Sir Leslie McConnan

Sir Leslie McConnan was the leading Australian banker of his day.  I do not mean by this that he was necessarily the best banker in the narrow, technical sense -- that must be left for others to decide.  But, when the private trading banks needed a champion to take up their cause against the Labor Government's efforts in the 1940's, first, to bring them under close control and, then, when they resisted, to the executioner's block, it was Sir Leslie who filled the role.  His knighthood was a peculiarly fitting recognition.

McConnan was born at Benalla in Victoria in 1887.  His father was a Presbyterian clergyman who had come to Australia from Dumfriesshire in Scotland in the 1880's after completing a divinity course at Glasgow University.  McConnan was proud of his home background;  throughout his life he was accustomed to emphasise that he was "a son of the manse".  Moreover, his youth was a very happy one, replete with all the healthy, outdoor country pursuits dear to a boy's heart.  But it is clear that he was not an average country lad.  In his home, like those of so many Scotch families, there was a taste for philosophical inquiry and many good books.  In his spare time, McConnan loved to ride horses;  but he also read and thought.  There were four sons and one daughter in the family.  After they had accompanied their father to one of his services in a distant church, McConnan and his brothers would first have to unharness the buggy and feed and water the horses.

In later life Leslie McConnan used to claim that his home was rich in everything but money.

He was educated at North-Eastern College.  But his family's material circumstances meant that the sons had to think about supporting themselves at an early age.  When 16, he obtained an appointment to the staff of the National Bank.

Previously he had applied for a job with the Union Bank, but had been rejected on the grounds, ironically enough, that the Bank regarded him as unsuited to a banking career.

After the normal beginning, the career of this conscientious and able youth progressed with some rapidity.  When 22 he began to emerge from the ruck by being appointed accountant at the Bank's Corowa branch.  A few years later, at the age of 27, he achieved his first branch managership.  Then, in 1923, when 36, he was appointed State Manager in South Australia.  There were clearly big things in store.  In 1929 he was made Manager of the Bank's London office, a post often reserved for those marked out for the highest preferment.  He returned to Australia a year or two later to become State Manager in New South Wales.  By 1935 he had completed his long but rapid climb of the bank's administrative pyramid;  he had reached the top-most point.  At 47 years of age he was the chief executive of one of Australia's largest financial institutions, and one of the youngest men ever to occupy such an exalted post.

McConnan was a banker of an unusual kind.  In the last ten or so years of his life at least, he was as much interested in public and political affairs as in the routine of everyday banking.  There is no suggestion that he neglected his banking duties.  In fact, the broadening of his experience and knowledge that came from his outside interests was likely to have better fitted him for the performance of his responsibilities as the top administrator of one of Australia's largest banks.  In any event, the trading banks as a whole might well regard themselves as fortunate in having such a stalwart, well-equipped, front-line fighter in the crucial years when their existence was threatened by the Chifley Government's attempt to nationalise them.

It is important to understand how McConnan came to acquire his great and absorbing interest in national affairs and politics, especially (but not only) where they touched on business and banking.  Up to the time he became Chief Manager of the National Bank in 1935, his experience had been largely confined to the sphere of everyday banking administration.  But he had hardly entered into his new responsibilities as the top executive of the Bank, than the Commonwealth Government instituted a national inquiry into the banking mechanism and national monetary policy by setting up a Royal Commission of six members.  This decision was no doubt largely inspired by the severe economic crisis of the early 1930's which had led to quite a deal of criticism of the private banks and of the administration of monetary policy during the years of the Depression.  McConnan sensed that the findings of the Commission might profoundly affect the whole structure of the Australian banking mechanism and the future of the private trading banks and he threw himself into the inquiry with single-minded zeal.  Thus, almost at the beginning of his tenure of office as Chief Manager of the National Bank, he became heavily involved in unfamiliar and complex matters.  This activity naturally encroached deeply on the time he could give to the internal affairs of the National Bank;  it also opened up for him a new and fascinating field of interest.

Because of the quality of his evidence and his ready willingness to co-operate fully with the Commission in supplying statistics and other data to assist it in its inquiries, McConnan came to be regarded by the Chairman, Mr. Justice Napier, and the other members, as one of the best and most helpful witnesses to appear before the Commission.  McConnan readily conceded the need for greater central supervision over national monetary policy but he was to advocate strenuously that the desired results could be achieved through close co-operation between the central banking authorities and the private banking institutions, without the necessity of legislative measures designed to give the Central Bank substantial powers over the activities of the trading banks.

This was undoubtedly the beginning of the reputation that he was to enjoy as a leader in the banking world until his retirement many years later.  His experience with the Royal Commission also helped to stimulate his interest in the broader economic aspects of banking and to impress upon him the value of the trained university economist.

