their profits from that source. A bill on London ought to carry a premium. So far as Australia is concerned there are only two creditor centres - London and New York. In 1911 I travelled abroad. When I went to Paris I cashed a bill on London for £25, and received for it £25 18s. In Berlin I was given £51 13s. 4d. for a bill drawn on London to the amount of £50. Why is it that if I take a bill on London to a Melbourne bank I have to cash it at a discount instead of receiving a premium for it, when exchange is always on London and money has always to be transferred there ? The banks would pay a premium if they were desirous of helping our producing interests. That is another reason why I want the gold reserve to regulate our credit. If our producers have bills on London for their wheat or their wool they should be paid a premium instead of having to cash them at a discount.

.- The Treasurer, has, no doubt, made out a case for this bill from his point of view, and has proved to his satisfaction the need for- safeguarding the gold holdings of Australia. In my opinion, however, he, like the bank directors, has “ got the wind up”, and is afraid “of what the money jugglers may do, by a species of lager de mom,,in working the currency, as they have always done, to the detriment of the workers. I do not propose to set myself up as one with an intimate knowledge of the intricacies of banking. There has been placed on the table a document, bearing the imprint of the Government Printer, which is a reprint from The Australasian Insurance and Banking Record of 21st November. Presumably it has been circulated for the information of honorable members, and sets out the statement of Mr. Phillip Snowden on the bank rate.

Mr Theodore:

– It was asked for.

Mr YATES:

– I believe it was, and I can understand why. Those who read the statement will be more in the dark - as Mr. Snowden is - than they were before. The ex-Treasurer shakes his head, but this is what Mr. Snowden said -

I have no doubt that all this seems quite as clear to you as mud, but it is the simplest form in which I can express the position.

I know some people who think they do, and the vigour with which they express their views is generally in proportion to their ignorance of the subject.

I quoted that passage for the purpose of exciting the guffaws of honorable members opposite, and I have not been disappointed. I have read the debates that preceded the establishment of the Australian note issue, and I shall quote for the information of honorable members, the gloomy predictions of the “knowalls” of the then Liberal party. They said that the proposal to issue an inconvertible note was a wild-cat scheme, yet it has proved the salvation of Australia. To-day, members of the reactionary parties in this House sneer when I attempt to expose a system of finance, by which financial cormorants keep the workers in thraldom. Mr. Snowden continued -

However, there must be something wrong, and something which needs attention, when an orgy of speculation in a country 3,000 miles away can dislocate the financial system here and inflict grave suffering on the workers of practically every country in the world.

– Different circumstances call for different treatment. Snowden knows England; let him do what he considers necessary there. We know Australia; let us do what is requisite here. I have every confidence that the action proposed by the Treasurer will achieve its purpose. The British Currency and Bank Notes Act of 1928 made another new departure. I quote from section 1 -

Notwithstanding anything contained in any act -

the bank may issue bank notes for one pound and for ten shillings:

I well remember that when the Fisher Government proposed to print ten-shilling notes the innovation was condemned by the troglodytes then in opposition, but last year the British Parliament did what the Australian Labour Ministry proposed in 1910. The section continues -

any such bank notes may be issued at any place out of London without being made payable at that place, and wherever issued shall be payable only at the head office of the bank.

When the Fisher Government proposed that the Commonwealth notes should be redeemable in gold at the Treasury, Melbourne, opponents of the scheme said that the currency would not be flexible enough. Paragraph (c) of the subsection reads -

Any such bank-notes may be put into circulation in Scotland and Northern Ireland and shall be current and legal tender in Scotland and Northern Ireland as in England.

I trust that honorable members realize the significance of that provision. It means that bank notes are actually taking the place of golden sovereigns. That has been the case in Australia for many years now, and the country has never developed at a faster rate than in the last decade. Sub-section 2 of the section reads -

Section6 of the Bank of England Act 1833 (which provides that hank notes shall be legal tender), shall have effect as if for the words “ shall be a legal tender to the amount expressed in such note or notes and shall be taken to be valid as a tender to such amount for all sums above £5 on all occasions on which any tender of money may be legally made” there were substituted the words “ shall be legal tender for the payment of any amount.”

In other words the bank note in England may be used to pay any sum. The honorable member for Swan (Mr. Gregory), said something about “ turning the printing press.” I remind him of a recent statement by the Minister for Health (Mr. Anstey) who said that the Bank of England was permitted to print £280,000,000 worth of notes in addition to the amount of its gold deposit and any further amount that might be deemed necessary. It could, as a matter of fact, print an unlimited number of notes. This Government is not asking for that power.

Mr Gregory:

– Not yet.

