The Australian Precedents for a

Hamiltonian Credit System.

Dennison Miller Commonwealth Bank Martin Place Sydney

King O’Malley

King O’Malley

Billy Hughes Andrew Fischer

Commonwealth Bank supports local Councils

The money to pay for the Commonwealth’s Trans-Australia Railway was paid for in the following manner: 1. From revenue (taxation) £ 1,205,651 2. From “profits” on the Australia Notes Account £ 3,428,519 3. From sale of some of the securities held by the Australian Notes Account £ 2,335,372 --------------- £ 6,969,542 Hansard Vol 129 p 1930

Australian Bank Note Issue increased by £50 million a. Some Notes were given to the banks in exchange for gold b. Some Notes were lent at interest to State Governments c. Some Notes were placed on fixed deposit with various banks at different rates of interest d. More than half the notes were invested in interest-bearing securities.

Treasury Bills £ Million Yearly Change

Pre- and early war 1933 + 4 1934 0 1935 - 4 1936 + 2 1937 - 1 1938 + 4 1939 + 3 1940 - 4 1941 + 1 Total + 5 Source: The Australian Trading Banks by HW Arndt

War-time under ALP 1942 + 59 1943 + 173 1944 + 77 1945 + 68 Total + 367

March 1945 Commonwealth Bank Bill Treasurer Ben Chifley: “The legislation that I am proposing today is based on the conviction that the Government must accept responsibility for the economic condition of the nation… Accordingly, the Government has decided to assume the powers which are necessary over banking policy to assist it in maintaining national economic health and prosperity... Reduced to its simplest terms, one of the main responsibilities of a central bank is to control the issue of bank credit by all the banks in such a manner as to avoid expansion of credit in times of boom, and contraction of credit in times of depression.” The bill aimed to: • “strengthen the central banking functions of the Commonwealth Bank [mandatory private bank deposits in special accounts in the Commonwealth Bank]; • to ensure that monetary and banking policy of the Commonwealth Bank shall be in harmony with the main decisions of government policy and in the interests of the people of Australia; • to ensure the development and expansion of its general banking business by active competition with the trading banks; • to return the control of the Commonwealth Bank to the governor, who will be assisted by an advisory council; • to assist in developing small industries and in enabling the people to secure homes.” • Also, abolish the Board control of the note issue; • abolish the currency reserve requirement of 25% in gold/silver.

Funding clause of Snowy Mountains legislation: 1. “The Authority shall have power to borrow money on overdraft from the Commonwealth Bank of Australia upon the guarantee of the Treasurer. 2. “The Treasurer may, out of moneys appropriated by the Parliament for the purposes of this Act, make advances to the Authority of such amounts and upon such terms as he thinks fit. 3. “Except with the consent of the Treasurer, the Authority shall not have power to borrow money otherwise than in accordance with this section.”

A paper presented to Cabinet calculated the value difference in exporting bauxite vs. processed aluminium, in 1970 dollars: Exporting 1 million tonnes of bauxite, the raw material, earned $ 5 million; Processed one step into alumina earned $ 27 million; Processed again into aluminium earned $ 125 million; and processed finally into aluminium products earned $ 600 million!