172 A HISTORY OF THE COLONY OF VICTORIA 



another bank was projected, which, being of local origin and 

 management, was fondly expected to be more ready to risk its 

 capital in advances on property than the conservative institutions 

 which were controlled from distant centres, and which retained 

 solemnly respectable theories on the subject of banking such as the 

 eager impetuosity of the settlers could not brook. 



Accordingly, before the end of 1838, the Port Phillip Bank was 

 projected, with a subscribed capital of 120,000 paid up to 50,000, 

 and commenced business in a portion of the auction mart of Mr. 

 Charles Williams, at the south-west corner of Collins and William 

 Streets, opposite St. James's Church, in 1839. It was ruled by a 

 large and influential Board of Directors, including such well-known 

 names as D. S. Campbell, Thomas Wills, Skene Craig, F. A. Pow- 

 lett and Foster Fyans, but the dominant spirit at the board was 

 Patricius W. Welsh (familiarly known as Paddy Welsh), and under 

 his energetic guidance the refreshing rills of financial assistance 

 were set flowing in all directions. The management was conferred 

 on Mr. John Gardiner, whose name is embalmed in Melbourne 

 annals as the sponsor of Gardiner's Creek, a local tributary of the 

 Yarra. 



At the outset the bank's prospects seemed brilliant, for at the 

 end of the first year it declared a dividend of 12| per cent., while 

 its conservative competitors were glad to divide a modest 8 per 

 cent. Elated with such a good beginning, the directors purchased 

 the site in Collins Street East now occupied by the Bank of Victoria, 

 on which they erected substantial premises and continued to bid for 

 popularity. The effect of these liberal advances was soon evident 

 in the creation of what the Americans call a " boom " in the land 

 market. 



At the first Government land sale, in June, 1837, the half-acre 

 town lots realised an average of 35 each. At the second sale, 

 in November of the same year, the average was raised to 42. 

 Within a year after the establishment of this bank, on 14th Sep- 

 tember, 1839, three of these lots, which had been purchased from 

 the Crown by Mr. C. H. Ebden for 136, were sold by public 

 auction for 10,224. Of course, such an enormous advance was 

 discounting the future at a ruinous rate which no calm consideration 



