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Friday, 18 September 1942


Senator BROWN (Queensland) . - There is something unreal about this debate. When one faces honorable senators opposite, one is inclined to take part in political disquisition and disputation, and a similar urge is felt by members of the Opposition. Day after day we seem to forget that Australia and the Empire itself are in grave danger. We continue to debate matters in a manner that incites the condemnation of many people who see us at work. We should remember the exploits of our soldiers and airmen who are facing the enemy in New Guinea and elsewhere, and of our naval forces which are contending with the enemy at sea, and refrain from any attempt to make political capital out of our remarks. If an honorable senator opposite hits me with a rhetorical mallet, I may feel inclined to strike back, but, recalling the amazing resistance by the Russians in that hell called Stalingrad, we should at least try to do our utmost to realize the seriousness of the position of our Empire3 and its allies. If we approached the matters under consideration in a different way from that in which they have been discussed, we should obtain considered decisions that would be of benefit to the people. Instead of trying to win favour with a section of the populace, we should endeavour at all times to act concertedly for the good of the nation. I do not speak bitterly of the views held by honorable senators opposite, or even by those on my own side of the chamber. Whilst I am a loyal member of the Labour party, and give every credit to the Treasurer (Mr. Chifley) and others who have helped him to compile the budget, it does not go as far as I should like, and does not contemplate putting into operation certain principles which the Labour party has advocated for many years.

The members of the party with which I am associated consider that the banking system of Australia should be completely controlled by the Government in the interests of the people, and that the Commonwealth Bank should be converted into a bank of the nation, and not be permitted, as it often is, to act as a servant of the banking interests of this country. We believe that in this war it would be possible, under a completely controlled banking system, to issue all the credit essential for the prosecution of the war. When Sir Walter Massey-Greene was a member of the House of Representatives, he stated, in reply to argument advanced by a former honorable member for Bourke (Mr. Anstey), that the financial principles advocated by Mr. Anstey could be put into operation, if Australia had one banking system under complete governmental control. Sir Walter Massey-Greene was a man of high intellectual attainments, and for many years was a member of this Senate. In support of my statement, I refer honorable senators to his remarks in Hansard. Other countries have successfully adopted advanced financial methods, but Australia is very conservative. The democracies have demonstrated their conservatism to such a degree that they have found difficulty in adopting modern methods in the prosecution of the war. It is time that they awoke to the fact that it is of no service to the people in their struggle against the totalitarian States to play up to tradition.


Senator McBride - Many members of the honorable senator's party apparently have not recognized that a war is in progress.


Senator BROWN - I shall not try to bolster up pacificism. Hundreds of thousands of men of that belief have closed their eyes to the fact that we are living in a world in which human wolves are prepared to devour us. The late Mr. Ramsay MacDonald, and even some Tories, put up a fight for the pacificist ideals to such a degree that Great Britain dared to reduce the size of its fleet. In the universities of Great Britain a large number of students practically took an oath never again to wear the King's uniform. Many mistakes of that kind have been made, but we should try to understand the position instead of indulging in political recrimination. Let

Us find out how the totalitarian leaders have gained the power that they command to-day, so that we may profit by a study of their methods. Just as those in charge of our fighting services try to obtain secret information, in order to discover the weapons and tactics of the enemy, we should endeavour to profit on the civil .side by the example set by the enemy. New methods have been adopted by enemy and other countries which have obtained remarkably good results. Why have the Russians developed the morale of their people to such a high degree that they are fighting to the last man for the preservation of their rights, and for the destruction of fascism, which, if not stamped out, may place its tentacles on the heart of Australia? The psychological effect of the system adopted in Germany has been to weld the people of that country into a solid phalanx. The Russian people are a remarkably united nation, and every individual is prepared to lay down his life for his country. I do not approve of fascism, but we can learn from Germany, and even from Italy and Japan. I would not cast aside any good idea obtainable from those countries that would aid us in our struggle to exist.

There has been some discussion of the financial systems of Russia, and Germany, and it has been said that the financial structure of Russia is similar to that of capitalist countries. In fact, there are many who sneer at Russia because its financial system has many features in common with the system in operation in Britain, the United States of America, and other capitalist count-tries. Some Communists wished to eliminate money from the Russian system, but that country has found it necessary to use money as well as cheques. Russia also has a central bank of issue, and, what is more astonishing, a system of long and short term loans.


