A NEW CURRENCY: 1900–1920
Formation of the Commonwealth Bank
With Federation, the Commonwealth Government acquired the power to make laws in respect of banking and currency. Establishment of a 'Commonwealth Bank of Issue, Deposit, Exchange and Reserve', became part of Labor Party policy.
Later, in 1908, the Labor Party Conference discussed detailed proposals by King O'Malley for a government-owned bank which would issue currency notes and also conduct the Government's accounts, manage its debt and hold the reserves of the banking system.
Mr
O'Malley, elected to the first Federal Parliament as a representative
from Tasmania, had been a long-term proponent of a central bank. He wanted
'a Bank of Australia to be in Australia what the Bank of England is in
England'.
Sydney
was selected as the centre for the Bank's head office and by January 1913
branches in all state capital cities, Canberra, Townsville and London
had been established.
A new Head Office in Martin Place was opened in 1916. The building served as a model for the Bank's home savings money box.
Despite earlier proposals, when established in 1912 the Commonwealth Bank was not given a central banking role, not even responsibility for issuing currency notes.
With
the passing of the Commonwealth Bank Act in 1911, the search for a suitable
Governor of the Bank concluded with the appointment of Denison SK Miller
in May 1912. Governor Miller was appointed for a seven year term at an
annual salary of £4 000, over $1 million in terms of today's earnings.
World War I provided significant opportunities for the development of the Commonwealth Bank. It boosted the Bank's role in the distribution of currency notes and in organising finance for Australia's war effort.
