The First 100 Years

A Cairns Institution!


100 Years – The Story of The Cairns Penny Bank 1899-1999

The following information was written & researched by Peter Ryle B.A. (Hon,.) and  Mary McKenzie B.A for ‘100 Years – The Story of The Cairns Penny Bank 1899-1999’ in our Centenary year.

The Cairns Cooperative Weekly Penny Savings Bank limited occupies a prominent position in the finance industry in Cairns. With assets of over $30,000,000, it is one of the largest “home grown” commercial entities in Cairns. Unlike its competitors, the Penny Bank is owned by the people of the district, and its policy is determined by the members of a Board of Directors who live and work in the district. This places the Bank in the unique position of “having a finger on the pulse”, of the Cairns economy. The decisions of the directors are therefore premised on what is best for its customers, and not on what is best for the national policy of a conglomerate bank. This “hands on” policy has seen the Penny Bank provide finance for a range of commercial enterprises in the Cairns district, in addition to the normal range of domestic lending. The history of the Penny Bank could be seen as confirmation of the adage: “Big oaks from little acorns grow”. The modern, vibrant Penny Bank which now serves the people of Cairns did indeed grow from a virtual ‘acorn’.

No record remains to explain why the children’s savings banks that operated in the late eighteenth century used the generic name Penny Savings Bank. In all probability it was because the penny was the lowest denomination full coin in use at the time, and was the one most used by children. Halfpennies (worth half of one penny), and farthings (worth one quarter of one penny) were in use, but were not considered as basic coins.

The English Penny had its origin in the Roman Denarius, which gave rise to the symbol “d” used to signify the penny. Australian coinage inherited this style with European settlement and used it until 1966, when the metric system was adopted. Thus, as in Britain, imperial money was recorded in Australia as £/s/d, for pounds, shillings and pence.

Although some pennies were coined in Australia before federation, the first Australian Commonwealth bronze pennies were made at the Royal Mint in London in 1911. The first issue of pennies featuring the well-known kangaroo on the reverse side was in 1938.

Take care of the Pennies and the Pounds will take care of Themselves.

The story of the Cairns Penny Bank can be seen as synonymous with the story of Cairns. The similarities between the history of Cairns and the history of the Bank are striking. When the first Europeans started to build a settlement on Trinity Bay they were in competition with the larger and stronger settlements at Cooktown and Townsville. Despite the disadvantages of competing with stronger settlements, and the formidable task of building a town on what was for the great part a tidal swamp, the settlement prospered. Larger towns like Cooktown failed to counter the decline in mining revenue, and therefore they withered away. In contrast, Cairns continued to survive and prosper, until it now rivals Townsville as the premier city in North Queensland.

So it was with the Cairns Penny Bank. It began operating when the larger institutions, with which it later competed, were already established, and it survived when some of them passed into history. Although other Penny Banks were established in North Queensland in the same era, none of them survived. Perhaps the survival of the Cairns Penny Bank, like that of Cairns itself, is due to the calibre of its founders, who had a vision for the future. It is no accident that many of the people who were prominent in promoting Cairns in its infancy were also involved in nurturing the infant Penny Bank.

In an era when the traditional banking system is being publicly criticised for cutting personalised services to its customers throughout Australia, the Cairns Penny Savings Bank maintains its “family” touch. Since it commenced operations in 1899, the Penny Bank has provided a continuous service to the people of Cairns and district. During this period, the Bank has shared the burdens of economic depressions with its customers, and helped them manage their funds when the good times returned. Unlike some of the large private banks that closed their doors to their customers when the economy foundered in the economic failure of the great depression of the 1930s, the Penny Bank was always there.

The Penny Savings Bank has resisted the change in culture by the conventional banking system, which has replaced “customers” with “consumers”, and which has seen service give way to product. The original concept of the bank, to encourage thrift and savings, and to help customers attain their goals in a sale economic environment, has remained intact. Although the concept of a “family relationship” between bank and customer has been abandoned by its competitors, the people of the Cairns district have voted in favour of personalised service by supporting the Penny Bank.

The concept of penny savings banks was initiated with the aim of encouraging thrift in young people by having them save small amounts of money on a regular basis. The traditional banks offered only trading facilities at the time and made no provision for children. The instigators of the Penny Bank concept hoped that the accumulation of savings, plus interest, would provide an example to the youth of the day. Hopefully the concept would show them that even small regular savings could accrue over time to provide a valuable resource in the future. In particular, the Cairns Penny Bank was to demonstrate that in addition to the benefits enjoyed by the individual depositor, the accumulated savings of the Bank’s customers provided a valuable source of development capital for the local community. Eventually the Penny Bank was to provide finance for social organisations that today form part of the social fabric of Cairns.

The establishment of a Penny Savings Bank in Cairns was proposed at a meeting on 5 April 1899. The meeting, which was held in the Council Chambers, was chaired by the Mayor, L. Brown. It was attended by a group of prominent Cairns business personalities, including C. Densford, J.G. Hoare, J. Lyons, J. Hyland, J. Crooke, F.J. Wilkinson, J.F. Hollis, and W.J. Hannaysee. The promoter of the scheme, J.G. Hoare, informed the meeting of a similar bank operating in Mackay, and explained the rules and conditions under which it worked. He also tendered a list of influential townspeople who were in favour of the proposal.

