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Tuesday, 25 November 1930

The PRESIDENT - I think he is. The Leader of the Senate may contradiethim if thestatement is incorrect.

Senator Daly - Then I shall be glad if the honorable senator willname the Minister who submittedtheresolutionto whichherefers.

Senator GUTHRIE - I understood that it was moved by Mr. Anstey and supported by Mr. Beasley.

Senator Daly - Will the honorable senator confine his comment to Ministers in the Senate?

Senator GUTHRIE - That shows the truth of my assertion.I do not suggest that either the Leader of. the Senate (Senator Daly) or his colleague in this chamber would support such a resolution, which, if accepted by the Government, would have been a clear indication that bondholders were not going to be paid the money due to them on the 15th of December. The subscribers to the loans maturing on that date were definitely promised a certain rate of interest, and also that the loan would be repaid on the date named. In every essential feature, it was a contract between the Commonwealth Government and the citizens of the Commonwealth. Imagine then the feelings of subscribers to that loan when they heard the awful news contained in the Anstey-Beasley resolution. We know, of course, that this Senate and the people of Australia will never allow the Government to dishonour its promise, but our creditors in other countries do not know this.

Sitting suspended from 6.15 to 8 p.m.

Senator GUTHRIE - I was very glad when the Acting Prime Minister (Mr:. Fenton) during his stay in England took exception to the so-called news published in the British press concerning Australian affairs. Nearly everything one sees in the press abroad, particularly in England, having reference to Australia, is. derogatory and damaging to it. The news cablegrams' sent from Australia to the press abroad are disgraceful. They are calculated to create in the mind's of those who do not know this; country the idea that Australia is a barren, droughtstricken desolate country inhabited by a dishonorable lot of crooks. This has. gone on for years. Every day the English newspapers tell their readers about, a drought, a flood, a fire, or astrikein Australia, or that Australians are considering; the repudiation of debt's. There is never anything in praise of Australia. The Australian people are represented to be an inferior race.

Senator DUNCAN-HUGHES (SOUTH AUSTRALIA) - Yet we give Great Britain substantial preference.

Senator GUTHRIE - We do. As I shall show later; it was during the regime of theBruce-Page Government, worth £8,000,000 a year to Great Britain, The British newspapers get their informationfrom somewhere. Enemies of Australia must be sending it.

Senator Daly - They are not in the Labour party.

Senator GUTHRIE - I am not suggesting that they are and, indeed, I am pleased to recall the fact that Mr. Fenton said that if the truth about Australia could not be published occasionally in the English press, there would need to be a censorship of press cables from Australia. I am strongly in favour of having such a censorship. We have every right to be proud of our country and Great Britain has every reason to be proud of her lusty son. We have one of the most productive countries in the world. There is nothing Australia cannot or does not produce as well as any other continent. We excel in all our produce, they are all of high quality. Of our people 98 per cent, are of British stock. It is a higher percentage than England has. Everyone knows that the east end of London is crowded with foreigners; in fact, every one knows that England is the dumping: ground for foreign goods and foreign people;

Senator Lynch - But we have some drawbacks.

Senator GUTHRIE - We have, just the same as every country has.

Senator Lynch - And one of them is the present Government.

Senator GUTHRIE - I have no wish to be personal in these remarks..

Senator Daly - The honorable senator is proud of everything, Australian. He is even proud of its Government..

Senator GUTHRIE - I am proud of Australia with all its faults and any temporary drawbacks there may be forthe time being. We never see in the press abroad references to the magnificent war record of Australia. Australians excel at sport. Australia has produced great musicians, like Melba, the world's greatest aviators, and great scientists and great surgeons. The. personal surgeon to His Majesty the King is a Victorian. My blood boils when I hear the remark of visitors to the Old Country about what they read abroad concerning Australia. The result of it all is that the people of England are ignorant of Australia, its deeds and capabilities. Their ignorance in this respect is about equal to that of the Americans regarding Great Britain's effort in the world war. "We ourselves are largely to blame. Our press cablegrams to Great Britain are disgraceful. I do not know who sends them. Much of the Australian literature and most of the Australian moving pictures harp on bushrangers. Books dealing with the Kelly gang and the moving picture For the Term of his Natural Life make us out to be descended from English convicts, and that England treated her people with great cruelty. Untruthful rubbish of that type is all too frequent. The other day I was shocked to hear a member of this Parliament - not an honorable senator - say that he knew Armistice Day because it was on the eleventh day of the eleventh month that Australia's national hero, Ned Kelly, was murdered by the police. He knew Armistice Day and kept it up, not in remembrance of those who fell fighting for their King and country, humanity and liberty, but because on that day of the year, a stealer of sheep, horses and cattle, and a murderer had justly met his death.

It is shameful that our reputations as a people should be blackened by such wild talk as we have heard lately from members of this Parliament, and I trust that the Government will not be so mad as to adopt the suggestion to innate the currency by printing paper money. It would simply mean higher prices for all the goods we require for local consumption, higher costs on all our people in Australia, higher production costs on everything we export, and lower prices for it. Inflation, if indulged in, would inflict hardship on the wage-earner. The position has been put very plainly by James Murray in an excellent little book recently published, and. well received by economists everywhere. It is entitled Auditing the ki Note.Mr. Murray says -

It is surely 'plain enough that, if the amount of work and produce sold is the same as previously hut the number of units used for exchanging them is increased, more units must be paid for each hour of work and each pound of goods, though no more work is done and no more goods are produced.. The worst sufferers are creditors and wage-earners. The former are paid in money that buys less than that which they lent. The latter, though wages rise with prices, suffer from an inevitable lag between the two so that remuneration does not overtake the cost of living.

