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BankWatch

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Operation BankWatch

A father of a young fellow trying to hold on to the farm made the deliberate claim one day at a sheep auction, "Interest rates are like cancer. They eat up everything you produce and still grow. We are just farming for the banks."

Contents

Foreword
The Eyre Peninsula Action Group - the beginnings of Bankwatch
The Australian Finance and Banking Industry - in whose interest?
A Year On from the Big Drought
The Great Harlot
Bill Carey

Jim Cronin March 1993

Jim Cronin's background
Jim Cronin was born on the Eyre Peninsula in South Australia in 1932 and was educated at the Cummins Area School. Jim first worked for a commission agent and learnt the farm agency business. Still in his teen years he took on grain agencies and then became a full time wheat lumper with stints in Wheat Board depots and on the wharf. This work proved to be both enjoyable and rewarding and along with his brother, Patrick, they later invested in farming land. The two brothers developed a wheat and wool property which they still farm today as well as maintaining an active interest in mining. For over twenty years, Jim has mined copper, gold and opals in various parts of Australia. Jim has also played Australian Rules Football to top level.

Jim Cronin
A life long interest in history and politics has constantly taken Jim to all corners of the world and he has become an informed commentator in the field of agri-politics. Also, Jim has worked unceasingly over the past four years to defend Australia's rural community from the worst affects of Australia's economic downturn setting up Rural Action Groups and the Bankwatch Movement.

Foreword

Since 'Operation Bankwatch' was first published in April 1991, an intense battle of wills has taken place throughout Australia between the banks and the borrower. The whole question of banking has been brought to the forefront of Australian consciousness by the efforts of numerous individuals and groups who have either written books or taken to the lecture trail. Bankers have been put under great pressure to maintain credibility over this period of time as responsible lending institutions, but the host of corporate crashes & financial dealings over the past few years that have been publicly aired with all the resultant recriminations has more than highlighted great deficiencies in the management of Australia's money system and financial institutions.
A Federal Parliamentary enquiry into banking, a State Royal Commission into the conduct of a particular bank, have come and gone and little has actually changed, nor is it likely to. During all this time mounting numbers of bankruptcies and business failures being acted out daily in the cities as well as rural Australia.

Governments of all persuasions and politicians in particular absolve themselves entirely from such responsibility in these matters and to why our financial system and economy has collapsed and is not being regenerated and refuse to apply themselves to this vital situation. The truth is the present impasse has actually been created by the actions and neglect of our Federal Politicians over a long period of time with the blessing of acquiescing State Governments. The responsibility is now entirely with these very same politicians, our duly elected representative to see that changes are made to Australia's financial system to allow unpayable debt to be accommodated & written down in some way. This situation must be addressed as a matter of urgency, otherwise the casualty lists among industry and farmers will grow & grow, till Australia self destructs economically and socially.

Conversely among other considerations this nations production capacity can only begin to regenerate with long term loans and low fixed term interest rates which would allow the small units to rebuild and flourish once again. This also would restore hope to young people rapidly growing disillusioned by what they perceive as grave financial injustices and ask whether the future holds anything for them at all. A conscious campaign to get changes has been stalled throughout Australia under the Bankwatch concept. Bankwatch committees have gone into bat endlessly over the past four years for a great number of people who want to fight to protect their way of life and hold on to their farms. Prime Minister Keatings, 'one Nation', commitment of 1992 to allow banks to claim taxation write-offs where restructuring of debts has been done off officially remains in place, but little used.

In the space of two years a great number of Bankwatch Action Groups of varying strengths have been set up across the nation as more and more people are asking why can't something be done? Bankwatch Leaders have travelled long distances in response to urgent situations more often by bus to promote the moral argument and show that something can really be done. Once the ordinary citizen begins to understand and take charge of their own financial affairs and begin to work within an action group structure, only then can Communities districts and peoples be held together. Bank foreclosures, evictions and repossessions can then be contested and blunted. Debt write off is certainly happening to a degree and some districts have already been settled down. But much more has to be done before any worthwhile changes are ushered in.

Bankwatch has further strengthened support from Trade Union movements along with wage earners and small business and anyone concerned to promote a single voice in this campaign to get better results from our financial planners. Our front line economists must share a dominant part of the blame for the financial mess Australia is in. The economists applauded the deregulation of the banking systems They condoned high interest rates as a financial Strategy for political ends. By their very understanding of figures these people would know when an industry or small business with fragile profit margins was deliberately set upon with outrageous interest rates that irreparable damage would result. But these same economists remain unchallenged & rationalise their projections by saying if we had less units doing this or doing that. the ones remaining will do better.

They push for micro economic reforms where industries are already pushed beyond endurance and so on. No thoughts about the social dislocation or what the flood of imports are doing to our base industries. Economists condone & argue for an unrealistically high value of the Australian dollar which essentially is keeping our exports almost valueless. In actual terms we need robust practical politicians, men & women who have compassion for the future of Australia, who will acknowledge the damage that has been done and immediately implement reforms to provide urgent help & protection for industry & farmers.

There are still legions of hapless victims being pushed to the wall with horrendous levels of unpayable debt. The Bankwatch Movement will continue to strive for changes to Australia's money system and make politicians aware of their obligations for the benefit of all Australians and to free the individual from his worst fears Jim Cronin March 1993

 

The Eyre Peninsula Action Group - the beginnings of Bankwatch

The story of the Bankwatch campaign needs to be told. The Eyre Peninsula, known in South Australia as the West Coast, had came through a number of droughts and adverse grain years during the 1980s. But none was as bad as 1988. It was the worst drought ever remembered in this area and ultimately caused terrible financial hardship It was not only the drought that cut income, but the viciously high interest rates; and grain prices (wheat in particular) had dropped as well. The awful prospect for many farmers of being forced off their land was too terrible to contemplate. Young people were leaving farms and towns in droves to find work elsewhere.

There was a great parallel looming in this present situation to that which took place in the depression years of the 1930's on the Eyre Peninsula when large numbers of farmers simply had to quit and walk off their land, However in that era the small community of Chandada produced men and women who became leaders and fought for farmers' and people's rights. One such person was Ron Loveday, an Englishman.

A former RAF World War I pilot who was battling to develop a scrub block at Chandada, Ron Loveday led the local branch of the Wheatgrowers Protection Association and was Secretary for the Eyre Peninsula. This was also at a time when the 'harsh debt adjustment act' was being administrated in its worst form, when banks suddenly recalled loans, and wheat prices fell to 15c a bushel. Loveday knew action had to be taken to oppose the 'seize and sell' syndrome of the banks which ruled the day. In pursuit of this end he ultimately became Minister for Education in the Dunstan Government as Labor member for Whyalla. Ron Loveday was motivated simply by the desire to help other people out of their difficulties and was determined to see others do well for themselves without fear or favour.

Chandada also had the only Women's Wheatgrowers Auxiliary group in Australia and was led by the courageous Mrs. Ardee Cash, an Irish-born schoolteacher. These farmers and their wives were prepared to stay and fight as they did even if there was only half a chance to survive. They didn't mind the hardships and primitive living conditions because they held visions of a better future. But after toiling for many years during the depression hope ultimately faded for them because it was felt the financial system was loaded against them and they felt cheated. It was the iniquitous treatment handed out by both government and banks that took these groups to the steps of Parliament House to fight for justice to be done.

The Debt Adjustment Board, which was initially set up under Judge Paine to deal with the 1930s situation, was completely despised in what was an unforgettable period of ten years when these ordinary people cried out for help. Imagine the mentality of banks when the mother of a new born baby was given a five pound ($10) 'baby bonus' by the government to help nurture and clothe the infant, only to see the banks claim the five pounds ($10) against farm debts. This was changed however after great outcry but it reflects the thinking of banking organisations in their pursuit of profits and power then, and in the financial system still today, for which both Government and banks are responsible when interest rates rise in excess of 20%.

The common thread through both eras has been the total disregard of ordinary people. If this campaign is not recorded and understood and acted upon, we could see a similar predicament emerge in the future - and this must be prevented. We trust this 'Bankwatch' story will assist great numbers of people, farmers, unionists, small businesses and people seeking secure jobs or affordable housing to understand the seemingly implacable forces organised against the interests of ordinary people. This story calls upon the broader Australian community to work together to build fairer and more democratic bank and finance system.

We can move forward with the inspiration of such people as Ron Loveday, who was determined to help when he could and who continued to champion the rights of people against injustice even after the experience of losing his own farm, and knowing the pain of walking away from years of work and sacrifice, a person who knew how to fight for just reforms.

People versus Banks!
Crushing debts and six years of drought had created a disaster for farmers on the Eyre Peninsula. Normally a drought or even a string of droughts would not cause utter despair and hopelessness in rural communities. But in the Bicentennial Year of 1988 things were different. Interest rates had exploded from 12% to 22% almost overnight and with no crops it was finally making loan repayments impossible. Land prices had fallen dramatically and some debts suddenly exceeded the value of the farm. For many, no further assistance or emergency drought aid could be arranged and because of the loss of equity in their properties many farmers turned into untouchables- officially not to be helped by anyone.
Banks were talking tough, threatening to sell farmers up and have them walk away with nothing while they were in the clutches of the worst drought in living memory. It took a friendly gathering at the Chandada Hall to celebrate a young woman's 18th birthday to actually make people realise that a number of the district's families faced the prospects of not being there the following year.

As was the usual practice in a small bush community the whole district had turned out for Belinda Dannenberg's party, but the overtone of the drought cast a somewhat gloomy pall over the gathering. No crops, little sheep feed and no cash coming in to meet commitments, Bill Carey, a hard-working family man and one of the community's leaders, was at that birthday party. He would survive the drought without any great problems, but the thought of his immediate neighbours and friends being in such diabolical trouble had a gut-wrenching effect on him.

Knowing that his closest friends were to be ousted without a good hearing from the government or recourse to the banks was more than Bill could bear. But to try to do something on his own would be futile and ineffective. However, Jim Cronin, another Chandada farmer, was home from opal mining at Coober Pedy. Bill grabbed Jim at suppertime knowing Jim was a man of action, and said, "How about coming over for tea tomorrow night? There are a few of the locals in big trouble with the banks. I'll tell you the story then, but it is pretty serious!"

After tea the next night when the Carey children had gone to bed. Bill was most direct and very specific about the actual financial situations which some of his neighbours had discussed with him. Bill expanded on the desperate plight facing Eyre Peninsula farmers. He spoke of the banks' inflexibility; stating that dozens of families could be forced from their properties - some properties farmed by the same family for three generations or more. He started to count on his fingers those in real trouble who had spoken to him about their circumstances and said "the Minister for Agriculture, Kym Mayes, says there is no hope for these people. The Premier, John Bannon was here twelve months ago, wringing his hands, and blaming the banks, but nothing has been done since. The Federal Government won't give us disaster relief because the State Government won't declare the drought a natural disaster! They are not prepared to spend any money in assistance to instigate Federal Relief funding!"

Bill continued in a fiery tone, " The banks are going to pick these fellows off, one by one! No-one seems to care how many of them go! So we'll have to help ourselves. This sketchy outline was enough to make Jim ask himself, 'What is Bill trying to do? He wants us to take on the world!' But, there was no question - something had to be done to try to save these farmers!

It seemed clear that there were only two choices. Either some form of grassroots action had to be taken in self defence, or large numbers of Eyre Peninsula farmers would have to leave their land, and those remaining would be left to wonder how long they could hang on before they too, would be forced off.
South Australian farmers had come face-to-face with the "get-big-or-get-out" philosophy that was killing semi-isolated rural areas all over Australia.

"All right," Jim said. "If we are going to do anything to stop forced sales and help the others we will have to get organised. We'll need some help. How about asking Anthony Tomney, Aden Lynch and Patrick (Cronin) to help us." Anthony, another neighbour, is a man of many talents, who expresses a lot of feeling for his fellow man. Aden Lynch, a close friend, with his own financial difficulties, would be prepared to take a risk as he did in buying more land at what proved to be an inopportune time. He would not complain, no matter how desperate the situation became. Jim said Aden and his wife, Josie, would make valuable contributions because they would fight.
Noted for his clear thinking, it was essential to include Patrick, Jim's brother in any further discussions or attempts to save these farmers. And so, two nights later, these five local farmers formed a group now known as the Chandada Action Group. Their discussions centred around the options available to a small group of farmers who were determined to do something - anything - rather than see the district decimated.

It was a rare meeting. Usually farmers in crisis tend to concentrate on the negatives - the weather, the banks, the government etc., but Carey and his friends dwelt only on the positive, and agreed that together, they had every chance of achieving a limited objective programme, provided they identified specific goals, and were prepared to think laterally - even unconventionally - in terms of tactics. They would simply make a considered decision about what results were required, and settle for nothing less. Their group was not a bureaucracy; there was no constitution, no minutes, no talk of membership. The leadership was self-selecting. Bill Carey; having taken the initiative, was to serve as chairman. Cronin, who would possibly be more readily available than the others, would serve as spokesman, or secretary. Every member of the group would be permanently available for taking part in both decision-making and necessary action. All the group consisted of was five extremely determined farmers and two objectives - to stop forced sales and to ensure that all farmers stayed on their land unless they wanted to go.