Not long after the Report of the Commission had been completed, and the inevitable controversial aftermath had died down, World War II broke out and McConnan was plunged again into matters concerned with the broader national responsibilities of the private banking institutions.  He came to represent the trading banks in many discussions and negotiations with the Commonwealth Government, the Federal Treasury and the Central Bank.  By 1941 the inflationary aspects of war-time finance were becoming alarmingly apparent and legislation to control the affairs of the trading banks began to be considered.  McConnan struggled desperately to find some other method than compulsion for regulating monetary policy in line with the needs of war-time finance.  Again he was to emphasise the principle of co-operation that he had expounded to the Royal Commission several years earlier.  Largely due to his efforts, some kind of "gentleman's agreement" was reached at this time between the banks and the Government in regard to the control of banking and the limitation of bank profits.  He was also mainly responsible for a scheme by which the trading banks agreed to rationalise their activities by restricting the number of competing branches in order to release man-power for other essential work in connection with the war effort.  The position as a recognised leader of the trading banks that McConnan had established through his work with the Royal Commission was thus reinforced by his activities during the war.

When, in 1945, the Chifley Labor Government introduced its far-reaching legislation for the control of peace-time banking and, two years later, tried to nationalise the banks, it was only natural that he should find himself in the position of being the main champion of the private banking institutions.  Thus, practically throughout the entire period of his office as chief executive of the National Bank, McConnan was contending with great issues above and beyond the normal activities of a chief manager of a trading bank.

While McConnan did not have the advantages of an advanced, formal education, he became educated through experience.  This process is rarer than is generally believed.  Some, perhaps even many, start from nothing, become successful, rise to the top ranks of business, and yet fail to shake off the shackles imposed by lack of early intellectual training.  Their thinking remains closeted in narrow, inhibiting grooves.  Not infrequently these men tend to despise those with an advanced education.  McConnan, on the contrary, undoubtedly envied them.  He saw clearly the benefits of university study and he was big enough not to delude himself about it.  He sent his own daughter to the University of Melbourne to study economics -- there is no question that he would have liked to have done the same himself.

At the same time, he was probably over-sensitive about what he may have thought of as his educational deficiencies.  A speech he gave at the University of Melbourne is revealing:

It is with much diffidence I stand before this body of trained minds to speak on any subject, and more particularly to speak on or about a subject to which they have given much thought.  My problem is that, among my many short-comings, I have not that great advantage of a university training.  I did get as far as matriculating, but in my lack of wisdom declined the opportunity to proceed -- a matter of life-long regret.  But it is true that I had my compensations.  Some of the years I might have spent at the Melbourne University were spent as a bank clerk in the furthest backblocks of Victoria in the period immediately following the crash of the nineties and the record drought of 1901/2 -- a period of tough living for all.

But, of course, it is out of common hardship that we are drawn more closely to each other, and even if I missed the advantages of all that the Melbourne University had to give, I learned a good deal about the working of the other fellow's mind during our daily struggle for existence.  The University of the Backblocks certainly has something to give.  I know for one thing, I learned English language from the bullock-drivers that I would not have learnt at the Melbourne University.

Following the example of Sir Alfred Davidson at the Bank of New South Wales, McConnan built up within the National Bank a staff of trained economists and statisticians.  His foresight was demonstrated when these people proved to be of inestimable value in the resistance to the bank nationalisation attempt.  He would have been the first to admit that he himself could not have performed his own leading role in that drama nearly so effectively without the skilled assistance of his staff of university-trained advisers.  Throughout his tenure of office as Chief Manager of the National Bank McConnan was never afraid to use the trained experts, but on the ideas and facts they furnished he placed the unmistakable imprint of his own experience and mature wisdom.

His build was of medium proportions:  medium height, medium thickness.  When my grandfather knew him his greyish hair was thinning and his complexion was mildly florid.  He had a typically Scotch, very slightly hooked nose, but his most notable feature was his eyes.  Here his moods were expressed.  They were very dark brown in colour, kindly and smiling when their possessor was in good humour, penetrating and questioning when not.

McConnan always seemed rather anxious to convey the impression of being a simple, homespun person, essentially what one would expect a product of a country manse to be.  Some people were prepared to accept this kind of self-evaluation.  My grandfather felt, on the contrary, that the simplicity which he professed on the surface hid an extremely complex human being.  The pattern of his character was highly involved and was anything bus easy to unravel.  There were often signs of inner tensions and unresolved conflicts.  There were times when the already dark eyes would darken into unfathomable pools of blackness and on these occasions the strong impression one gained was of a brooding, enigmatic, sceptical, almost baffling personality.  What was he really thinking?  Far from being simple, he was the most subtle of people.  He had, too, a fine, sensitive edge to his mind which registered "Stop, Go, Caution".  If he did not fully understand an argument, he relied on this intellectual antenna and it seldom failed him.

But the tensions, if they existed, had nothing to do with neuroticism;  they arose, my grandfather thought, from intellectual difficulties and doubts about the right thing to do, the right course of action to follow, and how to convince other people that what he proposed, in a given set of circumstances, was wise.  Rather than give direct instructions, McConnan always preferred to try to get people to come round to see his point of view, so that they would act voluntarily, convinced that what they were doing was right.

