PM Transcripts

COMMONWEALTH GOVERNMENT.
DIGEST OF DECISIONS
AND ANNOUNCEMENTS
IMPORTANT SPEECHES
BY
THE PRIME MINISTER
( THE RIGHT HON. j. B. CHIFLEY).
No. 131.
PERIOD -9TH OCTOBER, 1947, to 5TH NOVEMBER, 1947.
* h Aumwdty:
L F. JoamN. Cammnwealth Governm Printw. Canbom.
( Printed in Austmlia.)
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L INCOME TAX.
UNIFORM TAXATION-REIMBURSEMENT TO STATES,
BILL INTRODUCED.
In Parliamnt. v-Qn 9th October, 1947, the Prima Minister ( Mr.
Chifley) introduced the States Grants ( Tax Reimbursement) Bill. Mr.
Chifley said-
The object of this bill is to provide for the payment of an additional
tax reimbursement grant to the States under the uniform tax plan.
Under the 1946 act, a revised basis of tax reimbursement grants came
into operation as from 1st July, 1946. Main provisions of that act
were-Aggregate grant in 1946-47 and 1947-48 to be œ 40,000,000, distributed among
the States in Accordance with the first sche~ dule of the act.
-In 1948-49 and subsequent years, the aggregate grant to be increased in
accordance with the formula, which takes account of the variations in the States,
jpopulations, and one half of the percentage increase, if any, in the level of
average wages per person employed, over the level in 19441-47.
In 1948-49 and subsequent years, the distribution of the aggregate grant
aniong the States to be varied to an increasing degree in accordance with the
adjusted populations of the States.
The gralit to each State in any year to be not less than that received in
1946-47.
" At the conference of Commonwealth and State Ministers in
August, 1947, the Premiers maintained that the aggregate grant of
œ 4,000,000 would be insufficient to enable them to balance their budgets
in 1947-48. It is clear that there has been a deterioration of State
finances. Mainly because of the success of the Commonwealth Government's
low interest rate policy, State debt charges-which constitute a
major item of State expenditures-have in the aggregate not increased
over the 1938-39 level. In the field of administration and social services,
however, State expenditures are showing an unusually rapid increase,
partly because of the impact of rising costs and prices.
o " The Commonwealth Government does not desire to upset the basis
ofreimbursement provided for in the 1946 act, which, in the absence of
a major change in the relations between the Commonwealth and any
State or States having an effect on the finances ot a -State or -States, was
to operate for at least seven years. On this basis, the State governments
are, in effect, guaranteed the reimbursement provided for in the act,
irrespective of fluctuations in the financial position of the * Commonwealth.
Accordingly, the Government proposes that the States Grants
( Tax Reimbursement) Act 1946 shall continue in operation, with the
addition of a section to provide for-
The payment of an additional grant of œ 5,000,000 to the States in 1947-48.
The payment of an additional grant in subsequent years to cover any del
ciency that may occur between the aggregate grant as determined under the
present provisions of the act and 45,000), 000.
" It is also proposed that in each instance the additional grant is to
be distributed among the States in the same proportions as the aggregate
grant of œ 40,000,000 is distributed at present [ The bill was passed.
( For earlier references, please see No. 129, page 41.)

ROYAL AUSTRALIAN NAVY.
NAVAL BOARD-FOURTH MEMBER.
On 9th October, 1947, the Minister for the Navy ( Mr. Riordan)
announced that Captain E. W. Anstice had been appointed Fourth
Naval Member of the Naval Board.
COMMONWEALTH LITERARY FUND.
DECISIONS.
On 9th October, 1947, the Prime Minister ( Mr. Chifley) said-.
The Commonwealth Literary Fund Committee to-day awarded
fellowships for 1948 to K. ( Seaforth) MacKenzie, J. K. Ewers, and
Miss Jean Campbell. A Commonwealth Literary Fund pension was
awarded to J. W. Gordon Jim Grahame")"
BARLEY.
STABILIZATION PLAN-CONTINUANCE.
On 9th October, 1947, the Minister for Agriculture ( Mr. Pollard)
announced that the Commonwealth Government would extend barley
marketing regulations to enable the incoming crop to be marketed by
the Australian Barley Board as in previous seasons, on a Commonwealth
basis, with a guaranteed minimum price. Urgent requests had been
made by the Victorian and South Australian Governments and growers'
organizations that that would be done.
On 30th Octobcr, 1947, Mr. Pollard announced that the Australian
Barley Board would handle and market oats of all grades under voluntary
pool with a minimum guarantee from the Government, and
would be the sole exporter of oats. The arrangement would apply in
all States, but growers would be free to sell on the open market. The
Government guarantee of 3s. 3d. a bushel on rails at growers' sidings,
plus an extra 3d. a bushel to off-set higher cost of bags, would be payable,
but growers would not be permitted to rail oats until advised by the
board. ( For earlier references, please see No. 117, page 44.)
No. 8 POOL-FOURTH ADVANCE.
On 28th October, 1947, Mr. Pollard announced that a fourth advance
of 9d. a bushel for malting grades and 3d. a bushel for feed grades had
been approved on 1946-47 crop barley in No. 8 pool. The advance
brought payments to growers to 7s. 3d. a bushel less freight for 2-row
malting barley, and 3s. 8d. less freight for 6-row feed grade.
REMEMBRANCE SUNDAY.
On 9th October, 1947, the Prime Minister ( Mr. Chifley) said-
In accordance with the approval given by the King in respect of
the observance this year of Remembrance Sunday in Britain, the Commonwealth
Government proposes that the usual arrangements be made

in Australia for the commemoration of Remembrance Day on 9th
November, 1947, as a Day of Remembrance for those who gave their
lives both in World War I. and World War II.
WHEAT POOLS PAYMENTS.
No. 11 POOLr-FIRST ADVANCE.
On 10th October, 1947, the Minister for Agriculture ( Mr. Pollard)
announced that the first advance to growers for No. 11 wheat pool would
be 4s. 6d. a bushel net for bulk wheat and 5s. a bushel net for bagged
wheat-the highest first advance for any pool.
No. 10 POOL-THIRD ADVANCE.
On 30th October, 1947, Mr. Pollard announced that a third advance
of Is. a bushel had been approved for No. 10 pool. The advance would
bring the amounts to 6s. 7d. for bulk and 6s. 10d. for bagged. less freight.
PRIMARY INDUSTRIES.
DAIRY INDUSTRY-ADVISORY COMMITTEE, REPORT.
On 13th October, 1947, the Prime Minister ( Mr. Chifley) announced
that the Joint Dairy Industry Advisory Committee which had made a
survey of farm costs of production of butter, cheese and processed milk
products had, in advance of its final report, submitted recommendations
to the Government. It had been decided that the overall -basic return to
the farmer at the factory door would be 2s. per lb. commercial butter
basis-an increase of 41d. per lb. on the present recognized cost of production
of Is. 7Id. per lb. to the dairy farmer and, in accordance with
the Government's understanding with the industry, would be retrospective
to 1st April, 1947.
The Government had decided to guarantee a price to the industry
on total production of the products mentioned for five years from 1st
April, 1947. The basic return to the farmer of 2s. per lb. commercial
butter would be subject to variation up or down in accordance with
demonstrated movements in cost factors. There would be a review of
cost factors between 1s, April and 15th June in each year during the
five years, following which any necessary adjustmnents of the basic price
now determined would be made as from 1st July of the year under
reniew. As a result of the Government's decision, increases in the retail
prices of butter, cheese and associated milk products would be necessary
and while the existing subsidy payments of about œ 4,500,000 a year
would be continued, it had yet to determine the extent to which the whole
or part of the increased prices would be passed on to the consumer. It
was estimated that from 1st April, 1947, until such time as it was
possible to adjust retail prices to the consuming public the Commonwealth
Government would pay a further subsidy of about œ E2,000,000.

The Government had approved an annual grant of an amount not
exceeding œ 250,000 for five years commencing 1st January, 1948, to
promote improved farm practices in the dairy industry. Plans would
be drawn up by the Minister for Agriculture ( Mr. Pollard) in consultation
with representatives of the industry and State Ministers of
Agriculture. ( For earlier references, please see No. 115, page 33; No. 122, page 18.)
DAIRY INDUSTRY-CONTROL, BOARD CHAIRMAN.
On 4th November, 1947, Mr. Pollard announced that the president
of the Australian Dairy Farmers' Federation ( Mr. G. C. Howey) had
been appointed chairman of the Australian Dairy Produce Board,
re-constituted under recent legislation.
( For earlier reference, please see No. 130, page 3.)
EXPORTS TO BRITAIN-UNITED KINGDOM MISSION.
On 17th October, 1947, the Prime Minister ( Mr. Chifley) said-
The Australian Government considers it desirable that Britain
should send a small expert mission to Australia to continue exploratory
discussions commenced at London between representatives of the two
Governments, regarding the production of larger quantities of food in
Australia, so that greater supplies will be available for export to the
British people.
This view is being conveyed to the British Government through the
Australian High Commissioner at London ( Mr. Beasley). He will
express the opinion, already known to : be acceptable to the British
Government, that such a mission will become familiar with technical and
other problems associated with particular primary industries, and secure
a clearer appreciation of action already being taken to stimulate
production. The Australian Government will co-operate enthusiastically in a
project to further increase output of those foods desired by Britain
which can be produced on a commercial scale here, and or which markets
for a reasonable term ahead are assured. This will necessarily include
extensions of existing long-term contracts, and the negotiation of others
-exemplified in preliminary discussions on wheat with Lord Addison
when he was in Australia.
Australia has already been able to increase direct exports to Britain
since the war ended, and to provide food for British Empire countries
in the Pacific and elsewhere. The latter has, no doubt, relieved pressure
on Britain's other supply sources. Australia's efforts will be continued
and, no doubt, can be augmented with direct aid from Britain. Meii
and machines are among urgent requirements to stimulate production
The proposed mission of experts to Australia will have an opportunity
for discussion with Australian agricultural experts, and when
proposals are matured it can be anticipated that their guidance will be
a major contribution in developments

