After a career at the Bank of Australasia and in Commonwealth Bank branches, Ernest Cooper Riddle became Deputy Governor of the Commonwealth Bank for a three-year term on 10 October 1925. He was appointed as Governor of the Bank for a term of five years from 1 June 1927, then reappointed for a further seven years from 1 June 1932. He was knighted in 1935 (Knight Bachelor). Riddle’s governorship covered the period leading up to and including the Great Depression, and the recovery from it. He retired from the Bank on 28 February 1938 due to ill health.

Personal life

Ernest Riddle was born on 5 April 1873 at Gundermaine Station, near Narrabri in New South Wales, the son of John and Agnes Riddle who immigrated to Australia from Pattingham, England. He was educated at Narrabri Superior School. In 1899 he married Annie Bibby, from Beecroft. They had two children, daughter Enid and son John.

Banking

Riddle began his career in banking as a boy, commencing employment with the Bank of Australasia in July 1889 at the age of 16. There he gained extensive experience in banking, moving across branches and positions within the business. He was responsible for the Hurstville agency of the Bank of Australasia during the 1893 crisis, which saw some banks fail and many suspend payments. The Bank of Australasia was able to remain open throughout the crisis, and continued to operate.

Record of service with Bank of Australasia

Move to the Commonwealth Bank of Australia

Riddle applied for employment with the Commonwealth Bank of Australia on 3 February 1913, emphasising that he was interested in the potential ‘for immediate, as well as future, advancement’. In the initial application, he gave as a reference the Deputy Governor, James Kell, who had worked at the Bank of Australasia prior to the creation of the Commonwealth Bank. The Perth officer who forwarded Riddle’s application onto Head Office, where Governor Miller handled staff recruitment himself, disclosed that it needed to be kept secret as the Bank of Australasia would consider the application to be disloyal. Riddle was offered the position of Manager of Perth branch on 12 April 1915, more than two years after his application. Although he initially gave a month’s notice, the Bank of Australasia released him immediately and he started at Perth Commonwealth Bank on 21 April 1915.

First World War

During the First World War, Riddle applied for leave to serve in the Australian Infantry Force (AIF) but could not be spared from the Bank’s service. He had joined the Australian Military Forces (militia) in 1903 while in Orange, and by the beginning of the war had risen to the rank of major in the Commonwealth Reserve of Officers. Accordingly his services were sought after by the local military authorities in Perth.

The Governor was in favour of able-bodied men answering the call of war but noted that banking was ‘just as important to the country as fighting at the Front’. Eventually the Bank was able to grant permission for Major Riddle to mobilise for short-term duty at Blackboy Hill Camp from 6 to 21 October 1916. In this role he assisted in the training of the militia, commanding No.3 Training Battalion.

In November 1917, Riddle was asked to join the War Savings Committee in Western Australia in an honorary capacity. The purpose of the committee was to carry on a campaign for raising war funds by the sale of war savings certificates. The Bank allowed Riddle to join, emphasising his experience with war loans and war savings certificates through his work with the Bank.

Rapid promotion within the Bank

In March 1922, Riddle left Fremantle bound for London. Regarding the trip, Governor Miller telegrammed: ‘It is intended that you should remain in London for three or four months, in order that you may have the benefit of London experience, and should you desire to return via America, you may, if you so desire, remain in that country for, say, one month, in order to make yourself thoroughly conversant with the financial conditions in USA and Canada’.  

Riddle arrived at London Office on 6 April 1922, leaving England on 9 August, and returned to Australia via America and Canada (Toronto) as suggested, ultimately arriving in Perth on 18 October to return to work as Manager of Perth Branch.

After the death of Denison Miller on 6 June 1923, Riddle was urgently summoned to the Bank’s Sydney Head Office to assume its management. He was not given an appointment immediately but was made aware that a return to Perth would be unlikely.

Next came several senior roles in quick succession. He was first appointed Acting Manager, Head Office, on 9 July 1923. The next year, on 4 January 1924, Riddle was appointed Inspector and attached to Administrative Department. Later that year, in November 1924, he acted as the Bank’s representative at the conference between the Bank and the United Bank Officers’ Association in Melbourne, then became Manager of Melbourne Office on 17 November 1924.

While serving as Melbourne Manager, Riddle received the news that he had been appointed Deputy Governor for a period of three years from 10 October 1925. Advised not to wait for a replacement to arrive, he left Melbourne the next day and took up his new position in Sydney Head Office on 12 October. He was replaced in Melbourne by OA Smith.

The three-year Deputy Governor term was cut short by promotion when Riddle was appointed Governor for a period of five years from 1 June 1927 due to the retirement of Governor James Kell. HT Armitage was appointed Deputy Governor for the same five-year term.

As Governor of the Commonwealth Bank, Riddle served on the National Debt Commission, an authority constituted under the National Debt Sinking Fund Act 1923-1934. This was created in an attempt to address the war debts that had been accrued by Australia during the First World War and from 1924 half of the Commonwealth Bank’s profits were paid into it.

The advent of an Australian Central Bank

Prior to 1929, the only real central banking function managed by the Commonwealth Bank was the note issue. Throughout the 1930s the Commonwealth Bank acquired many more functions, including controlling Australia’s gold reserves, regulating the provision of deficit finance, control of the exchange rate, and influencing domestic interest rates. Riddle was the first governor to contend with these functions as central banking was a relatively new idea and there was no definitive way to proceed.