Background to the Plight
Farming, after all, is about growing crops and running stock. The amount of cash needed to sow crops in the first place has become enormous as costs of fuel and fertiliser have risen sharply. Most farmers have to borrow substantial amounts of money each year to get the crops planted, with the expectation that they will pay back the loan, the interest due and the family's grocery bills. Many have found that their original bank loan had almost trebled and they have been unable to meet any payments whatsoever because of the continuing drought.

When it will not rain or urgently needed showers pass by, it becomes agonising to see the grass and crops dry up and die. Paddocks start to blow dust; in the worst situation the whole district is drifting and roads can become impassable. Stock numbers have to be reduced. Buying in fodder or agisting out sheep or cattle is another cost and somewhat messy. Even worse, there is no grain to sell to meet the annual commitments. Instead of having something to show for the year's work there is no money, only heartbreak!

The Letter from the Bank
The most terrible feeling for a farmer in a prolonged drought situation, as was happening on the Eyre Peninsula, is opening a letter from the bank. It is with great distaste because the debit balance on the statement has blown out again with another dose of interest which seems unbelievable, along with a number of minor bank charges thrown in for good measure. If interest is calculated quarterly that alone will add another 1.4% to the annual bill. But now any new loans with one bank will be calculated monthly, adding even higher interest again - a further arrogant and unnecessary attack on their customer. It is this feeling that you are paying interest on interest that really galls. If interest rates were within a fair margin which reflected the reality of banks extending you credit under the privileges that have been granted by our government, farming would be worthwhile and much more enjoyable.

In a dryland farming situation, farmers normally receive very few income payments during a year. Harvest is the only comfortable time as the grain is delivered, and is also the most secure time because there is a feeling that at least there is some money about. Wool proceeds are tenuous for many reasons too, because of fertiliser and sundry purchases it is often mostly spent before the wool is sold. Weed spray, water improvements and veterinary items chew into the wool cheque and the bit that is left gets smaller and smaller.

With monthly accounting on stock mortgages, and higher rates than banks, to start with, interest has exceeded 25% with stock firms. This is also a clear case of interest accruing on interest. Or, when signing up for a bank loan, with an established rate of interest done with all due formality the documents are whisked from under your pen and held in security out of sight. You then know for sure the bank has a mortgage over you. As one bank manager told a Poochera client, "Really we own you!" But what is worse; much, much worse, the bank will raise the interest rate without consultation, simply advising you by letter with complete indifference to any budgeting or capacity to meet the increase - to the extent that farmers already in serious trouble meeting repayments after a series of droughts found their interest rates had actually doubled in a few short years.

At the time of deregulation in 1984 Australian banks went on a lending spree to keep foreign banks out of rural retailing. They also went into direct competition with each other to lock up this area of business. In some cases it was not friendly persuasion, but blatant coercion to borrow money. Banks were allowing their managers great freedom in throwing out half a million dollar loans by clients simply telling the bank how much money they wanted or saying to a farmer, "Buy the property, then come in and tell us how much you need." One such farmer went in to see a local bank in 1984 to ask about his chances in obtaining a $20,000 loan to purchase some equipment. The banker said, "I thought you were in to see about your neighbour's place (which was coming up for auction). The answer was, no. The banker then said, "You should think about that property. It is right next door - there is half a million dollars here. Just ring me.

Even if one bank refused a loan to a farmer an opposition bank in some instances heard about it, chased him down and accommodated him. With example after example over those couple of years, banks threw money at all and sundry, pushing up land prices to speculative levels in doing so. In one extreme example, a very large loan was approved when two banks were merging, and no cash flow analysis was done on the farmer's capacity to service the loan or repay it. Now, in case after case, the banks want to place all blame for the present situation on the borrowers. It is a far cry from a bank manager telling a nervous farmer's wife, why clearly he was leaning on them to borrow a large sum of money, You grow the wheat - and let us look after the money!" This is a long way short of their responsibility of fiduciary care when a bank must care the same about the client's situation as about the bank's.
At the height of this battle, more than one bank at head office level expressed the feeling that the Eyre Peninsula did not really count. But these banks would rather drop dead than disclose how much money they pulled out of the Eyre Peninsula in interest annually. You can bet the total sum is a staggering amount - millions upon millions of dollars!

Farmers and their wives were also subjected to personal abuse from bank managers; some instances within earshot of other staff. Some finally had to face up to head office in Adelaide about their situation. For each of five different visits to Adelaide, one couple fronted up to five different bank officers who could not care less what happened to them, and treated them like second-class citizens. These banks would never allow themselves to consider for a moment that any blame could be laid at their doorstep. Jim Cronin recalls many conversations, especially with women on the Eyre Peninsular who spoke as plainly as possible of these sorts of encounters with bank managers and hierarchy who believed the bank was completely right and client was completely wrong.

A Community In Crisis
Before the Action Group was formed growing numbers of people, groups and community organisations had begun to talk of the drought situation with its overall implications. However, the personal financial affairs of individual farmers were not being openly discussed. The "Stock Journal" published a special report on the drought stricken farmers on Eyre Peninsula. The report included the information that a group of 200 farmers were secretly planning to petition for bankruptcy on the same day if they were unable to get financial help to sow a crop in the 1989 season. They hoped that the shock waves from their concerted action would penetrate to the financial heart of Adelaide, having a devastating effect on the South Australian economy or at least put a scare into the situation and get some action.

But it was the churches who seemed to be far more aware of the catastrophic effect of widespread financial dislocation than either the bankers or government. As an example of the commitment they were prepared to make, the Uniting Church at Ceduna released its local minister, Reverend John Richardson, from his pastoral duties so that he could visit farming families in order to offer whatever comfort he could. He had been an Eyre Peninsula farmer himself and was secretary of the Far West Rural Support Group based at Ceduna at the time. In counselling despairing farmers he left no doubt in anyone's mind of the callousness of the State Government and the banks in ignoring the real situation.

When the State Minister for Agriculture, Mr. Kym Mayes, visited the district, John Richardson tackled him about the effects of the drought on people, but Mayes was very evasive as John Richardson discovered, "The impression that people got from Mr. Mayes was that some farmers would have to go, and as far as he was concerned, the quicker the better, ...these people have worked hard and paid taxes all their lives, and now they can't get benefits!"

However, the Rural Assistance Branch of the South Australian Department of Agriculture did have people in the field to counsel and assist farmers in re-financing and restructuring their loans under certain conditions. Tim Scholz from Wudinna, as a rural counsellor, was trying to cope with a situation that was rapidly getting out of control, but the Agricultural Department's rules were simple, if you were unviable - by their definition - you had to go!

The Department of Community Welfare's local officers were also most concerned that farmers who were in debt, and unable to offload their anxieties would resort to suicide. Carrie Gaskin of the Ceduna branch of the Department of Community Welfare, said, The West Coast scenario could evoke tragedies like suicide because the farming community has a sense of pride." Financial problems had led many people to conclude that they were personal failures.

Three years before Belinda Dannenberg's eighteenth birthday - almost to the day - the Brisbane "Telegraph" (24/10/85) reported:

"Seven Victorian Dairy farmers have committed suicide in the past 6 months, as a rural depression worsens. Many farming Communities are setting up counselling services in a bid to prevent further suicides. Victorian Milk Producers' Association spokesman, Mr. Norm Flinck, blamed the situation on increasing debt, and lack of government aid..."
The stage was set, in October 1988, for the same kind of crisis on the Eyre Peninsula. Massive debts, unseasonable drought, ridiculous interest rates, and no sign of government aid. Would this too, result in a rash of suicides?

Local doctors were worried about the burden of emotional stress that farmers and their families were carrying. Dr. Richard Jolly, of Ceduna, said that in the end West Coast farmers were being crucified by Federal and State Government incompetence, adding - the Federal and State Governments will do nothing to help these people because, while it's a large area, the population isn't big and none of the farmers would vote Labor in a fit."

Farmers were not the only people feeling the stress. Rural support businesses were also particularly hard-hit. Some local businesses were facing rapidly changing trading arrangements with their suppliers, necessitating quicker payments from their customer For many years, machinery dealers had carried some local farmers, often waiting months for them to pay accounts, or coping with finance companies themselves in keeping up payments, with unsold stocks on the showroom floor. Banks became unwilling to increase overdrafts; large machinery companies had amalgamated, cancelling franchises without notice, and without compensation. As a result, many country machinery dealerships were worthless - without even real estate value. The elimination of country businesses contributes to the death of small towns, increasing rural isolation, and further business centralisation in larger towns and regional centres. It is a common sight in the Australian bush.

The Eyre Peninsula farmers with the increasing publicity about the drought, were becoming defensive about the environment and the so called soil degradation issue. With clouds of dust in the air each day as summer approached more media attention was being focused on just what was happening to this region. It seemed like the questions being asked by city people were "Can't these farmers really look after thei land?' or "Should some of these areas be farmed at all?"

The suggestion that the Eyre Peninsula is of marginal economic value is not borne out the figures. Traditionally, the Peninsula has produced approximately 38% of South Australia's wheat crop. Mr. Gunn, the state Member of Parliament for Eyre, put the case in State Parliament (South Australian Hansard 16/2/89), - From the 1984-85 report of the Australian Bureau of Statistics on agricultural commodities, it is interesting to note that, in the 1983-84 year, Eyre Peninsula produced some $357 million worth of agricultural products. In the same year, the South East of South Australia produced approximately $269 million worth. Eyre Peninsula was second only to the Murrayland which produced some $364 million worth of production - a clear indication of the value and the ability of that part of South Australia to produce...."
Mr. Gunn then produced figures for grain production, which clearly demonstrated the ability of the Peninsula to produce under reasonable weather conditions.

Even the State's Environmental Protection Council has praised reclamation achieved by SA primary producers. The Farmer and Stockowner (18/4/89) reported:
"In its recently issued 'State of the Environment Report' the Council says much restoration had been achieved since the dustbowl conditions of the 1930's..." The Council, however, made the point that there was still much to be done. But it is inevitable that heavy financial pressures militate against good farming practices.

David Smith, author of "Animal Tales" and known for his involvement in the ABC Science Show, and Earthwatch, makes the following point.
"If we look at the extent of land degradation in Australia, it is certainly serious. Farmers are hocked to the hilt and, just to service their overdrafts, are being forced to the wall. They have to run the farm hard in order to have even a dog's chance of keeping the bank happy. But it is a vicious spiral: 'One good crop and I'll get the overdraft down. . . Oh no! Not another drought!" (The Australian 10/10/89)

The destruction of Australia's rural industry had more to do with the policies of State and Federal Governments than with the weather. Financial policies in particular contributed to rural depopulation. Rural politicians have let down their constituents in this regard. Over the many years when the Country Party was governing in coalition with the Liberals, it had an opportunity to fulfil its rural obligations, and to see that financial policies were pursued that would ensure that country areas remained healthy. In 1949, the Country Party platform (Section 37) included,"A credit policy designed to assist primary producers..." This was reaffirmed in 1953, but no significant steps were ever taken to give it effect. As a result of this failure, the bush is dying. It is losing its population, its country businesses, and its valuable production potential through massive soil erosion, destruction of soil structure, and salt encroachment as farmers work their soil hard to service their ever-increasing debts

In 1960, Australia had 290,000 primary producers with a net rural debt of $77 million. By 1970, there were 250,000 primary producers with a net debt of $1,224 million. In 1985, the primary producers were reduced to 170,000, carrying between them a debt of over $6,000 million. But by 1988, farmer numbers had dropped below 150,000 while their debt spiralled to around $8,000 million, and in 1990, $11 billion debt.

An average of six farmers per day are now leaving primary production. Farmers are being destroyed by impossibly high interest rates, and politicians of all parties are, by their silence and inaction, guilty of a "sell-out" to the big bankers. Private ownership of property, and key export industries are being destroyed!

Chandada Lights a Bushfire
The first step taken by the Action Group was to contact thirty key people in the wider district, and solicit their support for the Action Group's proposed programme. Having drawn up a list of responsible people from as far away as Lock and Ceduna, the Group invited them to meet at the Chandada Hall on the 1st November. In the bush - especially under crisis conditions, news spread very rapidly. Jim Cronin soon began to receive phone calls from others, asking if they might attend. Bill Carey had the same experience. In order to be able to fulfil their objectives, they began turning people away. The media, having heard a rumour, also wanted to attend. Cronin did his best to discourage them, but a report leaked out in the Adelaide "Advertiser" (November 1st 1988), on the day of the meeting which brought TV and radio networks to Chandada that night.

