OTHER BANKS.

Otago Witness, Issue 2045, 4 May 1893, Page 16

OTHER BANKS.

Melbourne, April 26. The London Chartered Bank held a good record, having been established in 1852. It transacts business in New South Wales, Queensland, and Victoria. Last quarter's return shows :— Assetsin New South Wales, £2,583,000 ; liabilities, £896,000. In Victoria the deposits amounted to £2,381,000, and the advances to £3,535,000. On December 31 the Australian deposits totalled £3,186,000; the British to £3,583,000. The bank reopened this morning to receive new accounts and cash notes. The Associated Banks were willing to assist, but owing to the excited condition of the public the management considered monetary aid would be ineffectual. April 27. The court has sanctioned the reconstruction of the Commercial Bank. The London Chartered Bank have half' a million sovereigns in the safe, and another halfmillion worth of assets can be realised immediately. Government deposits amount to £200,000. Over 150 accounts, aggregating £100,000, were opened yesterday. May 1. The Government have proclaimed a five days' bank holiday, counting from to-day, to allow the public excitement to cool. The closing of the banks for a five days' holiday has caused great inconvenience to the public. The banks were not unanimous in obeying the proclamation, for the Bank of Australasia, the Union Bank, and the Bank of New Zealand opened as usual this morning, but, acting on legal advice, they were unable to transact the usual business, and confined operations to cashing cheques, notes, and drafts. Brisk business was done by these institutions, and treble the number of officials usually engaged were employed to take deposits. May 2. Sir Graham Berry, referring to the action of the Government in proclaiming a week's bank holiday, considers it unaccountable, and contends that compulsory closing should not have been resorted to without the unanimous approval of the bankers. The opinion is expressed that the action of some of the banks in remaining open would have the best possible effect on Victorian credit. , The superintendent of the Bank of Australasia says that the Government did not consult his bank about proclaiming the holiday. If they bad he would have strenuously pointed out the grave objections to the course proposed. His bank have large interests everywhere, and the management feel it incumbent upon them to maintain the credit of their institution throughout the world. The only effectual course, therefore, was to keep open, even at the risk of straining at the legality of the position. The bank had always acted loyally by the Government, but they were compelled to show that they were prepared to meet all eventualities. The excitement has entirely subsided. The following banks have resumed business despite the Government proclamation with regard to the holiday: — Bank of New South Wales, Bank of New Zealand, Bank of Australasia, Union Bank of Australia, and Royal Bank of Australia. The Bank of New Zealand posted a notice on their premises to-day stating that business would be continued as usual, and that payment would be made in gold. Sydney, April 26. The Premier (Sir G. R. Dibbs) announced in the House last night that the panic had been entirely averted, and that there was no necessity for passing a new Bank Bill without the fullest discussion, The bill will be introduced to-day. April 28. The Bank Bill was introduced in the Legislative Assembly to-day. An exciting debate took place on the motion to suspend the Standing Orders to allow the .bill to pass all stages on Tuesday. Eventually the motion was carried. The reconstruction scheme of the Australian Joint Stock Bank provides for 143,000 preference shares of £10, to be subscribed by the creditors of the bank out of their deposits, or by shareholders, who also receive shares paid up to £4 10s in lieu of the present shares. The capital of the new company is £3,000,000. The deposit balances, after buying preferential shares, will be paid at the end of five years, with 4£ per cent, interest, payable half-yearly. Holders of current accounts to be allowed to operate up to £100. All drafts will be paid in full. The globo assets are to be transferred to a realisation account, any deficiency being paid out of dividends by the new company. May 1. Ministers consider Sir John Downer's sugges tion for holding a conference in Melbourne <0 discuss the best means of putting an end to tire financial crisis is too late, as they intend to push on the Bank Bill, and hope to see it become law by the end of the week. The feeling in tae city is that the Victorian Government made a mistake in proclaiming a bank holiday. The Government received a telegram from Mr Paterson, the Premier of Victoria, annouceing the course adopted, but the New South Wales Cabinet are satisfied to push on the Bank Bill. In addition to the cable announcing that a quarter of a million of gold had been shipped from London to the Commercial Banking Company, the same institution has a similar amount on the way out. May 2. The balance sheet of the Bank of New South Wales shows the large aggregation of £3,450,000 in gold, besides £560,000 worth of Government securities. The Government have further considered the Revised Bank Note Issue Bill. At a meeting of the Cabinet the proclamation of a holiday by the Victorian Government was discussed, but it was resolved that, as all excitement had calmed down in Sydney, such a course was not necessary here. Matters in financial circles are quiet. The Bank Bill is before the Legislative Assembly to-night. Adelaide, May 2. After an interview with the bank managers, Premier Downer stated that there is no panic in this city, therefore no call for Governmental action. The banks, he said, were prepared to pay all claims. Bank matters in this city are quiet. London, April 25. The Daily News says that owing to the reported demand in Australia for the notes of first-class banks, one Australian bank is having notes to the value of a million sterling printed in London for early despatch to the colonies. The Standard considers that the London Charged Bank's circular is frankly worded, and will lead jbo the belief that the bank's position is ponsiderably stronger than the public thought. The news of the suspension of the London Chartered 3ank of Australia was not known

