Borrowing and business in Australia

Bibliographic data

Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Prosperty and crisis after the gold discoveries

Collection:: Economics Books

AND THE CRISIS OF 1878 43 purpose of being wound up’. It was, for banks and other in- stitutions, a period of isolated, incoherent, and chaotic finance that very quickly brought about its own remedy by eliminating the unfit in drastic fashion. Warnings of a coming storm had already been noticed, but the shock came with dramatic suddenness in the failure of Overend, Gurney & Co. for ten millions.! It was a mercantile rather than a banking disaster, although bank reserves dimin- ished with alarming speed. Failure followed quickly upon failure, and only the most soundly based institutions came safely through. This catastrophe was in many ways a proto- type of that of 1893 in Australia. English bankers learnt in 1866 the lesson that their Australian confréres failed to agsimi- late for another thirty years, i.e. that safe banking depends upon a unity of interest among the banks, and on the exclusion of excessive and adventurous competition with its mischievous industrial reactions. Co-operation, absorption, and amalgama- tion was the note of the new period in English banking ; but the experience of 1893 was necessary to harmonize the Australian financial orchestra. The Overend-Gurney crash had an immediate reverberation in Australia. Although quite solvent, the Agra and Masterman’s Bank was forced to close its doors.2 News of this failure and of the disastrous drop of 3d. a pound in the price of wool reached Australia on the same day; and a period of the most acute distress for Queensland in particular began immediately. It will not serve any useful purpose at the moment to trace the history of the crisis further, but the impaired government credit, following upon the heels of somewhat similar happenings in the other colonies, caused an immediate check to the flow of capital that landed almost every colonial government in diffi- culties: New South Wales was in such urgent need that a 5 per cent. loan could not be placed at a figure higher than 70, redeemable at par, which made the rate of interest equivalent to 71 per cent. per annum—=a very distressing figure indeed. So 1 The firm of Overend, Gurney & Co. were bill brokers handling £60 to £70 millions of commercial bills per annum; and their failure ended, at least for a time, the ‘fatal facility of credit’ which was responsible for the collapse. 3 Agra and Masterman’s was quite solvent, and in the panic paid £3,000,000 across the counter. The actual suspension was due to & run on its Indian branches caused by false telegrams advising that the bank had closed its doors.

Access restriction

Copyright

fullscreen: Borrowing and business in Australia

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation