On The Homefront: Finance

The Second World War applied extraordinary strains to Australia’s economy. Whilst the war was fought off our shores, it was essential to maintain the nation’s capacity to support the allied war effort.

Low unemployment, increased consumer spending power via wage rises, and constrained supply created significant inflationary risks. The Australian Government sought to mitigate these risks and to fund its war effort via a number of measures including rationing, austerity campaigns and a war loans program.

To absorb some of the nation’s spending power, a series of war loans and war savings programs was introduced, including “Liberty Loans”, “Austerity Loans”, “Victory Loans”, “War Savings Stamps”, and “War Savings Certificates”. The loans not only helped mitigate the risk of uncontrolled inflation, but they also helped to finance the government’s war effort. National Savings Stamps and War Savings Certificates were introduced for lower income earners who found it more difficult to invest in the loans. Collectively, they raised £903 million for the war effort – equivalent to over $80 billion in 2026 dollars. Around half the total population of Australia contributed.

Local community organisations, schools, government departments and sections, and businesses helped promote and collect contributions to these loans, which were promoted primarily in terms of nationalism and civic duty, rather than individual gain, although the terms offered were favourable to investors. A sense of competition was also introduced, by the publication, by suburb or town, of the number of subscribers to each loan and the total amount subscribed.

Within months of opening the first war loan, the Queensland Times reported on 6 June 1940 the names of 15 local War Savings Groups. The formation and running of the groups was supported by a local executive committee comprising Messrs J.S. Heslop, J.G. Bishop, H.L. Grover, W. Medley and H.S. Shapcott.

For example, the Railway Workshops Shop and Job Committee was commended for its support for the loans and savings programs. Local businesses such as Cribb & Foote, Beirne Pty Ltd, and Duncalfe’s Men’s Store paid for full page Queensland Times advertisements promoting investment in the loans, and the newspapers published lists of subscribers.

The war loans program not only funded the war effort and protected the population from the effects of inflation, but the savings it generated contributed meaningfully to many Australians’ financial security in the post-war period. The maturation of these loans and savings bonds brought about a significant transfer of wealth from the state back to individual citizens.

School Banking

Irma Deas, the editor of Bremer Echoes, an Ipswich Genealogical Society publication recounted the story of school banking in the 1940s and 1950s.

“It is Wednesday do not forget your bank book” – was a call each week to remind us when we went off to school to take our Commonwealth Bank Pass book and some coins to bank.

 

Not every child was lucky enough to be able to use school banking, as in the 1940s and 50s many parents could not afford money each week for their children to bank.

 

I grew up in the country, and I do not remember any child who had more than a shilling [10 cents] each week to add to their slowly growing bank balance. When the child left school after Scholarship, they could continue using their Pass Book at the Commonwealth Bank, thereby adding to their savings.

 

Most children had a tin Commonwealth Bank Money Box, which was sealed, and when it was full it was taken to the bank, or in small towns it was the Post Office which was the Agent for the bank. There the box would be opened with a tin opener, the money counted and entered into the bank pass book and you would be presented with a brand new money box, to start saving again.