24 SEPTEMBER 1991: RICHARD RAXWORTHY TALKING TO LEN TALTY
I will ask you Mr Talty where were you born and when?
LT: I was born in Brisbane on 29 December 1922.
You grew up around the area your were born?
LT: Spent all my childhood on the south side, some four years after I was born out behind what is now known as Woolloongabba and after the War and on marriage moved back to the district in which I was born and have been there ever since at Bardon on the north-west side of Brisbane.
Not far from Merv Callaghan I suppose.
LT: I know him well.
What sort of influence do you think you got from your parents?
LT: I think the most important influence that my parents had on me was that my mother was Irish in the sense that she migrated with her parents in her very young years and was of that generation of Irish that were particularly religious and practising and with a very real fear of God and sin and wrong-doing. That was inculcated into all of us. On my father’s side I think probably more than anything achieved, or received, a love of the sea and all things maritime.
Did he go to sea?
LT: No, but he was a very avid sailor on Sydney Harbour. He was born and bred in Sydney and was a very active sailor, as a lot of Sydney youth were and are.
What did he work at?
LT: He was basically a baker and in my time, from 1922 on, he had come to Brisbane to marry my mother, whom he met on a interstate cruise. From thereon he was a part-time baker and predominantly a commercial traveller for Warwick Farmers’ Milling Company and for Brown and Kidd Bakery Machinery, which in those days was the General Motors style machinery used by bakers throughout Australia really.
I think it still is too.
LT: Yes it is. It is the Holden of the bakery world.
Where did you go to school?
LT: I went to school on the south side at St Joseph’s Convent for the first years and then to St Lawrence’s Christian Brothers College at South Brisbane, next to the Marta Hospital. Stayed there until I finished my Junior Certificate, which was as high as 90 per cent of children went in those days, the Depression days. The thing was to get a secure job and get it as quickly as you could from Junior, which is my experience.
So you left from Junior and went straight to what job?
LT: I left from Junior and in those days parents were very conscious of the difficulty of their youngsters getting positions, particularly getting secure positions, so the aim was to get them into the Public Service if you could. Well in 1937 you needed to come in Junior under 160th in the State and you were just about guaranteed a State Government job. In fact that is what I did. I came thirteenth and started work in the Taxation Office and stayed there for some forty-seven, forty-eight years.
With a bit of a gap.
LT: Well yes, there was a gap during the War. I was in the Air Force during the War. Joined up here under the old Empire Flying Training Scheme and did the bulk of my training here in Australia and subsequently went through Canada, did some anti-submarine work at the mouth of the Gulf of St Lawrence, then across to England. Subsequently I was on a Path Finder Squadron down in Market, Norfolk, just under Kings Lynne, where I saw out the War.
Did you see anything of credit unions while you were in Canada?
LT: No I didn’t know credit unions even existed at that stage. I think we would have been quite close to them because we were based in Charlotte Town on Prince Edward Island, in the Gulf of St Lawrence, which after all is not too far away from where the French-Canadian credit unions were operating.
Not to mention the Antigonish. Nova Scotia.
LT: There again, we weren’t too far from Halifax and Nova Scotia. Fond memories of that area because the place those days was mad with lobsters and they couldn’t give them away. All you had to do was to go to a lobster cannery on Prince Edward Island and they would give you as many bucketfuls as you wanted to take away, which suited us Australians of course.
What sort of aircraft were you involved with?
LT: Well from the early training days of course they were the old pre-War Ansons, here in Australia, Fairy Battles for the bombing and gunnery courses at Evans Head. Overseas on patrol in the Cape Gaspard, Gulf of St Lawrence, they were Hudsons. Then in England we converted to the four-engine heavy bombers from Wellingtons. Predominantly, on operations, we were on Lancasters. Being on Path Finders we were fortunate enough to get the best of the new gear as soon as it was proven and the best of the navigational equipment, radar and loran and H2S, so we really had no excuse for not being spot-on as far as getting there and, more importantly, getting back.
You were a navigator yourself?
LT: Yes, I was a navigator.
When you were on the Path Finder Squadrons you must have been involved in quite a number of difficult operations?
LT: Probably less difficult that the Main Force. The point in Path Finders was to identify a target and top-up with flare markings the target for Main Force to bomb on flare rather than on specific location of the target.
Top-up?
LT: Top-up in the sense that the types of flares we used those days were very coloured and they differed for each target and they lasted about three minutes. So the system was geared that Path Finder Force used to top them up, which was the term, every minute and a half. That took care of wastage of crews on the way to targets, not finding a target through metrological difficulties and the like, or running late. The aim was to have a group of flares continually burning throughout the duration of the raid. Of course if the raid was successful, like some of the fire raid places say Hamburg and the like, after some ten minutes there was no need for flares because the city itself would have been seen from the English Channel, the fires generated were so horrendous.