In support of the proposal to start a bank aimed primarily at encouraging youth to save, the Mayor stated:

It is Far better for the rising generation to be taught to save money for useful purposes than for them to spend it on merry­go-rounds and passing shows which did them no good. Morning Post 8 April 1899

The meeting resolved, on the motion of F.J. Wilkinson, to establish a bank to be known as the Cairns Weekly Penny Savings Bank. The meeting further resolved that a sub-committee, comprising Messrs Hyland, Hoare, Hollis, Draper and L. Brown, formulate a set of rules to govern the proposed bank. A meeting on the following day adopted the by-laws and appointed officers and directors to serve for twelve months. Mr L. Brown, was elected chairman, with J.G. Hoare appointed secretary. The directors were: M. Boland, J. Hyland, J.F. Hollis, G.R. Mayers, K. Aumuller, J. Lyons, A.J. Draper, J. Cairns, R.R. Miller, H. Barr, L. Brown, and J.H. Castle. The control of the bank was vested in its members, who elected a board of directors to serve their interests.

Many of the directors were prominent in the Cairns business community. Some were in business on their own account, while others occupied prominent positions in commerce. For instance, the Mayor had a photographic studio, Castle was a licensed vanman, and Boland and Mayers were storekeepers. Hollis was the manager of the Queensland National Bank, and Draper, who had arrived in Cairns as a bank manager, had diverse commercial interests. In addition to the chairman, Lyne Brown, at least four of the original directors served as Mayor of Cairns at various times. These included A.J. Draper, who was first elected Mayor in 1 891, and served seven terms in that position over various periods. J. Lyons served as Mayor in 1895 and 1896, and K. Aumuller occupied the position in 1898. J.G. Lyons, the instigator of the meeting that formed the Penny Bank, was elected Mayor in 1911, and served in that capacity again from 1920 to 1923. In view of the considerable differences in banking practices that apply now, it is interesting to consider some of the more unusual rules that applied when the Penny Bank started. The minimum amount that could be deposited at each meeting by a customer was one penny. While this seems an insignificant amount, it would represent an equivalent percentage of average weekly wages to about $1.50 in today’s terms. The maximum amount allowed in any one account was £50. Accounts up to £50 attracted an Interest rate of 2%, but any bonus applied on sums only to £25. It is significant that the children were charged three pence for their passbooks, and any lost passbooks were replaced at the same price. However, in an attempt to encourage its first customers, the Bank provided the first 400 books free.

As the new bank had no funds to commence operations, the directors agreed to contribute 3/- each towards the cost of purchasing passbooks. Tenders were called from local firms to supply these, resulting in the following offers:

Morning Post – 0/- for the first 100, 50/- for 200

Advocate –      35/- for the first 100, 25 /- for the next 100

Mr G. Henderson   –   32/ 6 for the first 100, 50/- for 200

Argus  –   35/- for 100

Mr Henderson’s tender of 50/- for 200 was accepted and the meeting resolved to canvass for more funds to purchase the passbooks and a ledger. The Mayor and J.F. Hollis volunteered to raise the funds. Initially all funds were to be banked in an account in “some local bank” in the names of the trustees of the Penny Bank. When the credit in this account reached £20 and was not required for immediate withdrawals, the amount exceeding $20 was to be placed in the Queensland Government Savings Bank, to be dealt with at the directors’ discretion. Ten directors, Hollis and Brown, Cairns and Aumuller, Miller and Castle, Lyons and Boland, Mayers and Barr, were authorised to receive deposits and attend to withdrawals. The directors would offer for duty on a roster system each Saturday from 2.30 to 4 p.m. They would receive no remuneration for these services.

When one considers the bureaucratic hurdles that now confront a new venture of this kind, and the inordinate time it currently takes to get such a venture “off the ground”, the time span for launching the Penny Bank seems miraculous. The initial meeting to consider the proposal was held on 5 April 1899. However, in less than three weeks the Secretary was able to write to schools in the district requesting head teachers to notify pupils that the Penny Bank would be open for business on Saturday April 22 1899. The opening was well attended, with eighty-six accounts being opened. Total deposits for the first day of business were £17 /1 /9, with individual deposits ranging from one penny upward.3 Morning Post 26 April 1899.

Of interest is the high proportion of Chinese people who patronised the Penny Bank in the period around the turn of the century. This reflected the significant influence that the Chinese merchants and farmers had in the Cairns area. The European families were represented with names such as Boland, Draper, Swallow, Cairns and Svendsons. Prominent among the Chinese customers were Ah Chong, Ah lett, Ah You, Ah Tiy, Ah Kim Tong, Tong Quang Loong, Tong Quong Hoy, and Ah Kim.

Although the idea of a bank dedicated to teaching children the advantages of saving money was universally applauded in Cairns, the local press took advantage of the situation to lampoon the directors. Soon after the Bank opened, the Morning Post commented:

It is reported that one of the directors of the Penny Bank suggested that parents should prevent their children from passing Waters’ Lolly Shop on their road to the Bank. The window show is too tempting.4 Morning Post, 10 May 1899.

