SEVENTY-FIVE years ago this month, Prime Minister Ben Chifley issued a press statement that declared the Labor Government would take steps to nationalise Australia's private banks.
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Chifley's proclamation on August 16, 1947 was perhaps his boldest announcement but ultimately contributed to the defeat of his government.
Post-war Australia had eight private banks including three owned by British interests. They had operated since colonial times and were worth close to a billion pounds.
The banks employed tens of thousands of people and had branches, agencies and offices across Australia and overseas.
The Government intended to absorb these banks into the government-owned Commonwealth Bank and turn Australia into a one-bank town.
There was no Australian precedent for such a measure and, apart from the Soviet Union, few examples of a successful government takeover on such a scale.
The Prime Minister's intention to abolish private banking came from personal experience and his vision of a golden age for Australia.
The men and women of Chifley's generation had been through the 1890s Depression, the Great Depression and two world wars.
These calamities robbed two generations of Australians of opportunities and denied the nation the full use of their talents.
Chifley's Labor Government was determined there should never be a repeat of this catalogue of miseries.
Chifley entered the 1946 election promising a "wondrous commercial-industrial age" and a future worthy of the wartime sacrifices made by Australians.
He outlined plans for full employment, better social services, unprecedented immigration, improved health and education and a resettlement scheme for veterans better than the one their fathers experienced after the First World War.
Chifley's vision of extraordinary opportunities demanded extraordinary action, including government control of banking and credit.
National development was too significant to leave to wealthy bankers interested only in profit.
Banking, along with other industries, had been heavily regulated during the war. Chifley wanted to continue these controls as the economy transitioned from war to peace.
In 1945, his government passed legislation to give the Commonwealth Bank more power and constrain the private banks.
A section of the new laws forced state and local governments to bank with the Commonwealth Bank. This posed a clear threat to some of the most profitable accounts managed by the private banks and they successfully challenged the legislation in the High Court.
Days after the High Court decision, the Prime Minister called an unscheduled cabinet meeting on a cold Saturday morning in Canberra.
Ministers gathered to discuss how the Government should respond to the bank victory. After two hours of discussion, they decided to nationalise the country's private banks.
The ALP had a majority in Parliament and bank nationalisation was law by Christmas.
The first stage of the bank takeover would take one to two years. Bank officers could transfer with the same pay and conditions to the Commonwealth Bank.
The Commonwealth would compensate bank shareholders and acquire the assets and property of each bank.
At first the private banks would become agents of the Commonwealth Bank but in time they would disappear. Banking would become a monopoly.
One mighty government bank would eventually hold the keys to every vault, make the decisions on who got credit and manage the mortgages of Australia's homes, farms and factories.
From 1947 to 1949 the issue divided Australians. Labor supporters and union members applauded the move. Many others saw it as a step toward socialism, even communism.
The banks fought furiously and spent countless millions on advertising campaigns, legal challenges and encouraging community opposition.
Polite, reserved bank officers with their jobs threatened became activists almost overnight.
In the lead-up to the 1949 election, they became one of the best organised political forces Australia has ever seen.
The Liberal Party seized on the issue and Robert Menzies travelled the country condemning the Government.
Labor had no answer for the volume of protest that hit Canberra. Outspent and out-generalled, it lost the 1949 election.
Labor's nationalisation plans were shelved but Chifley as Opposition Leader remained convinced state-controlled banking should play a key role in Australia's future.
Critics called him obstinate and pig-headed. Admirers said his determination to control the nation's credit for the benefit of everyone reflected his lifelong commitment to building a fairer, more equitable Australia.