Were you on any of those big raids?
LT: Yes we ended up as Deputy Master Bomber towards the tail-end of our service. We did some seventy operational trips in two tours. We were still going when it all finished, actually, in Europe.
Were there any difficult situations that you were involved in?
LT: Well yes, because it was par for the course that in spite of the fact that you were flying in four-engine bombers and that they had Rolls-Royce motors in them, they weren’t all that well received on their way to targets as far as flak was concerned. Of course the machines were pushed to the limit, as far as their load carrying capacities and they were thrown around fairly actively. If you had night fighter attack you weren’t too concerned about the welfare of the plane, rather the scope of the crew. The most important thing was to get on targets and mark the targets exactly on the time that you were planned to arrive there. Of course if you had an engine failure, or some such, you simply cut corners. Regardless of where you were flying over you simply went direct to target to get their on time.
As far as you were concerned did that mean if you were a Path Finder, you had a load of bombs as well as flares?
LT: Oh yes. The Lancasters were the most effective of any nation’s bombers at that stage, so much so that they could carry up to ten ton. You split the load between petrol, bombs and flares. You carried less bombs than a Main Force bomber carried or course, the flares were the critical part of your load.
So when you were topping-up the flares to mark the position of the target, how many times did you have to go round as compared to the people who weren’t Path Finders? Did you have to go round twice or three times?
LT: It depended what your role was. If you were a Deputy Master Bomber, or a Master Bomber, and the weather conditions were contrary to those forecast for Main Force and for Path Finders, you actually dropped flares only on a need to remark the target to its proper location. So if Main Force, as was generally the case, was coming in at 18,000 feet you needed to be down as low as say 4,000 feet, or 6,000 feet, circling the target and keeping the flares position properly and topped-up, so that at all times Main Force had a target to aim at in the right position. The main risk with that of course is that it is like standing under a shower and not wanting to get wet.
So in fact the Path Finders are a lot more at risk that the regular bombers because you are over the target longer.
LT: That would be the case if you were a Deputy Master Bomber, or a Master Bomber. But you did have the advantage over Main Force in that you had better navigational gear. You had the absolute, up to the minute, navigational gear which if you were an effective and experienced navigator precluded the risk which was very real to Main Force of using predicted winds which in fact were wrong, sometimes up to eighty knots from the wrong direction, they could be out 180*. You in fact had the better gear and you probably had the more experienced navigator, so that you rarely had problems in locating a target on time and returning to base on track.
But you still had to spend that extra time over the target.
LT: I suppose one of the advantages was the fact that the anti-aircraft shells used by the Germans were geared, set to explode, round the 18,000 feet. So provided you didn’t get a direct hit, which would have gone straight through you, you were fairly immune to anti-aircraft fire. What you weren’t immune to was the spray of bombs dropped by your own Main Force who could be 10,000 feet above you.
I never thought about that. I know for a fact that you got the DFC, and I shouldn’t think there would be that many navigators who received that, how did that happen?
LT: Well I guess if you are going to be realistic about it, a capacity to survive was a very major factor in being the recipient of an award. If you survived one tour of operations, which was on average about twenty-five operational trips, you were more experienced and you were given, for instance, Path Finder style duties to do. Provided that you stayed alive there was going to come a time when probably on long service alone, in a relative sense, you were going to get an award of some description. Inter-mixed with that of course is the odd operation where you may have just taken off and you lose a motor, which cuts back your airspeed by some forty knots or some such. You have still got your commitment in Hamburg, or some such place, so instead of flying a route to the target which would be off-putting to the enemy, you would simply plot a new straight line route to the target to get there in the earliest possible time. This meant you were flying over occupied territory on your own, which of course makes you more vulnerable. You are safer in amongst a hundred planes than you are if you are on your own for searchlight and anti-aircraft reasons. So the best recipe to be guaranteed an award is to do about two tours of operations and have one or two fairly spectacular survivals mixed up in it where you achieved, at whatever cost, what you were supposed to be doing.
Incidentally, if you do lose the use of an engine as you just took off, would you not be entitled just to drop your bombs and come back?
LT: Not if you had a Path Finder role, particularly if you are a Deputy Master Bomber or Master Bomber, you were fairly critical to the management of the operation which after all could involve four to six hundred Main Force planes, and the inherent risk that went with that. So your presence on target was fairly critical to the lives and expenditure and risk involved in a major raid.
But it was still up to the Captain to decide, the pilot to decide, what they were going to do?
