Reserve Bank of Australia Annual Report – 1963 Other Activities of The Bank

Those aspects of the Bank's work concerned with the formulation and implementation of monetary policy have been dealt with. The Bank also undertakes many other activities of importance to the financial system and to the community at large, such as note issue, dealings in foreign currencies under arrangements for the mobilization of foreign exchange and on government account, conduct of Inscribed Stock Registries and so on. Although the expansion of these services does not, in many cases, lend itself to ready statistical measurement, the overall volume of business of the Bank is growing and the pressure on the staff continues to be heavy. The following sections of the Report deal with some of the more important services provided by the Bank, some of the special activities in which it is engaged and some domestic matters.

Note Issue Department

Notes in circulation increased by £6 million in 1962/63, compared with an increase of £8 million in the previous year.

Notes in Circulation
(£ million)
End of June Total Denominations
    10/- £1 £5 £10 and over
1961 416 12 68 186 150
1962 424 12 68 190 154
1963 430 13 69 193 155

The major classes of security printing produced at the Bank's Note Printing Branch during the last three years are set out below.

Year ended
Other postal
(millions of pieces)
1961 179 998 16 40 68
1962 197 1,023 15 55 82
1963 189 949 16 56 86

The introduction of decimal currency in 1966 will place a heavy burden on note printing and note issue facilities, and will require extensive and detailed planning of the currency change-over.

Rural Credits Department

Rural Credits Department advances to finance the processing and marketing of primary products were at high levels during 1962/63, mainly to finance the record wheat crop. The seasonal peak of £137.5 million in March was £24 million higher than the 1961/62 peak and, mainly as a result of the conjuncture of the increased wheat harvest and reduced wheat shipments within the financial year, advances outstanding rose by £46 million over the year to £105 million at 30th June. Finance for the barley crop was at much the same level as in 1961/62 but advances to the dairy industry fell.

The Rural Credits Development Fund, to which half of the Department's profit is transferred each year, made grants totalling £224,805 to assist organisations engaged in a wide range of research and extension work for the promotion of primary production in Australia and the Territory of Papua and New Guinea. This year's grants brought the total since inception of the Development Fund in 1925 to £1.9 million.

Bonds and Stock

Although there were only two Commonwealth Government cash loan flotations in Australia in 1962/63, they both attracted a large volume of subscriptions and this phase of bonds and stock work was again heavy. In addition to these flotations, the tap issue of Special Bonds continued throughout the year, attracting increased public support, and the Government introduced a tap issue of Treasury notes of 91 days currency, which replaced seasonal securities and which have been very well received by short term investors. These tap issues, together with the advance subscription scheme, produce a more even flow of work in Government debt management.

Subscriptions to Commonwealth Cash Loans* (Public Issues)

Graph Showing Subscriptions to Commonwealth Cash Loans (Public Issues)

Marked changes have taken place in the pattern of Commonwealth loan subscriptions during the past twenty-five years or so. The number of subscriptions to cash loans rose from an average of about 16,000 per annum in the years 1935/36 to 1937/38 to a peak of just over 1 million in 1943/44. After the war, the number fell rapidly and in recent years has ranged between 40,000 and 60,000, including subscriptions to Special Bonds but excluding subscriptions to Treasury notes. The average amount of each cash subscription, which had been about £1,100 in the years 1935/36 to 1937/38, was only £270 in 1943/44 but has since risen to almost £3,000 in the three years to 1960/61 and about £4,700 in the last two years.

These trends, together with the lack of inscription facilities for Special Bonds (into which many smaller investors have converted inscribed holdings) have been reflected in a reduction of about 60 per cent in the number of inscribed stock holdings in our Registries since the end of the war. The average amount of each stock holding has increased more than four-fold. The volume of activity in Inscribed Stock Registries has been maintained and is tending to increase, mainly because of the increasing size and activity of the short term money market and heavier trading by other holders of Commonwealth Government issues. Techniques of processing and communication have been improved to meet the needs of the expanding market. The work of the Registries will increase further when recent legislation is put into effect, offering inscription facilities for Special Bonds and Treasury notes.

