I grew up in the Newcastle suburb of Rankin Park. It was a new suburb when we moved into the new house that was built there for my parents, in De Guerry Avenue, in 1969. It was a pretty good place to grow up. I could walk to South Wallsend school, to Scouts and to soccer practice. Rankin Park adjoined a big area of bushland where my brother and I spent countless hours, walking and riding our bikes on trails that extended between the old Wallsend brickworks, Jesmond Park, the Hollywood depression settlement, the Skyline Drive-in theatre and Rankin Park Hospital and its immense, mountainous rubbish tip which contained a bewildering array of fascinating items that we recycled into playthings and projects. There were great adventures to be had in this bushland.

Naturally, Rankin Park’s street names became familiar to me: Cambridge Drive, Hutcheson Avenue, Morton Parade and Dean Parade, to name a handful. Not until recently did I realise that many of these streets are named in honour of a company and its directors responsible for one of Australia’s most notorious corporate collapses.

Cambridge Credit was the company. It started in Newcastle in the late 1940s as a little hire purchase financier and by the early 1970s had become Australia’s biggest land developer. When it crashed in September 1974 it created spectacular headlines, sent shockwaves through the nation’s finance and business community and hurt about 38,000 mostly small investors who had deposited funds on the promise of high returns.

Cambridge Credit was the brainchild of Newcastle accountant and active Liberal Party member Robert Edward Morton “Mort” Hutcheson (there are some of those Rankin Park street names!). The earliest reference I can find to his business activities is in the NSW Universal Business Directory of 1949-50, where he is listed simply as an accountant at “Room 5, Hunter House, 262 Hunter Street”. Finance journalist and author Trevor Sykes wrote in one of his books on Australian corporate collapses that Mort Hutcheson had gone into business with his accountant father, R.E.B. Hutcheson, in 1950 with a view to establishing a finance company. That finance company was “Newcastle Acceptance Co Ltd”, which in 1951 was advertising in The Newcastle Herald, offering hire purchase finance to retailers of electrical goods.

By 1954, through the same company, Hutcheson was offering guaranteed interest of eight per cent per annum on deposits from £25 to £1500. The address at that time was listed as the corner of King and Bolton Streets.

In 1955, Trevor Sykes reported, Newcastle Acceptance had been renamed as Cambridge Credit, now based at “Morton House” at 5-7 Union Street – an address it shared with its Hutcheson family stablemate, “Northumberland Insurance Co Ltd”. Here’s a small sign of some degree of grandiosity on the part of Mort Hutcheson – labelling the company’s headquarters building with his own name. Other companies controlled by Cambridge were Wellington Court Holdings, Cowdroy Investments and Hunter Purchases.

Apparently the Hutcheson family had an umbrella company called Unilateral Services Pty Ltd which managed about 100 private and public companies including Cambridge. Sykes reported that Cambridge was listed on the stock exchange in 1957 and rapidly expanded from that time.

Cambridge paid good interest to investors and also paid generous dividends to shareholders. In 1960 it was calling itself “Newcastle’s foremost finance house” and had also opened an office in Park Street, Sydney. By then, Cambridge was placing large advertisements in major capital city newspapers offering high interest on investor deposits. Its assets exceeded £2.5 million, an advertisement boasted in January 1960. Cambridge rewarded long-term investors with preferential “renewal rates” for those willing to roll over their deposits.

A snippet in the Melbourne Age in November 1962 noted that a Cambridge director, “R.E. Hutcheson” had died and that T.G. (Thomas George) Whitbread had been appointed director. E. (Edwin Robert) Davis-Raiss was appointed company secretary. The deceased, I presume, was R.E.B. Hutcheson, the father of the company’s principal. Another Cambridge director was Mort Hutcheson’s brother-in-law John Dean (another Rankin Park street name).

I can’t escape the suspicion – armed with the benefit of hindsight – that this aggressive marketing was a sign that all wasn’t quite right with Cambridge Credit. That perhaps the need for new deposits reflected the need for cash-flow to support the interest and dividend outgoings – a ponzi scheme, in other words. Many years later it was reported that, in 1966, the company’s Brisbane office had run up bad debts of more than a million dollars via hire purchase agreements with customers of an electrical retailer. It was also alleged that the company had hidden these bad debts in its accounts, starting a shady practice that was ultimately its undoing.

