A businessman who emigrated from Scotland, Gibson was invited to become a member of the Commonwealth Bank Board of Directors in 1924. Subsequently, he was elected Vice-Chairman, then became Chairman in 1926. Gibson had no specific experience in the operational aspects of banking. However, he had extensive business experience and his role centred on the Bank’s policy decisions and liaising with government. He died in office in 1934. An often controversial and divisive figure known for his strong personality, Gibson was not afraid to disagree with politicians when he thought their proposals were not in the best interests of the Bank or Australia’s financial stability. For example, he notably refused a request from Prime Minister James Scullin for more funding for unemployment relief programs in 1931 during the Great Depression.

Early life

Gibson was born in Falkirk in Scotland on 4 November 1863. He left school, in 1879, at the age of 15 years to join the staff of Camelon Iron Co where his father had become Managing Partner. From 1883 to 1887 he served an apprenticeship with Robert Gardner & Co Ltd, lithographic draughtsmen of Glasgow, and studied art and design at the Haldane Academy (later Glasgow School of Art) in Glasgow. Gibson rejoined Camelon Iron Co in 1887 and was later appointed Manager of the London Office.

On 22 March 1890, Gibson married Winifred Moore at Trinity Congregation Church, Surrey and they left for Australia the same day. They had two sons and five daughters.

Life in Australia

Once in Melbourne, Gibson practised as a designer and draughtsman for six years. In 1897 he founded Austral Manufacturing Co Pty Ltd, producing metal bedframes and other goods mainly for hospitals. This venture met with moderate success. In 1907 he established Lux Foundry, which produced fuel stoves, metal grates, baths and other light casting industry products. Gibson designed the products for both companies and retained controlling interests in them for the rest of his life.

During the First World War, Gibson was appointed Victorian representative on the Central Coal Board (in 1916) and served on the Military Exemptions and Luxuries Board (in 1917). He was also appointed Deputy Chairman of Commissioners of the first Commonwealth Repatriation Commission, and was later appointed one of the Commissioners to administer the Australian Repatriation Act (1917, 1920).

Gibson served as Chairman of the Royal Commission Appointed to Consider and Report upon Public Expenditure of the Commonwealth of Australia with a view to effecting Economies, also known as the ‘Economy Commission’, from 21 November 1918 to 6 April 1921. The Commission was established at the end of the First World War to recommend cut-backs in government expenditure. The first Progress Report of the Commission, published in 1919, found that ‘many large economies in the current expenditure of the Commonwealth are possible and can be made’.

Gibson was knighted for public service in connection with repatriation and other matters during the war period, receiving the Commander of the Order of the British Empire (CBE) in 1919, Knight Commander of the Order of the British Empire (KBE) in 1920 and Knight Grand Cross of the Order of the British Empire (GBE) in 1932.

Gibson was involved with many companies and institutions, mostly prior to his work with the Bank. He was the Government’s representative on the Board of Robert Harper & Company Ltd and on the Board of Commonwealth Refineries Ltd, a member of the Victorian State Electricity Commission, Chairman of Directors of Manufacturers Insurance Ltd (1914–1928), Vice President (1916–1922) and later President (1922–1925) of the Victorian Chamber of Manufacturers, Chairman of the Supply and Purchase Board, Vice President (1924–1927) of the Associated Chamber of Manufacturers of Australia Board, Vice Chairman of the Melbourne Board of the Union Trustee Company, a Director of the National Life Assurance Co of Australia, a member of the University of Melbourne Council, and President of the Made-In-Australia Council.

The Commonwealth Bank Board of Directors

Gibson became a member of the Commonwealth Bank Board of Directors upon its creation in 1924. He was Acting Chairman during the absence of Chairman (Sir) John Garvan, due to illness, in 1926. Shortly afterwards, Garvan’s health problems forced his resignation and Gibson was unanimously elected Chairman of the Board at the meeting held on 13 September 1926. Dr Earle Page, then acting Prime Minister and Treasurer, commented ‘I am very pleased to hear that so able a successor has been found in Sir Robert Gibson, whose career of public service has been singularly distinguished’ (Table Talk 1930, p 12). Page was responsible for the Commonwealth Bank Act 1924, which created the Bank’s Board of Directors. This legislation also dictated that the Chairman of the Board would be elected by the Board, rather than automatically appointing the Bank Governor as Chairman as other banks did. This was seen as a weakness in the legislation by many.

