King O'Malley is best remembered as a colourful and at times controversial politician in the period following Australia's federation. He was a significant figure in the initiative to create a national bank with central banking responsibilities.
Who was King O'Malley?
Ambiguity surrounds the early years of King O'Malley's early life. By his own account, he was born in Quebec, Canada, but other sources suggest he began life in Kansas, United States. Following the death of his father in the Civil War, O'Malley was sent to live with his aunt and uncle in New York. He received a very limited education and spent much of his time working at his uncle's small bank between the ages of 14 and 22.
From the age of 22, O'Malley pursued a career as an insurance salesman and real estate agent on the United States' west coast. He migrated to Australia in 1888 – living at first in Melbourne, before Hobart and Zeehan in Tasmania, Coolgardie in Western Australia and Adelaide. O'Malley claimed to have arrived in Australia in Port Alma, Queensland, before journeying on foot to Sydney, then Melbourne and Adelaide – however, historians have regarded the tale of this dramatic arrival as dubious.
O'Malley was elected as an independent to the South Australian House of Assembly in 1896. He avoided an eligibility restriction precluding his candidacy by claiming to have been born in Canada (and therefore a British subject), rather than the United States. As a politician, he advocated fervently for the federation of the Australian colonies. He successfully stood for election to the new federal parliament in 1901. He first sat as an independent before joining the Australian Labor Party, representing mining and pastoral communities in western Tasmania. Despite being a popular and prominent Labor figure, O'Malley was something of an outlier within his party both. This was due to his atypical background and flamboyant style but also his political positions, which were often more radical than those of his caucus colleagues. It was at O'Malley's suggestion that the party revised the spelling of its name to the American style, ‘Labor’, which he argued would present a more modern image.
O'Malley was passed over for ministerial service in the short-lived Reid Labor Government, however with the election of the Fisher Labor Government, O'Malley served as Minister for Home Affairs from 1910 to 1913. He was reappointed to this ministry in the Hughes Government between 1915 and 1916. These appointments saw him involved in projects of national significance, such as the construction of Australia's transcontinental railway.
O'Malley was responsible for the identification of Canberra as the site of Australia's capital city and the selection of architect Walter Burley Griffin's design for it. O'Malley proved himself to be an important ally and enthusiastic supporter of Griffin, whose work was otherwise stymied by bureaucratic and political resistance. The prohibition of the sale of alcohol in the Australian Capital Territory until 1928 was a result of O'Malley's own position as a teetotaller. O'Malley's pocket watch, which was used as the official timepiece at the ceremony naming Canberra as the capital of Australia on 12 March 1913, is on display as part of the Museum's permanent exhibition.
The First World War placed O'Malley in an awkward political position. Whilst he was himself a committed pacifist, the constituency he represented was strongly in favour of Australia's involvement in the war. His anti-war and anti-conscription stance contributed to his alienation from cabinet and his defeat at the 1917 election. Subsequent attempts at re-election in 1919 and 1922 were both unsuccessful. After this, O'Malley withdrew from public life. O'Malley died in Melbourne in 1953 at the age of 99. He was the last surviving member of the first Federal parliament.
O'Malley was a charismatic, gregarious and colourful figure. His considerable intellect and his flair as a salesman contributed to his success both in business and in politics. His mischievous sense of humour charmed many.
King O'Malley and the Bank
Banking had long been one of King O'Malley's keenest interests as a politician. In 1905 he unsuccessfully advanced a proposal for a state-owned bank of deposit and issue to become part of Labor's campaign platform. In 1908, he presented a detailed plan to parliament for the creation of a government owned bank of deposit, issue, exchange and reserve. In pursing these policies, he often met with significant resistance from senior party figures such as William H ‘Billy’ Hughes and Andrew Fisher, who were not persuaded of its immediate necessity. Moreover, Fisher and Hughes favoured a bank that would be commercial in nature and provide competition to the private banks as a repository for savings. The Fisher Government lost office in 1909, before a bank of any kind could be established.
Fisher returned as Prime Minister at the 1910 election and O'Malley was appointed Minister for Home Affairs. O'Malley's lobbying efforts, supported by a ‘torpedo brigade’ of 19 supporters in the Labor caucus bore fruit in 1911, with the government legislating to establish a national bank. However, the form of the new Commonwealth Bank was not what O'Malley had envisaged with central banking responsibilities, with the power to issue money and finance government debt. Nor was it to act as a source of cheap credit for farmers and small businesses. Instead, the new government owned Bank was to be operated on a commercial basis, similar to the privately owned banks already operating in Australia. This was a source of bitter disappointment to O'Malley.
However, over subsequent years, the Commonwealth Bank adopted more of the functions and responsibilities of a central bank. In 1924, it became fully responsible for the issue of banknotes. In 1945, the Commonwealth Bank Act 1945 and Banking Act 1945 were passed, giving a legislative basis to various central banking roles and functions that the Commonwealth Bank had assumed over previous decades, particularly during World War Two. In undergoing these changes, the Bank began to more closely resemble the institution O'Malley had advocated for.
In his later years, he was known to pay visits to the Commonwealth Bank's Melbourne branch and distribute business cards describing himself as the ‘Founder of the Commonwealth Bank’ and published a wide range of literature promoting himself as such. It would be inaccurate to describe O'Malley as the Bank's founder. That this role has at times been attributed to him is partly a reflection at his own talent for self-promotion within his lifetime. The push to create a ‘national bank’ preceded his arrival in Australia by many years and involved a number of significant public figures. Moreover, the institution created in 1911 was one created in a form much more of Andrew Fisher's preference than of O'Malley's. It is, however, fair to credit him with the increased public consciousness of the issue and for rallying support within the governing Labor Party. O'Malley effectively seized important opportunities and his efforts and initiative contributed substantially to the foundation of the institution that later evolved into the Reserve Bank we know today.
The passage of the Reserve Bank Act 1959 resulted in the separation of the Reserve Bank from the Commonwealth Bank, to create a standalone central bank for Australia. After his death in 1953, it was decided by the trustees of O'Malley's estate that the Reserve Bank would be an appropriate home for a number of his personal effects, which have been cared for by the Bank's Archives since their transfer to it in 1964.