EXCLUSIVE TRADING WITH ONE BANK INVALID

Chronicle (Levin), 14 August 1947, Page 5

EXCLUSIVE TRADING WITH ONE BANK INVALID

Received Wednesday, 8 p.m. SYDNHY, August 13. By a majority decision the f'ull liench of the High Court today declared mvalid that seetion of the Pederal Banking Act which sought to compeJ city and municipal councils to trade witli the Couimonvvealth Bank to tlie exelusion of private trading banks. The judgmtyit was by a majority of five to one. The C'ommonwealtli was ordered to pay costs. The dissenting Judge was Mr. Justice Metiernan. The vaiidity of seetion 48 of the Act had been challcnged by the Melbourne City Couucil in a suit argued before the f'ull bench m Aleluourne last cnontli. At that hearing' the Commonvvealth and Pederal Treasurer entered a lemurrer claiming that the Ac.t was .-alid. Seetion 48, which provides that ixcept with the cousent of the Pederal Treasurer, a trading bank shall not conduet any banking business with a State or for any authority of a State ■ncluding a local government authority, was to have come into oiieration on August 1. On that day, however, the Chiel' Justice, on the application of the Melbourne City Council, granted an injunction against the Pederal Treasurer .estraining liim from enforciug the seetion pending the decision of the High ■Court on the validit-y suit. Today the Clrief Justice, Sir Johu Lathain, said that the seetion had the effect of submitting banking operations jf Stafces to the- control of the Commonvvealt'h Bank. Mr. Justice Strake lield that the States and local governing authorities and not the Conimonvvealth had power to administer con Lrol and bank their revenues -and funds. Mr. Justice Rich said that the Commonwealth constitution expressly provided for the continued existence of the States and that any action by the CorumonweaJth which -would prevent a State from continuing to exist and function as such was necessarily invalid. In Canberra Mr. Chifley refused to discuss -the -Court decision but it is believed that the Government is not lilce ly to attempt to take the matter f-ur-

,.ther. Most -Government- advisers believe today 's judgment was by such a large majority that application to the Privy Council would have little chance of success.