FINANCIAL TROUBLES.

Waikato Times, Volume XXXVII, Issue 3011, 31 October 1891, Page 5 (Supplement)

FINANCIAL TROUBLES.

The Australian Mutual Investment and Building Company whose operations were he most extensive of any company carri/hiff on business m this line in the city, of Melbourno ntopped payment latoly and the greutes excitement prevailed in comrcerical oircltjs when the newt) bocame known. Mr H. G. Swyny, tho managing director, etat.es tbnt the company cun show a good surplus if all the investments are advantageously realised, and the depositors do nut create a scare by creating a run on tho company. The cause of tho stoppage haa been the (■teady withdrawal of depoditt), canned the want of confidence which has spread through the failure of other companies, an 1 the deeire on the part of many others to withdraw before f'eir term was up. In justice to others these had to be refused, hence the directors took the only course open to them —to i-.lowe their doors. The company, according to the Beverul return*, has been progressing m<«t favourably, notwithstanding the general depression in the trade all over the colony. In the fir-t quarter of tho pnwont year the a«--ets increased by £30,37, nnd the liabiliti?« bv £9986, showinir a surplus of £20,251. In tho pecmd quarter the ass «tn inwwd by £14,92 , and the liabilities by £21,397, thus i'<!ducinif the surplus by £9470. Tne average surplus of apeeta over liabilities for the qu-irter ending J ioe 30 wan £65,433. The p»id-upcapiul and rewrve fund together stood at £75.333. As the funds with which tho opeiatious of the company were carried ou were found by depositors, when the latter in. vested their money el.-iowheru the compauy were obliged to stop, a< they had no capital to fall back upon, so that though on paper the assets look promisingeneuirh it is hardly likely that, the liabilities can be met other than by fresb depositors coming forward. The directors state thus they could hnvn pulled through despite the distrust of depositors, but the City Bank, who hold securities valued at £250,000 for an overdraft of only £32,005 refused to allow them to inerease thfir over, draft, a proceeding they could only ecoount for by coming to the conclusion that the banking institutions had mutually

tiwrood uot to allow building uocieties to withdraw tboir money and incresso their overdrafts. Had tho company been able to arrange to increase their overdraft to £. r )0,000 tho directors say that they would have been able to tide over tho present nri»w, as tho aasots of the company were never in a bettor position.