His way of working was distinctively his own.  my grandfather heard him say that he was never at his best in the morning;  he came to his office about 9.30 and often went to lunch early.  In the latter part of the afternoon he used to work up to his top mental pitch;  he seldom left the bank before 6 o'clock, and he often spent the evenings in the city attending committees concerned with public and social work in various fields.  Among other things, he was a member of the Central Executive of the Red Cross and Chairman of the Finance Committee.

Whatever the reason, McConnan had a peculiar aversion to leaving his own office to conduct discussions or negotiations.  He somehow felt much more confident and secure on his home ground, possibly because it gave him a greater sense of power and authority, and he was never entirely happy away from it.

Because he liked plenty of time to think and reflect, he had no great love for routine duties.  His secretary relates that often when she entered his room to see if he wanted anything he would be pacing up and down and would reply, with a twinkle in his eye, "No, I'm all right, I'm just hatching my nefarious schemes".  Hurry and bustle did not suit his particular temperament and he told my grandfather once that his mental and nervous energies were limited and he had to conserve them.  Perhaps he underestimated them:  they were certainly not in short supply in the years of the bank nationalisation threat.  All the same, unlike Massy-Greene and Gepp, work did not make up the whole of his existence.  He liked a certain order in his everyday life and was not happy to see it disturbed.  He played golf regularly on Saturdays.  The momentous news of Prime Minister Chifley's decision to nationalise the trading banks broke on a Saturday morning.  McConnan refused to let it upset his routine:  it was golf as usual.  Newspaper reporters seeking his reaction to the stunning announcement found that they had to wait until his return from the golf course late in the evening.

While in many ways a reserved man, McConnan had a considerable talent for handling people.  He liked to have a chat over a cup of afternoon tea and his approach was friendly and informal.  This was one way of getting information and of keeping his ear to the ground.  He had a keen interest in what was going on in the world.

My grandfather had the impression that he was never entirely comfortable in large gatherings.  Even on committees he sometimes appeared slightly ill at ease, except perhaps where he was completely familiar with the subjects being discussed.  Until the years of the nationalisation attempt he did not do a great deal of public speaking, largely, I think, because he had no taste for it.  He must have turned down numerous invitations.  In many respects he was diffident to the point of shyness.

McConnan had a strong personality, commanding respect.  With the traditional constraint and caution one might have expected in a person of Scotch descent, he played his cards close to his chest.  Except to people who were very close to him (and perhaps not then) I doubt if he ever completely unburdened himself.  Consequently he was hard to know.  It was not easy to win his respect, because he was very slow in arriving at judgments about people -- again the Scotch caution.

But though he could not give of himself easily, he had a genius for friendship, and his circle of close friends embraced people from diverse walks of life.  By his intimate friends he was held in great affection and, one might even say loved.  He had qualities which perhaps fully revealed themselves only to those closest to him:  a whimsicality of manner, a fine, old-fashioned courtesy and gentleness, allied to a good sense of fun.  One always felt about him, too, that he would be a first-rate person to have around in time of personal trouble -- the real test of a man's capacity for friendship.

McConnan had an innate understanding of younger people and they responded to him.  They would often approach him to ask his advice on problems disturbing them.  He would hesitate to be definite.  He preferred to explore their difficulty from all angles, to help them to see it more clearly, and then to decide wisely for themselves.

To those who worked for him he was a kind man and always had close to his heart the interests of his staff.  He was accustomed to refer to himself as an "employee" of the bank, as a "staff man", implying by this that he had a constant concern for the welfare of the staff -- as indeed he did.  Yet, in some ways, he preserved a rather old-fashioned decorum and formality in his everyday relations with his subordinates.  His office, although accessible, was referred to by some as "the throne room" and its occupant would only on rare occasions ask an employee of the bank to be seated in his presence.  Jealous of his high status, he always took pains to see that it was respected and preserved.  He did not invite familiarities.

At the same time he was the opposite of the stiff or officious.  I think he must have been the rare example of a businessman who genuinely hated to give brusque orders or directions.  In this respect, as in others, he was far removed from the accepted notion of a business tycoon, barking out instructions to his subordinates, calling them over the coals for trivial misdemeanours.  I am not saying that he did not like power -- I think he did -- but he liked to rule by example and persuasion and not the force of authority.  There was a rare gentleness in his disposition which made him hate to give pain or offence to others.  He once said to a member of his staff:  "What right have I got to upset another person's happiness or spoil his day".  In this admirable aspect of his nature he must have been nearly unique.

His methods of working were often indirect.  You were never quite sure where you or your business stood with him.  But once you had won his confidence -- and, as I have said, this was anything but easy -- you needed have no fears.

He was always utterly reliable and steadfast in his loyalties.