But putting these allegations and suspicions aside for the moment, it remains a fact that Cambridge Credit genuinely invested in productive real-world activities. Which brings us back to my parents and their block of land at Rankin Park. My parents bought their block of land in 1962, using as a deposit money my mother got as a termination payment from the job she had to leave because she was pregnant with me.

The 1960s was a time of a severe credit squeeze in Australia. My father left his job at Stewarts and Lloyds and went to the Sulphide Corporation because Sulphide offered him generous house finance assistance as an inducement to switch. As my mother recollects, Sulphide was willing to fund half the purchase price of a home on very generous terms. Skilled labour was evidently in short supply!

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A street directory history of Rankin Park

The land was sold by Sydney-based developer Willmore & Randell which was active in the Newcastle area at the time, selling land at “Beresfield Heights”, Toll’s Estate (Valentine) and Rankin Park. According to the company’s records, it sold 277 blocks at Rankin Park in 1962 (and none there in any other proximate years). My mother recalls the land cost £800, off the plan, and she believes that when they paid the deposit the street was tentatively named “Francis” or “Frances” Crescent. I can’t find any evidence to back this up, but I’m inclined to believe her.

This was evidently the first stage of the suburb of Rankin Park, an adjunct to the pre-existing South Wallsend. My mother recollects that her father-in-law tried hard to talk my father out of buying at such a “remote” location. At that time the estate could be entered only from the South Wallsend side, via Croudace Road. In a corporate history of Willmore & Randell written in 1992, Ian Willmore described a road access problem he had with the Rankin Park development:

The Rankin Park Hospital refused to allow access from Lookout Road, which at the time was a near-impassable track [he must mean the road now known as McCaffrey Drive: Lookout Road was a major road even then]. The hospital was adamant, despite our offer of $120,000 for some needed equipment. Subsequently the council resumed the access strip and constructed a road at no cost to us and no gain to the hospital.

The same book refers to Cambridge Credit:

In the 60s the Cambridge Credit Corporation Ltd emerged as a real estate financier. It was founded by the managing director R.E.M. (Mort) Hutcheson, from Newcastle, where he knew the Willmore & Randell organisation. The willingness of Cambridge Credit to enter joint ventures was a great attraction for us. Not only did this allow quick decisions and spread the risk but we were not required to provide personal guarantees. In all we entered into more than sixty joint ventures with Cambridge Credit, and they themselves had between 500 and 600 joint ventures worth about $95 million. These were their main assets. The corporation enjoyed a good reputation so that if they wanted to borrow money to support a venture with a real estate developer, they could negotiate with another finance company to provide a low proportion of the funds, say 60 per cent on a valuation of 80 per cent of what Cambridge was paying for the venture, and Cambridge took up the balance. This satisfied most of the finance companies, who were holding a first-mortgage security. With the sale of the joint venture these first-ranking financiers were paid, then Cambridge Credit and their joint developers received 50/50 of the rest. For a few years the sky was the limit and our association with Cambridge Credit developed very well.

It seems that Rankin Park was an early joint venture between Willmore & Randell and Cambridge Credit. Researcher Lachlan Wetherall has located a land transfer document, dated January 1960, recording the sale of the 63 acre parcel of land from Lambton Central Collieries Pty Limited to the Cambridge Credit Corporation. The subdivision was built on the site of the former Lambton Central No. 3 colliery, Lachlan said. This would explain the occasional incidents of mine subsidence in the estate, one of which I recall swallowed a driveway in Dean Parade. The bush behind the Skyline drive-in was also pockmarked with subsidence craters.

In later years more adjoining land areas were developed. I recollect the marketing campaign for “Cambridge Hills”, which was across McCaffrey Drive from the earlier Rankin Park Estate. According to the Willmore & Randell book again:

Half a dozen names were attached to this prestige development as successive sections were opened. Cambridge Hills was the firm’s choice but the older Rankin Park of the vicinity became the established title. It was a co-operative venture of Cambridge Credit Corporation and a Willmore & Randell subsidiary company that was formally launched in 1969. Then in 1973 it had substantial aid from the Australian Guarantee Corporation and from the Federal Government in a Newcastle housing grant. An advertising campaign on radio, TV and the press for the first 25 lots resulted in an invasion of the W&R onsite office by so many buyers that the salesmen had to put names in a hat and draw out the lucky winners.

