Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Tuesday, 28 June 1921

Senator GARDINER (NewSouth Wales) .- This is One of those measures on the first reading of which we are ableto discuss any grievance, but at thisjuncture mygrievances are not many. I should like to hear astatement fromthe Leaderof theSenateas to whether it is the intention of the

Government to fulfil their promise that one-third of the returned soldiers' war gratuity would beredeemed in cash in May last. I understand the Governmenthave cashed the bondsofa certain number of ex -soldiers who may havepurchased land or insured theirlives, and these persons have been placed ina more fortunate position than a good many others who were under the impression that one-third of the value of their bonds would be available to them in May of this year. If one peruses the Sydney Morning Herald, particularly a Saturday issue, he will find advertisements forthe purchase or sale of war gratuity bonds, notwithstanding that their sale or purchase hasbeen prohibited by Act of Parliament. A distinct and definite promise was made to the holders of the bonds that one-third of their value would be payable in May, 1921, one-third in 1922, and the remainder at the end of the term. At present, quite a number of bond-holders who were anticipating the payment of one-third in May of this year are very disappointed.

Senator E D MILLEN (NEW SOUTH WALES) - Is the honorable senator contending that the Government promised to pay one-third of each bond or one-third of the totalamount?

Senator GARDINER - One-third of eachbond was promised.

Senator Keating

Senator GARDINER - That is what the bond-holders expected, and now that a differentinterpretationhas been placed onthepromise of the Government, I shall have to take thetrouble of going further into the matter. If the Government will now state that they had no intention of paying each bond-holder onethird of the value of the bond, I am prepared to accept their statement ; but there are quitea number of bond-holders who were under the impression that they would receive one-third of the value of their bonds in May.

SenatorDuncan.-I have not met any, and I come in contact with a number.

Senator GARDINER - SenatorDuncan claims that he has not met any whowere under that impression, but, of course, he does not meet many. A number of men were expecting toreceive a one-third payment in May and now find that they cannot getit.

Senator Cox - I do not think the whole of them understood that, although I believe some did.

Senator GARDINER - Quite a number of distinct promises were made - some in this chamber - that one-third of the value of thebonds would be paid in May, 1921, which has now passed. The Govern-. ment may have cashed bonds in necessitous cases, but the real point is. that all those who are holding bonds expected to receive one-third in May, but now find that the money is not available. That, distinct promise was made a little more than twelve months ago.

Senator Payne -By whom?

Senator GARDINER - By nearly every member of the Cabinet. Of course, the Minister can say that the Government cannot pay one-third of the value of each bond, but what justice is there in it if the holder of one bond can receive payment and. the holder of another cannot? Those who have first-hand information may receive payment, whilst others cannot.

Senator Wilson - One may require the money, and another may not. That is the point the Government took up.

Senator GARDINER - That is quite true; but what if both required it? I do not intend to shirk theissue. I have not full information before me at present, because I did not intend to speak at length on this measure.

Senator E D MILLEN (NEW SOUTH WALES) - It is the first time a statement has been made to the effect that the Government promised to pay a percentage of each bond before maturity.

Senator GARDINER - I am glad to hear the Minister say that, because it is the first statement we have had of a definite character that the Government did not intend to pay one-third to the holder of each bond. It makes the position worse for the men who have not received payment. Some in necessitous circumstances have been paid, and I am quite aware that there have been many instances in which the Government have done good by paying persons in cash because they were urgently in need of money. But that does not prevent the Government doing still better by paying, as promised, onethird to persons in equally necessitous circumstances. Any one perusing the stock and money column in a Saturday's issue of Sydney's leading paper will see thereadvertisement after advertisement inserted by persons anxious to dispose of their bonds. To me it is a serious position, and if the Government are unable to keep their promises in full - torn-up scraps of paper discredit Governments- I think it is time consider ation was given to the advisableness of making these bonds negotiable, because they are being bought and sold at present contrary to law, with; the result- that many who are compelled to sell are being defrauded of large amounts. It would not be a very difficult matter to pass a Bill permitting war gratuity bonds to be placed on the market with war loan bonds. If that were done the Government would have no need, to be afraid.

