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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The boom of 1890 and its economic consequences

Collection:: Economics Books

70 THE COURSE OF THE CRISIS OF 1893 value of the declaration concerning the advantage to be gained from mutual support was now tested. The failure of the Federal Building Society had seriously endangered the stability of the parent Federal Bank, and an appeal for assistance was made to the ‘associated’ banks. As this appeal coincided with a Further spasm of withdrawals and at a time, moreover, when the clash between British and Australian interests was at its most bitter phase, the banks could not do otherwise than refuse to shoulder the liabilities of a bank which was conspicuously under the ban of popular disapproval for its connexion with the defaulting building society. The Federal, therefore, was forced bo suspend at the end of January, 1893. This susperision marks a further phase in the crisis. As far as the older banks were concerned their position was now most precarious. Security had depreciated everywhere. Advances had been made on a capital value that was established on returns which there never had been the remotest hope of realizing. A continuous run on all the banks now set in. In a belated attempt to secure some measure of concerted action the Premier now conferred with the bankers; but their nerve- less condition and mutual suspicion made the attempt quite futile. The motive underlying this move on the part of the government, and well understood by the associated banks, was the desire to save the most important bank of the colony, the Commercial of Australia which, as a counsel of desperation, had made an appeal for help to the government. Following the refusal of the associated banks to lend their aid the Commercial suspended in April. The credit of every bank in Australia was shaken by this crash ;! and, if the blow staggered Victorian finan- aial interests, it incensed to the point of frenzy those in London. The Commercial Bank of Australia reconstruction scheme was so successful that the conviction grew among the other banks that they must seek salvation along the same road. An 1 See Commonwealth Parliamentary Paper, Banks Trading in the Commonwealth, 1885-191 1, for the effect of the collapse upon the rate of dividends paid by the 1885 1886 1887 (888 {889 Per cent. 13-71 13-51 12-91 12-11 12:02 1890 1891 1892 1893 1900 Per cent. 12-37 12-75 12:09 7-20 4:05

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