Obituaries Australia

Apart from being one of Australia’s most eminent economists of the inter-war and post-World War II years, Sir Leslie Melville was the man governments of both persuasion so often turned to when some knotty problem arose. As a consequence, there has not been another Australian economist to hold the range of jobs that Melville did.

These ‘special assignments’ came as a result of the reputation he had established for competently handling discreet, independent inquiries or arbitrations. Though the spread of the tasks that came his way in the postwar years might suggest that his long career had been a ‘chequered’ one, it was built upon a solid foundation and wide experience in the working of government.

Almost from the time, he moved into his first job as government actuary in South Australia at the age of 22, he found himself called upon to advise the State government on economic and financial matters. But before all the part-time, ad-hoc jobs that fell to him, Sir Leslie, who has died in Canberra aged 100, had already had a distinguished career as an economist, in banking and in academia.

Born in Sydney on 26 March 1902, he was educated at Sydney Church of England Grammar School (Shore) and Sydney University. He had started at university doing engineering, but switched to science before settling finally on economics. Having early shown himself to be an outstanding mathematician, he had a brilliant economics course, which he had not quite finished when the opportunity to become government actuary in South Australia came his way. It was an offer that seemed to him ‘too good to refuse’. So in 1924, he took up the post in Adelaide.

Only at the suggestion of others did he apply for and was appointed inaugural professor of economics at Adelaide University, aged 27. However, he was induced to leave his chair in 1931 to become the Commonwealth Bank’s economic adviser. He remained with the bank until 1953, but from 1949 he was assistant governor, central banking, and a member of the bank’s board from 1951 to 1953. A monument to his work at the Commonwealth Bank was the setting up of an economics department, which also provided central-banking advice. This department went on to become the research department of the Reserve Bank, one of the major centres for economic research in Australia, with the quality of its work being recognised overseas.

With other economists, such as (Sir) Douglas Copland, L. F. Giblin, E. C. Dyason and Edward Shann, Melville had input to the Government’s Depression policy, the formulation of the famous Premiers’ Plan of 1931 and the (Sir) Wallace Bruce committee on unemployment in 1932. During the Depression Melville opposed Australia going back to the gold standard, as proposed by the Commonwealth Bank chairman, Sir Robert Gibson. He believed more should have been done with the exchange rate and public works. But, as he once told an interviewer, the problem was finding a policy that was ‘acceptable to everybody which would make things a bit better’.

In 1933 he was financial adviser to the Commonwealth delegation to the World Economic Conference and leader of the Australian delegation to the UN Monetary and Economic Conference at Bretton Woods in 1944. While retaining his Commonwealth Bank role, he went to Washington from 1950 to 1953 as executive director of the International Monetary Fund – a post that was really an extension of the central-banking activities in which he was already engaged. Through the 1930s and into the war years, he played an important part in the background of high finance policy. While in London in 1932, he gathered opinions from John Maynard Keynes, and other leading British economists, regarding the Australian-Sterling exchange rate.

Shortly before World War ll broke out, Melville worked on an informal committee with (Sir) Roland Wilson and Giblin examining economic implications for Australia in the event of a conflict with Japan. When war with Germany came in 1939, this body was augmented by economist J. B. Brigden, Copland and later H. C. (Nugget) Coombs and others to become the Commonwealth Advisory Committee on Finance and Economic Policy, filling a brains-trust role in relation to economic aspects of the war effort. After the war it went on to provide much of the framework of ideas for the post-war reconstruction program. Labor Prime Minister, Ben Chifley, soon after the war, once said, ‘While I am Treasurer and Mr Melville is adviser to the [Commonwealth] bank there will be no inflation’.

In retirement, Melville told an interviewer that the decision to nationalise the banks was Chifley’s alone, though he and Dr Evatt were in the room with him when he made it. As economic adviser to the Commonwealth Bank, he gave factual evidence for the Chifley Government during the bank nationalisation court case without being identified with the nationalisation policy.

From banking, Melville’s career path turned back to academia when he was appointed vice-chancellor of the Australian National University in 1953 in succession to Sir Douglas Copland. When the appointment was announced a financial authority of the day commented, ‘The most loquacious economist in Australia is being succeeded by one of the most reticent’. And in a way that comment roughly sums the two men’s approach to the ANU vice-chancellorship. Copland as first vice-chancellor, with his flamboyant, entrepreneurial style, had got the ANU off to an admirable start. Melville, more cautious and modest, ushered in an era of consolidation, marked by his shrewdness and humanity. Without cutting back unduly, he kept budgets at an acceptable level and overall engendered trust and certainty. To some ANU high-flyers like Sir Mark Oliphant and his cohorts, Melville was a ‘pain in the neck’, but his solid work undoubtedly paved the way for Canberra University College to become the ANU’s school of undergraduate studies. And it was during his seven-year term that distinguished Australian historian Sir Keith Hancock, was enticed to the ANU to head the Research School of Social Sciences. When Melville stepped down, the ANU in just 10 years of existence enjoyed an enviable national and international reputation for its high standard of scholarship and learning.

Again government service beckoned, and Sir Leslie, who had been knighted in 1957, went off ‘with some trepidation’ to become chairman of the Tariff Board and subsequently was ‘very sorry’ he did so. In less than three years, he had resigned after a dispute with the then Trade Minister (Sir) John McEwen over the special advisory authority set up to give emergency tariff protection. Melville saw this as weakening the role of the board. There were other issues, too, over staff as well as subtle pressure to come up with the sort of decisions McEwen wanted.

It looked as if he might be due for execution from public life. But another stint in Washington followed as a member of the development advisory service of the International Bank. He returned to Australia and his directorship of the Reserve Bank, which he had held since 1959. To this was added an appointment to the Commonwealth Grants Commission in October 1965. A year later he became its chairman, remaining until 1974. At the Grants Commission, he was a great advocate for the less-populous States. In his role at the commission he came full circle, having early in his career presented the first case for South Australia for a special grant from the Commonwealth.

In 1967 came his first major ‘special assignment’. The Holt Government commissioned him to report on the portability of pensions. His work formed the basis for legislation passed by Federal Parliament in 1970. In 1968 when the Minister for External Territories, ‘Ceb’ Barnes, wanted an independent adviser to the Administrator of Papua New Guinea on the future financial needs of PNG’s university and of the Institute of Higher Technical Education, Sir Leslie got the job. Evidently a satisfied employer, Barnes called on him again the following year to get PNG’s new Tariff Advisory Committee working. As Minister for Customs and Excise, Don Chipp sought his services in 1971 to determine what would be a fair price for oil refiners to charge independent operators for Australian crude. He also arbitrated in a dispute between Qantas and its pilots.

Never a headline grabber, Sir Leslie had a quiet, considered approach to all that he undertook. He was very much a pragmatist. In tackling a problem, he always looked for a practical solution, with the economic welfare of the community counting more than other matters. At the Tariff Board he acted on the principle that tariffs were desirable and good policy for Australia. However, he did not think that they should be set too high. He hoped that eventually Australia could move into a state where there was no need for any tariff. Though ever a strong proponent of full employment policy, his main interest was in monetary policy and banking in which he showed his real flair. A hard worker, tennis was his favourite form of exercise.

Sir Leslie is survived by two sons, Galfrid (Sydney) and Tony (Cambridge, UK). His wife, Mary, whom he married in 1925, predeceased him.

Sir Leslie Galfreid Melville, born 26 March 1902; died 29 April 2002.