Another Australian Bank Smash

Manawatu Times, Volume LIV, Issue 6636, 25 August 1931, Page 6

Another Australian Bank Smash

Primary Producers Closes its Doors MILLION AND A HALF DEPOSITS ENCOUNTERED UNPRECEDENTED DIFFICULTIES United Press Association.—By Eicctrif Telegraph.—Copyright. Received Tuesday, 1.0 a.m. SYDNEY, Aug. 24. The Primary Producers’ Bank of Australia, Ltd., with headquarters in Sydney and branches in other States .suspended payment as from to-day. The shareholders are to be recommended to place the hank in voluntary liquidation. The chairman of ’directors, Mr. H. Schweiger, announced to-night that if the hank’s securities realised anything like the hank’s valuation the whole of the depositors should ultimately receive 20/ in the pound.

The bank, which was established in 1923, had encountered unprecedented difficulties. These were accentuated by the pronounced fall in the values of wheat and other primary produce, thy marked reduction in security values such as country lands, the necessity of maintaining advances to farmers, coupled with steadily declining deposits, lack of adequate capital, and inability to obtain temporary accommodation or to amalgamate with any other financial institution, while most of the bank’s clients were unablo to reduce their indebtedness in the slightest degree. There was no alternative, added Mr. Schweiger, but to close the bank’s doors. Tho bank’s paid-up capital was £439,401. Deposits, at the last balancesheet. in February, amounted to £1,453,545, while assets amounted to £2,104,443, of which bills discounted, loans, advances and other assets accounted for £1,592,315. The bank held £370,086 in liquid assets, including £37,890 in cash, £92,000 at short call, and £145,67S in Commonwealth bonds. Mr. Schweiger stated further that his bank was also seriously prejudiced by the closing of tho Government Savings Bank of Now South Walc-s.