
Issue No 67		18 August 2000

LaborNET	Ask Neale	Tool of the Week

History

Money Power

By Neale Towart

Should the People or the Banks Rule? Reserve Bank Governor McFarlane thinks he knows the answer. Eddie Ward was pretty strongly of the opposite view when the ALP introduced the Commonwealth Banking Legislation in 1945.

The Commonwealth Bank Bill (this was establishing what became the Reserve Bank) set out the duty of the bank: "It shall be the duty of the Commonwealth Bank, within the limits of its powers, to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers...in such a manner as, in the opinion of the Bank, will best contribute to -

the stability of the currency of Australia
the maintenance of full employment in Australia; and
the economic prosperity and welfare of the people of Australia."

What is wrong with these general principles?" Ward asked.

McFarlane clearly thinks money might fall into the wrong hands i.e. the people who earned and paid it out as taxes. So he attempts to bully the politicians (who unfortunately don't need much persuasion) into keeping the wallet shut for fear of actually improving the living standards of workers.

Ward makes interesting reference to the AMP Society (recently demutualised to the benefit of the few) who had been running the following in advertisements:

"...in 40 years hence:

Of every 100 healthy men now 25 years of age -
ONE only will be wealthy;
FOUR will be well-to-do;
FIVE will still be working for a living;
THIRTY-SIX will be dead; and
FIFTY-FOUR will be dependent on relatives and charity"

This is the "new order" which the reactionary elements have in store".

Sounds a bit familiar. The 20-80 society (as suggested by The Global Trap authors and others) was on the drawing board in 1945.

Also familiar are the cries of government interference in banks, supposedly against the people's interest. The private banks vehemently opposed any government role, urging people to "write to your Member of Parliament and protest against any Government interference with private banking institutions."

Ward's advice to electors was to ask bank managers the following questions:

Did your bank suspend payment during the 1893 bank crisis?
What form of reconstruction did it adopt in order to re-open for business?
Under the terms of the reconstruction, how long was it before depositors were able to gain access to the amount of money represented by deposit receipts?

Ward is referring to the 1893 financial crisis in NSW that brought down the NSW government.

He continued in the same vein strong criticism of the private banks behaviour during the 1930s, and during the war. Menzies tried to support the banks, arguing that their profit rates fell during the war as the responded to the national crisis. Ward's response: "Well, it is just another illustration of the truth of the saying that figures cannot lie, but liars can figure." Ward was part of the Labor tradition of Frank Anstey, who also warned against the money power in the early decades of last century. Ward was for a long time on the outer with the ALP because of his strong links with Jack Lang.

He was the member for East Sydney from 1931 until 1963 and the Speakers' phrase "Order, order, the Honourable Member for East Sydney will resume his seat" was heard a great deal during his time as an MP. He was probably most comfortable in opposition, whether opposing his own party on various issues or attacking Menzies, which he did frequently throughout his time in politics.

The "Firebrand of East Sydney" was a distinctly Australian radical. His story is told in Elwyn Spratt's biography, "Eddie Ward: Firebrand of East Sydney, published by Rigby in 1965.

John Maynard Keynes was an advocate of the fine city minds who should control the economy, but even he called for the "voluntary euthanasia of the rentier" and the "somewhat comprehensive socialisation of investment."

Frank Stilwell in Workers Online no. 63 seems to be correct in predicting interest rate rises and a further tightening after the Olympics. He also advocates reconstruction in terms of regional policy and industry policy to revitalise key parts of the Australian economy that the current economic "faith" has effectively closed down, forcing a reliance on imports and thus a fear of currency movements.

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Issue 67 contents

Interview: Slyly Selling the Silver
In their recently published book Privatisation, Sell-off? or Sell out? (ABC Books), Bob and Betty Walker took a long hard look at the major government asset sales of the last decade. Here they tell Workers Online what they've learnt.

Politics: Dysfunctional Society
Noel Pearson looks at the plight of Aboriginal people through a prism of class and comes up with a challenging perspective on Aboriginal welfare, law and order and the state of our society.

History: Money Power
Should the People or the Banks Rule? Reserve Bank Governor McFarlane thinks he knows the answer. Eddie Ward was pretty strongly of the opposite view when the ALP introduced the Commonwealth Banking Legislation in 1945.

International: Soccer Pro Tackles Nike
Olympic sponsor Nike is under pressure over its human rights record in the run up to the Sydney Games.

Economics: Globalony
Frank Stillwell looks at the contradictory nature of the globalising economy and fears it is turning into a race to the bottom.

Satire: IVF Debate: Federal Government Tells Lesbians: "Get Fucked"
MELBOURNE, Monday: The Federal Court decision to allow single women and lesbians to use infertility treatment in Victoria has been attacked by the Federal Government, the Catholic Church and by pro-family community groups.

Review: Confessions Of A Union Buster
It's not a new tome but the threat for Australian Unions remains the same if not greater as when this book appeared five years ago.

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