THE COURSE OF THE CRISIS OF 1893 69 
was managed by a board of directors who were closely connected 
with some of the banks; and the mismanagement and fraud 
which were revealed created a most unfortunate atmosphere. 
The directors of the more stable banks declared that these 
failures were inevitable ; and that normal business could not be 
resumed until these pseudo-banks had paid the penalty. For 
this reason, and for others more urgent which were not made 
public, the banks refused accommodation tothe smaller financial 
companies; and left them to shoulder their own burdens, a 
perfectly justifiable course had the banks themselves been less 
responsible for the predicament of their clients. This policy, 
however, did nothing towards restoring confidence; and the 
withdrawal of deposits went on at a rate that very quickly 
assumed a quality of menace for the banks themselves. 
Having in mind the action of the English banks in the Baring 
trouble, the associated banks now conferred with a view to 
affording mutual support; and the decision that this was 
possible and advisable, upon ‘satisfactory (but undefined) 
conditions’, was equivalent to a resolution to do nothing 
since the whole financial body was one vast unsatisfactory 
condition. The conference at least had the effect of restoring 
some measure of confidence to the mind of the community, and 
a temporary pause gave the banks a breathing-space that was 
badly needed. The period of deepest gloom occurred in the 
middle of the year. Depression and the widespread loss of con- 
fidence strangled all enterprise, unemployment brought distress 
to almost every working-class home, purchasing-power and trade 
declined enormously, and stocks of every kind were almost 
valueless. 
The older and more carefully conducted banks now com- 
menced to close their doors. It was impossible to realize assets 
or to defer withdrawals in the midst of such depression.’ Dis- 
brust, distress, and almost despair marked the close of 1892, 
during which year nearly a hundred concerns had gone into 
liquidation with aggregate liabilities of over £15,000,000. The 
! G. M. Low gives the following figures for Australian banks at the time of 
suspension—total for 12 banks: 
Paid-up capital, Reserves, and Undivided Profits . £13,442,767 
Callable capital £11,230,726 
Liabilities ’ . £89,872,445 
Assets ” £103,315,212