Australian Dictionary of Biography

Ian Mathieson Jacoby (1901-1973), financier and hire purchase pioneer, was born on 27 January 1901 at Mundaring, Western Australia, second of four children of Mathieson Harry Jacoby, an orchardist from Adelaide and a member (1901-05, 1908-11) of the Western Australian Legislative Assembly, and his Victorian-born wife Mary Augusta Maude, née Cresswell. Ian was educated at Thomas Street State School, Subiaco, and Christ Church Grammar School, Claremont, but left when his father died in 1915. Two years later he became a founder of the Christ Church Old Boys' Association.

In busy wartime conditions Jacoby was soon employed in the shipping department of Dalgety & Co. for a half sovereign each week until he received a better offer (13s. 4d. a week) from McIlwraith, McEacharn & Co. at Fremantle. By the age of 20 he had saved more than £500 and was dissatisfied with the low rate of bank interest. In the early 1920s Perth had no finance companies, other than banks which were loath to lend for consumer goods such as motor vehicles. Jacoby reasoned that he could exceed bank interest on his money if he were prepared to provide hire purchase arrangements or instalment credit. Circumstances proved him correct—by 1927 he was augmenting his salary by some 40 per cent from these dealings.

His activities were noticed by a visiting representative of the American finance company, Industrial Acceptance Corporation, who offered him a job in its Australian headquarters in Sydney. Arriving there in mid-1927, Jacoby met and courted the violinist Hilda Irene Sutton (d.1968), whom he married on 7 September 1928 at St Mark's Anglican Church, Darling Point; they were to have one son before being divorced in February 1943. Jacoby's American directors, in an economy drive, had recalled senior executives and terminated the Studebaker franchise, leaving him in charge on a salary of £1250, plus 3 per cent commission. After the Wall Street crash they cabled Jacoby to put the Australasian subsidiary into liquidation. Instead, he sent a counter proposal that he be given a chance to sell I.A.C. (Australasia) Pty Ltd to Australian investors. The American principals consented, subject to a 31 December 1929 deadline.

Aged 28, with few wealthy contacts, Jacoby studied lists of company directors for prospective investors. He eventually approached the Nathan family who, with interests in Maples piano and furniture stores, and in Lane's and Neal's motors, were well aware of hire purchase potential. Benjamin Nathan bought the goodwill and outstanding debts owed to I.A.C., making himself chairman and Jacoby general manager. As the Depression bit and bank credit was curtailed, I.A.C.'s lending contracted, but Jacoby managed to pull the firm through, even paying a dividend of 7 per cent in 1931. The company then went from strength to strength as he 'probed with fascination the limits of prudent and therefore profitable lending'.

In 1939 Jacoby was sent overseas to study methods used in the hire purchase industry in the United States of America and England. He returned with new ideas for funding, though the outbreak of World War II postponed their implementation. On 17 December 1943 at the office of the government statist, Melbourne, he married a divorcee Elsa Antoinette Ruth Dadswell, née Stenning (d.1994), a 33-year-old Australian singer he had met in London; they were to have two children.

Due to Jacoby's careful management, I.A.C. came out of the war about equal in size to its rival, Australian Guarantee Corporation Ltd. Competition increased, however, with the entry of the industrial finance division of the Commonwealth Bank of Australia—headed by a friend of Jacoby's (Sir) Alfred Armstrong—which offered credit at 4 per cent, severely undercutting the 6.5 per cent charged by I.A.C. Although in favour of trading banks becoming associated with finance companies, Jacoby was determined to free the latter from the expense of bank credit. He persuaded his directors to list I.A.C. on the Sydney stock exchange in 1948, thus making it the first publicly listed finance company in Australia.

In 1949 Jacoby again went abroad, carrying letters of introduction from the governor of the Commonwealth Bank and Treasury officials. In America and England he encountered new ideas regarding consumer credit; on his return he gained approval to float short-term debentures as a means of raising capital. This move took I.A.C. and other finance companies farther away from the regulatory control of the banking system. In succeeding years Jacoby became an advocate of short-term stock through the financial press; he 'may have been the first to make commonplace the need for maximum returns on funds, and hence for a money market's services'.

By the early 1950s the Nathan connexion with I.A.C. had virtually been severed and Jacoby found it increasingly difficult to work with his conservative directors. In June 1953 he resigned and began a new company, Custom Credit Corporation Ltd, which was listed on 9 July. In a 'dazzling' coup he persuaded the National Bank of Australasia to take 40 per cent of Custom Credit's shares, thereby ensuring nationwide coverage and transforming its borrowing potential. His move soon had other banks scrambling for hire purchase associations. The new company did extremely well, surpassing by 1959 all but one of its competitors. None the less, by 1962 relations between Jacoby and other directors had soured. He suffered a mild stroke and resigned from the board in early 1963.

On 18 February that year Jacoby registered a new public company, Ready Credit Ltd, in Perth. A caricature, with a brief résumé of his career, appeared in the Weekend News (14 September 1963). Within two years friction again occurred between him and his directors; in 1965 he sold out his holdings and 'finished up a healthy benefactor from a company in which others did not do so well'.

Throughout this time Jacoby was still principally domiciled in Sydney, but the death of his 19-year-old son James in 1967 appears to have marked a turning-point. Jacoby returned to Perth. In January 1970 his wife divorced him. He abandoned business pursuits in favour of more leisurely interests, including writing his memoirs and supporting the Claremont Football Club. At the district registrar's office, Perth, on 13 February that year, the man who had declined to have personal details listed in Who's Who in Australia married a 45-year-old widow Florentine Sophia Blogg, née De Beers. Survived by his wife, and by the son of his first marriage and the daughter of his second, he died on 25 April 1973 at Shenton Park and was cremated. An obituarist described him as 'the finest financial brain in the country'.