McConnan was cautious also in arriving at definite conclusions.  My grandfather often had the impression that he hated to make a final, irrevocable decision.  He was loath to commit himself.  Consequently the business one had with him sometimes moved with frustrating slowness.  He would spend hours, days, even weeks, considering a problem, looking at it from every conceivable angle, studying all possible courses of action, weighing one against the other and trying to estimate their consequences.

It would be difficult to conceive of two people more different in their methods and approach than McConnan and Geoffrey Grimwade.  Whereas Grimwade was impatient, unsubtle and direct, McConnan was subtle, prepared to wait patiently for results, and by "indirection find direction out".

It is fascinating to reflect how a man with almost more than his share of traditional Scotch caution, and with a distaste for quick decision-making, came, in the end, to embroil himself so deeply in a great political drama which demanded so much enterprise, high resolve and purpose in its protagonists.  He was determined to fight the Government in its nationalisation "grab" to the maximum of his powers.  He became the unquestioned leader of the cause of the banks, so much so that his fellow chief managers in the other banks often seemed like reluctant followers.  Was this the Scotch "clannish" instinct coming to the fore, the determination to preserve hearth and home and family at all costs against the invaders?  He was not going to sit by and watch what he believed to be rightly his taken away from him -- at least not without the fight of his life.  His Scotch pugnacity was roused.  He marshalled his "clan" and led them into battle to the skirl of the bag-pipes.  This was "his finest hour".

In September, 1944, the Labor Government let leak its intention to continue into the post-war years the rigid banking controls necessary during the emergency of war and to introduce legislation for this purpose.  McConnan decided to hit back at once, but most of his fellow bankers were not altogether ready to follow where he wanted to lead.  They were fearful of departing from their long-standing tradition not to interfere in politics.  Disappointed but not dismayed, McConnan decided, if necessary, to go it alone.  (Later he was joined by the Commercial Bank of Australia, the Bank of Adelaide and the English, Scottish and Australian Bank.)  He prepared a statement to be sent to every customer of the National Bank, explaining that, in the future, their right to borrow money could be jeopardised by the interference of the Government.  Hundreds of thousands of circulars were issued and the verbal fight was on in the press, Parliament and in the streets.

The Labor Government, however, regardless of the protests, introduced its banking legislation into Parliament in March, 1945.  The Bill provided for the continuance, in substance, of the war-time powers of the Central Bank.  The Commonwealth Bank was to control interest rates and the advance policies of the trading banks;  the Special Accounts procedure was to be maintained.

In addition, the Commonwealth Bank Board was to be abolished and the Governor of the Bank was to be responsible for carrying out the wishes of the Commonwealth Government in matters of banking and monetary policy.  The Bill provided that in the event of a disagreement between the Bank and the Government, the will of the latter was to prevail.  This meant, in practical effect, that the Commonwealth Bank was no longer to be a strictly independent institution and that the control of monetary policy would virtually pass from the Bank to the Government.

McConnan vigorously opposed the Bill and especially the provisions relating to the ultimate authority of the Commonwealth Government in matters of monetary and banking policy.  He argued that this would open the gates to political manipulation of the banking mechanism and that, in effect, the Government would be able to withdraw or issue currency and credit without restriction to suit its own political whims or fancies.  Experience in other countries showed that this had often led to unbridled inflation.  The only way of protecting the value of a country's currency was, he contended, to entrust its management to the hands of a soundly constituted and expertly managed central bank free from all political influences.

But perhaps even more important in his mind than the risk of politically provoked inflation, was his fear that government control of the Commonwealth Bank would place the ultimate authority in the hands of those who could not be expected to understand the intricacies of central banking.  He believed the Central Bank, to operate effectively, should command the complete respect and confidence of the community and of the trading banks in particular.

In the hindsight of history, McConnan's attitude on the 1945 Banking Bill appears somewhat conservative.  The 1945 banking legislation was in the matter of final responsibility for monetary policy substantially following the recommendations made by the Royal Commission on Money and Banking in 1937.  Furthermore, in practically all advanced countries it was becoming widely accepted that governments would in future have to take a more active and responsible part in national economic management in many directions.  The demands for full employment, for expanded government spending on social services and, in Australia particularly, on economic development, all indicated the inevitability of greater government control over banking and monetary policy and thus over the banking mechanism.

Did this mean that McConnan, in his attitude to the 1945 banking legislation was out of step with prevailing trends?  On the face of it, he seemed to be trying to sail his ship in opposition to the "winds of change".

