CITY OF MELBOURNE BANK.

New Zealand Herald, Volume XXXIII, Issue 10081, 17 March 1896, Page 5

CITY OF MELBOURNE BANK.

EXTRAORDINARY REVELATIONS. Melbourne, March 16.

Another chapter in tho history of tho boom is being unfolded by the investigation of the affairs of the City of Melbourne Bank by a special commissioner. Judge Molesworth is conducting the examination. Mr. Loader, chairman of the bank, was the chief witness during the week. His evidence was a tale of hugo advances to various institutions on securities that afterwards became comparatively valueless. The manner in which somo overdrafts were negotiated and allowed to increase was brought out. For instante, C. H. James started with an overdraft of £130,000 in 1890, and, by the time the bank closed, had managed to increase it to over £210,000. The Keal Estate Bank was accommodated to the extent of over £90,000 on what proved to be very poor securities. M. \V. Fergusson, of Fergusson anil Mitchell, started with a liability of £215,000 in 1891, and finished in 1895 with an indebtedness of £291,01)0. David Munro and Co. could not [job bigger advances than 1-10,000 in 188$, but they managed to run up an amount of about £l'>o,ooo at tho close of tlio bank. John lilyth owed the bank £61,000, but, according to a minute of the directors, ho succeeded in shifting I this liability by withdrawing his opposition to the appointment of liquida- ] tors in a certain company. Witness declared that tho general manager, tho la to Mr. Longmuir, ruined himself and all connected with him to save tho bank. Ho left a debit),of £75,000 to the bank. The Munro Company owed the bunk between £400,000 and £500,000 at the time the bank closed. When he came back from England the account stood at debit) a quarter of a million, half tho paid-up capital of tho bank. J. (Jollier, one of the bank directors, was requested to join tho Board of the Munro Company, in order to protect the bank's interest. In September, 1889, the account got up to £341,000, and in March, 1890, by direct advance it went up to £370,000. Loader stated that his indebtedness to the bank when it closed amounted to a little over £20,000 for fivo accounts which stood in his name in the books. Ho had 1511 shares in tlio bank. The book value of the chares lodgod as security lor his debt was £23,000, but tho present uiaikei value was £7300.

Later. At the City of Melbourne Bank enquiry, Mr. Collier, a director, gave evidence that the bank undertook to sco the Munro Company's railway contracts through, and lost £14,000 over the Oakleigh line, while there were equally heavy losso* oil the other contracts. Tho bank was anxious for business, and the speculation seemed good enough, as the Company apparently had plenty of money.