LT: Sure. If you had mechanical, or whatever trouble, develop in the initial stages of a raid sufficient that there was no way that you would get the plane to and from target with any effectiveness, the thing to do was to run your petrol down, if it lent itself to that, and land wherever was appropriate in England. At least you saved the plane and you saved your crew and you saved your bombs and so forth. But it was a matter of discretion. There was a commonly used term in those days which I think in these days of more sophisticated psychiatric understanding would never be used, LMF they called it, ‘Lack of Moral Fibre’. Lots of fellows whose nerves packed up after eight, ten, twenty trips and just couldn’t hack it any more, instead of being cared for with some humanity they were simply dubbed LMF and hidden away in the cupboard. Should never have happened and wouldn’t happen in these days now that understanding is better.
In the First World War they shot them.
LT: True. Expendable.
You mentioned that you went on seventy sorties, which is a lot of sorties, but you didn’t mention the spectacular trips that you were cited for in your decoration.
LT: Well I think the one that was cited actually was a case where we took off from Norfolk, would not have gained 5,000 feet before an engine packed up. We were Deputy Master Bomber somewhere east of the Rhine, the particular route escapes me. We simply replotted that instead of going on a round about route, as planned for us and Main Force, it was a simple navigation exercise because you simply drew a track from where you were to the target and go there as soon as you could at the most effective height for the three remaining engines. In fact we got there on time and oddly enough never had a quieter trip flying right across France and Germany on our own. That is the way things go, for what was a sort of a Sunday afternoon trip, big deal.
Your Captain also got a DFC did he?
LT: Yes he did.
You as navigator for the trip, also. Any more of the crew?
LT: No, just the two of us.
Well we had better proceed to after the War, but it has been very interesting. I didn’t want to neglect that because it is very much part of your life.
LT: That’s true. In fact as I mentioned on your questionnaire under major influences I did mention that War service. Providing you get through it sound in wind and limb, after all what is but a round the world tour all organised for you. I never slept out of sheets and a great experience, providing you survive.
Well when you came back what happened to you then?
LT: I was on posting to Squadron up in the Islands at that stage and on leave before going up there and that was the stage that the Yanks dropped the atom bomb on Japan, so that changed the whole face of the Pacific War. I went into the office to say G’day and see my old contemporaries. I will never forget that I was greeted by my ex-boss, who was a little waspish old gentleman called Norman Archibald Reuben Toft Law. He sat there like a little martinet and said, “Is that you Len, are you back?” I said, “Yes Mr Law, I am back.” “What’s that uniform, are you in the Army?” I said, “No Mr Law it is an Air Force uniform.” “You’ve got those stripes on your arm, are you a Corporal?” I said, “No, I am an officer.” “Frankly lad, I didn’t think you had it in you.” So of course the point I am making is, the way authority and school and everything was in those days it was easy to be humble.
They had you back in harness pretty quickly?
LT: Well yes there was a very real need. I was one of the first back in Tax in Brisbane and they impressed on me that they desperately needed my service, so instead of taking the leave and free rail transport that I was entitled to throughout Australia, I was back working in Tax by September 1945. In fact I have stayed in Tax for the rest of my career.
Well now, when did you first hear about credit unions?
LT: Well I heard about them not long after the inception of CPS in the early 1960s.
You were not involved in the actual formation?
LT: I wasn’t involved in the formation. But a good friend of mine who was active in the Union was involved in the CPS Credit Union and casually asked me, because they short of a Director, would I be interested. In those days we were in our formative years and being a Director was very much a hands-on job. You were Ledger Keeper and you had a certain segment of the alphabet of loanees. Business was done by post-dated cheques in those days and it was your responsibility as a Ledger Keeper and Director to deposit those cheques on the due date.
Did you become a member shortly after the inception of the credit union?
LT: Yes I did, because at that stage I was married with an ever increasing family. It has persisted for the rest of my career and I was never in the black until the day that I retired. So the credit union was a very, very handy source of funds for the white goods that all young families need, particularly if you have got a family growing at the rate ours did, four sons and four daughters. You are always in need of a washing machine or a fridge or a car, or some such.
The first Chairman did you know him at all? Geoff Magrie?
LT: No, I didn’t know Magrie.
What about Phillip Bath?
LT: Well Phillip Bath was the contemporary of mine in Tax who invited me to join the Board.
Did he tell you anything about the reason that Magrie was only Chairman for so short a period of time? How he came to be no longer on the Board?
LT: My recollection is the Magrie was Army, civilian army, at Victoria Barracks. As far as I recall ill-health was the factor involved with him. Now I wouldn’t swear to that because I got that second-hand.
You never heard any story that he was rolled from the Board?