Special Activities

Some other activities of the Bank warrant special mention.

Rural Liaison Service: Through this Service, the Bank provides the trading banks with information on rural matters by regular publications, organisation of regional conferences and reviews of commodities and other topics specifically requested by individual banks. Two regional conferences were conducted during 1962/63. Valuation information for 39 shires in New South Wales and for 12 district councils in South Australia was assembled and distributed to trading banks. Officers of the Service also co-operate with government departments in the conduct of rural surveys.

Economic Liaison: Throughout the year regular contact continued to be maintained with businessmen in industry, commerce, trade and other organisations and with officers in government departments in all States. These contacts provide additional and valuable sources of information to assist the Bank in forming its assessments of the current positions and prospects of the economy generally and of particular sectors. They also afford frequent opportunities for discussion of other matters of mutual interest. The Bank is grateful to these businessmen and government officers for the assistance and co-operation they extend so readily. Automation in Banking: The Bank has a continuing interest in the application of advanced technology to its own operations and to banking activities generally. Early in 1962/63 a survey group was appointed to determine the Bank's likely overall electronic data processing requirements, with a view to the possible installation of a computer in the new Head Office building. The requirements were subsequently presented to locally represented computer organisations, and their proposals are now being evaluated. The Bank also is closely associated with inter-bank activities in automation research and assisted in producing a booklet during the year, setting out the specifications and guides for implementing the MICR common machine language agreed upon for automatic cheque processing in Australian banks.

Economic Research Fund: The Bank's financial support for post-graduate research into economic and financial matters bearing on the Australian economy embraced several new projects in 1962/63, including studies of the Australian capital market, the effects of changes in liquidity in Australia, and the impact of automation.

Other: It was announced last year that twenty-two post-graduate scholarships would be made available at Australian universities to mark the fiftieth anniversary of the establishment of the Bank. Applications have been received by universities from local and overseas students whose specialised interests cover a wide field. By the end of June, 1963, nine scholarships had been awarded to Australian residents and a number of applications from overseas students were under consideration.

In April, a third Overseas Trade Course was organised by the Bank at its Staff Training College in Sydney and officers attended from twelve banks represented in Australia.

Territory of Papua and New Guinea

The Bank carries out a number of central banking functions in the Territory of Papua and New Guinea. In Port Moresby it acts as banker to the Government, holding accounts of the Territory Administration and Commonwealth Government Departments; manages the Inscribed Stock Registry on behalf of the Administration; provides safe custody facilities for the public in respect of Territory Premium Bonds and Savings Certificates; assists the Government in floating its loan issues; and provides note issue and coin distribution facilities.

The Bank has continued to help in activities designed to extend the money economy and to improve the effectiveness of the monetary mechanism. Officers of the Bank's Rural Liaison Service are working with officers of the Territory Administration and of the Department of Territories on specific matters relating to economic development.

These activities in the Territory have assisted in the development of the financial system and they provide a framework within which further development and extension of central banking functions can take place.

The Bank is concerned to extend the understanding and use of money and credit among the people of the Territory and to foster the habit of saving, and it has collaborated with the Department of Territories, the Territory Administration and banks operating in the Territory to this end. An officer of the Bank has been appointed Registrar of Savings and Loan Societies and progress has been achieved in developing these societies among groups of Papuans and New Guineans. At the end of June, 1963 there were four registered societies in operation, providing an avenue for saving and making loans to members for a variety of purposes. Training of Papuans and New Guineans to run the societies is proceeding satisfactorily. In addition to registered societies, there were 52 Savings Clubs in operation at the end of June and 10 to 12 other clubs in process of formation; the clubs serve as a useful first step towards establishing registered societies. Besides the staff based at Port Moresby, an Australian and an indigenous officer are stationed at both Rabaul and Lae to encourage and assist in the development of savings clubs and societies in surrounding areas.

Two educational booklets were published during the year, entitled “What is Wealth?” and “Prices”. As with the previous publication, “Your Money”, these booklets are being translated into Pidgin English and Police Motu. Supplementary “Teacher's Notes”; have also been provided as a teaching aid in the schools. Further booklets in the series will be published.