Mr YATES:

– I am glad of that interjection. I hope that the time is not far distant when it will ask for it. I know that I am “ a voice crying in the wilderness” at present ; but seeing that the credit of this country has fallen from £59,000,000 to £42,000,000, I must confess that I cannot see that any harm would follow the printing of additional notes. I shall have more to say on this aspect of the subject on another occasion.

I wish now to quote from a book entitled International Gold Movements by Paul Einzig. I am sorry that I cannot at the moment state Mr. Einzig’s qualifications, but I assure honorable members that he is thoroughly competent to deal with this subject and is not one of those of whom the Chancellor of the British Exchequer (Mr. Phillip Snowden) said that their vigour in utterance indicated their ignorance of the subject with which they were dealing. Mr. Einzig is a. gentleman of international reputation on financial affairs. He wrote -

In the ease of Great Britain, the deflationary effect of the abnormal efflux of gold can be neutralized through the application of Clause 8 of the Currency and Bank Notes Act of 1928, by virtue of which the fiduciary issue may be raised for a period not exceeding six months. The increase of the fiduciary issue would not in any way check the efflux of gold, but it would protect trade against the adverse effects of a decline of the gold stock. Contrary to what may appear to the superficial observer, an increase of the fiduciary issue does not result in an increase of the active note circulation, but merely an increase of the part of the note issue which is covered with securities instead of gold.

What does the honorable member for Swan (Mr. Gregory) say to that? It appears to me that we ought to use the printing press to provide the country with the currency that it needs. So long as we hold fast to the fetish of former Governments and borrow money and make book entries in respect of which we pay £5 14s. 4d. per cent., we shall have difficulty in financing public undertakings. That cannot be allowed to go on too long. Some day the workers of Australia will awaken to the fact that they have been tricked, and when that time comes they will sweep right out of public life the persons responsible for such a system.

On page80 of his book, Mr. Einzig refers to the use of gold for internal monetary purposes. He says : -

Since the war, Great Britain and several other countries have adopted a monetary system in which gold has practically ceased to play any part in the internal monetary sphere. The Currency and Bank Notes Act of 1928 has dealt a final blow to the internal monetary use of gold in this country. The object of clause 1 1 , empowering the Bank of England to buy any amount of gold held in this country in excess of £10,000, provided that it. is not wanted for bona fide industrial or export requirements, is to concentrate in the hands of the central institutions all gold available for monetary purposes, so as to provide for the requirements arising from the international use of gold. While before the war the domestic transactions of the bank - the issue and withdrawal of sovereigns to and from internal circulation - were of great importance, at present they are insignificant as compared with international gold movements.

Mr Paterson:

– We are concerned about the internal position.

Mr YATES:

– So is the Treasurer, and that is why this bill has been introduced. The Government desires to do something to protect Australia against the gold jugglers.

I come now to another shibboleth of the financers. We have been told time after time that when we borrow abroad we must take goods instead of gold. I contend that if we want gold we should demand and get it. Mr. Einzig has some interesting remarks to make on this subject on page 20 of the same book. He says -

An unusual example of special transactions was provided by the gold exports of Brazil. Every Brazilian loan agreement concluded since 1927 - whether by the Federal Government, State Governments, or municipal authorities - has included a clause according to which the issuing houses have to transfer to Brazil the proceeds of the loans in the shape of actual gold. When the loans were issued in the United States of America, gold was taken from New York, When they were issued in London’ gold was usually shipped from South Africa.

Brazil has shown, us what can be done. When she wants gold she demands it and gets it. I trust that it will not be long before we follow her good example. I do not expect my remarks on this subject to bear much fruit immediately, but I trust that those who read Hansard will think over what I have said, and, in the interests qf humanity do their best to scotch the gold jugglers. We must rid our country of the market riggers, stock brokers, and gold jugglers who have hitherto fed upon it.

Mr PATERSON:
Gippsland

.- This bill is divided into two parts. The first part seeks to entrust the Treasurer with power to authorize the Commonwealth Bank to requisition gold coin and bullion from persons and banks; the second part gives the Treasurer discretionary power to place an embargo upon the export of gold. An amendment of which the Treasurer has to-day given notice proposes to modify this discretionary power, for it provides that it shall be exercised only upon the recommendation of the Commonwealth Bank. It seems to me that the second part of the bill, which places our gold standard in jeopardy, is particularly dangerous. Great Britain first adopted the gold standard in 181G, the year after the battle of Waterloo, and she has retained it, except during the last war, for more than a century. The gold standard was the successor to the silver pound standard which dated back to before the Norman Conquest. The countries of Europe have been gradually adopting the gold standard until to-day it is almost in universal use. It is extraordinary, therefore, that a Government which has been in office for only a few weeks should introduce a bill which may shake, to its very foundation a system of finance which has served Great Britain so well for so long. Until the outbreak of the great war British bank notes could be immediately converted at the will of the holder into gold. This practice was temporarily abandoned during the war years, and with it there appeared the most effective bar to inflation. In this connexion, I quote the following passage from a book entitled Inflation, by Professor Shield Nicholson, Professor of Political Economy at the University of Edinburgh : -

If, however, experience had shown that the issues of notes by the banks as a part of their own credit system, ought to be limited, still more clearly had experience shown that the issues of paper money by the Government ought to be placed under tlie most stringent limitation.