The aim of the proponents of the Penny Bank to demonstrate the potential effectiveness of combined savings, even of small amounts, was soon vindicated. By the end of June, only two months after commencing operations, the Bank had a credit of £73/16/11. In keeping with the philosophy that depositors funds be invested in worthy local projects which promised suitable returns, the directors decided to invest up to £ 100 in showground debentures, which promised a return of 8%. The initial investment would be £60, with the balance to be invested as funds became available.

It is pertinent to note that when the decision was made to secure the debentures, at least three of the directors of the Penny Bank were also members of the Cairns Agricultural, Pastoral and Mining Association (AP&M). These were L. Brown, A.J. Draper, and J. Lyons. Despite this situation, no concern was publicly expressed that a conflict of interest might exist. It is to the credit of those involved that none of the directors took remuneration for their services to the Bank, and all investments gave a creditable return.

While the June meeting saw the first investment of Bank funds, it was also notable for the resignation of a foundation member, A.J. Draper, whose business commitments precluded him attending to Saturday banking duties. He was replaced by N.A. Clowes.

The next meeting of directors, which was held on 18 August, was momentous for the Bank. It took place in the School of Arts building, and began an association with the School of Arts that lasted until 1972. This meeting accepted its second resignation, that of M. Boland, who was replaced by J.M. Burrows. The meeting also increased the investment in showground debentures by £50. By the end of the year the investment in these debentures had increased to £200.

The cautious investment policy of the directors paid good dividends for the depositors. At the Annual General meeting in May 1900, the directors declared a bonus of 3% in addition to the interest rate of 2%, giving an effective return of 5%. Total deposits to 30 April were £4, 127, with withdrawals of £144. Further investment in the local community followed. The Cairns Mulgrave Jockey Club, which wished to purchase and improve grounds for a racecourse, offered £5 debentures to a limit of£ 150, with interest at 1 0%. At this time the directors decided to purchase £1 00 in these debentures.

In the first few years the directors were faced with the need to review the bank’s rules to take account of changing circumstances, and to address anomalies not contemplated when the original rules were accepted. Concern was expressed with the rule preventing depositors with accounts holding less than ten shillings from receiving interest or bonus. Some directors felt that this could cause these depositors to lose faith in the process of saving. Most of these depositors were from poor families, and some directors believed that these people needed particular encouragement. While the directors were adamant that no interest could be paid on these accounts, they decided to endeavour to pay a bonus on them. Morning Post 12 May 1900, 6 Morning Post 7 May 1904.

Although some of the directors expressed concern at various times in regard to the debentures in the showgrounds and the Jockey Club, both debts were eventually repaid. During the term of the debt to the Penny Bank, the A.P.&M. Association faced many crises. When the loan was first secured, the show was held at Pryn’s, at the Four Mile, next to the present Woree Hotel. When the Bank expressed concern at the state of the debt, the A.P.&M. Association offered the deeds to their property as security.

Although the A.P.&M. Association had been experiencing steady progress, a cyclone in 1906 caused significant damage to its property. Following further setbacks, the Association conducted an Art Union “to aid in wiping off the liability to the Cairns Penny Savings Bank”. While the Art Union was originally expected to be drawn in February 1908, this did not occur until August 1909. The exercise obviously did not achieve its intended aim, as the annual statement of the Association for 1910 shows that the Penny Bank was still owed £243/12/10.

Despite the concern expressed at many Annual General Meetings of the Penny Bank at the precarious financial position of the Show Association, the majority of directors remained confident that the investment was secure. This confidence was justified when the loan was repaid in 1913.

The loan to the Jockey Club was of particular concern to many members, who were apprehensive about the Club’s inability to meet its financial commitments. Their concern was understandable, given the inauspicious beginnings of the Club. Although the Club was well received when it held its first meeting in 1884, it was almost defunct by 1890. However, under the control of T.J. Byrnes and T. Nesbitt, the Club made a good recovery. The Jockey Club had improved its circumstances sufficiently by 1900 to justify an investment by the Penny Bank. However, a further deterioration in its economic circumstances forced the Bank to request better security for its loan. Morning Post, 7 May 1904.

When concern was expressed at the Annual General Meeting of the Penny Bank in 1908 about the security of the loan to the Jockey Club, the meeting was informed that the bank had agreed to reduce the interest rate. In exchange for this concession, the Jockey Club had issued a real property mortgage over its property at the Four Mile. A claim was also made that three members of the Jockey Club had made themselves personally liable for the debt. However, Mr. D. Miller, a director, observed: “We have nothing in writing to that effect. There appears to be a good deal of sentimental risk about the matter”. When the Chairman commented that he was sure the Jockey Club would repay the money “sooner or later”, he was reminded that this had been a stock subject for six years. Despite the concern of these members, the debt was duly repaid.

Although the period of the First World War had an adverse effect upon the Bank, trading was better than had been expected. In his address to the Annual General Meeting of the Bank in 1918, the President reported that deposits dropped dramatically from 1914 to 1915. However, they had recovered significantly, and continued to rise in each succeeding year. By the end of the 1917 financial year, the annual deposits had reached £900. This brought deposits close to the record of £1,044 in 1914. In spite of the restrictions imposed by the war, the Penny Bank continued to pay a return to its customers of at least 4% during the conflict.