On Tuesday night, 1st November, about fifty farmers met at Chandada to discuss the proposals placed before them by the Action Group. The media was placed under an embargo allowing the frankest of discussion to occur. Aden Lynch rejects the suggestion that Bill Carey, who chaired the meeting, "laid down the law". But it was made quite clear that the Action Group had made certain decisions about the policies they were to pursue. They were appealing for support from other primary producers and country people. Constructive suggestions were welcomed, as were promises of assistance.

Feeling against the Government ran high because they were coming across as not being the least concerned about the Eyre Peninsula. The Minister for Agriculture, Kym Mayes, was singled out for harsh criticism from the floor because his government's policies were not producing any acceptable results and he was being seen as completely antagonistic towards farmers. A no confidence motion in Mr. Mayes was put from the floor, but the chairman would not accept it, stating, "It is really the Premier who should be addressing this problem because he is the Treasurer and the welfare of all the people in the state is in his domain."
The meeting duly endorsed this sentiment to meet with Premier Bannon as the leader of the State and ask him to intervene between the farmers and the banks, setting up an emergency structure and calling for a moratorium on all debts in the interim. This would allow all parties, farmers, banks and Government to get together and find solutions that could rescue the Eyre Peninsula because we believed and knew that it was worth saving.

During his address to the meeting, Jim Cronin stressed that the Action Group had agreed to pursue a one limited objective policy. All other activity must serve that policy, which was:
EVERY PRIMARY PRODUCER MUST BE ASSISTED TO REMAIN ON THEIR PROPERTY, UNLESS THEY VOLUNTARILY DECIDE TO LEAVE.

An overwhelming motion of confidence was passed in the Action Group and promises of support were noted. A decision was made that no further forced property sales would be permitted and the Group would seek wider community support throughout South Australia to save threatened farms. Bill Carey stated it was essential that each person present return to their own districts and spread the word that a group existed which proposed constructive action to prevent forced sales. Anthony Tomney announced that the time had come to call a halt to the destruction of the bush. "I can't sit back any longer and watch my friends, my neighbours and my colleagues be picked off by the banks one at a time. Banks are writing off huge losses in forced sales, but appear unable to write off losses to keep farmers on their land."

The Group also agreed to seek a moratorium on all farm debts, and decided to ask their Members of Parliament to arrange a meeting with the Premier, Mr. Bannon, as soon as possible to appeal to him to intervene with the banks, to spearhead a restructuring programme based on the provision of long-term, low interest loans for 200 struggling Eyre Peninsula farmers. Press reports following the meeting created enormous interest right across the Peninsula.

It soon became obvious that as the campaign developed, members of the Action Group would have to spend long periods of time on the telephone. Calls of support and offers of assistance began pouring in from all over the Peninsula. A report in the Stock Journal (November 3, 1988.) and a number of ABC radio interviews with Jim Cronin on the Action Group proposals were sufficient to ignite the whole region. At last someone was doing something positive!

However, more distressing calls also began to come in. Desperate farmers who felt that everyone else had abandoned them, pleaded for help. For many, just the knowledge that a stubborn group of resourceful people had decided that "enough was enough", was sufficient to lift morale, and give hope for the farming future. For Cronin, it was becoming increasingly distressing to spend time on the phone with farmers and their families begging for advice. The advice was always the same: "Hang on as long as you can. If we stand together there is hope for us all. Urgent action at the highest level is being taken."

The Action Group effectively became a counselling service, the amount of emotional energy required becoming enormous and draining. The media were extremely helpful. The Action Group was a new initiative, and was obviously big news in the developing climate of rural despair. The Adelaide media were as attentive as local media, and Cronin found that he had to be available at any hour. Sleep became a luxury.

A Test of Strength
It quickly became evident that it would not be easy to see the Premier and get him to act. However, after initially being unavailable, the Member for Flinders, Peter Blacker who worked closely with the group managed to secure a meeting with Mr. Bannon for November 15th. The Action Group's ability to command media attention was surely a factor in gaining the Premier's ear.

Meanwhile the Action Group was faced with its first major challenge - a forced sale at Cungena. The farmer, Ken Gerschwitz, had two properties. The agents, Hale Real Estate, were to sell Mr. Gerschwitz's Ceduna property in the morning (which he wanted to sell) and fly to Cungena to sell the second property, his home property, in the afternoon. As it happened, this was a case in which, only a few years before, the bank concerned had strongly encouraged Ken Gerschwitz, even coerced him, to buy additional land at Cungena without selling his Ceduna property which he wanted to do. This, the banker said, would make him more viable. "You will be a rich man".
But having given that advice and the necessary loan, the bank proved to be unprepared to match it with a stable financial service. Interest rates soon became intolerable and the Bank eventually forced Gerschwitz into a corner when his equity in the properties fell below a certain level. It was seen locally as the classic case of banks being two-faced and heavy handed; looking after themselves, quite comfortably, while another rural family endures the agony of not only a destroyed livelihood but a long established lifestyle.

A few days before the sale the "Advertiser" (7/11/88) ran an article floating the rumour that certain buyers were looking for very large parcels of cheap land on the West Coast. Bill Carey reacted with predictable heat and made it clear that local farmers would be out in strength to see that Ken Gerschwitz was not forced off his property by the bank. But he also make it clear that they would not be disruptive, nor resort to violence, relying both on moral force and force of numbers to give support to Ken Gerschwitz and his family.

The Day of the Sale
On the day of the sale (12/11/88), the Cungena Hall, where the auction was to be held, was packed, and the mood was tense. The nervous auctioneer, aware that he was the focus of hostility, did not even consider a bid of $10 per acre, which came in by facsimile from NSW. The Cungena property was subsequently passed in. Ken Gerschwitz remained on his property, and his home was temporarily secure.

The sale of this property, and the subsequent eviction of Edna and Ken Gerschwitz and their family would not only have weakened the credibility of the Action Group, but the inevitably low price realised on the property would have had the effect of lowering local property values further, thus reducing the equity of local farmers in their properties still further - and equity was the big criteria at the moment in the light of viability to qualify for the Department of Agriculture's financial assistance package. It would simply have been a spark that would lead to a rush of foreclosures on other local properties as banks panicked and tried to cut their losses.

The Action Group then began preparations to meet the Premier, fully aware that the whole campaign could hinge upon the case that they placed before Mr. Bannon. The deputation from the Action Group would consist of Bill Carey, Jim Cronin and Anthony Tomney.

The United Farmers and Stockowners
During the week before the meeting with the Premier, the State's largest farmer organisation, the United Farmers and Stockowners of SA, released a detailed proposal to assist the 200 farmers facing bankruptcy. As reported in the Advertiser (10/11/88)
"The complex plan will require the full co-operation of the banks and the State Government's Rural Assistance Branch.?

The UF&S spokesman, Mr. Pat McEwen, Chairman of the Economics Division of the UF&S said, "The plan offers banks a chance to minimise the significant losses they would face if they tried to foreclose on 400 properties (the approximate number owned by farmers in trouble) and released these farms onto the market, which would inevitably cause a crash in land prices. Under the plan, the banks would revalue currently unviable properties down to the realisable market value. Any amount owed by the farmer above this new valuation would be set aside to become an unsecured debt with a five year holding period. No interest would be payable on the set-aside amount over the first five years. If property values rose during this period, the banks would be able to claim half of the set-aside amount as an unpaid debt, to be repaid by the farmer through increased borrowings or land sales. The other half of the set-aside amount would be claimed by the banks as a loss incurred in the course of their business, and would bring the appropriate tax concessions."
Other elements of the proposal covered farmers in differing circumstances, but Mr. McEwen agreed that the plan would still not save all farmers in trouble. Even 130 marginal cases may take many years to again become "viable".

Mr. McEwen said, "The plan also called for farmers ineligible for the debt-transfer programme to be given access to the Rural Assistance Branch's existing programme offering loans of up to $250,000 at 8% for the first three years, to buy back their own properties, provided they could prove viability under such a loan programme. It would be better to have farmers with local knowledge and skills buying back their own farms, rather than have people without dryland management skills buying in," he said. The UF&S proposal was constructive and workable, given sufficient goodwill on all sides, and a genuine desire to see farmers remain on their land for a chance at one more cropping season.
The only deficiency in the plan was that it offered no hope to farmers who could not demonstrate 'viability" according to an established formula. This was seen as a concession to the banks, who would inevitably force a sale of the property, writing off the resultant loss as a tax concession.

The UF&S proposal was to be placed before the Ministerial Working Party for consideration. The UF&S also proposed a change to Part 10 of the Australian bankruptcy legislation, to reflect provision in Chapter 12 of the United States legislation, which gave the farmer certain negotiating rights, and perhaps enable them to re-structure their debts and modify the terms of their loans without the consent of all creditors. This, however, required complex legislative change, and clearly the farmers did not have the sanctions to force such changes.

Meeting the Premier
The meeting with Mr. Bannon took place on Tuesday November 1 5th, in his office in Adelaide. The Minister for Agriculture, Mr. Mayes, and the Minister for Minerals, Land and Water Resources, Ms. Lenehan were also present. So, too, was Director General of Agriculture Mr. John Radcliffe and representatives from the United Farmers and Stockowners of SA, and a deputation from the Far West Water Committee. A general discussion was difficult, with the Premier being inclined to catalogue the alleged benefits to rural people of the Labor Government's policies, and their drought relief proposals. Mr. Bannon was also obviously reluctant to become involved in any criticism of the banks. He had been taken to task in October by the Deputy General Manager of the Commonwealth Development Bank. Mr. Peter Fraser, over comments that he made after visiting the district the previous year, and also some recent comments.

The Action Group found the meeting largely unsatisfactory. There were too many groups represented to have their proposals and requests properly addressed. Jim Cronin did have an opportunity to appeal to the Premier to intervene with the banks to stop forced sales of properties and pointed out Mr. Bannon was the man to do it, as our leader. Mr. Bannon threw his arms in the air in mock horror, asking "Why me?" and laughing with his ministers. No satisfactory undertaking was given by the government.

The Premier pointed out that Mr. Mayes would again be meeting with the banks, finance companies, stock firms and the UF&S and other groups in the near future. This group making up the Ministerial Working Party would negotiate with the banks and report in the new year, and the UF&S's proposal would be considered.
To the Action Group representatives this was clearly unsatisfactory. By the new year many producers could be in a far worse situation than ever with their banks. But the Action Group were fully prepared to wait the outcome of these negotiations to see if a realistic solution would come forward.

The results of the drought were obvious. Everywhere on the peninsula farmers should have been preparing machinery for harvest. Few were doing so. The pathetic yields available simply didn't justify the expense of running the machinery in many areas. Large numbers of farmers would attempt to harvest sufficient for seed for the following season, but many would not even be able to do that. The onset of the hot summer months would bring additional problems of providing feed and water for remaining stock. Very little hay was cut in the spring; the growing conditions simply did not occur. And still the State Government refused to declare the drought a natural disaster. For the farming families, facing a hot, dry summer, no incomes and little chance of an annual holiday, the Bicentennial Christmas prospects were bleak indeed.

The Action Group, still receiving a steady stream of calls from desperate families, struggled to keep their own stock alive, and discussed the next initiative. Clearly they would have to tackle the banks themselves if nothing came of the Ministerial Working Party. In the meantime, Carey and Cronin were determined that no further forced sales would take place.

The South Australian Government
Few Labor Agriculture ministers have been able to so thoroughly alienate the rural sector as Minister for Agriculture Kym Mayes had done in South Australia. His handling of the portfolio has been widely criticised in many circles, particularly farming and media circles. Despite the undeniably harsh conditions caused by the drought the Minister refused to declare the Peninsula a hardship area because he kept saying his plan was better. Even describing part of it would have automatically qualified those areas affected for some forms of assistance from both the State, and then the Federal Government. Mr. Mayes' blunt refusal to take this course, and involve Federal as well as State assistance, has never been accompanied by a satisfactory explanation.

The intransigence of the South Australian government was attacked in the Federal Parliament by Mr. Bruce Lloyd, Deputy Federal National Party Leader. The Advertiser carried the report, (12/11/89),
"Mr. Lloyd, who is also Opposition Primary Industry spokesman, told Federal Parliament it was criminal for the State Government not to provide drought assistance for the cartage of water, livestock or fodder, or for the clearing of roads covered by sand drifts. The assistance was available under disaster relief and had been provided by all other State governments in similar circumstances...."

While Mr. Mayes maintained that disaster relief was not available to 'unviable' farmers, the Federal Agriculture Minister, John Kerin said otherwise. The West Coast Sentinel quoted Kerin (18/1/89),
"...that (natural disaster relief) is available regardless of viability of the farms or whether people have got a lot of money in the bank or not..."
Mr. Kerin said it was not means tested, and depended on the State declaration and for the State to spend a certain amount of money..."

Tim Schwarz, a 'marginal' farmer from Maltee said; Stock Journal, (20/10/89),
" Flood victims get help, bushfire victims get help; West Coast farmers get nothing...."

