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Thursday, 17 November 1927

Senator MCLACHLAN (South Australia) (Honorary Minister) . - Senator Lynch's statement that the goldmining industry has been persecuted isunwarranted. We should consider this bill from the viewpoint of business men. Particularly should we have regard to the source of the funds at the disposal of thesavings bank. Those funds should be invested with the greatest caution. There are already other channels through which the gold-mining industry,- if it can offer satisfactory security, may receive assistance. I take it that the honorable senator does not suggest that advancesshall be made without proper security. The general business of the Commonwealth Bank, and that of private tradingbanks, is conducted with money invested by shareholders who, in the hope of making profit's, are prepared to take some risks. That is not the position in the case of the funds of the savings bank. Those funds represent the savings of thepeople. Proposed section 35\v setsout the directions " in which the savings bank may invest its funds. Honorable senators will see that in each instance advances are tobe made on security of a suitable character. For instance, advances may be made in respect of any Government security approved by the Treasurer. That would be a sound investment. Again, land may be taken as security for advances. That is a well-recognized form of security. Money may also he advanced for the purchase or erection of dwelling houses, and for the discharge of mortgages on dwelling houses, in accordance with the Government's housing scheme. The bank is authorized to advance money for the erection of warehouses or storage facilities for primary productsincluding the erection of plant for the treatment, preservation and preparation of products for marketing. It, is provided further that it may invest money in debentures issued by the CommonwealthBank for the purposes- of its rural credits department- or on fixed deposit with the Commonwealth Bank, or " in any other prescribed manner." This last provision is embodied in the principal act. No savings bank has ever embarked on the business of lending money to encourage gold mining, or any other similar industry. We should treat t he savings of the people as a sacred trust, and hitherto they have been so regarded. I admit that the gold mining industry has done a great deal to promore the development of Australia; but having regard to the fact that it is a speculative enterprise, it would not be in the best interests o£ the Commonwealth to authorize the savings bank to risk moneys held by it for the encouragement of that industry. The Commonwealth Bank is empowered to do that and I understand that certain private trading banks are prepared to take much greater risks with their fuuds than would be justified by any trustee institution such as the savings bank.

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