Despite the euphoria that accompanied the cessation of hostilities, the period following the First World War did not bring the expected prosperity to Cairns or to the Penny Bank. Although the Bank continued to make progress, its growth did not reflect the rising population of the district. A variety of factors contributed to the malaise, including widespread industrial unrest, and poor returns in the mining industry. In such adverse circumstances, the directors were pleased to report that the Bank was able to maintain its position as a bank, and its vision for the future.

The 1920s saw changes in the rules of the Penny Bank, as well as changes in the personnel in charge. A revision of rules in 1922 allowed an increase in the maximum balance to be held by depositors from £50 to £200. The method of determining interest rates was also altered, with a fixed rate replacing the director-determined rate. A decision was also made to fix the number of directors at not fewer than twelve, and not more than fourteen. This period also saw the resignation of Mr. Henriques, who had served as Honorary President of the Bank for twenty-five years: He stated that he “was pleased that he left the bank in a very sound position in every respect; the assets were some hundreds of pounds in excess of its liabilities”.

W.J.E. Stillman, who had been vice-president for many years, replaced Henriques. Colonel Currie, who held a prominent position in the education department, filled the vacancy on the board of directors. In nominating him for the position, Mr. Rollwagen, a director, commented that “His position in the school would give him an excellent opportunity of impressing the children with the value and importance of the bank”.

The 1920s were also marked by a move to advertise the services of the Bank more prominently. As the Penny Bank was still using the School of Arts building to conduct its business, it was decided to seek permission from the officers of that organisation to erect advertising signs on the outside wall of their building. While the School of Arts considered the matter, the directors continued to pursue the idea of advertising. Eventually it was decided that in the interim, Messrs Smith, Johnston and Neary should compose some paragraphs to be included in the local press. However, the directors of the Bank continued to press the School of Arts for permission to erect signs.

By 1929, Australia was facing economic hardship again, as the Great Depression of the 1930s began to influence the economy. Unemployment remained high throughout the decade, and finally disappeared only after the commencement of the Second World War. With an economy that was largely reliant on the export of raw materials and agricultural produce, the effects on the Cairns community were catastrophic.

The directors of the Penny Bank were conscious of the extra responsibility imposed on them by the economic climate. They were more vigilant in vetting those who wished to borrow from the Bank, and more cautious in investing the Bank’s funds. Mr. Stillman, the President, explained to members that “due to the prevailing depression it is difficult to get money out at an advantage”. The loan rate had been raised by 0.5% in 1930, but it was difficult to loan money at that rate. Consequently, it was decided to revert to an interest rate of 8%.

The economic depression continued to have an impact on the progress of the Bank. In 1932, at the height of the depression, the President reported that there had been a reduction in deposits. However, the year closed with a credit balance of £476/19 /2 in the Commonwealth Bank, which was regarded as a tribute to the careful management by the directors. The economic malaise continued, and the directors had problems investing the Bank’s funds to advantage. At one time, the Bank had £2,000 in idle money because there was no secure avenue of investment at a reasonable return. By 1935, the return to depositors had dropped to 4%, comprising 2% interest and a further 2% bonus.

It is indicative of the trust placed in the directors that in a time of economic depression, deposits in the Penny Bank increased. Despite the decline in interest rates for depositors, the Bank had continued to grow. Perhaps this trust in the Penny Bank was engendered by the failure of some of the large corporate banks, and the loss of their depositors’ funds.

The rules of the Bank were again amended in 1936 to accommodate changes in social and economic circumstances. The maximum deposit allowed for any depositor was raised to £500. Interest would be paid on every account over ten shillings up to the limit of £500. Interest of 2% per annum would be calculated at the rate of thirty days each month, giving an interest year of 360 days. In a move that was insensitive to the economic hardships of the time, the directors decided that accounts that had not been operated on for one year should cease to attract interest or bonus. In addition, they would be charged one shilling per annum to keep the account alive. This contentious rule was rescinded in 1939 at the instigation of the President, C. Woodward, who thought that it was not equitable to deprive depositors of interest.

The Bank had a change of Presidents in 1938 when Mr. Stillman resigned after having served twenty-five years on the Board. He had been appointed a director in 1912, and elevated to president in 1927. In announcing his intention to resign, he expressed his pleasure that the Bank had never registered a bad debt. He said that “during his time, yearly deposits had increased to £1,921in 1937, though this decreased to £1,584 in 1938. Amounts lent on mortgage had also increased from £2,309 in 1925 to £4,742 at the close of the last financial year”.

At the end of the financial year on 30 April 1939, the Bank held £7,568/2/ 1 on behalf of its depositors. The number of individual deposits for the year was 848, with a total sum of £954/10/6 deposited. Total withdrawals for the year amounted to £1,223/3/6. Although weekly deposits were less than the previous year, the directors were more successful in lending money. The amount loaned out on mortgage increased by £1,068/12/4, making the total invested £5,811/8/5.

The restrictions imposed by the Second World War had an impact on the Penny Bank. The threat of imminent invasion caused an exodus of population-from North Queensland. Cairns, as a seaport, was seen as particularly vulnerable. Consequently, the civilian population dropped considerably. This situation was exacerbated by the building restrictions imposed by the Commonwealth Government to save materials for the war effort. The restrictions made it difficult to construct private buildings or effect repairs. A reduction in interest rates to 5% restricted the earnings of the Bank considerably. In presenting his report in 1945, the President, Mr. A Scott, acknowledged the difficult trading conditions. He explained that the directors had problems placing the funds of the Bank at a satisfactory advantage. Interest and bonus for the year was only 2.5%.

