OPENING OF THE A. N. Z. BANK BUILDING,
PITT AND HUNTER STREETS, SYDNEY 24TH SEPTEMBER, 1965
Speech by the Prime Minister, Sir Robert Menzies
Sir, Mr. Premier and Ladies and Gentlemen
Something tells me I might have to get into the lift
again on the way out, so I will take time by the forelock I
declare this building open. ( Laughter) hAat happens thereafter
can't alter the fact that this building is now, believe it or not,
open. Some of you may know that I am a species of politician
and a politician becomes accustomed to the ups and downs of life.
Each time one gees down, one comes up a legitimate abition which
so far I have been able to achieve; but this afternoon, I thought
" This is the end of the road. ' e've -one down, we'll never come
up again." ( Lauhhter) A sobering reTlection. I am not at all
sure that Darvail didn't arrange it. ( Laughter)
I am glad to hear on highest authority that this is
the greatest city. I knew it must be because though I have
opened three or Tour buildings in Melbourne, I must have opened
a dozen or two here and you are so successful in Sydney, everything
runs so well that even though it is three o'clock in the
afternoon, I always see the same 400 busy businessmen attending
an. opening, with lively ambitions, I hope. However, I say no
more about that. I have risen superior to these parochial
arguments. ( Laughter) The finest city in Australia is Canberra
( Laughter) ( Applause) because these things must be estimated not
quantitatively but qualitatively, and so I repeat: Canberra.
And I will continue to say that until I leave. ( Laughter) And
when I leave, I will go to Melbourne.
Now, I was very interested to hear my friend, Mr.
Darvall say something about the banking structure because I thought
I would like to say a little about that myself. We have had
recently under consideration a proposal that was made by a very
powerful Committee that there should be an enquiry into credit and
the facilities of credit it's a very wide term and can cover
a very wide field. The Government doesn't agree with this and
for reasons which I stated the other night, and which are worth
repeating in substance, though not, I hope in words.
We had for years and years in Australia a great
argument going on about'the Commonwealth Bank, the trading
activities of the Commonwealth Bank and the fact that they were
controlled by the same people as controlled the very important
central banking functions. We were told, and I think with some
reason that t is rather impaired the element of co-operation that
ought to exist between the trading banks and the Reserve Bank or
Central Bank, and we know, don't we most of us can remember it,
that there were great arguments, and very heated arguments.
Every time you start an argument on one of these
matters, it's astonishing how many people come out from behind
the bushes with new theories and old theories. It doesn't matter
how old they are and how discredited thry are, they will be
produced, and so you can devote a year or two to having arguments
going on about a structure which in reality ladies and gentlemen,
has ver the last six years, at least worked extraordinarily well;
because it was in 1959 that we thought to bring this to a head. / 2
2
We separated the Commonwealth Trading Bank operations from the
Reserve Bank, and put it under a separate corporation. I
venture to sa and what Mr. Darvall has said confirms me in
that belief, Lhat since then, with a growing experience of
mutual understanding and a feeling that the Reserve Bank and
the trading banks are not acting in rivalry but are subserving
a common purpose, in a different way, each time of course
inevitably, this system has, I believe been a very good thing
for banking, and therefore, for the entire business community
in Australia. And that being so, we would not want to see it
disturbed. ie have had a lot of experience even I have
had a lot of experience in political matters and how these
things go on I have seen more passions aroused over the banking
business than enough. At long last we reached a conclusion
and Parliament approved of it, which has, I believe, produced
a proper structure in which the many functions of the Reserve
Bank are understood they are respected, its authority is
respected, and at the same time, the banks themselves have been
able to carry on their business with some feeling of freedom
not always without some grievance; that's inevitable but on
the whole, with a sense of freedom and a sense that they could
go ahead and manage their own affairs within the general pattern
that any Reserve Bank must find itself responsible for.
Therefore, we decided, and I think auite rightly that we would
not disturb this pattern, at a time'when the machine is working
well, in order to have the whole of these issues reopened by an
investigation publicly conducted and therefore exposed to all
the advocacy from all sorts and conditions of people which any
enquiry inevitably attracts.
