DAYS OF TRIAL 309 



and in the personnel of their management. They were the most 

 prominent of a group of companies largely controlled by one family 

 and its immediate connections, and it involved tedious investigation 

 to follow the complicated entries by which they had supported each 

 other's credit, until the effort to keep afloat had finally strained that 

 of the Mercantile Bank to the bursting-point. Within a month two 

 more Mortgage Banks, both of which had been established many 

 years, and were apparently doing a legitimate business, were com- 

 pelled by the drain on their deposits to suspend. So by the middle 

 of 1892 there were twenty-one financial companies of one kind or 

 another in suspension, holding deposits to the extent of 11,000,000. 

 Another aspect of these failures, lightly regarded at the time, but 

 pregnant with grave trouble for shareholders, was the liability of 

 4,600,000 for uncalled capital. From this time the calls began to 

 be an oppressive item in the finances of hundreds of households. 

 At nearly all the meetings of this year the tone of the Directors and 

 Managers was optimistic in the extreme; shareholders generally 

 expressed confidence in an early resumption of business, and de- 

 positors in the receipt of their claims in full. At most of the half- 

 yearly meetings of the regular banks the depression was spoken of 

 as temporary, though in several cases considerable sums were set 

 aside out of reserves to provide for anticipated losses, with a con- 

 fident assurance of their sufficiency. 



The year 1892 was prolific in insolvencies. In Melbourne alone 

 no less than 610 persons effected legal compositions, or passed 

 through the Court with declared liabilities of 7,800,000, some 

 notorious dividends being for less than one penny in the . Beyond 

 these it was well known that compromises amounting in the aggre- 

 gate to an enormous sum were effected privately in cases where 

 both debtor and creditor shunned publicity. Apart from the heavy 

 losses sustained by the collapse of speculative companies, a serious 

 diminution of individual incomes followed the general reduction in 

 banking dividends ; and a heavy fall in the market value of the 

 colony's chief products, especially in wool, added to the depression 

 with which the year closed. With the door to further borrowing 

 apparently closed even against the Government, and with the Trea- 

 surer's statement that the accrued deficit in the public funds exceeded 



