Page 3268 - Week 11 - Thursday, 13 September 1990
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When I talk about banks, I talk about trading banks. Other banks do not have that privilege. How are the trading banks doing it? They have been given, or have got hold of, the power that is given to our State and Commonwealth governments to use parliamentary banks to create the wealth of a nation.
If no-one had the ability to create wealth on behalf of a nation we would still have the five and a half pounds worth of tents and other things that Captain Cook brought across with him. Naturally, there needs to be the right to create credit. Now, some people would think that I am talking about money; that is cash and coin. I am not. At any one time in Australia the amount of cash and coin is vastly outnumbered by the amount of credit or debt, depending on which end of the scale you are looking at.
To suggest that we cannot control money and cannot control inflation is to say that money controls us, and must control us. While I agree that money quite often does control most people, it is not a must; we can change it. We can change it by using the constitutional power for the State and Federal governments to create money through a parliamentary bank. The banks that we know of, State banks, are basically no different from other banks; they just happen to be owned by the government.
Now, I think it is perhaps time that I gave some of the evidence for these rather interesting statements that I have made, for all those people who are still absolutely 100 per cent convinced that banks lend depositors' money, that there is no way out of our economic problems in Australia other than to go deeper and deeper into debt, other than to have more and more businesses close, other than to have less people buy homes and more and more people driven off properties in the rural area.
That is the current thinking of governments in this nation. I really should ask for a hands up if there is anybody here that thinks that banks create money out of thin air. Mr Collaery thinks that banks create money out of thin air - well done. You are going to look very good in the ensuing time. Quite remarkable; well done. You are the only one. You are going to look very good in the future, Bernard.
Sir Josiah Stamp of the Bank of England - and, ladies and gentlemen, I suggest that you listen to the evidence - said:
The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.
Someone perhaps closer to home, a gentleman named Dr Coombs - "Nugget" as he was known - the former Governor of the Commonwealth Bank, later the Reserve Bank, and financial adviser to every Federal government from Chifley to Whitlam - said:
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