A BANKING ROMANCE

Dominion, Volume 21, Issue 193, 17 May 1928, Page 10

A BANKING ROMANCE

EARLY YEARS IN THE DOMINION

REMINISCENCES OF FALCONER LARKWORTHY

BIRTH OF BANK OF NEW ZEALAND Behind the brief cable message from London published m yesterday’s “Dominion.” announcing the death at uic age of 05 vears of Mr. Falconer Lark worthy, there lies an interesting anil romantic story ol a man who played a great part in the early financial and commercial history of New Zealand.

Falconer Larkworthy was born in Weymouth on March 22, 1833, lour years before Queen Victoria came to the throne. His father was a surgeon, who had been educated at Winchester, and his mother the daughter of John Cooke, merchant and shipowner, of Calcutta. At the age of 16 he entered the countinghouse of Ferith. Wallace and Co. (afterwards Ferith, Sands and Co.), East India merchants, of London. In 180- l.e

joined the staff of the Oriental Bank Corporation, and a few months later was appointed sub-accountant pf a branch of the bank to be opened in Mauritius. There lie spent two years until ill-health compelled him to go to Cape Town, whence, after a stay of some months, he travelled to_Melbourne, arriving there in March, 1855.

“Niiiety-ono Years.” The story of his remarkable life is intimately told by the late Mr. Falconer Larkworthy in his reminiscences, “Nine-ty-one Years,” edited by Mr. Harold Begbie. It was suggested to Mr. Larkworthy in 1919 when he retired from the chairmanship of the Indian Bank, being then in his eighty-seventh year, that he should prepare a book of his reminiscences, and he at last surrendered to the proposal that his family papers should be edited for publication. “Ninety-one years” is a notable contribution to the literature of biography and banking. It is the very human story of one who played a notable part in international finance, and a conspicuous and courageous part in the battle for currency reform. In tlie Days of the Gold Rushes. His was a romantic and adventurous career. On his arrival at Melbourne in 1855 he was assigned a post in the Oriental Bank Corporation’s melting and assay house, where he was quickly initiated into all the processes connected with the melting down of gold into ingots. “Gold-dust came pouring in by Government escort from agencies on the goldfields, packed and sealed iu separate bags according to the respective localities where the gold was found, and it was necessary to test these samples for fineness, and to ascertain if any were of fraudulent character. . . I attained an expert knowledge of dust by appearance and of melted gold by touch, aud became proficient at tossing gold-dust so as to cleanse it roughly from impurities.” Mr. Larkworthy's accounts of his experiences and adventures in Melbourne and at Ballarat during the days of the gold rush, and his stories of life on the Victorian goldfields arc of absorbing intcrestffi but stlil more so are the chap-

ters dealing with New Zealand as he fond it iu the “sixties.”

Arrival in New Zealand.

Jii December, 1857, Mr. Lark worthy married Mary Ralston, the youngest daughter of a Cape Town family, and in IS6O he left Australia with his wife and baby to take up an appointment in New Zealand. . ~ „ "I understood from the very' first, he writes, "that my appointment to Auckland might be only of a temporary character, as the Court of Directors in Loudon were doubtful as to the expediency of continuing business in New Zealand." In October, 1860, lie received a' letter from the manager of the Oriental Bank Corporation at Dunedin as follows: —

I am disgusted with New Zealand as n field for the bank. To have anything to do with the North Island is flat folly, of course; but eveu the Middle Island is no place for us.

Mr. Larkworthy writes that he thought his friend was ."smoewhat biased," owing to his personal want of success in Dunedin, for when he wrote his Government and public deposits did not exceed £25.000, and his current accounts £6000." . . - The fact was that the

Colony was on the eve of an immense economic and material development, and it was just the time for a new bank to rise with the tide. Within a very few’ months after this I had iu Dunedin upwards of £200,000 on deposit, in the shape of current accounts, in the books of the Bank of New Zealand, belonging to traders and successful miners.” In May, 1861, Mr. Larkworthy received orders to wind-up the Oriental Bank’s business in New Zealand. The premises and “as much of the business as suited them” were taken over by the Bank of New South Wales, this being done by Mr. D. L. Murdoch, who subsequently' became manager of the Bank of New Zealand in Auckland.

