100 years of banking in Kavieng – not quite!


FEW benefits came to New Ireland as a result of the Australian military occupation and administration during the First World War from 1914 to 1921. Although the war ended in Nov 1918 the military administration continued until May 9, 1921.
Wireless communications in 1916 and an overseas wharf in 1917 were two benefits and a third – only temporarily as it turned out – was access to ‘public’ banking services, as opposed to financial services previously offered by the larger German companies to their commercial customers.
The influx of about fifteen hundred Australian soldiers into German New Guinea, and the likelihood of them remaining until after the end of the war, whenever that might be, meant that the Australian government could not and would not rely on banking services owned by and controlled by enemy German businesses.
Therefore, in 1915 the Commonwealth Bank of Australia opened its first branch in Rabaul, and in 1916 at Kavieng, mainly to serve the needs of the military administration, Australian soldiers and, as all businesses and plantations were forbidden to trade with the enemy Germany, no doubt to facilitate their obligatory business and trade dealings with Australia.
The Commonwealth Bank of Australia in Kavieng, operated from a two storey building roughly where a road led down to the present Kavieng overseas wharf area, near where the Shell fuel depot is today, and was no doubt very convenient to the shipping and import/export services operated from the new overseas wharf when it opened early in 1917.
The Commonwealth Bank of Australia was the forerunner of the Bank of South Pacific operating in Kavieng today, and we might really have been celebrating 100 years of banking in New Ireland had not history intervened.
When the Australian military administration ceased on May 9, 1921, taken over by the administration of the new League of Nations mandated Territory of New Guinea (TNG) – where very often the same military officials just transferred to the new administration – Australia was no longer directly responsible for, or paying, those soldiers that transferred.
At the end of the war the Treaty of Versailles in 1919 required the German government to pay reparations for the war, and the Australian government, as a means of obtaining reparation, legislated to expropriate all German property in New Guinea and created the Custodian of Expropriated Properties (COEP) to do this.
By 1921 almost all of the Germans had been deported and returned to Germany, almost destitute, the commerce and properties throughout New Ireland and TNG had been expropriated and about 95 per cent of commerce in New Ireland and TNG was owned by and managed by the COEP. A very large enterprise.
There was therefore no need, in the view of the Commonwealth Bank, to continue the banking services operating from Kavieng, particularly as the bank would continue to operate its branch in Rabaul, the capital of the former German New Guinea. Kavieng branch, therefore, closed on Dec 31, 1923 after only seven years.
This necessitated, to the great annoyance of COEP, that they had to maintain large cash advances locally to supply the cash needs of their businesses, including trade stores, plantations, etc. Four years later, in 1927, another bank, the Bank of New South Wales (now known as Westpac Bank) operated in Kavieng serving the many now independently operating plantations and business that the COEP had sold off by tender, the plantations to ex-servicemen, often those who had stayed in TNG working for the administration. Everything halted abruptly when the Japanese invaded in Jan 1942.
Being an Australian government statutory body the COEP was subject to audit by the Auditor General’s office and some of those reports are now at the National Archives of Australia in Melbourne under reference MP 230/13 series and include interesting snippets of information about personnel and plantations in New Ireland.
One snippet, referring to banking in Kavieng, was a list of balances for European, Chinese and local depositors showing that at least one female, Mulienius, had an account. Enterprising and quite unusual for those early days.
After the war in 1945 it was some time before the banks returned to Kavieng and New Ireland. First the Commonwealth Bank of Australia and in the 1970s the Bank of NSW where today both Westpac Bank and the Bank of South Pacific are now operating, maintaining services that one way or another stretch back 100 years to 1916.

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