Senator McBride - Those loans are compulsory.


Senator BROWN - There is a good deal of superficiality about some of these things, because behind all financial transactions is the big hand of the State. All lands, trusts and railways, as well as all banks, are owned by the State. Under the Russian system, cheques passing from one trust to another, or from one industry to another, do not affect ownership. That is a point which should be remembered. The cheque system is merely part of the Soviet accountancy system. Russia has two principal banks, one of which is the Gosbank, which is a central bank, similar to the Bank of England. It holds gold reserves, issues currency, and manages loans. It is the direct source of shortterm credits. There are 2,600 of these banks in Russia, 50 per cent, of the profit of which goes to the government, whilst the other 50 per cent, is retained by the banks. The other principal bank is the Prombank, which is the institution through which long-term advances are made to industry. Free advances are made for the establishment of new industries. I emphasize that money advanced by the Prombank for the development of industry bears no interest and is nonreturnable. The fact is of interest in view of the frequent remarks of Senator Darcey in this chamber. The difference between the Russian system and that in operation in Britain, the United States of America, Australia and other capitalist countries is that, whereas in those countries industry is privately owned, in Russia it is owned by the community. The Prombank examines every plan of construction, and has its own expert advisers as to costs. It bears little resemblance to a capitalist bank. The plan of construction is made by some essential organization. Plans are made in relation to each district where industry is to be developed, and money is forthcoming from the bank for that development. The Russian people work to a plan. The idea underlying the Russian- money system is to keep in close touch with the costs of development; it is more a costing system than anything else. It is not a system for making profit by lending money. Honorable senators will understand that if money is issued by the central government of Russia through its various organizations, the returns from industry must equate the money that has gone to assist in the development of industry, otherwise inquiries are made as to the reason. If money has been advanced beyond what has been expended, it goes back to the bank.


Senator McBride - The honorable senator just now said that it was not returnable.


Senator BROWN - -I differentiated between the Gosbank and the Prombank The latter is the bank which makes money available for the development of industry; it provides the capital cost of buildings, machinery, and so on. The Gosbank, on the other hand, is the direct source of short-term credit ; money advanced by that bank must flow back. Russia has what is virtually a closed monetary system. Finance is the servant of the Russian people, and not their master. The Russian people realize that finance is essential if plans which have been drawn up are to be carried out efficiently. Russia has no general pricelevel such as we have ; the law of supply and demand does not exist there. In Russia the system of price-fixing and regulation of exchange depends on the will of the government. A few men control industry and finance, and finance is used more for the purpose of accountancy than as a means to enslave the people. Senator McBride laughs, but what I have said is true. I am not mentioning this subject for party political purposes, but in. order that honorable senators may understand and appreciate the conditions in other countries. The socialist doctrine has been subject to constant attack. I remember that nearly 40 years ago those who attacked socialism always said that, under socialism, the people would spend everything and save nothing. I say, in response to that argument, that the Russian people have set an example of willingness to sacrifice now in the interests of the future. In saying that, I am not contending that we in Australia should adopt their system.


Senator McBride - I was wondering where the honorable senator would cut adrift.


Senator BROWN - The honorable senator who has interjected has a type of mind with which it is difficult to deal ; it is a political mind, rather than a scientific or reasonable one. I do not say that I agree or disagree with what Russia is doing; what I am saying is that we should try to understand that country and its people. We should not maintain a to ry attitude and condemn everything Russian, German or Japanese. That attitude was at the root of our failure in Malaya. I am willing to learn from the J apanese ; and the sooner this nation adopts a similar attitude, the better it will be for us all.


Senator McBride - There seems to have been a conversion recently.


Senator BROWN - Some minds are not open to conviction; they are so ossified or petrified that they are as impenetrable as cement. Thousands of people in Australia are thinking as I am thinking; they are not content to have a " cement " mind, but are willing to learn.


Senator McBride - They are political acrobats.