Mr. Murraygoes on to explain

The ?1 note is a debt due by the Federal Government, payable to bearer on demand, in gold; and that legally the holder of the ?1 note is entitled to demand, in Australia,, woods or services to the value of a sovereign. Gold, coin, or bullion, is, by immemorial custom and by virtue of the metal's inherent qualities, a debt recognized as due by the civilized world to the holder; legal tender notes and metal tokens are, within the jurisdiction of the country in which they circulate, a debt due by the State, or the issuers, to the holders of the notes and tokens; bank balances are debts due by the bank to the customers.

A great deal has been said by honorable senators opposite about banks locking up money, about freezing credits, and about the release of credits. The statistics of the associated banks of Australia show that close on 99 per cent, of their deposit money has been lent to the people. It is a larger proportion than ever previously in the history of Australian banking. It is well for those who say that the banks are to blame for the present state of trade to remember this. It is absurd for any one .to say that the banks are not lending out their money. Mr. Murray also says -

It cannot be too often reiterated that government notes, before being issued, are printed pieces of paper only; they cost no more than the price of the paper and the printing. Otherwise they have no value at all. The greater the amount of notes in circulation in excess of requirements, the less the value of the notes, until the value of the note is negligible - a ?1,000,000 note is of less value than a packet of cigarettes.

That has been so in countries like Russia, Germany, and, to a certain extent, Prance, where there has been inflation. Mr. Murray sets out the position in this way -

Take a nobbier of Scotch whisky - or, if you baulk at whisky, take a glass of milk; it's pure: normally dilute with water - it is still good; add more water and drown the miller and the value is negligible. That is inflation. Apply this to the issue of notes; the result is the same. Notes issued against gold are worth 20s. in the ?1 of gold. Notes issued merely against the credit of the State are not worth 20s. in the £1 in gold, and an unlimited issue of notes against the mere credit of the State is worth nothing in gold.

Should these notes be presented for payment, they cannot be redeemed in gold. It i6 a popular fallacy that when the Federal Government issues a £1 note, it gives value with the note; yet it is an obvious, but amazing, truth that when the Federal Government issues a £1 note it does not give value. In every subsequent issue of notes by the Federal Government it is a physical impossibility for the State to give economic value; it cannot give, but on the contrary it must take, and it takes from the community. The only resource on the State is the power to tax, and that is not unlimited. It has already about reached! its limit.

We all know that under the present Government taxation has more than reached its limit. It has become a depressing burden on industry and on the people. Mr. Murray continues -

It will be noted that recently overseas snipowners stipulated that freight prepaid in Australia shall be in British currency, not in the depreciated Australian currency. This is merely an instance of how a depreciated currency reacts on a community. The solution is to reduce the over-issue of notes in circulation and so bring down prices to synchronize with the movement in overseas prices. This essentially necessitates the bringing down of the paper money wages, though not of the real wages, or wages expressed in goods and service. There is no other way. Australia is the only country within the Empire where the policy of the note issue is controlled by the State. If the State borrows from the community by forcing on it free of interest irredeemable £1 bonds or notes, the community pays.

It is time the Government, and the people of Australia generally, faced economic facts which have been ignored, not only in our legislation, but by a majority of the people. We can no more ignore economic facts that we can stem the tide with a piece of string. The facts are simple. Our national income has been reduced from between £100,000,000 and £150,000,000. It is an old truism that one cannot take more out of a bag than has been placed in it. There are some who say that one cannot take more out of a bottle than has been placed in it; but that is hardly accurate, as in addition to the contents, I am told that a headache is sometimes obtained from a bottle. The reduction in our national income should be shared by all sections of the community. Those in a sheltered position in highly protected industries, members of Parlia- ment, and public servants, are obtaining profits or salaries equivalent to those which they received in previous years, while others are not receiving anything. A selfish section insists upon receiving the same wages and salaries, notwithstanding the depleted state of our revenue, with the result that a large proportion of the community have to be rationed or denied employment. It is a cruel uneconomic procedure. When men are rationed their wages are, in effect, reduced ; but the cost of production or of living is not correspondingly reduced. The so-called high standard of living in Australia does not exist. While the cost of production and wages have doubled since pre-war days, real wages, based on their purchasing power, have increased by only 1 per cent. The so-called high standard of living in Australia is enjoyed by only a few, while those who are rationed, or who are out of work, have no standard at all.

The latest statistics disclose that since this Government took office unemployment has increased from 12 per cent, to 20.5 per cent., and that in some States under Labour Governments such as South Australia, it is as high as 25 per cent. The position is probably worse than those figures indicate as they are based on the returns supplied by trade union organizations, with which a large proportion of casual and other workers, who are the first to suffer, are not associated. Probably 25 per cent, of our adult population is out of employment or soon will be.

This awful state of affairs is due to some extent to world-wide depression, and to a degree to our lop-sided legislation. Customs duties have been increased until the fiscal policy of this Government is almost one of prohibition. Moreover, there are striking anomalies in our tariff schedule. One of the latest acts of the Government in this respect is to place an embargo upon importations of galvanized iron, which is used extensively by primary producers and those who desire to build cottages for themselves. All hut those who live in expensive houses must use galvanized iron. The action of the Government in this respect has resulted in granting one firm a complete monopoly.

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