By this time, Cambridge Credit had grown massively. From a little loan business run from the office of a Newcastle accountant, it had morphed into an immense enterprise that could no longer really be classed as a finance company at all. It was, instead, a real estate developer and speculator on a huge scale. By 1974 Cambridge was Australia’s largest land developer, with 67 subsidiary companies involved in about 500 land ventures across Australia and the Pacific region including New Guinea, Fiji and the New Hebrides. Its real estate interests were valued by the directors at more than $300 million – an enormous sum at that time.

Unfortunately, Cambridge’s published accounts were less than entirely honest. To cite one reported example, it booked land in which it had interests at full value, not disclosing debts on that land.

A fortnight before the company failed – on account of not being able to make due payments – Cambridge reported a $3 million profit. According to receivers, the real result for the year was a $70 million loss and the company’s liabilities were (perhaps conservatively) estimated at $190 million, with assets considered unlikely to bring more than $30 million in the prevailing market.

The company had a business model that depended on continual growth in land values, but when a credit squeeze struck in 1974 interest rates rose, demand for land fell and prices tumbled. Unable to keep attracting funds when the value of its assets was falling, Cambridge had nowhere to go other than into receivership. Tens of thousands of small creditors found themselves in trouble and the failure triggered a dangerous run on other financial institutions that the federal government struggled to stem.

When inspectors reported on Cambridge’s accounts in 1979 they opined that the company’s books had been falsified since 1966. Large cash losses by other companies in the Hutcheson family’s control were covered by money provided to Cambridge by investors – a fact the family kept concealed. Unless it could show profits it couldn’t attract more investor funds, so – the inspectors found – it cooked the books and misled people as to its true financial position. Despite all these negative findings, the ultimate official court finding was that the Cambridge collapse was caused by the economic downturn.

In Newcastle, Willmore & Randell subsidiary Manifold Estates was selling land at Medowie in a joint venture with Cambridge Credit at the time of the collapse. Ian Willmore wrote that “on 30 September, 1974, Cambridge went into receivership and all of Manifold Estates’ creditors immediately looked to us for payment. This made 1975 a very stressful year.” Willmore & Randell generated cash-flow by erecting and selling cheap hardiplank houses on blocks at Medowie. Within a year the developer was able to buy back 283 acres at Medowie from Cambridge’s receiver and make a profit from reselling some of it.

Irregular corporate behaviour

If elements of Cambridge’s corporate behaviour were akin to a ponzi scheme, some other aspects were curious in different respects. For example, when a US Mafia-linked lawyer, Harry Wainwright, fled the USA to Australia to avoid some serious indictments he managed very rapidly and in rather irregular circumstances to become a naturalised Australian citizen. Crime writer Bob Bottom wrote in The Sydney Morning Herald in 1985 that Wainwright transferred substantial sums to Australia, using $58,000 to buy a property at Port Macquarie, NSW, called “Broken Bit”. He then allegedly resold this property to Cambridge Credit for more than $1.4million, with Cambridge also throwing in a $125,000 penthouse at Sydney’s Darling Point. Wainwright took the penthouse and $467,000 as a deposit, financing a mortgage for Cambridge Credit for the million dollar balance. Cambridge paid another $80,000 in interest. Just before Cambridge went belly-up, Bottom wrote, Wainwright foreclosed and took the Port Macquarie property back, reselling the Sydney penthouse for $250,000. Wainwright was later named in relation to various drug-related transactions in Australia and was reputedly a busy client of the notorious Nugan Hand Bank – allegedly used by the Mafia and the US security agency, the CIA, for laundering their drug money.

For their part, the directors of Cambridge (and its Newcastle-based auditor Daniel Purcell) were charged over their false and misleading statements to investors. But government prosecutors dragged their feet so egregiously that the NSW Supreme Court in 1986 granted a permanent stay of proceedings on the basis of the “unreasonable” delay.

Debenture holders eventually got their money back, plus some interest, as the receiver drip-fed the real estate assets onto the market. Unsecured creditors, however, lost tens of millions of dollars.

While it was a huge event at the time, the Cambridge Credit saga is now largely forgotten. But in Rankin Park, some of the street names remain as memorials to the founders and directors who over two decades built the company from nothing, took it to stratospheric heights and brought it crashing back to nothing.

Some illuminating background about the Cambridge crash can be found here: (Thanks to reader James Franklin for drawing my attention to this article).

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TB, an old foe, half-forgotten but not gone