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EXPORT. S TO BRITAIN-BUTTER.
On 5th November, 1947, Mr. Pollard said that total exports of
butter during 1946-47 were 133,642,282 lb. of which 116,640,028 lb.
went to Britain. Excepting for a small quantity, Australian butter was
shipped either to or at the direction of the British Ministry of Food and
in accordance with International Emergency Food Council allocations.
( For earlier references, please see No. 115, page 32.)
RURAL PRODUCTION.
On 19th Oct6ber, 1947, Mr. Pollard said-
Gross value of rural production in Australia for 1947-48 has been
estimated at œ 447,000,000 compared with the estimated value of
œ 379,000,000 for 1946-47 and the average annual value for the five
pre-war years ended 1938-39 of œ 211,000,000. The current year's
estimate is about 18 per cent. higher than 1946-47, and considerably
more than double the pre-war figure.
Of the estimated total, agricultural industries are expected to
contribute œ 192,000,000, pastoral industries œ 168,000,000 and dairy
and farmyard industries œ 87,000,000, of which dairy and pig products
represent œ 60,000,000. The estimated figures for 1946-47 are
œ 139,000,000, œ 159,000,000 and œ 81,000,000 respectively.
Expressed in terms of percentages, compared with the average
figures for the pre-war five year period ended 1938-39, increases in the
estimated value of rural production for the current period are-
Wheat.-More than 300 per cent. increase in value and about 29 per cent
incrpase in volume.
Wool.-About 90 per cent. increase inlva lue, but about 8 per cent. decrease in
volume. Meats ( except pig-meats).-About 133 per cent. increase in value; 9 per cent.
increase in number of sheep and lambs slaughtered, but 4 per cent. fewer beef
cattle and calves.
Dairy Products ( including pig-meats).-About 112 per cent. in value, but
per cent. decrease in total milk produced and 16 per cent. decrease in the
number of pigs slaughtered.
" Wool, estimated to return œ 96,000,000, and wheat, at œ 93,000,000,
are expected to contribute 42 per cent. of the estimated gross return"
SUGAR-AGREEMENT, BILL INTRODUCED.
In Parliament.-On 23rd October, the Minister for Customs
( Senator Courtice) introduced the Sugar Agreement Bill. Senator
Courtice said-
This bill is intended to approve the supplementary sugar agreement
made on 17th October, 1947, between the Commonwealth Government
and the Queensland Government. Under that agreement the
governments agreed to amend the present sugar agrement to provide for
an increase of œ 4 2s. 8d. a ton in the wholesale price of refined sugar of
la grade, and for the prices of sugar of other grades at present fixed by

the Sugar Agreement Act, to be increased comnmensurately. Comparison
of the new maximum prices with the present ones is supplied in the
following table Present Price. New Price.
Per ton. Per ton.
E s. d. F d.
Refined sugar of I A grade 33 41 0 37 6 8
Refinied sugar of 1XD grade 32 10 9 36 11 9
Mill white and first quality mill sugar of not less than 98
net titre--
Price to mnanufacturers 29 8 0 32 10 6
Prico to other purchasers 30 0 0 33 3 9
" The effect of the increase of œ 4 2s. Sd. a ton in the wholesale price
will be to raise the retail price of refined sugar by Ad. per lb. The new
retail price in capitdl cities will be 4jd.
When the present agreement was signed in October, 1945, the Australian
Government gave an assurance to the sugar industry that, if
during the currency of the agreement, cost levels increased substantially,
it would be prepared to consider instituting an inquiry into the position
of the industry. The Government has become increasingly aware of the
difficulties which the industry had to face during the war years and since,
and it is now convinced that the urgency of the industry's need for
assistance is such that immediate action must be taken to provide a
stimulus to the industry [ The bill was passed.
( For earlier references, please see No. 112, page 30; No. 129, page 24.)
EDUCATION.
UNESCO-AUSTRALIAN DELEGATION 1947.
On 14th October, 1947, the Minister for Post-war Reconstruction
( Mr. Dedman) announced that an Australian delegation would attend
the second session of the Unesco conference at Mexico City in November,
1947. The delegation comprised-
Dr. E. R. Walker. leader, the Ausistant Director of the Commnonwealth Office
of Education ( Mr. WV. J. Weeden), the Secretary of the New South Wales
Public Library ( Mr. J. W. Metcalfe), the Lecturer in Arts at Sydney Technical
College ( Mr. F. Medworth), and a nomninee ( if the Australian Teachers
Federation. For earlier references, please see Nos. 112, page 23; 120, page 23; 125, page 9;
127, page 32.)
BANKING CONTROL.
LEGISLATION-NATIONALIZATION, BILL INTRODUCED.
In Parliament.-On 15th October, 1947, the Prime ' Minister ( Mr.*
Chifley) introduced the Banking Bill 1947. Mr. Chifley said-
" eThe purpose of this bill is to empower the Commonwealth Bank to
take over the banking business at present conducted in Australia by
private banks. ' State banks and savings banks will not be affected.

9
It will be the responsibility of the Commnonwea lth Bank under this
legislation-To provide, in accordance with the conditions of normal banking business,
adequate banking facilities for any State or person requiring them;
To conduct its business without discrimination.
To observe, except as otherwise required by law, the practices and usages
customary among bankers and, in particular, to maintain strict secrecy within
the law as to the affairs and dealings of its customers.
The bill also envisages the development, under public ownership,
of a comprehensive banking service that will strengthen and assist the
growth of the Australian economy and provide facilities adequate to its
rapidly expanding and changing needs.
" I hardly need argue the importance of money and credit in a
modern economic system. As the means by which resources are brought
together in production, goods are bought and sold, and prices, wages,
contracts and debts are determined, it plays a part as vital to the
economic body as the blood-stream to the human body. No single factorcan
do more to influence the welfare and progress of a community thanthe
management of the volume and flow of money. Mismanagement of
money, on the other hand, has contributed to the greatest economicdisasters
of modern times-booms and slumps, mass unemployment,
waste of resources, industrial unrest and social misery. Because these
facts are recognized, there is very wide agreement to-day as to the
puirposes which a monetary and banking system should serve in a modern
economy. In that connexion I quote the views expressed in 1937 in the
Report of the Royal Comm ission on Monetary and Banking Systems in
Australia-The general objective of an economic system for Australia should be to
achieve the best use of our productive resources, both present and future. This
mneans. the fullest possible employment of people and resources under conditions
that will provide the highest standard of living. It means, too, the reduction of
the monetary and banking system is an integral fluctuation in general economic
activity. Since part of the economic system, its objective will be to assist with
all the means at its disposal in achieving these ends. ( Para. 616.)
Those views as to the place and functions of money and banking in
Australia were subscribed to by all members of the commission, even
though there was some difference of opinion as to ways of achieving
them. The Labour party has maintained for many years that, since the
influence of money is so great, the entire monetary and banking system
should be controlled by public authorities responsible through the Government
and Parliament to the nation. On this principle the Labour
party has held further that since private banks are conducted primarily
for profit and therefore follow policies which in important respects run
counter to the public interest, their business should be transferred to
public ownership. For this view the strongest reasons can be stated.
In the absence of control, private banks can expand or contract the
volume of their lending and so vary within wide limits the supply of
money available to the public. They can also determine when arid
where they will lend and on what terms; and in these operations they

are guided primarily by the interests of those who own and control
them. Whatever regard they may claim to pay to the wider concerns
of the nation, their policies are dictated in the last resort by the desire
to make profits and to secure the value of their own assets. Experienet'
of the past has been that private banks increased their lending in good
times and contracted it in bad times, lent always where the profits
seemed largest and most assured, and charged the highest rates they
could obtain for their loans and general services.
" Since trading banks have handled practically all commercial
lending within Australia, their influence on the state of business has
been enormous-indeed dominating. Moreover, the number of banks
has been progressively reduced through amalgamations, of which twelve
have been carried through since 1917. Two more were announced this
year and had they been completed the number of major private trading
banks in Australia would have been reduced to seven. By this means
the great power of private banking in Australia has become concentrated
in the hands of boards of directors comprising a relatively few men
who are responsible for the exercise of their powers not to the nation
but only to a limited number of people, some here nd some abroad, who
have invested money in bank shares.
Time and again the policies of the private banks have run counter
to national needs for steady growth and high levels of employment. To
go some years back it is correct to say that the banks fed the boom and
promoted unsound development in the ' twenties. When the depression
came the banks as a whole restricted new lending and. called in advances.
Between December, 1929, and March, 1932, their advances fell by
approximately œ 45,000,000. The effect of this was to accentuate the
contraction of business and the unemployment of those years. They
helped but little in recovery during the ' thirties, waiting rather for
improvement to come from other sources instead of taking the initiative
and helping to promote recovery. They followed these courses because
it seemed best and safest from the standpoint of their own interests.
" Labour policy on banking has envisaged that, together with the
elimination of private banking, the Commonwealth Bank would be
strengthened to give it adequate control of monetary and credit conditions
within Australia and its services would be extended to meet the
needs of all sections of the people. The Labour party has in particuluar
advocated the reduction of interet rates which, in the absence of control,
were maintained at excessively high levels.
" The Commonwealth Bank was established in 1911 by the Labour
Government as a national bank, intended primarily to compete with the
private banks on their own ground and break the monopoly they held
over the business of banking in Australia. Despite bitter opposition
from private interests and many prophecies of failure, the Commonwealth
Bank rendered great service to the nation and grew rapidly
during World War I. and the succeeding years. In 1924, however, the
Bruce-Page Government reconstituted the bank and placed it under a

board comprised predominantly of representatives of private industry
and commerce. This board was mainly interested in turning the Commonwealth
Bank into a bankers' bank and its policy was to forbid the
bank from competing actively with the private banks for general banking
business, thus restricting its expansion and defeating the key
purpose for which the bank had been established. That fact was clearly
demons: rated in evidence before the banking commission. The late
Sir Ernest Riddle, who was then Governor of the bank, stated that even
if the bank had funds available over and above those deposited with it
by the trading banks it would not use those funds for advances to people
who wanted to transfer their accounts from trading banks to the Commonwealth
Bank. That kind of situation prevailed until the Labour
Government took office in 1941. Moreover, the Commonwealth Bank
Board, as constituted by the Bruce-Page Government, aligned itself with
the private banks during the crisis of the early ' thirties in attempting
to force on the Government a policy of monetary deflation and curtailment
of wages and social service payments. That policy was stated in
the following extract from a letter addressed by the chairman of the
Bank Board ( Sir Robert Gibson) to the then Treasurer ( Mr. Theodore)
on 12th February, 1931, which read-
Subject to adequate and equitable reductions in all wages, salaries, and
allowances, pensions, social benefits of all kinds, interest and other factors which
affect the cost of living. the Commonwealth Bank Board will actively co-operate
with the trading banks and the governments of Australia in sustaining industry
and restoring employment.
Thus during a critical time in Australia's history the bank was
used by reactionary interests for a purpose directly opposed to the
welfare of the Australian people and in opposition to the will of the
Government of the day.
In spite of conservative management under a board for many years,
the Commonwealth Bank, including the Commonwealth Savings Bank,
has made remarkable headway. At 30th June, 1947, it had 377 branches
spread throughout Australia, as well as branches in Papua, New Guinea
and in London. Total employees exceeded 9,000 and total assets, apart
from those held in respect of deposits of the private banks, were almost
œ 900,000,000. It has nearly 4,000,000 accounts and is unique among
the banks of the world in that it provides comprehensive banking facilities
for business and personal needs through its General Bank, Savings
Bank, Mortgage Bank, Rural Credits, Industrial Finance and Housing
Departments. In both wars the bank made advances against primary
commodities to enable producers to be paid promptly despite serious
delays in sea-borne trade. These advances exceeded œ 350,000,000 during
the six years of the last war. In another field the bank has administered
controls over banking, interest rates, the note issue, foreign exchange
and gold and has developed the full functions of a central bank. In all,
the record of the Commonwealth Bank stands as a great justification of
publicly-owned banking and demonstrates beyond question that a public
banking institution is capable of being highly efficient, progressive and

