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Wednesday, 28 April 1915

Sir WILLIAM IRVINE (FLINDERS, VICTORIA) - Was it not part of the arrangement arrived at by the Conference that the States were not to borrow money except for the conversion of existing loans, and were not to compete with the Commonwealth by entering upon the general money market for borrowing? Obviously the object of that was not to embarrass the Federal Government, which was lending the States a large sum of money. Does not the Prime Minister consider it necessary, in the interests of the Commonwealth, to see that that condition, which attached to the lending of that large sum of money, should be enforced?

Mr FISHER - I have again and again called the attention of the States to the terms of the agreement which the Premiers signed, but, as the honorable member for Flinders knows, in this matter we are not like private contracting parties. Circumstances may arise in which it would be in the interests of a State and the Commonwealth to relax the terms of that arrangement.

Sir William Irvine - But should not the States approach you first?

Mr FISHER - They have mentioned the matter to me more than once. One of the Premiers broached the subject before he left Melbourne, just after signing the agreement. In the case of another State, immediately the unemployed trouble arose, I was approached on the subject, and on the advice which was available I felt that it was my duty not to hold the States tightly to their agreement. However, the agreement is not set aside, and I never pretended to have any power to set it aside.

Sir William Irvine - Is it understood that the States may borrow without restriction ?


Mr Riley - What is to prevent them from doing so?

Mr FISHER - In my opinion, only their honour.

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