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Wednesday, 25 February 1942


Senator DARCEY (Tasmania) .- The statement' on international affairs which was read to the Senate this afternoon by the Minister for Information (Senator Ashley) reminded me of the many fine speeches that were made last week at the combined secret meeting of senators and members of the House of Representatives. However, not one speaker at the joint meeting dealt with fundamentals. Before we can do anything to introduce a new social order we must find the cause of the present disorder in the world - and " disorder " is a mild term to express our present position. In 1916, the late President Wilson, of the United States of America, said that America came into the war " to make the world safe for democracy". I maintain that there has never been a true democratic government in any country. President Wilson's illustrious predecessor, Abraham Lincoln, defined democracy as "government of the people, for the people, by the people ". It is a. truism to say that the destiny of the people lies in the hands of its government. I repeat that at no time lias there been true democratic government in the world. In 1914 the whole of Europe, with the exception of Russia, was controlled by so-called democratic governments. Nevertheless, we were forced into war in that year. After that war, we were told that democratic government continued. But what has happened in Europe since then? Take Italy as an example. Within two years there were three so-called democratic governments in that country - the Orlando, the Nitti and the Facta - and yet it continued to go to the dogs. In their fight for the fruit? of office they altogether neglected the goodwill of the people. As a result, the Communists took charge of the big Fiat factory at Turin, and the Socialists took charge of Milan. On this wave of disorganization, Mussolini and his Blackshirts were swept into Rome. We recall how he walked into the Senate, and said : " To hell with democracy, I spurn its corpse ". Mussolini introduced many great reforms, and, if he had not become obsessed with the idea that he was a modern Julius Caesar bent on forming a new Roman Empire, Italy would have been better governed under fascism than under any so-called democratic system.

What happened in France? Within two years,, that country had four governments - those led by Blum, Daladier, Reynaud and Laval - and over 100 Socialist deputies were cast into prison. This caused the greatest possible resentment throughout France, with the result that the war effort was held up. Blum tackled the Bank of France on the devaluation of the franc, but the. moneypower was too strong for him, and a similar experience befell the other governments of France which succeeded him. When Laval made a compact with Sir Samuel Hoare, to the disgust of the people of England, proof was given once more that democracy has never been in power in Europe. If we are to have; real democracy and a new order, we shall have to find out what is wrong with the present order. .Nothing has been done to bring about a new order. Conditions were almost as bad in England as they were in France. When Mr. Baldwin faced the electors on the last occasion, there was a strong peace move. He won the elections, but fell in with the peace movement by reducing the grants to the Navy, the Army and the Air Force, notwithstanding the fact that, week after week, Mr. Churchill had informed the House of Commons how powerfully the Germans were arming.

In 1936, Mr. Churchill pointed out, without avail, that Germany had exponded £800,000,000 on armaments; but he was too big for his associates, and was kept out of the Ministry, because he wanted democratic government and thought that the safety of his country should be the first concern of members of Parliament. The tremendous task that he has undertaken to-day was handed down to him by mcn who forgot the real principles of democracy. Sir Stafford Cripps, as soon as he returned from Russia, said it would bc a good thing if the Government of Great Britain told the people what they were fighting for. He remarked that it was not sufficient merely to tell the people that they were fighting for the conditions experienced by them prior to the war. The people should be guaranteed new social conditions, because the conditions obtaining in England three or four years ago were dreadful. When Sir

John Boyd Orr was asked to bring up a report on nutrition, he said that 4,000,000 people in England were each living on 4s. worth of food a week, 6,500,000 on 6s. worth, and 9,000,000 on only 9s. worth. That meant that almost 20,000,000 persons in England were living near, or down to, the bread-line. It is logical to say that the people who govern are those who get what they want, but do they want war under these dreadful social conditions? Of course not. Conditions to-day are as bad as they can be in Australia, but there is no effort by a democratic government to bring about better social conditions, and this is due to one particular fact. The present monetary system has brought about these conditions, and there is no chance of peace and better conditions while the present monetary system remains. Abraham Lincoln once said : " I have two enemies. One is to the south, to which I am advancing, and the other is the enemy behind me, the money-power. Of the two, the enemy behind me is the greater."