Establishing his dominance of the Board, Gibson interpreted his position in such a way that the Chairman took the responsibility for formulation of central banking policy largely for his own role. The Bank Governor at this time, (Sir) Ernest Riddle, was an experienced former commercial banker and focused on the day-to-day operations of the Bank.

Gibson was not afraid to disagree with Government policies, especially a proposed expansion of credit to be provided by the Bank as Australia’s financial situation worsened. Despite these robust debates, on 10 October 1930, Gibson was reappointed to the Board of the Bank for another seven years. It was a controversial decision that some saw as a serious political mistake which helped to bring down the Scullin Government.

Overseen by Gibson, the Bank’s first economist Professor (Sir) Leslie Melville was appointed to the staff in 1931, for an initial term of twelve months.

The Great Depression

Many scholars argue that one of the causes of the Great Depression was the return to the gold standard after it had been suspended during the First World War. The gold standard determined the exchange rate. Australia did not leave the gold standard until March 1931 and banks, including the Commonwealth Bank, were reluctant to cut interest rates which also slowed recovery.

At a Premiers’ Conference in February 1931, the Commonwealth Treasurer Mr E Theodore put forward an unconventional plan to address the Great Depression by stimulating activity through monetary expansion. The Premiers supported the plan, but Gibson did not. On behalf of the Bank Board, Gibson sent Theodore a letter stating that help from the Commonwealth Bank was conditional on a wide range of significant cost-cutting measures being undertaken first (RBA Archives S-e-21). Theodore attempted to introduce three pieces of legislation to enable his plan. Included was a Commonwealth Bank Bill, which would have removed the gold backing of Australian banknotes. The Bills were rejected by the Senate on the advice of Gibson.

On 3 May 1931, after the collapse of the Government Savings Bank of New South Wales in April, Gibson made a radio broadcast to reassure depositors of the safety of the Commonwealth Bank. He assured Australians that ‘the Bank will never close its doors, so long as the nation itself stands’. This speech was said to have prevented a run on the banks, a testament to Gibson’s standing in the community and the public trust in him. He was active in the negotiations that led to the amalgamation of the Government Savings Bank of New South Wales with the Commonwealth Savings Bank in December of that year. This led to Government Savings Bank account holders finally being able to regain access to their funds, which had been frozen for a prolonged period causing great hardship to many.

Devaluation of the Australian pound took place from late 1929, with heavier falls occurring between October 1930 and January 1931. It was an important aspect of the Australian economy’s road to recovery, aiding rural producers and assisting exports. However, devaluation was opposed by Gibson who remained strongly in favour of parity of the Australian and English pounds. The Bank of New South Wales was the first to encourage other banks to devalue.

Gibson is remembered, more than anything else, for his work during the Great Depression and the early stages of recovery. He supported several aspects of the Premiers’ Plan, a suite of economic policies agreed to by the Premiers of each Australian state in 1931, as a way of ‘fighting our way back to sound finance and stability’ (The Port Macquarie News and Hastings River Advocate 1931, p 4). Many of Gibson’s views were compatible with those of the visiting English banker Otto Niemeyer in thinking that the only way out of the financial crisis was for the states to balance their budgets and stop living beyond their incomes. This idea formed the basis of the Premiers’ Plan. Gibson’s cost-cutting stance during the Great Depression period can be seen as a continuation of his work reducing government expenditure which began with his time as Chairman of the ‘Economy Commission’ earlier in his career.

Illness

During his term as Bank Board Chairman, Gibson suffered several bouts of serious illness that prevented his attendance at meetings. He was absent for three months from 7 June 1927, missed the 10 September 1929 and the 8 March 1932 meetings and was absent for four months from 6 June 1933. During these absences, RB McComas was elected Acting Chairman.

Gibson died on 1 January 1934. A state funeral was held on 3 January in Victoria. The Commonwealth Bank closed during the afternoon as a mark of respect. Gibson was succeeded as Chairman of the Bank Board by Sir Claude Reading, KCMG.

