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Thursday, 28 May 1914


Senator GUTHRIE (SOUTH AUSTRALIA) - Have another referendum ?


Senator Lt Colonel Sir ALBERT GOULD - I am trying to deal with the matter as fairly as possible. Is it not honest that the Prime Minister should say to Parliament, " We agree with the desire expressed by the Premiers of the States that the Commonwealth Bank should not continue the Savings Bank business." Personally, I think it was a mistake for the Commonwealth Bank to enter upon that branch of business, and I say now that the matter is one of suchgrave public importance that it is worthy of a place in the Governor-General's Speech. The Government cannot be fairly accused of grovelling or kow-towing to the State Premiers when they recognise the importance of this question and express themselves as prepared to deal with it.


Senator Needham - The honorable senator said that we are closing the State Savings Banks in an underhand way.


Senator Lt Colonel Sir ALBERT GOULD - I did.


Senator Needham - How can the honorable senator say that when this Parliament openly passed the Commonwealth Bank Act?


Senator Lt Colonel Sir ALBERT GOULD - Let me be clear on the point. I say that this Parliament had the power to pass the Commonwealth Bank Act, but it did so in the face of strong opposition from certain quarters to the provisions permitting the Governor of the bank to conduct a Savings Bank business.


Senator Needham - Was that underhand?


Senator Lt Colonel Sir ALBERT GOULD - It was not. The underhand business arises in this way : There were Savings Banks established in the different States, and no complaints were made as to the way in which they were being conducted.


Senator Mullan - There was any number of complaints, and great reforms have since been effected in those institutions.


Senator Lt Colonel Sir ALBERT GOULD - I can speak with personal knowledge of the Savings Bank in New South Wales, and I believe that no complaint was made of the management of the Savings Bank in Victoria. There may have been some complaint in Queensland about the State institution there.


Senator Rae - Is the honorable senator aware of the fact that scores of new banking premises have been opened in New South Wales at places where branches of the Savings Bank were refused before the Commonwealth Bank started the Savings Bank business?


Senator Lt Colonel Sir ALBERT GOULD - That may be so; because before the Commonwealth Bank started, the State Government had the right to carry on Savings Bank business in the different post-offices. When that right was denied them, it was only natural thatthey should seek other methods of carrying on the business they had acquired, and of acquiring more business. I am not cavilling at the Governor of the Commonwealth Bank commencing a Savings Bank business. He is given the power to do so, and he has done so. He considers it desirable to continue and extend that branch of the business of the Commonwealth Bank. If I occupied the position held by Mr. Denison Miller I should probably feel inclined to adopt the same course. This Parliament determined to put the Governor of the Commonwealth Benk in a very strong position, and decided that he should not be amenable to political influence in any way whatever. When a man is placed in a dominant position like that we expect him to use his best judgment in dealing with the matters referred to him, and that he will not be the blind tool of the Ministry of the day.


Senator Rae - Is the honorable senator prepared to give away Federal rights?


Senator Lt Colonel Sir ALBERT GOULD - I am not prepared to give away either Federal or State rights. I am prepared to recognise both. The Constitution, in dealing with the power of this Parliament to control banking business, especially exempts all State banking. It was recognised that we could not close the State Savings Banks directly by legislation, and our honorable friends adopted this plan of bringing a competing bank into operation.


Senator Rae - Is the honorable senator aware that the competition by the Commonwealth Bank resolves itself into paying½ per cent. less interest on deposits than is paid by the State Savings Banks ?


Senator Lt Colonel Sir ALBERT GOULD - I believe the Governor of the Commonwealth Bank was determined to establish a Savings Bank business in a sound way. He did not desire to take any course that could be regarded as risky or speculative. 1 do not object to what he has done, but it is a matter for us to consider how long the existing position should be continued. The Senate should exercise its special power to protect the rights of the States.


Senator Guthrie - Is it not a fact that there were two competing Savings Banks in New South Wales before the es tablishment of the Commonwealth Savings Bank?


Senator Lt Colonel Sir ALBERT GOULD - Yes, that is a fact, and both were called Government Savings Banks. At any rate, there were two banks there. Was that any reason why a third should be established ? The present Government have determined to amalgamate these institutions, and to have only one bank there.


Senator McDougall - They only did that to compete with the Commonwealth Bank.


Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Sir ALBERTGOULD.- That may be. Now, why was it considered so very desirable to open a Savings Bank branch of the Commonwealth Bank? The fact is that my honorable friends started a bank without a penny of capital, and the readiest way in which they could place that institution in a position to compete with other banks was to obtain the requisite capital from the people of this country. In that way they thought they would be able to support the Commonwealth Bank and prevent it from being a failure.


Senator Ferricks - And the State Governments would not give it any capital by conducting their business with it until it had raised capital for itself.


Senator Lt Colonel Sir ALBERT GOULD - At any rate, the people have to realize that the State. Governments have shown their lack of confidence in the Commonwealth Bank by declining to give that institution their accounts.


Senator Lt Colonel O'loghlin - Does the honorable senator think that that is right ?


Senator Lt Colonel Sir ALBERT GOULD - I offer no opinion. We have established a Commonwealth Bank, and it is very difficult to go back on an institution of that character.


Senator O'Keefe - The honorable senator made an incorrect statement. He said that the States had not given the Commonwealth their business. Tasmania has done so.


Senator Lt Colonel Sir ALBERT GOULD - Of course, we recognise Tasmania as a State, but the honorable senator must realize that the tail cannot wag the dog.


Senator Rae - Would the honorable senator " pool " the savings of the people in the Commonwealth Territories?


Senator Lt Colonel Sir ALBERT GOULD - The States are not entrenched there. If Senator Rae asks me whether it would be wise for the Commonwealth Bank to establish branches in those Territories, my answer is" Yes." Seeing that we have established the Commonwealth Bank, I desire it to prove a success. We have been told by the Governor of that institution that it is to be the bankers' bank; so far, I do not see any sign of that. I do not think that the Commonwealth Bank will injure the private banks in the slightest degree.


Senator de Largie - It will swallow up all the others in time.


Senator Lt Colonel Sir ALBERT GOULD - It will be a very long time.


Senator Ready - Five years hence the honorable senator's party will be taking credit for the establishment of the Commonwealth Bank.


Senator Lt Colonel Sir ALBERT GOULD - I do not think that we can rival my honorable friends opposite in adopting an attitude of that kind. I have said nearly all that I wanted to say upon this question. My chief aim was to allude to the speech delivered the other day by Senator Pearce, and to the attempt which has been made to belittle the address delivered by the GovernorGeneral at the opening of this session. While the Vice-Regal utterance does not contain many promises, it contains sufficient to keep this Parliament busy if we only set to work in earnest. But with the position which exists to-day it is impossible for any serious business to be transacted. I have no doubt as to what would be the result of debate upon any measure which was intended to give effect to the agreement arrived at by the State Premiers in respect to the Commonwealth Bank. Indeed, I am very doubtful how far the proposal in respect of the utilization of the Murray waters would be acceptable to honorable senators opposite. Both in this Chamber and elsewhere we have recently heard a good deal about trusts and combines. We have been assured that there is some danger of a great trust securing a footing here. What have the Government done in respect of that matter? They have appointed a Royal Commission which will submit a report at an early date.


Senator Lt Colonel O'Loghlin - Mr. Groom has it under observation.


Senator Lt Colonel Sir ALBERT GOULD - And we must not forget that Mr. Tudor gave it the first lift up. 1 congratulate the Government upon having secured the services of Mr. Justice Street as Commissioner. He is a man of ability and integrity, and one whom I am sure will exhaustively investigate the position within the terms of his Commission.


Senator Rae - The Privy Council decision in the case of the Colonial Sugar Refining Company will about nullify his labours.


Senator Lt Colonel Sir ALBERT GOULD - I do not intend to discuss the effect of that decision now. Should it be found that Mr. Justice Street has not sufficient power to satisfactorily conduct his investigations, it will be quite open to the Government to submit legislation to endow him with that power, and even, if necessary, to amend the Constitution. We ought to be able to make effective whatever powers have been vested in this Parliament by the Constitution. Where the Constitution is defective, I am prepared to see it amended; but I have failed to discover any necessity for its amendment in connexion with any of the referenda proposals.


Senator Rae - The honorable senator is advancing.


Senator Lt Colonel Sir ALBERT GOULD - Although we have had a very long debate on this question, I believe that its effect on our legislation will not be very great. We all know that these discussions on the Address-in-Reply are chiefly useful in that they afford honorable senators an excellent opportunity for expressing their opinions on all questions mentioned or not mentioned in the Governor-General's Speech.