Again, if we appeal to experience we find that the most effective and tlie most beneficial form of the principle of limitation is the practical rule of immediate convertibility.

So long as the paper money is subject to this practical limitation, and so long as the real limitation is not evaded by all sorts of suspensory devices, or by the control of the export or the use of gold, the other regulations matter very little.

One hundred and fifty years ago Adam Smith, a very great authority on economies, in the Wealth of Nations, dealt with the evils that experience had shown to be associated, not only with inconvertible notes, but also with suspended convertibility. As I understand the latter part of this- bill, the Treasurer (Mr. Theodore) proposes that he shall be authorized to suspend the convertibility of notes into gold.

Mr Theodore:

– Nothing of the sort.

Mr PATERSON:

– The Treasurer will have power to prevent the export of gold. That simply means the suspension of the convertibility of notes into gold. It would be of little use to convert notes into gold for internal circulation if one were debarred from using the gold for the main purpose for which it can be used, that is, the rectification of exchanges overseas. Even if this power is never used, the fact that Parliament has given the Treasurer authority to use it, undoubtedly will lead to a weakening of confidence and an impairment of our credit in the eyes of other nations.

In his second-reading speech last Thursday, the Treasurer quoted from a letter sent to the Government by Sir Robert Gibson, the Chairman of the Board of Directors of the Commonwealth Bank. Probably the honorable gentleman felt that the reading of that letter would create confidence in the minds of honorable members on both sides of the House, the inference being that in taking this action the Government is merely carrying out what Sir Robert Gibson proposed. But one does not need to study the bill very deeply to realize that it goes very much further than that gentleman’s proposal.

Mr Theodore:

– This is the actual” proposal put forward by him.

Mr PATERSON:

– In that letter, not only does he not propose that an embargo shall be placed upon the export of gold, but he goes out of his way to point out the ill affects of such action. I quote the following extract from his letter: -

My board is of the opinion that the last resource which should be adopted would be any course which meant even temporary departure from the operation of the gold standard on the part of Australia.

It must be obvious that the placing of an embargo upon the export of gold would mean a departure from the gold standard. The letter goes on to say -

Such measure would reflect most adversely against Australia in respect of overseas credit, and incidentally have a most serious effect upon our abilities to raise loans abroad.

That is his opinion in relation to the jeopardising of our gold standard. He then says -

As a measure which would very materially help the position in the meantine, and in addition, having regard to precedent, would in the opinion of the board be a sound measure of permanent legislation, my board definitely recommends your Government to consider immediately the bringing in of legislation on similar lines to that which now exists and is operating in England.

It will be noticed that his pro.posal is that we should copy the legislation in operation in .Great Britain. He begins his letter by pointing out how bad it would be for Australia if we were to shake the foundations of the gold standard by prohibiting the export of gold, and goes out of his way to show that the British legislation does not do what the Treasurer by this bill proposes to do, namely, place an embargo upon the export of gold. I make the following further quotation from his letter: -

I do not propose to traverse the effect of such legislation, as perusal of the acts referred to will fully acquaint you with the position, but I might briefly say that such legislation would place the Commonwealth Bank in immediate control of all gold in Australia by whomsoever held.

Whilst this legislation in itself would not prevent exportation of gold from Australia, it would place the gold in Australia definitely in the control of the bank. Once placed in this position there would only be one authority in control of the gold in Australia.

Those quotations will suffice to show honorable members that the proposal put forward by Sir Robert Gibson is being very greatly exceeded by the Treasurer. His letter does not propose that there shall be an embargo upon the export of gold. I shall now make a further quotation from the work Inflation by Professor Shield Nicholson, to show the danger of imposing an embargo upon the export of gold and the advantage of having a gold standard. It reads: -

To resume the main argument: Before the war the gold standard was effectively maintained in this country because the principle of convertibility was strictly observed. At the small end of the system the proportion of bank notes to gold simply depended on the convenience of people. Any one who wished could change his bank notes for gold or get notes for his gold as he pleased. In cashing a cheque the option of the form of money - whether paper or gold or other coins - was left to the customer. Again, at the big end of the system, foreign countries could convert their claims into gold without let or hindrance. London, unlike some other capital cities, was strictly a free market for gold. The remarkable tiling about this free market was that the whole business was conducted on a less amount of gold kept in reserve than in other great monetary centres. The point was that, owing to the perfect convertibility of all our forms of representative money, a stream of gold was always flowing in and flowing out, and the cistern never ran dry.