There are several things which might be said in extenuation.  It needs to be remembered that in the years round the end of the war, the political atmosphere was highly charged with emotion.  On the part of the banks, there was a real, and not entirely unjustified, fear that the Labor Government was bent on the eventual destruction of the private banks through the nationalisation of banking.  McConnan, quite early in the piece, certainly before 1947, the year of the Bank Nationalisation Act, seemed to be firmly convinced that this was the Government's intention.  After all, it was written into the Labor platform.  And, in the Report of the Royal Commission on Banking in 1937, Mr. Chifley, who was now the Federal Treasurer, had issued a dissent to the effect that there was no possibility of well-ordered progress in a community in which there were privately owned trading banks established for the purpose of making profit.  Moreover, at that time most leading representatives of business believed, not without reason, that in the post-war years a Labor administration would move rapidly in the direction of its ultimate socialist goal.  The future of the war-time government controls was a bone of fierce contention.  It was surely natural that McConnan, who had come to be recognised as the chief spokesman and leader of the private banking institutions, should be caught up in the prevailing mood of the times and leap to the vigorous defence of the system which he sincerely believed to be threatened.

Never, at any stage did he contest the authority of the Central Bank itself and its responsibility for regulating the volume of money and credit in accordance with the national economic interest.  Indeed, his statements of protest against the 1945 Banking Bill indicated that he favoured a stronger central banking institution:  "I urge that the Commonwealth Bank be strengthened not weakened".

There is no doubt that McConnan's attitude was also influenced by a genuine fear of political interference in the day-to-day affairs of the banks as well as of the Labor Government's ultimate intentions.  He was not so short-sighted as to fail to see the inevitability of a greater role by the Central Bank in the sphere of national monetary policy, but his suspicions of the Labor Party led him, in the emotional atmosphere of those times, to go further in opposing the new developments in the field of national monetary and financial control than he might otherwise have done.  Only two years later, in 1947, when the private trading banks were threatened with nationalisation, he seemed more ready to accept the provisions of the 1945 Banking Act and especially the contentious Special Accounts procedure.

Another reason for McConnan's strong opposition to the banking controls could be traced to his deeply felt faith in co-operation as a solvent of many social problems.  He seemed to hold the idea that most of the objectives of the banking legislation could be achieved by responsible, intelligent men working together with the national interest in view, without the need for compulsion or the threat of compulsion.  This doctrine of common-sense co-operation was with him almost a personal philosophy of life.  He had a strong distaste for the use of compulsion in any form in fields far removed from the world of banking.

In August, 1945, the Banking Act was proclaimed.

Section 48 of the Act was the match that set the political and financial world aflame.  Under this Section the trading banks could be compelled to transfer their government and semi-government accounts to the Commonwealth Bank.  In May, 1947, the Governor of the Bank, Mr. H.T. Armitage, sent a letter to McConnan and the leaders of the other banks naming all municipalities and State instrumentalities which would be compelled to bank with the Commonwealth Bank from August 1.  This intimation infuriated the trading banks and was not to the liking of many of the local governing bodies who had long-standing and amicable relationships with them.

A customer of the National Bank, the Melbourne City Council, decided to challenge the constitutional validity of Section 48 before the High Court of Australia and also of Sections 18 to 22 dealing with the Special Accounts procedure.  Some of the trading banks viewed the latter intention with trepidation.  They felt that the Government might retaliate with much more coercive measures, even nationalisation.  In the event the Melbourne City Council confined its challenge to Section 48.  In August, 1947, the High Court ruled that governmental authorities could bank wherever they wished.

This decision, while not vital in itself, raised fears in the Government camp of further action against the Banking Act.  They decided to grasp the nettle and to endeavour, at one fell swoop, to achieve a long-cherished objective of the Labor Party.  On August 16, 1947, the Prime Minister, Mr. Chifley, made the momentous announcement that his Government would nationalise the trading banks.  This entirely unexpected development hit the Australian community with the suddeness and force of an atomic explosion.  McConnan, as Chairman of the Associated Banks, retaliated with the statement that the banks would "contest the legality of the scheme to the last ditch".

The battle had entered its final, climactic stage.  McConnan enlisted the ready assistance of thousands of bank officers in the anti-nationalisation campaign.  They canvassed up and down the country to arouse public opinion against the Government's objective.

On November 27, the Nationalisation Act received the Royal assent.  Legal action by the Banks to contest the constitutional validity of the Act was automatic.  On August 11, 1948, the High Court declared that vital sections of the Act were ultra vires the Constitution.  This was a great moment for McConnan.  In his carefully compiled history of the National Bank, the author, Geoffrey Blainey, writes:  "On the following morning when he entered the banking chamber, on his way to his office, he was spontaneously cheered by hundreds of officers as if the judgment of the High Court was his personal triumph".

An appeal to the Privy Council by the Commonwealth Government and the Labor Governments of New South Wales and Queensland followed.  But whatever the outcome of the appeal, it was now clear that the people would have their chance to express their views of the Government's nationalisation proposals at the General Elections to be held at the end of 1949.

McConnan was convinced the Government could be defeated on the banking issue and he threw himself and the staffs of the banks into the fray.  For many months almost his entire personal efforts were directed toward the defeat of the Labor Government at the polls.  Three weeks before the election hundreds of thousands of letters were sent to their customers by the Associated Banks urging an anti-Labor vote.

