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Trevor Hart Banking in a new world: the beginnings of ANZ

Proceedings of the ICOMON meetings, held in conjunction with the ICOM Conference, (, 10-16 October, 1998), ed. by Peter Lane and John Sharples.

Melbourne, Numismatic Association of Australia, Inc, 2000. 117 p. (NAA Special publication, 2). (English). pp. 39-46

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BANKING IN A NEW WORLD THE BEGINNINGS OF ANZ BANK By Trevor Hart ANZ Bank, Melbourne, Australia

For its first twenty-nine years proposed to the Government in Australia had no bank. The British England, the formation of "The New settlement of Australia began in South Wales Loan Bank" based on 1788, but Australia's first bank, the the bank at the Cape of Good Hope. Bank of , did not In 1812 the government refused open until 1817. his proposal. Macquarie accepted this refusal but was still convinced of Australia was founded as a the need for a bank in the colony.4 In self-supporting penal colony and 1816 he acted again, this time monetary arrangements were ad hoc. "convening a meeting of the A local currency of small private magistrates, principal merchants and promissory notes grew up in gentlemen of ... at which my conjunction with the circulation of favourite measure of a bank was Government Store receipts. This led brought forward."5 Macquarie issued to a dual monetary standard in a 'charter' for seven years to the which 'currency' came to mean directors of the new bank (which "money of purely local was later disallowed by the British acceptability" and 'sterling' meant Government) and on 8 April 1817 "any form of money ... equal in the Bank of New South Wales value and acceptability to bills on opened for business.6 After a number the Treasury".1 of restructurings and acquisitions the bank emerged in 1982 as Colonel , the Banking Corporation under colony's fifth governor2 attempted to which name it still trades as one of reform the monetary system. His first Australia's "big four" . acts included attempts to solve the shortage of 'specie' by proclaiming With the colony changing from fixed values for the various types of convict to free-market, S J Butlin coins that came into the colony. (Australia's major writer on the England, at Macquarie's request, also colonial monetary system) saw three exported dollars from India to main groups of events affecting the Australia and instructions were given monetary system: to the Governor to take steps to - the introduction of the Spanish prevent their re-export. This was dollar as legal tender in 1822; done by converting the silver coins - British legislation setting a to 'holey' dollars and creating a sterling standard in 1825 thus locally over-valued currency. The effectively creating the Australian holey dollar was given a face value pound; and of five shillings and the "dump" or - the multiplication of the banks central piece, fifteen pence or one from 1824.7 shilling and threepence. (The 'holey' dollar was, of course, not a new idea Ten banks were formed by the end of as it had already been used with the decade and all faced hard times coinage in the Caribbean.3) following the financial crisis of 1826 and a prolonged depression from In April 1810, four months after he 1828 to 1830. arrived in Australia, Macquarie

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By the end of 1840 over 40 banks At the first annual meeting of the had been proposed for Australia and Bank's shareholders held in June 28 had actually started operation. 1835, the chairman, John Studholme Brownrigg, gave a * lengthy description of the processes Australia & Banking of establishing the Bank.10 While Group Limited began trading on 1st waiting for the charter to issue the October 1970 and is the result of a Bank issued its prospectus, issued number of significant mergers. Its shares, prepared the Deed of Anglo-Australian origins go back Settlement and recruited some staff. through some fourteen banks. Since it was formed it has become the With the receipt of the Charter, the beneficiary of five other banking directors were able to start business companies, one with a background of and they dispatched their staff to building societies well into the Australia on 10th July 1835. Offices nineteenth century. Another, were opened in Sydney and , brings in a rich in December, and in Launceston in legacy as an Anglo- January 1836 following the begun in the late 1820s. But, it is acquisition of the business of the the Anglo-Australian business I will Cornwall Bank which had begun in talk about. Launceston in May 1828. Sydney was designated as the head office. ANZ's first major forebear, the , was formed in Meanwhile, on 7th July 1837 a 1833 but efforts to establish it can resolution was taken in London to be traced to 1832 when the Sydney form The Union Bank of Australasia. papers carried circumstantial The name was changed to The Union reports on plans for a "Bank and Bank of Australia after complaints Whaling Company on the Scotch from the Bank of Australasia about principle."8 The whaling idea was the similarity of name. The abandoned and the plan developed prospectus was authorised for into a Royal Bank of Australasia and insertion in seven of the London daily South Africa. The company would papers11 but according to Butlin this operate under a Royal charter was unnecessary as all shares were sought from the British Treasury in taken up without the publicity. May 1833, which would limit the Unlike the Bank of Australasia, the liability of shareholders to twice the Union Bank was a joint-stock amount of their shareholding. company with unlimited liability, and it traded as a joint-stock company The Treasury had laid down new until it registered under the English rules relating to applications for companies act in 1880. colonial banking charters on 1 April 1833, following a succession of By its title, the Union Bank indicated earlier initiatives relating to joint its intention "to facilitate the junction stock companies. A minute relating with some of the existing banks" in to the Australasia's petition said: Australia. In fact only one was available. The Tamar Bank was As this is the first application st for a charter for a colonial founded in Launceston on 1 banking company ... [since the January 1835 but was shaken by a rules were laid down] the con- conflict with the Bank of Australasia ditions now established will and accordingly sought a merger serve as a guide to the future.9 with the new Union Bank. The only other potential merger candidate was the Derwent Bank in Hobart