until after the hour of closing, and created much surprise. April 26. The Times advocates that in reconstruction schemes a clause be inserted compelling new banks to draw on independent sources here and not on branches. The Times adverts to the proposal to guarantee a note issue in Sydney as benefiting some creditors at the expense of others, and thinks any such legislation can only be harmful. Owing to the recent failures, the final liquidation of the Federal Bank may be deferred for three years. A call on shareholders is probable. Shares in the Queensland National Bank are now unquotable. The petition of H. Guinness, praying for the compulsory winding up of the Commercial Bank, has been adjourned till May 15. The question has been raised whether, being an Australian company, the court could interfere. The court made the usual order for winding up the English and Scottish Bank. London Chartered shares rose £1 yesterday, and some were sold at £7 10s. City men consider the bank ought to be reconstructed, as its business is sound. The failure caused no surprise in Edinburgh, where the local deposits amount to half a million, but there was considerable excitement at Glasgow, where the deposits are about the same. The action of the Government of New South I Wales in guaranteeing notes is generally approved, and it is hoped the other colonies will follow suit. The Scotsman denounces Sir G. R. Dibbs's proposal to authorise banks to issue notes against uncalled capital, on the ground that such a course would deprive British depositors of the chief guarantee in the event of liquidation. The directors of the London Chartered Bank of Australia have decided that shareholders shall meet as usual on May 4, when a scheme for reconstruction will be submitted to them. The total amount of Scotch deposits in the London Chartered Bank of Australia is £1,500,000. April 27. The Queensland National Bank intend to proceed against the Standard for libel for stating that there had been a serious ran on the bank in Brisbane. It is stated that less than 600 shares in the London Chartered Bank are held in the colonies. Sir J. F. Garrick doubts whether the bank could have withstood the run here had the Melbourne branch not shut. He states that the failure of the Commercial Bank induced fresh withdrawals. The directors of the London Chartered Bank are preparing a scheme of reconstruction, with the assistance of the directors of the English and Scottish Bank. It is officially stated that the scheme of reconstruction of the English and Scottish Bank providesfora share capital of £1,575,000. Fortyfive thousand new shares'at £35 will replace the old shares. New shares will be payable : £5 forthwith, and £7 10s at intervals of three, six, twelve, and eighteen months. The assets, comprising £310,000 reserve fund and £10 per share capital, paid up to the extent of £1,012,500, are to be acquired at a reduction of £760,000. Four per cent, debentures for £2,500,000 will be issued to creditors, and it is also proposed to issue 4£ per cent, perpetual deposit stock to an equal amount. Bank shares remain steady. The Queensland National Bank shares are quoted at £1. April 28. A Colonial Assets Company is being formed, with a capital of one million. Sir Saul Samuel asserts that the reckless writing in the English Press that has been persisted in for years has produced the present crisis. He is confident that credit will soon revive. The Standard publishes a correction of its statement regarding the Queensland National Bank. The Times suggests that the colonies should establish a central institution similar to the Bank of England. The scheme for the reconstruction -of the English, Scottish, and Australian Chartered Bank will be submitted to the shareholders and creditors in Lond6n on Tuesday and in Edinburgh on Wednesday. The Commercial Banking Company of Sydney have shipped a quarter of a million in gold by the Britannia. The failure of the second bank has further depressed the market. ' The chief depositors in London of the Chartered Bank discuss the reconstruction scheme on Monday. In financial circles the English, Scottish, and Australian Joint Stock, and London Chartered Banks are all considered sound, and it is believed that they will speedily recover their position and resume business. Fifty thousand pounds in gold was withdrawn from the Bank of England and sent to Western Australia. April 29. T. B. Moxon, in a letter to The Times, suggests bhat Australia, instead of having a temporary circulating medium, had better follow the example of England in the banking crisis a century ago, when the Treasury issued several million pounds' worth of Exchequer bills through a board of commissioners, thereby stopping the crisis with profit to the Government. The weekly financial papers condemn the issue of New South Wales notes being made a first charge on assets, and state that it is still more perilous to make them a legal tender. The Australian banks have raised the rate of exchange £ per cent. British deposits in the Standard Bank, which has suspended payment, amount to £272,000, two-thirds of which were deposited by persons in Scotland. Mr C. J. Hegan (chairman of the English, Scottish, and Australian Chartered Bank) has issued a circular stating that that institution in -the strictest sense is solvent, and the suspension was the result of the unreasonable panic of shareholders, who forced shares on a restricted market until depositors in Australia became alarmed. It states that the accountants appointed by the official receiver to report on the position of the bank state that it is solvent, and favours the reconstruction scheme as equitable and tending to make the bank impregnable. It will also enable creditors to obtain repayment of at least 50 per cent, of their claims. Mr Hegan continues that a radical change in the Australian banking system is necessary with regard to the receipt of large sums on deposit from tbe public at short dates when it is impossible to lend on liquid securities. Debenture stock ought to take a place in the fore-front of investment securities. In concluding, he states that if the scbeme is adopted the bank will be stronger than ever. April 30. The Scotsman says that it is impossible to conceive a more disastrous step than the proposed issue of notes by the New Soutih Wales Government. It considers the proposal is only worthy of a bankrupt South American Republic, and is. calculated to bring permanent discredit on the colony. Scotch depositors refuse to renew wjth the Standard Bauk, r

One hundred thousand shares in the Standard Bank are held in Great Britain. May 1. The Times, replying to a hostile correspondent, advises the acceptance of the scheme for the reconstruction of the English, Scottish, and Australian Chartered Bank, which it considers is better than liquidation. May 2. The City financiers condemn the enforced bank holiday in Melbourne, believing it to be unjust to the solvent banks. The official reviewer thinks that no definite scheme for the reconstruction of the London Chartered Bank of Australia will be evolved until the result of the meeting of shareholders of the English, Scottish, and Australian Chartered Bank is known. Leading bankers in the City express regret that the Victorian Government should have thought fit to proclaim a bank holiday, and state that they would have preferred to have seen the Government guarantee deposits.