Senator Wilson - There is quite enough on the market at present.

Senator GARDINER -That is the point I am leading up to. Honorable, senators may say that it would affect our stocks, and future loans; but it would not, do anything of the kind. If from £14,000,000 to £16,000,000 has still to be paid, and the bonds were made negotiable by Act of Parliament, the position would be much more satisfactory. These bonds have to be redeemed in 1924, and if the Government promise is carried outunless it is side-stepped as this one has been - there is to be a further part payment next year. But if they were put on the market, and. made negotiable, they could be handled as war bonds are, which would be a benefit to the men holding them, and would not be injurious to any one. The Government must redeem the bonds in 1924-unless they have not fully explained the position, and are not prepared to dp so. According to the terms under which the bonds were issued, they will have to be redeemed in 1924, and that year is not far ahead. In 1925 another big loan will have to be redeemed, and I am not sure, but I think we have to repay more money in 1923. If these bonds were on the market at present they would be as valuable as war bonds, . which, after interest has been paid, are worth about £90 10s. for every £100 of nominal value.

Senator E D MILLEN (NEW SOUTH WALES) - That is the 1925 bond.

Senator Payne - At 41/2 per cent.

Senator GARDINER - Yes; but with the advantage that the interest is not liable to income tax. If the war gratuity bonds were placed upon the market, earning interest at 5¼ per cent., they would sell at a higher rate than £95, although they might go down to £90.

Senator Fairbairn - Are they taxable?

Senator GARDINER - No. If they were to bring £90 or £95 there would be no objection to placing them on the market. If the Government are so short of money that they cannot find it for the soldier, possibly the public may find it. There may be £14,000,000 to £16,000,000 worth to he redeemed in 1924. If this country has the good fortune within the next year or two to have a Labour Government in office-

Senator THOMAS (NEW SOUTH WALES) - Did the honorable senator say the good fortune?

Senator GARDINER - Yes.

Senator Wilson - That would not improve the value of the bonds.

Senator GARDINER - I am surprised that representatives of South Australia and Tasmania should talk to me about the valueof bonds when the States which they represent are governed by antiLabour Governments, which find it more difficult to raise money than does the Government of New South Wales.

Senator Wilson - I thought the honorable senator was better versed in the facts than to make a statement of that kind.

Senator GARDINER - The day is young yet, and the honorable senator will have an opportunity to reply to what I say. I realize that it is sometimes hard target at the truth in these matters.

Senator Wilson - The honorable senator handles the truth so peculiarly.

Senator GARDINER - My method of handling the truth may appear peculiar to Senator Wilson, because the straightforward handling of facts is something to which the honorable senator is not accustomed. I, do not wish to be led away into an argument concerning the comparative value of the stocks of South Australia, Tasmania, and New South Wales. I was pointing out that within the next twelve months or two years it might be the good fortune of the Commonwealth to have a Labour Government, and we can then expect the prosperity which has always followed the accession to office in this countryof a Labour Government. On every occasion when Australia has bean governed by a Labour Government its prosperity has reached highwater mark.

Senator Pearce - Not a Government representing the Official Labour party.

Senator GARDINER - I remind the honorable senator that Australia has been governed by the Watson Government and the Fisher Government, and I believe that the honorable senator waa himself a distinguished member of those Governments, who raised the credit of this country to such a high level. He should not take exception to my statement of facts.

Senator Pearce - There is not the same Labour party now.

Senator GARDINER - The Labour party with Senator Pearce as a member of it differed very little from the Labour party without the honorable senator.

Senator Drake-Brockman - The Labour Governments to which the honorable senator refers were notbound by the resolution passed by the last Labour Conference.