40 who invited negotiations but no was a ‘company records remain to evidence the settlement’ founded under ideas discussion. similar to those of Edward Gibbon Wakefield. Angas promoted the The Union Bank's entry into South Australian Company that Melbourne was by absorption of the acquired the responsibility for Derwent Bank's agency. The settling migrants as well as its Derwent had opened in Melbourne normal trading activities. To in February 1838 but was not soundly augment its services the company based. When the Commercial Banking Company of Sydney opened a banking department in opened an agency in Melbourne in 1837 under the control of Edmund June, and knowing that the Bank of Stephens. During his passage across Australasia was also to open, the the Indian Ocean from South Africa, Derwent happily shed its agency to Stephens had had a tent made by the the Union Bank. ship's sail maker from canvas bought in Cape Town. This tent, 27 feet by The Bank of Australasia opened in 14 feet (about 8.25 x 4.25 metres) Melbourne at the direct request of was pitched on the beach and used as the Governor of New South Wales, a bank, the manager's residence, and Sir George Gipps. The bank shipped a church on Sundays. Stephens its equipment, notes and specie, two had brought materials for a house but bulldogs and an armed guard to they stayed on the beach because in Melbourne on the government's early, un-surveyed , the cutter. Their premises were a cottage cost of carting them the nine of four rooms; two for banking and kilometres to the town was too two for living. The staff slept with the expensive. Banking began as soon cash chest between their beds and as the tent was pitched and it was the dogs had the run of the yard at some months before the bank was night. By 1841, despite competition moved to Adelaide. from the Union Bank, the business was almost as big as at Sydney and The growth of the banking the Superintendent suggested that department was rapid and by 1842 the head-office be moved there the bank was split off from the from the northern city. It was not South Australian Company as a until nearly ten years after the gold separate business - The South discoveries, when it was clear that Australian Banking Company. The Melbourne had eclipsed Sydney as bank reaped the benefit of the financial capital of the colonies, expansion caused by the discoveries that the head office was moved. The of copper in South Australia in the Union Bank also moved its head 1840s. Fifty years later, when it had office from Sydney to Melbourne in overtraded in a later, great the early sixties. Australian economic boom, the bank was on the verge of collapse and George Fife Angas played a major offered itself to the Union Bank. The role in the founding of the Union Union took it over in 1892. Bank. But Angas was also heavily involved in the Bank of South Gold discoveries had various effects Australia and as a consequence the on ANZ's predecessors; in two cases Union Bank agreed not to trade in it created them: the London South Australia. Chartered Bank of Australia and the English, Scottish and Australian