adaptable. In another respect also the bank has largely fulfilled the
intentions of its founders that it should be a bank for the people.
Together with its associated institution, the Commonwealth Savings
Bank, it has become pre-eminently the bank for the average man and
woman. To-day it has a far greater number of depositors than the
whole of the private banks taken together. At April, 1947, the number
of deposit accounts with the Commonwealth Bank and Commonwealth
Savings Bank was about 3,800,000, whereas the number of deposit
accounts with the trading banks was approximately 1,250,000.
" Assisted by the existence of the Commonwealth Bank, the Labour
Government has been able to make notable progress in carrying out its
policy of lower interest rates. After World War I. the interest rate on
government loans reached as high as 64 per cent. At the outbreak of
World War II., the rate for long-term government loans was almost
4 per cent. It is now 34 per cent. The treasury-bill rate is now 1 per
cent., as compared with a rate of 6 per cent. in 1930. The maximum
overdraft rate has been restricted to 44 per cent., as compared with rates
of 6 per cent. and higher some years ago. Substantial reductions have
also been made in the rates at which semi-governmental bodies are able
to borrow, and in many other rates.
The experience of the war years emphasized the vital importance
of public control of the banking system. Through governmental expenditure
for war purposes, the liquid resources of the trading banksand
hence their capacity to expand credit-increased rapidly. To
prevent ' secondary inflation arising from such as expansion of credit.
even the then Treasurer ( Mr. Fadden) felt that some action was
necessary, and, in 1941, he obtained an undertaking from the private
banks that they would inform the Commonwealth Bank of the amount
of surplus investible funds they held from time to time and would
deposit with the Commonwealth Bank such amounts as were determined
by that hank. On assuming office in November, 1941, the Labour Government
carefully examined the arrangements made by the previous
Government and decided that it was necessary to introduce National
Security ( War-time Banking Control) Regulations. These regulations
greatly strengthened and increased in scope the arrangements agreed to
by the previous Government. They also ensured that the private banks
would not make unreasonable profits out of the war and implemented
certain recommendations of the Banking Commission.
" In the light of experience gained in the administration of these
regulations, the Government decided, in 1945, that the main principles
on which they were based should be embodied in substantive legislation.
At the same time the Government decided to reconstitute the Commonwalth
Bank and to assume greater powers over banking policy. The
main objects of the system of control provided by this legislation were-
To strengthen the central banking functions of the Commonwealth Bank,
especially by providing for the co-ordination of banking policy under the direc-
ø tion of the Commonwealth Bank; control through the special account system

of the volume of credit in circulation: control of bank interest rates and bank
advance policy; and the mobilization and control of the foreign exchange and
gold resources of the Australian economy.
To ensure that the financial policy of the Commonwealth Bank would be in
harmony with the general economic and financial policy of the Government and
in the interests of the people of Australia.
To reserve to publicly-owned and controlled banks the banking business of
governments and governmental authorities.
To safeguard the depositors of the banks against loss of their deposits.
The Bank Board was abolished and management of the bank was
entrusted to the Governor, assisted by an advisory council.
This legislation was very strongly opposed by the trading banks,
by some sections of the business community and by the Opposition
parties. It was said that the legislation would hand over the banking
system to political control, that it was nationalization on the cheap
and that it would open the way to the general socialization of industry
by indirect means. In his second-reading speech on the legislation, the
Leader of the Opposition ( Mr. Menzies) made a pledge that, if he and
his colleagues were returned to office, they would restore the former
method of control of the Commonwealth Bank by a board and would
hold themselves obliged instantly to review the working of the
legislation. In spite of the sectional clamour against the legislation
and the prediction of dire consequences to follow from it, the Government
was returned to office at the general election last year. It may,
therefore, be said that a majority of the electors have endorsed the
Government's 1945 banking legislation and have approved the purpose
for which it was enacted, namely, to give the Government full and
effective control over monetary and banking policy in Australia. That
object was made clear to Parliament and to the country.
The Banking Act of 1945 was framed on the best constitutional
advice and the Government felt confident that it would withstahd any
legal challenge that might be directed against it. For example, it
seemed quite clear that Parliament had made a law with respect to
banking, and had thus acted within the scope of the powers conferred
by section 51 ( xiii.) of the Constitution, when it enacted section 48 of
the Banking Act. This section prohibited trading banks, other than
State banks from carrying out banking business for a State or any
authority of a State, including a local governing authority. The provision
was regarded by the Government as an important part of the
legislation. It embodied the principle that the banking business of all
public bodies should be reserved to publicly-owned and controlled banks.
Further, in most other countries it has long been accepted that all
government banking business should be conducted through the central
bank so as to give the central bank added strength to control the supply
of credit and to enable it to take action in time to offset any disturbance
to credit conditions resulting from government operations. In the
aggregate the banking business of State governments and State
authorities is large and so are some of their individual transactions.

They have an important bearing on current financial conditions. It was
the Government's view that the powers of the central bank should be
strengthened by making it as far as practicable the banker for public
authorities. When challenged in the High Court, however, section 48
was held to be invalid on the grounds that so long as private banks
existed States and State authorities could not be denied the use of their
facilities. The decision showed that full public control of banking as
sought under the 1945 legislation could not be secured without pubiic
ownership of banking.
" The decision forced the Government to re-examine all the circumstances,
constitutional and otherwise, surrounding the legislation of
1945. In particular, the Government has had to reconsider the constitutional
basis of sections 18 to 22 of the Banking Act which required the
private banks to make deposits in special accounts with the Commonwealth
Bank and also the attitude of the private banks towards those
sections. The special accounts are the crux of the control of credit given
to the Commonwealth Bank by the Banking Act of 1945. The necessities
of war-time finance greatly increased the base of liquid reserves
on which trading banks normally build a superstructure of secondary
credit. To prevent secondary inflation with rising prices it was necessary
to imobilize some parts of the banks' deposits in special accounts
with the Commonwealth Bank from which the banks were not allowed to
withdraw any amounts, except with the consent of the Conimmonwealth
Bank. If the amounts in these special accounts were freely available
to the trading banks, they could, by increasing their advances, build up
a secondary credit expansion of formidable dimensions. Added to the
spending power already available to the public, this might easily
produce a dangerous inflationary situation. It would be disastrous,
from the point of view of the people of Australia and the prospects of
economic stability, if sections 18 to 22 of the Banking Act were held to
be invalid and the consequent loss of control over the banking system
led to an inflation of credit, with all the loss and disorder which inflation
entails. These sections necessarily severely limit the freedom of action
of the trading banks. This was their intention. The Government was
determined that the control of the Commonwealth Bank in this field
should be absolute and beyond dispute.
While the precise form of special accounts provided for in the
Banking Act of 1945 was peculiar to Australia, the essential feature of
the control of credit by this means are to be found in operation in
Britain, Canada and a number of other countries. The same conditions
which made a control of this kind essential in Australia have forced
governments elsewhere to adopt similar measures. They are to-day an
accepted part of central bank technique in many parts of the world.
The private banks in Australia have always bitterly resented any
attempt to place restrictions on their power to create or restrict credit.
When the 1945 Banking Bill was before the House they fought these
provisions with all the means, at their disposal. Towards the end of

1945, when the bill had become law, they were required to transfer their
war-time special deposits to the special accoun's established under the
new legislation and to make their first monthly lodgment to these
accounts. The private banks, obviously acting in concert and on legal
ndvice, made it clear a' that time that, while they were submitting to
the legislation for the time being, they were reserving the right to
rhalleng, it at a suitable opportunity. The following reservation was
made by one of the Iank-. in a let'er to the Commonwealth Bank:-
We are most anxiions. to co-operate with your Bank to ensure the continuance
of our present harmonious relations, but you will appreciate that our duty to our
shareholders compels us to have regard to our legal position; therefore, we feel
it necessary to advise yon, with all due respect, that acquiescence or compliance
on this Banik's part with any request or directions from you is not to be taken
to import nny contract with your Bank in the terms of the Act.
Statements to a similar effect were made in letters sent by six of
the other banks. These reservations were brought to the notice of the
Commonwealth Government at the time for legal consideration. This
indication of the attitude of the private banks assumed greater significance
when the special account system was challenged in the statement
of claim made by Melbourne City Council in connexion with the section
48 case-even though eventually the challenge to sections 18 to 22 of the
Banking Act was not pressed. It assumed still greater significance
when the High Court decision on section 48 made it clear that, although
the Commonwealth Parliament had by the Constitution been given
power to legislate on banking, nevertheless a law which was clearly a
law with respect to banking could be held invalid on other constitutional
considerations. The position which confronted the Government was
that while doubts had arisen as to the constitutional validity of its banking
legislation, there was evidence that the private banks were maintaining
their hostility towards this legislation and were biding their time
against a suitable opportunity to challenge it in the hope of throwing
off the restraints they so strongly disliked.
With economic difficulties increasing overseas the Government
must be in a position to act with certainty and effectiveness to ensure
fulfilment of its policy of full employment and the maintenance of economic
and financial stability. During the war and since its conclusion
the Australian economy has been kept more stable than the economy of
any other country in the world. It must be remembered that an important
part of the machinery for maintaining that stability has been the
control over the banking system exercised under the 1945 banking
legislation and that an essential part of that legislation is the special
account procedure. The difficulties of the transition from war to peace
are far from over. In fact, in some directions they are increasing.
The rapid exhaustion of the United States loan to Britain has confronted
the sterling area-and many other countries as well-with serious
balance of payments problems and this is only one aspect of a general
situation which is highly unstable.