LT: No I didn’t. I had heard that he wasn’t simpatico, if I can use that word, with some of the rest of the Board. But it would be almost gossip level for me to offer any opinion.
I suppose it is gossip level what I have been given, in that case. What about the others?
LT: There have been none of the others that I didn’t know quite well. There is a pattern if you look at the portraits of the previous Chairmen, with the exception of the first Chairman whom we couldn’t find a photo of anywhere. Bath is Income Tax, Garske is ex-Income Tax, Jennings is ex-Income Tax, and I am ex-Income Tax. It is probably more coincidence than anything else, but may be it has got a touch of the fact that income tax is a fairly hard line to sell and so it teaches you that you can relate better round a Board table with less hassles than, shall we say, an average public servant.
What about Jack Diamond, did you know him at all?
LT: I knew him well. He is an ex-Air Force man too. In fact he is a member of the Caterpillar Club, which means that he is one who got shot down and successfully jumped with a parachute over the Continent and got away with it.
Well what about the Secretaries of the credit union, and Treasurers? There was Lex McPherson, the first one, did you know him?
LT: I didn’t know Lex.
The next one is named Larsen I think, R V are his initials.
LT: I didn’t know Larsen.
Arthur White?
LT: Arthur White I knew well, he was a Valuer. Neville Dickson I knew well. Neville Dickson is currently the General Manager of Medibank here in Queensland.
What about the Treasurers? Ernie Downey, Ron Barber and Cyril Bourne, apart from Tom Corcoran.
LT: I knew all of them well with the exception of Bourne. Ernie Downey subsequently was General Secretary of the ACOA Union here in Brisbane. Barber I knew, and of course you have already interviewed Tom Corcoran who has been a contemporary of mine now for thirty-odd years. In those days of course the formation of the credit union was one of several arms of the Union, they were really part of the Union family. The ACOA was very active in providing services for their members, to such an extent that they formed not only the credit union but they formed terminating building societies and a permanent building society and a trading co-operative shop, which successfully traded for some twenty years or more until it was overwhelmed by the hypermarkets and the like, and the Commonwealth Club. So down in the Union building in Adelaide Street here you had a conglomerate of services available for members. Ultimately none of them have survived, bar the credit union, which is still going strong.
Were you involved in any of the others?
LT: I was. I was a Foundation Director of the Commonwealth Club. I wasn’t involved with the permanent building society or the terminating building societies. I wasn’t involved with the volunteers who worked in the trading co-op.
We are close to the end of this tape, but there is one other thing I want to ask you. Do you remember the appointment of George Hanlon and how that came about?
LT: Yes I do. It was like Topsy, the credit union had just grown and so it had an employee and then two employees.
End Tape 1B: 3868 Words: 1 hour 20 minutes
I just asked you about George Hanlon, you started to reply and we had to change the tape so perhaps I should ask again. Do you remember the employment of George Hanlon and did you know him before?
LT: No I didn’t know him personally, I knew of him because he had worked both for Tom Corcoran and for Neville Dickson in their departments. He was clearly seen to be of tremendous energy and loyalty and ability. So when the situation developed in the credit union that there was a need, to be quite specific, a Chief Clerk in those days rather than a Manager, his name came to the top. One of the Directors actually was quite keen to take the job but the consensus of opinion was that, gently put, George Hanlon would in the long-term be more appropriate.
Which of the Directors was it?
LT: I would prefer not to say. You don’t know where these tapes get to, do you? He is no longer a Director and hasn’t been for many years. Our project in those days turned out to be true, he is very ambitious and didn’t have a track record of being settled in any one job for too long if he could see something better, greener fields. We felt that from the point of view of the growth of the credit union, George Hanlon would have fewer preoccupations, we could be assured of his integrity and loyalty, energy and dedication. That is the way it has turned out.
Were you on the Selection Board meeting originally interviewed him?
LT: I was as a matter of fact. In fact I was the one that suggested that we shouldn’t put the name of Manager on the position, that we should call it Chief Clerk. The only other contender saw himself as a Manager and didn’t see much attraction in being termed a clerk, whether a Chief Clerk or any other sort of clerk. That dulled his push for the job too.
Who else was on the Selection Board at that time?
LT: Well I would think it was Neville Dickson, Tom Corcoran and probably Jack Durham were the main participants in the selection.
Now the running of the credit union? It was just about that time, one year before George Hanlon came on, that you became a member of the Board. Had you worked for the credit union as one of the assistants before?
LT: I had been a Ledger Keeper for some short time before that.
What did the job of Ledger Keeper entail?
