Changes in the coordinating activities of the Australian Universities Commission (AUC) between 1959 and 1970 are discussed, along with events leading to the creation of the Australian Research Grants Committee and the Academic Salaries Tribunal. In addition to reviewing relevant literature and official documents, interviews were conducted with university and government officials. Attention is directed to the role of the Commonwealth government in formulating education policy in the 1960s and the tensions faced by a large Commonwealth statutory authority in action. The AUC's role in responding to the following four tensions are addressed: providing advice to the Commonwealth on the universities' financial and developmental needs as part of its role as both an advisory and regulatory body, and administering programs of recurrent and capital grants that the AUC recommended; ensuring a proper balance of national needs and states' rights; reconciling changing views of university autonomy with changing government views regarding the accountability by universities for public funds provided to them; and safeguarding its own autonomy while serving successive ministers of education and cooperating with federal government departments responsible for coordinating the overall development of the Commonwealth's role in education. (SW)