Labor was overwhelmingly defeated at the election on December 10, 1949, and there was no doubt that the public resistance to bank nationalisation had been instrumental in its downfall.  Chifley's impetuous decision on Saturday, August 16, 1947, proved to have far-reaching political consequences.  In the history of democracies it would be hard to find another instance where the action of an intelligent, well-respected and, in many respects, outstanding party leader inflicted so much damage on his party for so many years in the future.

Nowhere was McConnan's innate shrewdness better demonstrated than in the methods he pursued in fighting the nationalisation issue.  The strategy and pattern of the campaign were of his own devising.  The argument was simple, homely, direct, a straight appeal to the common-sense and personal interests of the individual citizen.  It had little or nothing to do with the higher flights of economic and political dialectics.  It was directed in the main at the clients and staffs of the trading banks themselves.  McConnan was concerned, above all else, to show how the nationalisation of banking would affect each individual in an immediate, personal sense.  This remained the keynote of his approach throughout, from August, 1947, when the Labor Government's intention to nationalise the banks was first made clear, until the final defeat of its plans at the Federal Election in December, 1949.

The wisdom of this uncomplicated, down-to-earth approach was abundantly vindicated by events.

McConnan's appeal to resist the Government's plans was aimed at the 1,500,000 customers of the trading banks.  Immediately following Chifley's historic pronouncement in August, 1947, McConnan issued a statement:  "Let there be no misunderstanding as to the meaning of the drastic change the Government proposes to bring about.  The clear-cut objective is to ensure Government supervision and control of the financial affairs of every man and women.  Each individual will be compelled to conduct his or her banking account as ordered by the so-called Government bank which obviously cannot be other than an enormous and unwieldy Government department.  Monopolies are always dangerous and the most dangerous of all is a banking monopoly giving as it does complete power not only over the finances of industry but over the finances of each individual".

McConnan was quick to realise that the loyalty of the trading banks' staffs was a critical factor in the fight against nationalisation.  I don't think he harboured, for a moment, any doubts that bank officers would stand solidly behind the banks in their resistance to the Government.  He believed that his own great loyalty to the institution and the system he had served for so many years was paralleled in the feelings of the great majority of bank employees throughout the nation.  But he could take no chances and he played, very astutely, on the feelings of uncertainty and insecurity that had been aroused by the nationalisation proposals.  "I don't exaggerate when I say that anxiety and miserable forebodings are the order of the day in thousands of homes of banking men and women.  The bald position is that bank officers throughout Australia, 20,000 of us, were dumb-founded when, without a word of warning, we heard that our chosen way of life was to be destroyed and that, willy-nilly, we were to be conscripted into the service of the Government -- career prospects and cherished ambitions were to be dashed to the ground without the slightest opportunity being given for defence. ... The Government completely ignored and continues to ignore the thoughts and feelings of bank officers.  It even sneers at our protests against this blatant act of industrial conscription by saying we have no mind of our own.  It is all so thoroughly unfair and cruel that one can well understand the feeling of bank officers that they are being herded like cattle and driven into a thraldom they detest and fear".

Perhaps the appeal was rather overdone.  It seems, in some ways, peculiarly out of character with the sober banker they all knew, with his distaste for exaggeration or over-statement and his obvious dislike of emotion.  But then politics deals in emotions and McConnan knew that the game had to be played out on the political arena and not in the banking chamber.  He had almost certainly weighed the probable impact of such a statement on the public mind which, in times of crisis, can be more susceptible to passion than to cold reason.

McConnan saw, in the loyalty of their employees, the powerful political weapon in the hands of the banks.  There were 20,000 of them spread throughout Australia.  Through their banking duties, they had direct access to 1,500,000 bank customers and, through them, indirectly to the greater part of the Australian electorate.  Here was, in a sense, a ready-made, ideally constructed "political machine" which could be used to upset the Government's plans by bringing about its downfall at the 1949 elections.  In a speech McConnan said:  "Remember the enormous weight of 20,000 bank officers spread throughout Australia, but bounded together in a just cause.  If each plays his or her part we are the most powerful single political unit Australia has ever known.  The daily story of such an army will have a tremendous impact on the public mind".

Booklets, virtually amounting to "campaign directions," were compiled and issued to each member of the staffs of the trading banks through a committee known as "The Bank Employees Protest Committee".  One booklet began with the words:  "Recognising, as we must, the plain fact that nationalising banking can only be defeated finally by the people themselves when they next go to the polls, our immediate duty is to impress this fact on the minds of each of our customers and their friends ... The ability of bank officers to swing sufficient votes to defeat the Chifley Government is beyond question if each applies himself or herself to the task daily".

The staffs of the banks applied themselves to the job which McConnan had set them with spectacularly successful results.  But the major part of the credit for the overthrow of the Government on the nationalisation issue, and thus for the survival of the private trading banks, must be attributed to the astute, persistent, tenacious Scotch fighter who acted as their leader -- a banker with an almost uncanny political sense.

