Australia-first State Bank of South Australia from 1896 given wider government role under premier John Gunn
South Australian Labor premier John Gunn (at left) in the 1920s gave the state government-owned State Bank of South Australia, founded in 1896, a much wider role in funding government policies. The bank grew to have a five-storey head office at 51 Pirie Street, Adelaide, by 1928.
Images courtesy State Library of South Australia
The State Bank of South Australia – Australia's first – was created in 1896 and owned by the government of South Australia.
The government-owned bank was started in the wake of other Adelaide banks collapsing during the 1890s land speculation crisis. The State Bank of South Australia was founded in 1896 by the parliament with The Advances Bill to set up the bank to benefit primary producers and other industries by providing loans guaranteed by the government at preferential conditions.
A bill based on a failed proposal in Victoria was introduced by the government of premier Charles Cameron Kingston and treasurer Frederick Holder government in 1894 but it lapsed. After it was revived and clarified by Holder in 1895, the bank bill passed both houses of parliament in December that year.
Five bank trustees were appointed: H.M. Addison (chairman),. J.B. Spence, J. Angas Johnson, S. Stanton and G. Inglis. Addison resigned 1897 after being cited as the corespondent in the Nixon v. Nixon divorce case and was replaced by G. Fuller. Inglis became chairman (1900-14) and, when Stanton and Johnson died in 1902 within a week of each other, E.W. Frichauff and A.M. Simpson replaced them.
The trustees selected the widely-experienced public servant Gordon Wright as the bank’s inspector general. Government treasurer Holder gave the bank access to a modest amount of funding to lend money on mortgages. This sum was soon repaid and the bank needed no further assistance. South Australia’s state bank was soon followed in Australia by those in Victoria, Western Australia, Queensland and New South Wales.
During Wright’s 24 years (1896–1920) at the helm of the bank, it funded £7,250,000 of loans to around 10,000 mortgagors. A new Adelaide city building was erected for the bank on Rundle Street east, and opened in March 1915. It soon proved inadequate and, in 1928, a new five-storey building was opened at 51 Pirie Street.
Labor party premier John Gunn (1924-26) gave the bank a much wider government role, resented by the private banks. Gunn’s government empowered the bank to provide funding for 1000 homes for returned servicemen and the needy in the new suburb of Colonel Light Gardens. It became a model of suburban planning and design, bringing home ownership within the reach of many, especially returned servicemen. Gunn also improved public service working conditions, built more roads and encouraged rural settlement with a vision for more trees, access to bore water and agricultural expertise. He increased education spending, provided better medical care and junior technical schools, higher wages for teachers, and more scholarships.