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Chartered Bank were both floated in 1854 Melbourne, Jackson said, "the 1852. Prospectuses for these banks managers of public institutions in do not survive in the Bank's archive Melbourne live out of town ... the but an article in the Bankers' town is in summer so sultry and Magazine for 185312 described the dusty, and in winter so impassable motives of one "to be buying gold at from dirt and bog, that it is commonly £3.4 an ounce and selling in London regarded as unfit for residence."13 at £4" and the other of benefiting generally from the large banking The Bank of Australasia opened only profits to be made as evidenced by four goldfields branches and eight the large dividends of existing agencies14 between the gold banks. The article decried the discoveries and 1860, indicating potential profits to be made from wariness about the permanency of gold which were seen as having the goldfields. The Union Bank had disappeared with the rise in the gold opened six goldfields branches out of buying price, and went on to the twenty four it operated by 186015 declare that the high dividends while the London Bank had ten.16 were the result of accident through The ES&A Bank was quick to open the banks being fortunate to buy branches but shied away from the gold at cheap prices early on. goldfields with only one branch Nevertheless, the Australian banks opened at Castlemaine in 1863 but went on to become major gold closed the following year. purchasers and shippers. These four Anglo-Australian banks Both the ES&A Bank and the provided the basis for today's bank London bank established head by merging at separate times. As we offices in Sydney but like their two have seen, the Union Bank took over Anglo rivals they too migrated south the Bank of South Australia in 1892. to Melbourne. Ironically the London The ES&A acquired the London Bank Bank moved its head office back to in 1921. In 1951 the Union and Sydney in 1919 just before it was Bank of Australasia merged to form bought by the ES&A. Australia & New Zealand Bank Limited and this bank merged with The ES&A Bank found it difficult to the ES&A to form the present secure premises in either Melbourne company. or Sydney in 1853. Rents and land prices were escalating particularly in The records of these banks, some Melbourne because of the gold fever. largely complete, some very Jackson, the general manager, deficient, are in the archive of ANZ opened a small office in Sydney to Bank. The archival records of the allow him to plan the bank and then nineteenth century Australian banks rented a building in George Street account for about 20% of ANZ's where he opened the first branch in 1,600 metres of records. They October. In Melbourne, he opened comprise minute books, the branch in temporary premises but correspondence, statistical returns, finally secured a respectable office in personnel records, building plans and Elizabeth Street. In 1854, he was photographs. The archive as a discussing with his directors the whole also holds modern storage problems of living in Melbourne. It mediums such as film, audio-visual had not yet become the elegant city tapes and CD ROM. that was to appear in the 1860s. In

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Because of the nature of the banks valley is only expected to in ANZ's pedigree we hold a unique possess one string or lead record of Australian banking. The throughout, and must soon be Anglo-Australian banks, with their worked out - when this boards and management based in bustling and stirring London, required extensive community must migrate to a correspondence and statistical new field. The land worked returns to control their business. The being made valueless correspondence, written weekly and hereafter for any purpose monthly between London and whatever. To add to the great Australia contains an amazing detail danger of trusting or dealing of both banks and the economy in with storekeepers at these which they operated. The places - a fire might sweep the completeness of the record also whole town in a short space - contributes to an important though and no Insurance could be under-utilised historical record of effected for the protection of national importance to the country. such property. An agency of Vivid descriptions of early Australia the London Chartered Bank are held in the records as for had been opened here and the example this description of the other banks were preparing to temporary ‘town’ of Magpie Gully in follow.17 : The workings at this place And again for the now thriving inland extend in a straight line for 3 town of which had, in 1855 a or 4 miles [about 4-6 Main Street which: kilometres] the main Street all ... is a most dangerous and the way through consisting of filthy thoroughfare with stores, public houses. Billiard dilapidated Calico canvas and Rooms, etc packed closely weatherboarded stores, public together. The population houses etc closely ranged on (about 20,000) being either side - at the further end principally engaged in erecting on a rising ground stands the this temporary canvas town. Camp etc, Court House Very few appear to be digging principal Inn and some of the for gold - but a considerable Banks, all miserable sheds - number were shepherding (i.e.) with the exception of the Bank sitting in holes a couple of feet of Australasia built of brick & deep [about 600mm] keeping stone and stuccoed over said possession and watching the to have cost £10,000. The chances of the lead running other Banks here are The Bank under them. These holes, if left of New South Wales, Bank of unoccupied between the hours Victoria, London Chartered from 9 to 12 and 2 to 6 can be Bank, and an agency of the jumped by anyone, that is Oriental Bank - business was taken possession of to the exceedingly dull and very little exclusion of the former gold dust offering.... this field occupant. Several shafts had is at present almost been sunk at the lower end of deserted.18 the Gully some 90 to 130 feet deep [27 to 40 metres] - and At this early period banking at the were yielding largely. The diggings was "chiefly confined to