" To deal with the economic and financial problems both of the
transition period and of the following years, the Government must have
the necessary powers over banking and monetary policy. Fluctuations
in business activity and employment are not solely due to monetary
causes, but they are certainly greatly influenced by financial policy.
The Government would not be justified in gambling on the outcome of
possible threats to the 1945 legislation. The structure of banking based
on the legislation of 1945 went part of the way towards the objectives
which the Labour party has long advocated in regard to banking. At
the same time it offered to the private banks the opportunity to cooperate
within a national system of banking, subject to overall control
by the Commonwealth Bank, as they had, in fact, done during the war
period. That position was never accepted without reservation by the
private banks and now that the legal foundations of the system have
been challenged the Government has decided to proceed with its longstanding
policy of full public ownership.
The bill which is before the House gives effect to the Government's
decision. Before the Attorney-General ( Dr. Evatt) left Australia, he
gave close attention to the legal and constitutional aspects of the bill,
and laid down the main lines on which the preparation of the measure
has proceeded. I would emphasize that under this measure there will be no interruption
or disturbance of the usual banking facilities available to the
Australian community. The bill provides that the private banks shall
maintain their services until they are taken over by the Commonwealth
Bank. As the banks are taken over, either through the acquisition of
their shares or of their assets, they will be kept in operation as going
concerns. Customers will not notice any difference after the control
of the bank with which they have been dealing has passed to the Commonwealth
Bank. They will be able to continue their banking business
without change or interruption.
" The bill imposes on the Commonwealth Bank an obligation to
conduct its banking transactions in accordance with the practices and
usages customary among bankers particularly in regard to the nondisclosure
of information concerning the affairs of its customers. The
confidential nature of the relationship between banker and customer is
well established in law; and, subject to certain exceptions sanctioned
or required by law, bankers are under an obligation of secrecy with
respect to their customers' affairs. The bill specifically provides that
this position will be preserved.
" Differences between the constitutions of the various private banks
and the fact that some are incorporated in Australia and some overseas
make it desirable to provide alternative ways in which the Commonwealth
Bank may acquire their business. Accordingly the bill provides
for two main processes of acquisition-
Voluntary or compulsory acquisition of the Australian business and
assets of the private banks, or
Compulsory acquisition of shares.

" The first could be applied to all banks, whether incorporated in
Australia or overseas, and in the case of banks incorporated in. Australia,
any part of their overseas assets may also be acquired compulsorily.
Under the alternative procees, the shares of a private hank
may be conmpulsorily acquired if the Treasurer is satisfied that the
majority of its shares are registered in Australia. This process would
be applied only to banks9 incorporated in Australia, and would be the
initial step towards an eventual transfer of their business to the Commonwealth
Bank. As a preliminary step to tb' acquisition of the
business of a ) rivate bank, provision is m-ade for the Treasurer, by due
notice, to invite the private bank to make an agreement with the Cornrnonweal'h
Bank for the transfer of its business on a specified date,
which must be not more than two months later than the date on which
the notice is given. If an agreement for the transfer of the business of
a private bank, which is willing to negotiate, is not completed by the
specified date, the Treasurer may -extend the currency of the notice
until agreement is reached. Agreement must, however, be reached-if
there is to be agreement at all-before the notice expires. Once the notice
expires, the assets of the bank concerned forthwith becomes vested in,
and its liabilities are assumed by, the Commonwealth Bank. There is
nothing in the bill to prevent the Commonwealth Bank from reaching
an agreement with a private bank for the acquisition of its business
before any notice is issued at all; but all agreements, whether made
before or after notice is given, will be subject to the approval of the
Treasurer. The bill also includes a provision whereby the Treasurer
may, after the business of a private bank is acquired by the Commonwealth
Bank, require that private bank to cease carrying on further
banking business in Au-tralia.
" If a private bank enters into a voluntary agreement for the
acquisition of its business by the Commonwealth Bank, it will be
entitled to receive an exemption from taxation on the amount paid to it
in pursuance of the agreement. It is further provided in the bill that
shareholders of the bank will be exempt from taxation on any dividend
or distribution which directly results from the payment received from
the Commonwealth Bank under the agreement. These concessions will
not apply in the case of a compulsory acquisition. The exemptions
referred to will not relieve the private bank from liability for any tax
payable by the bank in respect of profits derived in the normal course
of its business but upon which the ordinary tax liability has not been
met. The bank and its shareholders will still be liable to taxation in
relation to profits earned after the year of income ended 30' h June, 1947,
or any accounting period substituted therefore, and before the date of
transfer, or in relation to any interest which may become payable under
the agreement. If shares are acquired by voluntary purchase, the price paid by
the Commonwealth Bank must not be less than the market value in
Australia of those shares at 15th August, 1947. These prices have been

carefully ascertained and are specified. The provision iinade for the
compulsory acquisition of shares will apply only to the share.-of private
banks incorporated in Australia, which are the institutions referred to
in Part I. of the First Schedule to the bill. Where the majority in
number of the shares of any of these banks are situated in Australia,
the bill provides that the Treasurer may, by notice published in the
Gazette, declare that the shares in the bank concerned shall be vested
in the Commonwealth Bank on a date specified by the Treasurer; and
on that date the Commonwealth Bank will, by force of the legislation,
become the holder (, othfe shares and a: m ember of the bank in question.
" It is provided that the directors of an Australian private bank,
the shares of which have Leen compulsorily acquired by the Commonwealth
Bank, will cease to hold office on the date on which the compulsory
acquisition becomes effective. The Governor of th, Commonwealth
Bank will, with the approval of the Treasurer, thereupon appoint
directors, including a chairman of directors. The directors appointed
by the Governor of the Commonwealth Bank will have full power to
manage the bank in question, to dispose of its business in Australia
to the Commonwealth Bank and to dispose also of the bank's business
outside Australia: but any arrangement for disposal may only be concluded
if approved by the Treasurer after he has received a reccommendation
from the Governor of the Commonwealth Bank.
For all property or shares of the banks, conmpulsorily acqtuiredl. fair
and reasonable compensation will be payable. The compensation
payable may be determined by agreement, approved by the Treasurcr
or, failing agreement, the amount payable will be determined by th: e
court of claims to be established under the proposed legislation. The
bill sets out the procedure to be followed in reaching agreement or,
alternatively, in referring claims to the court for determination. The
bill provides for the establishment of a Federal Court of Claims consisting
of a Chief Judge and such other judges as are appointed. The
court may, if it thinks fit, appoint two assessors to assist it. The court
will have jurisdiction to hear and determine claims for compensation
arising under this bill. Regulations may be made under other acts
also to confer jurisdiction on the court to determine claims arising out
of the operation of those acts. The jurisdiction of the court in respect
of compensation under this hill must be exercised by not. less than
three judges. Jurisdiction may, however, be exercised by less than
three judges by agreement between the parties concerned. A determination
of the court will be final and conclusive and not subject to appeal
to the High Court.
" The bill makes provision for the protection of officers of private
banks in respect of continuance of employment, salaries and conditions
of service. The bill provides that when the Commonwicalth Bank

proceeds by way of acquisition of the shares of a private bank, the
salary and general conditions of service of officers of the private bank
will not be disturbed, and will be secured to them. Similarly, when
the Commonwealth Bank takes over the assets of a private bank,
including the assets of a bank whose shares have previously been
acquired, each officer of the private bank who was employed in the
service of that bank in Australia will be entitled to be employed by
the Commonwealth Bank at the salary and on the general conditions of
service applicable to his existing employment. The Commonwealth
Bank will be obliged to appoint each such officer, being a . British
subject, to an appropriate position in the Commonwealth Bank Service.
This will be done as soon as practicable after employment commences
with" the Commonwealth Bank. Special provision also is made to enable
that service to absorb all officers stationed ou'side Australia whose duties
are connected with the Australian business. It will be seen that during
the period necessarily elapsing between the date of acquisition of a
private bank, either by way of shares or assets of the private bank, and
the date when an officer of that bank is appointed to an appropriate
position in the Commonwealth Bank Service, he is fully safeguarded.
He will continue to be employed with salary, pension benefits, and sick
and long service leave at least as favorable as when in the employ of
the private bank. When later appointed to the Commonwealth Bank
Service, he will enjoy all the rights and privileges of an officer of that
service, with protection in respect of existing salary, pension benefits,
and sick and long service leave. Service in the private bank, continuous
with service with the Commonwealth Bank, will count as service with
the Commonwealth Bank for purposes of promotion, leave and pensions.
To establish an officer's present entitlement to pension benefits and
sick and long service leave, the bill provides for the appointment of a
committee in respect of each private bank affected, consisting of a judge
( or a person qualified to be a judge), an officer of the Commonwealth
Bank, and a representative of the bank officers concerned, to ascertain
the benefits which are, or woul'd have been granted in accordance with
the practice of the private bank concerned, or of the superannuation
fund of that bank. The findings of this committee will then become a
legally enforceable right in respect of the future employment of these
nfficers even though they may not have at present any such legal protection.
The industrial awards now governing the employment of persons
in private banks will continue in force until appointment to the Commonwealth
Bank Service is made. Further, during this period, officers
will continue to have the right to apply to the appropriate tribunal for
variations of these awards. On appointment to the Commonwealth
Bank they will have the same rights in respect of industrial matters as
. lr, now enjoyed by officers of the Commonwealth Bank.
The Commonwealth Bank is recognized as a good employer. On
ihe whole the general conditions of employment in its service are at
least as good as, if not better than, those generally provided by the