LT: A Ledger Keeper simply meant that between the lot of you as Directors you split up the alphabet. May be that I had A to D so that any loanee who fell within that group, when his loan was approved, on the one hand the money was approved to be given to him, in exchange he gave you thirty-six or forty-eight monthly post-dated cheques. You as a Ledger Keeper guarded these with your life at home or wherever. You didn’t work out of the office all that much, except lunch-times. You simply presented those cheques on the appropriate dates and so the system ran.
That is amazing. I have never heard of a credit union that ran that way before.
LT: Well in those days we were all in a financial sense fairly naive. I might have known a fair bit about income tax and Tom Corcoran, for instance, might have known a fair bit about Commonwealth finance, but that is not to say you know much about the money marketplace. As an example of the vast changes in the responsibilities of credit union Directors in the thirty-odd years that we were Ledger Keepers and Directors I will simply instance that nowadays you have got legislation and regulations and Acts and whatever that governments have enacted to ensure that you keep particular percentages of liquidity. For instance it may well be currently that an Act says you have to have 12 per cent of your asset worth liquid. In the early days if we had a concern at all it certainly wasn’t about liquidity it was about making what money was available work for the credit union with the idea that the more effective you were, the lower the interest rates to the loanees and the higher the interest rates were to investors. I can recall at one stage we were trying to work out how to get a yield out of the difference between the cash book balance and the bank balance, which after all, not to mention any names, some of entrepreneurs have fallen flat on their faces by trying to use that float. It all seemed commonsense to us in those days, where you would shudder in horror these days.
You did have a few Treasury officials working for you as Treasurers didn’t you?
LT: Well we did. But if you go back to the 1960s, no-one in their wildest dreams ever envisaged that there would be a run on banks, that there would be a run on credit unions, building societies or whatever. We came of age, I suppose, when we had our own very personal run on the credit union. It was the day after St Patrick’s Day, if I remember, in 1974. I might be out a year there. Ironically it wasn’t due to any malfunction of the credit union, but simply that a lot of the investors in the ACOA Permanent Building Society knew so little about where their funds were lodged that when the building society was frozen by the then State Treasurer, Mr Chalk, as one of five that formed the nucleus of Suncorp Building Society, somehow or other the freezing of the permanent building society was interpreted as a freezing of the credit union, which had a somewhat similar name. But after all, it was a credit union it wasn’t a building society but we were inundated by our depositors wanting their money out. Fortunately they too were fairly naive, because most of them were satisfied with a cheque drawn on the credit union, which they took home, put under their pillows until the run finished and then brought it back and redeposited it the next week.
How long did the run last?
LT: It lasted for three days. Fortunately it coincided with a pay week. We weathered it okay.
Did you have to get some help from the bank?
LT: We requested help from the bank, but they had a fairly hard-nosed approach which was the cause of our changing bankers. We had some inside information from their place that the decision was to let it run until Tuesday, if we weathered it give us what we wanted and if we didn’t, don’t. We found that fairly cynical so we changed banks.
Did it run until the Tuesday?
LT: No it didn’t. It started on a Wednesday and it was all over by the following Monday.
It must have been fairly scary from your point of view?
LT: Well it was scary all right, although you get busy enough in those circumstances that you are not thinking scared. It was serious enough that I took leave from the Tax Office and spent my time with the Manager and other Directors actually on the floor of the credit union trying to talk sense into term depositors, who also thought they had a right to get their money out. We were regarded kindly by Departments in that whilst I took leave it was reinstated and I was given leave as being still on duty.
While I think about it, there is one thing that I often ask people and I would like to ask you, do you think your involvement in the credit union has been a barrier to promotion in your work?
LT: No I don’t think that. It never interfered with my official duties. There might be an odd phone call a day, but my work in those years was predominantly field work. I was an Income Tax Investigator through the 1960s and most of the 1970s, and as such I was all over the State on three up to six week itineraries, so it didn’t impinge on my work. You had a work load to do, you got it done, it necessitated regular usage of telephones and so forth and there was no bar on that sort of phone call.
Now the running of the credit union. You mentioned the way they operated in the first instance, with the post-dated cheques. When did that method of operation change roughly? Did that carry on until George Hanlon was appointed?
LT: It carried on for a while after George was appointed, if I remember rightly, until we got into our first computer which, I am guessing a bit, was a Nixdorf. We had a full-time employee who got to run the office full-time so that things could be handled over the counter.
How did you go with the Nixdorf?
LT: Well I never operated the thing. It was rather a mystery to me, I have got to say, and computers still are in the practical sense.
I have heard from other credit unions that the Nixdorf was an option which a few did take up but later regretted because it didn’t sort of tally with the rest of the movement.
