64 THE COURSE OF THE CRISIS OF 1893 
Upon these estates they had borrowed heavily for development, 
only to be struck by continued drought and low prices for wool. 
The more cautious institutions, both banks and companies, 
began furtively to set their houses in order, the banks by 
strengthening their local position and reducing commitments 
abroad, the sounder companies by closing down on speculative 
snterprise.l But events were moving to the inevitable end, and 
no efforts on the part of either banks or companies could now 
avert the disaster they had invoked. 
In December 1889, one of the new building societies—the 
Premier Permanent—demonstrated its lack of permanence by 
suspending, and well over half a million was lost to depositors. 
As this was one of the most imposing institutions of the time, 
with large offices and a string of prominent men as directors, 
the blow to public confidence coming at such a moment was 
almost shattering; and the effect on London opinion was 
disastrous. Quite apart from this added embarrassment the 
position of the banks, owing to the inactivity of trade and to 
the demands of the government for accommodation, was difficult 
in the extreme. Notwithstanding the difficult circumstances 
the government had prepared a fresh series of surprises for the 
jaded financiers. This was connected with an extensive railway 
programme which provided for the construction of over 700 
miles of line at an estimated cost of over eight millions. This 
programme, moreover, was merely a supplement to the con- 
struction, already approved, of fifty-four country and seven 
suburban lines at a cost of six millions. The total commit- 
ments under this heading, therefore, were in the neighbourhood 
of fifteen millions; and never in the history of the country was 
a programme of expansion so badly timed. 
The suspension of building and the maritime strike of August 
18902 led to extensive unemployment; and the rapid absorption 
of industrial savings added further to banking difficulties. 
Then, in October, the government budget disclosed a deficit 
which was creeping towards a round million. The railways 
already constructed were failing to pay interest and running- 
t The first serious strictures passed on the boom in Australia were contained in 
the Insurance and Banking Record, 16 Apr. 1889. 
¢ For the serious effect of the maritime strike on the financial position see Coghlan, 
p. 1667. The banks’ chief clients, the pastoralists, could not get the sheep shorn, 
nor, where shearing was completed, could they get the wool to market.