Senator BROWN - Whenever I try to say something helpful, Senator McBride utters some parrot cry. I shall ignore him. I have tried to clear up some misunderstandings about Russia which are due largely to prejudice. I repeat that in Russia the money system is the servant of the people, not their master.

A study of conditions in Germany is most interesting. The German people have taken advantage of the knowledge gained by their intelligent men, and have put into operation a financial system under which every man and woman capable of performing work has been absorbed in employment. That occurred before the war began. If I can show how Germany has eliminated unemployment and is making the fullest use of its people, I think that I am doing better service than if I were to indulge in bitter, stupid, political blathering. Surely we are all out to learn ! Germany has taught the world a lesson which we should do well to heed. I admit that Germany's great strength in arms is being used for a vile purpose, but my point is that the German people have made use of the intelligence among them, not only militarily, but also in the field of finance. We may hate the German rulers and their Nazi system, but we can learn something from them, notwithstanding that, we are determined to fight to the death against their attempt to force their system on the people of this country.


Senator Allan MacDonald - Some of the methods adopted by Germany are too vile to copy.


Senator BROWN - The application of their methods is "wrong, but we still may learn from them. We should not close our eyes to what is happening in other countries, but should take advantage of whatever they can teach us. As 1 said earlier, the countries opposed to Germany in this war are willing to take advantage of any knowledge they can gain of German military secrets. 'They should be just as willing to take advantage of things for -the good of the people that can be learned from the Germans. Sitting suspended from 12.45 to 2.15 p.m.


Senator BROWN - Finance has been made the servant of the German people. But whilst it has been made the servant of private capitalism in Germany, in Russia it has been made the servant of a socialized country. Some people contend that in both countries these financial plans were implemented by brute force. However, the considered opinion of most thinkers who have studied developments in Russia and Germany is that that was not the case. Some of the finest and most intelligent men brought their intellectual powers to bear on the matter, with the result that Germany, for instance, was able to cast aside its financial flat.earthers. They discovered that finance was round. The advance made by modern financial thinkers in Germany represents just as great an advance on the old ideas of finance as that achieved by the geographers who proved that the earth was not flat but round. It must be admitted that a wonderful advance has been made in finance in Germany. This new system retained the profit incentive, whereas Russia has destroyed the profit incentive. I shall explain briefly the methods by which Germany assumed control of its banking system in order to place all its unemployed in work, and keep its factories operating 100 per cent. The Nazis controlled the State completely. They sold their securities to the Reich Bank. The total deposits in the bank were increased by the total amount which the Nazis received for their securities. The bank's assets, therefore, were increased by government paper. The next problem was how to discharge those deposits from the banking system after they had been used for the purpose for which they were required. When bank deposits exceed a certain percentage, a certain amount of trouble is ahead. At least, that is the contention of honorable senators opposite; and we on this side accept that point of view. The Nazis used that money to buy, say, guns from Krupps. In payment a. cheque is issued by the Government, and that is deposited, to the credit of the firm. Whilst the universal deposits remain practically at the same figure, the cash position of Krupps is swollen to that degree, and that firm thus acquires funds for investment. A similar transaction is made with other big firms; and the result is a, surplus of liquid funds. That surplus might be so large as to cause interest rates to fall. Of course, that would be disastrous to investors. It is at this point that the Nazi Government uses its absolute control. It suggests to such firms as Krupps to buy a block of government securities from the Reich Bank-; and in that way the position is liquidated. By "being able to take the money back in that way from Krupps and other private firms, the 'Government can cancel that money, and reduce the total amount of liquid funds on the market. Those who have studied the German system say that it is fool proof, and that it enables the Nazi Government to employ its total labour. I have thought about that system. I do not say that I possess any great faculty for solving these financial problems but, quite frankly, I cannot see how, under the German system, the problem is solved completely, because there would be a surplus of .government securities held by private firms and private individuals. The only solution of that difficulty which I can see - and it may be .followed by the Nazis - " is for the Government to take back those liquid funds from the various firms in the form of taxes. That, briefly, is the scheme adopted by the Nazis in Germany ; and, prior to the war, it enabled them to employ all available labour and to build up one of the most powerful military machines the world has known.. At the same time, the Nazi government was able to develop the country through public works to a degree never known previously an modern history. Supporters of the old capitalism hold the theory that the growth, of capitalism will employ all people iri a country if that growth could be speeded up sufficiently rapidly. "We know that that theory is not sound. Indeed, Australia has, at various times, paid the price of this weak link in our capitalist democracy. During the last depression, for instance, over 400,000 of our people were out of work. There was no denying the fact that their capacity was sufficient to provide all of the food and clothing required by the nation. However, because of the weak link in the capitalist system, this huge number of people was thrown out of work. There was never a time in the history of our country when we had so many unemployed. This shows one of the greatest faults in capitalism, and it has been evident at various times. During depressions, men have been cast on the industrial scrapheap, and they and their dependants have been forced to starve. At such times these poor people were given the dole. Later, governments went a little farther and devised other methods in an attempt to destroy the canker that was eating the heart of the nation. I am not advocating the Nazi system; but if what I have said be true, and I am only repeating what I have read on the subject, I simply raise the query as to whether we cannot learn some lesson from Germany. Undoubtedly, Germany has changed modern capitalism. It has certainly not destroyed it; Russia has destroyed it. Undoubtedly, Germany, has been able to remove all of the obstacles and limitation of its financial environment.


