The Secretary to the Treasury has forwarded me the following memorandum for advice:

• I desire to refer to section 60AD, subsection 7, of the abovementioned Act,⁽¹⁾ which reads as follows:

In this section the word ‘Bank’ means a person or corporation carrying on the business of banking, and includes any person or corporation which receives deposits from the public and allows interest thereon and which is proclaimed by the Governor-General to be a bank for the purposes of this section.

2. A notification appearing on page 2789 of Commonwealth Gazette issued on the
   27th November proclaimed, among other institutions, the Rural Bank of New South Wales as a ‘Bank’ for the purposes of the above section.
3. The Secretary, Government Savings Bank of New South Wales, advises inter alia, under date 4th December, that the Proclamation does not legally bind them, inasmuch as that institution is a State Bank carrying on the business of banking within the limits of the State, and is, therefore, not subject to Commonwealth legislature.
4. I shall be glad if you will favour me with your advice on this point.
5. A copy of the letter received from the Savings Bank is enclosed.

The proclamation refers to the Rural Bank of New South Wales. The reference, I assume, is to the Rural Bank Department of the Government Savings Bank of New South Wales. That Department was established by the Government Savings Bank (Rural Bank) Act 1920 of New South Wales and superseded the Advance Department of the Savings Bank established by the Act of 1906.

The powers of the Commonwealth Parliament to pass legislation on the subject of banking are stated in placitum (xiii) of section 51 of the Constitution, as follows:

Banking, other than State banking, also State Banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money.

The operations of Rural Bank Department are State banking, and those operations are stated to be carried on within the limits of New South Wales. In the circumstances, the Bank is outside the scope of the Constitutional powers of the Commonwealth Parliament. Section 60AD of the Commonwealth Bank Act 1911–1924 should therefore be read as not applying to the Bank in question.

[Vol. 21, p. 414]

(1) Commonwealth Bank Act 1911.