Of course, on occasion of panic the reserve fell below that safety limit, but, as observed by the great Ricardo, “ Against such panics banks have no security on any system; at no time can there be in a bank or in a country as much specie or bullion as the moneyed individuals of such country have a right to demand.”

Before the war it used to be said that this country had carried the economy of gold to the verge of danger, and warnings were constantly given that the central reserve should be increased. And yet in practice it was found that the methods adopted to replenish the central reserve in case of need were sufficient. Everything depended upon convertibility - not on the piling up of great stores of gold.

My final quotation is the following : -

We found out in this country by experience that the best way to allay a monetary panic was to pour out the reserves freely in the usual channels on the usual security. “Be bold” was the rule.

In other countries this rule has been imperfectly understood. They pile up masses of gold. They make elaborate provision for the concentration of all the gold. But .they forget the one thing needful. They forget to use the gold.

The Treasurer has said that notes will still he convertible. I remind him, however, that if gold is liable to be commandeered, and its export prevented, such convertibility will be only a pretence.

Mr Lazzarini:

– It is a pretence now.

Mr PATERSON:

– It is not, so far as the utilization of gold for the rectification of foreign exchanges is concerned; otherwise there would be no necessity for the latter part of this bill.

Mr Crouch:

– It is merely a question of the channel through which it shall pass.

Mr PATERSON:

– It is not. If it were, I submit that this bill would be complete without the later clauses, which, irrespective of channel, give power to the Treasurer to prevent the export of gold.

– For the benefit of honorable members I shall again quote the sections in the 1925 and 1928 legislation in Great Britain which are relevant to this discussion. By clause 2 the Gold Standard Act 1925 provides :; -

So long as the preceding sub-section remains in force- r-

That is the sub-section which prevents the exchange of small quantities of bank notes for gold for internal use- the Bank of England shall be bound to sell to any person who makes a demand in that behalf at the head office of the bank during the office hours of the bank, and pays the purchase price in any legal tender, gold bullion, at the price of £3 17s. 10-id. per ounce troy of gold of the standard of fineness prescribed for gold coin by the Coinage Act 1870, but only in the form of bars containing approximately 400 ozs. troy of fine gold.

That only prevents the exportation of gold of less value than a bar containing 400 oz. and worth £1,557 10s. But the 1928 legislation, upon, which, apparently, the Treasurer is relying, makes the following provision : -

Any person in the United Kingdom owning any gold coin or bullion to an amount exceeding £10,000 pounds in value-

I pause there and point out to honorable members what must be fairly apparent to any one who reads the section carefully, that any person in Great Britain who holds less than £10,000 worth of gold has no restriction placed upon him in regard to its export. The section continues: - shall, on being required so to do by notice in writing from the Bank, forthwith furnish to the Bank in writing particulars of the gold coin and bullion owned by that person, and shall, if so required by the Bank, sell to the Bank the whole or any part of the said coin or bullion, other than any part thereof which is bona fide held for immediate export or which is bona fide required for industrial purposes, on payment therefor by the bank, in the case of coin, of the nominal value thereof, and in the case of bullion, at the rate fixed in section four of the Bank Charter Act 1844.

It will be seen that a restriction is placed, only upon a person or firm holding more than £10,000 worth of gold for which he or they have no immediate purpose. If a man is hoarding that quantity of gold and has no immediate need of it for the purposes of his business, or does not require it for export, the bank may call upon him to hand it over and receive paper money for it. But, if that man has any need to export it for business purposes, the section places no restriction on export. There is no export embargo in the British act, and to that extent there is a fundamental difference between this bill and the British measure, of which some honorable members seem to think it is a copy. The Government is going very much beyond the advice tendered by “the Commonwealth Bank.

Mr Gabb:

– Should we follow Britain in everything?

Mr PATERSON:

