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Wednesday, 2 March 1932

Mr HOLLOWAY - I ask honorable members to look carefully at this measure, and not allow themselves to be misled by impatience or antagonisms.

We have never before been faced with a bill of this kind. I do not think that we can avoid concluding, if we are reasonable men, that numerous speeches that have been delivered in our various parliaments, and On public platforms, in the last year or two, have shown that there is a tremendous bias against certain political leaders in New South Wales. This, possibly, has led to the introduction of a bill which savours of wartime, rather than peace-time, legislation.

I honestly believe that the measure is unconstitutional. The basis of our Constitution is the absolute sovereignty of the various States which agreed to weld themselves into a federation. Any act which violates the sovereignty of even one of the units of the federation, in my opinion, violates the Constitution of the Commonwealth itself. I cannot, for a single minute, believe that the High Court will do other than declare this measure unconstitutional.

Mr Thompson - There is no sovereign authority in the Commonwealth to-day.

Mr HOLLOWAY - In view of the very complex situation which faces us, we should be prepared to do unorthodox things. The Prime Minister referred today to the steps which the Government of Victoria is taking to solve the unemployment problem in that State; but the success of the move being made by that Government will depend entirely upon the willingness of the Loan Council to make a sum of approximately £1,500,000 available to Victoria. Unless the Commonwealth Treasurer, as a member of that council, is willing to make this money available, all the efforts that have been made in Victoria in the last three or four months to solve the unemployment problem must inevitably fail. I believe that the political leaders of New South Wales have tried to stand up to their contractual obligations, but I am not prepared to assume that, because they have not been able to do so, they have freely and voluntarily done something immoral. We should remember that if we pass this measure we shall deal a. blow, not at the Premier of New South Wales, or his government, but at the people of that State. The New South Wales Government has been unorthodox; but are not all the States of the Commonwealth also on the point of being unorthodox ? Even if unorthodox things are done, we are not justified in assuming that they have been done from choice. I desire that we shall meet every penny of our obligations, but a time has arrived, as even the most casual scanning of the international situation shows, when every country in the world is asking for a suspension of the financial conditions to which it agreed in other and better days, and it is claimed by experts that a complete cancellation is inevitable. If the countries of the wo:'d arc not seeking to repudiate, they are at least seeking to suspend the payment of the interest on their debts, and in some cases, they are even seeking the entire cancellation of all debts. Surely, we should not, because of our hatred of some one who has been charged with an immoral financial action, impose upon ourselves super moral standards! We must recognize that our international, financial, and economic problems have brought into question all ihe standards of other days. In our present circumstances, we have a right to ask ourselves whether the hard and fast bargains of other times should be insisted upon, and whether it is even possible to adhere to them. Some of the greatest financiers in the world - men who are neither Labour leaders nor socialists - are advocating the suspension of existing conditions. They are saying that to ask people to honour their obligations to the last fraction is immoral, in view of the revolutionary change which has taken place during the long period of deflation of values since the war. Sir Ernest Cassels, and other prominent financiers, are among those to whom I refer. These men are saying that a spirit of compromise must be shown. I wish it to be understood that I am not defending any financial immorality or default on the part of NewSouth Wales; I am. merely asking that serious consideration shall be given to the conditions which face the whole world.

Mr Fenton - The remarks of the honorable member are applicable chiefly to Avar borrowings.

Mr HOLLOWAY - They apply also to international debts generally.

Mr Thompson - But what about the people who lent their money?

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