Savings bank becomes schools institution and symbol of the state's financial independence

The former Savings Bank of South Australia building in King William Street, Adelaide.

Another important lost strand in the history of South Australian business was formed by the Savings Bank of South Australia and the State Bank of South Australia.

The Savings Bank of South Australia started in March 1848 with one employee, John Hector, trading from a room, provided rent-fee by Glen-Osmond Mining Company, in Adelaide's Gawler Place. A month later, the fledgling bank made its first loan, £500, to John Colton who became a successful businessman, South Australian premier, and, in 1875, a trustee on the bank's board.

The bank was based on the ideas of Scotsman, the Rev. Henry Duncan. Before the savings bank movement, commercial banks were not interested in taking small deposits from working class men.

South Australian supported Australian federation in 1901 because it relieved the state of the financial burden of developing the Northern Territory and building an east-west railway link.

But federation, represented by the Commonwealth Bank of Australia, posed a threat to South Australians’ financial independence.

The Savings Bank of South Australia persuaded the state parliament in 1907 to allow almost every public and private school in the state to take penny deposits from children on behalf of the bank.

These school savings accounts quickly became popular. School banking was key in instilling the savings mentality in children and helped to make the bank the largest in South Australia.