ANOTHER BANK FAILURE.

Hawera & Normanby Star, Volume XX, Issue 2393, 5 April 1893, Page 2

ANOTHER BANK FAILURE.

(PER PBEBS ASSOCIATION.)

MELBOUBNE, April 4. The Commercial Bank of Australia has suspended payment. It ia reported that the associated banks offered the institution a sum of two millions sterling, but the offer was declined, as the amount was insufficient to tide the bank through its difficulties. The rumor, however, lacks confirmation. No further particulars are available to-night.

Later.

The branch of the Commercial Bank of Australia in London closed its doors immediately on notice from the head office.

The directors are preparing au announcement, which will be made tomorrow.

The bulk of the deposits are Scotch.

The insurance oompaniea are heavily hit by the failure.

The officials of the bank were expecting the disaster some days before tbe Eaater holidays.

Tbe British deposits amount to five millions. It is expected the faiiare will seriously affect the weaker banks.

The Scottish depositors are certain to continue to withdraw.

The opinion of financiers and bankers is that tbe effect of the failure will be most disastrous.

MELBOURNE, April 5.

The Commercial Bank suspended in oonsequence ot withdrawals being so persistent and so heavy that it was impossible to overtake the exceptional demands upon the resources of tbe bank by calling in advances.

The offer of two millions by she associated banks is confirmed. The Commercial directors oould not, however, fix any definite amount, bat asked the united banks to support them to such an extent as they might require. This tbe latter could not see their way to do.

Of the deposits, about five millions are due in the United Kingdom, and nearly six millions in the colonies.

The paid-up capital amounts to £1,200,000, of which one sixth is upon tbe London register. The reserve fund amounts to £750,000.

As in the case of the Federal Bank, the difficulties of tbe institution were in Melbourne and Sydney. The branches did satisfactory business. Sydney seema likely to suffer more from the failure, owing to the fact that when the Bank acquired the business of the Mercantile Bank tbe shareholders in the latter were paid in new shares of the Commercial,

The last quarterly averages sfaow that Sydney deposits amonnted to £976,000.

The directors bad prepared a scheme of reconstruction, under which it waß proposed to go into voluntary liquidation and form a new company, with a capital of £6,300,000; ten pound shares to be budsoribed for by creditors and £300,000 ordinary paid op to £4 each, to be alloted among the present shareholders.