LT: That side of it didn’t worry us, we were always fairly self-contained. The Nixdorf within a few years outgrew its effectiveness. I can recall that we couldn’t even give it away, I think we paid to have it carted out such as it was. It was run on magnetic stripe cards in those days, very basic.
Did you go through a period of operating on bureau operation with another credit union’s bureau of some description?
LT: No. The closest we have come to that is than in conjunction with Credit Union Australia we shared common software. That persisted up until fairly recently, two or three years ago. We have gone on to a FCS system now which is common to the bulk of the credit union industry.
Credit Union Australia, I understand, are not in with the Queensland League. Do you know anything about that? They started the Federation a while ago. That split no body has been able to tell me very much about.
LT: Credit Union Australia is very much in the League. They are not in agreement with the League. In fact Andrew McKechran their General Manager is a Director of the League.
My apologies, I was thinking of Len Hedger and Sunstate.
LT: Well Len Hedger used to be Chairman of the League. They were very much in the League. But they had a disagreement on policy at the League and it caused a split.
Do you know what the policy disagreement was?
LT: I should remember. It was serious enough and talked about enough at the time, but frankly as I sit here today I can’t. Nowadays I would say it wouldn’t have been too big a deal anyway. Yes they split and they have stayed split. They have got an association, but the heat has gone out of all that. We have had them around this Board table as a matter of fact within the last twelve months. Len Hedger, as a guest to listen to a proposition on Project Renewal. There really isn’t much, if anything, standing in the way of unifying the industry in Queensland in the sense I think all is forgiven and forgotten as far as the split was concerned. That is not to say that Len Hedger and his association would be about to join League right now, whilst the Project Renewal lack of unanimity at League persists.
I was trying to get to see him, but I don’t know whether I will have the time this trip. I didn’t realise the implications when I came up. I was not coming up for the credit unions in the first instance, I was coming up for the Oral History Conference. So it looks like I might not get to see him before I go back, which is a pity.
LT: I suggest Richard that you do try to interview him, because he has got a very active memory and he was very actively involved in League and credit unionism, the whole works, for many years now.
I should have some evenings, if he has any time.
LT: I would suggest he would be only too interested to see you in the evenings.
I will have a go then. Back to the credit union again, the computerisation you pretty well covered that, you are over to FCS. Why in your credit union did you have an Internal Auditor and not a Supervisory Committee.
LT: I think it goes back to the fact that our Directors have always been very much hands-on. They had a total trust in one another and when George Hanlon was added to the team none of that trust was eroded vis a vis Directors, management or anything else. It would have been seen to be gilding the lily to have an internal audit, besides we weren’t big enough at that stage. As it has grown we have got very strong external audit. It started from a personal attachment to an individual auditor, and his name escapes me, in those days. As the accounting profession has gone on he went into partnership with someone and that partnership was amalgamated and so on. You come through the years now that our external auditors are Ernst and Young, one of the big three shall we say of the Chartered Accountants not just in Australia but worldwide. Now we have never ever felt, and no situation ever developed, where there was seen to be an need for internal audit. Simply when you get to the basis of a certain complexity and number of employees it is prudent anyway to insert an internal audit situation. Now it is not all that many years ago since we appointed a full-time qualified Accountant, internal auditor. We have been fortunate that you will see in the list of Directors there we have got a chap called A W Hill, Alan Hill. Now he spent his career in Bankruptcy Division here in Brisbane and prior to that he was in the Audit Section. So we have had at all times a professional auditor on the Board, which of course gives you a sense of some ease and satisfaction.
The point that I was making is that a Supervisory Committee in a credit union sense is not only a internal auditor it is an overview of the whole of the running of the credit union, including the Board. In fact you actually use the internal auditor as an Executive Officer, so he would be subject to the Board. Whereas the idea of a Supervisory Committee is to overview even the Board.
LT: I think that arrangement, if I can call it that, of a Supervisory Committee used to exist in some of the bigger Departmental credit unions. Postal Techs’ comes to mind. Teachers’ comes to mind. It seemed to us at the time when we liaised, and still do fairly closely with them, that there was almost a built in sense of distrust between the two parties. After all if you think about it, if Directors are maintaining the integrity and responsibility that the Companies Code requires of them, in the running of what to my mind is a relatively simple financial operation. Compared to a bank; a credit union is not involved in overseas currencies, not involved with whole gamut of merchant banking, it is not involved in commercial lending or rural lending. Particularly in our case we are involved with the cream of the borrowing public, public servants, Commonwealth public servants in the main, if they are in good health, they don’t readily lose their jobs. Against that base you would need to justify a Supervisory Committee. You would need to have a climate of distrust or reason for suspicion of some facet of the activities come up before you could justify a Supervisory Committee.