Senator Allan MACDONALD - How will the German government repay its loans ?


Senator BROWN - I have already made that point. So far as I can see, the only way it will be able to repay its loans is by taking back those securities which it has sold to the various private firms. They can be taken back through taxes; and, as a matter of fact, taxation is used in Germany as a means to reduce the total liquid assets. It is now proposed that we should do that in Australia. The difference between our proposals and those of honorable senators opposite is that honorable senators opposite want to take that money from the lower-paid workers in the form of compulsory loans. Russia has a form of compulsory loan. So far, we have not compulsory loans in Australia; but honorable senators opposite suggest that we should adopt that system, and recover all available liquid assets by taxing the lower-paid workers. Over 50,000 workers have been transferred from private industry to national works of great importance. I know many men who have been taken away from jobs, on which they received £7 or £8 a week, and have been put to pick-and-shovel work, although previously they never handled a pick or shovel in their life. In effect, we have conscripted them for employment on national works. They are taken at a moment's notice from their old jobs, and transferred to districts far removed from their home towns.


Senator FRASER (WESTERN AUSTRALIA) - And they are obliged to shoulder extra commitments.


Senator BROWN - That is so. Do not let us hide the facts. These men are undoubtedly making a great sacrifice for Australia. Honorable senators should consider what it would be like if they themselves were taken from their present jobs, in which they receive £1,000 a. year, and, at a moment's notice, placed in camps to do pick-and-shovel work at,, say, £5 a week-


Senator McBride - Or in the fighting forces ?


Senator BROWN - Yes. If we look at the matter from that point of view, all of us should be prepared to make greater sacrifices. We do not know what the future will bring; but at present we say that we are not going to impose compulsory loans on the workers. On the contrary, we are going to give to them an opportunity to lend their money. Senator Darcey and I hold similar ideas on the subject of finance; but that is the idea of our party, and as loyal members of it we subscribe to it. We say to the people of Australia, " You doubled your subscriptions to loans last year; let us see if you can double them again this year ".


Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - It is not so easy as that.


Senator BROWN - Time alone will tell; but I point out to the honorable senator that the liquid assets in this country have been increased enormously. It may be all financial legerdemain. Personally, I should prefer that the Government dealt first with economic realities. 11 am fly, the production of guns and food, find the training of our forces. Howover, we live under a financial economy, and must deal with the financial aspect. Unfortunately, the minds of many men are clouded by this financial legerdemain. For instance, we have the extreme financial reformer, and also the extreme conservative. As an example of the latter, I take the following quotation from a statement made by Sir Ernest J. B. Benn : -

The philosophy of pauperism must be reinstated with all its healthy stigma and the man. whatever his position, who accepts any sort of "dole" must be made to experience the restraint of a feeling of failure.

