The Sun.
London, England, 1858-02-03 00:00:00

The date from Melbourne is Dea. 15. There is
not much political or general news, but the corn
menial intelligence is important and unfavourable.
The following statement from the Melbourne Price
Current will explain the situation of affairs :
In our last circular, dated Nov. 16, we gave a detail
of the causes whose operation had produced the extra-
ordinary staenation almost amounting to a crisis then
existing. We expressed some surprise that so few
failures had occurred. Up to that time only one or two
of moment had been announced. Scarcely, however,
had the mail for England left, when a series of stop-
pages took place, to such an extent as for a time
almost completely to destroy confidence and suspend
trade. We have before us a list of insolvencies of
fifteen firms, whose liabilities, ranging from 9,0001.
to 90,0001., present an aggregate of 470,000/
The crisis has been sharp, but fortunately it has
been short. The principal failures have extended over a
period of about six weeks, and we are happy to say that,
according to the opinions of both bankers and merchants,
the severity of the crisis is over, and it is believed that
few or no further failures will take place for the present
in Melbourne. In the other seaports, and in the interior
townships, the mercantile communities have remained
comparatively sound and stable. It is possible that many
houses in the interior may be seriously affected by the
disastrous occurrences in Melbourne, and that some
may have to give, but at present there has been no such
result. On examining the list of houses that have sus-
pended payment the restricted effect of the insolvencies
is accounted for. Several are houses that have been
strugglingeence 1854 with the engagements of .the pre
♦ious crisis, and most of the failures are those of houses'
which four or five months ago speculated for a rise.
Scarcely any of these houses have been directly connected
with the goldfields. Within the last few days there have
been no fresh failures, or even rumours, and a feeling of
confidence arose, which for a time rapidly increased.
Just as confidence was arising as above mentioned, it
received a rude shock by the unprecedented occurrence
of a run upon the bank—the Union Bank of Australia.
This continued for several days during the week, but at
the worst it was in a voter mild form, and not more than
50,0001 in gold were drawn. The panic, it is believed,
arose from some expressions used in a report of a meet-
ing of shareholders in London, in which it was mentioned
that some of the directors had received considerable ad-
vances. Not only were reports spread unfavourable to
the credit of some of the local directors, but the stability
of the bank itself was impugned. The folly of the run
was clearly recognised from the first by all men in busi-
ness, and latterly even by the most ignorant. To make
assurer ce doubly sure, however, a meeting of the Cham-
ber of Commerce was called, at which a considerable
proporticn of our chief mercantile firms attended, and
they passed a resolution expressing the highest confi-
dence in the stability of the Union Bank of Australia.
This has been abundantly effectual, and the run has
altogether ceased. We have personally ascertained that
the stories of enormous advances t' directors and others
which have been circulated here, are absolutely untrue,
and it is equally untrue that there is any cause of doubt
in reference to the stability of the bank. In another
column we publish a statement of the assets and liabili-
ties of the various banks here. If our readers will take
the trouble to strike a balance betwee❑ the assets and
liabilities of the Union Bank, within the colony, they
will find that the value at credit of that bank, represent-
ing the amount of capital employed in the colony, is
753,4201., being a larger amount than that of any other
bank. The institution she stands alone in being unchar-
tered, and the liability of each shareholder is unlimited.
The security to the public in dealing with the Union
Bank is therefore much greater than that of any other
institution trading in the colonies. In addition to all
this•, it is only justice to those who have managed and
directed the bank to state, that during the last crisis its
losses by bad debts were comparatively trifling. Not-
withstanding these patent facts, the unthinking multi-
tude did "rush" the bank, From this unfortunate
occurrence serious evils must flow, the principal of which
will be the necessity for the bank restricting its accom-
modation ; and the inconvenience to its customers will
be felt by the commercial community generaliy ; a por-
tion of the burden will be thrown ou the other banks,
which will again limit their accommodation ; and thus
the low prices now ruling will become still lower by this
absurd run, causing a continued want of confidence, l,ss
credit, and less money for the use of trade.
We believe that about the beginning of the year all
the banks of Melbourne will alto v interest to their de-
positors, and that simultaneously with this movement it
is not unlikely that an advance of 1 per cent. on the
rates of discount will take place. Though there ma 3 be
an advance in the rates of discount, however, in the
event of the proisure on the money market being re-
lieved the former rites may be re-established.

