THE COURSE OF THE CRISIS OF 1893 67 
was at an absolute standstill, land was unsaleable, purchasers 
were forfeiting their blocks on all sides, and in every street 
stood dozens of empty houses. Then the situation took a 
new and more serious turn. In one month the failure of the 
Bank of Van Diemen’s Land had caused the suspension of the 
British Bank of Australia, and that involved the failure of an 
allied land-bank, the Anglo-Australian. The failures and their 
consequences did not have any great effect upon Australian 
investment ; but the effect upon the London market was a very 
different story. The Economist of September 1891 had scourged 
in no measured terms the land-banks of Victoria; and had 
warned the public against ‘those cancerous growths on the 
otherwise sound business of Victoria’. The revelations of the 
Anglo-Australian Bank inquiry provided food for this flame of 
criticism, and promoted such an immediate demand for with- 
drawals that another batch of similar institutions was also 
forced to suspend.? 
No help could be looked for from London. Trade there was 
declining, crops were poor and prices low and uncertain. In the 
words of Wesley Mitchell, 1892 was ‘a year of undigested 
securities’. A vast mass of stocks and bonds, which European 
investors had bought from promoters and had underwritten 
at home and abroad, weighed heavily on the market for long 
U After an appeal to the other banks, and a fruitless endeavour by the govern 
ment to preserve its solvency, the Bank of Van Diemen’s Land failed, with losses 
squal to the whole of the capital and reserves, in October 1891. Coghlan comments, 
Public works were stopped, there was a lack of confidence everywhere, government 
finance was hopeless, and absolute gloom prevailed with trade at its lowest ebb.’ 
Labour and Industry, p. 1829. 
* In the criminal inquiry which followed the Anglo-Australian Bank failure it 
was revealed that the share capital of £110,000 was represented by a sum of 
£37 10s., the remainder being an overdraft on the British Bank of Australasia. 
* For the world situation see paper by Carl Pinschof (1892), Our Financial 
Organization and the Present Crisis, before the Bankers’ Institute. ‘In other parts of 
the world we have witnessed the collapse of a reckless gold-mining bubble in South 
Africa, while in Asia the coffee and sugar plantations have suffered severe losses 
causing widespread ruin in Java, Ceylon, and also in Mauritius. The depreciation 
of the rupee threatened India with a monetary crisis of a most dangerous character. 
France suffered through the phylloxera to an extent estimated at £540 millions. 
In addition to this the Panama Canal Co. failed with £64,000,000 of liabilities, and 
the copper ring collapsed and took with it the Société de Métaux and the Comptoir 
d’Escompte de Paris, which was followed by the liquidation of one of the oldest 
financial houses in France, the Société des Dépots et des Comptes Courants. There 
were also serious financial complications in Italy, Spain, and Greece, the insolvency 
of Portugal and the Famine in Russia.’