Senator GARDINER - I am aware that it is contended that we live by resolutions, but when the Watson and Fisher Governments were in power they met with as much opposition as a Labour Government would meet with to-day, and there were the same predictions of disaster as the result of resolutions adopted by the party. I was saying that if it were the good fortune of the Commonwealth Government to be governed within the next two or three years by a Labour Governmentwe might reckon on a high tide of prosperity. The finances of Australia would soon be placed in a much better position than they are in at the present time. There would be all the difference between efficiency and inefficiency, and between real economy and extravagance.

Senator Drake-Brockman - If a Labour Government gains office, will they pay cash for the. war gratuity bonds ?

Senator GARDINER - They will find the cash, and pay cash for the bonds. I think that was one of our promises.

Senator Crawford - They may not find cash, but they can print notes.

Senator GARDINER - A great deal has Been said about the printing of notes, and it is important to remember that it was a Labour Government which introduced the first measure for the printing of Commonwealth notes. At that time politicians holding views similar to those held by Senator Crawford pointed out all the disasters that were to occur to Australia from a Commonwealth note issue.

Senator Duncan - They were called Fisher's "flimsies."

Senator GARDINER - Yes, and it was said that they would not be worth 15s. in the £1.

Senator Elliott - That is all that they are worth, is it not?

Senator Drake-Brockman - I think they are worth about 14s. in the £1.

Senator GARDINER - Goods to the same, if not of greater, value, can he purchased in Australia for an Australian note than can be purchased in any other country with the notes of that country. I read a statement a little while ago by the Acting Prime Minister (Sir Joseph Cook) to the effect that our note circulation is now less than it was two years ago, and I mention the matter in order to say that, though we now have a lower note circulation than we had two years ago, our notes to-day will purchase twice as much as they could purchase two years ago. If I had had a bullock to sell two years ago, I could have got £25 for it, whilst to-day I could get only £12 10s., though our note circulation has beenreduced. I may be told that the note circulation does not affect the value of bullocks, hut the same argument may he used with regard to the value of sheep.

Senator Drake-Brockman - What about the value of a suit of clothes?

Senator GARDINER - I was going to say that within the last two years there has been a distinct drop in the cost of a suit of clothes, notwithstanding the fact that there is now a lower note circulation than there was two years ago.

Senator Wilson - Let the honorable senator apply the argument to the cost of labour.

Senator GARDINER - I cannot undertake to develop the argument to suit the different opinions of different honorable senators. I find it sufficiently difficult to develop it in such a way as to suit myself. I believe I can show that, although we have a lower note circulation now than we had two years ago, according to Mr. Knibbs, we can buy more sheep, cattle, clothing, and groceries with our notes than we could two years ago.

Senator Payne - We cannot get any -more posts and rails split.

Senator GARDINER - The honorable senator means to say that we cannot now get men to work for lower wages, and I am very glad that we cannot. That is the whole point at issue. One set of men desire to reduce wages, not in order to make conditions better, hut in order that the employing class may earn greater profits. We can with our notes to-day purchase more of the things which we need than we could purchase two years ago, with a higher note circulation. Despite all the condemnation of the note issue originally, there is not a member of the Senate who, when the war and its disasters overtook us, was not glad that we had established a note issue. It was established in the teeth of the antiLabour party, but it gave results which enabled the Labour party in the two first years of the Avar to do things which it would have been impossible for a Labour or any other Government to have done if its establishment had not been an accomplished fact. The Acting Prime Minister, either in Parliament or in the course of an interview for the press, referred with pride to the fact that there are so many million pounds' worth of notes less in circulation to-day than there were two years ago; but if we look at the trade returns we shall find that there has been a revenue of £32,000,000 derived from Customs during the year. This indicates a huge trading business greatly in excess of that done two years ago, though we have now a smaller note circulation. One of the things that we need to-day - much as some honorable senators may fear it - is easier money.

Senator Crawford - What has our note issue to do with our oversea trade?