private banks. Its employees are given special legal protection as to
promotion, dismissal and disciplinary action. Under Part XIII. of
the Commonwealth Bank Act promotion and disciplinary appeal boards
have been constituted. Those boards, which are under an independent
chairman and include representatives of employees, are empowered to
give final decisions on appeals relating, respectively, to the promotion
and to the punishment, dismissal or reduction in status of officers.
Such rights of appeal . are not at present enjoyed by employees of the
private banks. The changed conditions of the expanded Commonwealth
Bank will, of courst, render it necessary to examine the provisions of
the Commonwealth Bank Act relating to the Commonwealth Bank
Service, and any amendments considered desirable to -meet the position
will be brought forward at an early date.
" With regard to former officers of the private banks who have
retired on pensions from the private banks' services, their position, as
well as that of dependants of deceased officers, is also fully safeguarded.
The Commonwealth Bank will assume responsibility for the payment
of pensions in accordance with existing rights, which will be converted
into legally enforceable claims. As the Commonwealth Bank is required
to assume liability for pensions, both in respect of retired officers and
officers now serving, it is necessary that an appropriate amount of the
superannuation funds established in association with the private banks
to meet these obligations should be transferred to the Commonwealth
Bank. The bill contains the necessary provisions to give effect to this
requirement. " There will be no necessity for a parliamentary appropriation to
provide for compcnsation. In acquiring the business of the private
banks the Commonwealth Bank will also assume the liabilities of these
institutions. The amount of compensation payable will necessarily
have regard to this factor and it will be well within the capacity of the
Commonwealth Bank to meet the payment from its own resources. The
Commonwealth Bank will make payment in cash or government bhond
as desired. " As I have said before, the Government believes that a publicly
owned and controlled banking system, in which final responsibility for
policy is in the hands of a government directly responsible to the
electors, conforms much more closely to the luirements of a democratic
community than the system advocated in 1945 by Mr. Menzieis,
who, with his party, is pledged to restore control of banking and
monetary policy to a body having no responsibility to the electors.
In most advanced countries there has been during recent years a
strong trend towards public ownership of key public utilities. This
trend has not been confined to governments, representing particular
political parties. Such projects have been brought forward both in
Australia and elsewhere not only by Labour governments but also by

non-Labour ' go vernments who recognized that in the circumstances of
the case the balance of advantages from the community standpoint lies
in national rather than private ownership and control. But if any
service fits the description of a key public utility it is banking. As I
have said earlier, no element in the working of our economy has a
greater influence for good or ev-il upon economic and social welfare
than the management of money and credit.
" The Government is convinced that under public ownership the
banking system will have immense opportunities for serving Australia.
It will have the backing of the entire credit resources of the nation. It
will be free from the cramping limitations of sectional private ownership
which bid the private banks to serve this interest but not that
interest, and to judge all business from the narrow standpoint of maximu-
m profits for the smallest outlay. It will be able to take longer-term
views of projects requiring finance and, since the whole Australian
economy will be its field, it will have the widest scope for initiative
and for the spread of its investments.
" Essentially tile task of the new organization will be to provide
a financial mechanism appropriate to the needs of our rapidly growing
economy. Australia is destined to see great developments in the coming
years and this process, which is already under way, must be promoted
by every every means possible. There will be a great increase in our
population. Industries will expand in all fields and we must extend our
markets abroad. The basic services of transport and communications,
water supply, power, housing, health and education must be enlarged to
meet the needs of a larger economy working at higher levels of technique
and productivity. The stress everywhere will be upon new forms of
enterpris e, new methodi of production, and new uses for the resourceis
of this country. Finance must co-operate and take the initiative in
this progress. As new types of industry are developed, new types of
finance will be required and the banking system s-hould anticipate these
needs and be in the field with the right kind of facilities to assist and
encourage such development.
Moreover, there can be no doubt that a bank should be more than
a mere money lender. A banking system created to serve the welfare of
the community can aid industry by the quality of its advice and the
incidental services it renders as well as by the financial accommodation
it provides. Hence the Government sets particular store on the developmnent
of these ancillary services, It has in view the building up of a
highly qualified staff that will enable the Commonwealth Bank to give
skilled advice as part of its banking service. Secondary industries, for
exa'mpkc, will be able to turn to the bank for the assistance of prodnction
engineers and cost accountants to help them with their problems.
Primary industries will have the aid of agricultural experts. I contemplate,
too, that the Bank would establish, at least in the capital cities,
departments of advice which would help individuals with their daily
financial problems. Whiether any charge would have to be made by the

bank would naturally depend on the circumstances of each case but
as far as possible these facilities would be provided freely as part of a
Ftrengthened banking service.
" But if the financial system is to meet these requirements it tmust
be comprehensive, strong and flexible. It must be alive to the requirements
of the times and be capable of seeing ahead. It must have one
goal for its policies and one standard for its work-the service of the
nation in all its interests, great or small. The Government believes that
only under a national system of banking can this ideal be approached.
Only under such a system will finance be a real servant of industry and
not its master.
" Fears are being spread by opponents of this measure that the
people will lose an advantage by reason of having only one bank to
deal with instead of a choice between several banks. This brings up the
question of competition between the private banks-how far it exists
and what it has been worth to the community and to customers of the
banks. The Banking Commission went into this question of competition
at great length. It found that the private banks did not compete in any
serious way as regards interest rates and other charges but sought rather
to attract customers by offering various other inducements. In general,
they behaved in the manner of semi-monopolistic institutions which
stood in fear of ruining their own market. There was certainly nothinglike
the all-out rivalry to give the public the widest and cheapest services
which we are asked to suppose exists between them. Amalgamations on
the other hand have reduced the number of banks, so accentuating the
monopolistic character of those that remain. There are to-day really no
more than eight trading banks doing a nation-wide business where
years ago there were twenty, -and we have no reason to suppose that this
process would not go further if private banking continued. The average
man, I suggest, will find it hard to believe that fewer banks mean greater
competition. We recall how the former Commonwealth Bank Board, which
considered itself to be conducting a bankers' bank, prevented the Commonwealth
Bank from competing with the private institutions. We
have the admissions of private bankers that competition between themselves
is of a limited kind. We have seen the number of banks dwindling
over the pears, each amalgamation removing one or more possible
competitors from the ring. It is a fair conclusion, I think, that from
the standpoint of benefit to the community, banking competition has
meant little for some time past and would probably have meant less as
time went on. On the other hand, I may point out that the Commonwealth
Bank is charged under the legislation to be strictly impartial as
between customers and to avoid all discrimination. A system of appeal
will be provided so that a person who considers he has not had reasonable
treatment from a local manager will be a'ble to refer his case to
regional authority for reconsideration. Special arrangements will be

: made to ensure that this re-con. sileration is given without delay. In
view of these considerations, therefore, it appears to me that the advantages
of having a choice between several private banks as compared with
. a single national bank are largely illusory.
The proposal to take over the banks is being condemned in some
quarters in recklessly extravagant terms; all kinds of hidden purposes
are being wrongly ascribed to it from the same sources. The simple
truth is this-the reasons and motives for this measure and the uses to
which it can and will be applied are no more and no less than I have
stated. The opponents of banking change seems always to have fought
against new developments while belatedly approving such changes as
have been made and which they had originally opposed. In 1937 they
criticized the Banking Commission Report and defended the old
syst-em. In 1945 they nailed their colours to the Banking Report and
resisted implacably the legislation of that year. Now they seem disposed
to make the 1945 legislation their rallying cry whilst preparing
themselves once again to die in the last ditch against a new, logical
and necessary developmen'. Their predictions of calamity will prove
just as groundless as those they have expressed so many times before.
There has been no political interference in banking under the 1945
legislation and there will be none under the new system. In not one
instance since that legislation was passed has the Government intervened
in the administration of the Commonwealth Bank. Within the
framework of the broad economic and financial policy laid down by
the Government the bank has carried on its work successfully and harmnoniously.
On broad policy issues it has in turn advised the Government
and been advised by the Government. Conflict has not arisen at
any stage. It is timely to record that under section 9 of the Commonwealth
Bank Act 1945 the Government cannot interfere in the internal
transactions of the bank. Its power is limited to the laying down where
necessary of the broad lines of monetary and banking policy. Business
people and private citizens will have all the safeguards as to the conduct
of their banking business which can be given by law and by the
long and honorable administrative tradition of the Commonwealth
Bank. On acquisition of a bank, shareholders are assured of just compensation,
bank employees are protected, depositors are guaranteed and
business will be carried on without interruption.
Full public ownership of the banks will ensure control of banking
in the public interest. It will enable effective steps to be taken against
the dangers of secondary inflation. It will assist us to stave off depres-
. sion and to avoid a repetition of the miseries of 1930. Beyond this, it
will o0 : nu a lung-locked doorway to the development of a monetary and
banking system truly adequate to our national requirements and wholly
devoted to the service of Australia [ The bill was passed.

NORTHERN TERRITORY.
CIVIL ADMINISTRATION-LEGISLATIVE COUNCIL
ELECTIONS.
On 15th October, 1947, the Minister for the Interior ( Mr. Johnson)
announced that elections for the Northern Territory Legislative
Council would be held on 13th December, 1947.
( For earlier reference, please see No. 126, page 33.)
COMMUNIST PARTY.
PRIME MINISTER'S STATEMENT.
In Parliament.-On 15th October, 1947, the Prime Minister ( Mr..
Chifley) said:-
" I understand that members of the Opposition last week pressed
for an inquiry into Communist activities in Australia. It is true that
similar proposals have been made before. The fact is that the Commonwealth
Investigation Service keeps under close observation all who
might be guilty of subversive activity. They include not only Communists
but also other persons whose activities might be detrimental
to the interests of this country. Nothing has been disclosed to date
that would warrant the appointment of a royal commission or any
other body to make a special inquiry. Should such an occasion arise as
the results of reports received regarding any section of the community
or any individual, the necessary action will he taken."
BRITAIN.
PRINCESS ELIZABETH-WEDDING PRESENT.
On 16th October, 1947, the Prime Minister ( Mr. Chifley) said:--
" The gift from the Commonwealth Government to Princess
Elizabeth on the occasion of her marriage to Lieutenant Philip.
Mountbatten, will be in the form of silver plate, comprising a
pair of comports and a pair of salvers. The salvers will be hand-chased
with pierced border of wattle design, on three hand-pierced feet. The.
Commonwealth Coat of Arms will be inlaid in gold on the comports
and inscribed on the salvers. The gift will be despatched by air to.
the Minister for External Affairs ( Dr. Evatt) at London for presentation
to Her Royal Highness."
FINANCIAL POLICY-DOLLAR IMPORTS, ESSENTIAL
GOODS.
On 30th October, 1947, the Minister for Customs ( Senator
Courtice) said that import licences for goods of dollar area origin would
be confirmed only if the goods were in transit on 21st October, 1947,
or if they were covered by an irrevocable credit or if they were determined
by his department to be essential to the Australian economy.

