The Commonwealth Bank of Australia was only two years old when the First World War broke out in 1914. Despite being in its infancy as an institution, the Bank readily took on the challenges and responsibilities of providing financial support to individuals and the nation as a whole during the war and its aftermath.

One of the areas in which the Bank was particularly involved was assisting in the organisation of Australia’s war finances. Between 1915 and 1921 the Bank managed the raising of seven war loans and three peace loans from the public. These were used to cover Australia’s war expenses including the repatriation of soldiers after the war. The Bank was also responsible for maintaining the stability of the currency. This included responding to the note shortage that occurred shortly after war broke out by issuing an emergency issue £1 note, commonly referred to as the ‘Rainbow Note’.

In addition to these responsibilities, the Bank needed to be able to continue to provide banking facilities to Australians. This required the hiring of additional staff, predominantly female, to handle the increased workload and compensate for the absence of the staff who had enlisted. The Bank also expanded its services in order to provide members of the armed forces with access to banking facilities. This included opening additional branches near to where the troops were quartered in England, expanding the range of services available at its branches, and making arrangements with overseas banks and the Defence Department to ensure that servicemen could access their money almost everywhere.

Financing the war effort

The Commonwealth Bank’s main role during the war was to assist the Australian Government in raising funds for the war effort. Initially the government intended to finance the war through revenue. By 1915 this method had proved insufficient with war expenditure almost 25 per cent higher than projected revenue. War loans already received or promised by Britain provided some assistance. However, it had become clear that Australia would need to finance its own share of the war expenses. The government decided to raise loans in Australia and entrusted the Commonwealth Bank with the management of these loans on its behalf. The public were asked to lend money to their country in exchange for war bonds which could be taken up as either inscribed stock or Treasury bonds. The bonds were made available to all Australians, even soldiers serving overseas, with instalment plans and advances offered to ensure the maximum number of subscriptions.

The First War Loan was announced by the Prime Minister, Andrew Fisher, on 1 July 1915 asking for £5,000,000. The public’s patriotism and enthusiasm to support the war effort led to the loan being oversubscribed and over £13,000,000 being raised. In total, seven war loans were announced with every loan raising more than the amount asked.

The Commonwealth Bank ran a series of publicity campaigns to encourage the public to subscribe to the loans. Initially, these campaigns were limited to advertisements in newspapers, banks and post offices but, as the war continued and the public were asked to raise increasingly large amounts of money, these campaigns became larger. In 1918, the Sixth and Seventh War Loans each asked the public to raise £40,000,000. Realising the enormity of this task, the Bank launched a number of publicity stunts including Tank Week, where the public could subscribe to the loan at various model tanks that travelled around Australia, and the building of the model destroyer, HMAS Australia, in front of the Commonwealth Bank Head Office in Moore Street (now Martin Place).

After the Armistice was declared, Australia was still in need of money to help in the resettlement of the returning soldiers. In the three years following the end of the war, three additional loans were announced now renamed ‘peace loans’. In order to maintain enthusiasm for supporting the loans, returning soldiers were used to bring a fresh realism to the war and remind the public how their money would be spent. This new strategy was successful and each of the three peace loans were oversubscribed. In total, the Australian public raised over £250,000,000 for the war and peace loans floated by the Commonwealth Bank.

Banking arrangements for the armed forces

From the outset of the war, the Commonwealth Bank made every effort to ensure banking services were available to all members of the armed forces. One of the earliest decisions made by the Bank allowed Australian banknotes to be cashed at par in other countries without charging a transaction fee. By the end of 1914 the Bank had also taken steps to ensure that servicemen could have access to banking facilities. They coordinated with the Defence Department to allow a Commonwealth Bank presence in the training camps in Australia every payday to help open savings accounts for the men. They also made savings bank facilities available to the Australian Expeditionary Force upon their arrival in England at the Commonwealth Bank branch in London. These facilities included a system wherein the men could draw part of their pay with the rest being deposited into a savings account at the Bank by the Pay Corps master which, at their instruction, could then be accessed by the men overseas or by their relatives in Australia.

The Bank also made arrangements for troops to be able to access their money overseas where there weren’t existing Commonwealth Bank branches. Credits were established with the Anglo-Egyptian Bank in Cairo to provide banking facilities for men training in Egypt in preparation for the Gallipoli Campaign. The Bank even started planning to open a branch there. However, the campaign ended and it was decided to abandon the idea. In England, the Australian troops were chiefly quartered on Salisbury Plain so the Bank opened branches at nearby Tidworth in 1916, and later at Warminster, Weymouth and Hurdcott. The Bank also made provisions for men in the navy by creating branches in the various naval facilities. They had already established Savings Bank Agencies on most ships in His Majesty’s Australian Navy in 1912–13 and now the Bank proceeded to arrange that all war ships and naval bases were attached to agencies of the Commonwealth Bank so that the Bank could cable money to the paymasters onboard. This arrangement was finalised by 1915. In this way the Bank’s arrangements enabled any Australian in the armed forces, who had filled out the appropriate requests before leaving Australia, access to their money almost anywhere. The one exception was in the theatres of war, where it was still necessary to rely on paymasters.

