AUSTRALASIA. 



53 



posits. Still, as it hod been given a share of 

 tin- Victoria (i. \.Tinnent deposits and business, 

 and was within the associat ion of hanks that 

 had agreed to assist and support each other, 

 .ilure disturbed public confidence in the 

 tpther banking institutions of the colony, and 

 tln-rc was a cessation in the supplies of money 

 from Great Britain. The nominal capital of the 

 Federal Mank was 2,000,000, of which 800,000 

 had been subscribed and 400,000 paid up. Its 

 liabilities at the time of suspension were esti- 

 mated at 2,000,000, about half of which was 

 due to British depositors. Depositors are likely 

 to lose fully half of their principal. The bank 

 had no branches, except at Sydney and Adelaide, 

 and these were not immediately affected by the 

 failure. The failure of the Federal Bank was 

 followed by the collapse of a number of land and 

 investment companies and other similar finan- 

 cial institutions in Victoria and New South 

 Wales, and the revelations of bad management 

 and positive dishonesty following closely there- 

 upon had a tendency to still further increase 

 the popular distrust in all financial institutions. 

 In order to allay this distrust and to restore con- 

 fidence in the banks, the Victorian associated 

 banks held a meeting on March 13, and passed a 

 resolution " to render financial assistance to each 

 other as occasion may require, on such terms 

 and to such extent as may seem justifiable to 

 each and all of them," and a few days later it 

 was announced that this agreement pledged the 

 associated banks, " in case any of their number 

 should require assistance, to advance any neces- 

 sary amount against its securities." The next 

 bank to succumb was the Commercial Bank of 

 Australia, Limited, at Melbourne, one of the as- 

 sociated banks, which closed its doors on April 

 4 on account of a continued drain on its re- 

 sources. The Commercial Bank was founded in 

 1866 with a nominal capital of 500,000, but 

 only half of the shares were originally issued. 

 The capital was afterward increased to 3,000.- 

 000, of which 1.200,000 were paid in. The vol- 

 ume of business done by the bank was very large. 

 The balance sheet for Dec. 31, 1892, showed that 

 out of a total liability to the public of 14,694,- 

 956, $12,044,596 was for deposits ; while the as- 

 sets included 12,111,235 for bills receivable 

 and other advances. At its last half-vearly 

 meeting the bank had declared an annual divi- 

 dend of 12| per cent., and carried forward 39,- 

 131 of profits; but it had also transferred 300,000 

 from its reserve to a contingent account, to meet 

 prospective losses on business based upon Mel- 

 bourne real-estate securities. This left a reserve 

 fund of 750,000. On the day of suspension the 

 management asked the associated banks to sign 

 an agreement to give the Commercial whatever 

 financial support it required. The associated 

 banks declined to do this, but offered to advance 

 1.750,000 against approved securities. The 

 Treasurer of Victoria, who was present at the 

 meeting, said the Government would assist with- 

 out conditions. Upon the advice of the solicit- 

 ors of the Commercial Bank the proposition of 

 the associated banks was declined, as it entailed 

 the surrender of the most valuable securities 

 of the Commercial Bank. The bank had 109 

 branches in the different colonies, and about 

 one half of its deposits belonged to British in- 



vestors. The English, Scottish, and Australian 

 Chartered Bank sus|H-ndi'd on April 12 on ac- 

 count of the heavy drain following the suspen- 

 sion of the Commercial Bank of Australia, and 

 which had amounted to 200,000 since the be- 

 ginning of the month. The capital of this bank 

 was 900,000 paid up, and its deposits amounted 

 to upward of 5,000,000, of which 900,000 be- 

 longed to British depositors. It had 91 branches 

 in the different colonies, but the bulk of its busi- 

 ness was in Victoria. The head office was in 

 London, but the branch at Melbourne was the 

 head office in Australian colonies. At its last 

 half-yearly meeting 200,000 had been placed to 

 a contingent account to provide for possible 

 losses. This bank did not apply for assistance 

 to the associated banks or to th'e Government. 

 On April 20 the Australian Joint Stock Bank 

 (Sydney) was compelled to suspend payment on 

 account of the persistent withdrawal of deposits. 

 This bank stood third as to the amount of busi- 

 ness transacted in New South Wales. Its author- 

 ized capital was 1,000,000, of which 704,394 

 were paid in, and the balance sheet for Dec. 81, 

 1892, showed 10,840,840 deposits, of which up- 

 ward of 4,000,000 were English. The reserve 

 fund amounted to 510,000. The bank had 200 

 branches, and while most of its business was in 

 New South Wales, there were 20 branches in 

 Queensland, and a considerable business was 

 done in that colony. In the period of distrust 

 which followed the failure of this bank, and 

 which all efforts were powerless to allay, there 

 began a general withdrawal of deposits in Aus- 

 tralia, and numerous notices of withdrawal were 

 sent from England and Scotland. The London 

 Chartered Bank of Australia, at Melbourne, an- 

 nounced its suspension on April 25. This bank 

 was established in 1852, and its paid-up capital 

 was 1,000,000, with a reserve liability of the 

 same amount. 



At the close of 1892 the deposits in the colo- 

 nies amounted to 3,315.242 2,295,878 in Vic- 

 toria, 869,555 in New South Wales, and 149,- 

 809 in Queensland and the total of British de- 

 posits was about the same as that of the colonies. 

 The advances at the same date were 6,312,966 

 3,554,635 in Victoria. 2,271,898 in New South 

 Wales, and 486,433 in Queensland. The coin 

 and bullion on hand amounted to 696,456. At 

 the time of suspension the total liabilities were 

 upward of 9,000,000. The head office of the 

 bank was in London, and it had 58 branches in 

 Australia. The Standard Bank of Australia 

 suspended on April 28. Its authorized capital 

 was 1,000,000; subscribed capital, 538,450, of 

 which 278,000 were paid in. The amount of 

 London was 273,000, and Australian 600.000. 

 On Dec. 3, 1891, the bank suspended payment, 

 but resumed business May 30, 1892. Its head 

 office was in London, and its Australian office 

 in Melbourne. It had but one branch. After 

 business hours on Saturday, April 29, the direc- 

 tors of the National Bank of Australasia (Mel- 

 bourne) decided that, in view of the heavy and 

 continuous withdrawal of its deposits and in 

 justice to the general body of its creditors, the 

 bank would be compelled to temporarily sus- 

 pend payment. During the month, 650,000 had 

 been withdrawn, and receipts of deposits had 

 declined greatly. The National Bank of Austral- 