Goods which the department considered had a high degree of essentiality
and in respect of which outstanding import licences would be confirmed
were-Cotton yarn, rayoi yarn, sewing threads, tyre cord, tyre cord fabric, elastic
piece goods for the nanufacture of corsetry, rubber thread, uncovered, for use in
the manufacture of elastics, paper pulp send waste paper for use in the manufacture
of paper, writing and printing paper, costing 15 cents or less per lb.
in respect of which evidence was available that shipment ex mill would
be effected on or before 30th November, 1947, timber ior construction work and
boxmaking, ball and roller bearings, high silicon steel sheets provided evidence
was available that shipment ex mill would be effected on or before 31st March,
1948, hand or tenon carpenters' saws, wood bits, carpenters' chisels, felts and
wire for paper-making machines, card wire for use in the textile industry, wood
turpentine, pine oil, caustic soda, soda ash, chemical re-agents for flotation
processes in gold-mining, carbon black, chemicals, rubber accelerators and antioxidants,
for use in the processing of rubber. chemicals for use in the tanning
of leather, asbestos fibre , um or wood resins, solvents for use in the manufacture
of paints, enamels and lacquers ( but not including toilet preparations), motor
vehicle chassis provide evidence was available that shipment ex factory would
be effected by 31st December, 1947, replacemeit parts for motor vehicles, food
processing equipment, marine engines, mining machinery for gold or coal-mining,
oil boring plant, tractors, wheel and crawler types,. provided evidence was available
that shipment ex factory would be effected on or before 31st December, 1947,
. and replacement parts, electric motors and replacement parts.
( For earlier references, please gee No. 129, page 27; No. 130, page 9.)
PRICES.
GOODS " DECLARED "-HAY, CHAFF, REVOCATION.
On 17th October, 1947, the Minister for Customs ( Senator
Courtice) said that hay and chaff had been removed from price control.
INDUSTRIAL.
ARBITRATION SYSTEM-CONCILIATION
COMMISSIONERS.
On 20th October, 1947, the Prime Minister ( Mr. Chifley) said-
" Cabinet decided to-day to appoint the president of the New South
Wales branch of the Australian Railways Union ( Mr. L. P. Austin),
the general secretary of the Australian Federal Union of Locomotive
Enginemen ( Mr. J. M. Galvin), and the New South Wales Minister for
Labour and Industry ( Mr. Hamilton Knight) as conciliation commissioners
under the Commonwealth Conciliation and Arbitration Act."
( For earlier reference, please see No. 129, page 6.)
[ Messrs. R. H. Beers. N. Roberts and W. Wallwork, who were appointed
on 15th August. 1947, resigned.]
UNEMPLOYMENT-FIGURES.
-On 29th October, 1947, the Minister for Labour ( Mr. Holloway)
said that the demand for labour in Australia continued to rise and the
level of unemployment to fall. At September, 1947, the number of
recipients of unemployment benefit had fallen to the new record low
level of 3,465 ( 3,335 males and 130 females). Unfilled vacancies held
by the Commonwealth Employment Service numbered 80,500 ( 47,300
: males and 33,200 females), over 4,000 greater than at August, 1947.

During September, 1947, the Commonwealthl Employment Service.
had referred 20,500 males and 7,300 females to employers. In addition,.
advice and information on employment and other problems had been
given to 26,800 males and 5,600 females.
HEALTH.
DIRECTOR-GENERAL--APPOINTMENT.
On 20th October, 1947, the Prime Minister ( Mr. Chifley) said-
Cabinet to-day decided to appoint Dr. A. J. Metcalfe as Commonwealth
Director-General of Health."
CIVIL AVIATION.
INTERNAL ROUTES-AUSTRALIAN NATIONAL AIRLINES,
ACT, AMENDMENT.
On 20th October, 1947, the Prime Minister ( Mr. Chifley) said-
Cabinet decided to-day that legislation . be prepared for submission:
to the Federal Parliamentary Labour party to amend the Australian
National Airlines Act to permit Trans-Australia Airlines to engage in
intra-state operations in Queensland in addition to intra-state operations
which a'e incidental to interstate and territorial services. At the.
conference of Commonwealth and State Ministers in August, 1947, the
Premier of Queensland ( Mr. Hanlon) intimated that his Government
was in favour of the Commonwealth airlines operating air services in-
Queensland." ( For earlier references, please see No. 105, page 38; No. 129, page 19.)
AUSTRALIAN WAR MEMORIAL.
NATIONAL WAR MEMORIALS-TOBRUK.
On 20th October, 1947, the Prime Minister ( Mr. Ohifley) said-
" In September, 1947, Cabinet considered a recommendation fromu
the Australian Battlefields Memorial Committee that an Australian delegation
proceed to the Middle East to unveil a memorial in Tobruk war
cemetery. Cabinet decided that the committee's recommendations be referred
back for further consideration.
Cabinet decided to-day that the Australian delegation should comprise
a member selected by the Commonwealth Government and a
representative of each of the Australian Battlefields Memorial Committee,
Returned Sailors, , Soldiers and Airmen's Imperial League of.
Australia, and the Rats of Tobruk Association. If possible, the Government's
representative will be Lieutenant-General Sir Leslie
Morshead, who commanded the Australian forces during the seige of
Tobruk. All members of the delegation will be returned servicemen
and, at the conclusion of the ceremony at Tobruk, the delegation will
proceed to Gallipoli on a tour of Australian war memorials and war
graves-the first official visit since 1924."

27
EXTERNAL COMMUN ICATIONS.
TELE-COMMUNIOATIONS--INTERNA TIONAL RADIO
BOARD.
On 20th October, 1947, the Postmaster-General ( Senator Cameron)
: announced that, as a result of decisions reached by international tele-
* communications conferences recently held at Atlantic City, an
international board would be established ' at Geneva to deal with the
-orderly registration of radio frequencies throughout -the world to meet
radio communication requirements generally. The International Frequency
Registration Board would be a highly specialized body responsible
for the study of the purposes and technical characteristics of each
; radio-frequency assignment necessary for application in the radiocommunication
sphere, with a view to ensuring formal international
, recognition thereof. The board would render advice to 80 member
countries of the International Tele-communications Union to secure the
-operation of the maximum practicable number of radio channels in
those portions of the spectrum where international interference might
occur. The board would consist of eleven members including Australia.
The Chief Research Engineer of the Postmaster-General's Depa-rtment
( Mr. S. H. Witt) would be Australia's representative on the board
mentioned. ,( For earlier references, please see No. 116, page 17; No. 123, page 3.)
DEFENCE.
SCIENCE CONFERENCE, 1947.
' On 20th October, 1947, the Minister for Defence Dedman)
announced that Australia would be represented at a meeting at London
in November, 1947, of British and Dominion representatives on defence
science by the chairman of -the New Weapons and Equipment Development
Committee ( Major-General L. E. Beavis), the Controller-General
of Munitions Supply, Department of Munitions ( Mr. N. K. S.
Brodribb), Brigadier H. S. Nurse and the Professor of Physics at
Melbourne University ( Professor L. F. Martin).
( For earlier references, please see No. 114, page 7.)
PARLIAMENT.
MEMBERS' ALLOWANCES-PARTY LEADERS, BILL
INTRODUCED.
In Parliamnent.-On 21st October, 1947, the Prime Minister ( Mr.
Chifley) introduced the Parliamentary Allowances Bill ( No. Mr.
Chifley) said-
" Parliamentary Allowances Act makes provision for the payment
' of annual allowances to the Leaders of the Opposition in both Houses
-of the Parliament as some recompense for the onerous nature of their
duties. When the act was under consideration in this House in June,
1947, I gave an undertaking that T would consider the submission to

Parliament during this sessional period of a bill to provide for the , payment,
as from 1st July, 1947, of an annual allowance to the Leader of
the Australian Country party for the same purpose. This bill is in
consequence of that promise." [ The bill was passed.
( For earlier references, please see No. 126, page 7; No. 127, page 34.)
SERVICE PAY RATES.
REPATRIATION-PATRIOTIC FUNDS.
In Parliament.-On 21st October, 1947, the Minister for Repatriation
( Mr. Barnard) introduced the Australian Soldiers' Repatriation
Bill. Mr. Barnard said-
The bill is to bring provisions for control of patriotic funds under
the Australian Soldiers' Repatriation Act. The existing . provisions are
National . Security ( Patriotic Funds) Regulations under the Defence-
( Transitional Provisions) Act. The main activities of the funds are
diminishing, and many have already been wound up, but others are
continuing their ordinary operations, and will eventually go through
the winding-up stage. Altogether, it is probable that, in some -form or
another, activities will continue for some time yet. It is therefore
desirable that the provisions be removed from the Defence ( Transitional
Provisions) Act. They are administered by the Minister for
Repatriation and the Repatriation Commission, and the logical place
for them is in the repatriation legislation. The bill inserts a section
in the Repatriation Act to enable the Governor-General to make the
necessary regulations under that act. National Security ( Patriotic
Funds) Regulations will be repealed, and the new regulations in the
Australian Soldiers' Repatriation Regulations will . be generally on the
same lines as those under which control has * been exercised up till now."
[ The bill was passed.
HOUSING.
WAR SERVICE HOMES-PRIORITY.
On 22nd October, 1947, the Minister -for Works and Housing ( Mr.
Lemmon) said that following the recent amendment to the War Service
Homes Act to enable a building programme to be undertaken it had
been necessary to meet changed circumstances resulting from greatly
increased demand for materials. The new procedure provided for the
determination of priority for building war service homes on the basis
of need. Applicants who had been requested by the War Service
Homes Commission to pay preliminary fees or arrange for the preparation
of plans and specifications by a private architect under the
previous priority system would be finalized under that system, but the
priority of all other applications would be decided in accordance with'
the new policy of determining priority on a needs basis.
( For earlier references, plea ; e see No. 128, page 33.)

