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Thursday, 3 April 1941

Senator E B JOHNSTON (Western Australia) . - On several occasions in the last few days I have listened to Senator Darcey speak on the subject of finance. It appears to me that what he advocates is uncontrolled use of the printing press. If he had his way, as I understand his remarks, he would simply put the Note Printing Branch at work to issue ?50,000,000 worth of notes and thereby bring about uncontrolled inflation, the results of which we saw a decade or so ago in Germany and other Central European states. If the printing press were set to work as apparently desired by the honorable senator, and that not inconsiderable body of public opinion which stands behind him on financial matters, no one would suffer more than the workers and those who are dependent on wages and salaries for their subsistence.

Senator Darcey - On a poinit of order. I have never made use of the words " printing press " in this chamber.

The CHAIRMAN - That is not a point of order. The honorable senator, if he so desires, may make a personal explanation when Senator Johnston has concluded his speech.

Senator E B JOHNSTON - Frankly and freely I admit that Senator Darcey has not used the words " printing press ", but I have often listened to the honorable senator and my interpretation of what he has had to say is that he is an advocate of uncontrolled inflation. If this is not so, will the honorable senator state exactly how the money would be raised by him.

The CHAIRMAN - Order ! Senator Darcey's method of finance is not before the chamber.

Senator E B JOHNSTON - As I see it, Senator Darcey desires that this £50,000,000 be raised not by the legitimate means of a loan from the hardearned savings of the people, as is properly desired by the Government, but by recourse to the printing press.

Senator Cameron - Senator Darcey has never said that.

Senator E B JOHNSTON - Not in so many words, but by implication. I know that the honorable senator's policy will never be applied by this Government, in whose financial policy I have every confidence. But, if it were followed, those who would suffer most from it would be the . workers and all people who are dependent on fixed wages and salaries for their subsistence. The prices of all commodities and of all the necessaries of life, particularly the imported, would rise higher and higher, and the thrifty worker would find that the value of his savings hank account and his insurance policies had depreciated. At any rate the Acting Prime Minister (Mr. Fadden) has told us that we have already used the national credit to the danger line. Under this bill we shall use the credit of the Commonwealth to the fullest degree. I commend the Government for the policy it is adopting, and urge it to stick to the margin of safety and not to be misled by those who would subject the people of Australia to the miseries of uncontrolled inflation.

Senator Darcey - I desire to make a personal explanation. - For two and a half years I have been trying to teach Senator Johnston the fundamentals of banking. I have never used the words " printing press " in this chamber, but I direct the attention of the committee to a letter which Senator Johnston forwarded to the Treasurer (Mr. Fadden) on .behalf of the social credit group, which shares my views on financial policy.

The CHAIRMAN - The honorable senator has explained that he has never used the words attributed to him by Senator Johnston. The committee accepts his assurance.

Senator Darcey - During the course of his remarks Senator Johnston maligned me.

The CHAIRMAN - Senator Johnstonwithdrew the Words to which the honorable senator took exception.

Senator Darcey - Senator Johnston sent a letter to the Treasurer, who is now the Acting Prime Minister, at the request of people -in Western Australia who hold the same ideas on finance as I do. One of the paragraphs of that letter referred to the use of the Commonwealth Bank to finance the war effort. In his reply, the Treasurer said -

The letter from Senator Johnston practically explains what the Government is already doing. It is using the national credit.

Later, the Treasurer said that if the suggestion made by Senator Johnston were given effect it would result in the financial ruin of Australia. Senator Johnston now comes along with all this tarradiddle about printing notes. In Australia, there is only about £65,000,000 worth of notes, and, according to a statement issued by the Commonwealth Bank Board, only £15,000,000 worth of notes is held by the associated banks. How, then, can the associated banks lend £20,000,000 to the Government?

The CHAIRMAN - The honorable senator i3 going beyond a personal explanation.

Senator Darcey - My intention in rising was merely to point out the idiocy of the honorable senator's remarks.

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