OUR MELBOURNE LETTER.

Otago Daily Times, Issue 9293, 8 December 1891, Page 3

OUR MELBOURNE LETTER.

(Fhom Our Own Correspondent.)

December 1. THE PUBLIC IMPECUNIOSITY. The Government havo been compelled by the outlook on the London money market to defer the floating of their two million loan for an indefinite period. Mr Munro has come to this conclusion only after an exceeding amount of hesitation; for money is remarkably scarce in the Treasury chest. The Argus suggests that the other colonies should follow suit, face the situation, and come to an agreement to offer no loans in London next year. It believes that an official announcement to this effect would help to bring about a recover}' of tone in London as regards colonial stocks. The determination to borrow no more money of course carries with it the resolution to cease railway construction, there being nothing wherewithal to "pay the piper." Another newspaper suggestion is that under these circumstances the private construction of lines should be allowed, as in New Zealand. But just at present there is a dearth of private as well as public capital, and company formation is at a very low ebb. There would probably be no little difficulty, therefore, in carrying out the suggestion. PRIVATE IMPECUNK »:T\« The country is in almost as bad a state privately as publicly. No one has any money. Economy is the watchword. The Government economises in even the smallest matters. Mr Guilfoyle, the curator of the Botanical Gardens, has just returned from a 12 months' trip round the world, and the head of his department refuses to print his report because of the expense involved. That affords an instance of the new policy. To return to private matters, one can scarcely guess how much pooler the Premier himself is than he was this tune two years. lie was the founder of the Heal Estate Bank, and is its chairman. He holds some thousands of shares. These are paid up to L 2 10« In the boom time they went u»;to

a high premium, and Mr Muuro wisely enough sold a portion of his holding. But he is still a very large holder, and their price now on 'Change is 6d! Imagine the loss involved m such a drop—shares paid up to 50s selling at 6d. Mr Munro is not the only public man whose private fortunes have undergone a reverse. Sir Matthew 11. Davies, the Spe jker of the Assembly, is actually declared to bo feeling the pinch. Sir Matthew was one of the biggest —if not the biggest—" boomer" of the past period. He was promoter of endless financial companies, and had a finger in every "booming" concern of the time. His wealth secured him the Sneakership on Mr Lalor's death, and his knighthood followed; and your readers may remember how in the exhibition year lie assumed the chair in a 200-guinea Speakers robe, which drove even the ladies mad with envy. Now he has shut up his Toorak house ; his wife lives out of town, and he baclielonses all week at the Athemeum Club; and he is resuming the practice of his profession—tlie law. His wife, no doubt, lives at D.indenong for her health's sake—at least the society papers say so; but why is Sir Matthew returning to business ? Mr Deakin also, who is chairman o: the latest building society to come to grief, is seeking an opening in the law, and he is not doing so because ho has grown richer of late.

THE LATEST SUSPENSION. Yesterday morning's newspapers contained the announcement of the suspension of the City of Melbourne Building Society. Mr Deakiu is chairman of this institution, haying succeeded Sir M. H. Davies in the position about two years ago. The suspension in this case has not been brought about by fraud or dishonesty, nor even can it be ascribed to plunging or reckless lending. The society has been established about 14 years, and stood in the front rank m public estimation. When the Premier lermanent came down some time ago, financial people were not at all surprised ; but the City of Melbourne had done business on vastly different lines, and was referred to as a striking contrast to the Premier Permanent. lhe society has never speculated in land or acquired properties except in the ordinary way, but rumours have gained currency that it has been compelled to take possession of a large number of properties on which it was uaable to realise in the present depressed state of the land market, and the depositors have been demanding repayments of the sums due to them. The directors have for the past eight or nine months withstood a steady drain on their resources, and m that time have repaid something like 1,80,000 of the amount owing to depositors ; but at last their bankers refused to make further advances, and an attempt was made to obtain assistance from other societies engaged in similar business. This had to be refused on the ground that the amount of help that could be rendered was not sufficient to carry the society through all its difficulties should the steady drain continue, and the directors had to call their creditors together. • Happily the shareholders and depositors, when the meeting was held, showed an excellent spirit, and gave no sign whatever of panic. Mr Deakiu explained that the larger portion of the deposits were held on short terms, such as six and twelve months, while the society's loans extended generally over years. Consequently the receipts could not meet tha withdrawals when the latter were at all numerous. Latterly they had been, and the society had been repaying deposits at the rate of LIOOO a day, while their receipts were only LIOOO a week. Of course they could not keep this up, but given proper time and he could assure everybody concerned that the assets would pay at least 27s 6d in the pound. The upshot was that a resolution was carried with enthusiasm to trust the society, not to withdraw any further deposits, but even if necessary to forego interest for six or twelve months.