Oscar Tamsen
Our Australian Government’s current revamping of our national Reserve Bank has an interesting sequel during the Great Depression days of the 1930s when the great-grandfather of a well-known Clarence Valley family stared down the Labor Government of the day and helped to save Australia’s then dwindling finances.
Our financial savour of the time was Sir Robert Gibson, a former leading Melbourne businessman and company director who, as head of the Commonwealth Bank and its central bank duties, stoically refused government and parliamentary demands to urgently print money.
Gibson’s concerned view was that this measure would only get Australia even further into serious debt and that the borrowing of more finance would only completely bankrupt the country.
This “man of iron,” as he was known, would probably have a wry smile if he were still alive and heard our current Treasurer, Dr. Jim Chalmers, more or less repeating what the former James Scullin Labor Government tried so desperately to do in 1931.
When Gibson was in charge of our national monetary policy, the Scullin Government continually failed to force him to open the then central bank’s coffers to provide it with borrowed monies which he considered Australia could not afford to have or spend.
Today, by comparison, Chalmers has taken on the Commonwealth Bank’s central bank successor — our Reserve Bank — over dissatisfaction voiced by financial pundits that it is confusing monetary policy with governance and the way it has been setting a continuous and static monetary rate against our high levels of inflation.
The interesting part of the whole story, of course, is that we are today living in somewhat similar circumstances to that which happened in the 1930s. Both periods followed world pandemics, periods of serious inflation, threats of high unemployment, untenable housing interest rates, the possibility of war and a shortage of affordable accommodation.
In Gibson’s day as Australia’s top banker, the severe financial difficulties experienced in all States started with the Wall Street stock market crash in the United States. The effects of this global calamity quickly spread around the world to Australia, causing Great Depression-style financial strictures and 30 per cent unemployment without any assistance from our yet to be established social security system.
This problem was made all the worse by the fact that Australia had already borrowed heavily from various countries, including Britain, but had no prospect of repaying these loans let alone meeting the interest charged on a variety of other outstanding money matters.
During Gibson’s time, Australia actually faced the prospect of national insolvency with the need for severe personal austerity. As wages were reduced, most people with bank accounts were forced to withdraw their earnings and savings in efforts to maintain a highly reduced standard of living.
Most financial institutions in those days experienced periods of heavy cash withdrawals and the Federal Deposit Bank and the Primary Producers’ Bank were forced to close their doors while the Government Savings Bank of N.S.W. amalgamated with Sir Robert Gibson’s Commonwealth Bank of Australia.
As a result of what became a big run on all banks and allied businesses, Sir Robert took an official stand against government spending and against people withdrawing their monetary assets. He also made it known that Australians were living above their means, and that wages and the country’s high living standards could no longer be supported by what was then a lower level of productivity.
He also ran a successful public campaign against the Federal and State governments for not balancing their budgets, for not cutting their expenditures and for not reducing the cost of production. This eventually resulted in Public Service and Parliamentary salaries also being reduced among a raft of other cost-cutting measures which helped Australia to marginally overcome the eventual ravages of the Great Depression and World War ll.
Today, Sir Robert is officially remembered as the first guardian and defender of the Commonwealth Bank and as the central banker prepared to say ‘no’ to an Australian prime minister and government in what he believed to be the financial interests of all.
Some political historians believe that Sir Robert was the cause of the Scullin Government’s eventual fall from power.
Today, he is dearly remembered by several grand and great-grandchildren living at various points around our Clarence Valley under the original overarching name of Willmore. Their mother and grandmother was Mrs “Winnie” Winifred Willmore, a very well-known resident at Ashby for 42 years until her passing in 2015 and wife of Colin, a one-time Maclean jeweller and watchmaker.