That is the point of view of an extreme lory. He would go so far as to say that if some financial decision meant placing millions of people out of work, he would stick to his philosophy that they should exercise their individual initiative to overcome, their difficulties. The Labour party does not subscribe to that point of view. We believe that by social cooperation, political effort, and economic common sense we can ordain the economic system in such a way that we can give employment to all our people. We have done that in war-time. We have done it to-day. because the nation is united and because we have thrown to one side financial legerdemain. We have insisted that there is a job to be done. Wetake the view that, whether or not we can get the money, men must be put to work on national projects of urgent importance, on the farm, or down the mines, in order that all will work for the nation in its emergency.


Senator McBride - Does the honorable senator subscribe to the principles enunciated by the Treasurer?


Senator BROWN - I say "yes" to that but, although it is easy to ask a question, it is often difficult to answer it offhand.


Senator McBride - It is easy to answer" yes " or " no ".


Senator BROWN - If is not. The late Sir George Reid on one occasion at a meeting propounded to an elector a question which could not be answered in that way. It was "Have you ceased beating your wife?" It is a matter of absolute historical fact that the Leader of the Senate (Senator Collings) on one occasion in Brisbane pro pounded that question to an interjector who was very insistent thatt he honorable senator should answer him yes " or " no ". The man immediately rushed down the hall, knocked the chairman out of his chair, upset the table, struck Senator Collings in the face, and smashed his false teeth, and finally had to be seized and dumped over a 20-ft. balcony before he could be quietened. It just happened that of the one million inhabitants of Queensland the honorable senator had picked on a man who only a few days before had been released from six months incarceration for beating his wife.

I have been trying to the best of my limited ability to show what is being done in other countries, and to lift the level of the debate from the low morass of political recrimination to which it had sunk. Germany and Russia have shown the world how to use labour power to the full. They did not suffer from the money complex, nor did they cease to use their labour when the financial machine could not turn out the necessary credits. They made the machine turn out the necessary credits, got rid of their medicine men of finance, and faced realities, as we ought to do. Not many years ago, when we wanted to send a man on to the land, we supplied him with a tin of treacle, some flour, an axe and a mortgage, and expected him to do a successful job. We nave now reached the stage that we can use an organized army of labour. A limited volume of labour was available on the sugar-cane fields, but I would have taken an army of men to do the job, and clean it up in a short time. Why should we not have an army of labour as well as a military army? We can do things on a big scale, . if we are only sensible enough to use the labour at our command. I should go further and use every prisoner of Avar to help to develop this country, not to put any of our own men out of work, but to make use of the prisoners' energy. Germany,Russia and Italy do it and there is no reason why we should not. If we do not undertake work on a large scale, we shall be at the mercy of the enemy, and God knows what will happen then. I have shown the position' as I see it. There is no doubt that we still have a lot to learn. We can by organized control of the banking system safeguard the interests of all those who in the past have placed their money at the service of the State. Labour guarantees to safeguard those who have saved money. At the same time I believe that by studying financial questions, and the exercise of our undoubted intellectual powers, we can make use of a new system of finance in order to overcome economic disabilities.


Senator McBride - Is not the honorable senator going to mention the budget?


Senator BROWN - Many have already mentioned it. I have simply been trying to show whathas been done in other countries to provide the money to carry on necessary works. I believe that the Treasurer (Mr. Chifley) and those associated with him have done a very good job, and that a certain amount of money will be forthcoming. I cannot say that the whole of it will be, but we have at the head of the Government men who have common sense and financial sense, and if the people do not overcome their difficulties in the next few months in the way that has been outlined to them, other measures will, I am sure, foe taken. I, hope, as I have done for many years, that by means of the control of finance we can do a great deal towards overcoming our disabilities. There are other problems that we shall have to consider; we shall have to exercise much common sense and intelligence in order to solve them. I do not believe that, merely by an alteration of our financial arrangements, we shall overcome all our difficulties, but if we have the courage we can use the present financial system in prosecuting the war to a successful conclusion, and at the same time safeguard the lives and living standards of our people. If that standard has to be lowered as it most likely will be as the war goes on, conditions worsen, and the work becomes harder, I am sure the workers will accept the position, and it will remain only for those who have a greater measure of this world's goods to show their bona fides by setting a glorious example to the working classes.