Mr. Mayes has consistently referred to a figure of between 100 and 300 farmers who were 'unviable', and had to be forced from their properties. For example, in a special article in the Advertiser (21/11/89) in which Mr. Mayes answers critics, he writes,
"Community attitudes, especially on Eyre Peninsula, suggest that those people feel that all farm businesses should be saved. While Government and bankers are exploring all possibilities to provide assistance to as many people as possible, it is clear that some farm families may have to sell up and move to other occupations. We will need to keep that number to an absolute minimum.The Government package which provides for loans of up to $150,000 at 8% per annum to farmers with some prospect for a profitable future will probably pick up all but the 200 worst situations. The 'special farm build-up loans" of up to $250,000 at 8% will encourage farmers in a strong position to purchase land used by farm businesses which have become non-viable. The $28,000 Re-establishment Grants will help families forced to relocate and re-establish themselves away from the farm..."

However, it took a feature article in the Advertiser (November 16, 1988) by Adelaide University geographer, economics graduate and Streaky Bay farmer Ron Hill to raise an interesting question..., 'What happened to all the drought relief funds, from previous droughts?' Ron Hill suggests that West Coast farmers had received a raw deal from the Government in terms of drought relief. He points to the fact that through previous droughts in the 1970s Federal Government relief funding came from Federal Government to South Australia under very favourable terms and the drought relief assistance loaned out was paid back by farmers to the state and a substantial pool of relief funds would have built up.

Apparently, rather than maintain this as an important reserve pool of drought relief funds for future use, the accumulated funds were shifted by successive State Governments into general revenue. The millions of dollars that could have been used for future relief programs have now been lost. These funds could have made a substantial difference to battling farmers and their families who have been forced through lack of assistance to walk away from their farms, communities and their livelihoods.

Official Policy - Get big or get out!
A Department of Agriculture letter refers to deliberations by the Ministerial Working Party, and Cabinet discussions, and appeals for comments upon a proposal put forward as a result of Cabinet discussions. It is significant, because it clearly confirms that the Labor Government was determined to weed out up to 200 of the more vulnerable West Coast farmers, using the drought as the excuse for doing so. By calling such farmers 'unviable" they were to be sacrificed, and given a $28,000 sop to disappear. There is never any suggestion that funds were unavailable to assist even the most vulnerable farmers to plant a 1989 crop, giving themselves even an outside chance of improving their situation, so that if they did freely decide to leave the industry, they might clear the bulk of their debts, and be able to take capital to begin again elsewhere.

Never, at any stage, did Mr Mayes suggest that the most vulnerable 200 farmers were incompetent, either in farming practices or financial management. Why then, did he insist again and again that they had to go? Because the figures looked bad? The equity figures, interest rate figures, or mortgage levels? If this was the case, who was responsible for such things as extremely high debt, and suicidal interest rates? Would the bank, and even the Federal Government itself (responsible for financial policy), accept any responsibility? The only possible conclusion to be drawn from the Minister's inflexible attitude is that the Labor Government had adopted as official policy that farmer numbers must be reduced for agriculture to become 'efficient".
That is emanating from the Department of Agriculture, the Director General of Agriculture Mr. John Radcliffe, being a chief proponent. Farmers must "get big" or take the alternative - "get out". The Government financial policies for relieving the effects of the drought confirm this. Decisions about a farmer's 'viability" would evidently be taken by the Department of Agriculture (Mr. Mayes!) on advice from the Department of Agriculture and Director General of Agriculture, John Radcliffe, and would recommend that no further assistance be given to the Eyre Peninsula farmers so desperately in need of help.

The following Editorial from the Advertiser (7/1/89), which Mr. Gunn, the Member for Eyre, read to Parliament in February is instructive, "The State Government's proposal this week for a so-called aid package to help the 400 farmers in the drought-stricken Upper Eyre Peninsula was a final admission from the State that farmers can expect nothing more than token support. After two years of crisis talks between rural representatives and the Minister for Agriculture, Mr. Mayes, the Government has done what it proposed to do all along. The United Farmers and Stockowners have warned repeatedly that some 200 West Coast farmers would be forced to walk off their properties by April 1990 unless the Government agreed to a realistic funding package. Mr. Mayes' aid package simply wrote off 100 of these farms as being 'unviable".

In January, the Ministerial Working Party effectively broke down after a failure to reach agreement between all parties involved about the best way to handle drought relief. The Government through the Minister for Agriculture, effectively stuck to it's guns maintaining that as many as 200 farmers must leave the industry.

Since before Christmas 1988, farmers had been receiving letters from the Department of Agriculture, advising them of either interest rate penalties or the failure of loan applications for last-resort assistance. For example, "Dear Client, We propose to increase the interest rate on the balance of your loan, not yet due - to....as from the 1st of February..." or "Following assessment of your application for financial assistance, I regret that, on the recommendation of the Rural Assistance Branch, the Minister of Agriculture has declined your application...."
Obviously, the Minister had already made decisions regarding eligibility for further finance.

Following the breakdown of the Ministerial Working Party, the Department of Agriculture, through the Rural Assistance Branch, distributed a document to householders on the Eyre Peninsula, entitled, "Government Assistance for Farmers on Eyre Peninsula". This document, widely criticised in the bush, set out the Minister's proposals - broadly the same as the proposals circulated in December. The document was met with contempt on the West Coast. The West Coast Sentinel (2 5/1/89) carried an article headed: Minister 'trying to flog goanna oil'. The article made it clear that farmer representatives rejected the financial proposals as 'snake oil' and again demanded that the area be declared a natural disaster area.

Jim Cronin, from the Action Group, again made the point that low interest loans were available to buy out existing farmers, but were not designed to keep those farmers and their skills in the industry. "I cannot see that aid packages are a cost to the South Australian taxpayer, because interest on Rural Assistance Branch, (RAB) loans goes back into State coffers," he said.

The State Government Profits From The Drought
Mr. Pat McEwen, was highly critical of the proposals. "The Minister is hiding behind a smokescreen of glib political statements rather than coming up with an aid package for farmers in need," he said. He also said that the UF&S's main objective was to come up with a plan and time frame to return troubled Eyre Peninsula farmers to a viable situation. This report unwittingly highlighted the differences in tactics of the UF&S and the Action Group. The UF&S had made the mistake of proposing a specific plan. This could be used as the subject of a debate by the Government that the UF&S could only lose. It was a case of the amateurs arguing financial policy with the experts.

On the other hand, the Action Group simply insisted that only one result was satisfactory: that every farmer who wished to remain, and plant a 1989 crop, should be assisted to do so. The policy of both groups were the same. The tactics were different. It is impossible to be diverted or defeated if a stand is taken on policy as the Action Group did. They simply refused to be diverted from that policy.

After many desperate primary producers applied for RAB assistance, and were turned down, and others had interest rates jacked up, the Stock Journal (9/2/89) also published a blast at the Rural Assistance Branch: "RAB 'insensitive to farmer needs'". The report consisted of a stinging criticism by a spokesman for the UF&S following their Cowell conference.

Lack of Understanding
Very few politicians and very few bankers understand primary production. If the Government did they wouldn't tax farmers as they do. They would not have eliminated Income Equalisation Deposits which at least allowed farmers to rationalise their taxable incomes to fit the good seasons with the bad to cope with fluctuations in commodity prices and so on. But worse still, is that governments encourage or allow NO area for thrift. You either have to pay high taxes in good years or to offset this you only have the option of investment incentives to buy machinery, simply purchasing machinery to avoid tax. The few remaining tax concessions have been whittled away to almost nothing.

Even the most fortunate of farmers are finding it difficult to sustain any progress whatsoever No matter how innovative they become... Thanks to gross Federal Government neglect of its duties to protect Australian industry and the economy, there is no low cost machinery now. In an industry such as farming where replacements are a continual problem, some primary producers take out more finance on equipment thinking somehow they have saved themselves some money at the end of the day while minimising tax. (Pigs may fly!)

Action Group Support Grows
After a totally dismal Christmas on the Peninsula, with farmers struggling to keep stock alive, it was becoming increasingly obvious that they were completely on their own. After the Ministerial Working Party broke down on January 5th it appeared that, having done their best, the UF&S, had been outflanked by the banks or the Department of Agriculture, or both. Banks not wanting to set precedents, the Premier's Department reported to Cronin that "the banks will never write off debts."

The Action Group began to feel increasing pressure to take the initiative. Support was slowly growing, as one after another farmer found either the RAB or the banks jacking up their interest rates. Some were unable to secure funds at all for another crop, or stock retention. Media interest remained high. Support began to arrive from unexpected sources. A facsimile eventually found its way to Jim Cronin from the United Trades and Labor Council in Whyalla, expressing support.

On January 5, 1989 the UTLC Branch had met, and passed the following motion, 'That this Council write to the South Australian Labor Government through the Minister of Agriculture, advocating maximum support for the plight of farmers on the West Coast, and their terrible debt problems. Further, we publish this decision in the "Whyalla News." It is a sign of crisis indeed, if traditional antagonists like farmers and unions find common cause - especially against a Labor Government!

The motion of support was moved by the Seaman's Union, and seconded by the South Australian Institute of Teachers. The resulting media reports raised widespread interest in other quarters, especially in Adelaide. Communication between Jim Cronin and John Lesses, Secretary of the United Trades and Labour Council of South Australia, revealed that unions and the farmer community shared more grievances than a superficial study would reveal. Interest rates, for example, were punishing home-buyers and as readily as farmers, and rising costs, heavy taxes and poor services on the Peninsula were common causes for complaint. John Lesses asked Jim Cronin if the Action Group could prepare a submission on primary producers' problems to be forwarded to the ACTU with a view to some form of common action. "You blokes are making good sense to me," said Lesses on one occasion. "We will look at ways to support you", he said.
Cronin was stunned. He committed the Action Group to co-operate.
Such an historical opportunity was too good to pass up.

Meanwhile, the Action Group was under pressure from many other directions. Cronin was constantly on the phone, day and night. He was travelling long distances at all hours. His brother Pat was a pilot with his own plane, which gave the Action Group a mobility advantage. The Action Group was also in contact with Senator Paul McLean, Democrat Senator for NSW, who was campaigning on corruption in banking circles. McLean had a thick sheaf of affidavits from bank customers who had strong grievances against several banks. They claimed that the banks had 'ripped them off". The Action Group was also under pressure from farmers to organise a rally that Bill Carey had foreshadowed before Christmas.

There appeared to be tremendous support for such a rally as Aden Lynch explained to the group, but Carey and Tomney were reluctant to hold a rally just for the sake of doing so. Some way had to be found for the rally to serve a positive purpose. Their attention began to turn to the banks. Could a rally be used to launch a moral assault on the banks in an attempt to force them to accept some of the responsibility for vicious financial injustices?

Tomney, Carey and Aden Lynch began to work on a possible programme to force the banks to back down. Some farmers were beginning to receive foreclosure letters. Others were having their interest rates jacked up 2 or 3% because they were 'high risk" clients. Aden Lynch suggested that the farmers take a leaf out of the burgeoning environmental book, and borrow from the "Earthwatch" concept. Thus, 'Bankwatch" came into being.

The Mayors Appeal
The crisis began to consume town businesses, when farmers stopped spending money, unable to clear their accounts at stores. This in turn began to impact upon regional centres. Realising this, the Mayor of Port Lincoln, Tom Secker, decided it was time to take action. He launched an appeal for donations for the purpose of ensuring that desperate families could at least be fed. The Mayor's Drought Relief Fund had already raised in excess of $40,000, without any contribution from State or Federal Governments, banks, or stock firms. Support came from as far away as Adelaide and even Victoria, where the victims of the infamous Ash Wednesday bushfires saw an opportunity to offer the same kind of assistance which they, themselves received when the bushfire disasters consumed them. Some of that assistance, especially for the Adelaide Hills victims, had come from the Peninsula.

The Churches Contribute
Many church groups on the Peninsula also ran their own relief fundraising, and organised family food hampers and even handled stock-feed donations. Some donations of oats and hay came from interstate, from as far away as WA., where church people had family and Christian links. Pastor Ivan Wittwer of the Lutheran Church at Cleve, organised a massive distribution of hay from the mainland for starving stock. The churches also maintained, as Christ taught, a steadfast and regular programme - prayer support for both the victims of drought and financial pressure, and those taking constructive action to solve problems. In addition to the church counselling service' prayer support may well have been as valuable as the fundraising and stockfeed donations. Both were critical in a climate where morale was everything.
The Action Group received constant telephone calls from farming families on the brink of disaster. As a result, Cronin found himself becoming involved in the emotional stress upon hundreds of West Coast people. The pressure for further action became intense.

Banks Get Tough
Almost immediately after the breakdown of the Ministerial Working Committee, the banks began to push the most vulnerable farmers towards foreclosure. Ultimatums were being issued in no-nonsense terms. The policy of the Action Group - that no farmer should be evicted from their property if they did not wish to leave the industry - seemed to be in serious jeopardy. It was only a matter of time before farming families began to buckle under the combined pressure of the summer heat and the banks. Initiative was needed. The Action Group decided on emergency guerilla tactics. Cronin had developed an excellent relationship with the media over the preceeding ten weeks of the campaign. He now made use of it.