Despite the weak private market for investment during the war years, the Commonwealth Government offered an avenue for investment. It encouraged public and private lenders to invest in war loans to enable the Government to prosecute the war effort. The loans, called Liberty Loans, Austerity Loans or Victory Loans, raised £950 million. The Penny Bank invested £200 in 194 1, with a further £1,000 in a long-term Austerity Loan in 1942. This trend continued in 1944-45, with £3,000 being invested, and a further £2,000 in June 1945. Even after the cessation of hostilities, the war savings certificates were popular. The Penny Bank re-invested most of its certificates in 1948 for a further five years. In addition to these investments, the Returned Services League borrowed £500 from the Bank in 1946 to build the Edmonton Bowling Club.

The Penny Bank was faced with a threat in 1945 when the Chifley Labor Government acted to give the Commonwealth Government increased power to regulate the banking industry. This included the power to regulate the policy of the trading banks, and to put the Government in control of banking policy. The legislation would also give the Commonwealth Bank an advantage over private banks. To protect the Penny Bank against any possible loss of privilege, the secretary of the Bank, Jim Burman, advised the directors to seek registration under the Cooperative Societies Act. He hoped that this action would exempt the Penny Bank from what the directors saw as the detrimental effects of a proposed new banking bill.

The Penny Bank instructed its solicitors to apply for registration under the Cooperative Societies Act. However, the directors were surprised when the solicitors informed them:

“We have to advise having made all searches to ascertain whether your Bank was ever registered as such and it appears to us on the information we have received to date that registration was never effected” J.J. Bell, Mm::Donnell, Harris & Bell, to The Manager, Cairns Weekly Penny Savings Bank, 1 October 1945.

The bank was urged to register immediately as it was necessary under the Acts. Once registration was granted, a license could be applied for under the recent Commonwealth Bank Bill. The Penny Bank was registered as a Co-operative in 1946, and its name was subsequently changed to include the word Co-operative. While the change gave the bank exemption from the provisions of the Banking Act, it was prohibited from carrying on banking business in any part of Australia other than the City of Cairns. It appears that the Penny Bank had been operating from 1899 to 1946 without the sanction of the law. This would explain the speed with which the Bank was able to be brought into operation at the beginning.

When the Commonwealth Government announced its intention to nationalise the private banking system in Australia in 1947, the directors were pleased that their actions were vindicated. Ultimately the High Court found that the Commonwealth Government had no power to nationalise the banks, a decision that was confirmed by the Privy Council in 1949. However, there was never any concern that the directors had made the correct decision.

The 1940s also saw a significant change in the culture of the bank, in that it adopted a more professional mode of operation. The bank changed its place of business from the chess room at the School of Arts building to the offices of its secretary, Jim Burman, whose accountancy office was also in the School of Arts building. Banking operations were conducted in the office of Burman’s accountancy practice, and meetings of directors were held in a shed behind that building. Having its own permanent address had the effect of changing the status of the Penny Bank from an “amateur” children’s bank to a “real” bank that was offering competition to the mainstream banks.

The period fallowing the Second World War saw the emergence of a buoyant economy. This was due in part to the post war reconstruction program of the Commonwealth Government, which was aimed at converting an economy geared to wartime production to one of peacetime production. The economy of Australia also profited from the increased market far primary products as the world recovered from the trauma of the war. Cairns was particularly favoured as the area provided meat, sugar and minerals for export.

The Penny Bank shared in the increased prosperity, with record deposits in 1948. The bank was described at the Annual General meeting in that year as being in an “excellent and flourishing position”. The president informed members that the bank had no difficulty lending money as demand exceeded available funds. However, interest and bonus payments were low at 2.5%, as this was the maximum allowed under the national security regulations. The meeting returned W. Smith & Co. as auditors at £l0/l0/0 {ten guineas) per annum, and Mr. J. Burman as secretary at £312. Advertising was again of concern to the directors. They finally decided to place advertisements each Wednesday and Saturday in the Cairns Post at a cost of five shillings per week.

The 1950s proved to be an era of growth for the Penny Bank. The decade started with record trading for the bank. The increased business prompted the secretary, J. Burman to state in 1951:

“The word “Penny” might well be deleted from the bank’s title as it is now handling large sums of money and the directors have difficulty in coping with the large increase in loan applicants.”

Despite the lack of publicity about the Penny Bank, it was competing favourably with large banks that spent considerable amounts on advertising. The President, R.J. Gorton, commented on this anomaly in 1953:

“People are surprised to hear that we are the concern we are … We do not go in for much publicity and the fact we lend money and are a people’s bank is surprising to many.”

Concern about the lack of advertising to promote the business of the bank was a recurrent theme at meetings during the 1950s. At the 1956 Annual General meeting, the only depositor present, J.W. Crain, suggested that advertising was essential to inform the public that the bank was open to all, and not restricted to children. Eventually the directors decided to enter into a contract with Chas. Blanks to advertise on cinema screens for a trial period of one month. The advertisements were to be shown at the four local cinemas for a period of one week each. Following this test period it was decided to extend the contract to six months. Advertisements were also inserted in the Cairns Post.