– Not necessarily; but we shall jeopardize the gold standard, and. make it practically worthless, if we tinker with the convertibility of our notes into gold. After the war we got back to the gold standard, after considerable difficulty and delay, and the last thing we should now do would be to surrender any ground recovered on that occasion. The honorable member for Corangamite (Mr. Crouch) seems to regard the return to the gold standard as having been harmful to the primary producers. In 1925 we had an extremely adverse exchange in Great Britain, which was detrimentally affecting our export trade. The exchange was against us to the extent of £4 per cent., which meant, that, on every bushel of wheat sent to Great Britain at 6s. a bushel, the primary producers lost 3d., and on every pound of butter worth, say, ls. 6d., they lost 3d. What happened when we reverted to the gold standard? That adverse exchange of £4 per cent, dropped to 5s. per cent., and the loss on wheat and butter practically disappeared immediately. What is the real object of the proposal to depart from the fundamental principle of a gold standard and convertibility? Is the object in mind the building up of gold reserves as a pretext for the printing of .’additional paper currency? If that is so, I think that it would be well for the Treasurer to let us know it. An increase in the note issue would simply mean that the cost of living would again advance. Experience shows us that every time paper money is increased in any country beyond a certain point, the additional currency does not enable more goods to be purchased. The Treasurer is playing with fire, and I should like a lot more information from him in his reply. I am strongly in favour of the proposal of the Leader of the Country party that an inquiry should be made by a select committee before the bill is further proceeded with.

Mr LAZZARINI:
Werriwa

.- The honorable member who has just resumed his seat said that the gold standard was restored in 1925, and that that resulted in immediate benefit. If a gold standard means immediate convertibility, no country has such a standard. The honorable member said that Great Britain had returned to a gold standard, and that, when Australia did so, the community benefited; but economists throughout the world agree that the economic woes from which Great Britain is suffering to-day are due to an attempt to deflate back to gold. It is pointed out that this deflation, has meant paying, with a deflated currency, interest on loans raised on an inflated currency. Arthur Kidston pointed out in 1917-18 what the bankers were scheming to do in Great Britain before the conclusion of the late war, and, in his lastpamphlet, he urged Britain to resist to the utmost any attempt to deflate back to a gold standard. If we brought about immediate convertibility to gold, there would be the greatest financial crisis the world has ever seen. In Australia, provision would have to be made for the conversion to gold of £544,000,000.

Mr Paterson:

– But experience shows that immediate conversion is not demanded.

Mr LAZZARINI:

– So far as my reading of the currency history of Great Britain and Australia enables me to speak, the gold standard has nothing to do with the export of gold, because gold is exported not as sovereigns, but as bullion. Sir Reginald McKenna, a former Chancellor of the British Exchequer, and President of the Midland Bank, has stated that the amount of money in existence depends, not on the note issue, but. on the action of the banks in increasing and diminishing deposits. He said that, in 1920, deposits in England were supposed to amount to £1,230,000,000, and payment of every penny of it could be demanded in gold. What is the use of talking of a gold standard? I merely rose to show the foolishness of some of the arguments that have been advanced in this debate. In 1907 a gang of swindlers was operating in New York and Great Britain, buying securities in America and getting gold for them. They purchased £70,000,000 worth of securities and obtained 70,000,000 sovereigns from the Bank of England. Although the total .wealth of England at the time was supposed to be about £300,000,000,000, that transhipment of sovereigns caused a slump in 225 standard British securities. The gold waa shipped to New York, and it caused an appreciation in American securities. It has been pointed out by Kidston that these persons gambled on two tables with double-headed pennies, aud in nine months they raked off £1 5,000,000. The free export of gold and a gold standard allow the financial juggler to play those tricks with the finances of different countries. The ex-Treasurer forgets that Great Britain was the only country with a gold standard until 1870, except that France had adopted bimetallism. We remember the way in which Bismarck built up Germany at the expense of Great Britain by draining its gold. The statistics of these two countries show that, prior to 1870, Germany sent her primary products to Great Britain, and took in exchange the merchandise of British factories; but, when it obtained the huge indemnity of £400,000,000 from France in 1870, the scene was changed. Germany no longer took the products of British factories, but drew gold from the Bank of England in payment for the primary products sent there. The Canadian and American farmers, whose wheat went to Great Britain, previously took away the produce of British factories.They ceased to do so, because it is an’ economic truism that money is more valuable in a poor country than in a rich one. Germany, at that time, was a poorer country than Britain, and the result was that the farmers of Canada no longer took the products of British factories but transferred their gold credits to Germany, and bought the products of that country. The same sort of thing would happen here, with perhaps Japan as the benefiting country, if no control were exercised over the gold reserve. That is why I support this measure. It represents only a small portion of the reconstructive financial programme of the Government. Unless the whole fabric of capitalistic finance is radically changed, the economic drift will become worse and worse. The vehicle we have, been using has landed us in a quagmire, and it is time we changed it for a more up-to-date one. The Leader of the Opposition (Mr. Latham) quoted from a book dealing with inflation. This word is used as a bogy to scare people when financial matters are under discussion. There is no financier in the world who can say where the line of safety ends, and that of inflation is crossed. The worst form of inflation is by the creation of cheque credits. In Great Britain, 1,230,000,000 cheque pounds have been manufactured by the banks on a legal currency of not more than £90,000,000. In our own country the associated banks have never, held more than £45,000,000 of legal currency, and with that they have manufactured 226,000,000 cheque pounds. The total liability of the banks here amounts to £276,000,000, and their assets are shown at £312,000,000. Their chief liabilities consist of deposits amounting to £270,000,000, and their chief assets are advances and overdrafts amounting to £236,000,000. “’ The difference is £34,000,000, which represents the actual legal currency paid into the banks. The gold standard is a figment. It has no more real existence than have the fetishes created by the medicine men of the South Sea Islands. It is a fetish by which financial gamblers, thieves and brigands have exploited the workers of every country in the world. Not until this fog of ignorance has been dispelled can we get back to a sane basis of commercial dealing, aud free ourselves from the economic mess in which we are to-day. Therefore, I am glad that this measure has been brought forward, not because I believe, any more than the

