on 17 December.
Although the Government acted on the advice of the Commonwealth Bank the Bank Bill was much criticised by Australian financial institutions and met spirited criticism
from the Opposition in Parliament. The debate on the Bill
defined the Opposition's attitude to Labor's economic legislation 84
during the next two years. It was an attitude of the utmost 80
The economic implications of the Act are explained in
C.B. Schedvin, Australia and the Great Depression, Sydney, 1970, pp.122-6; its main effect was to remove Australia from the Gold Standard, though this was not generally acknowledged until much later in 1930.
81
Theodore's brief explanation of the Bill in Caucus was made during a meeting otherwise devoted entirely to the coal dispute; Caucus, Minutes, 28 November 1929.
82
L.F.Giblin, The Growth of a Central Bank, Melbourne, 1951, p.66 83
Which was too late to thwart evasive action, involving over two million pounds, taken by two banks; S.J.Butlin, Australia and New Zealand Bank, London, 1961, p.394.
84
C.P.D., Vol. 122, (20 November-13 December 1929), H.of R. , 2nd rdg., pp.427-30, 596-626, 698-717; Senate, 2nd rdg., pp.885- 914, 974-1004.
was bent on the rapid destruction of the existing order by subterfuge, using 'political control of banking' as the chief weapon. Doubtless this was non-labor's reaction to and
counterpart of the widespread belief, in the Labor movement, in the Money Power Conspiracy. Both views were deeply embedded, and propounded with sincere conviction, though probably w i t h 'S* more justification in the case of the Labor attitude. Despite
confessed and apparent ignorance of economics both applied and theoretical, both camps remained convinced and the events of 1929-1931 served only to reinforce both sides in the rightness of their beliefs.
The Opposition criticised the 1929 Bank Bill because the Government had not consulted the Banks and it was not in the least reassured by Theodore's reply that he had discussed the matter at length with A.C. Davidson, Manager of
85
the Bank of New South Wales. The Opposition's remarks, then
85
as later, were founded on the conviction that Labor if not utterly malevolent in its intentions, was ignorant and incapable because it had no experience of business and
financial matters. There were frequent allegations that the Bill was the first step toward nationalisation of banking, wild inflation of the note issue and the destruction of all normal values. These fears were not assuaged by Theodore’s November revision of the Estimates, which budgeted for greater expenditure, using an increase in super tax, income tax and customs and excise duties. During his speech Theodore espoused the Keynesian notion of counter-cyclical spending on public works and expressed the Government's dissatisfaction with the
system of credit control in Australia, under which the private trading banks which had:
in recent years almost exclusively arrogated to themselves the power to determine the bank, discount and exchange rates, and the extent to which credit shall be expanded or restricted; and, equally important, the classes of business and industry to which credit facilities shall
be extended. 86
Ibid, (21 November 1929), p.116. 86
Theodore said that the Government regarded credit
manipulation as a matter for Government control and would therefore shortly 'give consideration to the question of remodelling the Commonwealth Bank and increasing its scope
8 7 and function'.
A major issue facing the Government was
unemployment. One small gesture toward easing the problem was taken when the Government opened negotiations with
Ramsay MacDonald's Government in Britain for the cesaation of the '£34 million agreement' under which the Bruce-Page
Government had agreed to an assisted immigration scheme. Since its inception it had been a thorn in the side of the Australian trade unions and the A.W.U., with its large number of unskilled
88
members, had been particularly vehement in its opposition.
87 Ibid.
88
See the A.W.U. Central Branch [N.S.W.], Annual Report and Balance Sheet, 1924, p.8; 1925, pp.11-2; 1926, p.9; 1927, p.ll; 1928, p.18 ('... we do offer strong objections to the swamping of Australia at a time of industrial depression and with a class that is repugnant to the ideals of a White Australia*); 1929, p.18; 1930, p.18.
Opening negotiations to set aside the Agreement, as with abolition of compulsory military training, was a move which was in accord with the Government's drive to economy in expenditure, its stated policy, and the interests and sentiments of the movement. Issues of this kind were few and quickly exhausted, but they contributed to the brief honeymoon period which existed in these early months between the Government and the Party organisation.
A similar issue of agreement was the ‘Scullin 89 tariff. Labor had long advocated high tariff protection. The main appeal was the stimulation of Australian industry and hence an increased level of employment, with subsidiary benefits in the maintenance of a white Australia and increased revenue. During the 1920's the Nationalist Party, and with some qualifications, the Country Party, had also supported a
90
high level of tariff protection. This, however, had not prepared the Opposition for the extravangance of Labor's tariff policy of 1929-1931.
89
C. Goodwin, Economic Enquiry in Australia, North Carolina, U.S.A., 1966, pp.26-31.
90