The following year, alter expressing confidence in the bank’s future, Gorton again voiced his concern that the bank was not as well known in the district as it might have been:

“There are still a number of residents who regard this bank as a children’s Penny bank, and when they are acquainted with the true position, ore surprised to learn of the facilities offered and available to them. We are in a position at times to make substantial advances on approved security.”

In the present borrowing climate where house loans are often offered on minimal, or even on no deposit, it is interesting to take note of the conditions applicable in past years. During the 1950s and 1960s, a borrower required “approved security” before a loan could be considered. This generally meant that the borrower owned a block of land and had other money in a bank account before they made application. According to long-time depositor and director, Harley Dudley:

“We got our house loan through the Penny Bank. It was very strong on minimum charges for loans. The bank had a very positive effect on our life, but I remember at the time being surprised that to borrow money to build a house you had to have a block of land and at least a quarter of the amount borrowed.”

While this meant that customers had to wait longer before they were eligible for a loan, it also assured that borrowers could not borrow beyond their means. Such policies are grounded on the “bricks and mortar” principle; namely to lend essentially on real estate, and particularly housing. Thus it is rare for borrowers to have to struggle to repay loans, and if problems occur, they usually receive a sympathetic resolution from management. After the death of A. Scott in 1960, George Welch was appointed a director. This was the start of an association with the bank that lasted until 1995. In this time, in addition to acting as a director, Welch served as secretary of the Penny Bank for twenty-nine years. As an accountant in Jim Burman’s office, Welch became familiar with the business of the Bank. When Burman retired in 1962 George Welch took over the practice and became the secretary of the Penny Bank.

The stewardship of Jim Burman and George Welch was vindicated in 1964 when the Penny Bank was especially mentioned in the Commonwealth Parliament as an acceptable institution for the purposes of granting Home Savings Grants to eligible persons. The Home Savings Grant was an initiative of the Government to encourage Australians to save for the purpose of building or purchasing their own homes. The grant applied to·funds saved in a specific home savings account that could be used only for the purpose of acquiring a home.

The 1960s were an important milestone for the Bank and for the directors. The goal of achieving its first million dollars in assets was eagerly awaited. When the prize was close George Welch jubilantly told Bob Gorton, “We’ve nearly got it, Bob”. His faith was well founded. In confirmation of the adage that ” the first million is the hardest to get”, within a decade the Bank had reached its two million dollar mark. This compared with the sixty years taken to reach the first million. The success has continued. The assets of the Penny Bank as at 30 June 1998 were recorded at over $30,000,000. Truly a great achievement for a bank founded on children’s savings.

Although many Board members regarded the progress of the Penny Bank as acceptable, the general changes in banking practices in the 1970s and 1980s put new pressures on the institution. Some directors recognised that changes were required to take advantage of the revolution in banking practice, and a shift in community requirements. In 1989 Bernie Treston suggested that a meeting be called to review the Bank’s position. He thought that the Board should assess the public acceptance of the Bank with a view to making it more acceptable in the modern environment. He also suggested that the Penny Bank should offer more services and functions to compete as a modern financial estabfishment, however, it was stressed that the “family atmosphere” must remain intact. The changes in the provision of services by the Penny Bank that resulted from this review paved the way for the modern banking establishment that now serves the people of Cairns.

In recognition of the present conventional nature of the Bank’s business, as opposed to the once weekly trading offered in the beginning, a Special Meeting of directors was called in July 1987 to consider whether the Bank’s name was appropriate to its present circumstances. Consequently, it was resolved that the “Weekly” part of the name would be removed, and the Bank would be known as the “The Cairns Cooperative Penny Savings Bank”. When this proposal was submitted to Treasury, a response was received that it would consent to dropping the word “Weekly” from the name provided the word “Bank” was also deleted. The directors hastily withdrew this proposal, although the business name “Cairns Penny Bank” was subsequently registered.

In the 1980’s, many significant decisions were made to complete the transformation of the Penny Bank from what could be regarded as an “amateur” operation to a fully professional organisation. Important among the changes were the modernisation of facilities and the acquisition of the bank’s own building. The modernisation process, as advised by director, Daphne O’Neill, included the purchase of computers. In 1981, a Phillips P.300 microcomputer was installed. This innovation allowed the staff to efficiently handle all operations of the business. These facilities were upgraded significantly after the Bank acquired its own premises in 1991. The terminals were linked to the computer at the Calvary Hospital, with Financial Computing Services providing the most modern software available. When the Bank finally acquired its separate premises in 1991, it ended almost a century of operating as an adjunct to other businesses. The Bank originally conducted business in premises owned by the School of Arts. When Jim Burman became the Bank’s secretary, his office, in the School of Arts building, handled all banking transactions. Upon Burman’s retirement in 1962, his accounting practice was taken over by George Welch, who also assumed the mantle of secretary of the Penny Bank. Welch and his partner, Daphne O’Neill, who was appointed assistant secretary, handled the affairs of the Bank. Daphne O’Neill later became the first female director of the Penny Bank in 1972.

The new accounting company, operating as G.A. Welch & Co., bought its own premises at 12 Aplin Street in 1970. The Penny Bank conducted business from this address, which offered more room and better banking facilities. Initially the Bank shared staff with G.A. Welch & Co, but increased trade saw the appointment of employees dedicated to Bank business only. Staff members, including Fay Mellick, who was employed in 1970, and Mary White, who worked with the Bank from 1973, are remembered by many of the Bank’s customers for their courteous attention.