He contacted a journalist from the Sunday Mail - Peter Morgan, and 'leaked" a story that the Action group was in the process of preparing to take direct action. (Sunday Mail 8/1/89). The State Manager of the first bank to foreclose on a farmer, or force them off his property, would find that farmer, and their family, chooks, and pets, camping on the front lawn of their Adelaide home within 24 hours. Farmers have no-where else to go," said Cronin. "We are remaining on our properties, where we belong, or we are camping on the banks' property, where we do not belong. We mean business!'

The result was dramatic. On Sunday 8th January, the front page headline of "The Sunday Mail" was: 'BANKS GET TOUGH ON FARMS', including the threat that farmers would begin camping on the lawns of State Manager homes in Adelaide of culprit banks. Cronin's allegations that banks were jacking up interest rates were quoted. Specific examples were detailed , which were confirmed when the Sunday Mail checked them.

Cronin pushed hard, quoting another specific case with a Boxing Day deadline to pay up (or else!) One farmer said, 'It makes me wonder what the bank hopes to achieve by increasing the debt burden at this time, unless it is thinking of writing it off for some form of tax concession. This is happening. Banks are raising the debts of clients and are claiming trading losses. There is a lot of paper shuffling going on...," The banks issued blanket denials.

Cronin had struck a raw nerve. But the result of the article was that pressure on farmers was eased immediately. The banks, in the face of an emotional public campaign, including the possibility of farmers camping on their lawns, backed off instantly. This concession simply allowed the Action Group breathing space. A few days later Cronin was phoned by Mr. Arthur Whyte of Kimba. Whyte, a former Legislative Councillor for the region, urged the Action Group to pull out all stops, saying that no one really took the Eyre Peninsula farmers seriously. "They're laughing at you, Jim," he said. Cronin was infuriated. He assumed that Whyte meant both the State Government and the banking industry.

Cronin, calling on an iron determination, the steel of which former footballing opponents can well testify, silently determined that the farmers would have the last say.

Appeal To The Governor
In an attempt to keep pressure on the State Government to declare the drought a natural disaster, the Action Group decided to petition the State Governor, Sir Donald Dunstan to use his powers. Anthony Tomney had found, in the 1988 Year Book, a summary of the powers and responsibilities of the Governor. It includes the following, "As titular head of the Government of South Australia the Governor exercises powers, duties and functions similar to those of a constitutional sovereign. On the one hand he is indirectly responsible to the Imperial Parliament through the Secretary of State for Foreign and Commonwealth Affairs, and on the other hand, he usually acts on the advice of his ministers, who take the responsibility for their advice. Nevertheless, the Governor retains important spheres of discretionary action, and is thus enabled to maintain something of a safeguard against malpractice and injustice, particularly in extreme circumstances..."

The Action Group was determined to test whether the Governor would consider the plight of the Eyre Peninsula farmers to be a matter of injustice on the part of the State Government. They were confident that they could demonstrate such "extreme circumstances".

Jim Cronin and Bill Carey went to Adelaide to petition the Governor on January 13th. As it happened, the Governor was away from Government House on that day, and the Action Group had to be content with presenting the petition to a gate attendant. In fact, in order to satisfy television and print media, the petition had to be presented more than once to a bemused attendant! The impact of media coverage of the episode was considerable, sparking radio talkback discussions with University Professors and Readers in Political Science and History, especially as Cronin explained the reasoning behind the petition.

Explaining to the press that the Action Group relied upon the 'reserve powers' of the Governor, giving him discretionary powers to act to maintain a safeguard against malpractice and injustice, Cronin said: "We are informing His Excellency that the Government is not effectively addressing the concerns of this region, and we have no alternative BUT TO COME DIRECTLY TO THE CROWN AS THE FINAL APPEAL OF THE COMMON PEOPLE. His Excellency may then instruct Mr. Mayes as his minister to initiate appropriate and immediate action to stabilise the tragedy unfolding in this important agricultural area."

Debate On The Role Of The Crown
This was a unique development. No-one had thought to appeal to the Crown in quite this fashion. There was no doubt that it was a proper appeal. Subjects of the Crown have the right to petition the Crown. Media cover of the presentation of the petition sparked debate about the powers of the Crown, and sanctions available to the Governor. But the Action Group, again and again forced the debate back to any practical form of assistance to West Coast farmers. 'Our Action Group will not let these people be forced off their farms," said Cronin. 'We mean business, as our appeal to the Governor demonstrates'. Many days my phone goes for 18 hours with people expressing support, offering help or seeking assistance.

The Petition
The Petition to the Governor summarised the events of the past few months, including the actions of the Action Group and the government, noting that a precedent for Government intervention occurred in 1933, when a Farmers' Assistance Board was introduced to prevent unnecessary foreclosures on many farms. The Action Group then listed their seven principal concerns, which included the drought conditions, the attitude of the banks, the policies of the Government and the difficulties of the farmers. Finally, the petitioners asked the Governor to accept an invitation to inspect the district, and receive a delegation of farmers, or receive a delegation at Government House.

The Action Group also appealed to the Governor to instruct the Government to stabilise the situation to prevent a run of foreclosures, downgrading land values, and placing more farmers at risk as their equity evaporated with falling values.

Bankwatch Support Grows
With Cronin still smarting from Arthur Whyte's comment, "They're laughing at the Eyre Peninsula, Jim", the Action Group turned their attention back to the banks. The Action Group Committee had been developing the "Bankwatch" concept, and it seemed obvious that they would have to now find ways to take the campaign right to the banks. They believed that the farmers had justifiable grievances.

Interest Rate Register
The Action Group began to circulate a request that every farmer provide voluntary information on their interest rates, bank charges, identify their bank, and any extraneous costs being charged. It was proposed to begin a voluntary register to monitor the activities of the banks. The Action Group also confirmed that plans were in motion to hold a rally, at which action proposals would be suggested.

The"West Coast Sentinel" (8/2/89) picked up the story:
"BANKWATCH SUPPORT GROWS". Revealing that the rally would be held at Wudinna, the paper quoted Cronin: "We are launching "BANKWATCH" and will then be specifying other action against the banks that will be the real test." The ABC regional radio station at Port Pirie were in constant contact with the Action Group. Their journalists always ensured that Cronin was out of bed in the mornings in time for a statement for the 6.00am news. Every evening the Action Group conferred, in order to set the agenda for the following day.
The date for the Wudinna Rally was set for Sunday February 12th.

The Wudinna Rally
Sunday February 12th was very hot, unrelieved by any cooling breeze. The Wudinna Community Sports Club was packed with country people, and others crowded outside, where loudspeakers were to relay the speeches. The Action Group Chairman, Bill Carey, would chair the rally. A number of speakers had been invited, including Lower Eyre Peninsula rural counsellor, Alan Glover, State President of the Country Women's Association (SA), Mrs. Enid Philbey, Mayor Tom Secker, of Port Lincoln, former President Legislative Councillor, Arthur Whyte, Member for Eyre, Graham Gunn, Member for Flinders, Peter Blacker, Chairman of Le Hunte District Council, Murray Gerschwitz, and UF&S Governing Councillors Tim Scholz and Barry Wakelin. All these people had been in the front line of the farmers' fight through their own organisations and were authorities on the day to day events.

The Port Lincoln Times carried a full report of the meeting, consisting of the entire front page of its February 14th edition, "the common needs of these people were welding them into a community where personal benefit was being put aside so that neighbours could be helped, a collective atmosphere reminiscent of the sacrificial days of World War II. The mood was sombre. Despair was giving way to determination, actions were outlined in which every person could participate..."

Jim Cronin told the crowd that, in launching 'BANKWATCH' the Action Group had a number of action proposals. The first was to hit the banks directly, through a boycott, by shifting accounts from the Commonwealth, ANZ, State Bank, and Westpac. (The National Australia Bank did not have a significant banking profile on the West Coast.) He said that some would be unable to shift accounts, but those who could were urged to do so within a week; every time an account was closed it would demonstrate to the banks that a solution to the bank and government-caused crisis must be negotiated. "The banks have a grave area of responsibility and they have told us to get lost. But we refuse to be left bashed and dying on the West Coast." said Cronin. (Port Lincoln Times, 14th February 1989.)

Chairman, Bill Carey said he was prepared to live in a caravan and doorknock the entire Eyre Peninsula to get adequate response to force banks to negotiate. He appealed for a list of volunteers who would be available for doorknocking, and for other unspecified action in about ten days. Carey said he would be moving his accounts from the bank used by his family for 64 years. He told of a recent experience when his bank had levelled grossly unfair charges because his account was overdrawn for two days, "After 64 years with the bank, we evidently did not have a good credit rating."

The Action Group appealed to farmers to let them know of any threats of forced sales repeating that no farmer should be driven off their property without a chance to crop in 1989. Other speakers made suggestions, and two motions were passed. The first called upon the Government to declare a natural disaster, so that funds would be available for stock agistment and fodder subsidies. The second motion commended the Action Group, and promised support for future action. The UF&S speakers were critical of the government, and Mayor Tom Secker was warmly welcomed. His Fund had now exceeded $100,000, raised from other councils, service clubs, churches, and other individuals. The fund was being disbursed to needy people for groceries, stock-feed, transport, freight for donated hay, etc., by the Rural Crisis Committee, in consultation with the Mayor. Still no government, stock firm or bank had contributed.

The Wudinna Rally received widespread support throughout the Peninsula, the State and across Australia. Groups from as far afield as Warracknabeal in Victoria, and Wodonga were requesting advice and information. Again, Cronin and members of the Action Group were in heavy demand by the media. Cronin was even attempting to do radio and television interviews even while other speakers were still addressing the Rally.

The "West Coast Sentinel" (15/2/89) summed up the Rally, "The rally ... was the ultimate pledge of unity in the battle with the banks and the State Government for support."

In the week following the rally, information poured into the Bankwatch headquarters, Cronin kitchen. The telephone was in constant use, and a solid picture began to build up of hundreds of rural people closing down bank accounts, from school children to pensioners. Building societies and credit unions were inundated with deposits, and had to assign additional staff to service new accounts. In particular, the NACOS Eyre Peninsula Credit Union did a roaring trade, as did the National Bank in Port Lincoln. The banks, stunned by the assault, had no answer.

New Campaign Phase
Only two days after the Rally, the "West Coast Sentinel" (25/2/89) reported that farmers had entered a 'new battle phase' with the banks. The Sentinel reported that the Action Group had been swamped with support. Other meetings were being organised quickly. Gary Zippel, of Mudamuckla even organised twenty-two farmers from between Ceduna and Wirrulla to meet the night following the rally. The meeting confirmed support for the Action Group, and everyone present agreed to shift at least one account.

The Governor agrees to visit
Two days after the rally, Jim Cronin was able to release the news that the Governor had agreed, through his secretary, Mr. Don McKay, to spend two days inspecting the drought-hit areas of the Peninsula as a result of the Action Group's invitation in their petition. "We're absolutely delighted by the trip," said Cronin. "It'll mean that the Crown is seen to have some influence still."

This placed immediate pressure upon the government since the Minister for Agriculture was responsible to the Crown. "The Advertiser" (14-2-89) carried a report on the proposed visit on 14th February, 1989.

Picketing The Banks
The Action Group, joining with the UF&S, began devoting increasing time to the next stage of the Bankwatch operation - picketing the banks. Support was overwhelming, and there were plenty of volunteers to picket twelve banks in Ceduna, Streaky Bay, Wudinna and Wirrulla. The picket was organised to coincide with a UF&S initiative to hold discussions with the banks in Adelaide on Monday February 20th. The operation was so well organised, and security so tight, that news of the picket came through on the telephone to the head offices of banks in Adelaide while the UF&S Economics Committee was meeting with the bankers. The UF&S representatives said the banks were furious, but the picket, which was more in the form of a lightning raid it lasted only one day - hit the banks like a bombshell. This had never happened before in Australia!

Media interest was widespread, again. television, radio and newspaper reports of West Coast Banks being picketed went across the nation. The Bulletin (2/5/89) in its feature article on banking, published an article, with a photograph of picketing farmers. The Bulletin recorded that the banks, having been extremely free with credit in past years, were now beginning to panic. Cronin was quoted: 'When people questioned their ability to repay (loans), the banks said, 'You look after the wheat, and we will look after the money.' Now it's a bit like a shotgun wedding. They had all their fun, but didn't want to accept the responsibility.'

On the picket lines, staffed by over 180 volunteers, bank customers were asked to postpone their banking business until another day. Customers were not prevented from crossing picket lines if they felt they had to do banking business, but were handed a form outlining bank charges to beware of, and requesting that the customer consider closing an account. The response was excellent. Anthony Tomney reported that an English woman and a Western Australian couple, not having much sympathy with banks, even volunteered to join the picketers at Streaky Bay!

