Australia's Central Bank

Abstract

O N MARCH 9, I945, the federal treasurer introduced into the Australian House of Representatives two bills,' the purpose of which was to modify considerably the structure of the Australian banking system. The allinclusive and even radical character of these measures resulted in much controversy. This paper attempts to indicate with some degree of objectivity both the content of these measures and those portions of the public debate which were relevant. Indeed, this debate commenced months before the bills were introduced into the House, and there were repeated probings in the federal Parliament to establish the character of the proposed changes. At the same time, there began a series of related propaganda campaigns aimed at preventing the passage of the proposed legislation (the content of which was then only imperfectly known to the trading banks, which were the most interested parties). Alternatively, it was hoped that, by mobilizing public opinion against the proposals and by attempting to bring pressure to bear on parliamentarians of all parties, substantial modifications might be forced upon the government. Meanwhile, the government refused to show its hand until the details were completed and the scheme could be judged as a whole, although the main outline of the proposals appears to have leaked out in various ways. The chief fear in banking circles was nationalization and political control.