The Great Depression

Riddle was Bank Governor for the duration of the Great Depression and its aftermath, facing unprecedented problems with Australia’s financial system and its global interactions. He was involved in the visit of Sir Otto Niemeyer from the Bank of England, in July and August 1930 and supported his deflationary stance. The Premiers’ Plan, which was adopted on 10 June 1931, was based on Niemeyer’s advice that budgets must be balanced. Riddle was interested to see if politicians could achieve the plan’s aims.

On 26 May 1932, the Governor-General in Council reappointed Riddle as Governor for a period of seven years from 1 June 1932, with Armitage as the Deputy Governor for the same term. Up until 1934 he worked alongside Chairman of the Bank Board Sir Robert Gibson, who is remembered for his contributions to banking during this difficult time.

Riddle and Professor LG Melville (Economic Advisor to the Commonwealth Bank), attended the Imperial Economic Conference in Ottawa as ‘Advisors on Financial Matters’ to the Australian delegation. The Ottawa Conference was held from July to August 1932, enabling the Great Depression to be discussed among the dominion countries of the Commonwealth. The failure of the Gold Standard, protective tariffs to foster relationships among British Empire countries, and Keynesian theory (where the state plays a role in economic management through spending) were some of the topics discussed at the conference. Riddle exchanged correspondence with Bank Chairman Robert Gibson regarding the conference, which can be found in the Bank’s records. Discussions continued at the 1933 World Economic Conference (also known as the London Monetary and Economic Conference). Representatives of 66 nations attended, including the manager of the London Office of the Bank, JS Scott, who prepared reports to be sent back to Riddle in Sydney. 

Under the Financial Relief Act 1933, on 3 November Riddle’s £4,000 per annum salary was reduced to £3,100. Pay was increased slowly over the years but full salary was not restored until 24 September 1936.

A Royal Commission into the Monetary and Banking system in Australia was launched in 1935, with the final report being issued in 1937. Questions addressed included whether the Commonwealth Bank, in its role as the central bank, could have done more to lessen the effects of the Depression on the country. As the Bank Governor during this period, Riddle gave evidence to the Commission. He was relieved to successfully get through the questioning and his name appears on the witness list for the Commission. However, there is some suggestion that his illness substantially effected his testimony and it was replaced with that of another Bank Board member. The Royal Commission concluded that both good and bad decisions had been made by the Bank during the Depression period, but highlighted that central banking in Australia was a completely new concept at the time and there were no precedents that could have been used to inform decision-making.

Illness and resignation

Riddle was prescribed six months rest by his doctor due to vertigo, which he took from 1 October 1936. A request for a further one month period of leave was lodged on 2 April 1937.

During this absence from the Bank, Riddle travelled overseas with his wife in the hope that a holiday would restore his health. However, his illness worsened and Riddle submitted his resignation for health reasons the next year, received by the Board on 18 January 1938. The Prime Minister accepted the resignation as from 28 February 1938. On 24 February 1938 the Commonwealth Government Gazette made the announcement that the Governor-General in Council had terminated the appointment of Riddle as Governor of the Commonwealth Bank, as from the close of business on 28 February 1938.

Riddle passed away exactly one year later on 28 February 1939 at his home in Woollahra, Sydney. It is believed that the vertigo he suffered from would today be identified as Parkinson’s Disease. Sir Harry Sheehan, formerly of Treasury, was appointed to succeed him as Governor of the Commonwealth Bank.

The Commonwealth Bank Board meeting minutes for 18 January 1938 note:

‘The Board noted the intimation with regret and resolved to place on record its appreciation of the loyal and faithful service rendered by Sir Ernest Riddle to the Bank during his 10 years of Office as Governor and the 12 years in various high executive positions prior to being appointed Governor. The sound banking knowledge, conscientious work and the high standards and ideals which he brought to bear in the execution of his responsible duties have been an inspiration to the staff and of great benefit to the Bank.’

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

Australian Bureau of Statistics (1937), ‘Financial Crises (1929)’, 1301.0 – Year Book Australia, 1937. Available at <https://www.abs.gov.au/ausstats/abs@.nsf/featurearticlesbytitle/244554793484CD12CA2569DE00296988>.

Copland D (1934), ‘The Premiers' Plan in Australia: An Experiment in Economic Adjustment’, International Affairs (Royal Institute of International Affairs 1931-1939), 13(1), pp 79-92. Doi: 10.2307/2603953.

Cornish S (2008), ‘History and the development of central banking in Australia 1920‑1970’, ANU Global Dynamic Systems Centre working papers, no. 3, June.

Kirkwood JA (1988), ‘Riddle, Sir Ernest Cooper (1873-1939)’, Australian Dictionary of Biography, National Centre of Biography, Australian National University. Available at <https://adb.anu.au/biography/riddle-sir-erneest-cooper-8209/text14363>.

Royal Commission appointed to inquire into the monetary and banking systems at present in operation in Australia – Final Report and Letters Patent – 1937. Available at <https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Browse_by_Topic/law/royalcommissions#1920>.

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