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Friday, 1 May 1936

Senator McLEAY (South Australia) . - The committee should consider the effect of the amendment on the commercial community, particularly those engaged in secondary industries. Any move to increase the rate of exchange would cause a great deal of inconvenience. Those who have read the evidence given by representatives of banking institutions before the Royal Commission on Monetary and Banking Systems will know that this problem has been engaging serious attention. Capital is extremely afraid of the capriciousness of governments ; it is fearful of sudden changes. We learn from the discussion this morning that already Senator Leckie is apprehensive of the effect of the amendment, and we can readily understand that people outside will be asking if the intention is to increase the rate of exchange. If this were done, what would be the attitude of the Senate, and what would be the effect of the amendment on people who have invested their capital in secondary industries? It is undesirable to cause any section of the community to be suspicious or uncertain about the trend of monetary policy. I was interested to note that several prominent bankers, in evidence before the Royal Commission on Monetary and Banking Systems expressed the opinion that it would be preferable to correct trade balances by means of the tariff rather than by interference with the rate of exchange. This opinion from leading bankers is worthy of consideration. I was rather surprised that the Postmaster-General (Senator A. J. McLachlan) was not prepared to give some information with reference to the Government's attitude to the duty on bitumen. The problem of trade balances is linked with the request moved by Senator DuncanHughes. It is the considered opinion of those who are anxious to see our present unfortunate trade positionrectified that the Government should take definite action against the United States of America, which is the cause of all our troubles. If our trade balance with that country were rectified, we should not have much to worry about. I sympathized with Senator Brown this morning, when he was endeavouring to secure information concerning this intricate problem, and I deprecate the attempt by Senator Arkins to dissuade the honorable gentleman from giving to the Senate the benefit of his views. It is astonishing to note that the duty on bitumen, asphalt, natural pitch, petroleum and bone pitch, which come into this country in millions of hundred-weights for our roads, is so low.

The CHAIRMAN - I ask the honorable senator to connect his remarks with the request before the Chair.

Senator McLEAY - In the consideration of the exchange rate we can scarcely avoid referring to the trade balance. Rather than follow the suggestion of Senator Duncan-Hughes, we should adopt another attitude.

The CHAIRMAN - The committee is dealing with glucose, not bitumen.

Senator McLEAY - I thought, Mr. Chairman, that the discussion had gone beyond glucose to a consideration of exchange, tariff and trade balances, all of which are inter-related. Last night the Postmaster-General (Senator A. J. McLachlan) advised honorable senators to make themselves familiar with these problems and with the Tariff Board's reports thereon. Having listened to the Postmaster-General, I return the compliment, and advise him to make himself thoroughly acquainted with the highly technical points upon which the board has reported. I conclude by saying that the misunderstanding which exists is likely to cause manufacturers to become suspicious that there is a sinister move against the secondary industries of this country, and to make people afraid to invest money in manufacturing concerns. I shall support the Govern ment, and Istrongly suggest that, at this stage, we should be careful not to do anything which might make the misunderstanding greater and create further difficulties.

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