Memorials

Shortly after Gibson’s death, the Victorian Chamber of Manufacturers commissioned a bronze bust of Gibson, which was unveiled by Prime Minister Lyons in December 1934. The Commonwealth Bank commissioned two Gibson busts from sculptor Paul Montford, one for the Sydney Head Office and one for the Melbourne Office at the 129th Board meeting on 7 November 1934, and they were noted as complete in the minutes of the 137th meeting on 28 May 1935. On 28 November 1935, Cabinet decided to commission a copy of the Manufacturers’ bust to display at Parliament House.

A small university of Melbourne scholarship was also established in his memory. A biography was proposed several times, and subscriptions raised, but the idea never came to fruition. Writers suggested for the job included Professor Wood, Edward Shann (Chair of Economics, University of Adelaide), Professor Oliphant (Melbourne University) and Professor Ernest Scott (Melbourne University).

Newspaper reports of the death of Sir Robert Gibson demonstrate the esteem in which he was held by his peers. For example, The Age (1934, p 10) reported Prime Minister Joseph Lyons as having commented:

Australia could never repay the debt she owed to Sir Robert Gibson, who, in the development of the nation itself, as well as in the development of its industries, was a very great figure indeed. As one who had been closely associated with Sir Robert Gibson, during a period of great difficulties, he knew how much the late chairman of the Commonwealth Bank Board did for this country …

The Commonwealth Bank under his control played such a part in the salvation of this country that, in the late chairman’s own words, ‘it seemed to be something in the nature of a fairytale’.

The Advocate (1934, p 7) reported:

Australia had recovered to a degree that was the envy of the world, and for this owed more to Sir Robert Gibson as chairman of the Commonwealth Bank Board than to all the Governments that had been in office in the past ten years, said the Prime Minister (Mr Lyons).

This information is drawn from records held by the Reserve Bank of Australia and the following external sources:

The Advocate (Burnie, Tasmania). 19 December 1934, p.7. Australia’s Recovery. “Largely Due to Late Sir Robert Gibson.” Memorial Unveiled.

The Age (Melbourne, Victoria). 19 December 1934, p.10. Late Sir R. Gibson. Manufacturers’ Tribute. Bronze Bust Unveiled by Prime Minister.

Bank Notes magazine (January 1934). Our Late Chairman, Sir Robert Gibson, G.B.E., Commonwealth Bank of Australia.

Butlin, M.W. and P.M. Boyce (1985), ‘Monetary Policy in Depression and Recovery’, Australian National University Working Papers in Economic History No. 44.

Cornish, S. and Coleman, W. (2014). Making a land fit for a gold standard: Monetary Policy in Australia 1920-1925. Discussion Paper No. 2014-06, Australian National University.

First Progress Report of the Royal Commission Appointed to Consider and Report upon the Public Expenditure of the Commonwealth of Australia with a view to effecting Economies (1919), First Progress Report (R. Gibson, Chairman), Government Printer, Melbourne.

Fisher, C. and Kent, C. (1999). RDP 1999-06: Two Depressions, One Banking Collapse, Reserve Bank of Australia.

The Port Macquarie News and Hastings River Advocate (NSW). 22 August 1931, p.4. Conversion. Sir Robert Gibson’s Broadcast.

Royal Commission into the Monetary and Banking Systems (1937), Final Report (J Napier, Chairman), Commonwealth Government Printer, Canberra.

Schedvin, C.B. (1970). Australia and the Great Depression: a study of economic development and policy in the 1920s and 1930s, Sydney University Press.

Schedvin, C.B. Gibson, Sir Robert (1863 – 1934), Australian Dictionary of Biography, National Centre of Biography, Australian National University, accessed at: <https://adb.anu.edu.au/biography/gibson-sir-robert-6310>.

Sharman, N. (1988). Back of the Bulletin. From the Past in The Reserve Bank of Australia Bulletin, Reserve Bank of Australia, Ambassador Press Pty. Ltd.

Strangio, P., Hart, P. and Walter, J. (2016). Settling the Office. The Australian Prime Ministership from Federation to Reconstruction. Melbourne University Publishing.

Suares, J. (2019). JB Chifley: An Ardent Internationalist. Melbourne University Publishing. Carlton, Victoria.

Table Talk (Melbourne, Victoria). 11 September 1930, p.12. Prominent Personalities Sir Robert Gibson C.B.E., K.B.E. Chairman of the Board of the Commonwealth Bank.

Overview of the records we hold relating to this topic, including records not yet available on Unreserved.