Therefore I was delighted to have my view
confirmed that the overall bankin-system in Australia is a good
one. It is, of course, susceptitle of improvement, but
improvement in detail, inprovement in application, not the sort
of improvement that people aim at by saying, " Let us drastically
alter the whole scheme". It is for that reason that we have
said that we don't propose to have a public enauiry of that kind,
and I thought it was an opportunity for telling you in the
simplest terms why. Now this Bank is an Anglo-Australian bank. We
are reminded of this by the distinguished presence of Lord
Bridgeman. An Anglo-Australian bank, a bank in which there are
shareholders, directors, various people in London in Great
Britain, and therefore a bank which can be exposed to criticism
by those of us who are narrow-minded enough to think that no good
can ccme out of any place but Australia. Now I believe that an
Anglo-Australian bank managed with skillard vision and intelligence
understandin, an Anglo-Australian bank has a special
opportunity, a special responsibility. Because as never before
in my political lifetime, and perhaps in your business lifetime,
never before have the problems of liquidity and of banking policy
generally become more and more international in their character
and the oroblem that is international reouires no narrow or
parochial view. It reouires a broad view. Just let me elaborate
that a morsel. We talk abut liquidity. Whenever we are discussing
the position of the banks, somebody will ask, ", hat is their
present liquidity ratio? How are things going? Are they short
of licuidity or have they too much?" This is the kind of
discussion that goes on inevitably between a reserve bank and a
trading bank, and all sorts of people of both sides have to do
something about it. But we are witnessing a state of affairs in / 3
the world today in which a shortage of liquidity in one country is
no longer just the business of that country but can have a chain
reaction all round the world. Let us just take a simple example
Japan. Japan has problems of liquidity. Japan has been a
great attractor and user of imported capital. If it turned out that
the policies of the United States for example, were such that
Japan began to become illiquid, tAat Japan became short of new
funds, we would know about it because Japan happens to be one of
our biggest customers in the world, and people can't buy things
withouf having the money to pay for them. Thereforethe liouidity
problem of Japan affects Ausrlalia, just as the liquidity pr6blem
in Great Britain affects Australia or of the Unite States affects
us. We have seen it. We have seen all these things in a distant
way, and sometimes if we have the opportunity, at cose quarters.
I really believe that, vastly important as it is
for us to try to sulve our own internal financial problems, our own
economic problems, vastly important as it is to have our credit
structure operatin. 7 inside our own country so that business can
proceed with opt imism it is even more important for the trading
world, the six or eigAt great trading nations, of which-we are just
abcut one. They have a problem in common. Nobody can detach tne
problems of Great Britain as she confronts her balance of payments
tasks, nobody can detach those from the balance of payments problem
of the Unite States of American or of any other of the tradIng
nations and more and more we must think about these matters in
international terms. The trading nations of the world, particularly
in the next two or three years, have a tremendous task in front of
them and it's a task in common so to handle those problems of
finance as to free the channels of trade. I am not talking about
tariff levels but to free the channels of trade and to expand the
world's trade, because I am old-fashioned enough to believe that
the greatest guarantee of peace in the world is that nations should
trade peacefully plentifully and profitably with each other.
This is a tremendous foundation for understanding and therefore
for peace. Now, Sir that is all I want to say about it. I am
talking to my betters, I know, as so many of you have technical
knowledge of these problems to which I can't aspire, buft as the Head
of a Government I am well aware of them. I feel some responsibility
for them, and it occurred to me that they might well be referred to
today because here we have people from London, from Australia. A
grea organisation London/ Australia here is something that has all
he elements of an international understanding of what, as I have
emphasised, is in many ways an international problem.
And so I had great pleasure in saying " Yes" when I
was invited to come, apart altogether from the fact that as Mr.
Darvall is not my banker, I have always felt it difficult to say
c" onmoe" atno d hiemv. e n g( Lraeua-; ehrt epr) l easuIrte thtoe rerfeopreea t gawvhea t meI gsraeiadt atp letahes urbee gitnoning
that the building is now open.