The Action Group continued to receive strong support, and a high level of media attention. Senator Paul McLean. N.S.W. Democrat, sought a meeting with the Action Committee, and as a result, Cronin went to Adelaide to meet McLean on Friday, February 24th with a view to participating in McLean's anti-corruption campaign in the Senate. Cronin came back impressed with some of Mclean's evidence of banking corruption, and invited McLean to speak on an Action Group platform in Adelaide the following month. McLean agreed.

In order to take their message to the city, the Action Group contacted the U.T.L.C. who had previously supported the farmers, inviting them to speak at a public meeting late in March. As well, a number of union officials agreed, as did representatives from the South Australian College of Advanced Education students' union, the small business association and a homebuyers mortgage action group. Senator McLean was to be the keynote speaker.

Meanwhile, banks continued to place pressure on the most vulnerable farmers. UF&S was compiling a register of farmers who had been refused carry-on finance to crop again in 1989. The Member for Eyre, Graham Gunn, was passing on foreclosure letters from the banks to the Minister for Agriculture, Mr. Mayes, to be forwarded to the Premier in order to maintain pressure for relief. There were, however, very few buyers for land in any case, high interest rates and determination of the action Group and their supporters saw to that. The banks began to change their tack. Properties that could demonstrably not be sold, would be leased back to the owner by the bank, under an agreement permitting the planting of a crop. It appeared that a stalemate had been reached.

The Governor's visit
The Action Group, now operating as a cross between a counselling service and an information service, became involved in a proposal to hold a "monster survival auction" in order to raise money for farmers who had been denied carry-on finance. Farmers who had machinery which was not immediately required, could offer it at the auction to raise the necessary finance to plant their crop. Preparations were also being made for the Governor, Sir Donald Dunstan, to visit the Peninsula. Sir Donald, through his secretary, had invited the Action Group to dine with him, to discuss their concerns, at Streaky Bay. Bill Carey readily accepted, seeing the dinner as an ideal opportunity to ensure that the Governor fully understood the Peninsula's difficulties.

The Advertiser (22/3/89) carried a report on the Governor's visit by road, in the Viceregal Rolls Royce. The Governor heard how farmers, struggling to pay off huge debts, had unsuccessfully pleaded for months for Government action to reduce their 22% and higher interest rates. Sir Donald was briefed on the devastating effects of the worst drought in living memory. He listened attentively while the farmers described how Coorabie, once a premium wheat producing area, had turned into a dust bowl, and that most of its inhabitants faced financial ruin. Mr. Alan Stott said Sir Donald had been very interested in learning about the district's problems, which was much more than the Agriculture Minister, Mr. Mayes had ever done.

The Action Group's secretary, Mr. Jim Cronin, and Chairman, Mr. Bill Carey, expressed their concerns to Sir Donald at dinner in Streaky Bay. Mr. Cronin, who had spent only one day of the past five months working on his own farm, because of campaign commitments, later told The Advertiser that banks had misled farmers by giving them incorrect advice. While the Governor denied that he could exercise any direct powers, the fact that he had taken the matter seriously, and had taken the time to observe conditions at first hand, was a tremendous boost to West Coast morale. He had spent three days listening to grievances, and had never once condemned farmers for incompetence - nor passed judgment on banks. "One talks with ministers of course and so on. Now I will be able to talk, having seen it," said Sir Donald. "With that background, I will find it very useful."
West Coast farmers were pleased that some additional pressure would be applied to the Bannon Government.

The Adelaide meeting
The public meeting to inform Adelaide people of Eyre Peninsula problems was held on Wednesday March 29th, at the Maronite Reception Hall, in Westbourne Park and advertised as "The Big Bank Rip Off". Jim Cronin spoke on behalf of the Action Group, and Senator Paul McLean spoke on practices among banks which may contravene the "fundamental fiduciary duty of bankers to their clients". McLean called for a Senate enquiry into banking practices during 1989, and was supported by other speakers, including John Lesses, Secretary of the United Trades and Labor Council in South Australia, Stephen Andrews representing the South Australian College of Advanced Education Students Union and Pat McEwen, Chairman of the Economic Committee, United Farmers and Stockowners.
Media coverage of the meeting ensured that city people had a better knowledge of some of the problems faced on Eyre Peninsula, and that the Government refused to take appropriate action.

The goodwill between the farmers and the city dwellers was assisted by the generosity of West Coast graziers the previous week when they had provided a total of 145 sheep for Easter hampers for needy Adelaide families. A truckload of sheep of surprisingly good quality had gone to the Murray Bridge abattoirs under the UF&S "Country Caring" programme, and helped to provide 1000 Easter hampers. Farmers donated sheep, a carrier had trucked them free of charge, and Mobil Oil Co. had provided fuel. Significantly, Union slaughtermen donated their time free at Murray Bridge.
As an exercise the Adelaide public meeting lacked the impact of the rural protests, but was nevertheless constructive. Cronin found it a novel experience to share a platform with union officers and others addressing him from the floor as "Comrade"! In all, a most worthwhile exercise of diverse groups coming together with a common goal since the financial system influences all sections of Australian society.

Monster auction nets $600,OOO
The idea of self-help through a massive surplus farm machinery auction caught the imagination of Eyre Peninsula farmers. Enquiries came from as far away as NSW and Victoria. A farmer from Katherine in the Northern Territory even attended. The auction was held at Wudinna on April 13th, and extensive reports were carried in the local papers, as well as city presses. Brenton Rehn reported for the "Stock Journal" (20/4/89), "More than half a million dollars in desperately needed capital was injected into the West Coast economy following last week's successful survival auction at Wudinna... For some farmers, the sale of surplus plant equipment is the only money they will have to finance the sowing of this year's crop....The success of the whole event proves that farmers can do something to help themselves, said Tim Scholz, the region's rural counsellor... It took at least six hours for the five voluntary auctioneers, helped by Dalgety and Elders men, often selling from the back of a utility completely surrounded by buyers, to offer and sell the array of farm machinery..."

Eyre Peninsula Action Group Chairman, Bill Carey, paid a tribute to the people from the mainland, especially Peter Rayner of Murray Town who made the event a success through his expertise in advertising and organising promoters. All the expenses of the day had been met from the sale of food and drinks donated from the mainland, with the volunteer auctioneers giving their time free to help maximise returns to farmers. Peter Heath and a band of Kyancutta farmers worked tirelessly and professionally to present the catalogue. NACOS Credit Union supplied the book-keeping staff and kept a check on sales dockets and cash. Mr. Carey said the Laura-Wirrabara Football Club staffed the beer stand, selling stubbies donated by the SA. Brewing Co. and hotels throughout the Wirrabara, Melrose and Port Augusta region. Murray Town farmer Lyle Woolford, organised the collection of sheep from the Peterborough-Jamestown region, and was overseer for the barbecue. EP Action Group spokesman, Jim Cronin, said items of plant passed in on sale day were still being sold to new owners in the days following the auction. Mr. Cronin said with the sales that had taken place before the auction, the total proceeds would now exceed $600,000. Generally, vendors were very happy with the results, and buyers from outside the region took most of the machinery," Mr. Cronin said. Elders at this time announced through their Port Lincoln manager John Semmler, they were providing $18,000 of seed pickle which went out to desperate growers who didn't reap any crop. This linked in with the U.F.&S. initiated seed pool scheme of seed donations from throughout the state for these drought victims. An imaginative ongoing example of farmers helping each other.

 

The Australian Finance and Banking Industry - in whose interest?

The future of many Australian industries will depend upon how Australia organises its financial system. Will we continue to go overseas for our credit to operate the economy, or will we begin to release some of our own credit, as a sovereign state should? Financial policy determines the degree to which Australia is dependent upon other nations. To maintain or establish reasonable control over domestic economic policy it is vital that we regain some economic independence through ensuring that our reliance on foreign investment does not compromise the Australian communities' capacity to plan and manage the economy within a globally dependent economic system.

In such an interdependent country, there would still be a place for the commercial bank. The competition between private, commercial, Australian-owned banks would be vital for a stable economy. While government must be firmly in control of financial policy, banks fill a valuable role of service to industry and the individual. However, that role must be as a financial servant, not as a finance master! Even in the present chaotic environment, individuals can still get good service from banks, as long as they refuse to be intimidated. The Bankwatch campaign demonstrated that.

After the election of the Hawke/Keating Government in 1983, the deregulation of the banking system became a high priority; the internationalisation of the Australian economy. Sixteen new banking licenses were offered, some to huge international banks. The Australian dollar was 'floated' (except that it sank like a stone). Conveniently, this was at the time that the international banking groups were buying their Australian assets - they got them for about half price. It is significant that Keating, only days before the election, opposed deregulation.

"The Age", February 1983 records Keating, "As to the argument that foreign bank entry will increasingly link Australia to the general instability of the international banking system, and lessen a Federal Government's control over domestic monetary policy, there is no doubt that this must be the case...." Keating added that foreign bank entry would "inevitably" push up interest rates. He was right!

After becoming Treasurer, and visiting New York, Keating totally changed his tune on deregulation. No reason for his reversal was ever given.

Banks go on a lending spree
Since the deregulation of the banking and financial industry in 1984, competition has, indeed, occurred. Banks have competed fiercely to lend money to anyone and everyone with the faintest excuse for wanting it. Security, or collateral, has become increasingly unimportant. "Leveraging" is a banking term meaning that a businessman has borrowed upon the minimum of security. A "fully leveraged" borrower could never meet their obligations if required to do so. As a result, banks are having their fingers burnt as in the case of the Victorian branch of the National Safety Council of Australia, or the Victorian Economic Development Commission case in Victoria. But do the banks suffer?
All evidence indicates that banks simply write off such losses against profits, and claim tax concessions as a result.

According to a major article by Stuart Kennedy in The Bulletin"(2/5/1989), titled "Why the Banks are Bastards", the effect of deregulation and profit hunger has had a dramatic impact on bank managers in the field, "Stress is increasingly a serious problem in banking, and part of it is because of the pressures of deregulation." Managers' salaries used to creep up with length of service. Now they're paid a base rate, and a bonus for performance... Senator Paul Mclean feels the performance whip is a factor driving managers to forsake ethical banking practice. "I have got ex-bank managers who are saying that, when you have got it put on you for a 30% profitability gain a year, that's potential for corruption", he said.

Len Hingley, Secretary of the Australian Bank Employees Union agrees that banks post-deregulation efforts to push credit have been over the top, but he adds that we also have entered the age of the fearless borrower. The South Australian Premier, Mr. Bannon charged in 1988 that West Coast farmers had been lured into large financial commitments by banks prepared to lend a lot of money. The Deputy Manager of the Commonwealth Development Bank, Mr. Peter Frazer defended the banks in "The Advertiser" (7/10/88), "Following deregulation of the financial system, banks became better able to accommodate lending previously not possible. As a result, willing lenders had negotiated loans with willing borrowers..."
Mr. Frazer blamed commodity prices, the weather and high interest rates for the resulting plight of the farmers. But if banks had been free of lending restrictions, had they not also been freed of interest rates restrictions? Was it not in their power to renegotiate interest rates? Why did they not do so? Do they have no responsibility to their clients? Or the community?

Mr. Gunn, Member for Eyre, addressed the issue in the House, South Australian Parliament Hansard (16/2/89), "Banks and other financial institutions have not only a commercial responsibility, but also a social responsibility. In many cases they encouraged people to enter into arrangements and contracts, and virtually begged them to take money. (To buy more land). One bank went into the West Coast to attract new business, and handed out money as if it were going out of fashion. Now, that same bank is attempting to force people off their farms".

The Commonwealth Development Bank has been the most difficult to deal with. It was set up by the Menzies Government to assist agriculture and development in this country, and it went out and lent money. It is now attempting to force people off their land and I believe that should not be occurring..."

Banking corruption
A constituent approached Senator Paul Mclean (Democrat, NSW) with cases of alleged corruption and malpractice within the Commonwealth Bank. He attempted to investigate, and then asked questions in the Senate. "The Bulletin" (2/5/89) quotes McLean, "Then the floodgate opened," he said. Since December, he has had more than 1000 calls from agitated bank customers, with 200 of these producing details of their woes. McLean has picked 100 cases which he feels are credible enough to demonstrate that something is rotten in the state of Australian banking.
On March 2nd he tabled 20 more affidavits which widened the allegations from the Commonwealth to the State Bank of NSW, National Australia Bank, Westpac, and the ANZ. According to McLean, in some cases corrupt bank officers have been pushing clients to bankruptcy, and then selling off their business to a 'syndicate' of people, most of whom are known to the bank official, and the assets are stripped... In other cases, the covering up of incompetent mistakes becomes fraud and corruption on the part of bank employees.

So far, the Australian Federal Police have made little headway in prosecutions, and McLean appears to be belting his head against a brick wall. The other political parties have not yet supported him. Presumably they still have election campaign debts from previous elections; debt owed to the very banks Mclean is investigating! The interest rate practices are a scandal.