Emergency issue banknotes

One of the Bank’s main responsibilities is maintaining the stability of the currency. Shortly after the outbreak of war in 1914 there was a shortage of notes. This led to the Bank issuing an emergency issue £1 note in 1914 that became known as the ‘Rainbow Note’. The note was more basic than others in circulation meaning that it could be printed and put into circulation quickly. However, the basic design of the note also meant that it had few security features and consequently counterfeits began to appear soon after the note was released. The note was therefore issued for only a brief period between November 1914 and April 1915 before being withdrawn from circulation.

In 1916 the rising price of silver led to concerns that the 5 shilling coin would soon become more expensive than its face value. In response to these concerns, a 5 shilling note was prepared, however the situation did not eventuate and the note was never issued.

Bank staff during the war

For Bank staff, the war meant a larger workload and longer hours due to the increased volume of business and the need to compensate for the absence of staff who had enlisted. To alleviate this, temporary clerks, predominantly female, were hired. These temporary female clerks were restricted in the extent to which they could assist with the workload as the Bank’s policy, as set out by the Governor, meant that women could only be employed on specialised tasks and not general banking work. After the war, only a small number of these women continued working for the Bank, but those that did were generally given permanent positions on the staff.

The Commonwealth Bank’s London Office was the most affected by the staff shortages. This was mainly due to the Military Service Act 1916 passed by the British Government in January that introduced conscription in Britain. The May amendment to the Act meant that all men who had been resident in Great Britain since 4 August 1914 and were between the ages of 18 and 41 were included under this legislation. By the end of 1916, all of the male staff in the London Office had been conscripted with the exception of the manager. During this time the number of female staff had increased to 150, with there having been only one female when war broke out in 1914. To further assist with the staffing problems at the London Office the Bank reached a compromise with the Army Council that allowed the Bank to take on a temporary staff of Australian soldiers who were either unfit for service or temporarily unfit while recovering from illness or injury. Preference was given to men from the Commonwealth Bank’s Australian staff who had enlisted or else any men with banking training.

In total, 206 members of the Bank’s staff enlisted over the course of the war. Not all who wished to enlist were able to because a bank clerk was considered a reserved occupation and therefore not all members of staff could be released for service. The Bank also made the decision that those under 21 could not be spared as they were not considered sufficiently mature to go on active service.

The Bank staff who didn’t serve found various ways to support their colleagues serving overseas. At Head Office the Patriotic Club was formed, which had a membership of around 275. One of their main activities was to conduct a booth outside of the Bank’s entrance in Moore Street (now Martin Place) where they sold articles and collected donations, raising over £850. They also prepared and despatched Christmas parcels to every member of staff on active service wherever they were in the world. In addition, the staff magazine Bank Notes was started in December 1918 and sent to all staff on active service as well as to all of the branches around Australia. It provided a medium through which letters from the servicemen and bank news could be reproduced and seen by all members of the staff in Australia and overseas.

From May 1918 to July 1919, the female staff of the Commonwealth Bank participated in the ‘strong posts’ started by the Minister of Recruiting, RB Orchard CBE. These were organised points along the routes that soldiers marched through the capital cities where people would gather to cheer the men as they passed. The Bank’s strong post was located outside its Head Office in Sydney. Waving flags, the female staff handed out cigarettes, flowers, cards and confectionary to the men as they marched past.

War service homes

In the aftermath of the war Australia found itself with a shortage of houses for the returning servicemen. The War Service Homes Act 1918 aimed to help address this shortage by providing homes for Australian soldiers and their dependents. It established a program wherein any eligible person could apply for assistance to build or purchase a house up to the value of £700. The program was open to any member of the military, naval or medical corps who saw active service outside Australia provided that they were married, about to marry, or had dependents. It was also available to the female dependents of servicemen whose husbands or sons were no longer able to support them.

The War Service Homes Commissioner was responsible for the execution of the Act and appointed the Commonwealth Bank to act as his agent. In this role the Bank handled the eligible applications for the Commissioner. The Bank could purchase existing homes, discharge a mortgage, or purchase vacant land and build a property based on a standard set of plans and specifications. The plans were prepared by John and Herwald Kirkpatrick, the same architects who worked on the Commonwealth Bank Head Office in Sydney. In total, the Bank approved 9,900 applications as part of this program.

This information is drawn from records held by the Reserve Bank of Australia Archives.

Researchers interested in this topic may also wish to view the Reserve Bank of Australia Museum’s online exhibition From Bank to Battlefield which explores the role of the Bank and its staff during the the First World War.

The records in the London Letters series contain materials sent between the Bank’s Head Office and London Office during this period. Topics covered include war loans, staffing, conscription, military banking arrangements, additional branches for servicemen, London funds and general banking business. The Archives also hold records of general banking activity during this period including depositors’ ledgers, security registers and accounting statistics. The majority of these are available on Unreserved.

Also available on Unreserved are photographs, booklet, pamphlets and works of art relating to the First World War and the Bank’s activities during the war and its aftermath. Topics covered include:

• Bank branches for military personnel
• Fund raising by staff
• Group photographs of staff from various branches
• London branch
• Savings bank facilities at military camps
• Staff at work
• Strong posts
• War and peace loan publicity campaigns
• War loan departments
• War service homes
• War service homes during construction

In addition, the following materials are not currently available on this site, but are available on request. To request to view these materials please contact the Archives.