RECONSTRUCT ION.
TRADE AND EMPLOYMENT-HAVANA CONFERENCE.
On 28th October, 1947, the Prime Minister ( Mr. Chifley) said-
" Cabinet to-day approved acceptance of the invitation to the
World Trade Conference which opens at Havana on 21st November,
1947. The Leader of the Australian delegation will be the Minister for
Post-war Reconstruction ( Mr. Dedman) and the delegation will comprise
the Director-General of Post-war Reconstruction ( Dr. H. C.
Coombs), the Secretary of the Department of Commerce and Agriculture
( Mr. E. McCarthy), the Assistant Comptroller-General of Customs
( Mr. C. E. Morton), the Commercial Counsellor, Australian Embassy,
Washington ( Mr. J. U. Garside), Messrs. J. G. Phillips of the Commonwealth
Bank's London office ( representing the Treasury), G. A.
Rattigan ( Department of Trade and Customs), C. L. Hewitt ( Departinent
of Post-war Reconstruction) and G. W. Smith ( Department of
Commerce and Agriculture).
" The work of the conference will be concerned mainly with the
consideration of a draft charter for an International Trade Organization.
This draft charter has been drawn up by a preparatory Committee
of eighteen countries, including Australia, which was set up by
the Economic and Social Council for the purpose early in 1946. The
preparatory committee has had two sessions-at London towards the
end of 1946 and more recently at Geneva. A special drafting cominittee
examined the text evolved at London before the full committee
reconsidered it at Geneva. The draft charter will now come before the
representatives of other countries which were not represented earlier.
If the work of the world conference is successful and sufficient
governments adopt the draft charter, the establishment of an International
Trade Organization, guided : by the principles of the charter,
should follow in due course."
( For earlier references, please see No. 122, page 30; No. 124, page 5; No. 125,
page 9; No. 126, page 21; No. 127, page 3; No. 129, page
TRADE AND EMPLOYMENT-PREPARATORY COMMITTEE,
MINISTER'S STATEMENT.
In Parliament.-On 29th October, 1947, the Minister for Post-war
Reconstruction ( Mr. Dedman) said-
" 1 make a brief statement in relation to tariff negotiations at
Geneva in which an Australian delegation has been engaged for some
time. Since April, 1947, the delegation has been conducting negotiations
with the re. presentatives of seventeen other countries for the
readjustment of tariffs and preferences on a mutually advantageous
basis. These negotiations have reached finality and the results are
being incorporated in a draft general agreement on tariff and trade

which is to be laid before the governments concerned for their consideration.
The large number of countries concerned involves certain practical
difficulties which have to be overcome. In the first place, it is
virtually impossible to keep proposed tariff changes completely confidential
for an indefinite period. Publication of the results in one
country before release in another could be very embarrassing.
Moreover, if the published rates differed from those at present
in force complications would arise because of the desire of
traders to wait for lower rates of duty. Further, the several
countries concerned have a variety of procedures for putting trade agreements
into force. To overcome those difficulties, a method has been
devised to provide for the simultaneous publication of the draft general
agreement on tariffs -and trade, and for the provisional application
of that agreement by the governments concerned. The countries concerned
may, instead of adopting the agreement outright, agree to apply.
provisionally, its provisions, including the tariff schedules. Their legislatures
will then -be able to examine the agreement and decide whether
or not it should be adopted.
Provided the requisite number of governments concur and notify
the Secretary-General of the United Nations by 15th November, 1947,
that they are prepared to adopt, provisionally, the draft agreement, the
text will -be published on 18th November, 1947.
The Australian Government believes that the proposed agreement
will prove advantageous to Australia. Accordingly, it has decided to
accept and . apply, provisionally, the draft general agreement on tariffs
and trade. The following procedure will be followed: On 30th October,
1947, the final act of the Geneva conference will be signed for the purpose
of authenticating the text of the draft general agreement. On or
before 15th November, 1947, the Government will inform the Secretary-
General of the United Nations that it is prepared to accept and apply,
provisionally, the general agreement on tariffs and trade. On 18th
November, 1947, if the requisite number of governments have decided
to accept the general agreement on tariffs and trade provisionally, the
agreement will be published simultaneously in the countries concerned.
On that date, the Australia -Government will lay the agreement on the
table of the House, and introduce the necessary tariff motion. The new
rates will become operative provisionally from that date.
Later, after conclusion of the Havana conference and within six
months of the tabling of the draft agreement, the Government will
decide whether Parliament is to be asked to confirm the agreement and.
if it so decides, will seek Parliament's approval for this course.
A statement on all phases of the Geneva conference will be made to
the House later in this session. For reasons I have outlined, it is not
possible, before the date agreed on for publication, to give any details
of the concessions made. However, I can assure the House that the
Government is convinced that the draft agreement will create new
export opportunities of great value to Australia. Throughout the

negotiations the Government has maintained the closest collaboration
with other members of the British Conunonwealth. The agreement
takes full account of the legitimate interests of both . primary and
secondary industries in this country; and, in relation to imperial preferences,
the agreement conforms to the policy enunciated ' by the Government
from time to time in this House.
Beyond these assurances, it would be improper for me to go at this
stage. Further, speculation is likely to be misleading and embarrassing
to all governments concerned. The Government, therefore, invites the
co-operation of the House and of the press until publication becomes
possible.' FOURTH SECURITY LOAN.
PRIME ~ VINISTER'S OPENING BROADCAST.
On 28th October, 1947, the Prime Minister ( Mr. Chifley) broadcast
over the national network. Mr. Chifley said-
Good evening ladies and gentlemen,
The Fourth Security Loan of œ 80,000,000 will be opened on 29th
October, 1947. The people of Australia are asked to subscribe
œ 48,000,000 for the programme of Commonwealth and State works
approved by the seven governments and for the rehabilitation of
former mem. bers of the fighting forces.
In addition, holders of securities in loans floated in the early years
of the war to a total of œ 32,000,000 are asked to convert their holdings
into new bonds in the Fourth Security Loan. Therefore, the loan which
will be opened to-morrow is for a total of œ 80,000,000 and, in the name
of the Commonwealth and State Governments of Australia, I ask that
it be over-subscribed.
The two financial operations involved in this loan-namely, the
subscription of new money and the conversion of old bonds-are a
vital part of the over-all economic policy being followed by the Australian
Government.
" That policy has been followed with the dual purpose of maintaining
the economic balance in this country and of ensuring that Australia,
as a member of the British Commonwealth of Nations, can fully
play her part for the welfare of all member nations and of Britain in
particular. The Australian Government's economic policy during the war
years and in post-war years that have followed have been amazingly
successful. To-day, the Australian œ 1 purchases more for the Australian
citizen in Australia than the American dollar does for Americans
or the œ 1 sterling does for the people in the United Kingdom.
Further, Australia is one of four nations in the world whose price rise
has ' been the lowest.

Those two facts demonstrate very clearly that the Commonwealth
Government's economic policy has resulted in the maximum welfare for
Australian men and women as individuals and for Australia as a
nation. You, the people of Australia, are asked to ensure the smooth
continuance of that policy by an over-subscription for the Fourth
Security Loan.-By so doing, you will make a contribution not only to
your own security but will maintain Australia's economic strength so
that she can continue to be a strong right arm for Britain in her
struggle. As you know, the Australian Government has laid down a . policy
of the . fullest possible assistance to the United Kingdom on the following
lines:-Export of the greatest volume of foodstuffs.
A gift of œ 23,000,000.
Export of current Australian gold production so that Britain
can use it to buy dollars.
Severe restrictions on Australian use of dollars.
The success of the Fourth Security Loan is essential so that the
policy I have outlined to you may , be maintained. I ask you to oversubscribe
the amount asked for in new money-œ 48; 000,000-and to
convert fully the œ 32,000,000 of securities from earlier loans. The
loan will open to-morrow and I am fully confident that you will play
your part as Australians."
( For earlier references, please see No. 130, page 27.)
NATIONAL MAPPING COUNCIL.
COMM YWEALTH SURVEY COMMITTEE.
On 28th OctoL:. r, 1947, the Prime Minister ( Mr. Chifley) said-
In 1935, Cabinet appointed the Commonwealth Survey Committee
comprising the Surveyor-General, chairman, and representatives
of the three defence services to bring about co-ordination of survey work
in Australia. In 1940, a representative of the Department of Civil
Aviation was appointed and in 1944 a representative of the Department
of Post-war Reconstruction was co-opted. In 1945, Commonwealth and
State Governments -agreed to the formation of a National Mapping
Council to ensure the co-ordination of mapping activities.
Cabinet decided to-day to re-constitute the committee to provide
for the Commonwealth Surveyor-General, who is also Director of the
National Mapping Council, as chairman, and a representative of each
of the Council for Scientific and Industrial Research, the three service
departments, the departments of Civil Aviation, Post-war Reconstruction
and Supply and Shipping. The committee's function will be to
recommend, through the Minister for the Interior, such action as is
needed to co-ordinate the activities and requirements of Commonwealth
Departments in respect of mapping and ground and air surveys."
( For earlier references, please see No. 94, page 36; No. 97, page

TRADING WITH ENEMY.
GERMANY-RESUMPTION.
On 28th October, 1947, the Minister for Customs ( Senator Courtice)
announced that the control authorities of the combined British-United
States zone in Germany were now permitting the entrance of limited
numbers of Australian businessmen to buy Oerman goods. Buyers
would be admitted into the zone for periods not normally exceeding
fourteen days. Because of the small quota allotted to Australia, sponsorship
would be accorded only to those businessmen who desired to
purchase goods considered essential in the national interest. Selection
for sponsorship would take into account the range and quantity of goods
available for export from Germany and the limitations on imports imposed
by the Australian import licensing system.
( For earlier references, please see No. 175, page 27.)
MOTOR CAR PRODUCTION.
CAR -CHASSIS IMPORTS.
On 30th October, 1947, the Minister for Customs ( Senator Courtice)
s~ aid that on 2nd September, 1947, it was -announced that imports for
North American motor vehicle chassis for 1948 would be reduced by
per cent, as against the quantities authorized for importation during
1947 and that the allocation of the cut to the various makes and models
of chassis would he considered by an inter-departmental committee on
which the trade would be represented. In the light of the subsequent
deterioration in the dollar situation, the Government had reconsidered
the matter to effect further economies. It had been decided that the
maximum amount be allotted for the importation of motor vehicle
chassis from the United States and Canada during 1948 was
œ A. 8,000,000. It has been decided to abandon the former system of
allocating quotas on a quantitative -basis and to fix a total c. i. f. and e.
ceiling value for each make and model of chassis. It would be necessary
to impose the condition that the value of the chassis to'be imported
during the first half of 1948 be not more than half the approved quota
value. ( For earlier -references, please see No. 125, page 29; No. 128, page 33.)
WAR H ISTORY.
WAR INDUSTRIES.
On 4th November, 1947, the Minister for the Interior ( Mr.
Johnson) announced that Dr. D. P. Mellor, of Sydney University, had
been chosen to write the volume of the Australian official war history
dealing with war industries and the application of scientific research
to war-time needs. Re succeeded Dr. A. S. Fitzpatrick who was unable
to continue the work.
( For earlier references, please see No. 108, page 34.)
7081.-2