Senator GARDINER - I think I ought not to be called upon to go into a detailed explanation of that. I say that the Customs revenue is increasing by leaps and bounds, and the quantity of materials we buy is surely a fair indication of the tradeof the country. The figures show that it has reached a very high level. Since the close of the war, our import trade has greatly increased, as every sane man knew it would. Trade is being restricted by the restriction of the note issue, and we have tight money and hard times because of it.

Senator Senior - While ships are coming from England, and other places, only half -loaded, or without any load at all.

Senator GARDINER - I know. The Government are responsible for that.

Senator Senior - But the honorable senator's argument is blown out by it.

Senator GARDINER - So far as idle shipping is concerned, the answer is that, by our Tariff, we have increased the cost of purchasing goods from Great Britain by from 10 to 50 per cent. We are calling upon people here to find more capital before they can buy goods from England. We allowed our Australian boys to die for England, but we will not allow our people totrade with England. We shall be called upon to discuss the Tariff next week, or next month, and I shall not further refer to it now. I was dealing with the financial position and the enormous development of trade since the close of the war. There was a great restriction upon trade during the war, and it required only common sense to foresee that, as soon as the war was over, our trade would at once increase. The Government have put up a Customs barrierranging from 10 to 100 per cent. to stop trade. I do mot say that they have done so with the deliberate purpose of preventing trade, but every man with a knowledge of trade knows that heavy Customs duties restrict it. The Protectionists say that they desire to restrict the importation of goods in order that similar goods may be manufactured here.

Senator THOMAS (NEW SOUTH WALES) - That is the main flank ofthe Official Labour party's platform.

Senator GARDINER - I am afraid that I could not better myself by doing what Senator Thomas has done in leaving the Labourparty, because it appears tobe the main plank of the Nationalist platform also.

SenatorReid. - What about the gratuity bonds.

Senator GARDINER - In view of the fact that my time is limited, I thought I had said sufficient about the gratuity bonds.

Senator Drake-Brockman - Wesympathized with what the honorablesenator was saying about them,but he did not finish his statement.

Senator GARDINER - I thought I had done so. I pointed out that it was understood that each gratuity bond would be paid in cash last May to the extent of one-third, and I got from the Minister for Defence (Senator Pearce) the statement that that promise was never intended to apply to the cashing of bonds for individuals.

Senator Pearce - What I said was that the Government had never made the promise referred to.

Senator GARDINER - I want to he perfectly fair in dealing with the matter. I said further, that if we have the good fortune to get a Labour Government in the near future; the soldiers will be paid cash for their bonds, and that promptly. Pending thereturn of a Labour Government, there is no reason why the present Governmentshould not accept good advice and put the war gratuity bonds on the market in the same way as war loan bonds.

Senator THOMAS (NEW SOUTH WALES) - Have the farmers in New South Wales been paid the advance of 2s. 6d. per bushel on their wheat which the Labour Government of that State promised them?

Senator GARDINER - As far as I know, the farmers have been paid the whole of that money. If the soldiers' war gratuity bonds were placed upon the market to-morrow an immense benefit would be conferred upon every bond-holder,and the Government would suffer no loss. It. cannot beurged that the placing of the bonds upon the market would depreciate -their value.

Senator Drake-Brockman - And it would protect the men who aredisposing of them from the imposition whichthey are at present suffering.

Senator GARDINER -No man who has got rid of his bond has any right to grumblebecause another man sells it upon the market openly and fairly.

SenatorCrawford. - Free trade in bonds !

SenatorGARDINER. - Exactly. Why shouldnot gratuity bondsbe placed upon exactly thesame footing aswar bondsandpeacebonds? Whyshould notthesoldierbetreatedatleastaswell asthespeculator ?

An Honorable Senator. -Because it is necessaryto protecthim.