One of the strangest features of this crucial and bitter episode in Australian history is that the leaders of the conflicting factions preserved throughout not merely a healthy mutual respect -- that is not unusual in the generals of opposing forces -- but what amounted to a sincere liking, almost affection, for one another.  McConnan used frequently to refer to the Prime Minister as "old Ben Chifley" and it was well known that Chifley, on his side, had similar feelings about McConnan.  The battle was fought with great intensity and with no quarter given or asked, but between the leaders there was a singular absence of personal bitterness.  This suggests that both McConnan and Chifley had, at root, a kind of tolerant humanity far above the ordinary.

The tremendous significance of the defeat of the bank nationalisation attempt should not be underestimated.  There is little doubt that this was the most vital political struggle since Federation.  The nationalisation of banking would have been something far more than just the nationalisation of a particular industry, important though that industry was.  The Labor Party had long regarded the banking and financial mechanism as the citadel of the free enterprise system.  If the citadel could be overthrown and brought under government ownership and control, the greatest obstacle impeding the advance toward socialism would have been removed and the way would lie open to the eventual realisation of the planned Socialist State.  Control of finance was therefore regarded by the socialist strategists as the Key to the Kingdom.

The plan was eventually frustrated by the simple fact that the Australian people were not prepared to hand over the key.  Chifley's desperate gamble was probably doomed from the outset;  the odds against success were too heavily loaded.  It would be going too far, therefore, to claim that McConnan, or the banks, or the political forces arrayed against socialism, were the saviours of the free enterprise system;  McConnan himself would certainly have been embarrassed to have been so regarded.  But to him, more than to any other individual, must go the credit for the destruction of the plans of the Labor Party in 1947 to make their dreams come true.  The result was, indeed, not merely a major political reverse;  it was a humiliating annihilation from which the Party took 23 years to fully recover.

The political philosophy of the man who played such a vital role in these critical events should be of some interest.  But, like the man himself, it is hard to define.  I doubt whether McConnan himself would have found it easy to put down on paper.  On many large political issues, I don't think he had formed any definite views.  He was certainly strongly anti-socialist -- but that does not tell us much.

He had no liking for change for the sake of change.  He was not a man for broad, sweeping plans and policies of any kind.  He preferred to deal with problems as they arose, and perhaps not always then if they could be safely put aside and forgotten.  Unlike Sir Herbert Gepp, he had no large, general ideas about future economic and social organisation.  Nor was he accustomed to putting much on paper.  He wrote few articles and made few speeches except those on specifically banking topics.  There is little here that would serve as a guide to his thinking on political issues or issues with political overtones.

Like Massy-Greene, he detested the phrase "the new order" which was being used everywhere around the end of World War II.  This did not mean that he opposed many of the ideals and objectives which it was supposed to encompass.  But the phrase suggested to him something revolutionary, something contrary to the dictates of experience and good, wholesome commonsense.  He was, in the very fibre of his being, an evolutionist.  He believed in progress, bit by bit, toward something better, changes made prudently and cautiously, with time to test the good and bad points and to witness their effects.  He did not hold with big jumps in the dark.  He wanted to be able to see as far as he possibly could where he was going to land.  He did not believe in around-the-corner millennia;  life did not work like that.  Consequently he hated quackery in all its forms and those who offered magic wands for the transformation of economic and social conditions.  Commonsense, allied to decent ideals, that was the golden rule of progress.

He believed that improvement in many directions lay through education.  He had played a leading role in the early, formative years of the Australian Institute for Public Policy and it was through this that my grandfather got to know him well.  At that time he had few, well-thought-out views about what the Institute should aim to do or how it should do it.  But he looked to others and particularly to men of a younger generation to come forward with ideas.  In framing the objectives of the Institute (he chaired the committee which was responsible) my grandfather found him cautious, but not conservative.  He was more ready than some to accept the new concepts of full employment and social security and the new ideas on industrial relations.  He was all for a progressive, positive programme;  he believed that socialism could not be fought with a "Maginot Line" mentality.  But he could not be rushed into hasty acceptance of ideas or hasty courses of action.  He liked to brood and ponder on and weigh minutely the suggestions that came before him.

When the drafts of the Institute's statement of policy, "Looking Forward", were finally prepared and put before the A.I.P.P. Council for consideration, he was somewhat less enthusiastic and less helpful than my grandfather and others had expected.  This did not mean that he was discouraging.  Rather one sensed that he was a little unsure of himself, because the policy ranged far and wide and covered areas of thought of which he felt he had little knowledge.  He was understandably disinclined to commit himself wholeheartedly on matters which he did not thoroughly comprehend.  Nevertheless, he put no serious obstacles in the way of eventual publication of a statement which in the event proved to be a bible of reference for those of liberal political persuasion and eventually for the newly-formed Liberal Party itself.