Start of the Bank of New Zealand. Mr. Larkworthy gives the credit for promoting and fostering the Bank of NewZealand to Mr. Thomas Russell, “a member of the firm of Whitaker and Russell, the leading solicitors in Auckland.” He describes Russell as “able and plausible,” and “a highly speculative man.” Larkworthy ascribes to Russell some of the responsibility for his own heavy losses in the “financial whirlpool which created so much havoc and disaster” in 188189, and “from being a comparatively rich man I became a poor one.” On condition of a promise that he would be appointed managing director in London, young Larkworthy agreed to join the Bank of New Zealand and render service for six months by opening branches' and establishing goldfield agencies. It had been discovered that the Coromandel Peninsula, the Thames district, and the province of Otago were rich with gold, and about this time there started the great rush to Gabriel’s Gully. The formation of the Bank of New Zealand was proceeded with, and the Act of Incorporation was passed on July 29, 1861. At this time,a tragedy befell young Darkworthy in. the death of his wife, soon after the birth of their second child, and he records how he was offered comfort and sympathy iu his home by Bishop Selwyn, who took the baby and walked up aud down the room with it when it cried. Gold Buying in Otago. In October, 1861, Mr. Larkwortliy arrived in Dunedin, and opened a branch of the Bank of New Zealand. His first assistant was Mr. John Kissling, from Auckland, and the staff soon became a large one. He has much to say of the infant city of Dunedin and of his experiences on the goldfields. He decided to go to Gabriel's Gully and' Waitahuna and buy gold on the spot. “I had neither agents nor banknotes. . . The B ( mk of New Zealand had only just been launched into the financial world, aud its cash resources were small and its banknotes had not yet left England. If I were to wait until I could begin gold buying with these notes it was quite clear that I should be hopelessly iu the rear of my competitors. I quickly made up ray mind—l would have notes of some kind, even if I bad to manufacture them myself.” He was granted permission to do so by the board in Auckland, but inquiries throughout New Zealand showed that th? only paper procurable in sufficient quantity was ordinary notepaper. “As it was a cas" of necessity I designed a form, set al' graphic press to work on the notepap, . and in the course of a couple days the printers furnished me with a stock of manv thousands of one pound forms. . . . The first specimen was by no means a bad-looking note when it was fresh from the press: but the bloom was destroyed by a little handling and a few drops of water and a rough squeeze turned it into blobs and tatters.” At Gabriel's Gully and Waitahuna both the Union Bank and the Bank of New South Wales had establishments, 'but at the Weatherstone there was no bank agency, and Mr. Larkworthy betook himself by Cobb’s coach to this virgin field. Using part of the counter of a local storekeeper, Mr. Larkworthy stood all day buying gold-dust “as hard as I could. The crowd was so great that I enlisted the services of the storekeeper and one of his assistants to buy on commission. . . Tn the course of two or three days I had practically cleared the, field of its already harvested treasure on, for the bank, highly advantageous terms. Every evening I deposited my purchases with Major Baldwin. Goldfields Commissioner, at the Police Camp, until I had between 3000 and 4000 ounces on hand for transport to Dunedin by the first escort: after fortifying some storekeepers—one of whom was a. Jew named Jacob—with the remainder of the notes I had on band, I started on my return to Dunedin.” An Interesting Sequel. Mr. Larkworthy had not been long back in Dunedin before he was called up by St. John Brannigan, chief ot the police in Otago, who informed him that there was trouble at the Weatherstoiie, where the miners had- been told that the Bank of New Zealand inotes wcjre ‘ duffers.” An Irishman had taken some of them to Waitahuna to get a draft on Ireland from one of the banks, and was told by the cashier that they were "no good." The notes had been obtained from the Jew Jacob in exchange for golddust. Jacob was arrested and held by the police. Larkwortliy at once returned to the goldfield, and after interviewing a number of diggers convinced them that the notes were good and that the false report had been circulated by agents of Ihe Bank of New Zealand s rivals. The Dunedin newspapers advised the public to mark their sense of the ungenerous treatment ot a local institution by transferring their banking, accounts to it. “This suggestion was promptly and heartily responded to, and