SenatorGARDINER.- There isalways a reason advanced whenacomparison is instituted between two different classes of men. I have used the illustration a dozen times in this Chamber, and I shall use it again - the illustration of the man who went to fight overseas, and of the individual who invested his capital in our war loans. Only the other day I was talking to a man in the town of Scone. He was just about to go shearing in some of the earlier Queensland sheds. He threw off hie shirt, and showed me quite a number of little patches upon his body where shrapnel had struck him. Whilst we were talking a rich squatter and a great patriot drove past in his motor car - a gentleman. who had invested £60,000 in war loans. How do we treat this man? We give him £3,000 a year interest upon his money, and concede to him the right to dispose of his bonds whenever he may wish to do so at the market price. To the soldier, however, we merely give a gratuity bond, not of a very great amount, and we impose the condition that no matter how badly in need of money he may be, he cannot sell his bond.

Senator Cox - Hecan sell it with the consent of the Government.

Senator GARDINER - But he cannot get the consent of the Government.

Senator Cox - Yes, he can.

Senator GARDINER - Probably the honorable senator has some inside information upon the matter.

Senator Fairbairn - I have bought some of these bonds within the past week.

Senator GARDINER - The war gratuity bonds should be placed upon the same footing as the bonds which are held by the war speculators. I have no desire to belittle the man who put his money into war bonds. It was well that he did so. But that is no reason why the individual who put his life in the balance should be treated differently. It is this difference betweenthe treatment of the men with moneyandofthosewho actually fought upon the battlefield of which I complain. I demand that the sameconsideration shall be extended to our soldiers who possess these gratuity bonds as is extended to the capitalist who invested his money in war bonds or peace bonds. The former should have the same right of buying and selling as has the latter. I know that the Government will say that they wish to protect the soldiers from the men who desire to make money out of them. But they do noto desire to protect the individual who has put his money into war bonds or peace bonds. He can look after himself, and they know it.

Senator Reid - If the gratuitybonds were placed upon the market, it would mean the flotation of another loan of about £15,000,000.

Senator GARDINER - Yes. But surely nobody will say that the flotation of such a loan would injuriously affect Australia's credit.

Senator Payne - The purchasers could not redeem the bonds until the due date, so that the Government would have to find the money.

Senator GARDINER - If these bonds were placed upon the market to-morrow, there are any number of people with money who would relieve our soldiers of them.

Senator Cox - If the honorable senator knows of anybody who is prepared to take up war gratuity bonds, the Government will allowthose bonds to be cashed.

Senator GARDINER - There is quite a lot of trouble involved in cashing them. Time after time men have come to me, and asked how they could get their bonds cashed. It is a most difficult matter for them to obtain cash, even from the Government. If it were hot so, the- whole of the bonds would have been cashed ere this.

Senator Pearce - Eleven million pounds worth of bonds have been cashed by the banks, and by employers, apart from what the Government have cashed.

Senator GARDINER - Have the Government cashed one-third of the bonds?

Senator Pearce - The Government have cashed about £3,000,000 worth. Roughly, £16,000,000 worth have been cashed altogether.

Senator GARDINER - That makes the positionfor which I am contending much easier for the. Government, because there are very few million pounds worth of bonds left, which could be placed upon the market to compete with loans raised for other purposes. Surely it is a fair requestthat the soldiers' bonds should be placed upon the same footing as the speculators' bonds?

Senator Pearce - What. I said by way of interjection meets the honorable senator's point that the man who is hard up for money cannot get it.

Senator GARDINER - If, by this day week, I bring to the Minister for Defence (Senator Pearce) ten bonds, whichare held by ten different persons, who . are really hard up, will he guarantee to give me cash for them.? .

Senator MILLEN (NEW SOUTH WALES) - Are the persons in necessitous circumstances?

Senator GARDINER - Yes.

Senator MILLEN (NEW SOUTH WALES) - Who is to be the judge of that - the honorable senator or the Treasury officials?

Senator GARDINER - As far as Commonwealth officials are concerned, I make it my business to allow them to attend to their business. I interfere with them as little as possible. But here is a concrete case. A woman whose husband is out of employment and ill, desires to get his gratuity bond cashed. She visited the War Gratuity office in New South Wales, but could get no satisfaction there. She then came to me, and I told her that I did not know what I could do in the matter.