McConnan's conception of the Institute was of a body doing a serious long-range educational programme contributing to a better informed and balanced public opinion.  But he believed that education, like charity, should commence at home and my grandfather heard him say, time out of number, that we must, above all, educate ourselves.  By "ourselves" he meant industrial and financial leaders, employers, top business executives, the people who belonged to the world which he himself inhabited.  He saw very clearly that in the post-war world, business would require men of broad vision and progressive ideas, with an insight into economic and political trends.  This was, I think, his outstanding contribution to the thought of the A.I.P.P., and it revealed a fine humility in the man himself, a quality not always found in those who occupy elevated posts in business and commercial life.

As a top banker, money was the stock in trade of his profession.  Yet he had no love for it as such and, indeed, viewed it with some suspicion.  People who placed money high on their scale of values did not attract him.  Among three other leading businessmen he was once approached by the Melbourne "Herald" to give his advice to young people on how to use £500.  His answer is worth repeating:  "If a young friend of mine asked me how to double his capital of £500, my advice would be 'Don't try'.  The more quickly one attempts to increase his capital, the greater are the risks, risks which will probably result in his losing what he has.  But there is a more cogent reason why a young man should guard against a determination to increase his monetary capital quickly.  As a career, the mere pursuit of money is the most soul-destroying and miserable I know.  Success in such a career almost invariably lowers one's self-respect.  I would suggest to our young friend that he spend at least one half of his £500 on equipping himself at a university or school for his chosen career, be it professional, industrial or business.  I would suggest he spend a bit more on a library and still something more on healthy recreation -- mental and physical -- especially recreation which calls for qualities of initiative and leadership.  With a well-equipped mind, and the esteem of his fellows, his capital will in due course double and redouble itself many times over."

Not long before he died, McConnan returned to his old home town of Benalla to present the prizes at a school speech day.  Amongst the advice he gave to the pupils were the following maxims:

"Great happiness is not to be found in great wealth."

"Health is more a source of content."

"Money is useful, but don't let it become your master."

"Too many people seek to accumulate it for its own sake."

Although McConnan had many of the conventional attributes of the typical Collins Street banker, he was unusual in his taste and talent for politics.  His great success in frustrating the ambitions and in bringing about the downfall of a powerful, well-entrenched Government raises the interesting speculation whether he could have achieved, if the Fates had ordained differently, national prominence in the political arena.  Success in the pursuit of political objectives demands, among other things, patience, persistence, a capacity for manoeuvre, a true sense of timing and, above all, an insight into the minds of ordinary men and women.  McConnan had all these qualities and particularly the last-mentioned.  But I doubt whether he could have been a successful politician.  For one thing he would have found the inevitable compromises too difficult.  Moreover, his inner reserve, almost shyness, and his distrust of any suggestion of histrionics would have been serious drawbacks.  But with wider knowledge of political issues, I can imagine him as a master political tactician.  Other men would have had to occupy the centre of the stage, but McConnan, in the wings, directing affairs by remote control, would have been an invaluable asset to any political party.

It is doubtful whether he knew much about, or had much interest in, the front-line of industry.  He was not a man of vast, wide-ranging knowledge such as Gepp and Massy-Greene;  but then these two were quite exceptional.  But he was not a Collins Street banker pure and simple.  Where banking touched on politics and economics, he was a long way ahead of his colleagues.

While he enjoyed the personal prominence into which he was precipitated by Labor's banking legislation, he preferred in the main to work "behind the scenes" -- not in any sinister sense, but simply because he felt that in this way he could be most effective.  He was often content to leave to others the nominal positions of leadership, but he liked to think that, in the last analysis, the real power rested with him and that, if necessary, he could lead the leaders.  At meetings of the A.I.P.P. he usually said little.  He sat quietly, listened to others talking, and often silently differing.  On important matters he would, when he thought necessary, have no hesitation in voicing his disagreement.  When he did, it was usually decisive.

McConnan possessed great charm of manner, but, in my grandfather's experience, he kept it too often under lock and key.  He had his moods and he didn't care who knew it.  Then one had to move warily.  But at his best he had an old-world graciousness and courtesy, and his handling of people and situations was never crude or rough.  His touch was light and gentle, but none the less firm.

His greatest quality was his hard-headed, down-to-earth acumen and wisdom.  He was never carried away by dazzling ideas or visionary conceptions.  He refused to leave the ground.  He was like an engineer in a mine-field, probing, feeling his way with infinite care, edging forward bit by bit.  In the affairs of the A.I.P.P. his contribution was considerable.  He had a flair for raising money.  He lent an element of stability.  And if he sometimes slowed progress to a walking pace, he, more than anyone else, prevented them from undertaking courses of action which, at best, would have been foolish and, at worst, would have seriously harmed the causes for which they were working.  He could smell trouble a mile off.

In the strictest intellectual sense, McConnan was not perhaps a brilliant man.  But he had what brilliant people often lack, uncommon sagacity and tough-mindedness, and some strange sense which enabled him to see into the mists of the future.  It was these qualities that were largely responsible for a career that carried him not only to the very pinnacle of his profession, but won for him a permanent place in the political history of Australia.