Interest rate practices
Stuart Kennedy produced the following article for the "Bulletin", (2/5/89), "Interest rates are how banks make money ... John Salmon spent 16 of his 36 years with the National Australia Bank as a senior manager. In documents tabled in Federal Parliament, by Democrat Senator Paul McLean, Salmon tells of unethical interest rate practices he claims take place in the National Australia Bank in Queensland. Salmon says the first practice starts with a customer taking out a trading bank loan through a branch manager at the bank's base rate, of say, 15%, with a margin of 1.5% to allow for fluctuations in the market rate. The borrower is informed on the interest rate by letter, and all is well. The branch manager has his customer loans reviewed by his superior, the regional manager". Following perusal, he says to the manager. 'This fellow's position is such that you should have charged a higher margin than 1.5%. I want you to amend records straight away and charge him a margin of 2% above base. Under no circumstances is the borrower to be informed of the increase". Or course, the customer ends up paying more interest than he originally believed he would be."

Salmon says customers rarely recognise the difference. "More often than not, borrowers have not got the expertise to determine what rate they are being charged. When the change comes from the market point of view, the rate is automatically put up by the computer for all borrowers; people accept it. It gets to the stage where most borrowers would not have a clue what they are being charged by the bank.

The theory of deregulated interest rates holds that the rates rise and fall with the market price of funds. While rates always rise, they do not always fall. There was a downward trend in interest rates in early 1987 but, according to Salmon, customers in some National Australia Bank Queensland branch regions, were not given the benefit of the trend. Managers were informed by phone in some instances that interest rates were shortly to drop. As soon as they were aware that the base rate had moved downward, they were to offset the drop by increasing the borrowing margin by a like amount. Borrowing customers, of course, thought they had benefited from the market trend. The regional managers' instructions on this issue were in turn handed down by the general manager for Queensland.

The Bulletin has spoken to a retired NAB manager who confirms the substance of Salmon's allegations. Salmon now advises customers running court actions against banks. In three cases, he says that bank officers have "conspired to pervert the course of justice" by all or a combination of the following:
Destroying and/or suppressing bank and customer file records, thereby avoiding discovery
Fabricating or destroying customer interview records
Unethical and unprofessional conduct by managers
Managers acting outside bank regulations
Altering the dates of documents
Bank branch staff setting out to deceive their superiors"

According to research, banks could afford lower mortgage and interest rates. A confidential report by Melbourne stockbrokers McIntosh, Hanson, Hoare, Govett indicates that banks are making double the profits of foreign counterparts; "The McIntosh report showed that in 1988, the National Australia Bank earned an average of 13.7% for its money while at the same time paying its depositors an average of 9. 1% - a profit margin of 4.6%. The same year, Westpac recorded a 3.8% profit margin by paying an average of 9.4% to depositors, while receiving money for 13.2% on loans. A similar average profit margin was likely to have been recorded by the ANZ and Commonwealth Banks.

According to the report's author, McIntosh analyst Mike Macrow banks in Britain, the U.S. and Canada had 1988 profit margins of 1.5% to 2%. The average difference - 2%-3% could have been carved off the Australian mortgage interest rate, now set at 17%, dropping it to around 14%" No wonder the "Daily News" report was headed: GREEDY BANKS IN HOME LOAN ROW. Daily News, Western Australia, 1989

The vicious debt cycle
Following deregulation, West Coast banks began aggressively lending in competition to each other, to farmers. Then, in 1986, drought conditions hit agriculture hard. Debt became difficult to service. By 1988, interest rates were beginning to rise uncomfortably far higher than borrowers advisers/accountants and economists could reasonably have expected. What were sound commercial borrowing decisions in 1986 became nightmares.

Farmers were reluctant to borrow at such high interest rates, which meant that the land values of any property that was sold, began to decline. This meant that heavy borrowers began to see the equity they held in their properties evaporate before their eyes. For anyone under the RAB it virtually then became impossible to service loans, as such farmers were regarded as "unviable" by the Department of Agriculture in South Australia. No Rural Assistance Board finance was to be made available to "unviable" farmers to plant a crop in 1989. Banks then began to foreclose, and wondered why there was growing rural resentment toward banks and financial institutions!

Some farmers on the Eyre Peninsula are paying up to 6.4% more than their neighbour this 'risk loading' is put on the worst-off farmers, building up their unpayable debts. A letter from one bank notified a farmer that further to consultations, it was lifting the mortgage rate by 2.2%. There were no consultations. This farmer thought they were in a desperate enough position already, with very little income this year.

Fiduciary duty
Actions against banks for failing to adequately inform customers of the dangers of borrowing offshore have had mixed success. Customers who had borrowed Swiss francs at the cheap rate of 4% to 8% were often told by banks that the practice was safe. However, following exchange rate changes, banks were often demanding huge repayments from loans that had effectively doubled. However, a number of cases have been successful for clients. Westpac has lost a number of cases in 1989 involving foreign currency loans. The "Weekend Australian" (2/9/89) reports that Justice Foster found in a client's favour, saying that a branch manager had been negligent in telling the client that there "was no catch". The judge found that "the bank, through its officers, was in breach of the common-law duty of care, and their conduct was misleading or deceptive."

This obligation on the part of the banks is otherwise known as "Fiduciary Duty. It refers to the bank's obligation to treat their clients' interests as equal to the bank's own. It is obviously justifiable and essential to ask if the banks on the Eyre Peninsula are observing their "Fiduciary Duty"!

The Creation of Credit
In his column in a "Weekend Australian"', B. A. Santamaria raised the question of banking practice, commenting that the financial system seems to have lost all connection to economic rationality and the concept of wealth as measured by the production of goods and services. "If hundreds of millions (of dollars) - perhaps billions - have been lost, in the various (corporate) collapses, whose money has been lost? The residual legatees of the great entrepreneurial empires turn out to be the banks, whose representatives preside over the asset sales, so as not to be caught in a re-run of Victoria's VEX and Tricontinental affairs ... Whence came the money lent by the banks? From their depositors? Or was it simply a series of book entries secured by more or less adequate liens on assets? If the latter, the power to charge 20% interest on a book entry is more rewarding than control of the Government's printing presses".

Mr. Santamaria has hit upon a vital part of banking. Bank assets have grown at a rate of 23% over the past 2 years - 1987-88 and 1988-89. The creation of credit is the key not only to the ownership of increasing assets by banks, but to the tyranny of foreign debt and all that goes with it!

It has been clearly established, in Australia and other countries, that the banking system creates credit. In 1937 an Australian Royal Commission investigated Finance and Banking. In his summing up, the Chairman, Sir Mellis Napier, of the Royal Commission stated,
"That the Commonwealth Bank (Reserve) can make money available to Governments or to others on such terms as it chooses even by way of a loan without interest or even without requiring either interest or repayment of principal."

The war-time Labor leader, John Curtin advocated the use of national credit. In a speech in the Sydney Town Hall at the outbreak of war, Curtin said,
"Everything must be paid for, not by reducing wage standards, but by the use of the National Credit. Because the Labor Government was in Federal Parliament, there is a Commonwealth Bank. It was created as a means of releasing National Credit. But because Labor lost office the National Bank (Commonwealth) has been transformed by our opponents into a mere puppet of the private banks... The costs of war can be met without piling up huge debts, and without interest payments sucking our national life-blood..."

The British historian, Sir Arthur Bryant had a clear understanding of the use of new credits. In "The Illustrated London News", March 1983, Bryant wrote:
"To exercise the right inherent in every sovereign state of creating and issuing a sufficiency of money to make financially possible what is physically possible and morally desirable, would enable as much real wealth to be brought into existence as, with its immense inventive and scientific potentialities, the nation is capable of making. It would give Government a freedom of action which its present dependence on borrowed money denies it."
This mechanism could certainly be used to relieve crippling financial burdens that threaten to destroy primary producers in times of crisis.
Would a Labor Premier, like Mr. Bannon, not take a lead in a time of crisis from a former Labor statesman? Apparently not.

There is a great case for changes to be made to the financial system. For Instance in the recent publication 'Democratisation of Money', Chas Pinwill, examines the Reserve Bank's summary of the increase in money and the accumulation of banks' assets. Pinwill, C., "Democratisation of Money".

Who's Making Money - And How Much?
Let's look at some official figures from the Reserve Bank of Australia's "Bulletin", (August, 1989). You can't get them more authoritative than that.

If, on 30th June 1988, you counted up all the Australian dollars in existence, you would find there were 130.2 billion of them. Somebody actually did it, and that's the answer. And exactly one year later, the 30th June, 1989, they did it again, and this time there were 165 billion of them. There were an extra 34.8 billion Australian dollars in existence. Where did they come from?

They were simply created in the banking system by the normal mechanism of extending extra credit to people. Well that's okay. We need a mechanism. It's a very simple, efficient, well-organised system. But should they then keep all the proceeds? They do now!

From today, until this day next year there will be an additional 34 billion Australian dollars or more created - more than $2,000 for every one of the 17 million Australians alive. Thinking of it in households of an average of four people, that is more than $8,000 for every Australian household. When next you take a drive through the city, or out in the country, every time you see a home, say to yourself, "Ah, another $8,000 was created just this last financial year"

Bank Robbery? - It Sure Is!
Well, if you doubt whether they kept the money or not, we've only got to refer back again to this same document, the Reserve Bank Bulletin of August, 1989. In that same financial year, at 30th June 1988, trading banks' and savings banks' assets were $145.8 and $72 billion respectively, or $217.8 billion together. At the end of the financial year, in June 1989, they were $181.9 and $86 billion respectively, for a total of $267.9 billion. Bank assets, in one year, increased by $50.1 billion dollars. And this is the Reserve Bank telling us that in its August, 1989 "Bulletin" that loans increased by over $50 billion. It is interesting, isn't it, that our deposits only increased by $34.8 billion, as we have already discovered. The reason for this discrepancy was in part, servicing overseas debt, and import costs.

Well of course, the banks are embarrassed. But we only hear about them being embarrassed about profits. The total trading bank profits for the last financial year were over the billion dollar mark. Bank assets growth in that year amounts to $2947 per citizen and to over $1 1,788 for every Australian household.

 

A Year On from the Big Drought

The Eyre Peninsula struck back with a good season in 1989/90 and grew 10% of the Australian wheat crop. But very little has changed financially. Reports coming to the Action Group still contain the same ingredients of despair as at the height of battle. However one of the things achieved by the Rural Counsellors, Farm organisations and Community Welfare people working in the field with these debt-stricken people is that the essential causes of this great debt problem can now be clearly defined. The answer of course, is that in Australia we have a system of financial control and direction that apparently cannot be challenged even if it wrecks our industries and people's lives in the process.

Some farmers have already been forced off their land and had to seek employment elsewhere. Many others are destined to follow soon if no realistic government intervention is forthcoming as this hard-pressed group of two hundred is still in deep financial trouble and trying to hang on.

All sectors of Australian society, be they homebuyers, small businesses, large industry or farmers, are still reeling from the impact of viciously high interest rates and overbearing control of their lives by banks. The majority of politicians say not one word and pretend the problem does not exist. A recent letter from a banker to a client is a damning indictment in itself, telling the farmer and his wife they will let them farm for another year but suggest they should 'offer' the farm for sale. The farmer has no equity left in his land whatsoever. The bank too easily gave money and pushed them to purchase another property in a lending spree but now accepts no responsibility for their predicament.
A finance company was charging 28% for machinery till it was repossessed. The bank is waiting for them to give up and leave.
The chaos and havoc the deregulated financial system has created in Australia has finally got down to a personal level of tragedy for the likes of this farming family. How does this family keep up their composure under such enormous pressure? They are still skillful farmers.

They were, however suckered into buying another property by a fast-talking Bank Manager hell-bent on a higher salary and personal promotion and now neither his bank nor the Government will acknowledge any responsibility for the overall predicament. Interest rates were half what they are now when the farmer agreed to borrow and who knows what the risk loading percentage was that he was never told about - 1.75%, 2.5%, 6.5%, or maybe 10.5%? It's anyone's guess. Now the debt is so great and unrecoverable we can clearly foresee one day soon that they will have to drive out the gate with a few miserable possessions or the sheriff is sent in to evict them.

They will be able to keep the furniture if they go quietly.
There are no courts interested to hear this family's side of the story - the drought, high interest rates and poor advice from their bank.

The Action Group repeatedly asked the Government to set up an emergency structure involving the Government, the banks, and farmers to examine how people can be helped to keep their farm. For example, it was suggested that the extra piece of land that the bank had loaded this family up with, be sold off to enable them to remain on their original farm. Such proposals have met with no adequate response. It seems that the present banking system must apparently be upheld at all costs. That our Government is subservient to the banks is now undeniable.