The Bank was faced with significant changes in 1984 when the firm of W. Smith and Co amalgamated with Coopers and Lybrand. This firm had performed the audit of the Bank for 53 years, after taking over the task in 1931 from Lionel Draper. Although Coopers and Lybrand was not available to audit the Penny Bank’s books, Mr K.A. Smith agreed to continue the service until another auditor was appointed. He retired from the position when the firm of K.M. Kehoe and Associates was appointed auditor in 1988. Of more significance, however, was the acquisition of G.A. Welch & Co by Coopers and Lybrand. The Bank was confident of maintaining its identity while working in conjunction with a small firm like Welch. However, fears were expressed that its interests would suffer if it remained connected with a large organisation with no particular interest in banking. The fear that such a large organisation would “cast a shadow over the Bank” and stifle growth fuelled the move for the Bank to become an entirely separate entity with its own premises.

With the acquisition of premises in the National Mutual Building in Grafton Street, the Penny Bank appointed its first Manager, Tony McAlary, who still holds the position (in 1999). The “coming of age” of the Bank was recognised by Tony McAlary when he said: “With my appointment as manager and our move to the National Mutual Tower, the bank achieved its independence”. The Penny Bank had indeed become a “professional” establishment.

In recognition of the professional nature of the modern Penny Bank, Chairman Bernie Treston said at the 94th Annual General Meeting:

“Future Boards may need to be manned by people with professional skills to ensure continued successful growth. In the interest of the bank and future members of the Board, it is necessary to set a remuneration to retain the services of the appropriate quality people on the Board.”

After having served in an honorary capacity for many years, directors were now receiving a small remuneration, and although they were reluctant to increase these fees, it was recognised that reasonable compensation should be made for the time expended in attendance at various director’s meetings.

Like its predecessors, the composition of the present (1999) Board of Directors, reflects a strong interest in local affairs. The tradition of having prominent local citizens as directors of the bank has continued. The present Board of Directors consists of Chairman Bernie Treston, a lawyer; Deputy Chairman Charles Woodward, tourist operator; Secretary Don Smith, an accountant.

The remaining directors are Angela Capitanio, principal of a prominent Real Estate office; Harley Dudley, retired businessman; Mike Schramm, electrical retailer and Randall Wynn, stockbroker. All have strong involvement in community matters around Cairns, and see the Penny Bank as having a special function to perform in the greater Cairns community for the present and future.

The Human Face

Despite the usually sombre view the public had of banks and their personnel, especially in the early part of this century, the Penny Bank and its directors sometimes revealed its “human face”. When this happened the press was quick to comment.

It was customary for the directors who conducted banking facilities each Saturday to provide the local press with a summary of trading for public information. Usually the report was inserted without comment, but this was not always so.

The Morning Post issued a tongue-in-cheek rebuke to two directors who had conducted the usual Saturday banking services in 1904:

“The directors on duty at the Cairns Penny Savings Bank last Saturday were, we trust, not offering a bad example to the children in the matter of intemperance. A slip “was” left at this office, stating that the deposits amounted to £ ….. and the withdrawals to a similar amount. The Post declined to nominate the amount shown, but commented that it was difficult to understand how a director who was about to graduate as an accountant with Honours could make such a mistake as to show withdrawals equal to deposits. The article concluded: “As for the other Director, a thirst is a noble thing to cherish in this climate, but it can be cultivated at too great expense sometimes”.Morning Post 6 December 1904. It appears that while many of the directors held lofty positions in the community, they were no more impervious to human foibles than the rest of us.

It would be reasonable to assume that some rebuke was issued over the incident. However, no explanation or rebuttal appears in the minutes, or was given through the press.

Perusal of the minutes of the early annual general meetings of the Bank reveals that it suffered from public apathy similar to that experienced by most community organisations now. As a public bank provided to handle children’s funds, the annual general meeting required a quorum of parents or representatives. Unfortunately, quite a few meetings failed to achieve this goal. At times, the directors regarded the absence of parents as a vote of confidence in their handling of the affairs of the Bank. However, the apathy of parents and representatives caused some directors to offer questionable solutions to the problem.

When the annual general meeting in May 1904 failed for want of a quorum, some directors blamed the inclement weather. One director, however, blamed apathy. He suggested that a full meeting would be assured if a notice of motion was issued to pay the directors. He thought that this would assure a thoroughly representative meeting and the expulsion of those in favour of the innovation. In reporting the incident, the Morning Post expressed the hope that the “mere suggestion of such action would ensure a good turnout to the next meeting.”

Despite the best efforts of the directors, little improvement occurred in the attendance of parents and representatives. The annual general meeting in 1906 also failed for want of a quorum. One Director expressed his disgust at the apathy of the parents:

“It requires 12 representatives of depositors to form a quorum and if sufficient interest is not taken in the bank by parents and others to induce them to attend a meeting once a year it is possible that the directors will get Mr. Kwong Sue Duck Kee and his numerous wives and progeny who are depositors in the bank to attend “en bloc” and carry out the business”. Kwong Sue Duck Kee was a prominent Chinese merchant in Cairns. Like many of the Chinese inhabitants of the area, he saw the Penny Bank as the ideal institution to instil the concept of thrift in his family.