I have been watching, while I have been going around interviewing different credit unions, exactly the effectiveness of such a Supervisory Committee. I think the general consensus of opinion has to be that as an internal audit they are not too bad. But as a supervising committee really they all turn up at Board meetings and are more of the same clump, so to speak. They are not overviewing the Board at all. Others, where they are completely separate and regard each other with some distrust. Some which are just totally ineffectual. I must admit that I don’t think they work very well.
LT: I have been fortunate in having the Board that I have had in the term I have been Chairman, which is getting to be fairly significantly long. I have been Chairman since 1970, which is probably quite unusual. In that term, in the absence of a Supervisory Committee or anything like it, after all your Annual Meeting is your best supervising committee if you are not performing you are not going to last.
Have you had any stormy Annual Meetings?
LT: We have had stormy Annual Meetings, but just to finish off that point about supervising committees, my experience says to me there has never been a stage that a supervising committee would have been of any use to us at all. Rather the opposite, it would have been a hindrance. That is my considered opinion on that. As to stormy Annual Meetings, we have never had a stormy Annual Meeting for the reason that the CPS Credit Society has been open to criticism for its operation in any particular year. There has been no reservations by external audit, as is noted within the Annual Reports. We have always been competitive. We have always been seen by all and sundry, not just our own members, as being solid, good safe investment. A word you are not allowed to use any more, ‘safe’. The only time we have had any active response from an Annual Meeting was when we had a need to open the membership bond. You will recall I said to you that originally we were part of a Union family. The membership bond in the early stages was that you had to be a financial member of the ACOA Union. Now loan demand and growth got to the stage, and so many structures within the Commonwealth Public Service, that the membership needed more money than financial members of the ACOA on their salary structure could afford to deposit. So here you had an extension of the loan waiting time, I can recall it got out beyond six weeks. We wanted to extend the membership beyond financial members of the ACOA to take in any public servant, Commonwealth Public Servants we used to call ourselves. That was resisted actively by the Union, oddly enough by the Fourth Division Union which really wasn’t part of the deal that spawned us at all. It got to the stage that they brought down bus loads of people from Toowoomba and what not to try and swing a vote, and effectively did it for two Annual General Meetings and a Special General Meeting. Commonsense ultimately prevailed and we got our way.
Tom Corcoran did tell me about that. Did you have any other conflicts over your amalgamations? I mean you amalgamated a number of credit unions into yours didn’t you?
LT: The only one that we have amalgamated in was the Fourth Division Credit Union. They were small enough and in such difficulties that it was more a St Vincent de Paul charity exercise. We simply absorbed them, there was no amalgamation in the sense of offering Board positions or anything else like that. We simply buried the union dead I suppose.
There is one thing I wanted to cover, have you been involved, both at credit union level and Queensland League level, on any legislative committees or advisory committees?
LT: No I haven’t.
What about the Queensland League’s Savings Protection Fund?
LT: When I was on the League the Savings Protection Funds Number One and Two existed. But I had no active participation in them, apart from the fact that the ultimate decisions in relation to them came to the League Board level. My own thoughts on the Savings Protection Fund were, and are, that they were sufficient for the protection of depositors and members of the credit union industry in Queensland. We are about to effected, from 1 July next year if Legislation Working Committee keeps on time and they are at the moment, by somewhat draconian legislation which will really regulate us very closely in that it will provide for reserve funds and the like which are really only geared on a knee-jerk. This is my personal opinion, a knee-jerk reaction to the mayhem that has happened in Victoria and other States with the Friendly Societies and to some extent credit unions in Western Australia. You had Pyramid, State banks, National Safety Council, all of these other shows that have fallen down dead down there. The governmental reaction is, “Let’s protect us as governments from that. Let’s make them provide from themselves a reserve fund which we the governments will control. We will use that to put out any fires that arise.” Now that, coming back to the SPF, was very effectively done in Queensland through SPF No.2. We have had our problems, we have had credit unions go down the tube in Queensland, three notable ones around about 1985, which in all would have cost the industry through the SPF something in the order of $4 million. Now there was ever any need for governments to be involved, or anything else, we buried our own dead with that. SPF No.2 persisted even after 30 June 1986. The significance of 30 June 1986 is that from 1 July 1986 the then new Credit Societies Act 1986 was legislated in Queensland, which created a Guarantee Fund which is government-controlled. It is really an imposition on all of us because we have to contribute pro-rata, in our case we would have at least $500,000 contributed, but we don’t have any capital equity in it. It can’t appear in our balance sheets, we get no servicing of that capital it is just used by the government no doubt, and it is controlled by a committee appointed by the government.