In conclusion I wish to deal with propaganda. I have told my party that under the present system we as a nation are not making the fullest use, by means of the Department of Information, of the powers of propaganda and education. I believe that the Department of Information should be, apart from the service departments, the most important.


Senator McBride - The Government is using it very well. It is putting the Government's point of view very consistently.


Senator BROWN - It has done a very good job, but is not being used to the fullest possible extent. It ought to be used to put the Government's point of view, because Labour owns only a few small newspapers throughout Australia. The majority of the daily and Sunday newspapers are owned by our opponents. I say frankly that any government, no matter what its calibre or colour, should havethe right to place its point of view before the people. I know that the Labour party and the Labour government are maligned, their words twisted, and a false conception of their attitude laid before the people. I should like the propaganda, of those who are opposed to the Government, when it is contrary to the best interests of the country, to be very much curtailed. A portion of the press should be set aside to publicize our activities. That is my own idea, although it may not be in accordance with the views of some members of the Labour party. [Extension of time granted.] The press undoubtedly is very powerful. I do not blame in any way those who are the servants of their masters. They have to interest the public by telling their stories brightly. A story is often coloured for that reason, and the man who can tell a highly coloured story often gets the job on certain types of newspapers. One well-known gentleman, who is no longer in Canberra, illustrating to me how the people can be misled, told me a story relating to the time when Canberra was " dry ". A pressman said to him, " I have no story for the week-end, and do not know what to do ". He took him outside Parliament House and showed him three empty bottles under a tree. From that was built up a story about the buying of beer in Queanbeyan, and drunken orgies under the trees in

Canberra. The press can do wonderful work, as can the Australian Broadcasting Commission. I believe that we should make the fullest use of both agencies. Recently I read in the press a statement that members of this Parliament do not take sufficient interest in the war, because, .of so many questions put to Ministers, not one related to the war. The fact is that members often ask Ministers questions privately because the publication of the answers would not be in the best interests of the nation. Only to-day I could have had wonderful press publicity, if I had asked questions in the Senate about certain information which .1 received. The country would have been electrified from one end to the other. There was a basis for the information that was supplied to me, and the authorities are taking action with regard to it. !' mention it now only to show the press that every member of Parliament is keenly interested in the war, and could nsk many questions relating to it. We are, however, anxious only to do our best for the country. The fact that we sire silent about certain matters does not prove that we are inactive. I 'have, with other honorable senators, taken certain action to bring about peace in industry. T know how easily false conceptions can get abroad in regard to the workers. In one industry, as the result of seeing the employers and the workers, we were able to arrange for the work to proceed and one American officer expressed to me personally his thanks for the action we took. It is only fair that the press should tell the truth, in regard to many of our activities that are hidden from the public. As an illustration of the effect of propaganda, I may mention that most young men who join the Air Force want to be pilots because the pilot's job is glamorized although observers and air-gunners are equally important. An observer has to be highly intelligent and must understand mathematics. I heard of an instance today in which the pilots were spoken of as if they were the only necessary members of an air crew. The others were spoken of as " only observers " and " only airgunners ". A certain amount of educational work is being carried out now with the object of showing that one job is as important as the other. We must give all credit to these men who are .risking their lives, whether they be pilots, observers or air-gunners, and I plead for a recognition of the valuable work that is being done.

There is one other matter to which I should like to refer and that is the complaint that the " silvertails " in Melbourne are receiving promotions, while the lads who are doing the actual fighting are more or less forgotten men. I have had many letters from Air Force men stating that it is extremely difficult to obtain promotion. Some of them have received increases from a pilot officer's pay to a flying officer's pay, but their promotions have not been gazetted. I was pleased to learn from the Minister for Air (Mr. Drakeford) that 200 promotions are to be gazetted shortly. The father of a member of the Royal Australian Air Force told me that, although his son had been serving for two years in Europe and India, he had received no promotion. He feared that he was one of the many "forgotten men ". Melbourne men who enlist for administrative duties soon get rapid promotion. There should be some distinction between the men of our fighting forces and those individuals such as lawyers who are employed purely in an administrative capacity and strut around Melbourne as if they are doing an unusual job. It is true that administrative work has to be done by someone, but some distinction should be made. We should see that our boys who are risking their life in the defence of this country are given just treatment.







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