Senator Pearce - The authority to which the honorable senator has referred consists of three returned soldiers, one of whom is nominated by the Returned Sailors and Soldiers' Imperial League.

Senator GARDINER - The Government may close their eyes to the immense amount of dissatisfaction which exists on account of the war gratuity bonds - not being negotiable even in real cases of necessity, but it is nevertheless a fact. I base my opinion upon the statement of people who come to me unsolicited and who ask me to do something for them. In the future, however, I shall say' to them, " Give me your bonds and I will take them over to Senator Pearce and get him to cash them for you." If I cannot then obtain . cash for them, the matter will be heard of in this Senate.

Senator Crawford - If the position is as stated by the honorable senator, he will be bringing a few thousand bonds over next week.

Senator GARDINER - That may . be so.

Senator E D MILLEN (NEW SOUTH WALES) - How can the honorable senator logically ask for the full payment of one individual bond when he says that the Government are under an obligation to cash a percentage of each bond ?

Senator GARDINER - I hold that the Government are under an obligation to cash a percentage of each bond. I also complain when the Government refuse to cash the bonds of persons who are in necessitous circumstances. I have put forward a proposal which, if adopted, would afford relief to our soldiers. The gratuity bonds which they hold should be made negotiable, and but for the fact that we have party government they would be negotiable.

Senator Senior - Do not say that.

Senator GARDINER - But for the fact that the Government have put their back up against the proposal, the thing would have been done.- Now Ministers say that to make the bonds negotiable would embarrass them in their finances.

Senator Fairbairn - The Government say that it would increase the cost of living. . .

Senator GARDINER - I know how careful the Government are about increasing the. cost of living. In order to show a little better balance-sheet they did not hesitate, in May of this year, to turn adrift from Cockatoo Island some 3,000 or 4,000. employees. They did this to avoid having to pay them wages for the closing months of the year. Perhaps I am anticipating the report of the Commission which has recently investigated this matter; but, so far as I can see, there was no other reason for putting these men out of employment and allowing millions of pounds' worth of plant to lie idle.

Senator Elliott - Had not the amount voted by Parliament for Cockatoo Island been already exceeded?

Senator GARDINER - Yes. Butmy idea is that when an appropriation has been exceeded Parliament should be called together to pass the requisite legislation authorizing a further expenditure. That legislation passed - as. this Supply Bill will be passed - within a period of twenty-f our hours. I submit that it would have been real economy on the part of' the Government to have kept the valuable -plant installed at Cockatoo Island working and producing, and to have retained the men there in their employment. Why were these men dismissed ? Merely in order that the Government might show upon paper, at the close of the financial year, a less expenditure than they could otherwise have shown.

Senator Wilson - Does not the honorable senator think there is something to be said upon the other side?

Senator GARDINER -I have no doubt there is a great deal to be said upon the other side. But I am here to speak on behalf of the men -who, at a time of unparalleled distress, and at a time when the Tariff is interfering with employment, were cast adrift.

Senator THOMAS (NEW SOUTH WALES) - I thought that the Tariff was intended to provide employ.ment,

Senator GARDINER - The Tariff burden has been increased by millions of pounds during the past twelve months.

Senator Duncan - Most of the Labour representatives in another place are supporting that policy.

Senator GARDINER - But the Government and its followers introduced it. Whilst the Government were in office they might have given Britain a chance as well as Australia.

Senator Duncan - A number of members of the honorable senator's party would have censured them had they done so.

Senator GARDINER - No doubtMany members of our party resemble myself in that they would censure the Government in any circumstances. It is because we feel that we could do the job so much better ourselves that we are continually censuring them.

Senator Drake-Brockman - The honorable senator is not very convincing in hi3 arguments.

Senator GARDINER - I do not like issuing challenges, because the challenger sometimes comes down with- a flat dive, but I am prepared, before any meeting of soldiers, to debate with Senator DrakeBrockman this question of the desirableness of making war gratuity bonds negotiable. I am willing to give him his own audience of the men who served under him.

Suggest corrections