The Commonwealth Bank was established despite the strong objections of all of the private banks. Mr. King O'Malley fought for ten years to bring the Commonwealth Bank into existence, and the late Sir Denison Miller, as governor of that bank, did a splendid job for Australia during the last war, when he raised money at one-tenth of the cost charged by the private banks for the same service. His death, however, gave to the private banks their chance. When the Bruce-Page Government was in power, the constitution of the hank was amended in such a manner that, as a people's bank, it was practically strangled. I told Mr. Bruce that in my opinion the amendment to the Commonwealth Bank Act in 1924 was the greatest piece of political treachery ever perpetrated on the people. That was followed by the attempted Casey amendment. Mr. Casey proposed a further amendment of the Commonwealth Bank Act, and also desired to establish a mortgage bank. At that time the Commonwealth Bank had .assets valued at £19,000,000 and had made advances amounting to £184,000,000. There was plenty of money with which to establish a mortgage bank, but that would not suit the private banks. The proposal then submitted was to sell inscribed stock and debentures, and the only people who could buy the inscribed stock were the banks themselves. They were to sell £20,000,000 worth of debentures to raise the money required to found the mortgage bank. That would have given to the private banks another tremendous advantage, because, under company law, if th, debenture holders were not satisfied with the way in which the business was being conducted, they could have taken it over. But there was such an outcry .against the Casey amendment at the time that the Government of the day dropped the proposal.

I remind honorable senators that it is their duty to endeavour to meet the new conditions. The old orthodox ideas will have to go by the board, particularly in regard to finance. I was in Martin-place, Sydney, last week, and saw a representation of " Britannia " on a fancy motor car surrounded by flowers. On my right hand was the head office of the great Commonwealth Bank, which could advance £100,000,000 of credit to-morrow in order to carry on the war. There is no need for the present heavy taxes, of which even members of the Opposition complain. It has been proved by a royal commission that the Commonwealth Bank could lend interest-free money to the Government, whilst the private banks can lend only against their cash reserves.


Senator E B Johnston - What about the present loan? Could all the money that is required be advanced by the Commonwealth Bank?


Senator DARCEY - Easily. There is no need for the loan to be floated in the way it is.


Senator Allan MacDonald - Why not tell that to the Treasurer?


Senator DARCEY - I have said that in this chamber for the last three years. I have given the number of the paragraph in the report of the Royal Commission on the Monetary and Banking Systems which .shows the absurdity of going to the private banks for money when hundreds of millions of pounds could be advanced by the Commonwealth Bank*, but I have been unable to make either the present Government or past governments act on my suggestion. I am speaking as a man who has the interests of the nation at bea.vt, but this action has not been taken.


Senator McBride - Does the honorable senator suggest that the present Government has not the interests of the people ar. heart?


Senator DARCEY - I referred on one occasion to the honorable senator who interjects as the minister for jeers and sneers, because he always makes inane remarks when I speak on finance.

As other honorable senators have said, we are in a desperately bad position, but I believe that we shall win the war. Our soldiers won the last war, but the banks won the peace, and that is why we are in the present war. Members of this Senate have taken a solemn oath in this chamber to put the interests of their country first, [n my opinion we shall have to drop all parties. When we are at war there should be only one party, and that -is the nation. Some of those who have jeered and laughed at me in this chamber because of nay views on financial matters now admit that I am right, but it is against the traditions of the Opposition to agree to anything that comes from this side of the chamber. That applies to whichever party happens to be in power. In this great crisis, however, I suggest that the Opposition should take a new view of finance, and take the right view of it, even if it means a departure from it. traditional performance of the past. I hope that in the present crisis some notice will be taken of what I have said with regard to the financial situation.

A few weeks ago the people were told that the currency of the United States of America had been incorporated in the currency of Australia. This is the first time in the history of the world that any nation has accepted the currency of another nation. .When our men were fighting in France they were paid in the currency of France, and, with the thousands of Americans in Australia to-day. I ask whether any pressure was brought to bear on. the Commonwealth Government by Wall-street to compel traders in Australia to accept dollar bills as currency. The exchange, as all honorable senators know, is the amount one country charges another for the use of its currency. The United States of America has been charging us 6s. 3d. for its dollar of 4s. 2d. ever since the outbreak of war, and also prior to that. Now an American citizen can present a dollar bill to any trader in Australia and demand for it 6s. 3d. worth of goods or services. Not only is Australia in the hands of the private banks, but the currency of the United States of America, created by banks over which we have no control, is also coming in. The Federal Reserve Bank of America, which has the same standing a* the Bank of England, must have exerted influence over the Commonwealth Government. We are not getting anything from the United States of America for nothing, but I do not think that that country has any right to demand 6s. 3d. worth of goods and services for its paper dollar.







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