BANKING CHALLENGE

Otago Daily Times, Issue 26707, 28 February 1948, Page 7

BANKING CHALLENGE

COMMONWEALTH'S REPLY ROWERS UNDER CONSTITUTION DEFINED • Rec 8 p.m. MELBOURNE, Feb. 26. After 12 days of hearing in the Federal High Court, the case for the three States and 11 private banks ended yesterday, and the Attorney-general (Dr H V. Evatt) began his reply to the Banking Act challenge. The Commonwealth’s reply is expected to last at least a fortnight. . Dr Evatt said his reply to the plaintiff banks and States would fall under seven headings. First, the Banking Act, 1947, was within the Cqmmonwealth Parliaments legislative power with respect to: (a) Banking (under paragraph 13 of section 51 of the Constitution); (b) foreign corporations and Australian financial corporations (under paragraph 20); (c) the acquisition of property for banking by the-. Commonwealth Bank (under paragraph 31). Secondly, the primary matter dealt with by the Banking Acts of 1945 and 1947 was the selection of those who shbuld coiiduct banking business in Australia. Such a measure was plainly the law with respect to bankm Thirdly, the Banking Act, 1947, provides for bringing under public ownership or control through the Commonwealth Bank of Australia all . banking business in Australia except banking business conducted by the States. The lpw conferring on the Commonwealth Banit the necessary powers anc’ functions was within the banking power Fourthly, the Act discloses an unmistakable intention to assure fair and reasonable compensation in respect oi every acquisition of property under the Act, and with this end in view Parliament has established a special and completely independent judicial Fifthly Privy Council decisions established that* the Act did not in anv way impair the freedom of interstate trade, commerce or intercourse protected by section 92 of the Con--8t Sixthly no unconstitutional interference with State unctions w^s involved. The States would still be entitled to avail themselves of all banking facilities lawfully established by State and Federal laws Seventhly, the Act was m no respect inconsistent with the financial agreement of 1938 as subsequently 3 The Australian Constitution dearly intended to give the Commonwealth Parliament nothing shoit of power over the whole monetary and banking system, said Dr Evatt. The collection of powers vested in Parliament by the Constitution included those over currency. legal tender, banking with a very y limited exception of State banking, the incorporation of banking and the issue of paper money, said Dr Evatt “When 1 use the term banking system T mean almost the very antithesis of what Mr Barwick, K.C. (for the Bank of New South Wales) says wnen he attempts to. confine banking merely to what happens between the bankei and his ■ customer,” said Dr Evatt “That is the operation which affects the public in its outer manifestation, but behind the dealings of banks with customers there is contained the bank s relations with the Commonwealth s power over currency, coinage legal tender and paper money—which is nothing short of the whole banking and monetary system of the Commonwealth ”