Another Big Bank Smash.

Manawatu Herald, 8 April 1893, Page 2

Another Big Bank Smash.

On April sth the Commercial Bank in Melbourne suspended in consequence of the ■withdrawals being so persistent and so heavy that it was impossible to overtake the exceptional demands upon the resources of the bank by calling in advances. Of the deposits, about £5,000,000 which is mostly Scotch, is due in the United Kingdom, and nearly £6,000, ! 000 in the colonies. j The paid up capital amounts to £1,200,000, of which one-sixth is upon the London register. The reserve fund amounts to £750,000. As in the case of the Federal Bank, the difficulties of the institution were only in Melbourne and Sydney. The branches did satisfactory business. Syduey seems likely to suffer most from the failure, owing to the fact that when the bank acquired the business of the Mercantile Bank the shareholders in the latter were paid in the new shares of the Commercial. The last quarterly averages show that Sydney deposits amounted to £976,000. The Chairman states that if the bank is forced into liquidation and its £12,000,000 worth of assets are forced on the market the shareholders will have to pay up the uncalled capital, and get nothing in return. He declares that there are only two courses open— liquidation or reconstruction. The firsfc means entire loss, while to adopt the latter course will not incur the loss of a shilling. Business in Adelaide is inconveni enced by the stoppage of the bank. The local liabilities are £395,000 and the assets £533,000. It is understood that the Commercial Bank had £150,000 of N.S. Wales Government funds. Tne Lands and Mines Departments and several minor departments transacted business through the bank. Financiers are of opinion that the bank possesses a good surplus, and that its suspension will entail no loss. There has been no run in Melbourne on the local banks, but the deposits in several have appreciably increased, owing to recent withdrawals from the Commercial Bank. The notes issned by the latter institution are being cashed by all the banks. The notes in circulation amount to £247,000. The Government deposits camount to £400,000. A meeting will be held to-morrow to consider the reconstruction of the bank. The Globe refers to the suspension of the Commercial Bank of Australia as one of the largest of modern failures. At ati enthusiastic meeting of shareholders and depositors in the Commercial Bank of Australia, in Melbourne, it was unanimously agreed to reconstruct the institution and the directors were instructed to take the necessary steps to carry out the wish of the meeting. Mr Guiness Mason, of Dublin, is petitioning to have the Commercial Bank of Australia wound up. The amount of his claim is £5000.