Treasurer does, that it will effect any great reform in our financial affairs, hut because it is necessary to protect us against the stupidity of other countries. It Will protect the country from the depletion of its gold reserves by financial gamblers, and will prevent the further forcing down of wages and prices in this country, for the purpose of improving the value of war bonds and loan debentures, as has been done in Great Britain and elsewhere. I should not have spoken on this matter at all, were it not that we have heard such a lot during the debate about the gold basis, when no such thing as a gold basis really exists.

Mr GREGORY:
Swan

.- It would have been very interesting if we could have heard the full-dress debate in the Government party room, revealing the real desire of the Government in regard to the note issue, and the wishes of honorable members generally on this matter. The honorable member who has just spoken referred to the great importance of the credit system generally in Australia, and the honorable member for Adelaide (Mr. Yates), when speaking recently on the subject, said that it was the duty of the Government to utilize the credit of the Government through the note issue, and make money available for carrying out important work to relieve unemployment. Is he aware that a pound note is a. promise to pay, and that we have to foot the bill no matter how many notes are issued?

How oft the sight of means to do ill deeds

Hakes ill deeds done!

What worries me is that when this measure is passed other legislation may follow of even greater importance. E look upon this bill as one of the most important which has been before Parliament for a long time. It deals with the credit of the nation, and there is undoubtedly very grave danger in passing legislation of this kind without the fullest inquiry. If it is urgently necessary that something on these lines be done, the Government has power to issue a proclamation prohibiting the export of gold, but it is not right to involve honorable members on this side of the House in the responsibility for such action until the matter has been fully investigated.

Mr Lewis:

– Why does the honorable member always urge procrastination?

Mr GREGORY:

– Perhaps some honorable members do not realize the advantage of obtaining the opinion of persons conversant with a subject before passing legislation dealing with it. Probably they would be only too pleased to pass this measure, and learn afterwards what its effect was. I want, if possible, to learn the effect beforehand. Surely there is need for caution. Time and again I have advocated that we should set up a special finance committee in Parliament to deal with all financial measures, particularly those dealing with taxation. Taxation billa have frequently been passed which next year had to be amended, and great harm is so often done when illconsidered legislation is rushed through Parliament. Evidence should be taken by a committee on such matters, and a report made to the House. What objection can there be to a slight delay? It ought not to take more than a fortnight for a committee to conduct its investigations and present a report. As I said before, if the Government feels that the position is acute, and is prepared to take the responsibility, it has power to proclaim by order in council that gold must not be exported. Such a proclamation could be repealed at any time it thought fit. An embargo was placed upon the export of gold from Australia at the beginning of the war. In 1922 a proclamation was issued repealing that prohibition. Only a few months afterwards the embargo was re-imposed, the previous action having been premature. Things went on in that way until February, 1925, when the banks were given authority, under certain conditions, to export gold. Later in 1925 a proclamation was issued making the export of gold free.

– Yes, rather than that the politicians should be given too much influence in the trade and commerce of the country. This bill is dangerous because of our limited knowledge of financial practice. As Mr. Snowden has said -

Nobody likes a high bank rate, but in this rather imperfect world we are sometimes compelled to submit to things we do not like, afraid that, if we do not, the consequences may be still more disagreeable.