When there was no improvement in attendance by parents in 1909 the directors recorded a formal vote of censure on parents and guardians for their apathy.” However, this type of castigation had little effect on the attendance of parents and guardians. When their absence was again commented on in the 1910 Annual General meeting, a director, Mr. H. Manners, suggested that the meeting should move to pay the directors £25 and ask parents to comment through the papers. This suggestion, which was given “tongue in cheek”, was received by his fellow directors with laughter. Needless to say, the suggestion was not proceeded with.

A Family Feeling

A consistent theme, which is apparent through the history of the Penny Bank, is the “lifetime” contribution of many directors. Although the directors never received any remuneration for the time they devoted to the business of the Penny Bank, some of them contributed unstintingly for many years. F.H. Abraham served as a director from 1905 to 1944, which was the longest term served by an individual. Another long-term director was George Ernst, who made his time available for thirty-nine years. Like many of the directors who gave their time to the bank, Ernst also conducted a successful business in Cairns. He took over his father’s Bee-hive Boot Shop and expanded the business to become the Bee-hive Sports and Hobby Store. George Ernst reached seventy-four years of age in 1977. The Cooperatives and Other Societies Act decreed that directors must resign when they reach seventy-two years of age. However, a Special Resolution was passed to enable the bank to retain his services.

Another director who had a long association with the bank was P.G. Close, who served on the board for thirty-seven years. Close, who was the Managing Director of the Cairns Post, joined the board as a director in 1928. He acted as treasurer of the Penny Bank from 1943 to 1945. Other directors who were associated with the bank for over thirty years included J.A. Barlow, who spent thirty-six years on the board. Barlow filled the position of president from 1957 until he retired in 1987, except for 1963, when R. J. Gorton occupied the position. In common with many of his fellow directors, Jim Barlow was involved with a variety of organisations in the Cairns district. In addition to his busy life as a partner in Whittick’s Newsagency, he was a Trustee of the Cairns Junior Eisteddfod, a member of the Saint Vincent de Paul Society, and a committee member of the Cairns Agricultural, Pastoral and Mining Association. In addition, Barlow was involved with Rugby League administration at local, North Queensland and Queensland levels. The people of Cairns must have believed the adage “if you have an important job to do give it to a busy person”, because in addition to his other interests Jim Barlow was elected as an Alderman to the Cairns City Council. He held this position for fifteen years.

The “family feel” of the Cairns Penny Bank could best be exemplified by the Woodward family, who have supplied three generations of directors to the Bank. When J.K. Woodward became a director in 1957, he carried on a family tradition started by his father Charles Woodward. Woodward senior served as a director from 1910 to 1919, and again from 1938 to 1945, a total of eighteen years. In addition to his duties as a director of the Penny Bank, Jack Woodward worked as a valuer and auctioneer in conjunction with his real estate business. Jack served on the board of the Penny Bank for the next thirty-four years. He retired in 1990, and his son Charles carried on the family tradition when he was appointed to the board of directors the same year. Charles Woodward, who has various business interests connected with the tourist industry, became deputy chairman in 1993, and remains in that position in 1998.

Another director who has served for a considerable period is Harley Dudley. Harley became a director in 1964 and remains a member of the board. George Ernst, his partner in the Bee-hive Sports Store, who was also his father-in-law, recommended Harley as a director. Harley has seen the meetings of the directors of the Penny Bank progress from a lean-to garage at the back of Jim Burman’s office in Shields Street to the modern amenities at the bank’s registered offices in Grafton Street. The monthly meetings to discuss the business of the bank have been replaced by an efficient banking system where sub-committees handle business in a professional and expeditious manner. A number of directors served for periods of between twenty and thirty years. These included J. Donnelley, who served twenty seven years; A. Blanchard -twenty six years; W.J.E. Stillman -twenty five years; E. Henriques and J.G. Boniface -twenty four years; A.W. Bolles -twenty three years; R.J. Gorton and W.W. Friend -twenty three years, and J. Tatton, who served twenty-one years.

The bank was also well served by its secretaries with three people holding the position for 78 years between them. These were G.H. Thomas -32 years; J.G. Burman -21 years, and G.A. Welch -25 years. Thomas and Welch also served as directors and gave 36 years and 35 years respectively in service to the bank.

1998-1999 Board of Directors

Standing: M.C. Schramm, C.H. Woodward, R.M. Smith, R.G. Wynn Seated: H.K. Dudley, B. Treston, A. Capitanio


Acknowledgement Written & Researched by

Peter Ryle B.A. (Hon,.) and Mary McKenzie B.A

© 1999 The Cairns Co-operative Weekly Penny Savings Bank Limited

First Edition 1999

This book is subject to copyright. No part of this publication may be reproduced or copied by any process whatsoever, electronic or otherwise, without the specific written permission of the copyright owner. No part of this publication may be stored electronically in any form without written permission of the copyright owner.

Enquiries should be directed to The Manager, The Cairns Co-operative Weekly Penny Savings Bank Limited, Cairns Queensland.



The Queensland Government Savings Bank was a bank in Queensland, Australia. It was operated by the Queensland Government.  –

Penny –