THE AUSTRALIAN BANKS.

New Zealand Mail, Issue 1106, 12 May 1893, Page 36

THE AUSTRALIAN BANKS.

London, May 3. Three of the leading Australian banks are sending L 750,000 in gold to Australia, and, if necessary, another L 500,000 will follow. A rise in the bank rate of discount is probable in consequence. The meeting of shareholders and depositors of the English, Scottish and Australian Chartered Bank at Edinburgh was noisy. The minority were in favour of liquidation, but the majority supported the reconstruction. The scheme, however, was adversely criticised, because the shareholders were made partners and all the creditors were not treated alike. The meeting ultimately adjourned for 10 days. The idea of amalgamating some of the Australian banks is much favoured in the city. London, May 4. The opinion in the city favours the action in. Sydney with regard to the banks. It is probable that the Union Bank of Australia will ship half a million of gold to the colonies. Melbourne, May 4. The reconstruction scheme of the National Bank of Australasia provides that the capital of the bank shall be L 4,000,000, of which the shareholders will be asked to t3lco L 2,500,000, and the depositors the remainder, as preferential shares. The shares will be LlO, bub it is not proposed to call up more

than L 3. The depositors will take new deposit slips for five, six and seven years, bearing interest at 4 per cent. Owners of current accounts will receive deposit slips for half the amount for five, six and seven years, and the balance for two, three and four years, bearing 4 per cent interest.

The Bank of Victoria and the City of Melbourne Bank have re-opened without waiting for the expiration of the five days' holiday. The Modern Permanent Building Society has called a meeting to consider a scheme of reconstruction. It is proposed to ask the depositors to consent to the renewal of their deposits for five years, recent events having had a disquieting effect upon some of them. At a meeting of depositors and shareholders of the National Bank of Australasia a resolution was carried agreeing to the proposal for the reconstruction of the institution. Sydney, May 4. There is a feeling of greater security in financial circles in the city. Ab a meeting of shareholders and depositors of the Australian Joint Stock Bank, the chairman announced that if the other banks had promised the assistance which was asked for to the extent of a million, or possibly three millions, the panic would have been averted, and only a small portion of the sum asked for would have been required ; but the assistance was declined, owing to the amount being so large and the notice so short. It was proposed to call up 30s a share, payment extending over twelve months. The scheme was unanimously adopted. Owing to the recent suspensions, many merchants had to give accommodation to their customers to-day. London, May 4. Sir John Bray, Agent-General for South Australia, upon seeing the failure of the National Bank of Australasia announced in Monday's papers, rushed off to the bank and demanded the surrender of three bills of L 12,500 each which had been entrusted to it for collection. The officials demurred, but Sir John Bray insisted on his strict legal rights, and eventually obtained the bills. The whole amount thus saved was lodged in the Bank of Adelaide. At a banquet at the Mansion House Mr D. Powell, Governor of the Bank of England, expressed the sincerest sympathy with the Australians, and recognised their pluck in meeting the difficulty without running to tho Bank of England for assistance. He deprecated the abuse which was being heaped upon the colonies. The Times considers that if the English, Scottish and Australian Chartered Bank and the London Chartered Bank were to amalgamate, the reconstruction would perhaps be successful. Forty depositors and shareholders attended the meeting in Edinburgh of the English, Scottish and Australian Chartered Bank. Mr Blair, Writer to the Signet, representing the small depositors, objected to the scheme, because it was proposed to carry through the composition by paying the creditors with a security of unknown value, and not in cash. The details, too, he thought, were radically bad. Other depositors also objected to the scheme, on the ground that it was unfair to in* volve the*depositors in a loss of threequarters of a million pounds when the shareholders lost nothing. Mr Blair estimates that if the assets are liquidated there will be a sum of L 4,900,000 available to meet a liability of L 3,343,000. London, May 5. At a private meeting of the principal Scotch shareholders and depositors in the London Chartered Bank of Australia, the draft scheme for the reconstruction of the institution was accepted. The directors of the English, Scottish and Australian Chartered Bank have Blightly modified the reconstruction scheme, which will be proceeded with irrespective of opposition on the part of a number of Scotch depositors and shareholders. Experts declare that it would be easy to arrange an amalgamation between the London Chartered Bank of Australia and the English, Scottish and Australian Chartered Bank. The Times doubts whether further suspensions of Australian banks are probable, although there may be some minor casualties. The best financial authorities believe the worst is past. Sydney, May 5. The passing of the Bank Issue Bill has already apparently had the desired effect, as the Government does not intend to issue any proclamation declaring notes a legal tender, for which power is given in the Bill, for the present. Melbourne, May 5. With the exception of the Colonial Bank of Australasia, all the banks have reopened. Dullness and stagnation have succeeded the rush and excitement of a few days ago. The Colonial Bank of Australasia has suspended payment. At the annual meeting, which was held last week, tho balance-sheet showed that the profit had been L 32,000, and a dividend of 8 per cent was declared, while L 13,000 was carried forward. The directors transferred L 160,000 from the reserve fund to pro» vide for contingencies. The bank occu« pies a strong position, and has 82 branches in the colony. It was thought the demand from these branches might , mean a very considerable withdrawal on j

re-opening to-morrow, and the directors therefore decided not to open, but to reconstruct the bank, bringing it under the Limited Liability Companies Act. Melbourne, May 6.

