Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Thursday, 17 November 1927

Senator OGDEN (Tasmania) . - The amendment moved by Senator Lynch means that the funds of the savings bank, which consist largely of the savings of the poorer sections of the people, may be advanced by the bank for the assistance of the gold mining industry. We should not forget that it is an extremely speculative enterprise. If it is to be assisted in this way, why not make similar provision also for other forms of mining, including lead, silver, copper and iron? The savings bank is a public financial institution, and its funds should not be jeopardized in the manner proposed.

Senator Lynch - But the Commonwealth Bank has already made advances to assist gold mining.

Senator OGDEN - I have had some experience in the industry. For some time I was Minister for Mines in Tasmania, in a government that set out to assist the mining industry. It advanced altogether about £25,000 to various companies, and I think I am safe in saying that only about 5 per cent. of that sum was returned to the State. The enterprise is a hazardous one because whenever a mine gets into difficulties, any security which it might have been able to offer to a bank against an advance is practically lost.

Senator Lynch - Did the honorable senator, when Minister for Mines in Tasmania, expect to have the money returned ?

Senator OGDEN - Certainly; it was a business transaction. Does Senator Lynch suggest that a government has no right to expect the return of money advanced to assist any particular industry? I object already to the powers given to the board under this bill. I do not regard advances for the erection of warehouses and for storage facilities as a sound investment for a savings bank. Certainly . I cannot support the amendment submitted by Senator Lynch. If we allowed the savings of the people to be advanced for the assistance of speculative industries like that of mining, we should be doing what honorable senators opposite have charged the Government with doing - attempting to destroy the Commonwealth Bank.

Senator Lynch - The Commonwealth Bank is already doing what I am proposing shall be done by the savings bank.

Senator Mclachlan - As a trading bank, yes.

Senator OGDEN - I shall oppose any proposal to jeopardise the savings of the people in such an unsound investment as gold mining. It is the function of the State to assist mining, and all funds set apart for this purpose should come from the public revenue. I doubt if Senator Lynch can cite one instance of a trading bank risking its funds in this way.

Senator Lynch - The Minister just said that the Commonwealth Bank isdoing so.

Senator OGDEN - If that is true, thenit is news to me. But can the honorablesenator mention any private trading bank that is making advances to assist mining?

Senator Lynch -Yes, the Queensland National Bank.

Senator Verran - The Commonwealth Bank was not prepared to finance the Wallaroo and Moonta mining company.

Senator OGDEN - And no bank will finance the Mount Morgan Company in its present position. It would be possible, of course, for a company like the Mount Lyell Company, with its railway. its superphosphate works and other assets, to obtain an advance; but the position of the ordinary mining company, whose only security is machinery and poppet legs on the mine, is entirely different. If anything goe3 wrong with such a mine, its assets practically disappear. No sensible business naan would' think of making an advance on that class of security.

Senator Lynch - The West Australian Bank has done so repeatedly.

Senator Thompson - That bank, like any other, would require a personal guarantee.

Senator McLACHLAN (SOUTH AUSTRALIA) - Or it might make an advance against the uncalled capital of the company.

Senator OGDEN - We may he sure that any bank that made an advance against a mining proposition would require a joint and several guarantee.

Senator Lynch - I know, to my sorrow, that the West Australia Bank made an advance to a mining company, because it sold up my share interest in that company.

Senator OGDEN - Then, it is obvious that the bank had to take action to recover its money. I hope that the savings of the people will never be invested in that way.

Suggest corrections