the Bank of New Zealand was at once placed, in regard to deposits and volume of business, in a position to, compaie favourably with the older institutions. A Love For New Zealand. The Bank of New Zealand prospered, and in ISGI Mr. Larkworthy, aged 28, sailed for England to establish an office in London. "I had become very warmly attached to New Zealand, he "and mv love for it. combined with the instinctive hunger for hind, fostered in me the idea of making the colony my ultimate home; of founding a family there; and. as a landowner, having my name recorded in the first New Zealand Domesday Book.’ Activities in London. On his return to London. Mr. Larkworthv approached Dr. J. Logan Campbell, “one of Auckland s oldest settlers, and asked him to join the London board,' but he left Scotland for Uorence. where his family were residing, and I had little or no directorial assistance until Mr W. S. Grahame, another old Auckland colonist, was appointed in January, 1863.” Mr. Larkworthy deals interestingly with the early business of the bank in London. "In connection with the forms provided by the bank for the use of the public, I adopted as distinctive ot the bank the well-known _ vignette ot Mount Egmont at Taranaki, with figures of Natives and of the apteryx (kiwi) in the foreground. This design, m an extended form, I drew for the reverses of an issue of bank notes; the bulls, cows and sheep, which are pictured on the faces of the notes, were drawn from ani-

mals’ in F.B.’s publication. “Photographs of Celebrated Shorthorns.” Bank’s Early Difficulties. “At a very early date the advances ot the bank at Auckland were some £200,000 in excess of the deposits, and this weakness became radical. Over and over again the bank found itself,. in regard to available cash in London, within dangerous limits, and it must be attributed more to good fortune than to any other cause that it did not succumb in this early state of its existence. . . . Late in 1862 the result, of this bad financing revealed itself in Loudon, for whilst Mr. Kennedy was supposing the London branch to be well in funds, he had only some £36,000 in gold bars coming forward to counter-balance maturing liabilities of £189,000. I had to explain matters to the Oriental Bank Cor-, poration, and they threatened to dishonour any further drafts of the Bank of New Zealand unless funds were placed in their hands to meet them, and tor some time I was exceedingly apprehensive that they would carry out their threat. ... As a remedial measure the board of the Bank of New Zealand decided that the bank in the colony should draw on their own branch in London. An overdraft of -50,000 was arranged with the Bank of London, which, to turn a corner, might be increased to £lOO.OOO without security, and also important discount facilities.” In April, 1863, Mr. Larkworthy married again, and in the same year ne writes ’ “My efforts to secure the most favourable rates possible for the Bank of New Zealand insurance business brought me into contact With the Commercial Union Assurance Company, which was then being launched intofflic world.” He joined the board of directors and was associated with the company fi.2 very many years.

Troublous Times. Several chapters running to over 10t> pages of his “Ninety-one Years are govoted by Mr. Larkworthy to the early struggle and financial difficulties of the Bank of New Zealand, particularly in connection with the great financial crisis which involved the .Bank of London and other banking institutions in. disaster in 1865-66. His account of the formation of the New Zealand Loan and Mercantile Agency Company, Ltd., iu April, 1865, the Waikato Land Association, Ltd., 1819, and the Auckland Agricultural Company, Ltd., ISB2, are of absorbing interest. As managing director of the New Zealand Loan and Mercantile Agency Company, Mr. Larkworthy visited New Zealand in 1888-bJ io investigate the then very disquieting position of the company. About this time lie wrote; “Year after year the financial position of the colony became more and more complicated, until it became submerged in the gloom of a long protracted mercantile and financial crisis, and the name of New. Zealand became a bv-word for discredit. ’ Mr. Larkworthy's reminiscences of this troubled period have a certain historic interest, and they throw much light on the financial operations of the period. Ultimately Mr. Larkworthy devoted himself to the affairs of the Commercial Union Assurance Company, and in 1898 he joined the board of directors of the lonian Bank, becoming chairman iu 1900. In 1903 he was decorated for his services by the King of Greece. "Every year the chairman's speech to the shareholders was regarded as something of an event iu the financial world, and towards the end of his term of office those speeches sound a story note of currency reform which roused echoes all over the world.”