A SCATHING EXPOSURE.

Otago Daily Times, Issue 9334, 27 January 1892, Page 3

A SCATHING EXPOSURE.

HOW THE BANK OF VAN DIEMEN'S LAND WAS MANAGED.

Some sensation has been caused in Tasmania by the statement made by Mr C. J. Barclay, managing director of the Commercial Bank of Tasmania, in reference to the failure of the Van Diemon's Land Bank. He said that the directors of the Van Diemen's Land Bank had issued a flourishing report, paid an increased dividend, and made a substantial increase to the reserve fund, yet in less than three weeks they closed their doors in hopeless, irretrievable ruin. In any other place but Tasmania an instant and searching inquiry would have been made into the cause of that disaster.- Here, instead of an inquiry, the foulest aud most calumnious statements were made. The Union and Commercial Banks were charged with conspiring to ruin an energetic and successful rival. The bank had been assassinated by us, we had slandered and crucified the assistants of that bank, and so on. If there had been an inquiry these statements could easily have been disproved, and I am here to-day to give them, each and all, an absolute denial. There is not a scintilla of truth in any of the statements that were made. If the bank could have been saved we would have saved it. We did our best to save it, but it was past saving. At times, during past years, we have given it substantial assistance. Five days before the bank closed we lent them L 20,000, and we arranged to make a further advance of L 13,000 or L 14.000. I have no hesitation whatever in saying that the L 20,000 obtained from me was obtained by falsehood and misrepresentation. That advance was made on the Tuesday preceding the stoppago of the bank, and that was the first intimation we had that the difficulties of the bank were immediate and pressing. JFrom that moment until the bank closed the Union Bank and ourselves were in constant communication with each other and with the officials of the Bank of Van Diemen's Land. We had very special interviews with-Mr Brown on the Thursday preceding the closing of the bank, when he assured us again of the stability of his position. He said that he had not a bad debt on his books and only wanted temporary assistance to enable him to carry on. He offered to give hs the fullest information as to the affairs of his bank, but this offer was afterwards withdrawn: Not until the Sunday preceding the closing of the bank did we get a statement. Instead of a proper report we simply got a list of names and amounts, no statement of securities, no balance.sheet.- We had to go through these on Sunday night. Thp revelation then made was one which in our wildest dreams we had.never anticipated. The only course we could advise was the closing of the bank. Mr Burgess, at the meeting, of the shareholders of the Bank of Van Diemen's Land on the sth August, made this statement :—' The immediate cause of the stopping of the bank was want of coin, caused by a very large, arid unexpected demand for withdrawals from London. We could not obtain the assistance we required. I pass no reflections; I could not get it, and I had no option in the matter but to do as I did.' Gentlemen, theYe was no sudden unexpected withdrawal of coin by the London and Westminster Bank, because the Bank of Van Diemen's Land did Hot pay one shilling to a bank in London; it was paid by ourselves. It was not ruined by outside enemies; the enemies were within their walls. It was ruined by gross incompotency, reckless mismanagement, and negligence which appears to me criminal. Mr Burgess told the shareholders on the occasion referred to that he would have opened the bank on Monday, but he had been totd that it would be a criminal act. I will hand you some figures which are accurate, and you can draw your own conclusions. On Monday morning, when the bank was closed, there was only apparently available L 89,000 to meet immediate requirements of L 225,000. I ask any sensible man whether it would not have been a criminal act to allow innocent ard unsuspecting people to continue to throw their money into the maelstrom. I make these remarks with no desire to cast reflections on men in misfortune^but because I think it is my duty to you thatli should clear the bank from the false and four slanders cast upon it."