It may be easily imagined that in present circumztauces
trade has been paralysed. At the date of our last report
itte nail, ad4ost, arrived, There
the nature of the advices
had not fully transpired. There was some hope, though
but faint, that it would bring intelligence of a pirtial
suspension of shipments, but to the deep disappointment
and dismay of importers, speculators, and holders gener-
ally, it was found that, instead of any cessation, the ex-
ports from Europe and other parts were on a greater
scale than ever. We do not hesitate to state that the
main cause of all our commercial disasters is over-
importation. We pointed out, in our last, that the chief
difficulty with which the mercantile body have at present
to contend is the loss sustained by the speculations
entered into in May and June last, and the retirement
of bills given for the purchases. Had the shipments since
that period been within reasonable bounds, the specula-
tions in question would have been legitimate and fortunate.
As it iv, the over supplies hav e caused wide-spread disaster
and ruin. Again, much depends upon the news by the
present mail. If it prove that immoderate shipments are
continued, the worst features of the recent crisis will
again appear, and the results may be ruinous not merely
to i he 11(.1ders of goods in Melbourne, but also to reckless
shippers in the producing countries. It is stated, appa-
rently with truth, that much evil has been caused by the
extensive indent orders which have been executed, in

many instances for men of straw ; but this furnishes no
excuse for the speculative shippers at home. They have
access to the amplest information as to the quantities of
goods shipped in Britain for this market, and by these
they ought to have regulated their own shipments.
In particular, they are to blame for ignoring the fact
that Australia is now providing the greater part of
the agricultural produce requisite both for man and
beast, The Australian colonies will, is not this year,
certainly in the next, predece all the fieur required
by their inhabitants ; and, in regard to horse feed,
the imports henceforth should be greatly restricted.
Every year, we had almost said every month, the pro-
gress of agriculture modifies the extent of our import
trade ; and this important fact shippers cannot too care-
fully bear in mind. From accounts received from the
neighbouring colonies the crops of every description are
much average ; and the breadth under cultivation is
almost everyavhere greatly increased. The only excep
tion is in New South Wales, where the crop; along the
course of some of the rivers have been destroyed by
floods. It is also ascertained that the crops in Europe
and America, in the northern hemisphere, are consider-
ably above an average : and we may expect that a por-
tion of the surplus produce on the western seaboard of
America, both north and south, will be sent to Australia
as the only available market. It is a remarkab:e fact,
however, that an abundant crop does not always lead to
a depreciation of prices. It gives an impetus to trade,
money becomes more abundant, and there is a largely
increased consumption. While, therefore, we do not
calculate on a rice in breadstuffs, we do not anticipate
any serious decline.
With regard to trade generally in this city at present
we may observe that for a very long time storekeepers
in the interior, and second bands generally, have been
purchasing only for immediate wants. There is no red'
son to believe that stocks in the interior, or in second
hands, are abundant ; and should the advices by the
coming mail report a decrease of shipments there would
be an improvement ; but, even if a favourable
report sLould be received, it is believed that prices
generally would not rally for two months to come. As
matters stand, the trade throughout the country is con-
fined to immediate requirements. There is an absolute
cessation of speculative purchases.
Messrs. Katzensteinand Co., of Melbourne agents
for Messrs. Arubberg and Co., of Adeiaide, have
contradicted an erroneous statement in the Argus,
that the affairs of the latter firm had been placed in
the Insolvent Court. The remark meant to apply
to Messrs. Amschel and Co.
The first session of the Victoria Parliament was
terminated by prorogation, a:,d after a few days'
recess a new session opened for the purpose chiefly
of voting supplies for the ensuing year. Tee fthan-
cialstatement of the Treasurer exeibits the revenues
in a satisfactory state, and a considerable reduction
in the expenditure. The estiraated revenue and
expenditure are respectively very nearly three
millions sterling. The sales of land continue
,on a
estimatedve rylarge scale.at3l6
,T91:8098 i., u
total
under 3,000,000/. The balance of surplus revenue
at the end of the year in the hands of government
will amount to nearly 40,0001. The estimated
procetc ls of sales of public land in the year
750,0001.
Government have called for tenders for the ex
cutien of upwards of 200 miles of railway Ther
intend to borrow money in the London market, f.
necessary, but not to force the debentures there ,
and the Treasurer anticipates that at the end of
proposes to borrow for the works of the current
the amount
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An act has been passed to oblige the Chinese in
Victoria to take out a license, renewable.every two
wilt c,.st 61. per annum. The penalty for not pay-
months, to reside in the colony. penalty
refer
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:not entitled to sue in any court of law.
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