43 buying gold dust and receiving storage with archival standard deposits" and the banks were very air-conditioning and security "illiberal" in their dealings. The systems. Our offices are comfortable banks were becoming alarmed at and efficient and a small the large amount of dust available conservation studio is provided for and some were considering elementary work. The archive still restrictions on purchase.19 faces all the problems associated with record keeping and, as for Initially the banks relied on gold other archives, electronic records agents to do their purchasing but as are our biggest challenge. the fields developed they employed their own assayers and built their The granting of a Royal charter to own assay offices. These were the Bank of Australasia on 21st May attached to their goldfields 1835 has been seen as a convenient branches of course (the Bank of date out of many which may be Australasia moved one from Daisy regarded as the foundation date of Hill to Avoca)20 but they also built ANZ. This date has been chosen them in Melbourne. When the because the bank was the first of the assayer resigned from the long-term banks to operate manager of the A'sia branch was Australia wide and without the told to remit raw gold to Melbourne charter the bank may well have been until a new man could be appointed wound up. locally.21 The Union Bank converted an out-house at their Melbourne In 1985, to mark the office to "a commodious smelting sesqui-centenary (150th room, [and] erected, three furnaces anniversary) of the bank, a history with chimney..."22 (There are assay was published. ANZ Bank: A History tools from Bendigo on display in of the Australia & New Zealand ANZ Banking museum). By 1877 Banking Group Limited and its the A'sia had had only 27 melting Constituents was commissioned by days in the previous six months and ANZ and written by a highly they dispensed with the assayer's regarded academic historian, David services because of a drop in yield Merrett formerly of Monash and profitability;23 but they still University. This history is a assayed until the early 1920s.24 companion to, and an extension of, Professor S J Butlin's major history of * the Bank published in 1961 to mark ANZ Group Archive is one of the the first ten years of the merger of oldest business archives in Australia the Bank of Australasia and the and was established in July 1951. as Australia As an in-house archive its primary & New Zealand Bank Limited. purpose is to serve the Bank, but many academic historians also seek ANZ also commemorated its access to our records. Areas such as sesqui-centenary by opening the economic, business, local, and ANZ Banking Museum. The museum architectural history are researched. is designed as a public museum that Genealogists are also large users of presents information about our complete runs of personnel Australian banking based on the records. Over 1,600 metres of resources of ANZ. It is one of only records are housed in a standard two banking museums in Australia warehouse with purpose fitted (the other is in Sydney). ANZ

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Banking Museum was opened by the heavily on the Bank's archival State Governor on the Bank's records both for research and foundation day in its present location contents. We keep track of new but was relocated to another part of techniques in museum management the city when the Bank took the and presentation and have looked at decision to restore its fine introducing virtual reality displays, nineteenth century bank building. but like most of you we are The banking museum returned to its constrained by cost - the museum is present location in 1995 after five far from being a core business. years away. Nevertheless, ANZ Banking Museum The museum is managed by archive is, I believe, an appropriate staff with the aid of a design contributor to the museum consultant with whom we have a community in Melbourne and a very strong relationship. Some suitable complement to the three thousand artefacts are adjoining complex of Gothic catalogued according to recognised buildings that is now ANZ Bank's museum standards. Displays draw world headquarters.

BIBLIOGRAPHY

Records. Australia and New Zealand Banking Group Ltd, Group Archive, Melbourne Butlin, S J Foundations of the Australian Monetary System 1788-1851 (1953) Butlin, S J Australia and New Zealand Bank (1961) Holder, R F. Bank of New South Wales: A History (1970)

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ENDNOTES

1 Foundations p.5 2 1 Jan 1810 - 1 Dec 1821. Australian Encyclopaedia (1925), Vol 1, p.567 3 Foundations p.81 4 Foundations p.78 5 Foundations p.110 6 Holder p.18 7 Foundations p.8 8 Sydney Gazette 9 Feb 1833 9 ANZ p.25 10 First report to the Annual general Meeting, 1 Jun 1835. A/180/1 11 ANZ Group Archive. U/1/1. Minutes 12 ‘Australian Banking Prospects’, Bankers' Magazine, 1853 13 E/143/1 GM to Court No 80 of 21 Apr 1854 f254

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14 A'sia branches at Ballarat, Castlemaine, Bendigo, & . Agencies at Amherst, Chiltern, Creswick, Dunolly, Heathcote, Smythesdale, Talbot, & Yackandandah 15 UBA branches at Bathurst, Ballarat, Bendigo, Ararat, Maryborough, & Castlemaine 16 LBA branches at Ararat, Ballarat, Ballarat East, Beaufort, Beechworth, Dunolly, Inglewood, Maryborough, Stawell, & Talbot 17 U/102/4 Inspector to London Manager No 174 of 29 November 1855 18 Ibid 19 Ibid 20 A/279/1 Branch letter book, Castlemaine 23 Feb 1856 21 A/191/6 Acting Superintendent to Manager, Sandhurst No 28 of 27 Aug 1859. 22 U/118/2 Inspector Southern Division to Secretary No 62 of 29 Jan 1859 23 A/8/52 Superintendent to Manager, London No 1810 of 1 Nov 1877 24 A/99/18 Superintendent to Manager, London Conf 768 of 28 May 1923

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