The Bank is training a number of Papuans and New Guineans in central banking operations, with the intention that indigenous officers should assume duties currently undertaken by Australians. At present five indigenous male officers are employed, four having been added to the strength during 1962/63. One of these officers has been granted a Bank scholarship to attend a full-time adult matriculation course conducted by the Territory Administration at Port Moresby. An indigenous girl, sponsored by the Bank for training as a typist by the Territory Public Service Institute in Port Mores by, has now commenced duty with the Bank at that point.

The New Guinean studying for a degree in Economics at the University of Sydney under a Bank bursary is making good progress. Efforts were made, without success, to extend additional bursaries in 1963 for university study in Economics or Arts. The Bank is hoping that it will be able to find at least one indigenous person for university training in 1964. Three students from the Territory are being educated at secondary level in Queensland under Bank scholarships; two former students have returned to Port Moresby in the Bank's employ.


Construction of the Bank's new Head Office building in Sydney is continuing and the Bank expects to occupy it about the middle of 1964. A tender has been accepted for the construction of the second stage of the building to house the Melbourne branch of the Bank on the corner of Collins and Exhibition Streets. Unexpected difficulties, mainly in respect of excavation and underpinning, encountered early in the first stage of construction delayed its completion. As a result, the building will not be available for occupation before 1965.

Tenders have been called for the erection of a building for the Bank in Canberra on the corner of London Circuit and the open court leading to the Law Courts. The design of the building is the result of an open competition for architects registered and domiciled in Australia. The estimated construction time is twelve months.

The Bank will be inviting tenders later this year for the construction of a multi-storeyed building for its Adelaide branch on a site on the corner of Victoria Square and Flinders Street, purchased from the South Australian Government. The completed building will have two basement levels for vaults and bulk cash handling, a ground floor entrance lobby and banking chamber and 16 upper floors rising to a height of 220 feet above Victoria Square. In terms of an agreement reached when the site was purchased, several upper floors will be leased to the State Government.

During the year, the Bank purchased a site for its Perth branch and conditionally accepted an offer by the Brisbane City Council of a site for its Brisbane branch. Planning for the Bank's own premises at Port Moresby is also proceeding.

International Liaison

Direct personal contact is maintained with other central banks concerning economic and financial matters of mutual interest. The Governor, Deputy Governor and several senior officers held discussions during the year with central bankers in Europe, Asia, North America and New Zealand and reciprocal visits were paid by a number of leading central bankers.

The Bank was represented at the Fifteenth International Banking Summer School and at the 1963 Bank of England Central Banking Course. The Bank is also participating in the planning and conduct of the Fifth SEANZA Central Banking Course to be held in Karachi early in 1964. Other aspects of co-operation with overseas Central Banks in the training of staff are being investigated.

A number of staff are serving with overseas institutions. Mr. J.G. Menzies continues as Deputy Governor of the Central Bank of Malaya. Other officers are also seconded to this Bank and to the Central Bank of Nigeria, and a member of the staff has been seconded to serve a period as Economist with the South Pacific Commission.

Mr. J.M. Garland holds the office of Executive Director for Australia, South Africa, Vietnam and New Zealand with the International Monetary Fund and the International Bank for Reconstruction and Development. Other members of our staff are serving with the I.M.F.


The Board recognises and appreciates the conscientious and efficient manner in which members of the staff perform their duties.

Mr. W.C.G. McCracken, formerly General Manager, Note Printing Branch, who was awarded an O.B.E. by Her Majesty the Queen during the year, and Mr. G. R. Simpson, formerly Manager for Western Australia, have retired from the Bank, each after nearly 50 years' service.

Mr. L.T. Hinde, who last year occupied the post of Assistant Manager and Actuary, Investment Department left Australia in July, 1962, to take up a Harkness Fellowship of the Commonwealth Fund, awarded to him for the study of financial developments and institutions in the U.S.A. Mr. Hinde is expected to return to the Bank early in 1964.

Staff training within Australia has continued through an internal staff training programme and participation in senior executive training courses. An increasing number of officers are undertaking university courses under the Bank's bursary scheme.