JAPAN.
WAR CRIMINALS-SIR WILLIAM WEBB'S RETURN.
On 4th November, 1947, the Prime Minister. ( Mr. Chifley) said-
" At my request, the Australian Government's representative on the
International Military Tribunal at Tokio ( Sir William Webb) has
arranged to return to Australia alriost imnmediately. This ivill enable
him to take his seat on the High Court Bench for the forthcoming
Sydney sittings. Sir William will return to Tokio, if necessary, ( luring
the summer vacation to complete his work as president of the tribunal.
" A seventh justiceship was restored to the High Court in April,
1946. When Sir Willi-am was appointed in May, 1946, it was anticipated
that his work at Tokio would last only a few months longer. The
trials have been unexpectedly long and Sir William ha~ s so far been
unable to assume his judicial duties here."
( For earlier references, please see No. 110, page 41.)
TRANSITION.
CONTROLS-FURTHER BILL INTRODUCED.
it. Parliament On 5th November, 1947, the Minister fox Post-war
Reconstruction ( Mr. Dedman) introduced the Defence ( Transitional
Provisions) Bill. Mr. Dedman said-
The purpose of this ' bill is to continue the operation for a further
period of twelve months of certain National Security Regulations, the
operation of which has already been prolonged by the Defence ( Transitional
Provisions) Act 1946 until the end of December, 1947. When
the Attorney-General ( Dr. Evatt) introduced the bill for that act he
dealt fully with the constitutional -basis for the bill. At that time, I
think that we all believed that by December, 1947, we should be able
to dispense with many of the regulations then in operation. However,
events have proved otherwise. Tihe principal reason is, that western
Europe has not succeeded in regaining a state of economic health. In
November, 1946, it appeared that the economic recovery of Europe
would not be unduly delayed, but since then Europe has experienced an
exceptionally severe winter, followed by a drought. During 1946, the
fact that the balance had been upset between the productive power and
resources of the western hemisphere, on the one hand, and those of the
rest of the world on the other, was obscured by the vast quantities of
goods poured into Europe by Unrra and other organizations. The disastrous
effects of winter and drought were followed by the dollar crisis.
Those events have had repercussions extending far beyond Europe;
indeed they threaten the foundations of world economy. In his speech in
1946, Dr. Evatt emphasized the need for the retention of measures designed
to check inflation and maintain stability. The Oovernment at
that time indicated its view that the operation of regulations covering
price control, rent control, capital issues, and land sales, would need to
be continued beyond December, 1947. The -bill makes provision for the
continuation of those regulations for a further twelve months.

No one would argue that price control has not been highly successful
in helping to keep the economy of Australia steady. A comparison
of the figures of the cost of living in Australia to-day with those for
the period following World War and those of countries which have
abandoned price control, prove the wisdom of the Government's action
in continuing the operation of war-time price control regulations in the
post-war period. To-day, Australia is one of the countries which shows
the lowest increase of prices, and a comparison of living costs with
those of other nations where prices control has lapsed, or has never
been enforced, proves how well we have controlled the post-war boom.
The United Nations' monthly ' bulletin of statistics for September, 1947,
shows that Australia is only one in a list of 35 countries in which the
rise of wholesale prices since 1937 has been less than 50 per cent. The
same authority gives the following percentage increases of retail prices
from 1939, to June, 1947:-Australia 28; South Africa 39; Canada
32; United Kingdom 29; United . States of America 57; Argentine
Sweden 52; Switzerland 56; Spain 109; Ireland 70; Turkey 245;
Poland 15,010; and China 2,087,900. The indications are that during
1948, the Australian price level will be subjected to pressure, as it was
in 1947. By V. P. Day, export prices had increased by 78 per cent.
over pre-war prices, and by 183 per cent. by June, 1947. Import
prices rose by 99 and 147 per cent., respectively. There is no sign of
the increase of overseas prices steadying as yet, and there is no doubt
that a serious post-war boom is taking place in the international field.
Under these conditions it would not be wise to remove the existing
control over prices.
An attempt to control prices generally without controlling the land
values would because of the present state of demand, permit serious distortions
of the whole cost-price structure. Excessive land values would
greatly inflate the cost of home-building and would make the administration
of rent control extremely difficult, if not impossible. The effect
on rural industries must also be particularly serious. When producers
are receiving high returns for their products, speculation becomes rampant
and land changes hands at boom prices financed by mortgage loans.
Then, when export prices decline, many producers find themselves ' burdened
with debt and high costs. A long and painful re-adjustment becomes
inescapable; and the result is a general state of depression
throughout the rural industries. To prevent a repetition of such experiences,
and to prevent execessive land values from unduly inflating costs
generally, it is proposed to continue the control of land values for a
further twelve months under this bill.
" Speculative investments are not confined to land. At present there
is a large supply of capital awaiting investment, but it is impossible
for all of it to be employed without making inordinate demands on the
available resources of material and man-power. It is clearly desirable
that resources should be concentrated on essential production and not be
diverted to speculative or unnecessary enterprises. It is, therefore, proposed
to continue the Capital Issues Regulations.
7081.-3

Rent control is a special aspect of economic controls, and its continuance
is rendered necessary by the present shortage of accommodation
of all kinds. It ensures a measure of stability where stability is
most needed. Its removal, and the removal of control over evictions
under present conditions, would result in inflation of rents, wholesale
evictions, exploitation and much misery.
" I mention briefly some marketing regulations which it is proposed
should be continued. The regulations under this group include those
relating to the control of barley, apples and pears, hides and leather,
potatoes, rabbit skins, as well as the acquisition of wheat and the
stabilization of the wheat industry. The reasons for continuing these
regulations are simply that the conditions which necessitated their
introduction are still with us, and the Commonwealth must keep the
faith with the primary producers. The detailed considerations differ
somewhat, depending on the commodity. In respect of the Australian
Barley Board, it was expected that legislation would be enacted by the
South Australian and Victorian Governments to carry on after the
end of 1947 the authority originally established by the Commonwealth,
but the sudden dissolution of the Victorian Parliament has delayed the
necessary legislation in that State, and the Commonwealth is accordingly
obliged to continue the regulations so that there will be no disorder
in the handling of the forthcoming crop. Refrigerated shipping
space for the apple and pear crops of Tasmania and Western Australia
is still inadequate, and hence the continuance of assistance is necessary
to protect the growers in those States. As regards potatoes, the Commonwealth
has let contracts to growers for the 1947-48 crop, and the
regulations are intended to control marketing until the crop
is sold. It is hoped that by the end of 1948 the organizations of the
States will be ready to take over potato marketing. Wheat regulations
are intended to cover the marketing of the 1947-48 crop. It has not
been practicable to reach agreement on a permanent marketing scheme
for the industry, but a further conference with the States will be held
shortly. Meanwhile the Commonwealth is continuing the Australian
Wheat Board in accordance with the desires of the growers and all
State Governments. In fact, no other organization could satisfactorily
market the crop. Controls over hides, leather and rabbit skins are
necessary mainly for price stabilization purposes, as the world prices
of these commodities greatly exceed the domestic prices. A limited
section of the food control regulations is preserved so that the distribution
of certain fats and oils can be equitably arranged, and also that
essential service supplies may be obtained.
There is a group of regulations which affect servicemen still serving
in the occupation forces in Japan. It is obviously necessary to
keep in force the Military Forces, Naval Forces and Women's Service
Regulations. There are still a few internees and prisoners of war in
Australia, and although very few are affected by them the provisions
by which their detention is regulated must remain in force.

37
" Parliament has considered several bills dealing with industrial
conditions-notably the Commonwealth Conciliation and Arbitration
Act, the Stevedoring Act and the Coal Act. These enactments go back
some distance in bringing back to a peace-time footing the framework
within which industrial conditions are settled. There are still, however,
fields to which attention has not been given, particularly the maritime
industry and the craft unionists employed in the coal industry. Pending
some further clarification in these fields, the existing regulations
must be preserved for a time.
Superphosphate regulations have been discontinued and the operation
of the Agricultural Aids Regulations restricted to a single item of
nicotine sulphate. The prospect of a record harvest has aggravated the
demand for both cornsacks and galvanized iron, and control over these
commodities must be continued for some time longer. While Britain's
position is so critical it is unthinkable for Australia to remove all
restrictions on commodities which are needed so badly there, and
accordingly ration schemes are being continued, particularly in relation
to meat and butter.
" About one do. en sets of regulations will be continued. They are
those under which war materials are being disposed of, war damage
claims settled, compensation with regard to requisitioned cargoes
assessed, property of enemy nationals administered, and the hundred
and one other things necessary to unwind the war effort. A good many
of the provisions of this sort cannot be dispensed with until the Treaty
of Peace is signed with Japan.
In 1946, a few amendments were made in permanent legislation.
This bill gives permanent expression in appropriate acts to some provisions
hitherto contained in National Security Regulations. The Acts
Interpretation Act is amended in two respects. One provision is made
to cover the case where the functions of one department are transferred
to another department. Reference to the former department or its
Minister will be read in an agreement as referring to the latter department
or its Minister. Secondly, there is a provision relating to delegation
of powers or functions. This provision permits the exercise of
powers or functions by a delegate in circumstances in which the exercise
of the power or function is dependent on the opinion, belief or state
of mind of the person exercising the power. An amendment made in
1946 to the Land Tax Assessment Act is continued for a further year.
This amendment continued for land tax purposes pegging of land values
which, up to that time had been pegged at 1939 values by regulation
under the National Security Act. The assessment of land tax on land
owned as at 30th June, 1948, will be based on the 1939 value.
" Action is being taken to amend the Defence Act by exempting from
jury service members of the Citizen Forces engaged on war service.
Probably the most important of these changes in permanent legislation
is the clause which repeals the National Registration Act. The Government
regards the National Registration Act as a type of legislation

which is undesirable during peace-time. It is the policy of the Government
to embody in permanent legislation at the earliest possible date
provisions now contained in National Security Regulations and which
it is desirable shall have permanent effect as part of the law of the
Commonwealth. This bill is one of a group of about half a dozen bills
which deal with matters previously covered ' by National Security Regu-'
lations. Already the Dairy Produce Export Control'bill has been introduced
and one of the effects of its pas-sage would be that the Dairy
Produce Acquisition Regulations will be permitted to lapse at the end
of the year. The Australian Soldiers Repatriation Bill contains a provision
permitting regulations to be made about patriotic funds, and
accordingly the Patriotic Funds Regulations will not be ' Continued next
year. Other legislation involving amendments to other acts is in train,
and will be introduced as early as possible. When thes3e bills are intro
duced, opportunity will be taken to place in permanent form some of
the provisions now carried on temporarily." [ Teblwapsed
( For earlier reference, please see N-o. 122, page
By Authority: L. F. JOHNSTONq, Commonwealth Government Printer, Canberra.