End Tape 2A: 3794 Words: 1 hour 25 minutes
LT: The point I wanted to make about SPF No.2, Savings Protection Fund Number Two, it was totally under the control of the Queensland League. During its operation no depositor to a credit union ever lost any money. From a credit union point of view, your investment in it, to build up the fund of money, was still capable of inclusion in your balance sheets. The investment controlled by the League each year was in fact pro rata distributed back to the credit unions. It is a very important difference. Unfortunately under the current Guarantee Fund that is not the case. We are hoping that in the new legislation which doesn’t apply until 1991, 1992, the government will seek to return the current moneys in the State Guarantee Fund, pro rata they will come back into our various balance sheets under the ????
????? two credit unions did go down and members did lose money because they weren’t in the New South Wales League.
LT: Yes well we haven’t had that experience fortunately in Queensland. I suppose to an extent we have been cushioned from the troubles in the south because we weren’t as big.
Well you have got sizeable credit unions in Queensland.
LT: They didn’t grow as big and as fast as some of them did in New South Wales ???? in our operations here. ????/
Was your credit union, or anybody you know in a credit union, involved in ?????
LT: Yes Godfrey certainly was. In fact it is good to see in recent times he has been awarded a national award for his ????? He was a real John the Baptist in that he only had one aim and that was to create more and more and more credit unions. I think it is fair comment to say that Godfrey wasn’t all that worried about the liabilities, the potential liabilities, ???? who shall remain nameless come to mind, but didn’t have a dog’s chance of survival right from day one. ????? as far as Godfrey was concerned and his heart was in the right place, very much so, along with Jack Ross. Very valuable to the industry.
Did you know Stan Arneil who was a major evangelist ????
LT: I didn’t know him well. I met his a couple of times. There is no doubt about his dedication. ???? Jack Ross who kicked off Teachers’. But I didn’t really know Stan.
The same sort of thing happened down there, there wasn’t the back-up ????
LT: It is fair to say that in the state of play that operates in Australia at the moment you would have to be irresponsible to claim that there is not any need for some sort of protection fund ??? Whether controlled by industry or controlled by governments you need them all right certainly.
Syd Einfeld in New South Wales ?????
LT: ???? reserve funds ????? against credit unions ???? suspicion that was generated by Pyramid ????
What about the law up here re commercial loans? Where there any rules against it?
LT: Yes there were. Under the Companies Act ???? It calls for an expertise which is not necessarily in the industry up here at this stage. ????? The same as if you opened up for rural loans, ???? You wouldn’t like to lightly open up to commercial and rural loans ?????
???????
LT: I am waiting on some ?????
They opened up didn’t they?
LT: Yes.
??????? sigh of relief that they didn’t.
LT: I don’t think I ?????? In getting investment into small business in Australia ???? the amount of our GDP available ?????? This again is a very critical point ?????
??????
LT: Well we do have a national approved deposit fund which ???? approved by the Taxation Office.
I suppose as we are short of time now, we had better get into a few things that we haven’t covered yet. One is did you go to any Credit Union Schools, Chapters or anything like that over the years?
LT: No. I am just the unqualified fellow ????????? Qualified by experience. That is where I am in the credit union history, qualified by experience.
You mentioned that you were involved with AICUM ??????
LT: It is also open for Directors as observers. I think as I mentioned earlier, we set a lot of store by AICUM standards ????? will attend AICUM conferences ????
Now that ICUD, the Institute of Credit Union Directors, has gone national are you involved in that?
LT: Yes we have some of our Board members on that. At the moment what inhibits Directors is, as in my day twenty years ago, the up-and-coming young Directors ???? time gets to be a premium ???
Now is there anything I should have asked you but I haven’t. ????
LT: The first one that comes to mind is ???? That is not through any eccentricity of mine. I am very fortunate in the composition of the Board. There has been no easier Board to chair. After all a Chairman ????? dyed in the wool rabid leader ????? If I have any satisfaction in my job it is that I had had an easy group to organise ????? Trying to combat bottom of the harbour schemes ????
Any regrets about the time you have put into credit unions?
LT: ????? all my family members are in credit unions. ????? It has allowed me to meet up with a great crowd of people in the industry in Queensland ????
What about any outside involvements that you have been doing as well as the credit union?
LT: Yes years ago, not so much in recent times, I was very active in my own ????? I had the great experience in recent times, ???? Chairman of the Standards Review Committee within the Department ????? whose role is to sort out any insoluble problems ????
Thank you very much Mr Len Talty.
LT: Thank you. It has brought to mind a lot of stuff. Now and again it has been very satisfying.
End Tape 2B: 1022 Words: 30 minutes
PLEASE NOTE TAPE RECORDING VERY FAINT SO UNABLE TO TRANSCRIBE FULLY.