The opinions of some honorable members in regard to the use of the printing press for the solution of our financial difficulties are well known, and we have had some experience of the result of such operations. About 1915 the private banks handed over to the Commonwealth Bank £10,000,000 worth of gold and with that backing, £18,000,000 worth of notes was issued and loaned to the various States for the carrying out of public works during 1917. A Governmental extravagance followed.’ When 300,000 of our vigorous men were at the front, works- to provide relief for the unemployed should not have been necessary; but that policy caused inflation, which increased until 1925, when approximately £53,000,000 worth of notes was current. The Note Issue Board then determined that deflation was necessary, and I think that about £5,000,000 worth of notes was cancelled. I well recollect that the wool sales at Brisbane had to be postponed because, owing to the reduction of the note issue, the banks had not the money with which to finance the transactions. A Japanese firm of buyers offered to send £200,000 worth of gold from San “Francisco to Sydney to be exchanged for Commonwealth notes, on condition that the gold would be repaid when the notes were returned. The offer was refused. The policy of inflation caused a great deal of trouble, and should act as a warning against the dangers of hasty and meddlesome legislation. In the Commonwealth and in every State, taxation has been increased until to-day it amounts to between £87,000,000 and £88,000,000. Notwithstanding this, nearly all the States have deficits, yet, at the same time, their governments are being asked to borrow more money for undertaking works that will relieve unemployment. Still further taxation will be necessary. Such circumstances offer considerable inducement to a necessitous Treasurer to resort to the printing press in order to overcome his difficulties. I quote from Currency and Credit by R. G. Hawtrey -

While the process of inflation is going on the Government has the advantage of spending money without the trouble of raising it; when the process is reversed the Government has the trouble of raising the money without the advantage of spending it. As the Bed Queen said to Alice, it takes all the Tunning you can do to keep in the same place.

The Government must raise the money either by taxation or by borrowing, and the borrowing must be genuine; it must draw upon the available stock of savings, and, like the taxation, diminish the amount of the consumer’s outlay in other directions. The portion of the consumer’s outlay so taken by the Government, vanishes like a stream which loses itself in the desert, and what remains thereupon becomes the measure of the consumer’s income, to suffer further diminution in turn. Demand flags, stocks accumulate, orders to producers are curtailed, production slackens, profits shrink, unemployment supervenes.

The depression does not differ in kind from that which is incidental to the familiar trade cycle, or from that which the country has to face when it has lapsed from gold parity through some miscalculation or some economic misfortune, and seeks to return. But although it does not differ in kind, the depression may differ vitally in degree. It. is serious enough to have to face a fall in the price level of, say, one-fifth, and on occasions when the trade cycle has involved so considerable a contraction, the process has been spread over several years of tribulation. But we are supposing that a country has lost control over its currency, and that the consequent depreciation has been gathering impetus during a period of strain which may have been contracted for years. If prices have been no more than doubled the disorder may be called mild.

Faced with deficits, increasing taxation, demands for further expenditure on public works, and with loan money obtainable only at a fairly high rate of interest, governments may find attractive the suggestion of the honorable member for Adelaide (Mr. Yates) that additional money should be put into circulation by means of the printing press. We should like to know what the Government intends to do, if this bill is passed, in regard to the control of the note issue which in 1925 was taken from the control of the Treasurer and handed to the Note Issue Board. The fiscal policy which it has adopted must result in an increase in the cost of living and of the cost of production; and possibly its actions after the passing of this bill may discourage our export trade. It must be realized that our returns from wool and wheat will be lower this year than last, and it would be very serious if anything were done to add to the discouragement of our producers.

We are a debtor nation and must maintain our export trade to the greatest possible degree in order to meet, our obligations. We shall receive at least £15,000,000 less this year for our wool than we received last year.

Mr Gabb:

– And we shall import fewer motor cars.

Mr GREGORY:

– When the 1920 schedule was before us it was said that our imports would decrease, and the same story has been told upon the introduction of successive tariff schedules since that time. The present Minister for Customs has the doubtful distinction of receiving the record monthly return for the

– The information that I have, is that we have £44,000,000 worth of gold in Australia. The Treasurer read a statement from the Argus when he introduced this bill, that the Commonwealth Bank alone had £22,000,000 worth and that it could export £11,000,000 and still hold enough gold to still be within the 25 per cent. limit.

Coal Industry

Motion (by Mr. Scullin) proposed -

That the House do now adjourn.

Mr SPEAKER:

– This afternoon, when the right honorable member for Cowper (Dr. Earle Page) was speaking, I interposed because I felt that his remarks were giving an incorrect impression of the conduct of honorable members at the time he was speaking. As presiding officer, it is my duty to protect honorable members, and to see that debate is properly conducted. I feel that it is my responsibility to prevent any unfaithful presentation of the conduct of any honorable member, or of members collectively. That was the reason of my intervention. But as some honorable members appeared surprised at what I did, I wish now to inform the House that I acted in accordance with the very best precedent, and in support of that statement I propose to quote briefly, in justification of my action, what was said in 1909 by Mr. Speaker Holder, in circumstances which, although not quite the same, are sufficiently similar to make his remarks valuable for our guidance - the passage will be found in Hansard, Vol. LI., page 3530 -

I would point out to the honorable member for Hume that vested in the chair is the right to so control debate that the feelings of an honorable member shall not be offended. The honorable member, having regard to his long and wide political experience, will bear out my statement that many honorable members suffer indignity rather than complain. I feel, however, that it is my duty to intervene on such occasions, and to protect honorable members.