The Attorney General has decided not to proceed with the second _ charge against those acquitted in connection with the administration of the Mercantile Bank.

The business of the Colonial '"Bank of Australasia was confined to Victoria. The bank declined the assistance of the Associated Banks. Its liabilities are L 4,394,000, including deposits and interest, L 3,431,000. The assets include coin and bullion cash balances, L 557,000 ; advances, L 3,530,000. Despite the suspension of the Colonial Bank of Australasia, the business transacted at the banks to-day was nothing out of the common. Sydney, May 7. The final revision of the reconstruction scheme of the Australian Joint Stock Bank scheme provides for the issue of negotiable inscribed stock to depositors uuwilling . to accept preferential shares with interest at 4£ per cent. This gets rid of the compulsion to take preferential shares. The Colonial Treasurer states that owing to the bank suspensions he proposes to meet the debentures which are due at the end of the year without approaching the London market. London, May 6. The Victorian Government have remitted, through the Associated Banks* L 600,000, the July interest. The recent suspensions have locked up L 350.000. An Assets Company is forming in London with a capital of a million, hoping for profitable chances in the Australian financial crisis. The gold shipped by the Ophir was for the Bank of Victoria and the Commercial Bank of Sydney L 200,000 each, for the Union Bank of Australia and the Bank of Australasia L 250,000 each. Several other banks were consigned small amounts. Mr Buxton, Under-Secretary at the Colonial Office, replying to a question in the House of Commons asked by Sir R. E. Webster, stated that he had no official knowledge in connection with the New South Wales paper money. Bankers consider that the recent shipments of gold to the colonies were neces•flary, owing to coin being locked up during the reconstruction. hi connection with the reconstruction schemes, it is considered in many quarters to be vitally important that the British depositors should not be compelled to accept preference shares for a portion of their deposits, but should be given the option to accept long-dated negotiable deposits, redeemable even in, say, 15 or 20 years, and ■while recognising" the superior right of the majority, yet advised considerate treatment of the minority, in view of future business relations. The various schemes are likely to be modified upon this principle. The Statist asserts that English depositors regard the money and interest as safe, and that it is simply locked up. The general feeling is more reassuring, owing to the bankers declining to accept the bank holiday proclaimed in Victoria, and also to the large shipments of gold to the colonies. London, May 7. The Union Bank of Australia has shipped L 1,000,000 in gold to meet possible needs, owing to the amount of money locked up in the banks that have suspended. Further shipments will posBibly follow. Melbourne, May 8. The general opinion on the Exchange ia that the bank scare has ended. The suspension of the Colonial Bank of Australasia created no surprise, as it was expected. Sir M. Davies made a statement to the Court that he believed the Mercantile Bank was thoroughly solvent. When the . accounts were laid before him he always took it for granted that allowance had been made for possible losses. He denied that there had been any conspiracy with Milledge, the manager. The latter also made a statement denying the charges of conspiracy.' Melbourne, May 9. Bishop Goe has issued a circular setting Wednesday, 17th inst., apart as a day of humiliation and prayer in connection ■with the financial troubles. The Bank of Victoria has suspended payment. The directors have issued a circular stating that, owing to heavy withdrawals, they propose to immediately reconstruct on similar lines to those taken by other banks. They announce that they are satisfied the institution is perfectly solvent.., The last balance-sheet showed liabilities Amounting to L 8,746,000, including deposits, L 7,057,000. The assets include advances ■ to the extent of L 6,430,000. London, May 8. Messrs Pringle, Dallas and Co., deposit agents in Edinburgh for the Standard Bank, have resigned, as they disagree ■with the scheme of reconstruction, and the bank refused to call a meeting of Scotch depositors. The firm has called an opposition meeting for to-morrow. A meeting of 40 shareholders of the bank has approved the reconstruction with but five dissentients. A meeting of depositors was adjourned, but a committee was appointed to discuss <ihe scheme with the London Board. The, Timest deprecates investors selling

colonial Government stocks, as it is utterly needless to become alarmed. (special. ) London, May 4.

The officials of the English, Scottish arid Australian Chartered Bank and the London Charteied Bank of Australia deny the reports that these two institutions intend to amalgamate. London, May 5.

The following shipments of gold are to be made to Australia :—Commercial Banking Company of Sydney, L 200.-000 ; Bank of Australasia, L 250,000; Union Bank of Australia, L 250.000.