The Government's policy of making cheap money available for someone else to buy this family's farm, but no cheap money to let them stay and trade their way out of trouble, is both bizarre and cruel. This policy serves only to divide the rural community placing farmer against farmer, neighbour against neighbour. The stigma created sixty years ago, by judgments made on farmers or businessmen who were regarded by the financial system as failures, will re-emerge. In those times people had their possessions virtually given away to others. They were given no guarantee that their residual debt would not be pursued by the bank for the rest of their life.

When the final blow comes to farmers banks conveniently maintain their distance in arranging farm sales. Instead of advertising a farm as a "bank" sale, the real estate agent is emerging as the go-between, soliciting offers from neighbours, with the debtor sometimes not being consulted until a sale is 'fait accompli', and so avoiding bankruptcy hearings.

Our Financial System
We can begin to take greater control of our own affairs by demanding some justice from the financial system. Farmers, homebuyers, businesses, workers and industry can profit from questioning all the details and options of their accounts or investments with bank and financial institutions. It must be stressed that banks are an especially privileged institution, with an exclusive right to create money in the form of bank credit. They have been given a licence to do this by the Government. To suggest they should not be regulated by and be responsible to the people's representatives is to accept a financial dictatorship above the Government.

A Policy waiting for Action
To achieve workable solutions for both primary and secondary industries we should consider perhaps just three points from ALP official policy in 1971, and ask ourselves are these policies still relevant and could Australia's position be turned around? Consider for a moment the following three propositions outlined in 1971 Official Labor Party policy by Dr Rex Patterson, Federal Member for Dawson in Queensland.
A Fullbright Scholar in 1958, he was also Deputy Director of the Bureau of Agricultural Economics as well as a practical man of the soil.

Social Credit: This section of the webpage has been set aside for those who truly want to understand why, in a world of such obvious plenty, why is there such poverty, misery and despair? Why are there countless voices crying out in the wilderness of human misery, frustration and insecurity? Not only do the concerned truly want to know why there is such poverty, misery and despair, but want to help in the restoration of families and communities; especially their own.

The Great Harlot

The prostitution of the role of money in the market place

An Idea Whose Time Has Come by Anthony Cooney

In the introduction to his book, Clifford Hugh Douglas, author Anthony Cooney explained to the younger generations: "It may astonish the young people of today to learn that when, fifty years ago, I first attempted to share with others the truth about money, which I had discovered in the works of C. H. Douglas, people would smile kindly, pat me on the head and explain to me that, "There has to be a pound's worth of gold, however microscopic, in the vaults of the Bank of England, for every pound note printed and issued." I do not think there is anyone who believes that today. Why on earth should there be gold? It is more to the point that there should be a dollar bill in someone's pocket for every dollar's worth of wheat in the granaries, or of gasoline in the pumps or of "Jacob's Creek" in the casks!

If people are without bread or wine or gasoline it is plainly because not enough dollar bills have been issued. However, a myth which still has its devotees, is that banks only lend their customers' deposits. This in spite of the fact that no one has ever had a letter from his bank manager, or knows of anyone who has had such a letter, explaining apologetically that the thousand dollars he thought he had in his deposit account is not immediately available to him since it has been loaned to someone else, who will not repay it for several months! If people can now smile at such notions, it is because almost a century ago, C.H. Douglas revealed to a disbelieving world the simple truth that Banks create money out of nothing. Further, the banks require that this money be repaid to them with interest.
It is a matter of simple arithmetic that if all the money in circulation originates as a debt to the bank, society cannot repay it with interest, unless someone, somewhere, borrows more money from the banks, so increasing the total indebtedness of the Nation! It was this "glimpse of reality," as he called it, which Douglas gave to the world.

Douglas' discovery was not entirely original. Others had seen that there was something wrong with the money system. Thomas Attwood, founder of "The Birmingham Political Union" and leader of the Midland Chartists, traced the depression of trade to a flaw in the monetary system, the correction of which would, he maintained, achieve all that the "Great Charter" demanded.

Douglas' ideas had their roots in the work of William Cobbett, John Ruskin and his "Guild of St. George," William Morris and his "Arts and Crafts Movement," Hilaire Belloc, (author of "The Servile State") and the Distributist League, but most of all in The New Age, edited by A. R. Orage and Arthur Penty, the journal of the Guild Socialist Movement. It was in the pages of The New Age, that Douglas' ideas were first presented to the public.
Penty, who also wrote for G.K's. Weekly, became the bridge between Distributism and Social Credit. Social Credit is therefore the culmination of a long process of radical and reformist thinking and action.

What was unique in Douglas' "glimpse of reality," were the solutions he proposed. Debt is really a measure of increased productivity. This increased productivity is Social, and it ought not to be a debit against society, but a Credit, to be shared by everyone through a birthright income or Dividend, and by Discounted prices. It was not Douglas' analysis of the monetary system which aroused opposition so much as his proposal that the new money to balance the new productivity should be created, debt and interest free, to provide a private income for everyone. Such a proposal, if put into effect, would bring to an end the Banking system's Monopoly of Credit, together with all the power and privilege of those who control it!

The Establishment's reaction, in the words of John Masefield in "The Everlasting Mercy," was, "Better a brutal, starving nation than men with thoughts above their station." What, then, of Douglas and Social Credit today?

It might have been thought by those who wish to maintain the monopoly of credit and economic power, that, like Ruskin and Morris, they had safely relegated Douglas to the pages of history. However all around us there is a renewed interest in the question of Debt, and particularly of the unrepayable debt of the Third World. "How is it," ask the people who flock to protest marches and demonstrations against degradation of the environment, poverty and waste of natural resources, "that the Debt not only can never be repaid, but keeps on growing, in spite of the fact that the original loan has been repaid, in interest, over and over again?" The answer to these questions can be found in the pages of Douglas for those who are serious enough about their protests to study them.

In the past few years three heavyweight books have been published by academic authors. The first was "The Political Economy of Social Credit and Guild Socialism," by Frances Hutchinson and Brian Burkitt, (Routledge, London, 1997.) The second, and perhaps more thorough, was "The Grip of Death - A Study of Modern Money, Debt Slavery and Destructive Economics" by Michael Rowbotham, (Jon Carpenter, Charlbury, 1998) and the third, which treats exclusively of Distributism, was "Jobs of Our Own: Building a Stakeholder Society: Alternative to the Market and the State," by Race Matthews (Pluto Press, Australia, 1999.)

Matthews rightly gives pride of place to Orage and Penty and their journal, "The New Age", but I find it all but incredible that he totally ignores the monetary theories of Douglas, first published in that paper and described as "Social Credit," by Orage. It seems to me to be axiomatic that widely distributed property cannot be achieved, let alone maintained, within a monopoly of credit creation. It usually takes at least a generation, and often longer, for the avant garde ideas of a genius to be understood and accepted by the general mass of people, to become part of the mental landscape.

The recent publication of these three books, together with articles and papers in a range of journals, shows that a wider awareness of Douglas' thinking is happening now. This short paper on Douglas, will, it is hoped, serve as an introduction to his "glimpse of reality," for all those who are now, for the first time, hearing his name and the intriguing words, "Social Credit," and will help to convince them that Social Credit is the Idea Whose Time has Come." Anthony Cooney, Liverpool. A.D.2002.

Employment, Debt, and 'The End of Man'

Did you find in the latest Elections, as in most previous Elections, Unemployment was a major issue between the Parties. Each had different plans for reducing it, but no party dared to face the full implications of the technological revolution which has so multiplied the productivity of labour that the routine work of producing all the goods and services which people can possibly need or reasonably want can never again require the full-time labour of the whole, able-bodied population. In other words, un-employment has come to stay, and ought to be welcomed as a liberation from unnecessary routine labour, far better done by machines which have no lives to waste, rather than punished by reduction to a legally enforced penury.

The other matter which is always a major issue at all elections, and in fact in all politics, is money - its provision and expenditure. Here again, no party has dared to face the full implications of the monetary revolution which has substituted a purely symbolic loan-credit, created by book-entries and repayable with interest, for a solid metal coinage of intrinsic value. These questions go too deep to be answered at the level of current politics and economics, which are mainly concerned with coping from day to day, or year to year, with the failure to face these fundamental changes in human society.

They go down to the purpose, to the End of Man, in a word, to religion.
What is employment for? What is money for? What are science, invention and technology for? For what purpose were we created and endowed with the resources of this planet?

Too many Christians have evaded the duty of seeking a true answer to these questions by pleading a lack of expertise in politics and economics, as if purpose were a technical matter; as if, when they are being driven in a car, the direction were a matter solely for skilled drivers and motor mechanics! No one calls a person who is not employed, but has private means, or a pension, 'unemployed'. It is dependence upon a job for a living, while lacking one, which characterises 'unemployment'. Financial independence transforms it into leisure; the freedom to choose how and for what purposes to employ one's time and energies, whether or not one is paid for them.

As long ago as the 1930's many people realised that, for the first time in human history, that freedom of choice could he available to all, in real economic terms. The limitations were then, as now, purely monetary. According to virtually all professional economists and experts on finance, those monetary limitations are absolute. Our whole civilisation was created and is controlled by credit-finance which is accepted as the immutable reality upon which all else is contingent. For many, perhaps most, people also, money is the ruling reality, as it is for the whole of our industry and commerce, aided now by the computer. As a result, our economy is now almost completely 'supply-led', rather than 'demand-led. It over-rides everything else, including quality, honesty, mercy, economy, common sense, and, on occasion, even sanity.

The extent to which people's lives, and the earth's ample, but limited, resources, are wasted for purely monetary reasons is seen to be quite staggering, when one comes to look into it. As a single example, the full implications of 'the junk mail' are worth following through. Ah! but it keeps people employed. Is that what men and women were born for?

What then is this 'money' which we worship as reality with our lives? It is a wholly artificial system of numerical symbols, created out of nothing by book-entries by certain men who have a monopoly, as a 'credit', repayable with interest which has now reached usurious rates. To the rest of us - the borrowers - its name is 'debt', and the whole principle on which our society is based is that of the mortgage: ''Take now, pay later!''
Both on the personal and the international scale, Debt rules the World. 'Credit' depends upon 'confidence'.

Both of these are words meaning 'faith'; very much the business of the Church, and of all Christians. In what, or whom, then should we have faith? In the eternal God and His Creation, which includes the enjoyment and stewardship of this generous, but limited planet, or in the immutable reality of usurious debt and its creators? For Christians there should surely be only one answer; but surprisingly many of them unwittingly reveal their deep faith in the primary reality of money when they insist that, with enormous resources of human ability and materials being wasted or unused, the poor are poor because the rich are rich and even because the comfortable are comfortable, so social justice requires that the latter be taxed to relieve the former.

There is, indeed, a scandal here in imposed and unnecessary poverty, but it is not primarily the scandal of wealth or comfort but the scandal of monetary control. Wealth and comfort have their responsibility towards the poor: it is the duty of giving. But taxation is not giving, but taking under threat of penalties. There is no love or merit in it either for the givers or the takers. It dries up good impulses on both sides.

Many of us might well benefit from a simpler life with fewer and more lasting goods and gadgets and unnecessary comforts: and it is urgent that this Earth's ample, but limited, resources be no longer squandered on unnecessary, wasteful or destructive activities undertaken to give people wages. But, as things are at present, with debt-money controlling rather than reflecting and enabling economic reality, to cut these down would merely add to the penurious unemployed. Surely there is something very wrong when people may not live simpler lives without impoverishing others! These matters have been long discussed and written about ever since the 'poverty-in-plenty' days of the 1930's, when it first became clear that poverty in a technologically advanced society was a monetary phenomenon, not based on our productive reality.

The solution which was put forward by the engineer C. H. Douglas, and widely supported by many Christians including T. S. Eliot, Canon V. A. Demant and the Chandos Group, was that of the social, or national, dividend, paid equally to all without conditions, the amount being calculated to enable them to meet current prices collectively without incurring debt. This was to be combined with an anti-inflationary price discount in fact a VAT, in reverse - an unprecedented use of money to lower instead of to raise prices.

All this was, naturally condemned and ridiculed by all the recognised experts on debt-controlled economics, since it was a direct challenge to their (unacknowledged) faith (or 'confidence') in the eternal and immutable nature of loan-credit finance. It would be practicable only by means of what to them, would be unthinkable arid impossible, an issue of debt-free money to counteract debt.

A temporary solution however was found along orthodox financial lines in World War II which provided destructive forces capable of coping with our productive powers, with 'jobs for all'. It is now very clear that the destruction necessary to provide 'jobs for all' with nuclear power and computerised automation, will also destroy what we call our civilisation: while the endless 'economic growth' and bureaucracy demanded by 'employmentism' financed by debt and taxation is doing it more slowly. Is this, then, to be our chosen End of Man?

Is it not time that we Christians recovered our courage, and instead of following the secular world, gave our own lead in accordance with our faith in God's not Man's reality and our belief that there is redemption for debt, even on so universal a scale?

© Published by the Australian League of Rights, P.O. Box 27 Happy Valley, SA 5159