Senator de Largie - This debate has let some light into the dark places connected with the present Administration. The Teesdale Smith contract is one of them.


Senator Lt Colonel Sir ALBERT GOULD .- Why should the honorable senator continue to hammer away at that ? For the time being, it is dead. I understand that Mr. Teesdale Smith was a particular friend of Mr. Henry Chinn, whom Senator de Largie has been so anxious to place upon a pedestal. There is just one other matter to which I would like to refer, and that is the administration of the Defence Department during the past few months. When Senator Pearce, who was Senator Millen's predecessor as the Ministerial head of the Department, spoke the other night, I was pleased to note that he took no exception to the action of the Minister of Defence in replying to the speech of Mr. Churchill, the First Lord of the Admiralty. Both sides of the Senate are pledged not to make the Defence question a party one; and I am sure Senator Pearce will acknowledge that I was always prepared to support him on matters of defence policy. I think that has been the attitude of the majority of honorable senators. A little time ago Senator Millen was called upon to comment on a speech delivered by Mr. Winston Churchill. I am very glad that he wrote the minute which he did regarding that matter - a minute in which he pointed out that the Commonwealth was proceeding upon a settled policy of naval defence, agreed to at a recent Imperial Conference, from which it was not going to be diverted by the utterance of Mr. Churchill. I am pleased that it has thus been brought home to the residents of the Old Country that we do not wish to be dependent upon a treaty with a naval Power whose people we do not welcome to the Commonwealth. It is about time that the Pacific was again policed by British war-ships, as it was in the days of old. I believe that that task can be effectively undertaken by our own Navy. There is no need for me to dilate upon the value of our Fleet as a naval training-ground for our own people. I admit that the report of General Ian Hamilton has given us grave reason for pause in respect of our military training scheme, seeing that he has affirmed that it will cost double the amount set down by Lord Kitchener. One cannot fail to realize that our monetary resources are limited ; but if we observe a wise economy and effect a change of policy in respect of our expenditure, I do not think that we need be apprehensive. There are many works connected with the defence of this country the value of which will be spread over a number of years, and the cost of which should be defrayed out of loan funds. For instance, there are parade grounds, rifle ranges, drillhalls and fortifications of a permanent character, and it is only fair that each year should bear its proportion of the expense incurred upon such works. If we wish to make our defence effective, we 6hall have to spend a great deal of money that we cannot reasonably be expected to raise each year. Let us assume, for example, that we wish to expend £400,000 or £500,000 upon these permanent works. It is a wise policy to realize that we cannot construct all works that are going to be of value for the next ten or twenty years out of our ordinary current revenue. The proper course is to borrow money to construct them, and charge each year with its fair proportion of their cost.

SenatorReady. - Your party wanted to borrow money to pay for warships.


Senator Lt Colonel Sir ALBERT GOULD - I voted for that Bill, and would do it again, so long as it contained a similar provision spreading the cost of the ships over the time for which they would be effective. It is not right to borrow to meet the current expenses of defence for each year, because these ought to be met from the revenue of each year; but it is a wise policy to borrow for defence works that are going to last for a long period of time, leaving each year to bear its own proportion. The Labour party say they do not believe in borrowing; but I do not suppose any party in the Commonwealth has borrowed more freely than the State Labour Governments have done. The vaunted non-borrowing policy has not been followed in New South Wales; and in Western Australia the Labour party have also been piling up a big debt. Labour members are beginning to realize that there are circumstances in which borrowing is perfectly justified. I hope that when this debate is finished we shall have an opportunity of dealing with the Government Preference Prohibition Bill. If the Opposition regard it as of such small moment, I hope they will pass the second reading, and allow it to become law, reserving to themselves the right of repealing it if at some future date they are returned to power.


Senator Turley - Is it not better to prevent it from becoming law?


Senator Lt Colonel Sir ALBERT GOULD - I am quite willing to see the Opposition take that course. I should like to go before the country, in order to get a definite majority in both Houses behind the Government, whether it is a Labour or Liberal Government. I shall vote for the second reading of the Bill. There are only five of us on this side, but we invite our honorable friends, if they dare to vote against it, to do so quickly, and let us have this vexed question as to whether we are entitled to a double dissolution or not settled.

Debate (on motion by Senator Babnes) adjourned.







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