314 A HISTORY OF THE COLONY OF VICTORIA 



only three branches, but it held 2,750,000 from British depositors, 

 by whom a considerable loss was sustained. 



The ineptitude of the Victorian Ministry was strongly in evidence 

 during this crisis. They accentuated the panic in its most acute 

 stage by proclaiming a Moratorium, in the shape of a Bank Holiday 

 from the 1st to the 5th of May inclusive. The Bank of Australasia, 

 the Union Bank and the Bank of New South Wales ignored the 

 proclamation and remained open to meet their liabilities, with a 

 result that confusion became worse confounded, and Central Mel- 

 bourne was like a disturbed ant-hill, men running hither and thither 

 with their money, not knowing in whom to believe. It must have 

 been very humiliating to the quaking Premier and Treasurer, Sir 

 James Patterson and Mr. Carter, to see how in the final extremity 

 Sir George Dibbs arrested the panic in Sydney and restored con- 

 fidence in the surviving institutions within twenty-four hours. The 

 Government proclamation issued in Sydney on 16th May made the 

 notes of the banks in that city, then remaining open, legal tender 

 throughout the colony for a period of six months. The effect was 

 to cause a huge expansion of the circulation for a week or two, and 

 then a gradual settling back into accustomed grooves, without any 

 excitement. Had the proclamation been made a day earlier it would 

 have saved the suspension of the Commercial Banking Company of 

 Sydney. As it was it provided ample means for meeting the drain 

 on the Bank of New South Wales, and blocked the further disasters 

 which so strongly threatened. When all arrangements were carried 

 through, it was found that the banks in process of reconstruction 

 throughout Australia had called up over 6,000,000 of fresh capital, 

 of which quite one-half was payable in Melbourne and about one- 

 fourth in Great Britain. The closing, even temporarily, of so many 

 banks necessarily threw business everywhere into confusion, but so 

 much consideration was shown all round that no mercantile disasters 

 immediately ensued. Some industries that, notwithstanding the 

 heavy preferences they enjoyed under protection, were really unpro- 

 fitable had to cease operations when they lost the support of their 

 bankers. A much more serious matter was the suspension in June 

 and July of two of the largest pastoral and wool-dealing companies, 

 with debenture and deposit liabilities in England of over 4,000,000 ; 