I shall at all times, without regard to party, seek to protect honorable members, individually and collectively, from any misrepresentation of their conduct.

Question resolved in the affirmative.

House adjourned at 11.8 p.m.

Cite as: Australia, House of Representatives, Debates, 3 December 1929, viewed 22 October 2017, <http://historichansard.net/hofreps/1929/19291203_reps_12_122/>.

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House of Representatives 3 December 1929

QUESTION

SUGAR EMBARGO

Mr MACKAY:LILLEY, QUEENSLAND

Mr SCULLIN:Minister for External Affairs · YARRA, VICTORIA · ALP

QUESTION

RELIEF OF UNEMPLOYMENT

Mr GABB:ANGAS, SOUTH AUSTRALIA

Mr SCULLIN:ALP

QUESTION

ANGLO-EGYPTIAN TREATY

Mr D CAMERON:BRISBANE. QLD · NAT

Mr SCULLIN:ALP

QUESTION

COMMONWEALTH PUBLIC SERVICE

Mr R GREEN:RICHMOND, NEW SOUTH WALES · CP

Mr SCULLIN:ALP

QUESTION

PRIVY COUNCIL APPEALS

Mr HAWKER:WAKEFIELD, SOUTH AUSTRALIA

Mr SCULLIN:ALP

QUESTION

REVENUE INCREASES

Mr WEST:EAST SYDNEY, NEW SOUTH WALES

Mr THEODORE:Treasurer · DALLEY, NEW SOUTH WALES · ALP

NORTH AUSTRALIA PASTORAL LANDS

Mr BLAKELEY:DARLING, NEW SOUTH WALES

COAL INDUSTRY

Formal Motion for Adjournment

Mr SPEAKER:

Mr JAMES:Hunter

Mr JAMES:

Mr Archdale Parkhill:

Mr JAMES:

Mr Nelson:

Mr JAMES:

Mr Cunningham:

Mr JAMES:

Mr PARKER MOLONEY:HUME, NEW SOUTH WALES · ALP

Mr JAMES:

Mr McNeill:

Mr JAMES:

Mr SCULLIN:Prime Minis.ister · Yarra · ALP

Mr Watkins:

Mr SCULLIN:

Mr R GREEN:RICHMOND, NEW SOUTH WALES · CP

Mr Lacey:

Mr SCULLIN:

Mr James:

Mr Lazzarini:

Mr SCULLIN:

Mr Bernard Corser:

Mr SCULLIN:

Mr Bernard Corser:

Mr SCULLIN:

Mr James:

Mr SCULLIN:

Mr GULLETT:Henty

Mr Scullin:

Mr GULLETT:

Mr Scullin:

Mr Riordan:

Mr GULLETT:

Mr LAZZARINI:Werriwa

Mr Curtin:

Mr LAZZARINI:

Mr BERNARD CORSER:Wide Bay

Mr E RILEY:SOUTH SYDNEY, NEW SOUTH WALES · ALP

Mr BERNARD CORSER:

Mr Coleman:

Mr BERNARD CORSER:

Mr Lewis:

Mr BERNARD CORSER:

Mr BRENNAN:AttorneyGeneral · Batman · ALP

Mr Gullett:

Mr BRENNAN:

Mr Gullett:

Mr BRENNAN:

Mr Archdale Parkhill:

Mr BRENNAN:

House of Representatives
3 December 1929

Mr MACKAY:
LILLEY, QUEENSLAND

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

Mr GABB:
ANGAS, SOUTH AUSTRALIA

Mr SCULLIN:
ALP

Mr D CAMERON:
BRISBANE. QLD · NAT

Mr SCULLIN:
ALP

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr SCULLIN:
ALP

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

Mr SCULLIN:
ALP

Mr WEST:
EAST SYDNEY, NEW SOUTH WALES

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

Mr JAMES:
Hunter

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

Mr SCULLIN:
Prime Minis.ister · Yarra · ALP

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr GULLETT:
Henty

Mr LAZZARINI:
Werriwa

Mr BERNARD CORSER:
Wide Bay

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

Mr BRENNAN:
AttorneyGeneral · Batman · ALP

Mr DEPUTY SPEAKER (Mr McGrath:
BALLAARAT, VICTORIA

Dr EARLE PAGE:
Cowper

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

Mr WATKINS:
Newcastle

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr GARDNER:
Robertson

Mr CROUCH:
CORANGAMITE, VICTORIA

Mr THEODORE:
ALP

Mr TULLY:
through Mr. Curtin

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

Mr THEODORE:
ALP

Mr THEODORE:
ALP

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr ANSTEY:
Minister for Health · BOURKE, VICTORIA · ALP

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

Mr ANSTEY:
ALP

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936