The Constitution
Bank Nationalisation Case
11 August 1948
A law which would nationalise banking in Australia is found to be invalid by the High Court of Australia.
In 1947 the Australian Parliament passed the Banking Act 1947. This Act allowed the Commonwealth – the Australian Government – to compulsorily buy private banks to create a government-owned banking monopoly. Nationalising the banks in this way would give the Government more direct control of the economy.
Before it was implemented, private banks challenged the Banking Act 1947 in the High Court of Australia. The Court found the Act was unconstitutional because the nationalisation of private banks would stop interstate free trade under section 92 of the Australian Constitution. Some justices also found the Commonwealth’s purchase of bank property was not ‘on just terms’ and would violate section 51 (xxxi) of the Constitution.
As a result of this decision, the Australian Government continued to run its own bank and other businesses but could not stop companies from conducting their own interstate businesses. The Bank Nationalisation Case lasted 39 days, the longest in the history of the High Court. It captured headlines around the country and was at the time the most expensive case in Australian legal history.
The Sydney Morning Herald, 12 August 1948
National Library of Australia
The Sydney Morning Herald, 12 August 1948
National Library of Australia
Description
The Bank Nationalisation Case made headlines when the High Court of Australia ruled that the Banking Act 1947 was unconstitutional. The front page of the Sydney Morning Herald newspaper on 12 August 1948 was dominated by stories about the Court’s ruling.